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Miami & Miami Beach Condo Trends – April 2010

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They say numbers don’t lie.  If that be the case, one message of truth shines through in the inventory figures below when compared to the ones I calculated exactly nine months earlier for Miami-Dade County condos: sales up, supply down.  I compiled the figures below on April 22, 2010 from the MLS in the exact same manner as I had the night of July 23, 2009.  Below, you will find three sets of spreadsheets and graphs: the first pertaining to the inventory of condos throughout Miami-Dade County; the second to those residing only in Miami while the third concentrates on those residing in Miami Beach.

Once again, I divided the supply figures into seven price ranges and included only sales that have closed within the past six months.  The last three columns show the percentage change in those statistics when compared to those published nine months earlier for July 2009.  It should be rather apparent, with a few exceptions, that the overall pattern is that condo inventory has decreased and closed sales have increased quite considerably within the past nine months.  For example, overall condo inventory in Miami-Dade County has decreased 13.78 percent while closed sales have increased 19.23 percent during that time frame which led to a 27.69 percent decrease in the overall months of supply.

The figures in the images below may be a bit difficult to read so I also published the workbook for this month’s Miami & Miami Beach Condo Trends in its entirety.  Be sure to check it out.  The worksheet and graph tabs can be found along the bottom of the workbook.

Below, you will find the Miami-Dade County condo supply and sales figures for April 2010:

Dade County condo spreadsheet - April 2010

Dade available condos graph April 2010

Dade closed condos April 2010

The following statistics encompass only those condos located throughout Miami (not other areas of Dade County such as Miami Beach, Aventura, Sunny Isles Beach, etc.):

Miami condos spreadsheet April 2010

Miami available condos graph April 2010

Miami closed condos graph April 2010

The following statistics encompass only those condos located throughout Miami Beach:

Miami Beach condo spreadsheet April 2010

Miami Beach available condos graph April 2010

Miami Beach closed condos graph April 2010

Market pessimists will likely argue that the statistics above do not incorporate developer inventory.  Commonly known as shadow inventory, developer inventory is typically not recorded in the MLS.  However, these people need to bear in mind that closed developer sales also are not included in the figures above.  Obviously, shadow inventory was a bigger problem nine months ago than it is today.  A more valid argument should point to the home buyer tax credit being the catalyst that increased sales within the past nine months.  Personally, however, I feel that the the home buyer tax credit has had a greater impact on the single family home market than the condo market.  It has played a very insignificant role in our business and I have spoken to other real estate agents who specialize in condominiums who have encountered the same.  With the home buyer tax credit expiring this Friday, we should be able to see within the next three months how instrumental of a role it has played in the increased sales numbers we’ve witnessed.



125 thoughts on “Miami & Miami Beach Condo Trends – April 2010

  1. Owner at infinity, you said “I was told that the deevloper/Starwood is in no hurry to sell out the building since they have a interest free loan from FDIC”
    Infact same holds true for Paramount. It seems they have such a sweet heart deal from the holders of the note, that the current owners of Paramount can afford to just sit on the property for many months with out having to do any major discounting. That is why I do not expect Paramount to be less than $400/sf when they do decide to open the building for sale. They are just waiting for the remaining inventory in the market to dry up. That is a very bold plan and ambitious too. But it also shows that they are severely confident to sell all their units at a profit (after all they only paid half the debt to own the property). Looks like they are on the right track.

  2. seems like the market activity is dominated by the under $250k price range. since quite a bit of inventory is caught up in Everglades, Icon and Paramount, which expect to price way outside of this range, any idea, based on the numbers above, how these units will fare in the next year?

    remember, the old numbers were calculated during the worst financial crisis in decades. one would expect better numbers today compared to then-we are no longer in a total collapse but sputtering forward. what would be really interesting is to see some numbers from the 2001-2003 years, when we still had behavior closer to historical norms. how does our activity stack up to that period? if we have less activity than 8 years ago i would have some concern. Lucas is it possible to dig up some numbers like this? Gixxer you also like to play with the numbers as well. any luck?

  3. I am a skeptic, but numbers don’t lie!

    Do these numbers count bulk sales? I know since July last year bulk sale activity has been pretty common.

    As gables pointed out the large majority is <$250K prices. I have always argued affordability (which is different from the ability to get loans.) <$250K is affordable and even the <$500K for dual incomes or a single high income earner.

    I guess my confusion is the large spread between available prices and sold prices. Regardless it is good to get these buildings filling up. You can see downtown starting to shift from sketchy electronics and luggage shops to welcoming cafes, bistros and restaurants.

  4. gables,

    The information I have for condos only goes back to 2005. But I have data for single family homes going back further. This should give you some ideal about sales volume.

    Yearly Sales Volume

    SFH
    2000 11,718
    2001 11,491
    2002 12,342
    2003 12,571
    2004 12,622
    2005 11,016
    2006 8,692
    2007 5289
    2008 4,379
    2009 6,685

    Condos
    2005 13,009
    2006 9,822
    2007 5,772
    2008 4,580
    2009 6,854

    As you can see the activity today is less than it was 8 years ago. But contrary to your argument that is a good thing. This means we still have room for improvement. If the sales volume was close to the historical norms then you could conclude that the sales activity most likely wont increase from today’s level. But since the sales volume is still well below historical norms its easier to rationalize that sales volume will continue to go up for some time.

    The argument that you are making is very psychological and irrational. Your argument is that since we were at a low the increase in not significant as to you that is the only option. But you leave out the option that we could have stayed at a low or worse continued to go lower.

    Ex. You normally travel at 65 mph. You then drop to 10 mph. You are now traveling at 30 mph and increasing. You are looking at this and seeing that you are still traveling 35 mph slower than before. But the problem is that there is no way to get back to 65 mph without increasing through, 35, 45, 55, etc, which is what were doing now. We are already on track to sell even more than we did in 2009. This should continue each year until we get back to historical norms.

    Another thing I would like to point out is that when you look at year over year sales, they really began rising around late 2008 early 2009. The dramatic increase in sales is what helped prices to bottom in the 2nd quarter of 2009.

  5. as we ramp up consumption of these units, the question begs: can we continue to devour an equal or more units per month into the future? remember investor units really become shadow inventory unless the investor is truly committed to renting long term. otherwise it’s a unit that will be back onto the market in a couple of years. but the numbers certainly indicate within a few years the downtown area will be a much better destination for living than a few years ago. now we search for what premium is to be had for that location???

  6. I guess the question is why would you think we couldn’t sell an equal number or more units per month into the future. Again your questions are more emotional and not based on the market.

    In a normal market we sell about 20,000 homes per year. We fell into a recession at which point we were selling 9,000 homes per year given that economic climate. The economic climate has gotten better to the point where we are selling 13,000 homes per year. If the economic climate is going to stay the same or get better then why would the number of homes sold do anything but stay the same or get better?

  7. Two points that I would like to append to the information offered in this article.

    There are still market distortions being created at the bequest of legislative entities in lieu of banks. These are anomalous and must go away at some point. Anyone taking the other side of that bet (read long real estate), is actually correlated with dollar erosion and all the minutiae that go along with it (another post entirely).

    There was a very compelling revision in the HAMP legislation that has created a severe backlog in foreclosure proceedings. I can only speculate on this point but I know the fundamentals of the program are much more compelling for applicants than previous iterations which must stir more demand. Any data set outlining HAMP ramifications should not be trusted for reasons I will not go into at this time.

    Demand and supply solutions respectively. Never in the history of bubbles (Rogoff amongst others) has one been successfully reflated. Lets keep a profitable perspective and let saner/lucid minds prevail.

    Lou

  8. I think as long as we don’t build large volumes of units the investor units and shadow inventory won’t be a problem.

    We can’t overlook the fact that “historic” data includes a large number of so called investors buying properties to flip them and make a quick buck. I would bet the days of individuals buying 3 or 4 units and flipping them are over. There are still real investors who are making money today via bulk sales and real investments.

  9. Gixxer, where is the 20,000 units a year from? Does it include years 2003-2008? Would like to know what the averages are from say 1998-2003-these will be less biased by investors and mortgage fraud of the past boom years. Any idea of the number of investor buys in the preboom years versus today? My understanding is that many of todays buyers are investors-was it the same a decade ago? If not, the current buy rate is not sustainable. As i said before, investor purchased units are tricky to count because they are expected to return to the market sooner rather than later. Investor purchases distort the residential market in ways that are very hard to predict over short and medium terms.

  10. gixxer, remember the local south florida economy is in the tank and far from returning to the preboom days. Unemployment is reported anywhere between 10-12% rather than 5-6% in days of yore. There is a certain minimum housing number that must occur do to job transfers, family upgrades, etc that will occur regardless of economic conditions (absent the complete disaster of 2008-2009 which is beyond bad economic conditions). From your numbers, the new normal is probably closer to 13,000 than 20,000.

  11. Do you guys think the Miami government will be smart enough to not approve (or issue permits ) for new projects in Downtown for the next 5 years? If they don’t allow new development, Downtown Miami will be more than fine. However if they allow new construction on every block again…

  12. Gixxer, you accuse someone of being irrational and emotional, your ten year sample hardly produces anything more than the illusion of rationality. Magnifying the danger is the fact that your sample size happens to be the biggest asset class dislocation ever witnessed. Any metric that is a function of real estate will be an outlier, any line chart makes this very apparent.

    http://finance.yahoo.com/q/ta?s=^TNX+Basic+Tech.+Analysis&t=my

    This is the 10 year treasury, what obvious distortion do you see and what pocket of time does it coincide with. Overlay that chart with your run rate sample.

    Mean reversion is a bitch.

  13. LSente:
    How dare you question Gixxer’s methodology. Just analyze his “driving 65 mph…and then dropping speed…and then going 55 mph….”

    Its so simple. The Miami real estate market is just like physics.

  14. gables,

    As Elvis pointed out I was simply adding SFH and condos. I wasn’t trying to be exact but instead just trying to prove a point. In the current economic climate, 12% unemployment and current prices we seem to not only be able to sustain the current sales volume but are increasing.

    Your questions about investors is really pointless. There is a shortage of rental property downtown. There were a total of 22,079 condo units built downtown. At the same time there were only 1,189 apartments built downtown. A large portion of these condos are going to remain rental units for years to com.

    Yes the unemployment rate is at 12%. However the job losses have stopped and we are at the point where we are beginning to add jobs. Each year from here on out the unemployment will slowly go lower, meaning more buyers next year and then more buyers the year after that. You make it seem as though unemployment is going to stay at 12% as the new normal rate. Unemployment in Miami-dade was at 10.4% in 1992. It took all the way until 1998 to work its way down to around 6%.

    “From your numbers, the new normal is probably closer to 13,000 than 20,000.”

    The normal goes up not down as the area is constantly growing. There are a lot more people in the area in 2010 than there were in 2000. We sold over 13,000 total homes in 2009 alone. If you were talking about just condos then I’d say your right. We’re at about 6,800 condos a year now and in normal times we should be just over 13,000.

  15. Gixxer, those numbers show a strong down trend in the past 5 and 10 years. In particular, the past five years. And this is when supply (especially of condos) exploded upward. Does it not concern you that sales are nearly half of what they were 5 and even 10 years ago, amid an historic rise in supply? Once investors run out of money (and eventually they will after buying at great prices), we are left with regular homebuyers, who will be operating in tough and increasingly tougher credit markets. As interest rates rise (my bet is they will), you will lose additional potential buyers. not sure if we will see the same numbers of even 10 years ago in the forseeable future. this is what has so many government and corporate figures so concerned about the recover.

  16. Simple question, how long can QE and ZIRP continue. There is your endgame, this is the argument that we are having, everything else is anecdotal.

    Fiscal/monetary policy == right now they seem to be a perpetual elixir, a simple remedy. They must stop however, how close to punishing rates and massive increases in crude/other inputs is when the rubber hits the road. So banter back and forth about econ data, but remember, we are on a clock and normal is a moving target.

    Gixxer, you seem to be a diligent student and all the best to you in your endeavors. This is not meant to be an ad-hominem attack, more a big picture appraisal to give this article perspective.

  17. I hate to always be a contrarian, but I’m having a hard time seeing what Lucas is so fired up about. Are we really supposed to be thrilled Miami is down to a 12-month inventory of condos worth $0 to $250,000? Is that what the allegedly “upscale Miami market” has come to — a celebration of bargain-basement sales?

    The very same charts show a 26-month inventory of condos worth $250,000 to $500,000. These are the very same units that, just 2-3 years ago, investors and realtors routinely derided as “starter homes” and “cookie-cutter condos.”

    Even worse, the chart shows a 31-month supply in the $500,000 to $999,999 range; a 30-month supply in the $1,000,000 to $2,499,999 range; and a whopping 55-month supply of condos priced $2,500,000 to $5,000,000.

    Seriously — this is the big “recovery” we’re supposed to be celebrating? The average Miami r.e. sale these days looks like it came straight out of the property transfer listings in upstate New York or suburban Illinois or other places like that, not an allegedly “upscale” market like Miami.

  18. gables,

    “Gixxer, those numbers show a strong down trend in the past 5 and 10 years. In particular, the past five years. And this is when supply (especially of condos) exploded upward. Does it not concern you that sales are nearly half of what they were 5 and even 10 years ago, amid an historic rise in supply?”

    You sure do a have a funny sense of logic.

    Sales are half of what the were 5 or 10 year ago because the economy is worse than what it was 5 or 10 years ago. Once the economy gets back to normal then sales will get back to normal. What’s hard to understand about that??

    The economy was worse in 2008 therefore sales were worse in 2008. The economy got better in 2009 therefore sales got better in 2009. The economy is already doing better at the beginning of 2010 and sales are doing better at the beginning of 2010. It doesn’t take a rocket scientist to see where this is headed.

    “Once investors run out of money (and eventually they will after buying at great prices), we are left with regular homebuyers, who will be operating in tough and increasingly tougher credit markets.”

    Again when looking at the downtown market it’s about 50/50 renter to owner. It’s likely to stay that way for some time. You make it seem as though buying these units today are going to dump these 5,000 condos onto the market a year from now. They bought them at rates that make it affordable for them to rent at. Why would they try and dump all the unit on the market to depress prices. If anything you can see investors and developers doing the opposite. Now that they can afford to hold these condos they are going to do so as long as the market rises. With nothing in the pipeline downtown will be at a shortage of housing in within 5 years.

    Also, I don’t know if I would really call this a “historic rise in supply”.

    Miami-Dade housing units

    2000 852,278
    2008 979,082

    Miami-Dade Population

    2000 2,253,362
    2008 2,398,245

    In that 8 year span housing grew by 144,883 units while the population grew by 126,804 people. Did they overbuild, yes. But by no means historical. More housing units were built during the early 70′s than were in the recent housing boom.

  19. A nice Goldman giggle posted on CR :)

    “You want the truth? You can’t handle the truth. Son, we live in a country with an investment gap. And that gap needs to be filled by men with money. Who’s gonna do it? You? You, Middle Class Consumer? Goldman Sachs has a greater responsibility than you can possibly fathom. You weep for Lehman and you curse derivatives. You have that luxury. You have the luxury of not knowing what we know: that Lehman’s death, while tragic, probably saved the financial system. And that Goldman’s existence, while grotesque and incomprehensible to you, saves pension funds. You don’t want the truth. Because deep down, in places you don’t talk about at parties, you want us to fill that investment gap. You need us to fill that gap. “We use words like credit default swaps, collateralized debt obligation, and securitization? We use these words as the backbone of a life spent investing in something. You use ‘em as a punchline. We have neither the time nor the inclination to explain ourselves to a commoner who rises and sleeps under the blanket of the very credit we provide, and then questions the manner in which we provide it! We’d rather you just said thank you and paid your taxes on time. Otherwise, we suggest you get an account and start trading. Either way, we don’t give a damn what you think you’re entitled to!”

  20. Gixxer, the economy leading up to the bubble was fueled on credit and not normal at all. From around 2000 until the bust, we had stock/tech and then RE, both bubbles which created environments which were not normal. we will be lucky to have a normal economic environment which matches that period. so i ask the question, if we do return to a normal, what will that level be? we have not had a normal economic environment in quite a long time. to think we will only drop back to the early 2000 time period is ignoring the bubbles that occurred then as well. this is why economists talk of the new normal-its an unknown of significant consequences.

  21. Joe,

    Lucas is fired up because he know how to actual read and understand information.

    Look at the last time he posed numbers. If you look at the break out for just Miami and look at the $250k -$500k range which is where most downtown condos fall you can see that there was a 53.62 month supply. Now if you look at the same segment today you see that there is a 32.33 month supply. That’s a difference of 21.29 months of supply in just 9 months. Why would you not be excited about that. Of course the supply isn’t going to disappear over night. But going from 53 months to 32 months in only 9 months seems like were on the right track.

    And more condos will probably be sold this year than last year meaning we’ll go through the inventory at an even faster rate. I told you all of this before. Although I think I had overall supply at 14 months not 16. You’re failure to understand simple mathematics is perplexing.

  22. Gixxer,

    The “historic rise in supply” is in condos requiring incomes far greater than the median income of Miami-Dade. ie. the condos that are the very focus of this blog.

    Looking at historical housing data from overall Miami Dade where the median income is about $40-50K isn’t very relevant to the condo segment we talk about.

    There’s no doubt the $200+/sq ft Miami condo overbuild is historic.

    In other words, if you’re used to seeing 2 or 3 cranes in Back Bay Beantown putting up high-rise condos and then for 7 years straight you suddenly see 12 cranes putting up high rise condos targeting a pricepoint that is 3x the median income of Boston, that would be analagous to what Miami just went thru.

    It’s easy to get lost in finding and then analyzing the relevant data… but if you actually lived thru the boom, you wouldn’t need anything more than to have seen all the cranes go up to grasp this “epic” buildout.

  23. Gixxer 1000 said: “In that 8 year span housing grew by 144,883 units while the population grew by 126,804 people. Did they overbuild, yes. But by no means historical. More housing units were built during the early 70’s than were in the recent housing boom.”

    – Really? For every person who moved into Miami over the past decade, *1.2* homes were built. Unless a huge population of rich, single, childless people moved into Miami while I wasn’t looking, I’d say it was indeed a “historical” overbuild.

    ——

    Gixxer 1000 said: “You’re failure to understand simple mathematics is perplexing.”

    – But not as perplexing as *your* repeated failure to grasp simple grammar.

    ——

    Gixxer 1000 said: “Look at the last time he posed numbers. If you look at the break out for just Miami and look at the $250k -$500k range which is where most downtown condos fall you can see that there was a 53.62 month supply. Now if you look at the same segment today you see that there is a 32.33 month supply. That’s a difference of 21.29 months of supply in just 9 months. Why would you not be excited about that. Of course the supply isn’t going to disappear over night. But going from 53 months to 32 months in only 9 months seems like were on the right track.”

    – Um, is this a joke? Do you really believe 21 months of supply in the $250,000 to $500,000 segment actually was SOLD in just 9 months, rather than simply being pushed down (via price decreases) into the $0 to $249,999 segment and/or shifted to the rental market?

    Please try to mix in a little honesty with your “analysis” rather than peeing on our legs and telling us it’s raining. 21 months’ worth of condos priced $250k to $500k assuredly did NOT sell in the past 9 months; rather, the supply was depleted largely by (downward) segment-shift and rentals. This is plainly obvious from the above charts and sales numbers. (And you claim *I* don’t know how to read charts or numbers? Ha ha ha ha ha.)

  24. no need to quote and bash each other. Gixer makes good points and so do many others. One thing I have learned is you can present any set of numbers and analyze them in any way which helps prove your point.

    I know that the condo supply has dwindled in the last year. For example in Met1 where I live about 9 months ago the developer started renting out units. At that time about 1/3 of the ~440 units were sold and now we have at least 300 units occupied. In addition there was a bulk sale of 80 units at the end of the year.

    So from actually living in the ‘Miami ground zero’ I see the inventory shrinking, but not necessarily sold properties at market rates. I would be interested to know how many of the units were actually sold to people (not LLC’s) instead of bulk investors and developer rental programs.

  25. Elvis, you make a valid point regarding the LLC’s. Look at the ownership list of many new condo buildings-an absurd number are owned by LLC’s. Many developers turned their remaining units over to LLC’s probably in an administrative move-the LLC names seem to indicate a link to the developer. These units will eventually come onto the market. Most likely at a loss, albeit over several years of somebody else carrying the cost.

    Joe is on the money regarding the transition of >$250k units into the under $250k unit range. While this may not explain all the changes, it certainly was not an insignificant number of units. If the RE market does stabilize, then we will see a rather odd trend of over $250k supply increase as prices are marked back up again. Not my prediction, but still an interesting possibility. Couple that with shadow inventory hitting the market if prices rise, and will be interesting to see how the market responds.

  26. Lucas, are your sales/rental listings updated daily on this site? Just curious whether we see real time or some delay in the listings. Thanks for the great web site!

  27. Joe,

    “Um, is this a joke? Do you really believe 21 months of supply in the $250,000 to $500,000 segment actually was SOLD in just 9 months, rather than simply being pushed down (via price decreases) into the $0 to $249,999 segment and/or shifted to the rental market?”

    Are people here really that ignorant. The term “supply” is relative. It changes each month depending on the number of houses you’re selling each month. If you have 1000 houses and your only selling 100 a month then you have 10 months of supply(1000/100 = 10). But if you start selling 200 houses each month, even if the number of houses on the market stays at 1000 you now have 5 months supply. That doesn’t mean that you actually sold 5 months of supply. If you can’t understand this then your an idiot. I think you are confusing INVENTORY with SUPPLY. INVENTORY was reduced by 242 units and SUPPLY was reduced by 21 months.

    The last time Lucas calculated supply there were 1,546 condos in the $250k – $500k price range. The reason there was 53.62 months of supply was because they were selling an average of 28.83 (1,546/28.83 = 53.62) condos in this price range a month. Now there are 1,304 condos in this price range. That’s only 242 condos less. The reason that the calculation for the supply is drastically different is because now were selling an average of 40.33 condos in this price range per month (1,304/40.33 = 32.33).

  28. Gixxer 1000 said: “Are people here really that ignorant. The term “supply” is relative. It changes each month depending on the number of houses you’re selling each month.”

    – Nice try, but if supply is relative and nothing to get fired up about, then why did you say this less just 24 hours ago:

    “Look at the last time he posed numbers. If you look at the break out for just Miami and look at the $250k -$500k range which is where most downtown condos fall you can see that there was a 53.62 month supply. Now if you look at the same segment today you see that there is a 32.33 month supply. That’s a difference of 21.29 months of supply in just 9 months. Why would you not be excited about that. Of course the supply isn’t going to disappear over night. But going from 53 months to 32 months in only 9 months seems like were on the right track.”

    ——

    So, yesterday, Gixxer 1000 asks, “Why would you not be excited about that?” but then, today, dissembles and claims people would have to be “ignorant” to not know it was mostly a paper improvement rather than a real-world improvement based on a huge uptick in actual sales. Shameless.

  29. “So, yesterday, Gixxer 1000 asks, “Why would you not be excited about that?” but then, today, dissembles and claims people would have to be “ignorant” to not know it was mostly a paper improvement rather than a real-world improvement based on a huge uptick in actual sales. Shameless.”

    Are you really that clueless. There was a HUGE uptick in actual sales. I don’t see how you can’t understand this. I mean its not like someone is telling this to you. It’s typed in. You can read it multiple times, even slowly if you like. These condos increased their sales by 40% in 9 months!!!

    You have 50 apples to sell. You want to sell them as quickly as you can. But you’re only selling 5 apples a month. So at that rate you PROJECT that it will take you 10 months to sell all of you apples (50/5 = 10). Then the next month you look at your orders and you realize that you sales have jumped to 7 apples per month. You’re sales have gone up by 40%. Now it will take you only 7 months instead of 10 months to sell those apples. Why would someone in the business of selling apples not get excited about this. That’s 40% more business.

    The only reason there was ever a PROJECTED 53.62 months of supply of these condos was because they were only selling 28.83 condos a month. That rate has gone up by 40% to 40.33 and continues to go higher. Year over year condo sales have been going up since late 2008.

    Lucas is using the past six months to project the future volume of condo sales. This projection usually works best in a situation where sales are constant. But as I just mention year over year sales have been increasing for over a year. These condos are selling at a faster rate today then they were 6 months ago. So his monthly supply projection is conservative at best. If he used sales from just the last 3 months you would get an even lower supply projection. Or if he waits three months from now and calculates the supply again it will have drastically reduced again. This will continue to happen as long as the the sales volume continues to increase, which it has now for over a year and a half.

  30. Gixxer 1000 — You’re the living embodiment of how statistics don’t lie, but liars use statistics.

    For one thing, your “HUGE uptick in actual sales” was from 28 units per month to 40 units per month in the $250k to $500k price segment. That’s a grand total of 144 additional sales over a 12-month period. If you call that a “HUGE” sales number, for an allegedly upscale, luxury market like Miami, and with mortgage rates at historic lows (and every imaginable incentive under the sun available to buyers), you’re crazy.

    For another, you’re not even being honest enough to make an apples to apples comparison. As I pointed out above, a lot of the condos that were in last year’s $250k to $500k price segment got bumped down into the $0 to $250k segment, and a lot of condos from last year’s $500k to $1M segment were bumped down into the current $250k to $500k segment. In real terms, this means that the current condos priced at $250k to $500k are, on average, much nicer than the ones priced at that same level last year, but even with the price decreases (and the low interest rates, and the buyer incentives), they’re not exactly flying off the MLS.

    I don’t know why this is such a hard concept for you to understand, but just because a bunch of condos have seemingly disappeared from various price segments does NOT mean they were sold. It’s plainly obvious, after spending no more than 20 seconds looking at the above charts, that the overwhelming majority of the action in the Miami market is, and has been, in the $0 to $250k price segment. If you think that’s something to get real excited about, or that it bodes well for Miami in the short or intermediate terms, you’re nuts. I hate to lower myself to the level of hurling insults, but your “analysis” has become downright Orwellian, and your strident tone makes it all the more maddening.

  31. RE miami 2009

    Terra Beachside is really Terra Roadside as it is sandwiched between the noisy northbound and the southbound lanes of Collins Ave on a narrow piece of land .

    The floorplans looked quite decent and this had the potential to be a first rate project but in ANOTHER quieter location not smack in the middle of Collins ave.

    Can not understand what motivated the developer to buy and develop this awful unliveable site -maybe he polled a focus group of the hearing impaired when he did his due diligence but..
    I suggest that if you purchase there ask them to throw in earplugs to drown out the noise and gas masks to combat the fumes.

  32. I’ll continue to be the idiot that is right. We had this same discussion about supply at the end of January where I said there was between a 20 and 14 month supply of condos priced $500k and bellow. I ended the conversation with this:

    “Listen, I’m done.

    Let’s wait until Lucas puts an update out and then look at his numbers to see how many months of supply we currently have.

    You have stated that in December ‘09 (which I consider current since its only January) the supply of condos $500k and under is almost 36 months.

    I have stated that I think the current supply of condos $500k and under is closer to 14 months.

    Maybe hearing it from someone else will help you to realize.”

    Now let’s fast forward to now and look at the supply of condos priced $500k and bellow. Per Lucas’ current information there are 13,040 condos available priced $500k and bellow. We are currently averaging about 895 sales of condos $500k and bellow each month. That results in 14.56 (13,040/895 = 14.56) months supply of condos priced $500k and bellow.

    So three months after we had this conversation Lucas’ numbers show we are in fact at 14 months supply. So three months ago I estimated 14 and Joe estimated 36. I think its obvious who understands what is going on who doesn’t.

  33. Greoge, thanks for the review of Terra. I just visited the complex. Liked the floorplans and overall the architecture is quite nice. You are right about the location however.

    Too bad…maybe for the right price.

  34. I was very disappointed when I saw Everglades on the Bay recently….

    It looks likes it is not being maintained when I saw it. It looked like a 5-10 year old buiilding rather then a 2 year old building. Both buildings already look like they need a paint job and the pool area’s concrete decking needs a good stream cleaning and pool furnture looked worn out already.

    Many of the patios had sloppy stuff out on them showing that the developer is renting many of the 400 rental units to lowerclass peolpe.

    Due to how dirty the exterior of the building is and how sloppy the patios are, the 2 two buildings look like buildings in some third world nation.

  35. Gixxer 1000 — Your post #38 might be the most dishonest post in the history of this site.

    I’ve been maintaining for a year now that almost all of the action in Miami is in the $0 to $250,000 segment, and NOTHING in Lucas’ updated numbers above disproves my point.

    Further, for you to claim there’s only a “14-month supply” of condos priced at $500,000 and below is BLATANTLY DISHONEST. Lucas’ chart plainly states that there’s a 26-MONTH supply of condos priced at $250,000 to $500,000. The only way you’re coming up with your magic “14-month” number is by disingenuously adding the $0-250 and $250-500 segments and then averaging them, as if the $250-500 segment is selling at the same rate as the $0-250, which you know damn well isn’t true.

    When I’m wrong, I say I’m wrong. But when you’re wrong, you try to convince us that 2+2=5. For God’s sake, give us a break already.

  36. Everglades has A LOT of units. Curious if they came on the market now, what would their pricepoint have to be to sell out?

  37. Joe,

    Again you are have no comprehension. You make it seem like when people buy condos they only look at the $0 – $250k segment or the $250 – $500 segment. Lucas just broke these segments out as a guide. But he could have just as easily made the segments $0 – $200, $200 – $400, $400 – $600 etc. Or he could have made them $0 – $150k, $150k – $300, etc.

    But regardless we were talking about ALL condos priced $500k and bellow. Here is your quote:

    Joe Wrote:
    “As of December 2009, there was almost a 3-year supply of condos available in the $500,000-and-under price range.”

    You were claiming there was a 3 year supply in the $500k and under range. The $500 and under range also includes the $250k and under range. It encompasses all condos under $500k. And again when you look at the JUST the $500k and under range there is currently a 14 month supply. That isn’t dishonesty, that’s just fact.

    As you go up in price the months of supply also goes up. With this limited information we don’t know how much of the supply is at $250k, $300k, $350k, $400k, $450k or $500k.

    It’s not like someone goes into the market for only a $250k home. Is the supply going to change from 26 months if someone looks for a house that cost $251k down to 12 months if they drop their price to $249k????

    “The only way you’re coming up with your magic “14-month” number is by disingenuously adding the $0-250 and $250-500 segments and then averaging them, as if the $250-500 segment is selling at the same rate as the $0-250, which you know damn well isn’t true.”

    The numbers that Lucas’ posted are averages. I’m sure if you broke the segments out even further it would probably look something like this:

    $0 – 100k 6 months
    $100k – $200k 9 months
    $200 – $300k 12 months
    $300k – $400k 19 months
    $400k – $500k 26 months

    This would have probably been more helpful as most people don’t go buying houses with a range of $250k. In fact it probably would have been best at $50k intervals as I have rarely seen someones with a $100k range when looking at homes. But that would have been a lot more work so I’m not complaining.

    If you are looking at a $300k condo then the supply of units is probably closer to 12 months than it is to 26 months. Is Lucas dishonest for grouping the $300k condos with the $480k condos which clearly are two different buyers??? No it was just a reference point. Which you clearly can’t understand.

    You’re not even smart enough to realize when you’re wrong.

  38. “New High: 22,000 Residences Under Contract In South Florida”

    http://condovultures.com/home/5506–new-high-22000-residences-under-contract-in-south-florida.html

    “Nearly half – about 46 percent – of the current pending contracts are in Miami-Dade County, which is home to Aventura, Miami Beach, and Sunny Isles Beach. Condos and townhouses account for more than 5,800 pending deals while single-family houses represent an additional 4,500 contracts, according to the report.”

    As of 4/26/10 (4 days after Lucas’ numbers) they are showing 16,291 total condos available in Miami-Dade. At the same time they are showing 5,748 pending sales.

    And seeing that the tax credit is set to expire I’d guess there are going to be a few more pending sales between 4/26 and 4/30 as people rush to hit the deadline.

    Another thing to point out. Miami-Dade makes up 37% of the active listings but accounts for 46% of the pended sales.

  39. Joe, Gixx, et. al:

    BOYS! BOYS! BOYS! Don’t make me come back there and separate you!

    Can’t we all just get along?

    I think that what we need here are the facts. Is there available data on this “reverse bracket creep” – - meaning raw, cold, unflinching numbers concerning the number of condo units whose price began in range A but were shifted to range B or range C. Is there a report, chart, etc. showing, for example, that Unit 1000 in Development X was priced at $1.5 million in the first quarter of 2009 but was downgraded to $900k in the third quarter of 2009 and is now priced in $500k in the first quarter of 2010? Maybe a less specific survey would be easier? Can this data be quantified and published – — you choose the scale: monthly, quarterly.

    I think that your disagreement – - for lack of a better word – - needs to be resolved because it is an interesting topic (once you separate the subjective characterizations from your arguments, that is).

    Lucas: You are the statistical wizard here. Got anything?

    scriv

  40. Big article in the Herald today about the $8,000 tax-credit expiration and the “mad rush” of buyers trying to sign contracts in order to qualify on time.

    Funny thing is, if most of these buyers wait an extra 6 mos or a year for prices to continue their fall, the discounted sales price will easily eclipse the $8,000 they’ll receive on their 2011 tax return. No realtors are talking about that, though…..

  41. That’s weird because here are the foreclosure filling statistics for Miami-Dade county directly from the source:

    http://www.miami-dadeclerk.com/dadecoc/Mortgage-Statics.asp

    1st Quarter 2009
    Jan 6,063
    Feb 5,942
    Mar 7,103

    Total 19,108

    1st Quarter 2010
    Jan 4,128
    Feb 4,880
    Mar 3,244

    Total 12,252

    Year over year foreclosure fillings are down 36%.

    Actual foreclosures were also down 33% in the first quarter for Miami-Dade.

    http://sf.therealdeal.com/miami/articles/foreclosures-down-21-percent-in-first-quarter

  42. Gixxer, i know you like to use the stats from miami-dade. and they should be the true source for data and following analysis. But the culture in south florida, and miami in particular, would not lead me to be very confident the numbers you obtain from a south florida local government web site to be particularly accurate. we have very few accurate counts on anything down here-this is how the fraud continues to thrive. the only way we know the magnitude of our budget deficit is the federal audit we get every few years when state and federal takeovers are threatening.

  43. Gables,

    Realty Trac gets their numbers from the same source. There is no other way to get these numbers except from public records.

    After looking at the RealtyTrac data here are a few things I found. The are reporting the total number of properties that have received a foreclosure filling. So for example if a property receives a foreclosure filling and it stays in the system until it is actually foreclosed on. There record show that in the entire metro area of Miami-Fort Lauderdale-Pompano Beach, FL there are a total of 52,224 properties that have received some sort of foreclosure fillings. Interestingly enough this accounts for 2.15% of the total housing units in that area. They currently have that entire metro area ranked 11th in terms of foreclosures.

    So to be clear the person who WROTE the EDITORIAL did so after reading RealtyTrac’s information. This is what the person wrote:

    “Miami had the steepest year-over-year increase for any top 20 market. There were over 71% more filings during the first quarter of 2010 than it recorded during the same quarter in 2009.”

    This however is completely false. If you go to the link and look at the RealtyTrac table they report the the number of properties WITH a foreclosure filling is up 71%. Foreclosure fillings and foreclosure auctions are down in Miami-Dade county. For whatever reason properties are being served a foreclosure filling in Miami-Dade county and these properties are staying in the system and never being foreclosed on. That could mean that they still have yet to be foreclosed on or that the loans were modified or that somehow they were brought back current.

    Interestingly enough when Miami-Dade county clerk of courts foreclosure filling were increasing to the highest levels ever no one said you cant trust these numbers. It’s not until the numbers go down that they cant be trusted.

  44. Scriv,

    While I can’t tell you exact condo units (which would be tedious for over 16,000 condos) you can look at condoreports.com average price for listing per sqft by quarter. This can give you an ideal how listing prices are changing building by building. Since were talking about the change from July 09 and April 10 which is the beginning of the second quarter I looked at the difference between 3Q09 and 1Q10. Here is what I got for select buildings in different areas of downtwon:

    Brickell:
    Axis North
    4Q09 $318 1Q10 $319 (not 3Q data)
    Axis South
    3Q09 $334 1Q10 $331
    Brickell on the River North
    3Q09 $317 1Q10 $258
    Brickell on the River South
    3Q09 $258 1Q10 $268
    Jade
    3Q09 $515 1Q10 $475
    Mark
    3Q09 $319 1Q10 $314
    Solaris
    3Q09 $220 1Q10 $231
    Vue
    3Q09 $213 1Q10 $168

    CBD:
    900 Biscayne
    3Q09 $509 1Q10 $489
    50 Biscayne
    3Q09 $401 1Q10 $385
    Epic
    3Q09 $536 1Q10 $562
    Marina Blue
    3Q09 $355 1Q10 $356
    MET 1
    3Q09 $301 1Q10 $459
    One Miami East
    3Q09 $323 1Q10 $325
    One Miami West
    3Q09 $306 1Q10 $296
    TMP
    3Q09 $457 1Q10 $450
    Wind
    3Q09 $323 1Q10 $315

    Wynwood/Edgewater:
    1800 club
    3Q09 $397 1Q10 $371
    Biscayne Plaza
    3Q09 $206 1Q10 $221
    Blue
    3Q09 $267 1Q10 $273
    Quantum on the Bay North
    3Q09 $359 1Q10 $391
    Venetia
    3Q09 $264 1Q10 $194
    Yorker
    3Q09 $246 1Q10 $246

    This list doesn’t cover everything, but gives you an idea of where listing prices were in July 2009 and the end of Mar 2010 in Downtown areas. Looking at the average listing price most of them seem to be about flat. Some are slightly down, some are slight up. Given an average size of about 850 – 1850 sqft for the majority of these condos you would think you would really need at least a $50 decrease in the average price per sqft to start to move these condos down to lower segments.

    Ex. You have a 1200 sqft unit listed at $250 per sqft for a total of $300k. You would need to drop you listing price to $200 per sqft to get that listing price down to $240k and move it into the lower segment. And that’s for a unit that is already close the the lower segment. If you are talking about a $400k unit or above you’re going to need a serious drop in the average price per sqft.

    While looking up these prices I also looked at the average price per sqft of sold units throughout downtown. I can tell you that the majority of buildings are closing at higher a higher price per sqft now then they were in the 3rd quarter of 2009. We can argue whether prices are going to fall again, but looking at the sales data right now prices are higher for the majority of downtown buildings.

  45. Gixxer 1000 — How is it that you’re always right, while all of us, and all of the national r.e. and economics writers, are always wrong about the Miami r.e. market?

    Every freaking article I read tells me that the percentage of people falling behind on their mortgage in Miami has been trending higher and higher over the past 6 months, yet here you are, telling us that everyone is wrong and you’re right.

    Also, do you have any idea how inept the Miami government and courts are? Last year, a court clerk found something like 15,000 foreclosure notices that had been filed and then sat around without being served. (I’ll try to find the link.) If you trust the locally reported numbers over those from the national experts, you’re nuts.

    Here’s the link re: the 15,000 “lost” foreclosures:

    http://livinglies.wordpress.com/2009/06/30/circuit-judge-jennifer-bailey-miami-throws-15000-foreclosures-into-chaos-for-procedural-irregularities/

  46. Gixxer 1000 — Nice job running the numbers in post #54, but given that Miami condo prices fell over the past year, I’m curious how you explain this conclusion:

    “Looking at the average listing price most of them seem to be about flat. Some are slightly down, some are slight up.”

    If condo prices fell, the price decreases have to be accounted for somewhere.

  47. gixxer, i never trusted the foreclosure numbers when they were rising and have the same level of trust for when they fall. you’re in for one hell of a wake up call if you arrive in miami-please be warned. i’ve lived in places like nyc, dc and philly-they dont compare.

    regarding foreclosures, and this has been discussed on this blog many times, numbers down here are highly inaccurate. the foreclosure process requires a costly and lengthy judicial process compared to other states-this is dragging out the housing problems in fla. many banks are not even filing foreclosure on their units-they dont know what to do with them. my bet is most of the short sales in the condo buildings you see are neither paying mortgages or hoa fees. i personally know several people living here in units they are renting, but the owner is not paying any fees-just waiting for an action from the bank. in short, the foreclosure situation is very convoluted and hard to describe accurately-except that it is not good.

  48. “How is it that you’re always right, while all of us, and all of the national r.e. and economics writers, are always wrong about the Miami r.e. market?”

    Well first is because I actually take the time to READ most articles rather than simply repeating a random talking point. For example if an article is title “Housing could drop another 50000%” most people read the headline, maybe skim through it and then go to work and say “Hey Joe, did you hear housing is going to drop 50000%”. But if you actually read the article the actual facts say that they will drop 50000% only if a meteorite hits America and there is a .00000000001% chance of that happening, so technically there are not lying.

    Now I can post a bunch of articles from people saying that they believe we have already bottomed, but as most of the articles you or most people here post, its mainly opinion. So I try to stick close to actual data.

    Here is one from today if you would like:

    http://sf.therealdeal.com/miami/articles/florida-real-estate-market-stabilizing-according-to-a-survey-from-the-university-of-florida-bergstrom-center-for-real-estate-studies

    “Every freaking article I read tells me that the percentage of people falling behind on their mortgage in Miami has been trending higher and higher over the past 6 months, yet here you are, telling us that everyone is wrong and you’re right.”

    I agree that the percentage of people falling behind on their mortgage is trending higher. Nowhere have I said you are wrong on this fact. What I am saying is that they are filling less foreclosures and there are less foreclosure auctions. There is a difference. I assume this is for multiple reasons. One is that in our current political landscape where we have bailed out most of these banks politician don’t want to see the average Joe’s served with these foreclosure notices, hence things like the HAMP program. This undoubtedly does not solve the problem and sooner or later these people will need to be foreclosed on. Another is that banks are realizing that short sales can be more profitable to them so they are starting to become more willing to negotiate. But instead of actually looking at the problem you just run around saying people can’t afford their mortgages so prices have to drop! It’s a lot more complex than that. Especially when we are primarily concerned with downtown condos who by and large have fewer foreclosures than the rest of the area.

    “Also, do you have any idea how inept the Miami government and courts are? Last year, a court clerk found something like 15,000 foreclosure notices that had been filed and then sat around without being served. (I’ll try to find the link.) If you trust the locally reported numbers over those from the national experts, you’re nuts.

    Here’s the link re: the 15,000 “lost” foreclosures:”

    Where have I trusted the local reported numbers over the “national experts”. You are so ignorant its not even funny. The “national experts” that you are referring to is RealtyTrac, a company based in California created primarily to sell foreclosure listing information about California, but branched out when foreclosures spread elsewhere.

    The only information they have is from the “locally reported” numbers. They are just keeping track of the information in a different way, not to mention they are reporting information for Ft. Luaderdale and Pompano Beach together. It’s the same information just presented a different way. Again instead of actually reading most people just run around repeating a half truth.

    And I read you’re article and what does that have to do with anything. These foreclosures were FILLED they just weren’t served. You seriously think sh!t like this doesn’t happen anywhere else? How does that affect anything. Again they were FILLED so the foreclosure FILLING statistics are still correct.

    From the article:

    “Fort Lauderdale foreclosure defense attorney Morton Antman, says the problem is that lenders and process servers don’t have the resources to pursue every foreclosure properly, and mistakes are made along the way. In Antman’s mind, volume is a factor, but chasing residents who don’t want to be found is a persistent problem. “The primary issue is that most of these people leave their house,” he said. “They just vanish, and how do you make service on these people? Constructive service is a lengthy process.””

    From reading the article it appears that in many cases they simply cannot find the person to actual serve them. Its not that that you have 15,000 fillings sitting in a box but that when you see how undermanned they are they haven’t been able to serve all these people. Saying that these fillings were lost is NOT the truth and again the result of you not reading to understand what the article is saying. There are 15,219 cases where a foreclosure was filled but they don’t have a record of the person being served.

  49. gables,

    You are free to believe or disbelieve whatever you want. And again for the millionth time I’m not saying that everything you are saying is incorrect. What I am saying is that the foreclosure system in Miami, with all its problems that you profess to, is currently not enough to take the value of downtown condos lower than what they are currently at. I have been arguing that around 2nd Quarter 2009 is when the majority of these condos bottomed and are now moving into a slow, long, boring recovery.

    People here seem to focus in on the extreme cases. And while I’m not saying these things are not happening they are not average. Go through sales prices building by building and you will see that the actual sales prices are going higher.

    Median values in Brickell already started going higher in the 4th quarter of 2009. If you look at the case shiller index which is two months behind and currently reporting information for February 2010 you will see that more than likely when it hits April 09 it will start to report year over year INCREASES in Miami. So for example if they report a year over year increase in May 2010 then it would stand to reason the the lower point or bottom was May 2009.

  50. Joe,

    “Nice job running the numbers in post #54, but given that Miami condo prices fell over the past year, I’m curious how you explain this conclusion:

    “Looking at the average listing price most of them seem to be about flat. Some are slightly down, some are slight up.”

    If condo prices fell, the price decreases have to be accounted for somewhere.”

    Do you have any analytical abilities???

    Were not comparing last year to this year. Were comparing July 09 to April 10. Price declines don’t have to be accounted for anywhere because there weren’t any price declines during that period. The Prices fell from the 1st quarter 2009 to the 3rd quarter 2009 and then stopped falling. This is what I have been trying to tell you but you cant seem to understand. If I were to compare the listing prices from 1st quarter 2009 to the 3rd quarter 2009 that’s where you would see the price drops accounted for. But prices from 3rd Quarter 2009 to 2nd Quarter 2010 are higher.

    If prices BOTTOMED around April 2009 they the year over year numbers are going to be lower until the next April:

    Jan 09 $149k —> Jan 10 $141k (down 5% YoY)
    Feb 09 $146k —> Feb 10 $126k (down 14% YoY)
    Mar 09 $151k —> Mar 10 $138k (down 8% YoY)
    Apr 09 $133k —-> ?????
    May 09 $140k
    Jun 09 $141k
    Jul 09 $137k
    Aug 09 $144k
    Sep 09 $132k
    Oct 09 $138k
    Nov 09 $149k
    Dec o9 $148k

    We should be getting to the point where we stop posting year over year decreases next month.

  51. Biscyane Landing condo buyers were promised a 6,000-unit resort-like oasis on 200 acres. Instead just 170 condos were finished.

    Now those residents may get to stare at a 600 ft tall warehouse full of fake snow. Sounds wonderful.

    The principals of Boca Developers (now liquidated) should go to jail for that debacle.

  52. HELP

    Hi everybody,

    I just had news from Icon Brickell’s team. I bought a pre construction in 2007, one bedroom, really expensive. They offered me a new price yesterday, -50%.
    It’s near 200$ in the residence at Viceroy. I m interested. Do you know if is it possible to have a loan for this building at this price. I m french. I cant got this in France. Can you explain me how can i got it in united states ? I already paid 20% of this price.
    If you think that’s is possible, can you give me a contact ASAP

    thx

  53. Gixxer, your numbers above show the 2010 months are all lower than the 2009 months, so how can a bottom be had in April 2009?

  54. Not sure many people knew the site of Biscayne Landing was a landfill a few years earlier. The smell is still pretty bad on some days.

  55. Lucas, Can you please post the Daily Business Review article on Everglades on the Bay possible price reductions?

  56. Gixxer 1000 — You keep saying that the bottom probably occurred in 2009, but I don’t see it. I might agree that the bottom occurred in the $0 to $250,000 price segment, but there’s been so little action in all other price segments that it seems impossible to make that claim right now.

    As you know, I follow the Beach a lot closer than I follow downtown, and all I see on the Beach is stagnation. There are high-end buildings on the Beach that are still 30 to 50% for sale and/or investor-owned, with some of the best buildings on the Beach having had no more than 2-3 sales over the last 120 days or more.

  57. Joe and Gixxer 1000 —

    For what I have seen, I think bottom occurred in the $0 to $200,000/$250,000 price segment for condos in Miami downtown, brickell and midtown near the bay.

    It thinks it because there are just more peolpe who can effort condos in that price range and investors know they can rent them near or at their carring costs.

    I would suggest for peolpe to buy condo in that lower price range. I think that price range is the saftest bet now,

  58. owneratinfinity — Personally, I’d be much more inclined to rent a unit in the $0 to $250,000 segment than to buy one. Even if a de facto bottom has been reached, I can’t see big appreciation occurring in that segment anytime soon, so why get locked into ownership? A lot of these HOAs have taken big hits over the past few years, so I’m guessing we’ll start seeing big assessments once the buildings and overall market are a little more stable.

    More than anything, I still see affordability as the major drawback to almost all of the new condos in the Miami area. I can’t imagine buying a $250,000 condo with a mortgage and then also having to pay $500 or more per month in HOA fees. No matter how low some of the unit prices go, the overall HOA business models don’t seem to work at a lot of these buildings. They might have worked when the developers expected the well-heeled to be buying and occupying the units, but the budgets/numbers seem like a stretch at the current numbers/demographics.

  59. I don’t understand why a bulk deal like this at Met 1 goes through but about 3 months ago, i offered $310k for on of these and they told me to go away.

    04/10 T-2506 2 2 1005 290,375 289 J P Downtown
    04/10 T-2712 2 2 1006 246,100 245 J P Downtown
    04/10 T-3210 2 2 1091 287,213 263 J P Downtown
    04/10 T-3314 2 2 1006 272,838 271 J P Downtown
    04/10 T-3406 2 2 1005 240,350 239 J P Downtown
    04/10 T-3408 2 2 1091 357,938 328 J P Downtown a
    04/10 T-3416 2 2 1126 276,000 245 J P Downtown
    04/10 T-3514 2 2 1006 227,000 226 J P Downtown
    04/10 T-3604 2 2 1014 269,675 266 J P Downtown
    04/10 T-3610 2 2 1091 280,888 257 J P Downtown

  60. Bill — A lot of people have made similar comments/complaints as yours. On the surface, it doesn’t make much sense. A bulk r.e. deal still involves transferring individual titles, so I can’t imagine a bulk sale offers so much in the way of cost savings or efficiency that developers would turn away interested buyers.

    Were you trying to buy in the best line and/or floor for that particular building? If so, maybe the developer was trying to hold onto some higher-end units in order to make bulk sales look more appealing (rather than trying to package only lower-end units in bulk). Otherwise, your guess is as good as mine.

  61. JOE, you said
    owneratinfinity — Personally, I’d be much more inclined to rent a unit in the $0 to $250,000 segment than to buy one. Even if a de facto bottom has been reached, I can’t see big appreciation occurring in that segment anytime soon, so why get locked into ownership? A lot of these HOAs have taken big hits over the past few years, so I’m guessing we’ll start seeing big assessments once the buildings and overall market are a little more stable.

    —> when i suggested folks to buy in the 0-200k/250k price range i was talking as a end user more then an investor,

    —> being at ground zero i see that this range is at the bottom, the thing i sugguest end users is to do what i did, buy the smallest condo on the highest floor in the best location in the best building for the less amount of money

    —-> also pick a building like mine that is very very new that has no forclousers nor shot sales, theses building like mine don’t have any past due hoa fees. since almost all paid cash for their units, and therefore have more to loss if there dont paid their hoa dues and prop taxes. in these type of buidings like mine will not have an assessment for a very long time.

    —-> as an end user i have NO interest nor desrire in any big appreciation on my condo. i would rather that my condo’s value stay the same so my prop taxes stay the same. all i would like to that all the condos in miami get sold out in the not to distance future for not less then paid. it’s that simple.

    —-> all i know is that my condo is on the 50 and 51 floors with an azaming east water bay/ocean view in a nice brand new building in the best area of urban miami for $1384 per month total (includes my mortgage, prop taxes and HOA dues, cable, internet and phone land line) that aloso includes access to the roof top deck on rge 52nd floor, since my condo is on one of the penthouse floors.

    —-> via my research it’s the nicest place you can own in the best location on the hightest flo0rs with the best water view for the LEAST amount of money in the entire UNITIED STATES. again it’s that simple.

    —-> i suggest that end users do A LOT of shoppin before they buy a condo, so they can get a the best value for the money like i did.

  62. Joe & Bill:

    These bulk sales are raising the “conspiracy theory” red flag – - or at least for me they are. But I enjoy a good conspiracy…so humor me.

    Who are theses bulk buyers? Has anyone, for example, run their identities (corporate name) through the State of Florida’s business registration data base? When were they formed? Where are they based?

    Is it possible that what looks like a “bulk sale” is really a concerted effort by a group to restructure the ownership, and thus control, of the development by having an affiliated group/syndicate of seemingly independently owned entities purchase in bulk? I mean, if, for exampled, the developer wants to maintain control so he/she/it/they can continue to manage the development, I think an easy way to retain control while appearing to generate sales activity – - albeit “synthetic” – - would be to arrange a series of bulk sales to a series of structured buyers who are really holding companies (LLC’s or S-corps would be my choice) masquerading as independent entities, which in fact are part of a syndicated or affiliated group controlled by the developer?

    Given the availability of so many units on the market, this could explain why they turned you away Bill. They had allocated a “chunk” of the units and did not want to break it up. Why break up a matched set? Right?

    Thoughts?

    scriv

  63. “so I can’t imagine a bulk sale offers so much in the way of cost savings or efficiency that developers would turn away interested buyers”

    http://bulkdeals.condovultures.com/index.php?option=com_content&view=article&id=58:80-unit-bulk-deal-trades-for-167-million-in-downtown-miami&catid=2:bulkdeals-blog&Itemid=1

    If you don’t understand the concept of selling units at a discount to someone buying 80 units at a time and bringing in $16.7 million worth of cash flow as compared to a guy offering $310k for one unit then I don’t know what to say.

    Bill,

    This deal was probably done prior to your offer. Which ironically probably helped them turn you down as they had already received a decent amount of cash flow. When you look at recent non-bulk deals you can see that $310k on a 2/2 was a lowball offer.

    Current asking prices start at $360k for the loft units with no views and $380k for loft units with bay views. Here are two recent loft unit sales of 2/2 to individual buyers:

    Unit T-3402 (2/2) 1,017/sqft (03/2010) $385,000 $379/sqft
    Unit T-3410 (2 /2) 1,091/sqft (03/2010) $420,000 $385/sqft

    These are the comps you should be using if you’re only planning on buying one unit.

    Scriv,

    “All 80 units were recorded as individual transactions under three different entities: J.P. Downtown Apartments LLC, Met One Apartments LLC, and M.O. Units LLCs. The principals of all three buying entities are Alejandro Angulo, Juan Carlos Angulo, Jose Luis Innocenti, and Miguel Angel Innocenti, according to the Florida Secretary of State.”

    No conspiracy, just common sense.

  64. Gixxer 1000 said: “If you don’t understand the concept of selling units at a discount to someone buying 80 units at a time and bringing in $16.7 million worth of cash flow as compared to a guy offering $310k for one unit then I don’t know what to say.”

    – Don’t be such a dishonest jerk. I never suggested developers should offer units to the public for the same prices as they’re being sold in bulk. I was simply replying to Bill’s specific example, in which he claimed to offer $310,000 for a unit that might have been sold in bulk for as little as $227,000.

    ——

    Gixxer 1000 said: “[Bill --] These are the comps you should be using if you’re only planning on buying one unit.”

    – That’s nonsense. The comps are the comps, whether an individual sale, a bulk sale, a foreclosure, or a short sale. If individual demand was so high at Gixxer’s so-called individual prices, then developers wouldn’t even be considering bulk sales, let alone offering bulk sales with discounts of 25 percent or more.

  65. gables,

    The median sales price fluctuates from month to month. So looking at month to month sales isn’t a good indicator. Therefore we look at year over year numbers. If APRIL 2009 is the bottom, then you’re not going to see it until APRIL 2010. Of course Jan – Mar 2010 year over year numbers are lower. If they weren’t then Jan – Mar 2009 would have been the bottom.

    Were basically looking for which month has the lowest median price for that month. It’s either that OR use numbers from a place that is seasonally adjusted. That way you are comparing apples to apples. So I’m predicting the first month to reach the lowest median price for that month is April 2009. The only other way I can think to explain it is this. Let’s say April 2010 numbers come out and the median sales price is UP 5% to about 140k. This would be the first time we have a year over year increase. But April 2010 obviously can’t be the bottom when April 2009 was 5% lower. Therefore April 2009 would be the bottom.

    To further prove my point here are the seasonally adjusted case shiller numbers for Miami. This actually provides a better indicator as it tracks the VALUE of housing and not just the median price of what is sold that month.

    Feb 09 153.92
    Mar 09 149.68
    Apr 09 147.31
    May 09 145.79
    Jun 09 146.54
    Jul 09 147.42
    Aug 09 148.37
    Sep 09 149.1
    Oct 09 148.28
    Nov 09 147.89
    Dec 09 147.73
    Jan 10 147.6
    Feb 10 147.21

    Since it’s seasonally adjusted you can compare the numbers month to month. So here we essentially have the lowest point being 145.79 in May of 2009, which is again 2nd Quarter 2009.

    Funny enough case shiller tracks the value of housing as compared to prices in January 2000. So a value of 147.6 in January 2010 indicates that if you would have bought a property in January of 2000 and held it until January 2010 the value of that property would be 47.6% higher. People here are so caught up in the boom and so far detached from reality that they can’t see that even after all the price drops housing is STILL up 47.6% from 10 years ago. And more than likely will be up another 47.6% another 10 years from now.

  66. Joe,

    You argue that you understand the concept of a bulk purchase:

    “I never suggested developers should offer units to the public for the same prices as they’re being sold in bulk.”

    Then you turn around and contradict yourself in your very next statement:

    “That’s nonsense. The comps are the comps, whether an individual sale, a bulk sale, a foreclosure, or a short sale.”

    How can Bill use a comp where a unit was sold in a bulk sale of 80 units. If Bill wants to purchase 80 units then by all means use the bulk sale unit as a comp. But going to a developer or anywhere and asking someone to give you the same price that someone else paid for 80 times more of the same product is ridiculous.

    Name one thing in this World that you can’t get cheaper if you purchase it in large quantities.

    Have you ever taken an appraisal course??? Everything about the transaction should be looked at and can affect the value of the comp. If a seller is selling a condo at $400k and decides to credit the buyer $16,000 in closing cost rather than reduce the value of the unit by $16,000 what is the real value of that condo???

    The fact that 80 units were sold to achieve that price should definitely be considered. Bill should be using the prices that were sold to other individual buyers.

    “If individual demand was so high at Gixxer’s so-called individual prices, then developers wouldn’t even be considering bulk sales, let alone offering bulk sales with discounts of 25 percent or more.”

    Two can play that game. If individual demand was low as Joe indicates then developers wouldn’t be turning away offers from Bill that are only 20% lower.

    I can’t even begin to state what a completely stupid statement that is. You’re telling me that the price that an individual person is paying right now for an individual unit does not reflect the current price to another individual buyer???

    “Hey, I see this guy paid $400k for one unit and this other guy paid $390 for one unit. But this other guy Paid $300k and bought 80 units. I want you to give me the same price on one unit that the guy who paid for 80.”

    And then when Bill gets his offered rejected you scratch your head and wonder why????

    “Were you trying to buy in the best line and/or floor for that particular building? If so, maybe the developer was trying to hold onto some higher-end units in order to make bulk sales look more appealing (rather than trying to package only lower-end units in bulk). Otherwise, your guess is as good as mine.”

    Obviously they turned him down because they still have other units selling for $75k higher than what he offered.

  67. gixxer, your numbers and your logic lead to the conclusion we should have a bottom in first quarter 2010 at the earliest. no matter what you get for the april numbers this year, we already know jan-march were still falling from a year ago. meaning we have to wait until jan 2011 to see if we really bottomed in first quarter 2010. your call for the bottom of april 2009 is probably about a year off.

    in post #79 you may want to notice a peak in sep 09 and has trended down (albeit slightly) from that point on. in fact, even with the adjusted numbers, you have year over year decline from feb 09 to feb 10. what this indicates to me is no clear bottom. we are at a bottom, have been there for about a year, and shown no indication of increasing. in fact the numbers would imply a false bottom with downside to come if you had to bet using these numbers.

  68. gixxer, a 47 percent increase over a 10 year period perhaps keeps up with inflation. over a decade, unless you begin or end your calculation at the peak of a bubble, you should get housing to appreciate equally with inflation over that period of time (many long term RE studies seem to point to this). a good investment should double over that 10 year period. in fact, when you factor in taxes, etc housing has been a bit of a losing proposition in the past decade-unless you could sell at the top. i guess the lesson learned is dont buy in a bubble.

  69. GENTRIFICATION

    Gixxer 1000, what do think about it when it comes to miami areas like overtown. There are both good and bad things about it. What are your thoughts on the subjec in the Miami downtown Areat?

  70. Gixxer 1000 — The fact that you keep issuing 1,000-word rebuttals to people who make two-sentence statements is proof of what a blowhard you are. Seriously, your act is getting tired. Give it a rest already.

    I didn’t contradict myself *at all* in my comments above. I stand 100% by my statement that it would be foolish for a developer to sell a unit in bulk for $227,000 if the developer has an individual buyer offering $310,000. Now, as I said above, if the $310,000 unit was the best unit in the building and it had to be included as a sweetener to get the bulk sale closed, then that might be different, but that didn’t seem to be the situation Bill described.

    As for the bulk sale comps and the legitimacy of those sales, you (Gixxer 1000) have no clue if these deals were true arms-length deals, etc., etc. For all you know, they were little more than paper deals to make it look like sales and prices are strong. But regardless, an individual buyer would be a FOOL not to take bulk sale pricing into account if shopping for a Miami condo.

    You can play word games all you want, but if individual sales were so strong at the “individual” pricing you mentioned, then why would developers be selling 40 and 80 units at a time at prices 25% or more *below* your so-called individual pricing? Selling r.e. in bulk isn’t like selling apples in bulk; r.e. still requires individual title transfers. If individual sales were so strong, the only non-foolish reason for a developer to sell in bulk would be if he was on the brink of bankruptcy — and if that is/was the case, then said developer would be stupid to turn down purchase offers from ANYONE who walked through the door.

  71. Here is another rather scientific metric that you all may be interested in looking at which supports Lucas’ conclusion that the Miami condo market trends are turning positive. The metric is called the “Residential Liquidity Ratio” This metric was developed by two Florida International University professors in FIU’s real estate department. You can find an explanation of the Residential Liquidity Ratio, and detailed graphs showing the historic and current ratios for both Condos and residential in several South Florida markets, including Miami-Dade. The metric results in the March report are positive!

    Here are the website URLs

    http://business.fiu.edu/realestate/market_report.html
    http://business.fiu.edu/realestate/pdf/Market_Summary_March_2010.pdf

    Check out Exhibit 4 in the Market Summary to see the ratios for Miami Dade Condos.

  72. gables,
    I’ll leave it to Gixxer1000 to demolish you at length – he’s unsurpassed at that…
    Since I have a life, I can’t spend an hour debunking something as idiotic as your latest posting.
    All I can say is that you are not really good at charts, to put it mildly.
    Jan-March 2010 is compared to Jan-March 2009, you see? That means that prices could have easily bottomed in April 2009, BECAUSE APRIL COMES AFTER MARCH.
    Take a look at a calendar, if you don’t believe me.
    Well, anyways, it is only after April and May 2010 stats come in – and prices are shown to be lower than comparables for 2009, that you can start gloating.
    At this point, it’s a bit early.

  73. Joe,
    looks like Gixxer 1000 is starting to get under your thin and wrinkly skin.
    You can call him blowhard in a sense that every time he speaks he blows you out of your filthy pool pretty damn hard, but that’s just how it works. Life of a moron is a life of endless suffering, as Dalai-Lama said when informed about you.
    There is simply no contest between you two. The fact that you keep popping up after he smacks you over your tiny head might be an evidence of your great fiestiness, but there is no way you’ll ever win this argument.
    It’s a sad display, really. Like Mohammed Ali vs a toddler…with you not being Mohammed Ali, just to make it clear.

  74. Hey, look!! Gixxer 1000′s alter ego, F-35, is back again. This is getting downright AJ-esque, except that AJ was funny. Gixxer 1000 a.k.a. F-35 is just a broken record.

  75. f35, gixxer says april 09 is the bottom. according to the numbers he provided, the numbers for april and may are irrelevant. year over year numbers dropped from 09 to 10 for jan-march for post 61. this says the bottom is at least first quarter of 2010. this is based on yoy comparisons.

    His numbers from post 79 are for seasonally adjusted numbers, so month to month may be useful (although many folks, including shiller, think these adjustments are not very good in the current environment). If you compare year over year, the numbers are still down in 2010. this series of numbers may have a low point in april 2009-but the 3 month trend is not very promising for april 2010.

    so f35 before you go calling names, maybe you should look at BOTH sets of numbers gixxer provided. i’m just telling you what the numbers are saying-if you dont like it then go change the numbers to suit your taste i guess.

  76. gables,

    A year over year increase means that the median sales price INCREASED from the last year. IF the APRIL median sales price is HIGHER in APRIL 2010 then that would mean that the median sales prices was LOWER in APRIL 2009. Why would the bottom be the HIGHER number??? Why is this so hard to understand? Because we’re using year over year numbers we won’t know where the bottom is until a year after it happens. I will fill in the the rest of the information hypothetically so maybe you can understand:

    These are BS numbers just to prove a point.

    Jan 09 $149k —> Jan 10 $141k (down 5% YoY)—->Jan 11 $148k (up 5% YoY)
    Feb 09 $146k —> Feb 10 $126k (down 14% YoY)–>Feb 11 $147k (up 16% YoY)
    Mar 09 $151k —> Mar 10 $138k (down 8% YoY)—>Mar 11 $149k (up 8% YoY)
    Apr 09 $133k —->Apr 10 $139k (up 4% YoY)——>Apr 11 $150k (up8% YoY)
    May 09 $140k—>May 10 $143k (up 2% YoY)
    Jun 09 $141k—->Jun 10 $145k (up 1% YoY)
    Jul 09 $137k—–>Jul 10 $141k (up 3% YoY)
    Aug 09 $144k–>Aug 10 $142k (down 2% YoY)
    Sep 09 $132k—>Sep 10 $139k (up 5% YoY)
    Oct 09 $138k—->Oct 10 $144k (up 4% YoY)
    Nov 09 $149k–>Nov 10 $152k (up 2% YoY)
    Dec o9 $148k—>Dec 10 $151k (up 2% YoY)

    Now from this information you can see that April 2010 was the first month to have a year over year increase. But again the median price in April 2010 is $139k but the median price in April 2009 is $133k. Obviously if you look back to find which month was the LOWEST or the BOTTOM it would be April 2009. Just like May 2009 is LOWER than May 2010. Just like June 2009 is LOWER than June 2010, etc, etc.

    You seem not able to understand that Jan – Mar 2010 is AFTER April 2009. Again Year over year means the numbers are higher a YEAR LATER.

    If you still cant understand then take away the Year over year numbers and tell me which month is the lowest month:

    Jan 09 $149k —> Jan 10 $141k—->Jan 11 $148k (up 5% YoY)
    Feb 09 $146k —> Feb 10 $126k–>Feb 11 $147k
    Mar 09 $151k —> Mar 10 $138k—>Mar 11 $149k
    Apr 09 $133k —->Apr 10 $139k—->Apr 11 $150k
    May 09 $140k—>May 10 $143k
    Jun 09 $141k—->Jun 10 $145k
    Jul 09 $137k—–>Jul 10 $141k
    Aug 09 $144k–>Aug 10 $142k
    Sep 09 $132k—>Sep 10 $139k
    Oct 09 $138k—->Oct 10 $144k
    Nov 09 $149k–>Nov 10 $152k
    Dec o9 $148k—>Dec 10 $151k

    Without the year over year numbers to distract you, it becomes obvious that the FIRST month to reach the lowest number is April 2009

    If this doesn’t work then maybe simple numbers will make it easy.

    Jan 09$60—>Jan 10 $37
    Feb 09 $50—>Feb 10 $38
    Mar 09 $40—>Mar 10 $38
    Apr 09 $30—->Apr 10 $39
    May 09 $31—>May 10 $40
    Jun 09 $32—->Jun 10 $41
    Jul 09 $33—–>Jul 10 $42
    Aug 09 $34—->Aug 10 $43
    Sep 09 $35—–>Sep 10 $44
    Oct 09 $35—–>Oct 10 $45
    Nov 09 $36—>Nov 10 $46
    Dec $36———->Dec 10 $47

    Now from this chart you would have to be an idiot not to be able to see that the bottom is April 2009 at $30. But if we look at year over year numbers we get:

    Jan 09$60—>Jan 10 $37 (down 39% YoY)
    Feb 09 $50—>Feb 10 $38 (down 24% YoY)
    Mar 09 $40—>Mar 10 $38 (down 5% YoY)
    Apr 09 $30—->Apr 10 $39 (up 30% YoY)
    May 09 $31—>May 10 $40 (up 29% YoY)
    Jun 09 $32—->Jun 10 $41 (up 28% YoY)
    Jul 09 $33—–>Jul 10 $42 (up 27% YoY)
    Aug 09 $34—->Aug 10 $43 (up 26% YoY)
    Sep 09 $35—–>Sep 10 $44 (up 25% YoY)
    Oct 09 $35—–>Oct 10 $45 (up 28% YoY)
    Nov 09 $36—>Nov 10 $46 (up 27% YoY)
    Dec $36——–>Dec 10 $47 (up 30% YoY)

    So the bottom was OBVIOUSLY April 2009 BUT the YEAR OVER YEAR increases don’t show up until April 2010 a YEAR LATER, Hence the term YEAR OVER YEAR INCREASE.

  77. gables,
    where did I call you names?
    Calling your post idiotic is just stating the obvious.
    It’s the most polite definition I could find in all of the English language.
    The solution is rather simple – STOP posting idiotic comments and you’ll avoid the aggravation.

  78. Joe,
    thanks for continually reducing the volume of your moronic contributions. The shorter they are, the better. I’m seeing huge progress. Don’t stop …

  79. from gixxer post #61
    Jan 09 $149k —> Jan 10 $141k (down 5% YoY)
    Feb 09 $146k —> Feb 10 $126k (down 14% YoY)
    Mar 09 $151k —> Mar 10 $138k (down 8% YoY)
    Apr 09 $133k —-> ?????
    May 09 $140k
    Jun 09 $141k
    Jul 09 $137k
    Aug 09 $144k
    Sep 09 $132k
    Oct 09 $138k
    Nov 09 $149k
    Dec o9 $148k

    the lowest median number in the data is feb 2010-not seasonally adjusted. the yoy numbers for jan-march 2010 are lower than 2009. you can spin things all you like, but the data indicates a median bottom of feb 2010 but with a continuing yoy drop. april 2009 is meaningless when you consider the feb 2010 number.

    i wont argue with the seasonally adjusted numbers from post #79, but my bet again is april 2010 will show a new bottom.

    gixxer, i appreciate your use of numbers. but everything i stated above is directly from the numbers and correct.

    f35, only an idiot could not understand what was just described. can you understand it?

  80. Answer me this, IF April 2010 median sales price is $138, then which month will have been lower, April 2009 or April 2010????

    The fact that you can’t understand this really makes you look like an idiot. This is not a hard concept.

    Please look at these numbers and tell me which month is the bottom:

    Jan 09$60—>Jan 10 $37
    Feb 09 $50—>Feb 10 $38
    Mar 09 $40—>Mar 10 $38
    Apr 09 $30—->Apr 10 $39
    May 09 $31—>May 10 $40
    Jun 09 $32—->Jun 10 $41
    Jul 09 $33—–>Jul 10 $42
    Aug 09 $34—->Aug 10 $43
    Sep 09 $35—–>Sep 10 $44
    Oct 09 $35—–>Oct 10 $45
    Nov 09 $36—>Nov 10 $46
    Dec $36———->Dec 10 $47

  81. why are you using made up numbers? if the numbers i listed, which you provided, are not real then let me know. april 09 is no longer useful. it shows itself as a relative minimum, but not a minimum. using your data, feb 10 is lower than feb 09, and also in magnitude lower than april 09. i really dont care about april 10 right now in reinforcing anything from 09. it is not relevent.

    if you would quit providing fictitious numbers to try to prove your point this discussion would now be over. i understand yoy far better than you do. april 09 is not the bottom no matter what april 10 says. if it is, then explain feb 2010. like arguing with a brick wall.

  82. “using your data, feb 10 is lower than feb 09, and also in magnitude lower than april 09.”

    You clearly don’t understand YoY numbers then. Feb 10 is lower than Feb 09 meaning Feb 09 CANT be the bottom. So then you go the next month. Ifs Mar 10 lower than Mar 09? No, so Mar 09 can’t be the bottom. Is April 10 lower than April 09? If it is not lower then April 09 is the bottom.

    “i really dont care about april 10 right now in reinforcing anything from 09. it is not relevent.”

    Why would you not care where Apr 10 numbers are in relation to April 09???? That’s the only way you would tell how well the numbers are, you compare them to the same numbers from last year.

    April 08 $275k
    April 09 $133k
    April 10 $138k (random guess)

    April 09 is clearly the lowest

    Mar 08 $263
    Mar 09 $151
    Mar 10 $138

    March 10 is clearly the lowest. But Mar 10 is AFTER Apr 09.

    Example:

    Apr 09 the first Apr to bottom, May 09 the first May to bottom, Jun 09 the first jun to bottom, Jul 09 the first Jul to bottom…..Dec 09 the first Dec to bottom, Jan 10 the first Jan to bottom, Feb 10 the first Feb to bottom Mar 10 the first Mar to bottom, Apr 10 the SECOND Apr to bottom…….

    You keep trying to use YoY in month to month terms. This is why the seasonally adjusted numbers match what I’m saying.

    This is like arguing with a brick wall, you just can’t realize you’re the brick wall. But never mind. Just how I ignored Joe last time and then the numbers came out closer to what I said, let’s just drop it and see where the chips fall. Again I predict the bottom will be 2nd quarter 2009.

  83. gixxer, just look at this cut of numbers
    Feb 09 $146k —> Feb 10 $126k (down 14% YoY)
    Mar 09 $151k —> Mar 10 $138k (down 8% YoY)
    Apr 09 $133k —-> ?????

    now tell me, in any way shape or form, how april 09 could be considered lower than feb 10? i will have to wait until feb 11 to confirm it is a possible bottom.

    get out of the textbook and realize a real world scenario is playing out with a relative min appearing in april 09, but that is not a bottom. you are getting into the double dip everybody has talked about. you are making the assumption this curve goes down and then curves back up-very academic. but the data suggests it moves down, has a slight hiccup, and has continued down again (the numbers from jan-march 2010 show we are still going down). face it april 09 cannot be a bottom no matter how you look at this.

  84. Again, you are trying to compare MONTH TO MONTH. You want to compare APRIL to FEBRUARY. The numbers month to month ALWAYS FLUCTUATE. That is the NATURE of REAL ESTATE. If you look at the historical numbers they ALWAYS move up and DOWN each month. DOES that mean the VALUE of real estate goes up and down each month????? Of course not. The value of your house doesn’t go up 7% one month, down 10% the next month and then back up 12% the next month. This is why we look at numbers YEAR to YEAR. We compare the numbers in APRIL to the numbers in APRIL in another year because the market is different in APRIL than it is in MARCH or NOVEMBER or DECEMBER.

    That’s why when the seasonally adjust the numbers!!!!!

    Case shiller numbers
    Non Adjusted/Seasonally adjusted
    February 09 154.23—–>153.92
    March 09—-148.75——>149.68
    April 09 —–145.78——>147.31
    May 09 ——144.59 ——>145.79
    June 09 ——145.38——>146.54
    July 09 ——-147.27——>147.42
    August 09 —-148.91——>148.37
    September 09 149.69 —>149.1
    October 09 —-149.09 —->148.28
    November 09 -149.08 —->147.89
    December 09 –148.66 —>147.73
    January 09 —–148.32 —->147.6
    February 09 —147.52 —->147.21

    Looking at the NON adjusted numbers you can see that the numbers were 145 in April, 144 in May and 145 in June (ALL of which are in the 2nd quarter). But when you look at the SEASONALLY Adjusted numbers you’ll see that the spring numbers were revised UP while the winter numbers were revised Down. That’s because the winter is the buying season and the spring is not. If were were up north then the Spring numbers would have probably been revised down and the winter numbers would have been revised up because up north the spring and summer months are the buying season.

    “you are getting into the double dip everybody has talked about. you are making the assumption this curve goes down and then curves back up-very academic. but the data suggests it moves down, has a slight hiccup, and has continued down again (the numbers from jan-march 2010 show we are still going down).”

    For there to be a double dip you would need the numbers to go up and then down in the same month consistently over a quarter. As in bottom April 09, May 09, Jun 09 then up in April 10, May 10, Jun 10 and then back down in April 11, May 11, Jun 11. If the case shiller numbers start to go back below 145 (seasonaly adjusted) then at that point we would be moving into a double dip.

    So since these are our numbers:

    Jan 09 $149k —> Jan 10 $141k (down 5% YoY)
    Feb 09 $146k —> Feb 10 $126k (down 14% YoY)
    Mar 09 $151k —> Mar 10 $138k (down 8% YoY)
    Apr 09 $133k
    May 09 $140k
    Jun 09 $141k
    Jul 09 $137k
    Aug 09 $144k
    Sep 09 $132k
    Oct 09 $138k
    Nov 09 $149k
    Dec o9 $148k

    You are basically saying the market fell to a bottom in April 09 then rose to $141k in Jun 09, then fell to $137 in Jul 09, then rose to $144 in Aug 09, then fell to a new bottom of $132k in Sep 09, and then rose to $149k in Nov 09, then fell to another new bottom of $126k in Feb 10 and is now rising again at $138k in Mar 10.

    Don’t you see how irrational that is????

    Again the main thing you’re missing is that you can’t really compare April’s sales to Febuary’s sales. Here is an example that might help you. Let’s say you sell flowers. We’ll you can sell flowers year round. But obviously MORE people buy flowers in February because of Valentines day. So when you look at sales to see how your doing you are NOT going to compare February sales to April’s sales because April sales are always lower. So when the April sales come in you going to look to the last April to see how well you are doing.

    1st Quarter sales are usually higher than 2nd quarter sales. So it doesn’t make sense to compare 2nd quarter sales 2009 to 1st quarter sales 2010. So for the millionth time I’m saying that 2nd quarter 2009 will be the first quarter to hit a bottom.

  85. gables — I’m glad I’m not the only one who has discovered that Gixxer 1000 is a huge blowhard. It’s absolutely astonishing that he keeps insisting the “bottom” was April 2009 at $133,000 when HIS OWN NUMBER for Feb. 2010 is $126,000. Gixxer 1000 is pathologically incapable of admitting an error. It would be funny it weren’t so childish.

  86. this argument is exactly why people in the RE industry should not be allowed to provide financial advice to buyers, who are undoubtedly making the biggest financial decision of their lives based on the insane type of logic being provided by gixxer.

    gixxer’s seasonally adjusted numbers to compare month to month:
    Feb 09 153.92
    Mar 09 149.68
    Apr 09 147.31
    May 09 145.79
    Jun 09 146.54
    Jul 09 147.42
    Aug 09 148.37
    Sep 09 149.1
    Oct 09 148.28
    Nov 09 147.89
    Dec 09 147.73
    Jan 10 147.6
    Feb 10 147.21
    a relative min occurs in May09, rises to a relative max in Sep 09, then begins to fall again to what will be either another relative min, or perhaps an absolute min if it is below 145.8. my guess is you will see this occur in late summer after the tax credit passes (which is hard to incorporate into seasonal numbers). this is a a double dip (albeit shallow).

    when you look at YoY data we have discussed, there is a yearly decline from jan-mar 09 to 10. this indicates, even if you had a yoy rise for april 09, at best you will still have a yoy rise for jan 11. this indicates another bottom in Q1 10. this is a double dip. this may not be explained in your textbooks, but the numbers cannot be disputed. you are confusing the first sign of positive behavior as a bottom and neglecting the very real possibility of a double dip.

  87. i offered $310k for one of the units which was similiary sold during the bulk deal for $250k plus/minus. I’m on the conspiracy train theory..something pretty dishonest is going on.. but eventually…(most of the time)…time runs out, things catch up with stuff like that. I’m sure i’m not the only one the US who has experienced this. With empty apt buildings across the US (was in Portland last week..same deal there..and everywhere i travel for work which is everywhere…from Quito to Hollywood, i see empty buildings) there’s a glut of living space and not many buyers. The people who built them can’t hide from their lenders with shell games forever.

  88. gables,

    You are getting closer. This is not insane logic and I’m sure if we were in the same room and I had something to write on you would completely understand what I’m saying in 5 min. It’s just like when they talk about the recession, they can’t declare when its over until a year later. You can’t tell if that is the lowers month until after you wait a year later to see if you go higher or not.

    I’m not neglecting the possibility of a double dip. For there even to be a double dip than there has to at least be a bottom first. A double dip would mean you would drop to a low point then reverse course and go higher and then turn around a drop to a new lower.

    In our case we currently aren’t going into a double dip. We dropped to a low of 145.79 in May o9 and started going higher. We got up to about 149 and then came back down a bit to 147. If we were to go lower than 145 (and sustained, not just dip bellow for 1 month) then at that point we would be in a double dip.

    The case shiller number are always two months behind so right now they only go to February. In March the median price for both condos and SFH went higher. This leads me to believe that the case shiller numbers for March will go higher (or at least not go lower) than 147 where it is currently at. Again this is just my guess, we won’t know until the last Tuesday in May.

    Also read this article here:

    http://dqnews.com/Articles/2010/News/Miami/RRDAFL100430.aspx

    Notice how when they talk about numbers for a certain period they use the same period in a previous year to compare.

    “Total escrow closings were the highest for a March since 2007, but they fell 27.1 percent short of the average for that month since 1997″

    “An increase in sales from February is normal for the season, but this March’s 43.3 percent gain was well above the average February-to-March increase of 30.8 percent since 1997.”

    Here is also something I wanted to point out:

    “The median price paid for all homes sold rose insignificantly from February and fell 11.3 percent below the year-ago level, marking the smallest annual decline in 22 months, a real estate information service reported.”

    So basically the year over year decline is the lowest it has been in 22 months. This combined with the fact that median prices are moving higher is what leads me to think they year over year numbers for April will be at least flat and possible higher.

    Also from what I have seen there are about 24,000 total active listings in Miami-Dade and about 10,000 pending sales. Even if only 70% of those pending sales go through that is going to put a serious dent in inventory.

    You seem to be more level headed than Joe. Let’s agree to disagree and then see what happens. I’m not professing that I’m clairvoyant, this is just my educated guess with my reasoning behind it. I could be totally wrong and the numbers could nose dive tomorrow and the Moody’s Economy.com prediction that prices drop 30% by September could be right. I doubt it, but you never know.

  89. Bill,

    The units that sold in the Bulk deal that are around $250 (plus/minus) are the tower units with views that are currently selling for $385k and $420k. I understand how seeing a similar unit sold for $250k in a bulk deal can be frustrating but how can you think its some sort of conspiracy if other people are purchasing these units for $75k – $110k more than what you offered. You are complaining that these units don’t have buyers but you can clearly see that they do.

    If they see the market getting better and they just got $16.7 million from the bulk deal to hold them over for a while why would they not hold out and sell the units slowly to the people who are willing to pay $400+/sqft. The second they sell you a unit for $310k then they shoot themselves in the foot because everyone else is going to want the same deal. As long as the low price is in a bulk deal they can justify telling everyone else no.

    It’s like a luxury hotel, they leave the room empty or put it on priceline but they’ll never drop their rates because they’ll never be able to raise them again. I just got back from Vegas and I decided to stay an extra night with my fiance away from the group so I looked up rooms on expedia.com When I walked in to book the room the price they gave me was considerable higher than the the price on expedia. I even pulled it up on the iphone and showed them. They told me I could step out of the line and book it on expedia but they would not give me the same rate in person because they want that rate associated with expedia and not them. Basically expedia had already purchased a bunch of rooms (bulk) and is free to sell those rooms at any price because they feel that the expedia rooms don’t take away from their rooms because of the repuation of expedia.

    So your best bet is to find the bulk buyers who purchased the unit for $250k and see if they are willing to sell it for $310k. Although as long as a few people continue to purchase units at $385k – $420k I doubt they will.

  90. gixxer, i am not getting closer, i’ve been there all along. just to reiterate, the methodology for seasonally adjusted numbers has been seriously questioned by many analysts in the RE biz. we have had too many unique circumstances in the past year to make the numbers valid. schiller i believe even said uncorrected numbers are now more insightful than corrected numbers. my preference is YoY for the near term because of these issues-but to each their own.

  91. Using not seasonally adjusted case shiller numbers still puts May 2009 as the bottom. Using year over year numbers would still put April 2009 as the bottom IF April 2010 is higher than April 2009. My argument doesn’t rely on seasonally adjusted numbers. I was using seasonally adjusted numbers to prove a point, that you can’t seem to understand.

    So yes, to each their own.

  92. “No conspiracy, just common sense.” – - Gixxer

    Dude. You sure about that?

    Not wanting to jump on the “Gixxer pummeling team,” before you respond, you may want to check sunbiz.org. Search the names of the companies. Check out their “registered agent name & address.” There is a pattern.

    See what I mean?

    Not that there is anything necessarily wrong with the pattern. It is simply something I find interesting – - maybe you will too.

    scriv

  93. scriv, i agree with gixxer. it is not really a conspiracy. more like a way of life in beautiful south florida :) we just learn to live with it.

  94. To add insult to injury it looks like the same people just purchased 10 more units at Met 1:

    http://condovultures.com/home/5577-bulk-buyer-acquires-10-more-condos-at-downtown-miami-tower.html

    “The same private equity group that acquired 80 units at the end of 2009 in the Met 1 condominium has just purchased an additional 10 units in the new 40-story tower in Greater Downtown Miami, according to a new report from CondoVultures.com.”

    “The Met 1 bulk buyer purchased at an average price of $250 per square foot, which is a 40 percent discount on $414 per square foot average for individual transactions with the developer in the project”

  95. gables:

    Come now.

    I will concede the “conspiracy” issue…..for now. ;)

    But you can’t shuffle this thing under the “welcome to south Florida” excuse. That is just too … too … tacky; because THIS IS NEAT STUFF!

    Three companies: all LLC’s; all of which were formed less than a year ago; all of which are owned/managed by people sharing the same last name; all share the same Brickell address; all share the same registered agent – - which is a corporate maintenance business. All three entities purchase, in bulk, a series of units in the same building. Work with me here! Do the math: 1 + 1 + 1 + 1 + 1 + 1= ?

    Now, I am not saying that something “fishy” is going on here: I wouldn’t. I will go only as far as “something is afoot,” and “games are being played” – - they usually are when you have real estate transactions involving pass-through entities such as these.

    And I am willing to bet there is more to it than just being able to derive tax benefits.

    COME ON GUYS, there has to be – - at minimum – - one NCIS fan out there/in here that recognizes the application of Rule #39: There is no such thing as coincidence.

    Again, neat stuff.

    scriv

  96. scriv,

    Read the first article I posted about this:

    “All 80 units were recorded as individual transactions under three different entities: J.P. Downtown Apartments LLC, Met One Apartments LLC, and M.O. Units LLCs. The principals of all three buying entities are Alejandro Angulo, Juan Carlos Angulo, Jose Luis Innocenti, and Miguel Angel Innocenti, according to the Florida Secretary of State.”

    It was know from the beginning that they were pooling their resources to buy in bulk together. What is wrong with that??? If me and two of my family members had the resources we would do the exact same thing. We each create separate LLC’s to keep track of our individual units but we would rather have the bargaining power of buying 80 units together instead of only about 20+ units each.

  97. And I add:

    “The bulk buyer now own 34 percent of the 268 condo units sold at Met 1, and 20 percent of the 447 total residential units that exist in the project, according to the Condo Vultures® Bulk Deals Database™.”

    scriv

  98. scriv,

    What’s your point? Who cares if they bought 100% of the units. Your starting to confuse yourself with paranoia.

  99. Gixx:

    There is ABSOLUTELY nothing wrong with it. “Pooling assets,” as you said, is done every day for a variety of reasons – - be it purchasing assets or pizza and beer.

    But this particular “pool” just … peaks my interest. We have: related parties; three newly formed LLC’s that share the same address and registered agent; each LLC is managed by these related parties; their registered agent is a maintenance corporation; these LLC’s now own 34% of the units in Met 1 and 20% of the units in the entire development.

    Could be nothing, I grant you.

    But ……….. if you are willing to apply the analogy, there is also the possibility that what we have here is a 20% shareholder. And that is a lot of power, if you catch my drift.

    Again, I could be wrong. I could be “off my rocker.” I could be “tilting at wind mills.”

    But then again……………….

    scriv

  100. 35% of your development sales goes to essentially a single entity at a 40% discount to your public sale. not happy if i already purchased, particularly at preconstruction prices. with only 60% of units sold, not good for the future. that is alot of units left to sell. but i personally really like the project-may work out for the best after all. will be a prime location if you can get a unit with water views.

  101. gables:

    This is another component of the puzzle which draws my curiosity as well.

    Why would someone – - be they a person or a business entity – - buy 34% or 35% of the units in a building? After all, an individual can physically only use one unit at a time, right? And the days when units could be rapid-fire flipped are over, right?

    This is what I was alluding to in my earlier posts.

    The purchaser in such a situation is buying more than just the condo unit. They are shooting for more than just profit from anticipated appreciation in value and potential rental income.

    I imagine that what they are buying is control. Control of the board: the power to not only influence but control decisions of the board.

    Again, there is nothing wrong with this.

    But the point I was kicking around with Gixxer – - possibly more appropriately “the point I flogging Gixxer with” – - is: the substance of the transaction here is so much more interesting if you examine all the facts. And merely regurgitating a paragraph from an article published on the internet is not sufficient.

    An issue I have been pondering is this: what is the next game for these condo developments? Game 1 was financing. Game 2 is unloading the units.

    The next game, it seems to me, will be operation. How are these shiny developments going to be maintained? Could it be that, in an economic environment such as we have where HOA’s are financially strapped and budgets are tight, a reasonable and rational way to keep these developments maintained is to sell units in bulk to entities, giving the purchasing entity a “controlling share” and thus control of the HOA board? In such a case this entity would have the power, for example, to award the maintenance contract to the company of its choice? The purchasing entity gains the income from the maintenance contract, profit from sale of the unit and, in the interim, rental income.

    Just a theory.

    Again, I could be wrong. I could be “off my rocker.” I could be “tilting at wind mills.”

    But then again……………….

    scriv

  102. scriv, i would also be concerned about modifying condo rules with respect to rental aspects. the developer may have defined serious restrictions (one lease per year) when marketing the product. this is great for an owner occupied building. but if the developer (or any investor for that matter) wants to get in with shorter term leases, this will need to be changed through an operating HOA (not under control of developer). these LLC type companies can use their influence to change the HOA once developer gives up control. at any rate, would not be happy with entities controlling large segments of my condo. i want individual users whose long term needs match mine as a user, not investor. unfortunately it seems as though many newer buildings have LLC ownership groups in them-part of reality i guess.

  103. scriv,

    Again you have been watching to many NCIS and CSI shows.

    “An issue I have been pondering is this: what is the next game for these condo developments? Game 1 was financing. Game 2 is unloading the units.”

    It’s obvious what the next move for these condo developments are. There are about 23,000 new condo units downtown and less than 2000 actual rental apartments. What should have happened is after the crash is a few of the the entire developments should have been turned into rentals to even the ratio of condo’s to apartments. This didn’t happen. But regardless for the market to be healthy a large portion of these condos have to be rentals. The investors know this. The bulk buyers were purchasing units knowing they are going to hold many of these units for a long time. I’m assuming that was part of there argument to the developers to sell $400+/sqft units at $250/sqft. “Hey Mr, Developer I will purchase 80 units but I know I’ll have to hold many of these units for a long time so I can’t justify paying a higher price where I can’t rent these units out a profit in the near future”. So they buy 80 units sell 10 units 8 months later to get some short term returns while renting the other 70. Then after another year they sell another 5 or 10 units while renting the remaining 60…etc, etc.

    You keep acting like the only way to make money is by selling the units. That game is dead and it’s back to “Real” real estate investing, which happens over the long haul.

    Let’s take these guys at Met 1 for example. They bought a total of 90 units at about $250/sqft. Now they obviously cant unload all these units in a year at $400/sqft or else the developer would have just held them and kept the profit for themselves. The key here is for these developers to either hold the units or find someone else who will hold the units and SLOWLY release the supply keeping the prices from falling. It’s like artificially lowering the supply to keep demand high.

    So the bulk buyers get 90 units and only sells 10 units within a year. So they paid approx $2.5 million for those ten units and they sell them for approx $4 million for a profit of $1.5 million. Part of that $1.5 million profit is used to offset the losses on the rentals. Each unit is costing them about $2400 a month and the current rental prices is about $2200. So if they are losing about $200 on the remaining 80 units a month that about $192k a year, that leaves them with about $1.3 million in profit minus their cost of capital. Year 2 they sell 10 more units, this time at an average of $410/sqft for about $4.1 million making a profit on those units of about $1.6 million. By this time the rent has gone up $2250 so they are only losing $150 on each unit or about $126k. You repeat the process each year selling off the least desirable units. 5 years down the road you own 40 units that only cost you about $2200 a month but they now rent for $2600 a month, so now you profiting $192k a year just to hold the units. The profit from the sale of the small amount of units each year provides cash flow and money to return to your investors.

    This is what the developers would do but they are strapped for cash flow to pay for their capital. The cash flow from selling a few units at $400/sqft won’t keep them going. So they can either drop the price to $300/sqft and pick up a few more buyers like Bill or they can do 1 or two bulk deals at $250/sqft. In the end while it seems like they probably make the same amount of money because if they do a bulk deal for $250/sqft and then slowly sell the rest for $400/sqft that averages out to about $325/sqft. But its quicker to do the bulk deal and they don’t have to fight to raise prices again after dropping them.

    As far as the HOA is concerned what both of you are talking about makes no sense. Who cares if 1 investor or 50 investors controls the HOA. If you have 50 separate investors who own the majority of the building they are still going to vote in ways that benefit an investor regardless of whether or not they know each other.

    Let’s say they are going to vote to allow short term leases. If there are 100 separate investors who don’t know each other but collectively own 70% of the building and would benefit from short term leases they are probably going to vote to allow it. That no different than if you have 1 investor that owns 70% of the building and he votes to allow it.

    “In such a case this entity would have the power, for example, to award the maintenance contract to the company of its choice? The purchasing entity gains the income from the maintenance contract, profit from sale of the unit and, in the interim, rental income.”

    The money from the Maintenance contract comes form the HOA FEES. If you own a majority of the building why would you raise the HOA FEES on the units you OWN only to siphon off the money from the maintenance contract back to you. You would be stealing from YOURSELF.

  104. Gixx:

    Here is some free advice: read, digest, and then, and only then, respond. Write this down. Commit it to memory. Attach it to the side of your monitor to remind you. Because your lengthy post – - wow, that was some AAA-rated effluent.

    scriv

  105. Gixxer 1000 — “Who cares if [investors] control the HOA?” Are you freaking kidding me? Do you know ANYTHING about condo living? And do you REALLY believe prices will continue to rise as these allegedly “upscale, luxury” buildings slowly but surely (or rapidly and surely) turn into glorified rental buildings?

  106. scriv,

    It doesn’t take much time to read and digest the ridiculous stuff you post. Here is some free advice. Stop trying to use logic from a stupid t.v. show. The next time you get the ideal to post a sentence like this:

    “COME ON GUYS, there has to be – – at minimum – – one NCIS fan out there/in here that recognizes the application of Rule #39: There is no such thing as coincidence.”

    Stop and don’t do it.

    I hope that was short enough for you :-)

  107. There! You see my point?

    That is the some of the most concise writing I have see you post. (That is a compliment, by the way)

    Finally.

    scriv

  108. Gixxer et al.. the original question/issue was lost in all of these posts..of course it’s a good idea to buy them at $250/sf and flip them slowly…..it just doesn’t make any sense for the developer to sell them in bulk to that buyer and then turn down an offer $60/sf higher. And i hear the Expedia/Bilagio comparison. I also hear the fact that a few very confused individuals with a lot of money purchased at $380/sf…but i still sense something fishy.

  109. scriv — That might have been a nice, concise post by Gixxer 1000, but you’ll notice he didn’t retract any of the nonsense in his prior post. I guess he stands by his absurd “who cares if investors control the HOA” statement.

  110. gixxer, you do realize that as a building becomes a rental community, its upside becomes severely limited. people wont spend top dollar to buy into a building that is rental based-at least to live in. so the upside of that building, price wise, will be restricted to what you can make off of the rent. and that is a function of purchase price-thus keeping it lower. a bulk buyer can make money off of the rentals with the right price, but the presence of bulk buyers also will limit the potential upside of appreciation-not that we really expect that anytime soon. the enormous number of short sales in many of these buildings we keep significant appreciation from occurring in the foreseeable future.

  111. Joe:

    Yeah…unfortunately I did notice that. But I was hoping that a bit of “positive reinforcement” would be helpful. I am not “at war” with anyone here. Nor am I looking for a fight. A debate, sure, but not a fight.

    I simply enjoy batting around the issues. We are living in an interesting time. The substance of these bulk transactions is what interests me as I think it reveals the next financing scheme for these developments.

    My Dad told me – - and please correct me if I am wrong in this regard- – that when the last housing boom occurred in Miami – - back in the 1980′s – - the problem was that the developers got stuck holding the bag because when the market crashed/burst, buyers were able to walk away as the developments were built first, then sold.

    This time around, the developers tried to avoid this buy selling first, then building – - hoping that their short position (the “reservation” contracts) would sustain them through their long position, the closing. For some this worked, for others, no so much. So what’s the next financing game? I think it is the bulk buyer. The question is, will it work out or will the bulk buyer get stuck?

    gables:

    Great observation!

    An interesting question underlying these bulk buyer transactions is: can their “short” ((rental income + depreciating deductions + hypothetical income from, for example, directing the maintenance contract to their affiliate) – (carrying costs)) sustain/cover their “long” position (eventual sale of the individual units).

    Granted, the bulk buyers are being paid for the risk they are taking on the long side – - in the form of a discount. The discount may (or may not) also factor in a “clean up” component: reduction of price to reflect assumption of any encumbrances (tax liens, etc.)

    But one has to admit, it is a risky proposition because, for example, if after bulk buying 30% of the units in Met 1 for roughly $260+ per square foot, the value declines, these entities are looking at potentially large long-term capital losses. And these losses, as Gables points out, could be even larger if the building converts into a rental property because the “top dollar” purchasers won’t value a rental property as high as a non-rental because the value (standard of care, maintenance, etc) is just not there.

    Equally important in this valuation game is the effect that these bulk buyers will have on the developments themselves. One can reasonably argue that a bulk buyer’s interest in the developments will be vastly different from that of a purchaser who lives there as an investor is interested in profits while a resident owner is interested in, for lack of a better word, “creature comforts.” Thus their effect on the management decisions of the HOA could affect, for better or worse, the property’s value. For example, it is conceivable that the bulk buyer in a financially trouble development would shift expenses from “luxury expenses” to more bare bones maintenance. The resident purchasers may not appreciate it, but the investors would as it arguably protects their potential return on their investment. It should be interesting to see how this plays out.

    Move over Goldman Sachs synthetic derivatives, make way for Miami condo bulk buyer contracts!

    scriv

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