Miami Condo News & Rumors

March 25, 2008 by Lucas Lechuga

I’ve heard, saw and ascertained much on the street within the past couple of weeks regarding the Miami condo market but haven’t had the time to write an in-depth post about each item. I figured that something short and sweet is better than nothing at all. So here it is:

  • As many of you have already heard, a construction crane fell this afternoon at around 1:45pm at Paramount Bay. 2 people were reported dead and 5 reported injured. My warmest regards goes out to all with family or friends involved in the accident. The crane fell through the roof of the home that belonged to Mary in the 1998 film Something About Mary. Though many of you have called and emailed, no, Mary was not harmed during the accident.
  • This one goes into the “rumor” category. I’ve heard that BAP Development is on the brink of bankruptcy. BAP Development is the developer behind Onyx on the Bay. Closings for condos at Onyx on the Bay began on July 31, 2007. My February condo closing rate post revealed that Onyx on the Bay was able to close only 45.38 percent of its units at the time. Another rumor that I’ve heard, but haven’t been able to confirm, is that Continental, the property management company, walked out on Onyx on the Bay because the developer was unable to pay them any longer. Anyone hear anything regarding this?
  • Another rumor here. A loyal reader revealed to me today, via email, that he heard today that Boca Developers “went belly up” . Boca Developers is the development company behind Peninsula I, Peninsula II and Biscayne Landing. He also stated that he was able to confirm that Boca Developers “cut loose” their sales staff for Peninsula II and Biscayne Landing. Has anyone else out there caught wind of this?
  • Closings have begun at Continuum North Tower in South Beach. I’ll get my chance to tour the newest addition to South of Fifth this Thursday morning with some out-of-state clients. I will try to share what I see that day with readers of this blog at a later date.
  • There’s going to be some great additions to Midtown Miami. This one I heard from a Midtown representative last week. The two parcels of land between the Midtown shops and the two condo buildings just east of it, Midtown 2 and 4, will be transformed into a very nice park within the next 3 months. However, there are plans for an IMAX Theater to go into the northern parcel of land within the next 2-3 years. Additionally, Midblock will house a Sushi Samba and Segafredo’s relatively soon. I was pretty pessimistic about Midtown about six months ago but I think this is going to be the place to be for 20-somethings in about 3 years. It may very well become what it was promised to be: a city within a city.
  • Someone recently left a comment saying that, after 3 appraisals, they were unable to have their condo at 1060 Brickell appraise for the amount on their purchase contract. Any other contract holders at 1060 Brickell having this problem?
  • Asking prices of condos in the “mortgage fraud” buildings in Brickell have come down BIG since November 2007. The last time I did a Brickell Condo Index was November 2007. Last Tuesday, I pulled some new data. I haven’t had the time to reveal a full-blown monthly Brickell Condo Index, but I will reveal what the asking prices for the following buildings with prevalent mortgage fraud have fallen since November 2007:
    • The Club at Brickell Bay – The average asking price per square foot has fallen 22.86% since November 2007.
    • Vue at Brickell – Average asking price per square foot has fallen 19.60% since November 2007.
    • Jade at Brickell Bay – The average asking price per square foot has fallen 16.24% since November 2007.

Those are some large reductions in asking prices since November 2007. Only time will tell how much further the “fallen angels” will fall.

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119 Comments on "Miami Condo News & Rumors"


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Anonymous
Renter Tom
8 years 6 months ago

A realtor today also told me the Peninsula developer just went under… He is from a pretty big office and he said he just learned about it too….. I think he was trying to get me to think about buying in the near future….little does he know I read and post on this blog! BTW, my name’s not really even Tom!!! Also, so far the renting is nice and worry free….

Anonymous
8 years 6 months ago

We are experiencing very similar numbers as compared to this article. We have some great condos for sale in San Diego and they are not moving nearly as quickly as they did in a better real estate market. It’s interesting to see how other real estate markets are being affected. Thanks for the article!

Anonymous
Short Seller
8 years 6 months ago

CONGRATULATION’S …TOM..or (not sure) but Tom will do .You just got a free lunch with Lucas.Good going.Do you think we’ll see $150-175 a sq. foot soon??

Anonymous
BFG
8 years 6 months ago

One of the worst condo projects I’ve seen was by Boca Developers: the Marina Grande in Riviera Beach. It’s a McDonalds-colored (dark red and mustard yellow) waterfront building at the foot of the Blue Heron bridge (nice view, bad neighborhood).

People paid $500k or more (about a $4000/month holding cost) for condos that they now can’t rent for $1500/month. Almost 100% speculators, and tons of walk-aways on the deposits.

Anonymous
Renter Tom
8 years 6 months ago
Right on the beach with direct east and south views with wrap around balcony, high floor but not too high. Brand new 1600+ s.f., 24×24 marble floors throughout, granite, stainless steal appliances, fully professionally decorated and furnished (all brand new, never used), parking, 100% turnkey with linens, dishes, nice beds, etc. … just a tad over $3K/month locked in for quite awhile unless I decide to move out (negotiated that clause in contract). I estimate I’m paying 1/2 the cash outlay (mortgage, taxes, HOA) with little moving in and out hassles (since its furnished) and I don’t have to worry… Read more »
Anonymous
Seanjohn
8 years 6 months ago

Renter Tom
That seems like a good rental deal, is it in South Beach?

Anonymous
8 years 6 months ago

Great post, Lucas.
I love the possibility of having a good (non-Starbucks) coffee bar at Midtown. But why can’t someone put in a Whole Foods???!!! Or a bookstore?

Anonymous
Condo Flipper Bleeding To Death
8 years 6 months ago

renter tom, what building?

Anonymous
Gustavo gabriel
8 years 6 months ago

My contacts are telling me that Onyx on the Bay ‘developers (ggm developers and bap developer) are both in near bunkrupcy. They have many loans oustandings (Corus Bank of Chicago, Kennedy funding,personal loans,etc.). Also somebody told me that they are trying to sell 10 units to a group from Mexico at $165 sq.ft. Do you think $165 sq.ft is a good deal for that building??.

Anonymous
8 years 6 months ago

Renter Tom: now you just have to tell us which building; please?

Onyx on the Bay: Avg. listing price per sqft is around $500 (so it’s like 33cents on a dollar for the mexican group)

http://www.condo.com/BuildingDetails.aspx?ID=1448238

Anonymous
Rich
8 years 6 months ago

That’s great news about Midtown. I really think it’s a great concept and a development with a good future. I go there relatively often myself, and I’m glad to hear there will soon be more reasons to go there.

Anonymous
Ro
8 years 6 months ago

Can anyone advise on One Miami? I am considering buying, but with all the fraud I am really scared. I have looked at several projects e.g. 1800 in downtown, south beach, and millionaires row, but every time I discover something wrong, too many foreclosures etc etc. Does anyone know about a safe project? By the way, do you think that 165 per sqft is really the bottom line? That would help with negotiations.
Thanks a lot!!!
Tortured potential buyer Ro

PS By the way I was offered an Onyx unit for half price, now I know why – thanks to you friends!

Anonymous
8 years 6 months ago

I’ve just get the information that the Attorney General in New York is ordering the Related Group to relase the New York buyers from their contracts and return their deposits.

http://condhotel.blogspot.com/2008/03/new-york-attorney-general-bureau-chief.html

I don’t know what it will do for the other people seeking to recover their deposits but this is huge.

Best regards.

FD @ Condo Hotel South Beach

Anonymous
AU
8 years 6 months ago

With all this good deals around, does anybody know what the market is in Key Biscayne?

Anonymous
Renter Tom
8 years 6 months ago

It’s a new building in Sunny Isles… There are a lot of unfurnished units, but few professionally decorated and furnished. Supposedly it’s going to be in some upcoming magazine issue….so a lot better decorated than I could do myself!

Anonymous
Mike
8 years 6 months ago

They just openned a Segafredo in Brickell, and im not aware of a 3rd segafredo going to Midtown… I would verify that with either Lincoln or Brickell owners since its 2 different entities. By the way Star Lofts. The building next to Onyx is 80 to 90% empty, any news if they are going to auction? I saw the units and the space is nice even tough the finishes in the units are horrible. Nothing 30k cant fix, and the hall way colors are depresing.. But still would buy there if the price was right.

Anonymous
Mike
8 years 6 months ago

Sunny Isles, I just heard a rumor that over 70 people have walked away from closing in Trump Towers 1. And they are planning on turning Trump Tower 3 into a rental building… HMMM Jorge Should rethink his new projects pricing.

Anonymous
searching
8 years 6 months ago

to make things even tougher the new guidelines are in for the new jumbo mkts and i just saw WAMU’s info regarding Miami-Dade, Maximum loan amt $ $423,750 not even close to the $730k max that was promised its going to be even harder for this area considering that mtgs are going to tougher and pricier to get, i don’t know if all the other banks are gong to follow but my guess is yes,

Anonymous
night0wl
8 years 6 months ago

What do people think about Bel-Aire on the Ocean? What will be the end $/sq foot in that building, or on North Beach in general for new buildings? I love the views

Anonymous
jcrimes
8 years 6 months ago

searching
the jumbo loan amount wasn’t supposed to go to 700k+ down here. no one read the fine print – its 125% of the median sales price for the area, which for MDC is the 420k/430k figure. for certain parts of the country where the median sales price is astronomical, the jumbo amount could top out at 730k.

Anonymous
searching
8 years 6 months ago

actually if you look, many parts of the country do make the $730k limit, and Miami is considered a Major City, and the $730k #’s allow for easier financing and better pricing. that would also boost the housing making financing readily available. there is wide gap between agency loans and non agency- with these disparities in major cities like miami could easily continue to be in a dark market where other markets may not feel the pain because there markets will have a soft landing.
Miami could have benefited from a large loan amount.

Anonymous
jcrimes
8 years 6 months ago

bel aire is a great location, nice views but the units are nothing special. you’ll have to put a couple grand in your place to get it up to par.

Anonymous
night0wl
8 years 6 months ago

jcrimes – Is there a better buy for the money than Bel Aire right now? Thats the important part for me.

Anonymous
Marcela
8 years 6 months ago

Lucas, I just wanted to say that your blog is very helpful and informative. I agree with your comments about Midtown, I was first doubtful with the project but after visiting many times I’m amazed at how the developer had the vision for this area. I truly believe that Midtown will be a city within a city.

Anonymous
jcrimes
8 years 6 months ago
searching, you’re wrong, parts of california, ny and some parts of the northeast do not make “many parts of the country do make the 730k limit.” as for miami, as i said before, the jumbo increase is tied to median price. the median price in miami isn’t high enough to hit the 730k. i’m not sure how miami would be better off if agencies and banks could go to 730k regardless of tying it to median. what you fail to grasp, as well as others, is that the current malaise is not attributable to a lack of credit, but rather,… Read more »
Anonymous
8 years 6 months ago

searching,

I think jcrimes is correct. I was under the impression that the new jumbo rate limits were dependent upon the median home price of the city. You can’t compare the new limit amounts to cities in California where median home prices are much larger.

Anonymous
Marcela
8 years 6 months ago

night0wl-
Belaire in my opinion looks very nice from the outside, but the units are not well designed. The floor plans make and the bedrooms are small, this is the comment that I always get from my clients as well. I think the most important factor when buying a property is not thinking about how to get in there but how to get out of there, and that building is hard to sell. If you want oceanfront property, the best prices and negotiations right now is in Sunny Isles Beach.

Anonymous
Un-Related
8 years 6 months ago

It appears that if Eliot Spitzer was still Attorney General of New York, they would be sizing up Gourge Perez for a grey-bar condo. If one of Related’s buildings goes “tits up”, maybe they could use it as a jail and lock the crew up in there?

The Related Group Ordered to Make Condo Refunds

The New York attorney general directed The Related Group to cancel contracts and return deposits to some buyers solicited in the Empire State.

http://www.miamiherald.com/business/story/470213.html

Anonymous
jcrimes
8 years 6 months ago

nightowl
i think it’s really driven by what type of unit you’re looking for. there’s some other buildings in that area that have good units (76 through 78 st on collins), although the views are not nearly as nice as bel aire. akoya is alright, and frankly, i like the units facing south (you get the ocean and city views which is really nice), however, the units and building are again, a little off compared to the price. have you looked at green/blue diamond?

Anonymous
perez
8 years 6 months ago
Marcela, you are right to bring up Sunny Isles Beach as an option; it has many nice new condos and prices are coming down. But SIB doesn’t seem as pedestrian-friendly as North Beach. Collins Avenue is like 6 lanes wide up there, and grocers, restaurants and parks don’t seem to be walking distance from most condos. Other beach-front options in North Beach include The Collins, Canyon Ranch, La Gorce, Mei; bay-front options include Aqua, Regatta, NoBe Bay, Aquasol. What do people think about King Cole? Is Bel-Aire on the Bay still going foward?
Anonymous
perez
8 years 6 months ago

Lucas, thanks for the kind words to the families of the construction workers killed in the crane accident. Many of us appreciate the hard work and risks involved in working at a construction site, and some of us realize the work is more dangerous than police officers and firefighters, whose deaths are much more honored and whose families are better compensated. I have nothing against those public servants, but I wonder how the construction workers’ families will be treated.

Anonymous
Juan L.
8 years 6 months ago

$$$ 165 a sq. ft.WOW….wait till next month and you’ll be able to buy those unit’s from the Mexican’s for $150.ROME wasn’t built in a day….only MIAMI was.Have patient’s my fellow man and you will be rewarded.There is only one way that real estate price’s are going in Miami…and that’s DOWN DOWN DOWN. ……….BUYER BEWARE

Anonymous
Eric Stratton
8 years 6 months ago

I’m sure more details are available now, but it was a piece of the crane that fell yesterday at Paramount Bay. It fell on the office and killed an Employee of Marsh (the insurance guys that insure against construction accidents etc.)
As for Avenue, a friend closed two weeks ago on at 1,200+ sq ft 2/2 for $420K without any appraisal issues whatsoever.

Anonymous
lara
8 years 6 months ago

$165/sq.ft that’s a great price. I just do not think that it is realistic at this moment. Please if someone could describe this building. I think that it is right on the bay. Any opinions? I would buy for that price. What is the quantum? Some people like this term instead of the price for the unit.

Anonymous
8 years 6 months ago

Juan L,

Maybe I’m wrong, but I highly, highly doubt that you or anyone else will be buying condos at Onyx on the Bay for $150 per square foot. Bulk buyers may be afforded that opportunity, although I think their sales price will be closer to $200 per square foot, but I don’t ever think you’ll be buying the defaulted condos at Onyx from Mexicans, or any other bulk buyer, for anything less than $225 per square foot.

Anonymous
8 years 6 months ago

The Bulk Buyers are buying to hold so in a way they almost create a floor, since they get a bigger discount since they are buying a block usually know what they are getting into in terms of rental income and use an income approach for valuation and cap rates.

This may vary in case by case but it is my opinion that the bulk buyers can afford to hold for a couple of years by the time the market picks up again.

Anonymous
Juan L.
8 years 6 months ago

DO you really think the market will pick up in a couple of year’s….realistically?? Any comment’s would be appreciated.

Anonymous
8 years 6 months ago

$165/foot – Good luck! See you in 5 years again on this blog wishing you bought something or commenting that prices should go down to $50/foot and crying you keep throwing away money in rent and crying your landlord is pissed because you ruined his floors in the condo you rent and is holding your security deposit. Its funny most of the commentors on this blog think something priced at $300 per sq foot when most other new construction is priced for $500 per sq foot still expect that $300/ft to go down to $150/ft. Rediculous.

Anonymous
Mike K
8 years 6 months ago

Samir…the one problem is that the avg person making the MEDIAN INCOME in Miami can only afford 150/sq. ft. How long have you been a realtor? Because I remember 150/sq ft. used to be considered a normal amount just 5 years ago. That’s what is happening to this market. It is returning back to NORMAL. $500/sq ft once bought you a house on the water…not a cookie cutter condo!

Anonymous
Richard
8 years 6 months ago

Nightowl–the hallways at Bellaire with 8 millions doors is enough to turn anyone off.

Anonymous
Edgestone
8 years 6 months ago

you can google historical data

real estate runs on 8 year cycles approximately.
last one began heating up in 1984 and in the early 1990-92 crashed
by 2000, the market heated up again and crashed in 2007
the miami real estate market will not turn the corner until 2014 or so

Anonymous
Mike K
8 years 6 months ago

You want to talk about throwing away money…

1. Closing costs on a mortgage…origination fees, doc stamps…more bullsh*t fee’s….PMI insurance (if you don’t have the 20percent)

2. PAYING REAL ESTATE TAXES

3. PAYING INTEREST on a mortgage (even though its tax deductible…you still end up paying more than you save)

4. PAYING MAINTENANCE

5. Having your money tied up in a DEPRECIATING ASSET.

I think I’ve made my point…

Renting: NO TAXES, NO INTEREST, NO MAINTENANCE, NO RISK OF DEPRECIATION, ALL COSTS ARE FIXED, NO WORRIES, NO REPAIRS….

RENTING=NO PROBLEM

Anonymous
Jamie
8 years 6 months ago

@au: Yes, I can tell you about the market on Key Biscayne. The high end is holding up better than most places in Miami. The low end is really puzzling. I always thought those condos would hold their value, because you cannot find a 2/2 condo a half-block to the beach, a 1/2 block to the supermarket, and with admission to an A-rated elementary school three or four blocks away. Plus it is so incredibly safe.

Anonymous
Antonio
8 years 6 months ago
Here is my opinion – I think the market will come back. But not to the prices we saw in 2005. Bubbles bursting and fallout is a necessary part of the boom-bust cycle. I was part of the dot.com boom/bust. I am a computer programmer who quadrupled his salary in the 5 years from 1995-2000, just to see most programmers unemployed in 2002 (I was a little luckier, I only took a $25k paycut). Other IT people including myself personally felt that this real estate boom was just like the dot.com boom, contrary to what everyone was saying. What I… Read more »
Anonymous
night0wl
8 years 6 months ago
Well, if there’s one thing to be learned by the dot com implosion of 2000/2001, its that bubbles take many many years to recover. I think 2010/2011 is just too close if you want to use the dot com bubble as an analogy. The peak of dot com was 11500 I think, and the market didn’t recover to that level till May of 2006. Thats a valley spanning *6 years*. And get this, we’re only still currently at 12400 after all the gyrations. That means there’s a span of almost a decade before the bubble is worked through. I’ve heard… Read more »
Anonymous
Mike K
8 years 6 months ago

Nightowl….it is better to use the peak of the Nasdaq market since most of the dot.com’s resided in that market. This market topped out at 5,000. As of today, we closed at 2,324.36…roughly half our value from the year 2000. So here we are 8 years later…and we haven’t ever recovered half of our losses (and this isn’t adjusted for inflation.

Did you know it took DOW 27 years to get above the previous high it set in 1929 (around 380) just before the crash (we bottomed out around 50)!!

Here are some historical charts of the Dow…

Anonymous
Mike K
8 years 6 months ago

and this was the recovery….

Anonymous
Mike K
8 years 6 months ago

Here is the Nasdaq….

Anonymous
Mike K
8 years 6 months ago

You can also read up on the “Dutch Tulip Bubble of 1636″….the “South Sea Bubble of the 1720’s”… “the Mississippi Bubble”

What all bubbles have in common is their end is ALWAYS lower than the beginning point. If 2002-2003 marks the start to the Housing Bubble…it will settle below these prices before taking YEARS to crawl back up.

HISTORY REPEATS ITSELF….

Anonymous
Condo Flipper Bleeding To Death
8 years 6 months ago

Renter Tom, for god sakes tell us more than, “It’s a new building in Sunny Isles”
I just read in FT London several interviews from noted financial gurus in Hong Kong and London that Fannie Mae and Freddie Mac will be nationalized by the end of the year. Fannie Mae and Freddie Mac will be the next crisis, in addition to subprime crisis. This will push prices down more this year………

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