Distressed Condos Report – New Condo Developments

So should I buy now or forever be priced out of the market?

Roberts, Looks like there’s plenty of time to pick and chose. I’m curious to see how the prices drop over the next two or three months as the FannieMae impact really hits the market. Buildings like TMP and MB should show up quite a bit on this list going forward.

Interesting to note that the unit being sold at 50 Biscayne is asking $285k, almost exactly the average price per unit that Related-Lubert bought their 120 unit portfolio in that building a little while back.

The bulk sales, as predicted, have created a new floor for the unit prices at these buildings. Expect that to continue in all the buildings where bulk sales occur.

This is going to take mucho tiempo.
2012-2013….

I was being sarcastic

Only 13!

The MLS is such an out of date dinosaur on RealtyTrac there are over 2,000!

The Smart Money

The Ace,

You found over 2,000 distressed condos on RealtyTrac in major condo developments in Miami completed within the past two years? Highly, highly doubtful. Most of the distressed condos are in older buildings.

QUESTION to anyone? Are we still looking at $125 a sq. ft. for beautiful Miami Condo’s?The ACE predicted it…….Renter Tom …confirmed it…….AJ….seconded it……Lara ………..motioned it….and even MUIR agree’s with it.When you have this many experts in one place…..they ALL can’t be wrong.

How does $400 per sq ft. at 50 Biscayne qualify as “distressed”?

I thought at $200 sq ft i would jump on a condo. Now i can get them in buildings i am interested in, and it does not feel like a good deal. My target is closer to $150 sq ft to pull the trigger now. I am very leery the condos will become a money trap with assessments, HOA and taxes, so unless you buy quite cheap, just not a deal. still a lot of downside to this market i am afraid. this really sucks because i want to buy, but not when the price will fall an additional $50-$100k… Read more »

Looks like the economy will be preforming worse, not better, with all the government interventions causing ever more uncertainty and buyer/investor hesitation. The debt shell game will grow and generations of U.S. citizen taxpayers will be burdened with a debt unimaginable just 10 years ago. This debt burden will limit consumer and household debt. When the U.S. per capita debt balloons from $34K to $54K+ a family of four will be burdened with over $200K in federal debt. The higher tax burden and higher consumer interest rates as a result of enormous federal debts will crowd out borrowing for the… Read more »

Looks like Canyon Ranch buyers were “Trump”d. Trump’s “lease my name” condos are one thing, but if Canyon Ranch Miami Beach has only a fleeting relationship with the legit Canyon Ranch management, then this is getting really crooked IMO.

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Developer of Canyon Ranch Living Miami Beach Sued for Deceptive and Unfair Trade Practices

How about the Dubai market? Sounds like the sweet-smell-of-success according to this article!

http://www.timesonline.co.uk/tol/travel/news/article5607619.ece

All my models of rent vs buy indicate that sell prices should be at around $150sqf and this is with no big assessments or increases in HOA, in top of this unknown you have to add the developer risk taken by purchasers of more than 7 units. I believe that the smart money will start flowing at $125sqf. Then you have an additional factor to consider in brickell, what will be the liquidation price of the ICON. This will set the benchmark for other buildings.

Danny

danny
the inevitable bulk sale at icon will be the watershed pricing moment for brickell condos. although a conversion, harbour house showed that even mighty related needed to capitulate and unload inventory. as of now, i believe about 10% of the units at icon are involved in litigation (perhaps a related troll can correct me…i know you all scan this site…one of your managers confirmed as much) and i wouldn’t doubt that in total, probably 25% of contract holders are saying they won’t close ever.

any idea of how many units have closed in the ICON. i have a friend that sold more than 10 to Foreign nationals, he is looking for 40% loans on them, no banks are willing to lend in the ICON.
The big question is how many units will be able to close..i am betting not many, the rest will go to the bank who will hold and sell them for below 300? below 250? below 200?
any idea how much is the total debt of the icon?

Banks won’t hold properties until they appreciate. Once taxpayer subsidizes bank losses they will be dumped at the price the market can bear.much lower than you’d ever imagined….

for the experts: good deal or no? 2/2 PH loft unit @ the Brickell on the River South tower 1301 sq ft. $297k ~ $228 per sq/ft

Danny… tell your friend not to spend the commission money. I know two Brokers who would have closed shop by now but have held out with the expectation of final commission on Icon and Everglades. As of last week 13 units were showing closed at Icon according to Miami Dade public records. I have learned from a good source that 20 had actually closed and that they didn’t expect any other closings. With new mortgage guidelines as of January 15th it is impossible to get mortgage. Lenders now require 70% of the property to be in contract to meet just… Read more »

Porto Bellagio in Sunny Isles ?

Off topic…but is anyone familiar with this building ? Is it nice or is it a dump ? Seems like prices are pretty low there right now…and some units look decent in photos..but no idea otherwise about the area or whether the building has issues.

Any comments appreciated.

Phil

Off topic as well, but does anyone know ballpark what I’d be looking at to install hardwood flooring in an approximately 1700 sq. foot condo. The 2.5 baths already have flooring, so I’m assuming there would be about 1500 or so sq. feet that would need to be covered. I’m not looking for any exotic woods or anything, just your average stuff.

WHAT?? Wake up all! — I defy anybody here to show me a new condo development building where $150 psft returns more than 4%. That, for those of us that like that stuff, is a PE of 25. Historically, home prices have a PE of 15-17 — Case-Schiller for Nov 2008 is at 169 for the Miami market. That’s 2003 prices. Case-Schiller at 100 means we revert back to the year 2000. — Open challenge to all: show me where I can make more than 4% if I bought cash on one of these new condo developments. (I’ll ignore HOA… Read more »

Zimbabwe killed its currency yesterday. When a dozen eggs cost Trillions of Zimbabwe dollars (no joke, it did….Trillions!) the currency devaluation was just incredible. While the U.S. will fair better, I hope, the only upside to Miami Condos now is that it is a hard asset, albeit with high carrying costs. I think the distressed condos will become the norm as prices continue to fall to get inline with rents.

Zimbabwe killed its currency yesterday. When a dozen eggs cost Trillions of Zimbabwe dollars (no joke, it did….Trillions!) the currency devaluation was just incredible. While the U.S. will fair better, I hope, the only upside to Miami Condos now is that it is a hard asset, albeit with high carrying costs. I think the distressed condos will become the norm as prices continue to fall to get inline with rents…

At least we don’t have Dubai’s problems…yet.

Sounds like they have the “sweet smell” of success!

http://www.timesonline.co.uk/tol/travel/news/article5607619.ece

It is a triple bank failure Friday!!! Including Ocala National Bank, Ocala, Florida. What is nice is that ALL deposits were covered including any non-FDIC insured deposits so no depositor has lost any money. Seems that the FDIC has been doing a much better job after the IndyMac failure to make these things as seemless and painless as possible. Thanks Sheila! Doing a great job under trying circumstance…..just please stop advocating write downs of mortgage principal….after all if you can’t afford when you bought it then you have to give it up! Many people lost their homes when their tech… Read more »

Just – Very interesting article.

RT, i agree with you, but with a twist. write down the mortgage principal, but then transfer the home and mortgage to a financially stable individual on the sidelines who will make the most of the property. if you bought in over your head, you do not deserve to keep the home. you get debt relief, but get spanked on your credit score, and return to the rental market and straighten up your life before you enter homeownership again. why are they worried about protecting those foreclosed individuals with a deal, while leaving the responsible financial people who want a… Read more »

PHIL on Porto Bellagio Sunny Isles…..is that the Phil from Toronto,Ontario?? if it is…you can do Much better Phil.

Yeah, Phil from Toronto 🙂 Sunny Isles is not an area I am interested in or would buy in now….was just more surprised at the low $$/sq ft for these units. But probably a good reason exists.

What I can’t believe is that someone who has accumulated enough cash to buy one of these Chinese takeout boxes would be dumb enough to buy one now.

the condo market in downtown would chug along on bottom price of $100/sq ft and maintenance dropping to below $500. Miami beach perhaps @150. This excludes only super luxury condos and not wannabe luxuries. Marble fls /spa/gym not going to fetch any premium. That is the reality folks. Along the plunge, de facto, many will buy and that is a good thing as slower pace of transaction at least provides crumbs to real estate folks. No can time the bottom except for a few lucky ones. Sofla unemployment will gather steam this yr (on the way to double digit) as… Read more »

As many of you know The Smart Money has been verbally abused and ridiculed for nigh on two years for our steadfast prediction that anyone paying above $125.00 per sq foot for a luxary ocean view Miami Condo is a fool and as we all know fools and their money are soon parted.

So it is a great satisfaction and vindication to The Smart Money to learn that the majority have now become believers, better late than never so welcome to The Smart Money!

The Smart Money.

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The unanswered challenge on #19 speaks for itself.
Forget $150 psft.

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A poster a while ago said that at 7% return, investors would flock, and that this 7% return, translated to $125 psft.
He was absolutely right on the first, had his math wrong on the second.

Muir, The cash flow per sq. ft. part of the math is rather simple (although it ignores the more difficult appreciation-depreciation potential part of the investment analysis): $150 per sq. ft. purchase at a 4% rate of return = $6 per sq. ft. per annum or 50 cents per month. The typical numbers I see in the recent rentals sections are $1.50 per sq. ft., although it drops as low as $1.20 sometimes. If we estimate HOA at 50 cents per sq. ft. and taxes at 30 cents per sq. ft. (based on current millage of purchase value) then the… Read more »

Guys I think we are forgeting a couple of very important elements in this math: vacancy Rental Commission Rental management fee provision for capital improvements. To this we have to add the uncertainty over special assessments, potential permanent increases in HOA, rental declines, tax assessment values or millage rate changes. One we factor all in we can certainly agree that to obtain a “good” cap rate prices will have to be at least south of 125 sqf. we are all speaking the same language here. The conclusion is prices will drop and drop and drop until demand is higher than… Read more »

Danny, I agree. Not only does one have to look at $ sq ft, but also at the absolute value of a unit. For instance, I do believe that units above $250k are going to be harder and harder to sell at large volume in the future, because there simply will be less households which can afford such a unit on top of HOA and taxes. A unit could sell at $125 sf, but if it is a large unit this could still add up to a large overall cost to buy the unit-plus even larger HOA based on sf.… Read more »

“The question that I pose to this group is not what the bottom will be, let’s assume that it will be 125 sqf, but when the bottom will be and most important what prices will be in 5 years from now?” The bottom will be hard to call until our government can quit monkeying around with the laws and let the market begin to settle on its own. Until we eliminate false support to foreclosures, the market forces cannot act efficiently. My hope is by this summer the market will finally be allowed to fully move on its own and… Read more »

gables – CNN.money.com had an interesting figure that the bailout so far costs $9,700 per tax filer (only about 160 million Americans file income tax returns, out of 300 million+). Of course only about half actual pay any tax so really the debt burden per tax payer is around $19,400 so far. Predicted to double or triple of the next year or two. Someone must stop this insanity of fed govt spending since it will crowd out private investment and purchases esp. among large ticket items (condos, autos) that require financing. I don’t see a bottom in housing this summer….not… Read more »

I have noticed some interesting behavior by some friends and family lately. They are leaving industry and opening their own consulting shops, and working fewer hours but at much higher pay per hour. The really interesting part is they are spending much more time “day trading” than in the past-and making money as well. Shorts are easier to make money than longs the past few months. But the kicker is they get a 12% tax cut since payroll taxes dont apply to their investment income. If this becomes a trend, it will tank both social security, medicare and income taxes… Read more »

Have a question!!! I am looking to buy a condo in Miami for under 100K , 1 bedroom for investment purposes. Could you suggest the neighborhood, the building that could rent in reasonable amount of time. I was looking at Brickell and buildings like the Vue. Do you think, i am on the right track. Thanks , Alona