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Top 5 Distressed Condo Sales Closed in January 2010

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Below, you will find what I believe to be the five best condo deals of the 66 distressed sales that closed in January 2010 in the MLS located in Brickell, Brickell Key, Downtown Miami and the Arts District.

  1. Ten Museum Park #1905 – 1 bedroom/1.5 bath (791 square feet) – This unit sold for $137,000, or $173 per square foot, on January 11, 2010.  Short Sale
  2. Neo Vertika #PH226 – 1 bedroom/2 bath (1,155 square feet) – This unit sold for $158,000, or $137 per square foot, on January 11, 2010.  Foreclosure
  3. Parc Lofts #206 – 2 bedroom/1 bath (1,267 square feet) – This unit sold for $122,000, or $96 per square foot, on January 8, 2010.  Foreclosure
  4. The Club at Brickell Bay #1506 – 1 bedroom/1 bath (825 square feet) – This unit sold for $108,000, or $131 per square foot, on January 15, 2010. Foreclosure
  5. Solaris at Brickell #806 – 1 bedroom/1 bath (754 square feet) – This unit sold for $120,000 or $159 per square foot, on January 29, 2010.  Foreclosure

221 thoughts on “Top 5 Distressed Condo Sales Closed in January 2010

  1. I wish I was watching with my eyes open. $122,000 for a loft in Parc Loft!! I could have bought for that kind of money. Even if for nothing else, I could have used it as a crash pad during my trips to Miami instead of staying in hotels. I love that building. I like the residents there and everything about that building. There are some chickens on this blog (you know who), who would not venture west of Biscayne Blvd. But I saw during my many bicycle trips out there, fashionable young ladies walking their dogs around that building and people actually walking to the Ziff ballet in their evening finery. The area is totally safe and yes there are bums to be seen but I don’t care and neither are those people living in that building. It is the starting point of The Metro Mover Omni loop. The bayview Market, once it comes up is their neighbor.
    It is definitely a missed opportunity.
    gables, stop thinking about Brickell and do something. You could have been there instead. jcrimes, what happened to your unban pioneerism? why are you looking at $600,000 lofts in Epic when you could have picked this up? If nothing else, in 10 years from now, your investmesnt will triple if not quadruple when you buy at such a low price in a extremely well made building located in a iffy area but holding enormous promise and potential.

  2. While Parc Lofts is a nice and unique building, it takes a certain demographic to actually live there: single heterosexual male, at least 6’2″, 225 lbs, with concealed weapon permit and/or can run away quickly from gangstas.

  3. Drew, that was funny! but not all that bad. And BTW, I have seen smaller framed gay guys walking their dogs around that building too!

  4. In all seriousness, it would be a cool bachelor pad. …great for entertaining, and probably very convenient for weekend drug purchases.

    But for anyone w/ a wife and kid, no way.

  5. Angel -DML -Carlos – Caelos

    Thank you guys for your advice about Everglades On The Bay. I finally did a tour of the place and was hoping to get your guys response. first of all to DML who asked why I like the location as opposed to Brickell. First I work near the Miami-Dade Courthouse and there is a Metro-Mover train right outside the entrance to Everglades and would take me 5 minutes to get to work , plus I could take the train over to Mary Brickell Village if I wanted to eat or shop. Also I am a 3 block walk to the Miami Heat Arena for whatever and Bayside is across the street and when if I walk downstairs everything is right there – bank -pharmacy-post office-haircuts-dry cleaners etc. But more importantly – I have a dog and there is a huge Bayfront park just across the street. Brickell buildings are not on the water and there isnt any parks worthwhile that I could walk to.
    Caaelos says the building has too many issues – could you elaborate on that? Im aware they are in Chapter 11 bankruptcy but whats the worst that could happen if i end up with a good priced unit?
    Angel says he was not impressed with the quality and detail. I havent been in 900 Biscayne but the lobby at Everglades was very impressive to me and the apartment interiors were very nive- -not great but very nice marble baths – granite in the kitchen with stainless steel and very nice Italian cabinets Snaidero i believe. Not Miele or btter but i could always swap those out later for a few thousand. Lots of wood in the hallways and elevators. But the thing that impressed me most was the huge party room and the huge gym facilities w/ steam/sauna/ etc. This is in a seperate building from the tower. Then they have 2 large pools on the deck and another full length lap pool that all hovers over Biscayne Bl. facing EAst onto the park and bay. Another fourth pool in the back. so – why would i pay more for Marquis or 900 Biscayne? The views of the apartments facing direct east overlooks Bayfront Park and the Bay. Great Views of the park and the cruise ships etc. I would rank the views as a 9 or 10 on a scale of 1-10. Your thoughts. Thanks guys.

  6. My bad, erase that. Parc Lofts is right NEXT to the cemetery. Another thing, gotta a friend who was robbed at gun point last year, while having lunch in the Arts District. I’ve been living in Miami for 20 years, far from a tourist.

  7. I think this post should have been called: the most moronic purchases in jan 2010: seriously, who wants to buy in thse buildings, regardless of waht the asking price is???

  8. I think some of these units would sell better if instead of reducing the sales prices they reduced HOA fee. This pricing seems okay for investors but not for owners. Who wants to have a mortgage of $550 and then spend $650 on HOA fees? Now your options are buy a $120k condo or a $240k house for the same monthly payment. Most people want to own because they feel they buying equity. Heck, even before you start looking at interest and principal, 2/3 of your payment is gone to HOA and taxes. Not to mention $650 (the biggest payment) isn’t even tax deductible.

    So for example this sales prices for Parc Lofts puts renting and owning in the same realm. So if an investor purchased he could rent to someone and possibly get into positive cash flow. And there are plenty of people who can only rent. But what about someone who is looking to buy to actually live in the unit. $650 can buy you an additional $120k worth of house.

    Drop the HOA to at least $500 and sell it at $160k. That seems more reasonable to pay for a condo lifestyle. I mean seriously, what the hell kind of amenities do they have at Parc Lofts that cost $650 for a 1 bedroom?

  9. Lucas:

    Thanks for posting this.

    I noticed that all of the “good deals” for the month were were under $160k. Why is that? Is it reflective of the a lot of sales in the sub 200k market and substantially less when it comes to properties above 200k? You used to analyze the market by tier (x sales for properties under 200k, y sales for properties between 200k and 500k, etc). I know it is a lot of work to do that analysis, but roughly what have you seen as the number of sales and/or inventory at the low, mid and high price points?

  10. Gixxer is assuming the 240k single family doesnt have monthly maintenance fees close to the condo – Like water/sewer, garbage pickup, lawn maitenance, pool cleaning, internet and cable, flood insurance and windstorm etc. Add them up and you are not that far apart.

  11. Gixxer- HOA and sales prices are independent of one another. Any HOA reduction will come from the association, not the seller. HOA budget amendments need to be voted on by the owners. Maybe your scenario would work in a developer-controlled property, but Parc Lofts has been owned by individual unit owners for some time.

  12. Reducing the HOA fee? lol
    Thats like saying, “my condo sure would sell better if I could eliminate the power bill.” Maybe if I could eliminate the property taxes too. Lets not pay them.

  13. Ah the memories:

    Bank Approved Short-Sale at Parc Lofts – $220,000

    Same square footage, similar unit on the cemetery side of the building, just a $100k lower price. Lucas did that short sale ever close? If so, the owner must be loving the new comps for the building.

    Parc Lofts is an interesting project but you’d have to be out of your mind to live in that hood, let alone to buy there.

    AJ I love your rosy portrayal of the neighborhood, it really is beyond delusional. That area is a complete wasteland. Unless you work at the cement plant around the corner (yes, in addition to the crack infested cemetery, there is a working cement plant in the hood), I can’t imagine why someone would choose to live there.

  14. I saw this Parc Loft deal on Lucas’s site told my friend about it in December and he was very excited. But before he could act on it, it slipped through his fingers.
    That is why you got to pounce on deals like this when you see them. The next nearest similar loft is now listed at $220K for a short sale (unapproved) and 339K for another unit.
    Miami Skeptic, you can live under the Julia Tuttle for free. See, no more skepticism! Life is beautiful and rosy once again.

  15. Thank u Kramer!
    Neo vertica a good deal? Give me a break! Maybe if u r moving in from overtown that would be considered an upgrade!

  16. These prices probably make buying cheaper than renting with the tax deduction. None of the 5 would work for investor seeking positive cash flow. Like Parc Lofts building a lot but it is ghetto complete with roosters the day I was there. Sunday paper had full page real estate ads like the old days.

  17. Miami Skeptic “crack infested cemetery”
    Kramer “The dead smoke crack? Party on!”,
    LMFAO, I was rolling on my stomach.

    As others have pointed out, these are just some low priced deals. Not the best deals. TMP, Club at Brickell, Neo Vertika are not really all that. Some like Club are failed buildings. If you can snag a low priced deal in a desirable building, then it is news.
    But for a chump change like 122K, the Parc Loft deal is the only good deal IMO, notwithstanding the location.

  18. AJ – You already bought your condos YEARS ago, so I have to ask, why are you here? Seriously, you’re not looking to buy and all you do is defend condo bubble prices as if they were to magically come back. The bubble burst, game over.

  19. “Neo-Vertica – Ha Ha. Has anyone here ever been in that Hell Hole. It reminds me of a college dorm building.”

    I went there last week, day time, and I could hear the electronic music blasting from the lobby, as I walked outside. What’s that place? A nightclub?

  20. “Miami Skeptic, you can live under the Julia Tuttle for free. See, no more skepticism! Life is beautiful and rosy once again.”

    Or you can camp on Pace Park with the other hobos, then play basketball with the thugs at night.

  21. “I had a root canal done last week…………….”

    Lemme guess AJ, you traveled to Monaco to have the root canal done in a castle, with Princess Caroline’s personal dentist. Then you jumped on your private jet and went for a shopping spree on Faubourg St Honoré, and came to rest from the entire ordeal in front of crappy Pace park. Right? You big shot you. You Donald Trump you.

  22. Renter Tom/Joe/others looking at stuff in SoFi around $1M –

    What do you make of #2602 at Portofino Tower? A short sale, admittedly, but at that building, that floor, that size and those finishes, don’t you think the market, as exemplified by that offering if real, is getting intriguing?

    Like you, I’m in no rush but this offering – again, if real – gets my blood going. Things are trending down, for sure. Could this mean a unit like this could go for $850K next year? I know trying to time the bottom is virtually impossible but, again, if this #2602 “asking $1,090,000” is real, we’re getting there, no?

  23. crap can be cheap and crap can be expensive but good can never be cheap, good can be slightly marked down at best so if its 120k for a 2 bed…. it can only be crap. End off.

  24. good can be cheap when it is foreclosed on. nobody sells good for cheap by choice. but today’s financial disasters make the opportunity available. granted the best units will definitely not sell at the lowest prices. but they will sell cheap.

  25. Club at brickell is a flop and a dump! Residents, rentals, temporary and seasonal rentals.. It is a anything goes type of building

  26. The Reality — Boston, Atlanta, and San Diego are reporting price declines which is the beginning of a double dip in their real estate market prices. Meanwhile the govt is buying up mortgages that are 4-months past due….taxpayers will be paying this off for many years to come. Persistent unemployment and return to traditional lending standards will be two price decline drivers going forward… It is fair to say there is no “V” shaped recovery in housing prices, even in 1800 Club!

  27. RT, You are the devils incarnate. Even though the news is scary and worrisome, you seem to take a deviant pleasure out of Americas miseries. I hate the word DD and if it happens due to your strong wishes and black tongue, you should be drawn, quartered, tarred and feathered.
    I am not worried about about my home values, I am generally very sorry for the way our country is sliding down the tube and it has absolutely nothing to do with either Mr. O or Mr. W

  28. More to come…”Roughly four in 10 single-family homeowners with a mortgage in South Florida owe more than the property is worth, said Wednesday.”

    – Nationally, about 1/3 rent, 1/3 own without a mortgage, and 1/3 own with a mortgage. Somehow, I suspect that in our market more that own have a mortgage than nationally. Also note, the Zillow quote is about SINGLE FAMILY HOMES….I would also suspect that condos are much worse!!! Strategic defaults and short sales will be our market for 2010…or at least that is what the devil told me! LOL

  29. “Four in 10 South Florida mortgage holders `underwater’

    Roughly four in 10 single-family homeowners with a mortgage in South Florida owe more than the property is worth, said Wednesday.

    About 41 percent of the 836,723 single-family home mortgages in Broward, Miami-Dade and Palm Beach counties are “underwater,” according to a fourth-quarter report from Zillow. The Seattle real estate firm compiles data from public property records.

    The percentage of borrowers with so-called negative equity has decreased slightly since it hit 47 percent in the second quarter of last year. It dropped to 46.2 percent in the third quarter. Still, the problem here remains far greater than it is nationwide, where 21.4 percent of single-family mortgage holders are underwater.

    Because prices have fallen so far, it will take a decade or longer for many of these borrowers to sell their homes for what they paid. But some won’t wait around and instead will walk away from the mortgages, adding to the glut of foreclosures.”

  30. RT

    Perspective. Perspective. If 2/3 rent or have no mortgage and only 20% nationally of the rest 1/3 are under water – it is not the crisis you are suggesting. Get a grip.

  31. Kramer – Um, yes it is. Prices are made at the magin. Most of the renters are in apartments so it is really 20% of ALL homes. That is an historic high…and may get worse. Remember, this is ON TOP OF the ones that have already lost their homes or given up! Come on Kramer, you’re smart enough to realize the ramifications. We may not agree on everything or even much, but this is a major stat that is twice the national average.

  32. remember that many renters are living in homes where the owner (investor) will also have a mortgage. thus there exists some dubious counting. how many “renter” households also have a mortgage owed on the property? when rents drop, those units are in trouble. the possiblity of a rental home being underwater is usually discarded in the 1/3 division arguement. and that is not correct.

  33. To clarify the statistic, Zillow reported that 40% of mortgages on homes were underwater. That is, of all home mortgages out there for whatever type of ownership, 40% of the mortgage balances were more than the Zillow estimate.

  34. So if there is another 10% maybe 20% downside to prices are you going to wait for the exact day of the bottom if you find a place that you really like? Besides, there is a number of ways to hedge that 20% downside risk.

  35. Kramer, you could be looking at $20k to $60k savings by waiting. when rolled into a 30 year mortgate at 5.5%, that will be a lot of dough to give away. could get a new condo and a new car by waiting! and dont have to catch the bottom because the ride up will not be fast and furious. and saving over $10k a year by renting! not saying buying is bad, just dont see the hurry unless my dream unit becomes available at an affordable price. that is the only reason to buy today.

  36. (MIAMI, FL) — According to a new report from Condo Vultures, lenders initiated 7 percent fewer foreclosure actions in South Florida in January 2010 on a year-over-year basis, with total filings slipping for the month below 5,800 in the tricounty region.
    By comparison, in January 2009 there were nearly 6,200 foreclosure actions – also known as Lis Pendens or Notices of Default – filed in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties. In January 2008, there were nearly 4,100 actions filed, according to a report prepared using the Condo Vultures foreclosure database.
    Based on January’s foreclosure actions, South Florida is starting the year on pace for about 69,000 filings. In January 2009, South Florida was on pace for 74,000 foreclosure filings before ultimately experiencing just over 97,000 filings for the year. By comparison, in 2008 lenders filed 76,000 foreclosure actions in South Florida, more than double the 33,000 foreclosure actions filed in 2007, according to the report.
    On a county-by-county basis, two of the three counties experienced decreases in foreclosure actions while the third experienced a more than 75 percent increase in the number of actions initiated.
    Miami-Dade County, where Aventura, Coral Gables, and Miami Beach are located, experienced a 33 percent drop in foreclosure filings in January 2010, slipping to less than 1,400 compared to about 2,050 in January 2009. A year earlier in January 2008, there were 897 foreclosure actions filed in Miami-Dade County, according to Condo Vultures report.
    Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, experienced a 23 percent decrease in foreclosure actions, slipping to less than 2,250 filings in January 2010 compared to more than 2,900 actions in January 2009. A year earlier in January 2008, there were slightly more than 1,700 foreclosure actions filed in Broward, according to the report.

  37. GoodNews – I hope you are being sarcastic…..with trial mods and other govt market interventions failing, short sales are going to go up significantly (possibly foreclosures too).

  38. I guess some people here believe in fairy talte and Santa Claus!
    Regardless of how hopeful or desperate for a recovery one may be, the bare reality is that talking about recovery now is a joke!
    Unfortunately, we have barely scratched the surface on this and the real estate market problem is far from over.
    Lots of inventory, still overpriced by a lot, despite the advertised price reductions. Lots of people are underwater, including lenders and developers who still hold a lot of units unaccounted for.
    It is not a matter of being pessimistic: you just have to analyse the situation and try to take advntage or cope with it, if you will.

  39. GoodNews – You sound like one of those people who say you can’t predict the real estate market…well, for the most part, you can. Unlike stocks, RE is illiquid and each property is unique (except perhaps for condo units!). The drivers for price declines are pretty clear. Apparently you are frustrated but you would be better off understanding the macro econ factors and planning accordingly instead of pretending something is unknowable.

  40. I think that stress will be on short sales rather than foreclosures due to the fact that since investors are underwater and carry significant negatives every month combined with dropped prices and no visible future for their investments to recover. They prefer short sales because it does not interfere with their credit scores as much as foreclosure. It is better for the banks as well. Every foreclosure cost them at least $50,000.

    Also in Miami there are a lot of investors who buy. As long as banks will shorten their time to process short sales it is in everybody’s benefit.

    For investors it is a good opportunity to buy at good prices in good buildings. The goals of end buyer and investor though are different it means that criteria of buying is different.

  41. Lara – I agree with your comments in #61. There is one thing I would add, why would a bank agree to a short sale for an investor if the investor has assets? My understanding is that banks aren’t letting borrowers off the hook that easily. Now if the investor, in a rare occurrence, was able to title that single condo into a a separate business entity such as an LLC and NOT have to sign a personal guarantee on the mortgage then perhaps the investor can walkaway. These investors bought on margin and so it is now time to pay the piper. Banks are still in the mode, and rightfully so, of “prove it” regarding not being able to pay. I have zero sympathy for investors…as I have posted, I lost some money in the tech stock collapse (not enough to affect my lifestyle though) when I was “green” and still a youngin’ investor, I didn’t like it but that is the risk you take…live and learn…now more prudent. Taxpayers shouldn’t absorb the losses, don’t let investors off the hook. Just sayin…..

  42. GoodNews – Hey no problem, always appreciate the insults! :-) Apparently you must have made a bad RE purchase, sorry to hear that.

  43. Bottom line people is that this market will take many years to recover.
    That does not mean there will not be great deals along the way.
    For investors, only those with cash who buy at rock bottom and can find cash flow positive deals will benefit.
    However, for those looking to occupy a unit for the next five years or longer, this represents an opportunity to buy.
    If you are an owner/occupier and can buy a unit where the monthly expenses are close to rental prices then its a good deal.
    It will take at least the next three to five years for all the short sales and foreclosure deals to be absorbed.
    So, unless you are cash rich and can buy with no debt, this is a market only for those looking to occupy the living space for the foreseeable future.

  44. Recover to what? Prices downtown/brickell are at what they should be. 2005-2007 was a complete falsehood of inflated values, unsupported by local economics and true demand. Those buildings won’t bring that inflated value for decades.

  45. Southbeachsand

    prices will fall more! Trust me
    I live on the beach as well, but u have to be realistic and see that even though the units are holding their value better, no one is really immune to this.. Everyone is affected one way or another!

  46. My point is that, people should stop thinking they got a great deal because they “paid $300,000 for a $500,000 condo”. No, that condo was never worth $500,000, and will never be worth that much. You bought a $300,000 condo for $300,000. Prices are not going to be inflated up to that value again.

  47. Right. Its like Miami Herald with a headine that ICON prices drop 51%, trying to convey that its a good deal. Well they should also state that the prices were 60%overpriced to begin with.

  48. Micheal,
    I agree with you 100%, that is what I’ve been saying here for a year now.
    Q1 Last year was probably the best time to go out to make a deal on a distressed property because banks were fighting for survival and desprate to raise cash. There are still deals to be made now but banks are not as desperate and are in better financial health today. While there seems to be many condo deals today at lower prices my feeling is that these deals are usually in less desireable units. I could be wrong but it seems that while prices are generally lower today the units that are available are generally not the premium, most desired units. Am I wrong in my observations?

  49. RT is no different than the realtors he dislike. They get on here to pump up the market so they can benefit from increased sales. RT gets on here to talk down the economy and the market so he can get a cheaper $M1 condo. Difference is the Realtor is probably trying to feed his family and pay bills while Millionare RT is trying to …. well who knows why he takes so much enjoyment from others misfortune.

  50. Makes Me Think – Thanks for mischaracterizing me yet again. Cheers. I try to be blunt, not negative, and in hindsight have been too bullish. I will agree with you that Michael is correct in his overview. I do disagree that good unit aren’t available at better prices than a year ago. There is no rush, but if you find something you like and the price is “sane” then go for it as long as the condo HOA is stable (and that is the wild card).

  51. Blunt?
    I’d likely believe that but I don’t see you posting good news and gloating whenever there is a positive article about RE or the economy in general. What you call blunt others like myself my see as cheer-leading. Maybe you should try to be blunt with a little empathy.

    I’ll take your word for it about the price of premium units, you seems to be more informed about that. I checked the archives of lucas condo deals pages from a year ago and xref them with the asking prices of today an noticed some of those deals beat what is listed today also appears very few of the “deals” are being criticized as not good deals.

  52. MMT, the units being offered today are not the premium units-and few of those will ever be offered at big discount. those days are done. but they only constitute perhaps 10% of the total number. for the bottom 10%, nobody wants them which is why you see such discounts on 4th floor units. its the game to be played over the next 2 years with the middle (average) 80% of units which will be intriguing.

  53. (ORLANDO, FL) — Sales of existing single-family homes in Florida rose 44 percent in fourth quarter 2009 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors. A total of 43,926 existing homes sold statewide in 4Q 2009; during the same period the year before, a total of 30,610 existing homes sold. It marks the sixth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

    Statewide sales of existing condominiums in the fourth quarter rose 93 percent compared to the same time the previous year. This marks the fifth consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

    On the positive side, private investors – both foreign and domestic – are starting to “kick the tires” in many markets, said Timothy Becker, the center’s director. In addition, investor expectation for returns is starting to fall to more realistic levels, helping to close the spread between bidding and asking prices, he said.

    “These developments bode well for the transaction market when quality properties start coming to the marketplace,” Becker added.

    Eighteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the fourth quarter compared to the same three-month-period a year earlier, while all of the MSAs showed gains in condo sales.

    In the year-to-year quarterly comparison for condo sales, 16,255 units sold statewide for the quarter compared to 8,410 in 4Q 2008 for a 93 percent increase.

  54. Real estate inventories are falling, sales are surging, mortgage rates are at record lows – all ingredients are in place for a significant rebound in home prices in hardest-hit cities with almost zero new construction like Las Vegas and Miami.
    With recent buyers losing their homes and able only to rent, huge pressure on rental market is surely developing. With rental prices about to spike, home prices have nowhere to go but up.
    Developer’s and bank inventory in Miami is declining by 800 or so units a month, and should be largely gone within 8-9 monts.
    Sceptics are bound to be embarassed by the sudden strength of Miami market.

  55. Good news
    your optimism or attempt to convince people the RE market is renouncing is a little silly!
    Don’t you know this stories in papers are written to convey a certain message to people who can’t use proper reasoning?
    Because either you are not really seeing the current market or you are in some kind of Alice in wonderland mode!
    Optimism is welcome, but let’s be realistic!

  56. Wong, what are you gonna do when your landlord raises your rent? Did you write down what you’ll say? Will you tell him/her that he/she can’t do that because you can’t afford it? LOL… please, share your strategy with me.

  57. It seems strange Good news that you claim I am an idiot and I drop around my blah-blah-blah, when you are the one who believes in these prefabricated news and starts having goosebumps every time the news says..foreclosures have dropped! sales have surged! Miami market is re-bouncing! Get a grip with reality , man and stop being so offensive to people!
    You may believe whatever you decide to, but try not to act silly convincing people of something everyone who really knows the market knows it is not true!
    Unless you think that re-bouncing is buying a place in neo vertika for 130k.

  58. South Florida home prices continue falling
    Palm Beach Post

    Nearly half of South Florida homes sold in December did so at a loss, a 4 percent increase from the previous year and a “disturbing” sign for anyone with a home on the market. The data, released Wednesday by, evaluated sales by region, county and ZIP code.

    Zillow’s study also measured negative equity in home loans by region. At the end of December, about 41 percent of South Florida borrowers owed more on their mortgages than what their home was worth. That’s a small improvement over the 46 percent seen earlier in the fall.

    Statewide, 47 percent of homes sold at a loss in December, nearly equal to the 48 percent in South Florida, which includes Broward, Miami-Dade, and Palm Beach counties.

    “This shows how deeply home values have fallen in South Florida since the peak of the market,” said Amy Bohutinsky, vice president of communications for Zillow. “It is certainly a disturbing number as far as what is happening to home sellers.”

    Ken Johnson, a Florida International University professor and real estate economist, said he’s not surprised by the December statistics. They reflect how inflated prices had become during the boom, he said.

    Also, high foreclosure rates naturally lead to lower sale prices as banks try to unload inventory. More than 500,000 Florida homes received some type of foreclosure notice last year.

    “This is the market clearing,” Johnson said about the Zillow study. “It’s bad medicine and we either swallow it a little at a time or a lot at a time. This is a lot.”

  59. Foreclosures drop in January – but don’t get excited
    By Les Christie, staff writerFebruary 11, 2010: 10:44 AM ET

    NEW YORK ( — First, the good news: Foreclosure filings dropped nearly 10% between December and January.

    That’s a total of 315,716 notices compared to 349,519 in December, according to RealtyTrac, which issues a monthly report on foreclosure activity.

    Now, the bad news: Filings rose 15% compared to a year ago, and the number of people who actually had their homes repossessed jumped 31% to 87,648.

    That year-over-year increase in bank repossessions is what Rick Sharga, a spokesman for RealtyTrac, finds most troubling. “A lot of properties that had been stalled in foreclosure are now going all the way through to auction,” he said.

    The repossession numbers for January indicate to Sharga that the nation will probably set a new record for homes lost this year. All that needs to happen is for repossession numbers to stay flat the rest of the year.

    And the drop in filings might — or might not — be actual good news. The numbers followed a familiar theme: December foreclosure statistics tend to spike as households cope with increased spending preceding the holidays and end of year financial pressures.
    Talkback: Did you buy a foreclosure?

    “January foreclosure numbers are exhibiting a pattern very similar to a year ago,” said James Saccacio, RealtyTrac’s CEO. “If history repeats itself, we will see a surge in the numbers over the next few months as lenders foreclose on delinquent loans where neither the existing loan-modification programs or the new short sale and deed-in-lieu of foreclosure alternatives works.”

    Most industry observers also expect home prices to decline further this year before they stabilize. That will push more homeowners underwater — meaning they owe more on their mortgages than their homes are worth — making them less likely or able to pay off their mortgage loans.

    Sharga does not think the problem is going away anytime soon. “We’ve settled into a plateau,” he said, “with 11 straight months of 300,000-plus filings. I don’t see that changing the rest of the year.”
    Worst-hit places

    Foreclosure filings dropped 18% year-over-year in Nevada, but it still remained the nation’s leading foreclosure state with one household in every 95 receiving at least one filing during the month.
    Foreclosure plauge: Where it’s spreading

    Arizona was the second-worst performer, with a rate of one household for every 129 receiving a filing. Florida and California followed with one in every 187 households.

    California, by far the nation’s most populated state, had the highest volume of filings, with 71,817. Florida was second, with 47,069.

    The least affected state was South Dakota, which had a total of only 14 foreclosure filings during the month, one household in nearly 26,000. Vermont also maintained a nearly pristine record with just one household in every 20,841 getting hit.
    America’s most overvalued cities

    The hardest hit metropolitan area in January was Las Vegas, with a rate of one for every 82 households. Phoenix was next, with one in every 102.

    The next six hardest-hit metro areas all are located in California, led by number three Modesto and Stockton, both with one in every 107. Two Florida places made the top 10 list: Cape Coral-Ft. Myers (one in 121) and Orlando (one in 143).

    Are you underwater on your mortgage? Money Magazine can help. Send your name, age, hometown and photo to and you could be profiled in an upcoming story. To top of page

  60. Thought I should post some recent articles to keep the thread going.
    Hope you enjoy.
    Whether you agree or not, it is always good to keep yourself informed.
    Have a nice day.

  61. I have to agree with my brethren here – – GoodNews is drinking the KoolAid (as well as the CoolAid (wink)). PUT THE CUP DOWN AND BACK AWAY! Because the CoolAid ain’t working for you.

    However, rather than pound GoodNews’ view, opinion and utter lack of proof – – and I reject news paper articles as substantive proof – – I would posit a question for debate.

    Let’s assume that sales of new homes “rose 44 percent” and that condo sales posted a “93 percent increase” are true facts.

    So what?

    In a market where foreclosures are sky rocketing and developers are, for example, surrendering their inventory to their lenders to avoid foreclosure and/or to acquire the management contract for the building – – do these numbers, positive though they appear, really mean anything?

    For example, does a 44% increase in new home sales really mean anything – – is it evidence of a recovery/rebound in the market – – if it is also true or possible that a majority or a high percentage of these 44% were short sales or bargain hunters picking up homes following a foreclosure?

    It seems to me that the Florida market will not begin to recover until “real purchasers” start acquiring properties in the free market. By “real” I mean people who purchase because they want to make a bona fide home/condo owner use of the property.

    Based on what I see that is not necessarily occurring yet. What with the condo vultures (no offense guys) and the bulk sales – – these sales are not evidence of recovery or rebound. These are, at best, evidence of more market deterioration.



    PS: And GoodNews, here’s what you tell your landlord when they raise your rent:

    “It has been a pleasure doing business with you. Because the supply of available comparable units such as yours in the Miami area has out-paced demand, I am going to pursue other options. I am confident that I can find a person in (INSERT NAME) who would be happy to rent their unit to me.”

    Hearing this, my guess is that the reasonable landlord will quickly reconsider raising the rent.

  62. GoodNews(#77)
    You sound exactly like a board from a Realtor office. Are you in the business?

    There must be an increase in RE activity year over year. Nothing sold last year so by default, so if any return to normalcy would be expected then year over year numbers should improve drastically from the small number of sales which occurred. This does not mean we are out of the woods by any means. We still have buyers out there (like myself) who will engage the market at the right price. But we are a long way from selling off the excess inventory and returning to a bidder up market.

    Once the developers sell off their inventory (at a discount), we move into the next phase whereby all the short sales and foreclosures must be sold. This is a big and growing problem. Look at all the short sales listed at overpriced numbers. These are disasters waiting to happen for owner and bank. These REO and short units far outnumber the traditional owners looking to sell and make the market.

    “With rental prices about to spike, home prices have nowhere to go but up.” Pressure on rental prices? Are you delusional? I’ve already pushed my rate down once, and could very easily mark it down another 10%. There is absolutely no pressure on renters whatsovever in Miami. Markets fluctuate drastically but ultimately average based on supply and demand. With excess supply for years to come and limited demand in todays economy, there is no concern on rentals and no rush to buy.

  63. “With excess supply for years to come and limited demand in [today’s] economy, there is no concern on rentals and no rush to buy.” – – gables



  64. I just heard that all developer units at the Wind have been sold! Anyone know something about this news? Where is Peter Zalewski when you really need him?


  65. DML,
    Peter Zalewski is a turncoat. Don’t trust anything he says. 1.5 years ago he completely changed his tune as he is now representing some bulk buyers.

  66. DML:

    Maybe. Don’t believe the hype.

    Condo Bulk Buyer Pays $173 Per Foot In Downtown Miami
    Wednesday, 13 January 2010 12:12

    A Broward County group has paid $173 per square for a block of 10 units in the new Wind by Neo condominium highrise in Downtown Miami, a price that represents a 53 percent discount off of the average closed sales amount for the building prior to the transaction, according to a new report from

    The buyer, Logia One LLC with Nicolas N. Mateo and Pablo Paladino of Hallandale Beach, purchased 6,980 square feet of condo space for $1.2 million in a transaction dated Dec. 16 but not recorded until Dec. 29, 2009. Each of the 10 units were purchased in separate transactions using the same corporate name, according to the report produced using Miami-Dade County records.

    “The buyers paid an amount that is slightly less – about three percent – than the average price per square foot for a bulk deal in Greater Downtown Miami,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. “The deal’s appeal is the fact that the units are efficient at only 698 square feet each and the price point is only about $121,000 per door. The buyers have plenty of options going forward regardless of whether they decide to lease out the units or resell them at a higher price.”

    Buyers – primarily with no financing – closed on an average of 197 new developer-owned units per month in Greater Downtown Miami in 2009. More than 1,650 units were transacted in the second half of the year, reducing the overall number of developer units down to less than 7,300 condos, or 34 percent, out of pool of about 22,250, according to a new Condo Vultures® White Paper™.

    The overall new inventory supply was reduced by 495 units in the last week of December 2009 when the Related Group changed course and sold off the land for the proposed 32-story Loft III project to Miami Dade College, which plans to use the site for future expansion, according to a recent report.

    Wind by Neo is a 41-story tower with 489 units standing on the north bank of the Miami River in a gated community that can accommodate six high rises. Only three towers – Wind, Ivy, and Mint – have been built within the community located between South Miami Avenue and Southwest 3rd Street, according to the Condo Vultures® Official Condo Buyers Guide To Miami™.

    The project’s construction lender, Wachovia Bank which was ultimately acquired by Wells Fargo Bank, filed to foreclose on the Wind project in November 2008. The lender succeeded in putting a court-approved monitor in place in August 2009 to oversee the management of the condominium and the eventual sales of the units, according to court records.

    The official seller of the 10-unit bulk deal was Randy K. Weisburd as the court-appointed monitor on behalf of the property owner, Neo Epoch 2 LLC with ultimate principals Frank Guerra, Lissette Calderon, and Maria Calderon.

    Miami-Dade Circuit Court Judge Israel Reyes signed an order approving the Logia One bulk deal on Dec. 2, according to court documents.

    Between March 2008 and July 2009, the developer of Wind sold 240 units with nearly 220,200 square feet of livable space for $81.5 million, or $368 per square foot. Since December 2009, the bank’s monitor has sold 40 units with 35,000 square feet for $6.9 million, or $197 per square foot, according to the Condo Vultures® Official Condo Buyers Guide To Miami™.

    With the recent discounting, the blended average sales price in the building is now $346 per square foot, according to the report.

    This is the 14th bulk deal (two of the transactions were note sales with no deeds conveyed) to close in Greater Downtown Miami since July 2008. Bulk buyers have paid $179 per square foot for nearly 900 units and about 1.1 million square feet of livable space, according to the Condo Vultures® Bulk Deals Database™.

    Prior to the Wind deal, the last bulk buyer to complete a transaction paid $248 per square foot for 80 units in the Met One condominium tower on Biscayne Boulevard in Downtown Miami, according to a recent report.

    Overall, bulk buyers have closed 35 transactions (five deals were note sales with no deeds conveyed) at an average price of $249 per square foot for more than 3,000 units and nearly 3.5 million square feet of livable space, according to the Condo Vultures® Bulk Deals Database™.


  67. Question to the legal luminaries on this blog.

    1. Can I finance my own co-op in NYC that I am planning to sell?
    If the buyer is having trouble getting financing from a bank and he/she is willing to put 30-40% down, can I (as a seller) finance my own flat? I hold it free and clear of any mortgage.

    2. Does it mean that I get all the rights and privileges of a lender and foreclose on the property and repossess the same if the buyer fails to pay the agreed note (or mortgage) in a timely fashion?

    3. Does it require any major drafting of a myriad of paperwork by lawyers?


  68. AJ:

    To answer question #3: yes, most definitely YES. You will need a competent attorney to structure this deal, plan and execute this deal. Failure to do so exposes you to a myriad of really ugly adverse consequences.

    The deal intrigues me. Concerning questions #1 and #2: What do you mean by “finance my own flat?”


  69. Scriv, I mean Seller financing. If the buyer puts down 30%, I will sell him the flat for a note on the remainder, like 1-2% points interest rate above the regular going rate.
    I just don’t know how cumbersome will be the foreclosure proceedings in the state of NY if the buyer defaults on his/her monthly payments.
    I believe I can execute a 30 year note with a “due in” clause of 5, 10 or 15 years.

  70. AJ:

    First I definitely recommend you consult a lawyer on this matter, as well as the co-op’s rules (if applicable).

    Secondly, I think you should find another buyer. I know the market is tough out there, but a buyer who can not get credit is not a buyer worth dealing with. If you are going to sell this thing, sell it. If you are going to rent it out, then rent it. But your proposed transaction seems to fall in between selling and renting: what’s the point?

    Third, this deal, as you described it, is not so much a “sale” but, rather, an installment sale in that the buyer’s right to title passes only after he has paid, in installments, the purchase price (plus interest).

    Are you really SURE you want to go down this road?

    As for your remedies, that all depends on what the sales contract says. But I would caution you here: you probably would not be able to “foreclose” on the property because you would not be a “lender.” Your rights against the lender could be a tricky detail as mortgage lenders’ record their interests and typically insist that they “come first,” so your remedies could be severely limited against a defaulting buyer.

    Generally speaking, your rights would be those defined under NY law and the contract. If the buyer breaches the agreement, you rights would be (or “could be”, depending on the terms of the sales contract) limited to breach of contract remedies including returning the right of possession to you and damages.

    Are you REALLY SURE you want to go down this road?

    Again, retain a NY lawyer to advise you on this. I cannot stress this point enough.


  71. While I think GoodNews is overly optimistic I think other here are overly pessimistic. How come when someone post that ACTUAL SALES are up, ACTUAL INVENTORY is DECREASING and ACTUAL FORECLOSURES are DECREASING, this means nothing. But when someone posts that PREDICTIONS that it will get worse these predictions are somehow facts.

    From forclosures are down 32% YoY and are clearly trending downward since there peak in March ’09

    Carlos then post an article from Realtytrac (a places that markets foreclosures) with a lot of predictions:

    “The repossession numbers for January INDICATE to Sharga that the nation will PROBABLY set a new record for homes lost this year. ALL THAT NEEDS TO HAPPEN is for repossession numbers to stay flat the rest of the year.”

    “IF history repeats itself, we will see a surge in the numbers over the next few months”

    “Most industry observers also EXPECT home prices to decline further this year before they stabilize.”

    And these predictions are not even specific to Miami or even Florida. However further review from their other articles indicates:

    “[Florida’s] fourth quarter foreclosure activity was down nearly 9 percent from the previous quarter”

    So even their predictions are based off the assumption that repossessions stay flat but at the same time foreclosures were decreasing in the fourth quarter and the January numbers indicated they decreasing even further from that.

    Now will the trend change, I honestly don’t know. But the facts are that foreclosures are decreasing. Why ignore the facts for industry predictions?

    Carlos also post an article from zillow about home prices. But if you actually read it it tells you that the number of houses that sold at a loss increased by 4% AND the number of homeowners underwater DECREASED by 5%.

    People were posting articles that were PREDICTING that people underwater on their mortgages will increase, but here Carlos post that Zillow has ACTUAL data to show the contrary is true and he so stuck on predicting doom and gloom that he doesn’t even realize it.

    GoodNews posts:

    “Statewide sales of existing condominiums in the fourth quarter rose 93 percent compared to the same time the previous year. This marks the fifth consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.”

    Sales have been on a steady increase for 5 straight quarters Then Scriv posts comments like this:

    “However, rather than pound GoodNews’ view, opinion and utter lack of proof – – and I reject news paper articles as substantive proof – – I would posit a question for debate.”

    Read the actual articles Scriv, the information is based on MLS figures. If you don’t believe MLS figures then you going to have to go out and start interviewing everyone who bought or sold. Besides, if these articles were saying that sales were down, all the doom and gloom people would be quoting the same sources as fact.

    Then Sciv writes:

    “It seems to me that the Florida market will not begin to recover until “real purchasers” start acquiring properties in the free market. By “real” I mean people who purchase because they want to make a bona fide home/condo owner use of the property.”

    Is there some law against a person actually buying a foreclosure or short sale to live in. I watch that show “My first place” on HGTV and it sure does seem like a lot of those people are buying these properties.

    Scriv also wrote:
    PS: And GoodNews, here’s what you tell your landlord when they raise your rent:
    “It has been a pleasure doing business with you. Because the supply of available comparable units such as yours in the Miami area has out-paced demand, I am going to pursue other options. I am confident that I can find a person in (INSERT NAME) who would be happy to rent their unit to me.”

    Take a look at this article from 1/18/2010:

    “Of the other major Florida markets, Miami had the lowest vacancy rate at 5.8 percent as well as the highest asking rental rate at $1,063.”

    “The U.S. average apartment vacancy rate was 8 percent and the asking rental rate was $1,026.”

    Miami’s has the lowest vacancy rate in the state and is well below the U.S. average.

    Now I’m not saying prices are increasing next month. I’m just saying lets try and look at the information objectively, dissect the predictions from the facts and realize that most of us have a biased opinion and are probably too optimistic or too pessimistic.

  72. AJ, Not an attorney, but my understanding in these cases is you must be very careful how the deal is structured. If you become the lender, you also are subject to regulations such as SEC, etc which open a whole new can of worms. this issue of regulation is why so few of these deals are sealed.

    As scriv said, be a seller or a renter, but not both. i’m sure you didn’t mean this, but it appears to me as though you have somebody who you dont think can actually buy the property, but is willing to be a sucker long enough to provide you with cash and the property back through foreclosure. this could become a 15 to 30 year headache in my opinion.

    agree with scriv, get a lawyer.

  73. computer consultant – About time…I can’t believe Related was even still involved at all. Thanks for the update.

    AJ – If they buyer is putting down 30%, then you have to ask yourself why the buyer can’t get a mortgage for the rest? If you want to hold back a mortgage on the property, so be it, but as others have said get a top notch RE attorney who does these things on a regular basis which will cost you more per hour but will have forms/contracts on file. I personally would not want to go down this road but I don’t think is dire not to if it really is your only option. Check with HOA, have a great contract and mortgage/note, and check the IRS code to structure it right….as scriv mentioned, it is most probably an installment sale (for IRS purposes). I would want 50% though… Beware of scam buyers. This could be a waste of time for you as the buyer may not be as committed to the purchase as you may think…

  74. RT, Yes, it could be an installment sale for deferred capital gains purpose. But I think I will pass this option as it looks too contorted for my liking.

  75. – Like I said, paying half price for renting is great! :-) That is the pride of renting!

    “Where’s housing headed? Follow rents”

    “But by mid-2006, with the craze in full swing, the figure fell below 60%. At that point, Americans were spending an incredible 66% more to own than to rent. It was far worse in the bubble markets: In Las Vegas, Phoenix and Miami, homeowners were paying twice as much as renters, and in San Francisco and Orange Country, owners’ monthly payments were triple those of their neighbors with leases instead of mortgages.”

  76. You guys do realize that apartment vacancy rates in Miami are much lower than the average and going even lower don’t you????

    Here is an article from Nov ’09:

    Of the 47 markets covered Miami had the 10th lowest vacancy rate tied with NY at 6.5% with the average being around 8%

    Here is an article from Jan ’10:

    It quotes the average for the US at 8% and Miami at 5.8%. Jacksonville has the highest in Florida at 14.4%.

    There is more to the market than condo’s. While ASKING prices for condo rents may be decreasing actual apartment rents aren’t.

  77. Condo Deals Page

    Wow. A 1529 sq ft 2/2 at Jade for $328,000. Thats around $215. per sq ft. A water view apartment on the 15th floor with new wood floors and top of the line appliances that is a foreclosure. This price seems custom made for Gables. Allow lets say $20,000. for three years of high maintenance fees as the building stabilizes ,and you are still buying a premium waterfront building for $226. per sq foot. Yes or No ?

  78. Kramer, you are right this is a great deal for that building. but with $1100 a month HOA and perhaps another $1000 a month in taxes, plus nearly $2000 a month in mortgage, we are pushing the envelope when it comes to affordability. $4k a month is a heavy price to pay for a working stiff looking for a place to sleep at night. setting my sites on some units around $200k with half the tax and hoa costs. just a personal financial decision-have other fun things planned for my cash than dumping it into a condo and eating mac and cheese for dinner every night!

  79. 1502 is not facing the bay. It is also a non-approved short sale. I agree the building is great, but they are having serious issues with delinquencies in HOA.
    Jade is a fantastic project, but I would not get inside any building with unstable finances.
    From an insider’s scoop, there will be plenty more units there going into SS or REO.

  80. Jade will go through turmoil, but ultimately it will become one of the premier buildings in the area. The location is about as good as you can get for waterfront in Brickell. Mortgage fraud created problems, but ultimately the building will attract wealthier owners who will keep it afloat. As an example, i wont (or cant?) buy into the building because HOA and taxes will be too high. once the rif-raf like myself become financially forced out of such buildings (this will take time), then it will reach its potential.

  81. Caelos – You seem to have a lot of information which we appreciate here. What is your opinion of Brickell vs. Downtown vs. Park West and Pace Park for someone who is looking? And if you have time, a personal assessment of the buildings along the “Wall” on Biscayne Blvd. Starting with lets say Met One – then 50 Biscayne – Everglades On The Bay – Marina Blue – 900 Biscayne – Ten Museum – and finally Marquis. The pro’s and cons. Thanks.

  82. Time and again, gables keeps proving he is one of the smartest guys on this blog. Very very common sense guy. This is one housing bear, I will definitely listen to when he talks.

  83. Kramer,

    Biscayne corridor – best buildings are 900 and Marquis. Much higher ending than the rest. Not perfect but better. Marquis is right next to the highway, but is impeccable Bedroom has shower open to room, so you must not mind lack of privacy.. 900 has some flaws in the common areas but the units are good.
    Ten museum is a nice concept but not for everyone. Very high HOA. Only good if you like loft-style. Cramped in between two buildings.Marina blue has great views, but the building is sort of cheap, with poor finishing. Tenants are destroying common areas!
    50 Biscayne and everglades only have in their favor the views in some units. Everglades is cheap, unfinished and is undergoing foreclosure. 50 Biscayne has some nice units, but they are going thru issues as well.
    Don’t know anything about Met one. Building doesn’t appeal to me. Too cramped in between many towers.
    I am sure that most of these condos will be prime real estate in the future and we will be thinking..remember when the prices collapsed? Units facing west are not attractive to me. At least until the remodeling project in downtown and the world center project takes off ( if they ever will ).

    I totally agree with you. Jade is prime real estate. I just don’t think it is a smart move to buy there now. More inventory will come into the market. However, the even-numbered units don’t appeal to me.

  84. There is something we never discuss here about the cost of buying versus renting… Real Estate tax portability. I bought my first condo in Aventura about 15 years ago for $100k. A few years ago, it was assessed at $350k by the property taxes. I then purchased a 3 bed (@ $400k) appraised by the county at $310k. Because I had a tax portability of almost $250k, I was able to transfer it to my new 3 bed condo. I am now in a situation where I only pay a few hundred dollar a year for my real estate taxes. And because of homestead exemption, this can only go up 3% a year.

  85. Mobi – The key here I think is that you bought 15 years ago…what about new buyers to the area? They have to “pay more” since you “pay less”. The entire homestead thing in FL is a crazy mess that had short term goals with long term negative consequences.

  86. new buyers have to “pay more” since you “pay less”. The entire homestead thing in FL is a crazy mess that had short term goals with long term negative consequences- RT
    Cant agree more. This horrible tax rule created a kind of haves and have nots and discouraging new people to move into Florida. Tax reform must start with getting rid of homestead exemptions and tax portability altogether unless the person involved (such as old, retired, long term residents) can demonstrate severe financial hardship. That way a well to do long term resident will pay a bit more and a new arrival will pay a bit less than the abominable current rate. But as always nothing works or gets passed in this hick state. They cant even add a couple of pennies to sales tax in exchange for reducing the property taxes even though the talks are going on for years.

  87. couldnt agree more with the RE tax issue. Actually have less of an issue with homestead act, since it keeps a long term resident from being taxed out of their home. but portability is pure bull shit! with a net flow out for population dynamics in Florida recently, legislators had better wise up to these issues. at inflated prices, I pay more in RE taxes than in state income taxes of most other states. the tax incentive is no longer a reason to live in florida.

  88. AJ


  89. Carlos,
    It is not an issue about who likes what areas. Read closely and you will know that this article is not just a puff piece about Downtown. It is something much more than that.

    When I traveled this past month in Asia etc, there is one thing that is strikingly obvious between us (America) and them. All those countries are brimming with energy supplied by a mostly young population. We (America) look like a sick man and Europe looks like a dying man or an already dead man (excepting Germany). Why? Apart from all the usual obvious reasons, we are lacking the dynamism and energy supplied by young people.
    Young people (under 35) = Rebirth, energy, hope and dynamism
    Old people = Stagnation

    Now go back and read that article again.

    There are 2 great things that happened in the condo boom and bust for Miami.

    1. Condo Boom: If not for this, there would have been a derelict downtown. Miami has transformed overnight (or in 5 years) into an almost World class city.

    2. Condo Bust: Thank god for this too. If not for this, we would have a Miami central core that would be in the hands of investors and some rich vacation home owners and never see the light of the day as we are seeing for another 15 or 20 years. Because of the bust, the young people are actually able to live in these condos at a highly subsidized rate and they are causing the rebirth and rejuvenation of Miami downtown. If not for these people, the area would have taken forever to gentrify.

    But the most funny part is that these young pioneers are actually gentrifying the downtown and will be pricing themselves out of the area in about 5 years. When Downtown living becomes so attractive with all these conveniences of life and the dynamic lifestyle, it becomes very attractive to the old and the established. And then again only a CEO will be able to live in 2/2 in 900 or MB. Not a medical resident.

    The cycle will repeat all over again.

  90. AJ – The other cities look young and dynamic because they are poor with their only opportunities in the new big cities and the life span is less. You are correct that the RE boom produced something that will last….just like the tech boom did too. It comes at a steep price, financial ruin for quite a few, but should pay dividends down the road to the area….AS LONG AS govt does screw it up and turn stuff into subsidized housing!

  91. RT-It comes at a steep price, financial ruin for quite a few, but should pay dividends down the road to the area…….. How very true.
    But I do not totally feel sorry for those who lost their shirt. It is the similar Madoff folk who thought they are going to get an assured fat return and put their life savings in his hands. Those who never intended to step foot in the flats they are buying and are just in it for a quick profit got what they got. But in the bargain, they transformed my lovely city for the better. If not for them, an ordinary bloke like me would have never got a dream flat with a million dollar view in a fancy building. I am sorry about your losses but I am also Thankful to you all.

  92. Miami will always be Miami.
    Some building do better than others. Economy will recover but housing market will stay flat for a while…..
    I think there will be and they are some opportunities that you will never get again in lifetime.
    Dont look your house as investment guys and you will be fine. If you buy now for living or as a real second home, you will be fine.
    Any broker can confirm that best deal are already gone. It will be on market still deals but again the prices will never be the same as they used to be in 2008 and 2009.

  93. JOED – I disagree that the best deals are gone. Where there was one deal in a building that popped up last year, now, just recently, I am seeing 3-5 pop up in these same buildings. Granted, all these are usually short sales…which could be a long process and the price not really set, but I am seeing some things that are surprising me again. For example, I was looking at one smaller newer development and considering making an offer since it was 45% off the peak pricing but now two pop up that are 60% off! I suspect that 2010 will be the year of the short sale and the unloading of REO’s…. There are more distressed owners out there then what you think….thanks to the higher unemployment levels. It may be time to troll around more seriously, but don’t reel in just yet unless you hooked that prized fish!!! :-)

  94. So RT,
    Stuff seemed reasonably priced to you at 45% off, but now when it’s 60% off, you are scared???
    Are you a total idiot or something? Go scoop it up ASAP.

  95. Renter Tom,
    you wont get on short sale or REO condo you want with views and floor plan you really really like. it will always be something missing.
    maybe u get a deal but no water view. if u are happy with that thats cool but i am saying that great condo that u really really like its hard to get on in those deals.

  96. From SocGen’s research paper published 4 days ago (by Dylan Grice):

    “Investors understand the affliction all too well: a stock trades at £10 and we tell ourselves that we’re buyers at £8. But how many of us buy when it gets to £8? Some of us do, but most of us don’t. Most of us (I can’t be the only one!) convince ourselves that it’s going lower still: “I’ll buy at £7” becomes “I’ll buy at £6” and by the time it’s back at £8 we’re “waiting for a pullback” Each investor has their own way of circumventing this problem. But at root, such poor decision-making is a consequence of our fundamental underestimation today of the discipline and even courage we will require in the future.”

    RT, this is about you!!!

  97. Oh My – Did you not read my entire comment? “It may be time to troll around more seriously, but don’t reel in just yet unless you hooked that prized fish!!!”

    Secondly, real estate isn’t like stocks so your quote is really not applicable. I have made literally millions in real estate so thanks for the additional edification even if not applicable. The South Florida market is unique…and for me, worthy of study…the level of fraud, corruption, unethical real estate agents, foreigners with no concern about the U.S., the list goes on. It really is like the “wild west” in real estate down here. Prudence is more than a virtue, it is an investment principle. Use it. There are many opportunities out there so why make a desperate grab?

  98. JOED – In the last two years, there is only ONE that perhaps I have some regret that I didn’t buy, but it was a very weird situation. Oh well, when I hook the prize fish, I’m prepared to reel it in! When you look for a new home to live in, you know it’s right in the first 30 seconds. Haven’t found that one yet…except for great rental deals!

  99. RT, the point is you didn’t reel anything, and you keep discouraging others from doing so, even though – as you admit – opportunities are clearly there…
    You simply have no guts and no discipline. As prices move down, you move down even more, but that will not continue forever.
    Prices will rebound and you’ll be left high and dry.
    Bottom line?

  100. Please note, the comments posted above by Oh My are not those of Makes Me Think posting under a different handle. I agree with him 1o0% though. As I have said on this blog many times before, I don’t believe RT will ever buy a condo in miami . That’s cool though, I just wish he would stop pretending.

  101. AJ, In re to your question regarding seller’s financing. I ve done it but in Florida. It actually worked pretty well for me. I do not see any difficulty in that. In NY you have to use a competent Real Estate attorney who would be able to draw a good contract and mortgage paper. I do not know the rules in your coop but in general you are going to play a role of a bank. You have to check your buyer a bit. His records and why he cannot get financing. In this day and time it can be a lot of reasons not related to his real ability to pay his mortgage. If he is a real buyer and paying you a good price I would not hesitate (attorney would be able to check coop rules for you and give you a good advice).

  102. some people live in illusion that condo market will rebound like stock market.
    economy will one day come up but condo market will be down for year to come….
    just like japan for 10 years failing prices…. or at least flat

  103. JOED, Japanese real estate fell because of yen revaluation. It actually never went down much in US Dollars. Yen prices fell 50%, but yen appreciated 50% against US$. So your example is flawed. US prices will behave like Hong Kong. Fast down, fast up.

  104. Sorry, wrong numbers. Yen went up against US$ by 70% since 1989, while Japanese property prices declined by 45% since 1991. Outcome is the same – Jap RE is flat in US$.

  105. AJ

    Thanks for posting those two articles about Downtown. About Carlos point – I don’t agree. As the article states, there is enough infrastructure in place right now that the current residents are happy with. To them and people like me we are looking for a residence where we can leave our apartment and reasonably walk to places that we want and need in our daily living and leave the car at home. Thats a post office, a pharmacy, a bank, a dry cleaners, a good deli, a book store and a few white table cloth dining restaurants etc etc. It’s not all there yet but isn’t far away as the article states. And I definately agree with the residents second most requested establishment – a local dive bar :-). Something similar to Macs Club Deuce on 14 street in south beach or Tobacco Road near Brickell where you can get a cold beer for $2.50 and shoot some pool and watch the game on TV without paying $15. bucks for a cocktail and the atmosphere is not so pretentious and you can walk (stagger) back to your apartment with a short walk. It’s not prime time yet but will evolve into a very livable urban space within 2-3 years.

  106. Miami property taxes.

    Lets say i buy a condo as an investment for 150k and it is assessed at 250k. It is my understanding that for current year i will have to pay 2% tax on 250k and next fiscal year i will be paying 2% on 150k. OR if next year condo is assesed at $200k i will have to pay 2% of 200k?

    What happens in year 3? Is there a cap on how much property tax can go up?

  107. Lara,
    Thanks. I am looking at all aspects and want to expand my buyer pool. But let us see how much extra headache this is going to be. I might just stick with a straight sale.

    Meanwhile, I am preparing for my upcoming 2 month long stay in Miami for Apr and May. Hope to see you there.

  108. Oh My said: “Prices will rebound and you’ll be left high and dry.”

    – Well, I am buying a place based on the my opinion that that will not be the case. That is, prices will not rebound for reasons that have been repeatedly stated so no need to rehash. But if you believe they will, then got for it! No one is stopping YOU My posts are simply my opinion of the market and so far have been pretty darn accurate. I’ll be the first to say that it is just MY opinion…and it is a free opinion so take it for what it is worth, for you apparently it is nothing. What I don’t like is people trying to push people into buying into bad investments….there was enough of that in this area and it has caused a lot of people a lot of harm.

    – My opinion is that this is the year that REO’s and short sales really make their appearance on the market in this area.Will they peak in 2010? I don’t know but they could peak in 2011 or in 2012 too.

    – Just a couple of months ago, Money Magazine came out with their projections of about a 30% price decline in our area. That is a tough number to swallow. They have been fairly accurate in the past and have mostly erred on the side of being too bullish. You have to ask yourself, why are big name celebrities taking, in some cases, multi-million dollar loses on their properties? Why don’t they just hold onto them? What are their financial advisors telling them? The mortgage market has even normalized yet so how can there be stabilization in housing until that happens?

    – Is the RE market as overprices as it was two years ago? Of course not. But who wants to buy something that is still gonna jump another 25% down? Since we don’t know when the bottom will be, it is a much safer position to simply buy on the way up. Don’t believe the hype that you’re gonna “miss the bottom and miss out”. That is nonsense.

  109. RT,
    “Much safer position to buy on the way up?”. LOL. I guess by your logic it was much safer to buy in 2005 than now, when inflation-adjusted prices are plumbing 1999 level. That’s just plain stupid to me.
    Just as stupid as wanting to buy a place at 45% off, then backing off when price fell an additional 15% – as you did.
    As for Money magazine and the celebrities you are talking about – THESE PEOPLE ARE ALWAYS WRONG. These are morons who consistently buy on top and sell at the bottom. I thought you were smarter than that. Apparently not. Is Nicolas Cage your shining example in managing money? His adviser is available, as I understand…

  110. The mistake that Rt makes in his hypothetical is that he never calculates the rent money lost that (poof) disappears and is never to be seen again. If, while he waits 2-3 years for his dream condo to decline in price 10 to 20% and he is paying his landlord lets say $3000. per month – He now has as much as $108,000. dollars less to purchase with. That money disappears. Fear and greed are the two emotions that rule most investments. RT seems to be paralyzed by the fear that his purchase may decline in value by 20% more – even though on average most condo’s have already declined in price by 40 to 50%. A fools errand in trying to guess the exact bottom in Miami real estate not unlike an investment in the stock market. Thus he finds himself in the very uncomfortable position of being unable to pull the trigger.

  111. BTW – DJ is probably the best example in here of someone who wanted to purchase a condo – did a thoughtful and thorough analysis of what and where and how much – and then pounced and pulled the trigger when his gut told him – “This is It”. My guess is that DJ will never ever second guess his decision no matter what.

  112. Oh My – Thanks for extrapolating to the absurd and putting words in my mouth that are false. Very constructive comments, not. You must not have done very much investing.

    Kramer – Oh please. You can’t be serious. As I said, I am trolling for properties on a more serious level in 2010. Renting for HALF price is hardly throwing your money away. In the meantime I can get a 3%-6% FDIC insured return on my money too. Admit that renting has been good. I am hardly paralyzed, I have made a lot of decisions regarding real estate, regarding purchasing, the decisions have been no, no, and no. Regarding renting at 1/2 price for a penthouse condo, that was a yes. Why are you upset that renting is a better deal than buying in many cases in this market?

  113. Kramer – I have bought numerous real estate properties in the past. You make money in real estate at the time you purchase it, not when you sell it. Why be compulsive, make an emotional purchase, etc? I am looking for a higher priced place and that part of the market has lagged the lower to mid priced market and is now showing some better deals compared to a year ago, that’s a fact jack. :-)

  114. That would be impulsive not “compulsive. Either way you seem to be “investing” in a condo whereas people like DJ and Gables and many others myslelf included are more interested in finding a Home. You lack emotion – almost robotic.

  115. RT,

    How are you getting 3%-6% FDIC insured return om your money???? You’d have to lock your money in for at least 5 years just to get 3%.

  116. I thought AJ’s article about downtown was very interesting. One of the thing it highlights is something I was trying to post a few days ago but my comments are “awaiting moderation”.

    The apartment vacancy rate in Miami is very low and going lower. The apartment vacancy rate in Nov ’09 was 6.5% and in Jan ’10 it’s 5.8% and the average rent is $1,063. The US average is 8% with an average month rent of $1,023.

    This article suggest that condo vacancy rate is 38% or less. A lot of people here seem to want to use the condo vacancy rates as the entire vacancy rate. If you want to rent an apartment anywhere but downtown you can expect your rent to increase. Downtown has hardly no apartments. If you search most apartment sites for downtown almost all the listings are condo’s.

    Here is an excerpt for the rental apartment market in southeast florida:

    “As of May, 2009 the vacancy rate in Miami-Dade Count apartment developments stood at a moderate 6.6% level while in Broward County the rate was at 6.8%. The vacancy rate is somewhat higher in Palm Beach County at 7.9%

    During the four year period of 2003 through 2006 a total of 64,501 apartments in Southeast Florida were converted to condominiums. During this same period only 19,403 new apartments were added to the market. These factors resulted in vacancy rates falling to 3.0% or less in each of the three counties.

    Following 2006 many ownership housing units, including both condominiums and single family homes, were placed into the rental market by developers and individual owners unable to sell their units, creating a “shadow” rental market. By mid-2008 the shadow rental market had at least stopped expanding and vacancy rates tended to level out. Soon, however, the economic recession became more apparent and job losses grew pushing vacancy rates upward.

    The dual factors of the shadow rental market and the recession would have pushed vacancy rates to considerable higher levels in recent months were it not for two other important market influences working in the opposite direction. One factor was the continued low level of new apartment construction while the second was the reduction of rents.

    Over the next one year there is an estimated demand for 4,888 additional market rate apartments in the three-county area and demand from 2010 to 2012 is for 7,124 units per year. The total demand potential over the next three year period, therefore, is for 19,136 units, almost twice the estimated supply potentail.

    Assuming that all of the planned/proposed apartment developments are built and delivered to the market of the next three years, the following shows the forecasted apartment vacancy rates for each of the Southeast Counties:

    May 2009 6.6%
    May 2010 5.2%
    May 2011 3.0%
    may 2012 3.0% or less

    Apartments rents are expected to hold rather steady over the next one year with a 1.0% increase possible. From 2010 to 2011 a 2.0% increase is expected and from 2011 to 2012 a more normal 3.0% increase is forecasted. ”

    Rents everywhere but downtown are holding stead or going up. The downtown market is priced much higher than everywhere else. As the rents decrease to the levels of apartments everywhere else they are going to fill up with renters leaving older apartments to brand new condos for a similar price.

  117. AJ

    “Trimming down there plummets to levels almost as low as the country Greece”. Or Italy I might add. Hilarious. Thanks. I guess some guys like their lady with a little growth – Ewwww. I love the Onion. Saw one recently about a news flash about a new Sony product introduction where the announcer begs people to Go out and ” Buy this effin piece of shit right now” before they are all sold out.

  118. Kramer,
    I love Onion too. A great piece of stimulating rag.

    Thanks For commenting on my downtown article. It is a very significant piece of news and I was hoping more people would carry the discussion forward. But alas, only Carlos, RT and you chimed in.
    Those of you who were busy with the weekend festivities and canoodling and missed the subject, please click on the link on post 119 and read the related post 122 also.

  119. AJ – On Feb. 14 at 11:29 p.m. I posted a lengthy reply about your downtown article. It’s still posted on my computer but with a – “Your comment is awaiting moderation” and apparently isn’t posted universally yet. What the heck does “Your comment is awaiting moderation” mean exactly. First time that has happened to me. It was a somewhat lengthy reply, so I’m wondering if Lucas has imposed a gatekeeper system either for comments that are too lengthy – or maybe to keep the riffraff out? I have noticed recently that some of the wackos have kind of disappeared. We all know who they are. Maybe this is a good thing but I wish that Lucas would explain. Btw – My post was a favorable reply to that downtown article. Thanks again.

  120. Gixxer 1000 – That would be true (mostly) if you were putting in money NOW. Although, I do have some unique CD arrangements that permit me to add money to an existing CD AND get the original rate PLUS being able to withdraw without penalties 10 days each year AND the interest rate steps up each year. That bank needed the money I guess….and all FDIC insured!!!

    Kramer – Was multitasking so didn’t proofread….yes, impulsive. Funny, I was just getting off the phone and had Hoarders on TV in the background so my mindset was “compulsive” as in compulsive hoarding. Fascinating disorder, but a bit boring compared to Intervention which is one real drama show that tugs at the heart strings.

  121. Kramer,

    I posted two similar posts on Feb 12. Post #99 and post #108. They both said they were awaiting moderation until about an hour ago. Seems kind of weird because I most people don’t go back and reread through the old posts.

  122. Gixxer,
    I still have cash in CD’s from a few years ago making better than 5%. Currently deployed money is making much less. But proper investing strategies should not have you deploying all of your assets at once. And if you need yield, plenty of dividend stocks paying well-think con ed. granted not FDIC insured, but better than the loss it would take on a condo right now.

    The problem is tax and HOA basically are equivalent to rental cost in todays market. So rent money lost is the same loss for owners. No real benefit to owning. Cant really buy from an investment perspective in the near term. But many of us will pay a premium to own if the unit we want appears. What is incomprehnsible from a business perspective is the number of low level, no view units asking $300 sq/ft. These units need to become affordable to the working stiffs of the world. I dont need a penthouse unit with a view. But i want four walls with parking and safety, without mortgaging my first child.

  123. Kramer,
    I am eager to read your post.

    I definitely know one reason which will trigger “Awaiting moderation” axe. It happened to me many times.
    If the post has more than one http:// link, it will not publish you.

    This happened to me many times. I wait days and days, the “awaited” post never gets moderated or published. If I try to re-post, it rejects saying “you already said the same thing before”. Can you explain why this is happening? I cannot find anywhere on your site, guidelines to avoid being ghosted.
    Don’t be silent to us regarding this “awaiting moderation” annoyance.
    Also can you please release all the awaiting moderation posts please this past week please? I would like to see what Kramer and others have to say. tks

  124. I haven’t made any changes lately regarding how comments are approved. However, some comments are automatically flagged by WordPress. This is usually because the comment is suspected to be spam. When this happens the comment awaits moderation. I need to go in and manually approve those comments. This has always been the case. If I turn off this feature though then you’ll start to see a lot of comments that truly are spam.

    I’ve already released the comments that were awaiting moderation from this weekend.

  125. Aj

    Once again great article……i have been following lucas blog since the very beginning. As for me, i am a college student majoring in Business Adminstration here at FIU. Though the market is down right now, i do have hope/faith in our city. We should all thank Renter Tom , AJ, and all the normal MCI bloggers for putting in their input about our current real estate cycle.

  126. Geez, i read my post after it got published and it sounds vulger. It is not what you guys think. Kramer said that his post was probably too long and hence it was awaiting moderation. Just wanted to clarify before someones brain starts to go on overdrive.

  127. RT you are right the high end MB market has come down some but has still over performed the uner 300K market. The problem is that not everyone is looking for a beachfront penthouse condo. I would venture to say the vast majority of folks are looking for a sub 300K condo on the mainland. The market for those units, particularly those with waterfront views and a stable HOA may not have another 30% dip. Their bottom may have been reached already, I think DJ’s example may be used to support my point. He closed last july but he was in negotiations for months prior to closing. He probably wouldn’t be able to negotiate the same deal with the banks today.

  128. Kramer Post #141,

    I also think downtown (and other parts as well) will be a very urban “walkable” place in the next 3 years. The Miami21 new zoning codes were approved and should become effective in May 2010. For those who are not familiar the Miami21 it is a complete revision of the old zoning code. It’s based on the philosophy of New Urbanism which is essentially about building smaller communities within a community so that all essential needs are within about 10 minutes instead of an ad hoc zoning plan where essentials can be places all over the city making a car mandatory.

    For example under the old zoning code certain zones allowed for condos that prohibited retail within the same building so you couldn’t put a dry cleaner, coffee shop, etc. in the ground floor. The new code also focus a lot more on pedestrians and public transportation.

    Miami has actually been a city that has been focusing on this for a while. I’m actually considering U of Miami over some other more prestigious schools because its the only school that offers a graduate degree in real estate development that focuses on urbanism. The dean of the school of Architecture was the lead consultant on t Miami21.

    If anyone is interested the website is

  129. Gixxer,
    Miami21 would be nice. Problem is that alot of the infrastructure has already been built. A planning and zoning program is most effective prior to construction, not post. The city really did miss the boat on this. Think about how walkable and livable downtown Coral Gables is. I have yet to see how Brickell will be quite comparable. It will be livable and walkable, but could have been so much more with better planning. The small shops and businesses will struggle unless they are placed inland from Brickell Ave-which creates a need to walk some distance from home to entertainment. Not a great distance, but would have been nice to see them nestled at the foot of all these new condo buildings.

  130. The miami21 results will be more noticeable in the Arts district where the new construction will be going to come up. The best example of Miami21 is Cite’. It was built to that code even before it became a law. And Cite’ is a great project. It has a concealed garage (one of the requirements of M21), retail on the ground floor etc.

  131. Gixxer

    Interesting choice regarding UM’s graduate degree program in RE Development/Urbanism. I have met with Elizabeth-Plater Zybrek I believe her name is and her husband when I lived in Coconut Grove and we were attmpting to make the Grove more pedestrian friendly. Unsuccessfully I might add for a variety of reasons. I have always admired her work at “Seaside” in the Florida Panhandle. Perfection – if want to see how urbanism can work in a place built from scratch. Gables makes a good point about the hodge-podge attempt in Brickell but remember Brickell started late with this attempt and many gaps do exist. Downtown has a better chance to be successful because a lot of the older infrastructure is inland and not on Biscayne Blvd. and can be converted into shops that are welcome to the new residents. And you are seeing some modest attempts in the new condo’s on the boulevard. The upscale Italian restaurant at One Miami and in Met one across the street you Have the new Manny’s Steakhouse. Going north there is Mia’s now at 50 Biscayne. At Everglades On The Bay is a new CVS pharmacy. Then further up 900 Biscayne has the new Brazilian restaurant. Dribs and drabs but progress nonetheless.

  132. Good Grief

    I just posted #170 and got hit with “Comment awaiting Moderation”. What in the world triggers this as spam? My post in response to Gixxer’s #167 and mentions some names of shops and restaurants that recently opened downtown. Is the mention of a commercial name trigger the spam suspect?

  133. Btw – I have a funny anecdote about urbanism in Coconut Grove. A few years back when i lived there I was walking near the very heart of Coconut Grove at the corner of Grand Avenue and Virginia Street – which if your familiar is dead center Coconut Grove – right in front of Coco-Walk and the Mayfair shops and hotel. I was walking past a young Japanese couple – tourists obviously with their camera and the like. They stopped me to ask me a question as they appeared a little confused and proceeded to ask me -” Where is Coconut Grove” ? I was a little embarrassed to inform them that they were smack dab in the middle of the Grove. I guess they had been reading the brochures about a tiny artsy crafty Bohemian charming village with Art gallerys and such. Not!

  134. Kramer (#148) and MMT (#166),

    Haven’t been on in a few days, but scanning through I noticed you referenced me in your posts. You both hit the nail on the head. I was looking for a condo for a long time, and doing all the requisite due dilligence. When I toured it, I fell in love with my building, especially the corner units, and knew this was exactly what I wanted. So when I found a few day old short sale listing on one of the best units in the building, I immedately put in my offer. I even put in the offer at a few grand above asking price because I knew it was a great deal, there would be multiple offers, and I really wanted it.

    I knew I was a taking a risk because the most recent sale before mine was about nine months prior. Since closing though, I’ve realized that the risk definately paid off. There have been (I think) 17 additional sales since I closed, all at prices higher than mine on comparable units. So not only an I in love my condo, but I could realistically sell at what comps have gone for recently at a $40-50k profit, after less than 6 months of living here. That doesn’t matter so much to me because I plan on living here at least 5 years, but it definately makes me feel like I owe myself a pat on the back.

    I think you have to differentiate between people who are looking for a home, and willing to take a calculated, (albeit) educated risk to get what they really want, and people who look at buying a condo just like any other comodity. To that latter group, its all gonna be a scientific, dollars and cents, cash-flow-this, ROI-that approach. If you look at it that way, and rely so heavily on empirical data to make your decision for you, you’re gonna be waiting on the sidelines for a long time. Things are way too uncertain right now to rely only on statistics and projections alone. There has to be some level of gut-instinct, if you wanna call it that.

    Anyway that’s my two cents.

  135. AJ — I’ve never said you’re an idiot for liking downtown, so I don’t know why you keep baiting those of us who, while liking downtown and respecting its progress, simply like other places more.

    As I’ve said what seems like dozens of times, I like downtown Miami. Without question, it has come a long, long way from my first trips to the Magic City back in the ’90s. But as someone from N.Y. for whom living at the beach is still a novelty, I still prefer SoBe to downtown. It’s as simple as that.

  136. DJ, couldnt agree with you more. But it is hard work finding a good deal on a unit you will live in for a while. Actually went after one unit, but the deal fell through. Short sales and foreclosures are not easy processes to complete today. Eventually lenders with REO units will realize there are people like myself, who are not RE investors, who want to buy to live in at affordable prices. Target us, let us buy reasonable units at reasonable prices. The remaining units the company holds in the building can then be sold to investors using my sale as a comp. The building will have owners living there so it will be more desirable.

    The current approach by banks seems to favor investors, but that does no good for raising the % of owners living on campus and other issues favorable to the building. It just keeps the building a rental and limits financing for other units.

  137. Since the riff raff threatened to leave the blog for one month, and actually left, This blog has become such a pleasure to read. The comments are relevant and mature and very informative. Both sides of the debate can actually have a proper conversation and they are indeed having it.
    I am dreading that they (or him with 10 different names) will come back. By constantly hijacking the thread, these guys are actually doing a disservice to the housing bears such as Joe, RT etc. on this blog. If you all agree with me, how civilized and to the point this blog has become in the past 2 weeks, please stand with me and chase away these losers with sticks and brooms, if they ever come back.

  138. Just to be specific, have you noticed how there is no talk about porn films in Miami condos, shootings in some club and other stupid and inane stuff in the past couple of weeks?
    Lucas, I hope, you have the tools to maintain this blog like this. If these guys do come back, please take a minute once in a while to Zap comments like Continuum rooftop being used to make porn films and yesterday someone got shot in so and so club. You will have a much larger blogger participation. Maybe one day even LaLa will come back after she left in disgust due to the exact nature of such conversations that were going on here.

  139. Gables,

    “Miami21 would be nice. Problem is that alot of the infrastructure has already been built. A planning and zoning program is most effective prior to construction, not post.”

    I hate to tell you but the infrastructure (Roads, water, sewer, power, telecommunications, etc.) was built a long time ago. Development is an ongoing process that is continually happening. Sure a lot of condos have already been built downtown. But that doesn’t mean development just stops. Now business will be redeveloped around these condos. So as AJ’s article suggested we can just allow baggage and other tourist shops to be built or we can determine the needs of the community and apply smart regulation to encourage it.

    Everyone here keeps complaining that the problem with downtown is that if you walk a couple of blocks it deteriorates. With increasingly more people moving downtown it’s not going to stay that way. And with the new zoning regulations it ensures that instead of baggage tourist shops, new redevelopment is done with urban living in mind.

  140. This post in Miami Herald about Sunny Isles is a joke. Anyone who drives by there at night will see that it is most like 75% unsold ( and that is being very optimistic ) than 25% .
    Great buildings hitting the market in a bad time! Still very overpriced for today’s market, despite the fact they are oceanfront.
    Prices will have to drop a lot or they will have to wait for years until they are sold out. Very high HOA’s there are driving buyers away as well.

  141. CARLOS,

    The article says that 24% of the units are still owned by developers. This is pretty easy to check as fact. It also does not mean that someone is actually living in the unit. Try reading the actual article (considering its only 2 paragraphs) before saying it false.

  142. computer consultant,

    Since their isn’t really a standard for determining shadow inventory and no one seems to publish how they actually arrive at these numbers the majority of quoted numbers seem pointless.

    “The data from Default Research shows how much is going into the foreclosure pipeline. Nonetheless, when combined with delinquencies and loans held up in loss mitigation programs, the so-called shadow inventory of homes is growing. By how much is up for debate; First American CoreLogic finds 1.7m in the shadow inventory, compared to Amherst Securities‘ 7m.”

    Banks are holding back REO’s to limit supply. Unless something is done to force these banks to release these properties nothing is going to change and current inventory levels (which are decreasing) are going to dictate prices.

  143. Miami21 is a step in the right direction, but as others have mentioned, it arrived to late to help during the construction boom.

    Take a walk down Brickell Bay Drive or the back side of the Biscayne Wall, it’s a disgrace that they were allowed to build the blank 10+ story parking garages with zero storefronts/opportunities for interaction with the street. These areas and others like them are complete dead zones.

    This infrastructure will be in place for a long time, regardless of the new zoning laws.

  144. “trust me. I know for a fact! Sunny idles is another current flop in the market!”

    Maybe so, but what does that have to do with the price of tea in China? The article said 24% of new condos in Sunny Isles are owned by developers and that market is experiencing some of the same challenges as downtown. How is that information a joke?

    It was a negative article, but you’re so bent on prediction doom and gloom that you even disagree with the negative facts that aren’t negative enough.

  145. The numbers are not correct Glixxer. As I have told you, I know for a fact. Do your research and you will find out what I am posting is true.
    I am not concerned about the nature of the article: I am commenting based on objective data.
    Thanks for posting.

  146. Then post your “fact”. If these are not the correct numbers then what are they.

    “More than 24 percent of the 6,300 new condo units built or converted in the barrier island city of Sunny Isles Beach during the boom years in South Florida remain in the hands of developers, according to a new report from

    Today, more than 1,500 units remain unsold and still in the hands of the developers, according to the report produced using the newly released Condo Vultures®.

    Developers created 27 condominium buildings in Sunny Isles Beach between 2003 and 2010, selling 76 percent of the 6,300 units for $3.3 billion, or $712,000 per property”

  147. Miami Skeptic,

    Again infrastructure is roads, sewer, telecommunications etc. not buildings. Yes a lot of condos are already built. But again this is not the majority of downtown. Take North Brickell for example from the river down to 15th rd. The majority of everything east of 1st ave is complete. But everything west of 1st still is ready to be redeveloped. The entire area is zoned T6-48. The zoning will affect the redevelopment off this entire area. For example the only frontages now allowed in this area are forecourts, stoops or shopfronts. Parking garages will require parking liners where the actual garage is within the unit an obstructed from the street leaving streets free for frontage that I just described. Furthermore, you’re talking about a 10 minute walk from SW 2nd ave to Brickell ave.

    The same can be said for 2nd ave north of the river. The majority of everything west of NE 2nd ave is prime for redevelopment. Especially west of where 900 and TMP are located.

    The bulk of the residential was placed, now the rest will follow (under the new guidelines).

  148. The 900 and MB back sides are an eye sore at the street level. 50 Biscayne did a good job of store fronts on the back of the building.

    In about 10 years, the club landscape behind Park West will give way to either Miami World Center or some such development. That is when people will be saying the west side of NE 2nd ave is beautiful (built for Miami21 specs) and the East side is just high rise garages. But other than such missed opportunities, the rest of the Miami West of Biscayne Blvd is ripe for development and M21 will help put in place a good set of buildings there when ever that is going to happen.

  149. Gixer,
    Infrastructure most definately includes buildings. My career is intimately tied to this issue. And as MiamiSkeptic said, the existing condo structures are an inefficiency which will hamper the potential over the next few decades. Small shops will need to be located west of Brickell, since so few of the new buildings are designed to properly house the delis, coffee shops, bookstore, etc people would like to use on a day to day basis. And parking will be a disaster with so few parking spots allocated to each building (2 and 3 BR condos with only one included spot? ridiculous!).

    I agree Miami21 will help in the areas yet to be developed. But the most desirable areas, which will be seen worldwide, have not been built within a strong development vision. Just a shame-but not a disaster.

  150. On the flip side, with poor development techniques applied to the existing Brickell area, this may provide an incentive for proper construction to be built in the current rundown areas with people actually preferring to live within that region rather than nonwaterfront Brickell properties.

  151. gables,

    “And parking will be a disaster with so few parking spots allocated to each building”

    If we don’t improve highly the public mass transit in Miami, there will be a shortage of parking spots for ever, even with more allocated parking spots in the condo buildings.

    We should learn from the European cities with their modern mass transit systems, e.g. Munich, Zurich, Berlin etc.

    A car congested city is not very livable!

  152. Ever try to live year round in Miami without a car? Would like to see less use of cars, but today’s reality must be faced. Usable mass transit would be great but currently does not truly exist throughout most of miami.

    “The car is not the measure of all things !” Couldnt agree more. Mine is five years old, and plan to drive it into the ground. Love to spend the extra $400 a month on fun things in the Magic City :)

  153. Rubber wheeled trolly is just 5 months away from launch. Rickenbacker to Pace Park along the Biscayne blvd, to be extended eventually to midtown. Should help.

  154. I agree Miami needs much better mass transit, but good luck getting it with the dipshit politicians who run Miami Dade. Tax a look at the transit-tax debacle. Ten years and hundreds of millions of dollars later, I believe there are *fewer* miles of mass-transit in service than before that tax was implemented.

    Remember, Miami is a city that went like 6 years without luggage carts at the airport because the crooked pols were too busy trying to get their piece of the action. Miami is a city that just now, in 2010, has a transportation hub coming to its airport. And Miami is a city that waited until Dec. 2009 to have public mass transit running between the airport and Miami Beach. (Hey, it’s not like Miami Beach was a hotspot in the ’80s. Oh, wait …)

    It’s un-freaking-believable how bad the local government is, but I have almost no hope that it will improve anytime soon.

  155. Joe, the semi tropical (and thus a semi third world) city of Miami operates differently compared to rest of American cities. It is a given. Warm weather usually makes people lazy and corrupt. The lethargy and inertia induced by the warmth usually take their own time and course in effecting change and good things. But it will happen eventually. Just that we need patience. We cannot expect a New York City restaurant style service and efficiency on the beach. Can we?

  156. Joe:

    I could not agree with you more.

    What’s more, Miami’s team of city planners clearly dropped the ball – – once again – – during the housing bubble. It is their job to provide a comprehensive plan under which Miami’s development and growth will occur. There was clearly no plan in place when the developers descended on Miami with their condo plans – – as evidenced by the density of the buildings (Miami is NOT New York and never will be), the location of the structures as well as the construction and features of many of the new “luxury condo buildings.” (Yep, the last crack is directly from the chasm of sarcasm)

    Now the city has thousands of new condos, potentially thousands of new residents coming to the city, and no infrastructure. The roads are inadequate, mass transit is substandard. (Do we really want to talk about the availability of parking …seriously? Did they really think that valet was a substitute? Really?)

    One day the City of Miami has to recognize that “after the fact” city planning is more costly, expensive, detrimental and embarrassing than good old fashioned planning using a comprehensive plan.


    But that is just me. I could be way off.


  157. you can safely thing of miami as a giant ponzi scheme. last man holding the bag will be out of luck. but the allure and shiney happy people keep the flow of new blood into the city, thinking they will each get their piece of the pie. you are ok as long as you are not the last one into town!

  158. Interesting, the Fed Forecast for the next few years (2010, 2011, 2012):
    GDP Growth: 3.2%, 4.0%, 4.0%
    Unemployment Rate: 9.6%, 8.4%, 7.1%
    PCE Inflation: 1.6%, 1.6%, 1.7%

    What does that tell us? Well, returns on bank accounts will stay low and probably mortgage rates will remain reasonable…not where they are at now, but still under 10%. Florida unemployment will affect our market as it is close to 12% than the national of 9.6%. Foreclosures in Florida are the highest as a % than any other state in the U.S. With modest GDP growth (really fueled by fed govt borrow and spend with $1T+ annual deficits), persistent high unemployment, but low inflation (shift down in demand curve as a result of the credit bubble burst). It should be clear, that there are no drivers for a sharp rebound in housing….the relatively low mortgage rates are more than offset by “lend and hold” mortgage underwriting standards…the banks simply have to be conservative in their lending as there is no secondary market other than the U.S. govt which is exiting this market (or at least will be trying to exit as best they can).

    Is it time to dollar cost average monies into the stock market over the next 6-18 months for long term holds as part of an overall investment portfolio allocation? Probably.

  159. Between now and the end of the year, a gradual return to “return on capital” rather then the very defensive “return of capital”.

  160. Renter Tom:

    Time to enter the stock market? ABSOLUTELY.

    Real estate is nice but it does not pay dividends. Real estate is nice but it does not appreciate in value. Real estate is nice, but it has other complications such as carrying costs, maintenance and passive loss rules that make it a pain.

    Besides, the reason that a lot of people got hurt during the crash is that they had all their eggs in one basket: be it real estate, Madoff/Stanford/hedge fund, etc.

    Diversification is the key. So yes, I would argue that jumping into the stock market – – some stocks, ETF’s, mutual funds and maybe, even, a little gold (I personally like the SPDR Gold trust because you get the benefits of owning gold without the costs of having to store it).

    But diversify your investments. If Madoff and Stanford taught the world anything, never sink all your cash into to one firm’s control. Spread it around.


  161. Forecast for the next few years (2010, 2011, 2012):
    GDP Growth: 3.2%, 4.0%, 4.0%
    Unemployment Rate: 9.6%, 8.4%, 7.1%
    PCE Inflation: 1.6%, 1.6%, 1.7%

    Actually these are surprisingly good numbers. Better than what an optimist like me would have thought would actually be. If it holds true, I couldn’t be happier.

  162. Hey scrivener – Just to clarify, I am in stocks as part of my portfolio and have been throughout. Basically, I just road through the volatility as invested and used the opportunity to sell managed funds at a loss and simply then buy a few very low cost, tax efficient ETF mutual funds so kept in play and took the loses without running into the wash sale rule. My exposure to stocks was such that it didn’t cause me any real issues and at most affected my net holdings by maybe 10%, now 5% but the other holdings went up to offset that too so net net probably no worse and not much better than before the crash. I stopped additional investments in 2nd Q 2007. My question now is, to restart and make significant contributions to the stock portfolio portion or not. I don’t see any huge spike, but the number one rule “to not lose money” is not as large of a risk as before. With a balanced worldwide exposure to stocks it should be good for a few decades.

  163. AJ – There is still years for sh****t to work through in the economy and Miami area in particular. The fed govt has done what it could to absorb the shock of the credit bubble, but it is no substitute as fed govt demand is different and more inefficient compared to private esp with respect to business investment. Low interest rates which makes debt cheaper is no substitute for real risk bets of an equity state. When debt is used as a substitute it takes on too much risk for the cost and so misallocates the risk. The feds liquidity injections helped avoid a complete meltdown but did not fully satisfy the negative money multiplier effect of the credit bubble burst. There is no free lunch and there will be negative ramifications to the economy that will result in an anemic recovery.

    Dollar cost averaging additional capital into stocks now is a more reasonable course then during the crazy crisis time (unless you really are a high risk, gambler type). It gives you the exposure to stocks that one may want should the market continue to go up but lessens the risk should we a see a double dip (the double dip would most probably not be nearly as severe as the first dip). I am feeling inclined to pursue this course beginning in March barring some major negative event. So, for all you who think I am just a bear….I’m not. Just realistic and prudent. :-)

  164. Caelos – I would agree that one should have exposure to stocks outside the U.S. but I personally prefer a mix that is a least 50% U.S. if not 70% for just the stock portion of one’s portfolio esp since many large U.S. companies are multinational in reach anyway and although there are shenanigans in the U.S. stock market, they are much worse overseas.

  165. awhhh shucks, the experts say it’s time to buy into the stock market.
    Must mean it’s about time for me to sell the rest of my positions.

  166. Renter Tom:

    I applaud your moves! Taking the losses and moving on rather than doing what a lot of really, really, really unsophisticated people did: that being pulling out of the market altogether.

    What I would suggest is sitting down with your portfolio (maybe with a glass of wine or a good brandy) and assessing where you want to go.

    Where is your money invested? As you look at your portfolio, do you have any investments that are unusually large? Are these concentrations performing or not. A good portfolio should be yielding at least 20%. If your portfolio is not, why not? Moreover, if your portfolio is not yielding a minimum of 20%, it is time to get the lead out.

    Certainly ETF’s and mutual funds are terrific investment vehicles in that you can gain exposure to an industry, commodity, sector, etc. without having to research individual stocks, companies, etc and they also reduce your risk of loss/making a bad bet. I plugged it earlier, but I am watching the Spyder Gold Trust (GLD). I recommend, as part of a well-balanced portfolio, you continue investing some portion of your efforts in funds. If it helps, I like, for example, the Oppenheimer Developing Markets (ODMAX).

    But the real growth in the coming fiscal year, as the economy recovers, is going to be in stocks. I would definitely concentrate your efforts on the stock portion of your portfolio. As you clearly demonstrated in your post, the key to a well balanced portfolio is having diversified investments so that when the market, or part of it, goes sour, your losses in one area are just as valuable as your gains in another. (e.g. capital losses offsetting capital gains) Nothing is more frustrating than a capital loss carry-forward.

    Moreover, I recommend you take a hard look at the individual stocks you are invested in and ask yourself: “Why do I own this stock?” Do I own it because this stock, say Intel, Microsoft, Coke, etc, pays a juicy dividend? Do I own it because its yield is generating value for my portfolio? Do I own this stock because it is generating a loss to offset taxable capital gains?

    Also important in the diversification game is separating your dividend-rich stocks from your dividend-lean stocks. A juicy dividend can clearly ease the pain of a market down turn. I recommend that your portfolio assessment include analysis of whether you have enough dividend paying stocks because, be they cash or stock dividends, they generate value for your portfolio.

    As for spiking values, they are out there. Check out stocks like Cisco (CSCO), Fiserv (FISV), Fastenal (FAST), Johnson & Johnson (JNJ), Kraft (KFT), and Walgreen (WAG).


  167. anyone have any thoughts on sunny isles, where prices will be in the next 6-12 months? looking to purchase but i figure time is on the buyers side. thoughts would be greatly appreciated.

  168. The real problem is that I am looking to purchase a home in the 600K -700K range. I have plenty of income to afford a monthly paymemnt but there is no way I am putting down 25% in this market for a non-conforming loan. Does anyone know of any other options for someone like me who wants to butya place but doesn’t want or have the capital to put that kind of money down???


    Florida No. 1 in mortgages past due
    South Florida Business Journal

    Florida is first in the nation, with 26 percent of mortgages one or more payment past due as of Dec. 31, according to the Mortgage Bankers Association’s National Delinquency Survey.

    The survey finds 20.4 percent of Florida mortgages are 90 days late or already in the process of foreclosure.

    Nevada comes in second, with 24.7 percent one payment or more past due and 19 percent 90 days or more late or in the process of foreclosure.

    Nationwide, the delinquency rate fell to a seasonally adjusted rate of 9.47 percent of all loans outstanding as of the end of the fourth quarter. That’s down 17 basis points from the third quarter, but up 159 basis points from a year ago. A basis point is one-hundredth of a percentage point.

    The MBA said the drop in the 30-day delinquency rate is “a concrete sign” that the end of the mortgage crisis may be near. That’s important because mortgages that are 30 days late generally serve as a leading indicator of serious delinquencies and foreclosures.

    “We are likely seeing the beginning of the end of the unprecedented wave of mortgage delinquencies and foreclosures that started with the subprime defaults in early 2007, continued with the meltdown of the California and Florida housing markets due to overbuilding and the weak loan underwriting that supported that overbuilding, and culminated with a recession that saw 8.5 million people lose their jobs,” said Jay Brinkmann, MBA’s chief economist, in a news release.

    Many of the loans that are 90 or more days late are in loan modification programs, but are considered delinquent until borrowers can show they will be able to make payments once their mortgages are modified.

    On Thursday, the U.S. Department of the Treasury reported that, while more than 1 million U.S. homeowners have started the process of modifying their home loans under the government’s Home Affordable Modification Program (HAMP), only 116,000 have actually had their mortgages modified as of last month.

    South Florida ranks fourth out of 15 metropolitan areas with the highest HAMP activity, at 4.7 percent. Through January, South Florida saw 39,356 active trial modifications, of which 5,143 have been permanently modified.

  170. Here is my problem. Worked 4 6 months 5 years ago im Miami housing seems to have dropped since then and now I am taking a job at Childrens hospital by the airport I believe. Here is my problem I am settling three lawsuits that will leave me about 160K+ I want to put 80% in a roof paid for the rest in the bank maybe all in a roof. There is me girlfriend two cats where do I live safley and can I get a house/condo seeing water for 145,000 or so?

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