Vue at Brickell – Are Prices Finally Bottoming?
March 8, 2008
by: Lucas Lechuga
On May 24, 2007, I wrote a blog post entitled “Vue at Brickell – Overpriced or Insanely Overpriced?“. At the time, the average list price of condos available at Vue at Brickell was over $550 per square foot. As many of you now know, and as the blog post explains, the inflated list prices were a direct result of the rampant mortgage fraud that occurred in the building. Since that time, as more and more people became aware of the situation and as a large number of foreclosures in the building hit the market, prices at Vue at Brickell have come down like a ton of bricks.
There are now indications, however, that prices at Vue at Brickell may be close to reaching the bottom. Buyers are finally stepping in. Since the last week of January, there have been 7 condos at Vue at Brickell that went pending. With list prices of $190,000-$199,900 for 1 bedroom condos and $220,000-$249,900 for 2 bedroom condos, it makes sense that buyers are now beginning to accept the risks associated with buying a condo in a building that has a high number of foreclosures. It will be interesting to see the sales prices of these condos at Vue at Brickell once they close. It’ll give us a better indication as to the level of motivation of some of these banks.
Below you’ll find the best deals at Vue at Brickell:
- 1 Bedrooms
- Unit 2111 – short-sale – $162,500
- Unit 1710 – short-sale – $162,500
- Unit 1211 – short-sale – $162,500
- Unit 1413 – short-sale – $162,500
- Unit 2307 – foreclosure – $205,000
- 2 Bedrooms
- Unit 1303 – short-sale – $229,900
- Unit 1505 – short-sale – $250,000
- Unit 1304 – short-sale – $279,900
- 3 Bedrooms
- Unit 3006 – short-sale – $357,000
- Unit 3606 – foreclosure – $379,900
The mortgages of three of the four short-sale one bedroom units listed for $162,500 are held with the same lender. This may be an opportunity for an investor to grab all three for a bargain-basement price. There are currently only 8 condos available for rent at Vue at Brickell. Within the past 12 months, the lowest that a one bedroom has ever rented was $1,300 per month. The lowest that a 2 bedroom rented was $1,550 while 3 bedrooms condos bottomed at $2,500 per month.
Good sign.
No sense in delaying the inevitable.
My personal opinion is that price’ s will drop even lower…..quite a bit lower before it’ all over.Some seller’s are FINALLY coming to their senses and realizing that …….and pricing accordingly.The only way to know for sure is the sale’s report’s.Some of the buildindg’s I’ve been watching..haven’t had a sale since last year.Good luck to everyone buying and selling.
i figured this building to be a good predictor of the bottom prices to be seen in the future. the low 2b prices seen in this building are well under $300k. my guess is this would indicate that most other new buildings, which may not have had the same issues as vue (massive foreclosure, speculation, fraud, delayed mainenance, etc) will price slightly higher at around $300k for a 2b. this will indicate the price point at which buyers can affordably buy into the market-also the price point that mortgage lenders will lend. deals will be had under $300k, but opportunity exists for the market to pick up at that price point. this corresponds into sales prices in the range of $200-$300 sf, higher the unit higher the price.
Lucas, how do you know that that those rental #’s are the “lowest” in the past year? What about all the private-party transactions that are taking place where there is no way for you to have knowledge of rental terms of those leases?
MY FOREIGN CLIENTS WITH THE STRONG
EURO SUPPORT ARE GETTING SERIOUS ABOUT BUYING ANYONE WITH INTERESTING PLAN LET ME KNOW..I WOULD CONSIDER
SOME TYPE OF SYNDICATION FOR THEM
Vue, altough is nice from the outside nothing architehtially stunning is still in a great location in Brickell. At that price it’s a steal. Yes, prob all the kitchens will all need updating as I believe this was first a rental building that turned to condos. It actually wasn’t called VUE before.
Keep in mind the retial on the bottom floor is also gettinf full and you have a nice lounge downstairs called Badrutt’s Place which is owned by Europeans which they’ve done a beautiful job with the place. Decor is excellent and food is good too.
My personal taste i would refer AXIS since it’s new, nicer looking and has more glass vs concrete but then again expect to pay alot more than VUE.
IMOP, I think of vue as the economy brand and axis as the premium. However, some units at VUE have bigger square footage liek the 3brwhich would be the price of a smaller 2bd at axis.
Anybody know what the sales status at the Mondrian on West Ave on South Beach currently?
While some condos may appear to have bottomoed out, the housing market in general is far from bottoming out. The job market is taking a dive. School districts and local government is laying part-timers and contractors. As the prices of condos drop, the pool of qualified people who can buy is also dropping.
On a related note, does anyone have data on prices for brikell condos from 03 and 04. I am curious about the price point before the housing bubble started inflating.
It is too early to call a bottom in housing. Further price declines are inevitable since we are still above the long-term fundamentals. The question is not whether we will return to the fundamentals, the question is how far below them will this cycle take us?
I would be curious to see the numbers for how many months of homes are on the market right now? Was the Feb numbers posted anywhere?
FRAUD, FRAUD, FRAUD. The Vue among other buildings was used as an ATM, putting hundreds of thousands in the hands of thieves. It is disgusting that a few Realtors, Mortgage Brokers, Appraisers and Title Companies facilitated those transaction. Yes, rents are very low. Why? Because those committing fraud wanted to fill those units FAST to generate more dollars into their pockets. The heist of the decade.
Contract 2-3 units, have the Title Company write an escrow deposit letter when really not a cent was put down, have your mortgage broker embellish your income and assets to qualify, create a second inflated contract to submit to the Lender, have your appraiser support that inflated contract value. Then at the very well orchestrated closing the seller (who most likely has no clue about the fraud) transfers the deed and collects any proceeds of the original contract and once out the door the buyers PARTY. The next day with hundreds of thousands in their pocket, a new Hummer in the drive, the biggest flat screen still in box and bags of DeZina cloths all over the $1,200 rental it’s time to find a girlfriend and take her to a Sandals ReSort.
vue the pricing of the units that lucas listed is a little lower than what was sought when the building was first converted. the location is not bad but the units are entirely unimpressive. considering all the inventory that’s coming online in that area (e.g., infinity, axis, 1060, POB, BOS) along with all the current inventory, i’d wait rather than buy today at the vue.
I still think these units will fall even further. Economy is bad right now and the condo supply in Miami far exceeds demand. Soon all of these buildings will be competing for the same consumer which means more price competition. Im looking forward to it.
Oh, I forgot to at that a $645 maintenance fee for a 2br at Vue is absolutely absurd.
Mr. Waverly–jcrimes Blind Mind and other’s…I’m with you.we still can’t see the mirror’s for the smoke.I think were going to see $175 a sq. ft. very soon.Anybody else agree with that?
Blind Mind brings up a good point with the maintenance. This building was overrun by fraudsters who let maintenance go just as much as the mortgage.
Anybody out there know what the financial condition of this association is? Is that $645 likely to go up?
And another question… Just what the F happened to the fanfare of the Mayor’s mortgage fraud task force? Any of these guys going to jail or what? Not hard to figure out who they were…their names were on the freaking deeds.
Bottoming? Is this comment a joke? Are you kidding, this market has a lot longer to drop, unless you talking beach front. The foreclosure district @Brickell has just started the drop. Your looking at 20 percent to 30 percent more drop. Banks are not loaning, regardless of how good someone’s credit is. And cash buyers are on the sidelines. New developments in California are now pricing at 35 percent off with no takers. Now they are trying auctions for property with still no takers. The same effect will start here on Brickell. Way to early to buy
Does anybody have any knowledge about 188th ST. in Aventura?? There are currently 5 project’s underway or completed on that street so far.I believe Uptown Marina Loft’s ….. The Atrium…. 3030 ….Eastside ….Artech….Any comment’s -recomendation’s -information would be very much appreciated.That is STILL a VERY PRICEY area from what I can see.Is something going on there that I don’t know about???
Lurker Tom,
You write………..
“And another question… Just what the F happened to the fanfare of the Mayor’s mortgage fraud task force?”
You can try paging them during lunch at Capital Grille. I understand they usually sit at a large round table in front. They may have moved on to another restaurant, so best to check on this information. It may be inaccurate or not up to date.
If that does not work try the Miami Herald ,local coverage dept.
Goodluck!
If I were a Realtor I would “lien” my clients away from anything in the City of Miami. If you know what I mean.
This is a great blog but I don’t see a lot of discussions on condos in South Beach. What do you guys think of the middle range condos in South Beach, eg: Mirador, Waverly ? Any signs they are bottoming out too ?
Is it true that the prices in South Beach are still holding up pretty good in comparison to downtown Miami?
Thanks
BTW, I just went to Bank of America for a mortgage last Thursday. A 30-year fixed is at 6.75% !!!!!!!! The rate has actually gone up substantially compared to one or two months ago. With 30 year rate at 6.75%, I don’t think the market will bottom out any time soon. Right now I suspect the only people who are buying are those who are paying with cash.
Anyone heard anything about Perez of Related group raising money for a billion dollar vulture fund?
My guess being that REIT’s will purchase units in bulk from developers that have unit owners walk at 40/c on the dollar.
Converting entire buildings to rental. Sitting on them until they can condo convert seems feasible and economically advantageous. Should be a good holding period return and they get paid to wait. Only drawback is the amount needed to invest and a lockin of 5-10 years.
Banks are not loaning on condos in south florida. Even if the buyer has the highest credit rating and lot’s of dough in the bank, the problems are the banks.
Probably one of the better options is self financing. You loan and finance the transaction yourself
JL
Did you just write that? Then Buyer Tom would be right.
The real estate market is over RIGHT NOW.
Johnny,
That’s just not true. A client of mine locked in a $1M jumbo loan with Bank of America at 5.2% a few weeks ago. No points, origination fee or prepayment penalty either.
Lucas,
It’s great there’s so much banter on your blog, but I got to tell you, and we’re all guilty of it to an extent, but if some of the sarcasm, digs, mud-slinging, my bank balance is bigger/smaller/multiples of yours etc, doesn’t get reeled in, people will end up bored, annoyed and then stop participating in your blog and we’ll all be the poorer for it.
Just my 2 Rmb worth.
Even though I’m guilty of some of that stuff too, I was just telling Lucas that five minutes ago.
PL
I was just talking to a very large company who owns rental towers in NYC.
Here’s the issue (big): a portion of the units will already be closed. So the units are all condos already.
Related will end up being a landlord by default. Here’s the big problem: for rentals they built the units “too fancy-schmancy” and they will/are gonna lose the a**es because of the actual market rate for that unit.
Bad times for Related…Bad times.
Kevin
Do you think that let’s say in a tower of 100 units, 50 close and 35 are up for re-sale that we will reach a point where the developer and banks take a view such as this:
– Developer buys out the 50 units at xx cents in the dollar, as agreed with the bank.
– The banks writes off the remaining % from the condo owner, just as they’d really have to if all these places foreclosed one by one.
– The Developer now owns 100% of the condo and turns it rental. The bank takes a direct equity share in the gross rental proceeds and a share in the (say 5-10 yr) equity up lift when or if the building is sold on in whole or in part
– Obviously the banks would prefer not to own real estate, nor have to forgive so much debt, but this way, they take the same pain (write offs) but have direct control (with the developer) over a single rental building and its cashflows. So much better than dozens and dozens of units spread all over the place.
Julian
I agree–ultimately, in some cases, banks will end up owning the projects.
Like that one in Dadeland…I don’t go over the bridge, but I think it’s Downtown Dadeland.
Julian
I think it would be interesting if developer would “cancel” the project, or let the buyers who wanted out, out and dissolved the condominium and made them rental towers.
http://money.cnn.com/2008/03/08/news/companies/countrywide_FBI/index.htm?postversion=2008030810
Julian,
I don’t care how much US money you have, that does not matter. Tell me how much Euro you have.
I agree with Kevin – I don’t see how Related is going to get out of this unscathed. Even holding the units as rentals is a money-losing proposition. Unless Perez cleverly uses that “vulture” fund to bail out his own condos using other “smart money” Latin American investors’ money.
Today I walked all through Brickell. Sure was quiet – other than the sound of construction on the new condos. Not many people around at all.
The last thing that would have come to my mind, looking at all the empty and soon-to-be finished condos, was “we’re nearing the bottom”.
$645 for maintenance is absurd, plain and simple. Unless, of course, Im being greeted by the Playmate of the Month who is there to give me oral pleasure while I read the paper in the morning. What needs to be maintained for that amount of cash?
Im loving the price drops, especially in that shithole we call downtown. Reality is not far away!
I don’t get it. Even when the bottom happens it is not like prices are going to jump up again and people will be buying and flipping. I think when the bottom does happen it will stay for some time. So what if I missed the best price when the bottom happens. Even if I purchase a unit $10k over the bottom price, big deal especially if I take a 30 year mortgage.
Right now if you purchase a one bedroom for $300K and only rent it at best for $2k month you still have negative carry that I think will last for some time. The numbers don’t add up. I always remember people tell me if I were purchase the rent should more or less cover all my expenses.
I also think the maintenance in some of these buildings is out of control. Some 2 bedrooms on the beach have a maintenance of $1000 per month for like 1,300 square feet. Yeah yo may get perks like internet, cable parking etc. It is a big factor on why some of these units are not selling.
BFG..wheni moved to miami, I looked at many condos on brikell and the reason I did not buy there was the simple fact that place is empty after 6 pm and on weekends. When all the business are open during weekdays, there seems to be traffic, but after that the place is dead.
I have been checking out Zillow.com to see prices for condos in brickell area for the past few years and in my very informal research have noted that most condos doubled in value from 03 to 08. Needless to say, that price point is not sustainable. It will be interesting to note what type of condos are sold at fire sale prices in the future…the new construction or old construction.
On a different note, I have some friends who have condos in Los Alos area in FLL. They made an interesting comment to me about peopel who live in their buildings. Most of them travel for a living. I.e they are consultants (various specializations) who get on a plan mon morning and fly back Thu or Fri night. There are no jobs in miami that allows them to pay for their condos. Most of them work elsewhere, but live in south FL.
The post had nothing to do with prices “bottoming” in the overall real estate market in Miami. It only dealt with prices at Vue at Brickell. I don’t think you can say that prices for condos in various condos buildings in Miami will all bottom at the same time. Certain buildings will reach a bottom much quicker than others.
The Mayor’s mortgage fraud task force was created to put someone’s cousin, niece or nephew on the city payroll.
I personally tracked 18 units that when listed on the MLS had prices between $520K to $580K, after those same units closed the public records showed sale prices at $820K to $840K. Someone pocketed $250K to $300K.
I first called the Mayor’s Mortgage Fraud Task Force office to report this and only got a voice mail. Then I scanned the MLS listings and public records and then sent it to them in an Email. I later followed up with another messages on their voice mail. It’s been about a month and NO ONE HAS CONTACTED ME.
Miami City Government is a complete embarrassment. Taxes have doubled in a four year period yet services have diminished. City payrolls have increased while population has seen only a moderate increase.
Maybe it is in Local Government’s best interest to ignore this fraud and inflated sales. Inflated sales increase estimated tax values and tax bills, thus more $$$ for local government. It was very interesting to see the job report numbers this week. I believe all were down except service and government jobs. Four years ago it took two guys to mow the lawn at our local (small) park. For the last year six to eight city workers show up in two trucks, four to five sit in the trucks while the other three to four mow the lawn. It’s like one of those jokes “how many people does it take to mow a lawn?”.. I guess the answer would depend on how poorly managed your city is.
Mr. Waverly,
I told you Capital Grill, third table on the left. Large round table!
If that fails, Miami-Herald city beat. Lucas can help you. Lucas’s real “calling” (he does not realize it yet) is investigative journalism. IN FACT LUCAS should be writing for the Herald.
Lucas,
You team up with Mr. Waverly. Sounds like he know what he is talking about. He sounds passionate and neds help!
Kevin,
I see two scenarios.
One being that all the units close to different banks. Most foreclose, leaving 30 different banks holding the bag of 200+ units in a building. A single buyer (REIT or investor) would be unwilling to negotiate in seperate party transactions.
If anyone remembers that 12-plex on south shore drive all owned by different banks. A nightmare getting them to agree to think cohesively.
Or
The marble floors and beautiful lobby seem excessive for a rental only if you as a landlord pay full price.
A developer with a tower slated for completion at the end of ’09 will have a gross majority of owners walk. With a majority of the buildings units reverting to the developer. One buyer and seller is easier. A REIT buys the majority of the units at a steep steep discount (like a massive short sale). Charging market rental prices and justifying the cost of the units with a reasonable purchase price per unit.
I believe that Perez wouldn’t be buying his own towers. Someone needs to take a hit and preferably it’s not your own development company.
Let the bank take the hit, then swoop in for the bargain.
Mr. Waverly:
I think you’re right: the “task force” really is not interested – they don’t have a real incentive to be.
The banks and investors who bought the CDOs are the ones holding the bag on this. I think they’re the ones who have to get the ball rolling on this issue. However, they’re so busy just trying to stay alive right now, the last thing they’re probably worried about is “getting revinge” on the fraudsters. I think their focus right now is preventing further fraud, and figuring out how to get out of the mess they’re already in.
Once the worst of this credit crunch has passed, I think you’ll might see this issue revisited. But at this point, there really isn’t much the banks can gain by going after these guys. The money is gone.
If anything, the banks can hold themselves at least half-responsible for letting things like this happen. It doesn’t take much effort to spot those phony sales, just like you did. But when you’re so busy rolling in the dough like the banks were when things we going well, you lose sight of basic underwriting standards.
To: HairSite
South Beach has its fair share of troubles – take Flamingo for example – it was touted as biggest condo conversion ever (in FL) – and what happened – they managed to convert South tower – but canceled North (& Center).
Compared to Brickell – South Beach is holding up better – but looking at Flamingo one might think that we are running out of interested Eurpean investors because:
Dollar will still continue to drop
Prices are still high (looking at monthly rent in SoBe – it is up to 3 times cheaper to rent than buy).
PL said: “Let the bank take the hit, then swoop in for the bargain.”
I agree completely. Any one of these “vulture” investors that buys from anyone other than the bank (after foreclosure), they’re paying too much.
If the developer is able to keep from losing the building to foreclosure, and it makes sense to hold onto it and either rent or try to sell the remaining units, then why wouldn’t the developer do that themselves rather than let a “vulture” profit from it?
The answer is that it DOESN’T make sense, and the “vulture” investor would really be the bagholder on a deal like that. Most of these towers are not worth what the developer owes on them. I guess the seller of the building could arrange a “short-sale”. But even then, the vultures would be better off waiting for the inevitable: foreclosure.
never through any market runup such as the one we have had in real estate, has there been ANY sort of recovery until some in the undustry are jailed … and some big players in the field have gone bankrupt – NEITHER of which we’ve seen so far …
when Angelo Mozilo is put in jail, when WCI some other builder goes bust – then and ONLY then will we know that slowly things start to bottom out. some of this reality will hit when the stock markets start to massively puke in ways that’s not comprehensible by the masses.
THEN maaaybe we’ll see a proper, multi-yr bottoming out process. until then, it’s just a pipe dream and a wish.
keeps eyes on bear stearns, wash. mutual, etc etc…
cyrus
come on, no one deserves to go to jail…at least based on the facts that have been presented so far.
as for bankruptcy, well, levitt and tousa are already in. my guess, wci barely avoids it (like american airlines a few years back). if they were going to file, it would have been better to do before starting closings on OBH.
At $165k, $645 maintenance, $1400 rent and 20% down these 1bd are more or less at the break even. Correct me if i am wrong.
As more units come on the market, I’m afraid to say but the rental prices will probably decrease.
The one bedrooms in Vue will go to $99,999 before the end of 2008, you heard it here first.
Someone asked about the Mirador earlier in the comments section – my feeling is that the location is so prime that rentals will continue to be strong, as long as there are young people who want to live the South Beach lifestyle and can afford to pay it. $1200-$1300 a month for a unit with a view of the water will continue to be acceptable because the Mirador is a known party building, and the management is doing a good job of keeping the place up. Whenever I visit my friends who live there I’m amazed by the “Melrose Place” feel of the building, and the fact that it’s on the water, across from Starbucks, some decent restaurants, and steps from Lincoln Road will keep the values in that building stable.
And if the Mondrian ever gets completed, that will obviously just enhance value, but all bets are off.
1. Note to Self – if these condos sell for $99k in a years time, buy one.
2. Note to Congress – introduce legislation to raze the excess, empty SFH homes and condos to the ground. Recycle the steel, re-export the sub-zero fridges back to China, burn the wood as biomass. Ships which arrive in US full and return empty, will now be full.
3. I am deadly serious about 2.
Mr. Waverly,
Have you tried taking it to a Federal level? Its clear that anyone involved on this “task force” has clearly been put there for smoke-n-mirrors purposes. Theyre saying, “Look, we’re trying to end this corruption!” while in reality the corruption continues. Honestly, the way that this city government works makes me really angry. Its so blatantly obvious what is going on and nothing can be done to stop it. If you can run a good scam and get away with it, good for you. But when you pull crap like this its just insulting.
And Cyrus has a point. The way I see it, people will continue to press another person’s buttons no matter what as long as they continually get away with it. Then they get their ass kicked and all of a sudden it stops. This city government needs a serious ass kicking. Whether its jail time, legal battles, you name it. Something needs to be done because the rest of us resident taxpayers are getting sodomized on a daily basis.
Yes, The FBI was first notified in September 2006 and has been given regular updates. It was hope early on that they would step in to stop the activities yet fraud sales continued. When blatant fraud carries on all around and you ask for help at the highest levels and nothing happens there is a problem.
I have Tenants coming to me daily about to be kicked out of there units due to fraud owners defaulting. I have sellers who are trying to sell while now competing with fraud units recovered by the Lender and now discounted. I know tax bills came out in November adjusted higher due to the averages pushed up from the fraud sales. I know owners are going to get hit with an assessment soon to cover “bad debt” due to fraud buyers who stopped paying maintenance thus creating shortfalls for operating budgets.
It is my opinion that none of this had to happen if local, state and federal government had stepped in to stop the fraud and protected the consumer.
Let me add Countrywide’s and IndyMacs negligence. Countrywide representatives were notified about suspicious activity and a possible loan they were going to fund. By two different departments I was told is was “not your business” regarding the actual value and the amount they were funding.
Two weeks later that suspicious unit listed at $580,000 on the MLS had closed with two Countrywide loans totaling $765,000. Countrywide should be held accountable for directly contributing to the burdens now set upon the responsible owners.
BTW that same unit is listed today at $900,000 by Fortune International, MLS # D1258103 . Are they that ignorant or aggregate to continue their association with this property?
Do the math, it’s pretty basic yet you report to Realtor Association and they
toss it back at you to give a report and file it with this department and jump through this hope. As Agents it is our responsibility to do our jobs, we should not have to be policing members and then filing reports.
A little off-topic, but I just wanted to address something about foreclosures…
Foreclosures do not CAUSE lower values – they are a symptom of them.
I hear about sellers complaining that they are having to “compete” with all these foreclosures – that they are ruining the values in their area. Not true at all.
The fact is, the banks want to get as much as they can for the properties, but they’re not going to (or can’t) wait until the second coming of Christ for values to return to their boom-era levels.
In most cases, they are just pricing the properties to sell. And many foreclosures, even though they are, by far, the lowest priced homes or condos, still have to be reduced in price several times before they sell.
Any listing that has been reduced even once in price can not be called a “bargain” when it sells. It simply sold at the price that people were willing and able to pay – the market price.
Again – foreclosures do not cause lower values. It’s the opposite – foreclosures are caused by lower values. That’s why we had virtually no foreclosures when values were going up. Only when they start going down does it become a problem.
I’m sure many people understand this, but a lot of sellers out there sure don’t. They’re the ones who will continue to chase the market down.
Ironically, the greediest sellers are the ones who will end up with the least money.
Pricing your property to sell NOW will save you tons of money in the end through both a reduction in holding costs (it will sell sooner), and by getting you a better price before your property value goes down even further (which they will).
jcrimes,
not sure if you were serious but there already are MANY instances which calls for jail time … for many of these so-called CEO’s.
angelo mozilo (Countrywide): had not sold a single stock in CFC since 1984. unloaded approx 160 million of personal stock during the 1st quarter of 07. stock was in the 40’s…since then it has dumped down to 5 (and bank of america will get totally roasted on their purchase of CFC even if they did get a ‘good deal’).
BOB TOLL (toll brothers): both Toll brothers sold more personal stock that last quarter of 2005 that the company generated in revenues.
amazingly, these scumbags were buying back stock w/the company’s capital at the same time they were unloading personal stock. the EXACT same thing was happening in tech stocks as that bubble was about to pop….very simple scam: announce a buyback and sell personal stock into it. disgusting. mark my words: there WILL be many that wind up in jail once it really busts. obviously there hasnt been enough pain for that stage in the cycle to arrive…yet.
JULIAN,
as crazy as it may sound to some…but if some of these buildings are about to go bust – its not TOO crazy to remove all copper piping and over-used steel, and sell it. these prices on these commodities are out of control (though i think they will come down to earth after the morons cut rates drastically again on mar 18).
replace parts and pieces w/pvc or plastic – a $99k 1 bedroom doesn’t need copper piping. re-coup some of the building costs by replacing raw materials w/less expensive replacements and selling off what u scrap out of it. sounds crazy but it’s not really. this will make more sense if prices really crap out.
cyrus…the fact that housing bubble is bursting and the dollar is tanking, a lot of money is going into commodoties like oil, copper, gold, etc. That is the only “safe” bet left. Stocks, housing, us$…are all tanking.
Sooner or later, this equity bubble is going to bust. It will probably be just around the time these massive buildings are torn down. They will actually have to pay someone to take the metal away from these condos.
On a related note, i have seen pics of abandones high rise buildings where the skeleton of the structure has been build, but it has no walls. This is common in south america and asia. Builders simply stop at the point where they are out of money. So you end up with these ugly structures with only steel and concrete visible…no walls, no windows. These buildings are not torn down as it is seen as waste. The builder will finish the building when they have money in the future.
here is a link to a pic of a building that was abandoned as is..in phillipines
http://www.cgstock.com/philippines/manila/4451
I get your point Cyrus….however being in the scrap metal business myself ,don’t think it’s very feasible.One thing you forgot about .LABOUR….By the time you pull out a few lbs. of copper and replace it with NEW pvc the labour will kill you.
Oh silly carbonblackcab, haven’t you been reading Kevin’s posts? The water is fine, jump in, now is the time to buy. Or it really will be a bad market. I think it would be prudent to put up the structure, then stop, but most won’t do that unless the bank stops the loans.
when the prices go up they go up in spikes and they come down the same way!! some of us may be fooled into beliving its the bottom! as the us economy drags the global economies lower and the dolla weakens more and more, prices will fall even more! when the prices of commodoties begin to fall in real terms ie cement, steel etc that make the building thats when the turnaround will happen! we are still a wile a way from that. Good luck to all in the market right now.
Buyer Tom
Ur a full-on a**. I never said that. You are the most instigating commentor here.
You’re annoying.
SIDELINER,
i’ll assume you are in UK? … in miami, labor is very cheap, especially since the local economy has gotten hammered and housing (the main “industry” for the past 5-7 yrs) is unraveling, labor may not be as bad as you think.
having said this…what i mentioned was for a market when there just are NO buyers for a long period of time to the point the builder is done…and there are no bids. this may be soon or it may never be so bad where this extreme measure could actually be perceived as an option?
scrap metal biz must be good the past few yrs, no? i know metals across the board (steel/gold/platinum/copper, etc) pricing has been close to parabolic going back 2 yrs.
cyrus…my own two cents, you won’t see mozillo or toll go down for what you described. usao/sec aren’t going to waste their time on an insider theory with these guys.
btw, someone mentioned bringing instances of mortgage fraud to the fed. i remember that acosta had set up some type of task force to deal with this. that said, i don’t think their mandate will extend to individual purchases (i.e., they’ll let state authorities make a prosecution decision).
Seeing that six units in the Yacht Club” are currently “under contract”suprised me today frankly. Closing remains to be seen but if they do, that seems like a healthy level of movement in that building no?
SeanJohn,
I now see 10 pending sales. Two new units went pending yesterday (March 10, 2008). That is very healthy movement for that building even if only half of them close.
Lucas,
I think many foreigners are buyingin the Yacht Club because of their loose rental policy. They allow monthly rentals. The yacht club is one of the few building on the beach that allows this. Plus it is South of Fitfh.
I’m not buying into this idea of “selling the scrap” from these buildings.
The labor and mobilization effort required to do that would erase any financial gain that could be had from selling the materials.
And more importantly, even though I’m bearish on the market, but I’m not THAT bearish.
Do some people here really think that some of these condos aren’t worth the materials that make them up? That’s a bit absurd, if you ask me.
If any of these buildings had a “blowout” sale tommorrow where they discounted them 70%, I’m sure you’d sell them overnight. And the money from that would far surpass the value of the raw materials minus demolition costs. I’m not a contractor, but I’m sure that labor and associated costs makes up the majority of the cost of any building structure anyways – not the raw materials.
Ok…so now you guys are now RIPPING DOWN the buildings in here.
Wow. I would have once joked about comments coming to this.
Lucas,
It’s funny now you even have to justify pending sales.
Wow.
BFG et al – The point isn’t to scrap the towers for the sake of the raw materials.
The point is scrapping the towers/SFH deals with the oversupply issue – corrects a large part of the problem which is causing such strain in the banking system. Seriously, why be concerned about 2 million more units nationwide that required, the impact of these inventories on prices, HOA, foreclosures etc etc etc etc (everything we discuss on here), when part of the problem – too much building with cheap money – can be erased.
You know, if “Housing” were a retail company, it would scale back capex, close stores, repair the balance sheet, focus on existing stores (or existing homes). “Housing” needs to think like this
A side effect is there is some scrap value to be had out of it too.
Lucas
Also hearing that the cheapest 1/1 ($450k) at Bently Bay N may be in contract as well. Whatever about Europeans or the monthly rentals at Yacht Club the current pendings are impressive versus the last 12 month activity there. Data is data. Lets see how the closings go.
A Realtor’s® number one sales tool is to create a sense of urgency in the prospective buyer. Many Realtors® manipulate that along with the long drawn out emotional buying process. With the housing glut, many buyers are not taking the bait….unless it is “the US dollar will strengthen”, “we’ve reached the bottom”, etc. so you don’t want to miss this opportunity…it’ll get away from you. Seen this in my local market with home builder sales incentives…the problem is, after the deadline, bigger deals have been coming next. Again, once we reach the bottom, housing prices will be flat for a very long time, there simply is NO HURRY in buying right now.
That is my conclusion…
Other questions to ask regarding buying now are: why were prices so high? when will those high prices come back?
If it is a bubble, then the answers are: those were fictitious prices and gains. never in real dollars but sometime in 10+ years in nominal dollars.
Julian – what would compel the owner of one of these buildings to do that (tear a building down)? The chance to be a martyr for the sake of helping to prop-up condo prices?
You really can’t be serious about this. I assume you were talking hypothetically – not realistically. If we’re speaking hypothetically, we might as well suggest giving Wall Street and real estate developers a time machine to go back and tighten their belts towards the middle of the boom to fix the mortgage/oversupply problem. That’s about as realistic a proposal as expecting developers and banks to tear down perfectly good condos just because of an oversupply issue.
BFG – read no.52. I was talking the context of Congress addressing the overall issue, with no expectation that any individual developer would do this on their own.
Yes, of course, it’s an unconventional idea, but unconventional times call for unconventional approaches. Or more likely, take over entire towers as rentals by doing deals with the Developers – a lesser nightmare than dealing with 100 different foreclosures in different buildings/parcels.
(oh and your last paragraph – we are, in part, and in effect, giving them exactly that. Got some rubbish loans you don’t want, don’t worry we’ll give you some Treasurys instead!)
Vue units to be auctioned. Let’s see who comes closest to guessing the auction price of Vue units 1207 and 1609. Unit 1207 is a 1/1 with 814 sqft. Tax valued at $339,000, sold in May, 2006 for $495,000. Units 1609 is also a 1/1, but with 783 sf, tax valued at $330,000, also sold for $495,000 in May, 2006.
Starting price of both is $59,000. Details of auction are at http://ushomeauction.com/property.php?auctionID=H-024&itemID=18217&venueId=112&start=0
Come on boys and girls, bragging rights are on the line!
Anyone know the results of the auction from this past weekend?
i’ll take the bait -both units face west….125k for 1207 and 130k for 1609
My guess is both go for $125K.
someone mentioned hulk hogan was the buyer, comment?
update on this auction?
can anyone explain this?
http://www.zillow.com/search/RealEstateSearch.htm?dg=dg2&addrstrthood=1250+S+Miami+Ave&citystatezip=miami%2C+fl#view=ver%3D1%26op%3Dbuilding%26scen%3Ds8%26map%3D%28AlAaAt%3A25761938%21AlAoAn%3AAN80193345%29%26mode%3D%28zoom%3A17%21sortANdir%3Ad%21sortANparam%3Ax18%21bin%3Aprice%21zpid%3A70767317%21page%3A1%21pagesize%3A250%29%26dg%3Ddg4%26citystatezip%3Dmiami%2C%20fl%26addrstrthood%3D1250%20S%20Miami%20Ave%26loc%3Dzpid