New Miami Condos – Closing Rates for May 2008
May 28, 2008
by: Lucas Lechuga
It’s been almost 2 months since my last post regarding the closing rates of various Miami condo developments. That post was published on April 4, 2008. Referring back to that post and comparing it to the figures in the graph below, you may quickly realize that I must have made a mistake last month when pulling the data for Loft Downtown 2. I’m not sure how that happened. I double and tripled checked the figures this month, however, for all of the condo developments.
Below you will find the date that each condo development began closings:
Even with the overstatement of closed units corrected, Loft Downtown 2 still has the best closing rate of any condo development located in Miami included in this post, and the second best overall. Loft Downtown 2 isn’t as close to hitting the 100 percent mark as I had previously thought, but it’s doing comparatively quite well. The overall closing rate at 50 Biscayne increased slightly over 6 points while the rest, in the group above, increased 2.52 points or less, since the last update.
As over half of this group approaches the one year mark since their closings began, a few interesting questions come to mind. What is happening to the defaulted condos? Are developer’s leasing them and holding until the market gets better or are they hoping for onesy and twosy buyers to come along to slowly deplete their inventory? Are any of these developers feeling the pain yet? I’ve heard that at least one of these condo developers has been for a few months. If that’s true, then when, if ever, are we going to see some bulk sales?
I’m sure glad he’s proving me wrong. Those were my first thoughts when looking at the chart above. My second thoughts are that Apogee South Beach has continued to make great strides in closing its condos. Apogee has improved almost 15 points since my last update. Quantum on the Bay and 1800 Club, the only other two condo developments in the group above the 50 percent mark, each continued to show nice progress as well.
Below you will find the date that each condo development began closings:
Marina Blue is off to a very good start. Pretty impressive from a condo development that started closings so late in the game. Asia is doing relatively well given that it had its first closing less than two months ago. However, Asia has only 123 total units. I’m expecting that we’ll some good progress in Asia’s closing rate next month. I guess we’ll have to wait for the next update, however, to find out.
Disclaimer: The above closing rate information was derived from public County records. There can be a 2-3 week delay from the time that a closing occurs and the time that the closing is recorded.
Would be good numbers for the early closing buildings if there weren’t so many units for sale in all of them.
Kind of makes the closing numbers as a supply/demand statistic moot.
Marina Blue is the biggest surprise. I am pleasantly surprised that it hit almost 50% mark so soon. Looks like the owners have a lot of faith in that building and Park west. Good news. Confidance is what we need to turn this economy and the slump around. Looking forward to the numbers of 900 biscayne.
Even though I am very happy that 1800 is 2/3 closed and Quantum is very near there, I was disappointed that 18 has only 6% improvement in the past 2 months. Owners, HELLO, You have a winner here. Close on 1800 and Quantum and live happily ever after (dont close if you want to sell it right away)
I feel bad for the 25% people who closed on Opera Tower (the last report it was 15%). Are they not seeing the writing on the wall? I have been inside Opera yesterday, The finishes, elevators, the pool and the pool deck are good (or may be even great). Other than that the units and hallways are claustrophobic. appliances stink. I just couldnt wait to get out. It will be fantastic as a hotel as the building is cute and rooms are small. But for a long term living, a definite no-no. This is a building which would have done very well in closet sized apt’s buildings of Tokyo and Hong Kong. But in the +sized America, it is a bad design.
Once again, Lucas, Great job and Thanks.
In a previous post on another thread, I was sneering at Wind by Neo, I was not sure if I am justified to disparage a building I did not really know much about. But after I saw the closing numbers, I feel justified. The building sucks (From outside, I dont know how it is inside, I am pretty sure no better) and the location sucks. I will make it my new punching bag. Move aside Opera.
Great work Lucas… This is great info.
Because you have the data, it would be great to see a small table showing the total number of units in the building, the number closed and then the number for sale on MLS.
I think the closing rate is a good measurement of the success of the building, but seeing how a lot of people are still closing and hoping to sell, it would be even better to see how many units are actually for sale.
A % of closed unit that are for sale would be interesting. Say 36% have closed but 18% or building for sale or 50% of the closed units are for sale. That would be a telling statistic.
I cannot belive that onyx on the bay is still own by the developers!!!!. Is Corus Bank of Chicago is still in business??.
Do you calculate in foreclosings?
A lot of those units can be pre-sold just to be returned to the developer
Very happy to see Marina Blue doing well. I really like that building. Seems Ten Museum is at a stand still. Can’t wait to see the numbers for 900…
Lucas,
Thanks again for keeping this up. I’m also very impressed by Marina Blue’s progress in such a short period of time. Apogee’s success is also amazing considering it caters to such a high-end market.
From what I’ve heard, 50 Biscayne is still doing 2-3 closings per week. Slowly but surely the closings are happening.
I just wonder how many of these closings are done by (1) owner occupants, (2) investors looking to flip, and (3) investors looking to rent and hang in there for the long term?
** On another note, it’s nice to see 50 Biscayne is winning the poll on your site! 🙂
Thanks again Lucas! I heard from some UK investors that seven Onyx units closed 10 days ago. and anoter 10 are due to close soon. every little bit helps?
Anyone know when Ivy will begin closings….
Ohhh Neo is feeling the pain.
Thats what happens when you sell falsley advertised units. They tried selling people 2bed 2 bath when they were really 1 bed 1 baths and a den even on the 3 bedrooms ame ol trick , lol nice try Neo. But the people have spoken. 11% ouch!
Here’s a new trick. Developers leaving lights on in empty units to give an impression of activity in the building. Has anyone noticed both 900 and Marina Blue lite up more than any other buildings? The same thing happened at 1800 and Quantum about four months ago.
I cannot possibily imagine anyone closing on Asia, unless they are delusional, drunk or both. This building was sold at the highest price per square foot anywhere off the beach.
I think this fortune cookie is going to crack wide open and have a higher default rate than many want to imagine. AHHH-SOOOO
By the way I see Jade has come down 100’s of thousands recently. You can get a 1,700 square foot condo there for around $1,035,000. (and you can problably offer 975k and they will take it) It was almost double this at the height of the “my best friend is my banker, and I need to give him back some cash in a brown paper bag” good old days.
Nuff said
Hi people! The foreclosures are just getting started.
1,700 square foot condo at Jade… more like $750K not $975K.
This brings up an interesting point… What the heck is going on there? Is it going to go to Zero?
Is it just me or does it seem like condo owners are starting to finally throw in the towel on the Beach. I haven’t checked out the Zilbert site in a while and when I just did now, you couldn’t help but notice all the yellow in SoBe (yellow = new listings). Flamingo seemed like a big highlight and Murano Grande and Waverly definitely seemed more yellow than ever before… was it possibly due to Zilbert just changing his methodology or something I don’t know about?
The closing rates for Midtown4 are abysmal but I have high (hopefully not unrealized) hopes for the concept of what the developers planned. Maybe when Ocean Drive magazine, Sugar Cane lounge, and the fancy gym that are planned to open become reality, more people will gravitate to this area. I think the units here rival anything in the category of Quantum or 1800. In fact I have friends at those buildings and I, unbiased of course, think midtown is superior; atleast, on the inside of the unit. The mediocre gym and non-existent club room are another matter.
I live there now and really like being central to everything Miami has to offer. I think of all the areas that are up and coming, this one offers the most for young, urban, non millioniares. This is just my humble opinion and wish, please don’t clog the blog with all the disparaging remarks I have so far heard about my beloved midtown. 🙂 I know it is not everyone’s cup of tea.
This one is for you Lucas:
http://seekingalpha.com/article/79166-realtors-prepare-to-lose-your-6-percent
Waverly has had about 60 units for sale for at least six months now.
Lucas,
Closing rates: For statistical reasons, you should take the same % scale for all comparisons.
2 or 3 closings a week is a joke on pre-contruction contracts. Looks like location is still the number 1 rule in real estate. Only 1 condo on beach in the survey and it blows the others away. Don’t sue me, but poor Opera views are dismal at best and some units don’t even have washer/dryer hookups.
Didn’t the Opera Building have some major issues? Pipes bursting, etc.
Hi Storm,
Midtown is a great concept and I for one always love living on or next to a mall (may be I was a mall rat in my last life). The neighborhood is a little sketchy but I am 100% sure, it is going to get gentrified very soon. My only issue with Midtown is that the developers have skimped out on the roads. A single (yes a SINGLE) lane road next to a major mall!? If one car stops, it will cause havoc. How the city permitted that is beyond me. Other than that Midtown is a nice up and coming middle class neighborhood.
Dear POO, What exactly is the ruling they are talking about? Do you know more? I posed this question on that site. Does anyone know the answer to this. I repeat the question:
“This article or the posters failed to answer one biggest question on my mind.
Will this ruling make the MLS available to non real estate people like me? My only recourse is now to post on the Craigs list and it gets inundated with hundreds of posts. I always wished, I could post my for sale sign on the MLS with out listing with a broker.
Please someone anwser my question, once again, I repeat:
WILL THIS RULING MAKE THE MLS SYSTEM AVAILABLE TO THOSE OUTSIDE NAR (national association of realtors) to post properties for sale?”
THANKS
AJ
http://online.wsj.com/article/SB121199607806026533.html?mod=RealEstateMain_1
Storm, I agree that the Midtown projects are superior to many other developments. The location is also improving significantly over time.
AJ, good point about the single lane roads. I’ve been there when it’s busy and it can easily get jammed up if a car stops in the way. Doesn’t look like they left much room for expansion either.
Meet the neighbors at Midtown:
http://www.miamiurbanlife.com/group/midtown2
http://www.miamiurbanlife.com/group/midtown4
Lucas,
Do the Quantum figures include both towers?
What about Plaza on Brickell?
JBrando,
Yes.
AJ,
Not from what I’ve read. It’s just going to allow discount brokerages access to the MLS. Some discount brokers were shut out in the past. They still need to be licensed though. This ruling won’t be a big deal until the market gets hot again.
Agree with the comment about the lights being put on soem condos when no one livs in them. I drove by one night say 9pm and no lights then the next night 40% of lights were on. Doesnt make any sence. I think i was a ploy cause thsi happened when there was that festival the other weekend in Bayside/Biceentenial Park. Could have been to show people ohh yeah people ive here and they can see eveything going on at the park wouldnt you want to live here too so you wouldnt have to drive. I think it’s definitly a ploy to fool people cause eveyone always talks about have you seen those condos there no lights on nobody lives there.
I saw this at MB and a few in 900. MB was the bigest 24 hour light up from day to next day so seems suspect to me. TMP is over it and seems stalled s no need to fake light.
jcrimes….thx for posting the WSJ article. Very intersting.
One of the items in that article says that there are homes out west in FL that have zero value. That is a scary though. I dont think it is out of the question that many condos in downtown Miami may have zero value.
Someone on this blog had mentioned that condos in brickell in the 80’s were being sold for “free” as long as you paid HOA and taxes. Looks like history is going to repeat itself.
I hear and read all this doom and gloom. Can someone out there please tell me how a broker can list a 900 sqft 1 bedroom condo in Ten Museum for 560K over 622 $/sf? When will the MLS reflect real pricing???
I would love to make an offer but feel guilty offering 250K for a condo listed at 560K. I believe that if MLS prices were more reasonable more units would get offers and eventually sold.
Dear Condo Developer,
I am a private contracter available for hire. I specialize in light switch operations in condo projects. Currently I am available for light switch operation to immediately make your project look successful. I operate each light switch independently in 100 plus condo units, and vary timing to give a more lived in look to your quality condo.
thank you for your consideration.
David Smart
CEO of Turnkey Light Productions
I may be contacted at, [email protected]
Lucas,
Thanks for answering my question.
So I guess I would never get to lay my hands on the holy grail called MLS unless I have a real estate license 🙁
Once Again
The new tainted kool aid is the buildings being lite up like Christmas trees. It is total BS and a ploy to attract contract holder and all others considering the building like moths to the flame (as Miss Jackson says). I was one of the early closers at Quantum (Terra Group like 900 Biscayn), from early on I could see the lights from the Miami Beach Side. Being to investigator that I am I decided to check some of the floor plans other than mine, door after door that I opened had the lights lite yet the units had not closed. Hummm? It’s no coincidence that these lights were left on. Leaving lights on is the best advertisement and delivers a message to the very soul of those on the fence about closing. Like moths to flame those who close will get burnt if the plan to rent, flip or make a cent of $$ within the next eight years.
just a head sup on the lights on in new condos to make it look like it’s occupied. drove by on my way to SOBE at 10pm and a bunch of lights were on at Marina Blue and 900. Left Sobe at 2:45am and guess what the same lights are on. Dunno about anyone else but this is such a scam I would find it hard pressed that so many so called residents would have their lights on at 230am. I mean it was ridicoulous the amoutn of units with lights on at 230am doesnt make sence so it’s seems to be just another scam. In fact when I saw Ten Museum there was only 1 ligh ton on the units facign east which sounds fine cause prob any other residents would have been asleep.
So sorry all not fact on this but most likely the scam has been exposed that there still isnt that many people living there.
So what’s wrong with leaving the lights on for advertisement purposes.
Thank you Lara; exactly WHO CARES !!!!!
Let the developers leave the lights on if they so desire !!!!
Lucas, thanks for the data-certainly helps in gaging the outlook for each building.
For buildings without significant closings-say for example Plaza at this point with only about 40% closing. What is happening with the other 60% units not closed? Are the developers actively shopping them around? Is there a chance to make a good deal on these units? Must you use a RE broker to investigate these, or are the sales people for the development a better source for availability? Just wondering if this is an avenue to pursue in the future. I have not heard much regarding new buyers purchasing directly from the developer-but have heard much about old buyers trying to get away from the developer.
lara – I guess it’s like that movie “Weekend at Bernie’s” (stupid movie) where you go around and have good time pretending he’s alive…just like some of those condo developments. Next on the staging front from furniture, to turning on lights, soon will be fake residences going in and out of the condo repeatedly like on the Truman Show… too funny.
Spoof on the famous JP Morgan CEO: “Jamie Dimon Style Condo Vulturing in Miami”.
Gables,
You have a better shot of getting a deal from a closed unit which is on the MLS thank from the developer owned unit. I have no idea why a developer is holding on so tough with regards to discounting his units. He already has 20% from the people who walked away. Jorge Perez says that these are very valueble units in the future and he will hold on to them. Many other developers are doing the same. They would rather give it for pennies on the dollar (45 to 60 cents)to a bulk or cash buyer in a behind the scene, secret deals than sell it you and me for 20% off (80 cents on the dollar off of preconstruction prices). I understand that they are trying to uphold the value of the units, but the logic seems to defy logic!
actually renter tom…the wab analogy isn’t so far fetched. the forge (which is actually a good restaurant…not great, but good) hires models to sit at tables during peak hours to beautify the place and give the appearance of a chic crowd.
gables,
I have a client who was expected to close on his unit in the 901 Tower at Plaza on Brickell towards the end of February. He still hasn’t closed and he wants to really bad. I know that Plaza is doing very well as far as sales go but I’m not sure why it is taking them forever to close units.
I guess you could call it Weekend at Marina Blue then. I guess they are trying to sell the vision…like the brochures and website videos. When projects go bad things can really drag out and then the lawyers get involved…….endless problems.
Does anybody know what the sale prices are being offered by the developer at Plaza? I saw the lowest MLS for a 2B2B for $370k. Is the developer offering anything near this list price?
What about a building like TMP or Latitude? These are nearly 80% closed. Any chance they will liquidate the remaining at a good price?
Keep looking for info on Met1 and found nothing. Any news on this building?
AJ, I feel the same as you. 80% now is cheaper than the carrying costs and loss later, not sure why their number crunchers are holding out. I’ve mentioned before, $300k will form a mark for sales to pick up for 2B2B units. Ballpark that is about $300 sq ft, and prices will not hold out above that over the next few years.
The developers are stuck in a no-win situation. The market is too risky for any “bulk buyer” to come in unless a very substantial discont is offered from the “current going rate”
Now if Developer’s start to get real and try to sell some inventory on a retail level by slashing 20%… guess what, they just dropped the current going rate by 20% so a bulk buyer is going to have to readjust their math downwards.
At the end of the day, I think most developers realize the amount they would have to slash thier units on a retail level to make a dent in their inventory would pretty much close the door on their ability to get any bulk buyers at a price above a fire sale. They’re stuck between a rock and a hard place…
AJ, all of the developers are not keeping the 20%. Some per their contracts return 5% to the contract holder if they default. Some of it has to go back to the developers lender. So they keep some but not all of it.
JL – Moreover, bulk buyers need to buy at a discount from what retail buyers are willing to pay to make it worth while. So, the developer has to hold on to high prices as best he can and show to bulk buyers that if you buy it at 30% discount you will make money….hence they need to get things moving by turning on lights etc. and one wonders if they would even go so far as to have a few straw buyers come in to show some unit sales??? Real estate can be ruthless that’s for sure. If developers sell at 30% off then bulk buyers may want another 30% off. The REALLY scary thing is what if the developer marks units down 20% and no one buys or the response is anemic??? Then what??? Even a bulk buyer wouldn’t pay 50¢ on the dollar. Holding a depreciating illiquid asset where you can’t control the market (although attempts have been made to do that including the price increase game that you need to buy now since I am going to raise the price 10% in 6 months) is one of the worst positions you can be in since you are helpless….
Renter Tom,
There definitely is a developer’s dilemma. You are right, if they slash prices by 30% then a bulk buyer will want an additional 30% off. If they reduce prices by 30% to the general public then they have two issues on their hands. One, people who bought at original prices will be very angry and probably sue (they likely won’t have a case but this is the U.S. of A., after all). Two, sales and closings to the general public will take at least 2-3 months, maybe even longer depending on how many condos are available. If the developer is in dire straits then he may not have 2-3 months, or longer. Additionally, if the developer doesn’t sell his remaining inventory then bulk buyers will want an additional 30% off.
I received a phone call today from a guy who wanted a 30-50% discount off a condo at 900 Biscayne Bay. I was like “Why the hell would a contract holder give you 30-50% off when he could just walk away and lose 15-20%?”. He then said “Oh…well how about from the developer?”. I said “Why would the developer give you 30-50% off when (1) he doesn’t even know how many units he’s going to get back because they just started closings, and (2) you’re only buying one freakin’ unit from him?”. I then said “Oh wait…I’m in an elevator…click!”. I hate when I receive phone calls like that. However, I actually enjoy being an asshole when they do call.
Lucas, it is funny to hear those stories and laugh about it, but truth is the buyer is the one with the cash and the RE pros (developers, brokers, agents, etc) need to recognize that. Our price expectations may appear absurd to you, but to a very great extent they are realistic. Units that are unsold or unrented are not only dead money, they are losing money. The majority of new 2B units will rent for less than $2200 a month in the maimi area-do the math backwards to find the true value of the unit.
I made an offer for a unit a year ago, which the sellers laughed at. Recently they contacted me and wanted to close the deal on the offer i made-and i laughed back. My current offer is 20% off, and if they dont take it now if will be even lower in another 3 months. My lowly 2% money market account makes money over their depreciating illiquid asset. Sellers must realize they will bite the bullet long before i will. I must agree with you on the developers dilemma though, your argument holds water. But in this battle of wills, the buyer is going to win in the end.
Lucas – I was going to say, I didn’t think you really were in an elevator when you hung up on me! LOL Just kidding, I didn’t call….. I’d have wanted 2/3’s off instead!
The open question is if developers will result in having fake buyers buy at high prices for comps and to show to bulk buyers??? One wonders….
Samir,
Some developers such as Marina Blue are crooks. In their contract, there is a clause to return 5% if buyers default. The fact is many people now have to sue just to get their 5% since those thugs refuse to return any money.
The problem with the developers having there lights on, making it appear the building is well lived in when it is not, is that it is another bull shit deceitful tactic by these developers. other than that it is fine…if you like misrepresentations and manipulation.
It really isn’t that big of a deal… They do it BC the building looks much better lit up. When people move in it really will look like that. It’s not a tactic to rip you off.
MB seller said: “Some developers such as Marina Blue are crooks. In their contract, there is a clause to return 5% if buyers default. The fact is many people now have to sue just to get their 5% since those thugs refuse to return any money.”
Throw El Gourgo Perez into the “thug” group. Same thing going on with 50 Biscayne, Harbour House, Plaza….ect.
Expecting same at 500 Brickell. I am surprised nobody has gone for punitive damages because of their INTENTIONAL CONTRACT BREACHES.
Developers are buying their own units back to raise and/or maintain value. I found 4 recent sales in 2008 in Neo Vertika that were purchased at a very high price. What a coincidence the buyers were The Founder/owner of Neo, Her mother, Her Husband, and Her sister. All 4 of them purchased units over $400 per sq ft. Look it up in miamidade.gov
Will this be the new tricks developers have up their sleeve? Will we see. More developers following this pattern?
We’ll Leave the Light On For You And Remember Your Name is the Motel 6 slogan.
Maybe some of these condos should be turned into a Motel 6?
Marina Blue by Motel 6—“We’ll Leave the Light on for you.”
EVERYONE CAN WE PLEASE GET OFF OF THE LIGHTS IN THE BUILDINGS CRAP… ITS NOT THAT BIG OF A DEAL. GET OVER IT, NEW SUBJECT…..
I agree. It’s not like they’re fooling anybody. Do you really think that people drive by and say “Damn! I’m going to miss the boat if I don’t wake up tomorrow and buy a condo there”? I agree with Juan that the buildings, and thus our city skyline, look much better when they’re lit up.
I like that idea of leaving the lights on actually. It certainly gives the city a nice look. More buildings should do it.
Just some constructive criticism here…
I agree with poster #4. It doesn’t require any additional work to post the actual number closed in addition to the percentages, and it does make the report a whole lot more useful.
The point of posting a bar graph showing closing rates is to presumably show the relative “success” of each building in closing their sales.
But is it really fair to compare a building with say, 100 units, to one that has 1,000? A 1,000 unit building with a 50% closing rate (500 units) would have closed more than 6 times as many units as a 100 unit building that has an 80% closing rate (80 units). I don’t really think it is fair to compare those buildings by percentages alone.
Keep the graph the way it is – just add the total number of units of each building at the bottom.
Also, since the graph is supposed to represent each building’s progress towards a full closing rate, you should use 100% as the maximum range of your graphs, not 90% and 50%, as your 2 graphs show. That would ensure a consistent visual comparison between closing rates (which is the whole point of posting a graph in the first place – to show a quick visual comparison).
The lights will have an effect, not on everyone, but probably some on purchasing why else would they spend the money doing this? It is part of “staging” the building and selling the “dream”. Buying real estate can be mostly an emotional decision and who would want to buy into a dead building? I find it more humorous than anything and might deceive the out of town buyer or foreign buyer.
With that said, the straw buyer who buys at a high price is worth exploring. Maybe the Miami Herald can do an investigative story on this matter. The story has legs.
What if the straw buyer got a mortgage and didn’t disclose the relationship in the application paperwork? Moreover, those comps affect appraisals which affect other mortgages so banks are loaning more than they should be….etc. etc. etc. This type of stuff crosses the “puffery” line and could be fraud.
One quick note on Apogee; the statistics show an 88% closing rate and this is being heralded as a great success and I suppose it is, but I can tell you that the building is almost completely empty. No one seems to be moving in. There appears to be maybe 3 or 4 occupied condos and that’s it. The rest of the building is unoccupied. There is no furniture, no shades, no nothing in the vast majority of these units and hence I am not sure what this means. Buyers of these units had to dish out almost a million dollars for the cheapest unit as a down payment and hence I suspect that they have the money to hold the units until the market turns around. I live right next to apogee and I can tell you that it is a fully staffed high end building with practically no one living in it.
DLJ – Same goes for the first Trump Tower in Sunny Isles Beach. The valet looks bored and I have never ever seen one single person in the gym there.
Renter Tom,
I may be wrong, but I’m not too sure that it’s costing the developer much money to keep the lights on. When someone closes on their condo they are required to provide proof that they have contacted FPL to transfer the bill to their name. The buildings require this because they want to be sure that the A/C is turned on to ensure that mold doesn’t form in the condo. It makes sense, but what if a few lights are kept on? It wouldn’t cost the developer a dime.
Lucas – If you’re lighting 50 units then it would cost a bit, not a lot, but a bit. It is a non-issue though but does indicate that developers are having to not only present a good product in the lobby, etc. but are having to stage the building in a more creative way to the general public. Who’d want to buy in a dead building when there are so many alternatives. What was that movie with Steve Martin (?) (or Chevy Chase?) where the whole town came out to present an ideally country town atmosphere? Too funny.
It will cross the line though when straw buyers come in to inflate the comps to try and sell to bulk buyers, etc… Can you saw lawsuit? This is something that needs to be looked into.
Of interest, with people previously living far beyond their means and tapping easy credit, just saw an article where we’ve gone from Foreclosure Cats to Foreclosure Horses…. The upper end tipping point has arrived.
http://www.time.com/time/nation/article/0,8599,1809950,00.html?cnn=yes
The lights on issue is a misleading tactic and yeah they can do it nothing illegal but it borders ethical marketing tactics as it’s used as a misleading approach to give the perception on people living there such as staging. Also another issue we are going through an energy crisis and the world is about now conserving energy turn the lights off etc..and here are these developers with multiple units with lights on all night for a scam marketing tactic. Unproffesional to say the least. if they want to market the buildign then do it by eflyers, , incentives, constant reach out to clientle that has visited the sales center, work with realtors, be proavtive, negotiate but don’t try to be stupid and hard as they are now.
A buling that is open and freindly to multiple parties and easy to work with will garner the attention and support of most if they built a good product as well as keep owners happy knowing they bought in a proactive and friendly building.
If it’s true of the neo re-purchasing to inflate the comps and appraisels then this is what got peopel in trouble in the first place. It’s flat out fraud and the mortgage fraud commitie should get notified. I would go out to say they prob shuffeled around cash within the family to make an all cash buy as well on each if those units so they could bypass mortgage rules etc.. so then there’s no appraisels required on all cash buys only sold comps.
Shaddy tactic and like i said “if ture” this should be investigated.
“New Miami Condos – Closing Rates for May 2008” – I believe this was the topic of this post. Not “Marina Blue developer turning on all lights to present a lived in building”
The lights on issue is absurd. One could say they owe it to the current tenants. If its marketing it only makes sense. Would someone prefer that they be require to display a closing count on the side of the building. That sounds fair doesn’t it.
As to rentertom’s post regarding investigatiing the earlier post’s claim that a few high priced closings are recorded to insider’s. If true and only if it is true, we can all say anything we want here, that certainly does warrant investigating because it sounds likefraud, fraudin the inducement to prospective purchasers and a vaiety of other civil and criminal wrongs. Very interesting. Assuming the earlier post was accurate.
These buildings shouldn’t be called condominiums. The term everybody should use is developer controlled buildings or developer controlled rental buildings.
Even buildings with high closing rates can languish for year as developer controlled buildings.
What is the difference between a developer leaving the lights on and a homeowner hiring a professional home staging company?
If I was a developer, I would leave the lights on too. It’s business. Do whatever, short of illegal, to sell your units is the name of the game.
If I lived in one of those buildings, I would much rather come home to a building with “phony” lights on than a mostly dark building every night.
This is Miami, afterall. Perception is everything.
I agree, Storm. Nothing unethical about leaving lights on. Manipulating purchase prices is a different story.
Hopefully, Developer’s will take the staging one step further and truck topless sunbather’s over from the Flamingo.
PS, How can Stockton, California have 3 out of every 4 homes for sale be a foreclosure? Did they use the Jade financing team?
i closed plaza at brickell i did not have any problems. if your client has problems than is with mortgage or financing. usually if you have money or a good mortgage it does not take more than 30 min to close. just my 2 cents.
they are pretty fast with closing.
just few more things to say: i live in plaza on brickell and garage is full of cars. people are moving in and new people are coming every day to take a look to buy.
reading here posts, it looks so bad. but in real life it is not so bad. sometimes is so busy inside the building that i have problems getting elevator. i think PLAZA ON BRICKELL will have no big problems with closing. also there are many wealthy people from argentina and latin america who have a second home here. i met many in my building.
The lights issue, as I previously wrote, is interesting but a non-issue. If people want to post about it go ahead, if Samir doesn’t want to read those posts then don’t read them.
I would suspect that having closely related sales, if mortgages weren’t involved, and the money actually changed hands would not be illegal. It just shows you that you MUST do your due diligence in real estate, especially in this market. No wonder banks are scared. If there were mortgages involved then one would need to examine the mortgage applications for fraud.
My main point was that if the developer is trying to get out of the project and unload to a bulk buyer, then attracting a few high priced sales would help. Desperate people do desperate things…except eat horse I guess.
Any info on the closings at the Avenue on Brickell (1050-1060 Brickell)? I am under contract to purchase a loft there and was wondering if people were going through with their purchases.
JL asked: “PS, How can Stockton, California have 3 out of every 4 homes for sale be a foreclosure? Did they use the Jade financing team?”
No, but Bank of America and Wells Fargo have been giving mortgages to illegal Mexicans for about four years.
Busy buildings don’t necessarily mean a building is successful. It might mean your developer has rented out half the building.
Long waits for elevators could mean that the service or other banks are broken or stuck on one floor.
Check the elevator cab inspection plaque to see if it’s up to date.
If it doesn’t have one your building has issues.
Plaza is nice no doubt it’s ok but waiting for the elevator there is horrific. I was there when the building wasn’t even that full and the wait was super long. I can’t imagine when it is full how bad it would be. they should have prob put more elevators in. Same issues with alot of new condos yuo share alot of elevators and your wait will be long in a ful building.
Avenue on Brickell, that’ s just a big problem sitting on a great street. People got hosed there.
Once Again,
What do you mean by people getting hosed at Avenue?
DLJ (post #69). We were in sobe last night and i saw only 1 condo with lights on in the Apogee. I think i saw 2 lights on in Continuum II. What surprised me the most was Continuum I had only 10 % of the lights on around 9:45 pm. We were in the area till 1 am and i did not notice any differnece in the number of lights on.
The only building that had 60-70% of the lights on was the Hilton Condo hotel next to Nikki Beach.
On a unrelated note, whats up with Club Nikki? It used to be a hot place to hang out, but it is dead lately. Nikki Beach (restaurant next to club) is doing well, but the Club is deserted most of the time that I am there (mostly Fri or Sat night). 🙁
life goes on. maybe this is not the best time to buy a place but if you live in miami you have to buy or to rent or if you have a second home you just wanna buy.
some buildings will do fine some not just like some car brands do just fine and some have problems with selling.
wish u all good luck with your decision whatever you do. but i am telling you miami is not going under as many think.
Miami’s not going under and neither is Vegas. It’s just flushing the flippers and overzealous developers.
JL
problem is when you flush the flippers and overzealous devlopers chances are you can’t contain the collateral damage
and carbon…alright, now you’re asking about club nikki on top of your reference last week to mangos? be honest, you’re a habitual crappy bar fan:) then again, me and some friends just got bottle service at the durty purdy a few weeks back so frankly, i don’t think my life has ever hit a lower point.
I don’t think a developer leaving lights on to make a building appear occupied will change anything at all, so it’s really a non-issue.
The vast majority of the buildings that were built in the last 6 years in Miami were only built to satisfy demand from flippers – not end users. People thought buying real estate was a “can’t lose” path to riches. They feverishly bid against each other using money that banks gave away to anyone with a pulse, and drove prices up way beyond their fundamental, affordable levels.
The population, in general, never could afford the boom-era prices. The reason prices have been coming down is because of affordability. There aren’t enough people out there who can afford the boom-era priced condos.
Turning lights on in a building doesn’t make the condos more affordable, does it? No. Therefore, it will have no affect at all on prices. Sure – an idiot or two will mistake the lights as being indicative of an in-demand building and overpay for a unit.
But there will never be enough of them to change the direction of the market.
Prices will continue to fall until market supply reaches normal levels and affordability falls back in line with historical norms (hint: we’re nowhere near that point right now). It’s as simple as that.
Developers can try every dishonest tactic they want – it won’t change a thing in the long run.
With the advent of creative mortgages there was a demand surge since you didn’t have to wait and save for a down payment. Hence, the buyers in the pipeline started to buy all at once creating a housing shortage since homes and development take time to meet demand. By the time it got ramped up people had seen the high appreciation rates in residential real estate that was really created by this demand surge, and after the tech stock bubble crash & 9/11 people wanted to invest in solid, home based real estate too. These combined factors drew the interest of investors which prolonged the demand surge along with low interest rates and easy credit…who wouldn’t buy if rates were at 6% and appreciation was at 12%…you were paid to own a home, plus you could cash out on this new found paper wealth and still keep the asset. Banks were throwing money at people who had never qualified for such money ever before….it was raining money on them. Now the demand surge and follow up demand momentum demand is gone, gone, gone. The reverse of the first demand surge is now in place. We now have a huge and growing (thanks to walkaways and foreclosures) supply surge. The return of traditional lending standards combined with the glut, declining asset values that is now widely recognized will result in a decade long bear market for residential real estate. Some parts of the country are 3 years into this and other are just now having the tide roll out on them…the high end homes. The bottom line, residential real estate will not be a good “investment” in the short or medium term for sure. That’s my two cents. Buy a home to live in but don’t overpay so wait for Act 2 to complete this year…
Jcrimes….lol. maybe we are in a different age group and hence the preferences for different entertainment establishments. Besides, my gf chooses the location that we goto anyways, so i am just along for the ride. hahaha.
Carbon, Club Nikki is terrible. Nothing like Pearl. The atmosphere sucks due to the people they let in. It doesn’t surprise me that it is empty. I guess everyone is going to the clubs in CBD???
Don’t forget all the mortgage fraud buyers who purchased units all around Miami/Miami Beach. These fraud buyers paid full price only to walk away with a coulple of hundred thousands of dollars per unit. They also over inflated the market during its peak.
Thank you all for your very interesting comments.I can appreciate them all!!!!! However can ANYBODY TELL ME THE REAL TRUTH ABOUT THE MARKET IN THE MIAMI AREA?You can read about light’s left on and closing rate’s BUT is there really anything actually SELLING??? thank you.
looking to buy: “is there really anything actually SELLING???”
Renter Tom: no or I should say NO
I think you are going to have to be more specific on what you are asking. Miami is a big area if you’ve been here before. Money magazine came out with a prediction about 3 weeks ago that the Miami area would decline 24.9% over the next 12 months…ouch. Buy at your own risk. I’m not buying yet….I choose to rent and wait it out a bit.
Thank you Renter Tom…….that’s sort of what I figured anyway.Why all the realestate HYPE????I want to buy for $150 a sq. foot.how much longer do you think I’ll have to wait???
looking to buy: Townhouses and Single Family homes in good areas are selling and properties are exchanging hands.
Condos on the other hand are not doing as well. Even if prices drop to $150/sq.ft, you still need to take into account the special assesments and others not paying their HOA. The entire condo market is doing badly and even when prices come down to “reasonable” levels, there will still be pain after that before things get better.
So, when is it a good time to buy?
It depends on what you are looking for. If you have a specific building in mind, keep on watching the sales in the building and see where prices are headed. Dont judge the price by a single unit sale….watch over time how multiple units are doing. Prices will stabilize at some point and the ideal time to buy is when prices begin to rise after hitting bottom. In the past, there have been false bottoms where prices seem to have hit the low point and begin to rise and then drop again.
There is a lot of luck involved when it comes to timing the market.
In an ideal scenario, you should rent in the building that you plan to buy into. That way, you can make sure that you will indeed like to live there long term, and get to see condition and financal health of the building. Sometimes you can derive more useful information from chit chat with neighbors, valets and staff in condo buildings then from business publications or online blogs. 🙂
No need to time the bottom of this condo market. The bottom will last at least 4 years. Take it easy.
Sorry to contribute to the “lights” saga…but I think people are confused about Marina Blue. The lights you see blazing are from the service corridors on the West side on the building…not from actual units.
All of the actual units more or less face East and from that view you will not see many lights on. Thus, all this talk about devel0pers “leaving the lights on” is a tempest in a teacup. They are not engaging in that practice…in most cases these are just hallway lights people!
And sometimes lights left on by finish workers doing tile and other projects after closings on some units.
If anything, it’s sad many of these buildings don’t have sensor lighting in some of the public areas and hallways so all that energy isn’t wasted 24-hours a day. Whatever happened to Miami-Dade’s big push for LEED certified construction?
I agree, the market bottom will last a loooong time. No, you won’t miss it… In real dollar terms (instead of nominal dollars) the bottom will be so protracted that people will think residential real estate in Florida never goes up! I am putting my money were my posts are and waiting. I kinda dabble in looking around online on occasion. Might look more serious toward the hurricane season, but I strongly suspect that all indications will be that the slide will continue through 2009. Anyone that tells you that you can’t time this market or you are gonna miss the bottom simply doesn’t understand the serious nature of the housing bubble in South Florida and Miami in particular.
Did you know that the median mortgage payments as a percent of income in Miami are 41%? That simply is not a long term sustainable number. The U.S. average is 20%.
I would not be out of the question to think that housing prices in Miami could fall 50% from today’s prices. At the very least, a 50% from peak prices of Q4 ’06 is likely.
Money magazine predicts that the bottom (again this is in nominal dollar terms so in real dollar terms it will keep falling from there) for the Miami market will hit in Q2 ’10 with a 44.3% price drop from peak.
So if you bought at the peak for $1M you’d have lost $443K on average. Ouch.
The bottom line: wait and reevaluate once a month or quarter as this thing plays itself out. We’re only in Act 2 of at least a 4 Act play here.
On the cnn.money website it predicts for the Miami-Miami Beach-Kendall area to fall 23.8% in 2008 and 18.2% in 2009. I think they meant the percentage as price from the beginning of each year not from peak prices since that would mean prices would end up only around 1/3 from peak…
I haven’t heard anyone mention interest rates yet. This is going to be the real kicker. These condos are currently unaffordable and they are going to get even more unaffordable in the near future.
Although a housing crash is deflationary, with the amount of money the Fed has pumped into the system we are facing huge inflation. Sure the CPI us under 5%, but those numbers are hardly true. Private groups who track the M3 (since Greenspan decided it was too embarrassing to publish) cite an increase of money supply around 15%. Right now interest rates don’t even cover inflation, so this is obviously going to change.
Just like stagflation in the late 70’s and interest rates at 18% in 1980, and gold at record highs…it is all happening again. Land, commodities, and tangible assets are all superior to holding a freefalling dollar, but who can afford a house payment when rates will spike?
Most people buy homes using financing. That financing has dried up for a very large segment of the population now and those that can get financing need a reasonable down payment. The silly financing of a few years ago is gone and it isn’t coming back.
All the fundamentals, supply levels, availability of financing, rental rates, affordability, etc. all point to substantial home price declines ahead for the Miami market. There simply is NOT ONE fundamental indicator that would point to a bottom at this time.
Let’s hope the stagflation scenario doesn’t happen and the dollar continues to stabilize and strengthen.
Louix – actually I think you won’t see interest rates above inflation especially if you are bearish.
Beggar thy neighbor – inflate your debt load away – keep rates well below inflation. Savers suffer, but those with debt gain, over time.
Given the balance sheet of Western economies, and the response in the 1930s – that should be your policy response benchmark if you are concerned about high inflation and high debt loads.
If this really will be a repeat of the boom and bust days of the late 1970s when gold, gas and interest rates went through the roof, is anyone on this board familiar with how people took advantage of the situation back then and made money in the downturn?
Seems too easy to think that if interest rates double or triple to their 1980-82 levels all you need to do is park your money in the bank and see a 15-20% return…
Quantum is getting better, slowly. Both pools are heated now, the four elevators on the south tower are working today (not yesterday). HOA dues are higher than 1800 for similar units, seems like a lot of security guards doing nothing (excess personnel) , and few maintenance people seen. I hope these problems get looked into soon. Question: Does developer pay HOA dues on unsold and unclosed units?
candela
ST gov’t securities. if i remember correctly, TIPS were particularly popular.
Al – Good to hear that the elevator problem in Quantum is fixed – that was a nightmare this weekend. Also nice to hear about the pools.
Hello , I have a question: I read everybody talking about how bad the market is right now and when the bottom will be for this real state market but what will happens when the market turns maybe in 09 or 10.
What will happen to home prices. Will they rise. I am more interested in the SFR and townhouse market than in the condo market.
I bought new 2 SFR properties in a good neighborhood (Miami Lakes) in 2007 at 290K each ….are they loosing that 24.9% stated in Money magazine? What will happen in 2010-11?
What will happen after the bottom?
It is better to keep them as I have them now ( rental)
Any ideas
By the way they generate a negative cash flow of $350-400 (property taxes). Rent covers mortgage and association fees. Signed 3 year rental contracts on both.
Al , pools are heated? when this happened. I was on the pool on Saturday and it was ice cold. Yes the elevator problem was a pain…
All that security staff doing nothing… equals high assc fees.
I actually borrowed the Nintendo Ds from the guard in the north tower. Great Game.
The pool area at 1800 Club looks amazing even at night. Lights , clean and beautiful
Does Quantum has a Jacuzzi ..I can’t find it and every single new builing in miami have one.. I guess that is luxury as advertised.
Jacuzzi is keyed and available through security. I heard security has been renting out to XXX film makers to film triple X adult films very late at night.
Ask for jose or abel.
Quantum did not advertised a jacuzzi. The did advertise a steam room and they did not deliver it.
“…then again, me and some friends just got bottle service at the durty purdy a few weeks back so frankly, i don’t think my life has ever hit a lower point.”
jcrimes,
no shame in dredging the depths of miami’s shitty bar scene – in fact, it’s akin to buying a small house in a neighborhood of mansions – a smart RE play. Keep a lookout for my article: “Why smart money gets bottle service at the durty purdy”
shwin
Interest rates are going to be rising later this year, because of inflation and gas concerns. Hammer into each corner for extra security .
Banks are already pricing this in, and 30 year interest rates have risen significantly in the last two weeks.
This will be the nail in the coffin for real estate for many years. As a friend of mine said to a flipper who is stuck, “never do business with your residence”
XXX….we had a renter in our townhouse complex who was making adult movies in the house. They were caught when the other owner of the house came back from a business trip to brazil at around 3 AM and saw a bunch of women smoking outside barely wearning anything. After that, we saw other signs of adult movie making there…they have cameras all over the house.
Our association voted to evict those people and after they left, we discovered that they were not only making adult movies, but also were growing marijuana in 1 of the bedrooms and bathrooms. There was a lot of mould and we found some equipmetn used to dry/process marijuana.
None of us neighbors were asked to be fluffers. lol
On a serious note, there are a lot of people supporting themselves by growing or selling drugs these days. I know of a few people who work in my office (shipping clerks) who are dealing marijuana. It is done discretely, but it is not a big secret. I guess, drug business does very well in bad times as people need to escape reality.
Nail in Coffin : If interest rates go too high, it will kill the mortgage business. Banks are not going to do that. I doubt we will see double digit interest rates anytime soon.
US economy may be in the crapper right now, but wait till the rest of the world is in the crapper as well. We will look really good then.
Gas prices are high and food prices are high…people here are cutting back. People in poor countries are starving. India and China may have pockets of wealth, but the majority of those two countries are poor and there will be riots when food/energy prices go even higher.
no matter how bad things get here, i seriously doubt that people will be starving.
2902-Lissette Calderon- Neo owner/CEO
2502 – Maria Calderon- Mother of Developer
1202- Husband of Developer
All 3 units purchased in 2008 close to $500k
These are the 3 units purchased by the Developer and the developers family at an very high price to raise the value of their own product, Neo Vertika
This is very shady.
Straw,
Doesnt make sense, no one is looking at comparables when purchasing these days….
Mo, I cannot read your blog. Change the black background!
Straw
it might be shady but it doesn’t appear to be mortgage fraud.
The Neo Vertika purchases mentioned above are non-arms-length transactions and appraisers are required to ignore them when generating comps (assuming the appraisers are aware of the fact that the transactions are non-arms-length).
One way to help ensure that future appraisers are aware that the transactions are NAL would be to contact the selling agent(s) and let them know that the whole world knows that the transactions are non-arms-length.
If/when an appraiser asks the selling agent about the transaction, the selling agent must disclose the fact that they NAL. Since the selling agent almost certainly represents the Neo Vertika developer, failure to inform future appraisers about the transactions’ NAL status may be taken as evidence of the developer’s and agent’s intent to defraud future buyers by fraudulently inflating comps.
SB,
You assume that everyone knows what is a NAL transaction. Majority bloggers here are not realtors. Explain to people what is a non arms length transaction is.
AJ,
Good point. Here’s what I posted previously about mortgage fraud and non arm’s length transactions in response to a post by perez:
“perez,
You wrote: “If I recall these were all private sales between individuals, and other than the apparently high prices I have no reason to suspect fraud.”
Here are a few symptoms of fraudulent real estate transactions:
1) A non-arm’s length sale: buyer and seller are related by blood or otherwise.
2) Limited Liability Company is participant (buyer or seller) in the current or previous transaction.
3) Non-MLS transaction; property was not marketed openly prior to sale.
4) No money changes hands but the transaction is reported as a sale even though, in reality, one party simply deeded the property to the other party.
From the fraudsters’ perspective, the transactions you mentioned may help provide fake, high dollar comps for subsequent transactions in which real money changes hands (from dumb, out-of-state lender to slick local fraudsters). The appraiser is supposed to disclose non-arm’s length transactions and non-MLS transactions but they are often willing participants and enablers of the fraud. So keep an eye out for the real fraud to follow in this building or nearby buildings… ”
Hope this explanation helps …
“As for condominiums, Palacios said renting is even more attractive, telling Local 10’s Rob Schmitt that many rental prices are barely covering the taxes and association fees, leaving many condo owners with the burden of the full mortgage each month.”
http://www.local10.com/news/16463693/detail.html
The main reason I think that you can’t call anything close to a bottom right now in the condo market is that the carrying costs versus rental costs of a unit is still way out of whack even afer the slide so far.
That’s the 800 lb. gorilla. It doesn’t matter how much any RE has come down. If I can rent a comparable unit or your unit for your HOA and Tax costs (or less) and you are responsible for repairs, why would I want the burden of putting 20% down on a mortgage + monthly mortgage payments?
Prices still need to come down a lot further or rental prices need to come up a lot higher. So far, the trend for both have been down and down.
I just discovered another fishy buy at the Vertika done in March.
But this one is extremely out of control.
The President/Partner of Neo Purchased 2 units in Vertika. Look at these prices!!!!
2702 (1337 sqft)- $775,000
1101 (727 sqft) – $775,000
This is CRAAZZZYYYY!!!!!
HE SHOULD BE REPORTED AT ONCE AND CHARGED.THIS IS FRAUD
Does anyone follow the Hallandale condo market? Specifically I’m looking at two new buildings – Duo and Ocean Marine & Yacht Club. Duo has had closings for a few months now and I think Ocean Marine should start soon. But the prices still seem high. Anyone have any opinions on what a 1 bedroom in these buildings should be fairly going for?
While the discussion is on NeoVertika, I’d like to bring to everyone’s attention what a disaster this building has been. I lived there for a year where it was first opened, and had nothing but problems. There were at least 4 large leaks damaging dozens of units, shoddy construction, unpromised amenties, an sprikler replacement of the ENTIRE building (i.e going into each unit, ripping out drywall, inconvience, etc.) and on and on and on.
The units themselves are so small, there is no closet space and everything is done on the cheap…buyer beware.
I looked an Neo Vertika when the building was in resales in ’06. The RE Agent (Not Lucas) I was working with actually told me that I would never again find “anything of the same caliber”. I am so glad i didn’t bite!
After reading about the California developer who is giving away a rowhouse if you buy a luxury house, I wonder if any developer in Miami will try the same. Buy a 2BR (high floor) and we will give you a 1BR or studio (lower floor) for free. Removes carrying cost for the developer and most likely puts the cheaper condo in the hands of somebody who will pay tax and HOA. Seems a bit far fetched, but you never know these days.
Lucas,
There must be a good correlation between the preconstruction sales price and the closing rates in these buildings.
Do you have or is it possible to get preconstruction price / Sq ft?
I’m putting together some graphs with the info you’ve posted. Once I complete them I’ll share them with you.
JL – Which map or tool on the Zilbert site are you referring to? The one that shows new listings in yellow?
Brando,
Brilliant idea. But that is the most hard to come by information. It is gaurded like a coke formula. Even the precon prices vary wildly for the same building. Depends on the time it is bought and the deals made with the developer. I can never get this info as it is not public knowledge.
TK, are you referring to my May 30 Post? I made another post looking for Zilbert-like sites in Lauderdale a couple days ago but that post vanished.
AJ said: “Even the precon prices vary wildly for the same building. Depends on the time it is bought and the deals made with the developer. I can never get this info as it is not public knowledge.”
So, let’s see what everyone here has personal knowledge of as far as precon prices. It may be somewhat helpful…post what you KNOW!
500 Brickell in Jan. 2005 – INTERIOR ONLY
1 bd. oo Line East Tower – $431.74 (901 sq ft)
1 bd. 00 Line West Tower – $374.02 (901 sq ft)
1 bd. 04 Line East Tower – $371.21 (851 sq ft)
Will post AXIS later
Anybody else?
Even Ed McMahon is losing his house to foreclosure….even after receiving a multimillion dollar $7.2M settlement over mold in his house and death of his dog.
http://www.usatoday.com/money/economy/housing/2008-06-04-mcmahon-foreclosure_N.htm
Americans aren’t poor, many have just been living beyond their means. Save 10%-20% pre-tax and you’ll never have money worries…
Precon prices:
I know a couple of people who paid $343/sf and $384/sf preconstruction for the choicest 2 BR lines (5 and 7) in the 1800 Club. But those were the first and early bookings. Many people paid $400/sf and up for the same units in 2005.
Any one from Quantum and Marina Blue can volunteer with this info?
I paid $400 for line 01 at Quantum in 2006
Mane, that is a good price for line 1 in 2006. Is it a reassignment of contract from someone or you bought from the developer directly?
aj, it was a reassignment from an european who decided to get out in sept 2006. Asking price was $460/sqft.
I have to hold it for few years.
you sure about a few years? try a decade before we get back to those prices.
You wrote< Straw Buyer At Neo Vertika // Jun 3, 2008 at 6:03 pm
I just discovered another fishy buy at the Vertika done in March.
But this one is extremely out of control.
The President/Partner of Neo Purchased 2 units in Vertika. Look at these prices!!!!
2702 (1337 sqft)- $775,000
1101 (727 sqft) – $775,000
This is CRAAZZZYYYY!!!!!
I hope the mortgage fraud and FBI roast her ass she deserves it if this is try based on what you wrote. I remember begging to buy that penthouse and she had such a smug holly than thou look as though she was the most important person in miami. At one time you really had to have the right last name or really BE SOMEONE IMPORTANT in her eyes, now she is resorting to fraud. Maybe should be out on that street corner with a cardboard sign announcing 50 percent off!
I wonder how much a new hotel room costs to build, furnish, apportion part of common areas etc.? $100K, $200K each for a luxury hotel room??? I ask this since there seems to be a lot of $400K-$1M+ condos that are being run like hotel rooms now for short term rentals…anything to bring in cash (aside from some short term rentals for er…. video shoots).
Seems like a losers game…who wants to manage just ONE “hotel room”…ouch what a pain.
unless there was a misrepresention to the lender in the transaction, there’s no mortgage fraud. i highly doubt any bank, after the goings of the past several months, financed these transactions. someone check the public records?
also, the fact that this might skew appraisals doesn’t make this fraudulent either. it’s up to the parties in a later transaction to decide whether these sales have any merit in arriving at an arm’s length purchase price.
I used the Miami Dade website to look at closed sales but I can’t seem to find any info for Plaza at Brickell. Can you tell me what info you are using?
jcrimes,
Your wrote: “the fact that this might skew appraisals doesn’t make this fraudulent.”
Not true. If those transactions were made with the express purpose of misleading future buyers about the value of Neo Vertika condos, an allegation of fraud can and should be sustained against the initiators.
“Under common law, three elements are required to prove fraud: a material false statement made with an intent to deceive (scienter), a victim’s reliance on the statement and damages.”
False statement: representing a nonsale as a sale with intent to create a false and/or misleading comp.
Reliance: future appraisers, lenders and/or buyers rely on false comps.
Damages: buyer pays substantially greater price than warranted or lender makes under-collateralized mortgage loan and writes down asset or loses money at foreclosure.
“scienter” is legalese for “evil intent” / with malice aforethought, etc…
I believe the reason the Developer and the Developers family purchased these 4-6 units was to great an unrealistic value to one of their products, which is the Vertika.
They are currently trying to close on Wind units and sell Cima units . By showing their past products maintain value, they hope it will help them sell the new product at a higher value .
SB
first, that’s the civil standard you cited, not the criminal. there’s an important difference both in what is proved and to what extent. second, what you’re talking about is an appraiser being duped by these sales. i’m sorry, but no credible appraiser in today’s market will give those sales any credence. nor would any bank or purchaser for that matter. thus, there’s no one out there to prove they were defrauded.
the way the appraisers did their job over the past couple of years, don’t bet on it. sometimes we give a little too much credit to people who have not come close to earning it. many appraisers are in it for the money, and not too worried about getting it right. if/when they fail and lose their job, they will just move on to another. most of these people are career hoppers, not just job hoppers. this tends to be the case in most RE jobs.
okay, so if fraud was not their motivation, what possible other reason would there be to pay insanely over FMV for units they developed?
I lived a few years in NeoLofts after it opened. what a sad decline that place has had.
gables – now you’re talking about an issue betwen the bank and its appraiser, i.e., he was a moron in determining an arm’s length valuation of the property. this still doesn’t implicate the principals behind the earlier insider sales at neovertika. using SB’s definition of fraud, there is no representation being made by these insiders to a subsequent third party purchaser and the affiliated parties in that later transaction.
note, i’m not saying these transactions don’t stink. rather, criminal liability for mortgage fraud or some type type of fraud on the market theory (which doesn’t fly in the first instance) is very specific in terms of proof and more importantly, inapplicable here.
jcrimes,
you said: “credible appraiser.” The operative word is “credible.”
The bank rarely chooses the appraiser, the mortgage broker does. Brokers, Realtors, developers and appraisers are hungry for business and more likely to take shortcuts. And there’s no shortage of appraisers willing to fudge the numbers especially when provided with a plausibly deniable out in the form of fraudulent comps.
Fraud is fraud. The standard of proof is higher for criminal than civil but the essential underpinnings are the same (unless modified by statute).
You also wrote: “there is no representation being made by these insiders to a subsequent third party purchaser and the affiliated parties in that later transaction.”
If the developer or an affiliated party presents a contrived, non-cash transfer as a sale with the intent of misleading any interested party, we have the first two elements of fraud. Whether the presentation occurs by broadcasting the misinformation through the county recorder or television or verbal utterance or any other means, we have fraud. If mail is sent or an interstate phone call is made as a result of that fraud, we have mail fraud or wire fraud both of which are Federal criminal offenses.
These fraudulent things that people are talking about cannot be true. Not in Miami. These types of things just don’t happen in America. Real estate is regulated. Fraud is not possible.
Thought I saw her on Brickell, with those fake (Hialeah made) Versachi sun glasses
SB
under your interpretation any insider transaction would be subject to a claim by a subsequent purchaser of a similar asset. that doesn’t fly.
more importantly, you still can’t point to me who your victim is here. it can’t be fraud if everyone knows it’s bs.
whether the “fraud” is provable or not really does not matter to me. it helps me to eliminate the buildings and businesses with whom i will deal now and in the future. these people just help me in my decision making 🙂
jcrimes,
If/when buyer and/or lender do not know the comps are BS, they get scammed; if they know the comps are BS, they will not buy or lend. Those in the know simply don’t transact; others get fleeced.
You wrote: “any insider transaction would be subject to a claim by a subsequent purchaser of a similar asset. that doesn’t fly.”
Wrong. Pump and dump insider transactions are unlawful whether they are done in stock sales or real estate sales.
I respect and value most of your comments but on this matter, you are off base.
This is good stuff, a Herald reporter should cover this blog for some juicy leads.
SB
eight years of practicing law…i don’t think i’m off base on this one. i’ll say it again – a lender, purchaser whoever on a subsequent sale can’t scream fraud because of these earlier insider sales. the fact that the documents are recorded for the public to see does not make them “representations” in the context of a later sale. you don’t have any privity among the parties.
think it through…i need to say to you “buy my widget because of x” knowing full way that “x” is wrong. you of course buy the widget because of “x.” the gist of the hypo is simple – the misrep needs to be from the seller, not an unrelated third party who has absolutely nothing to do with the transaction.
your point i presume is that these insider sales perhaps affect future sales. i’ll use a more salient example then – the pump in dump (which is not what happened here). CFO telling the market “we’re doing great” when in actuality the company is sinking (and he knows it). by making this statement, stock goes up and the CFO sells out. few months later, company goes under, everyone loses except the CFO. what makes this hypo fraud while th neo situation technically clean? simple, you still have the privity in place, i.e., the company is lying to you the purchaser.
Love that pump and dump. I think the analogy that she is a pumper and dumper is good. You know those french manicures she got every week cost a but load. About 60 a week. Someone need to examine her relationship with the city commissioner, and who she purchased nail polish for.
I really do think I saw her on Brickell with a beat up sign hawking her condos at 30 percent off her jacked up price, but maybe it was a mirage or sign of the future. Please help me out……
Lets go back to XXX. If the condo association approves renting out to porno producers at day or week rates empty units, is this a viable way to balance the budget and throw off excess cash? I think VIVID and other producers are looking for areas in Miami and those condo associations could reap great profits with legitamate business.
Has anyone heard of anything on the Ivy Riverfront? I purchased there at $368/sq ft 2 2 1/2.. Any thoughts? Might walk away.. carrying costs and being under around $50/sq ft makes is finacially prudent to take a partial loss of my deposit…70k out of 93k…Anyone interested in buying..lol.. Crazy market.. Trying to negotiate price and finishes…Lets see what they come up with..Building seems nice.. Not a speculator, but not worth if i am down 100k off the bat..
New concept being developed. turning luxury condo buildings into dogaminiums. Concept is a turn key gorgeous unit for your dog. Concierge service available, dog walking service, gourmet cooked meals, protein shakes for the dog, exercise room for dogs, and special high end decor for the dog lover. Please respond to [email protected] for preregistration and presale information. We are going to announce in 30 days those units that are available by lottery, because of expected high demand waiting list for this product.
Let’s go back to the lights issue in each empty building. Or at least have a joke section. I like this jokers last posting, had me on the floor laughing my behind off.
New Condo Concept Dogaminiums – You forgot about the valet parking….
Valet parking is available and concierge service as well for your dog. Turn key white glove service for your dog.
Will the humans visiting the Dogaminium be allowed to enter through the lobby, or do they have to use the service enterance and elevator?
Oh, and will humans staying in the Dogaminium be limited to a certain size, say less than 5’10” and weigh less than 170?
Everyone knows prices are coming down, no one is looking to buy unless they need to. Is this blog getting to be more of a useless blog of pain and suffering, rather than a tool for buying? Let’s here some comments on this.
“Daniel // Jun 12, 2008 at 4:33 pm
Has anyone heard of anything on the Ivy Riverfront? I purchased there at $368/sq ft 2 2 1/2.. Any thoughts? Might walk away.. carrying costs and being under around $50/sq ft makes is finacially prudent to take a partial loss of my deposit…70k out of 93k…Anyone interested in buying..lol.. Crazy market.. Trying to negotiate price and finishes…Lets see what they come up with..Building seems nice.. Not a speculator, but not worth if i am down 100k off the bat..”
– Yeah, I came to the same conclusion, did not even consider negotiating. Just decided to take a loss and walk away one month ago. I’m still waiting for the 25% DEPOSIT REFUND hoping that hopefully there will be no need for a lawyer.
I’ll let you folks know when I’ll get it.
Pelide said: “- Yeah, I came to the same conclusion, did not even consider negotiating. Just decided to take a loss and walk away one month ago. I’m still waiting for the 25% DEPOSIT REFUND hoping that hopefully there will be no need for a lawyer.”
Idea for you to help protect a timely disposition of your waiting for that refund: “CALL YOUR ESCROW COMPANY, GET THE NAME AND FAX FOR THE UNDERWRITER OF YOUR ESCROW, SEND THEM A FAX AND CERTIFIED LETTER noting that you have a dispute with the developer and INSTRUCT THEM NOT TO RELEASE ANY FUNDS FROM THE ESCROW until you notify them, in writing, that your dispute has been settled.
That way, when the developer wants his one-half of that escrow bad enough, you will get your one-half at the same time.
Un-Related , thaks but I wish I had your tip earlier.
They told me that to process my request it was necessary to sign and send them a “cancellation of purchase agreement and release”, so I did.
Few days later I got a copy of their 2 letters. The first to the escrow company instructing them to release the funds in two equal parts, by sending them a check (for me I guess ?) and wiring the same amount to their bank a/c.
The second was to their bank asking them to authorize the Escrow Co. to release the funds.
Almost one month has passed but I still didn’t get my check. I do hope to get it soon. 🙂
Pelide,
Good luck! Some of the developer’s will honor their contracts and return the 25% without an argument.
Unfortunately, Related doesn’t respond to phone calls and certified mail and as a result of what they did to people who walked at 50 Biscayne, I would not take a chance. (It’s simple: POSSESSION is 90% of the law!)
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Regarding discounts or lack of discounts. If the developer is still into the bank then he cannot discount the units,the bank will not allow him to do that, it is only when he is out of the construction loan that he has flexibility, but discounting at point creates another problem, people buying will be unable to get financing, the banks will not loan in a development where they cannot get their amrs around the debt to value rations, if the units are constantly being discounted it leaves the banks with too much exposure, so the developer would be stuck with the units. What I am finding is that I can up a unit at pre construction pricing, this I determined is the result of the Premium evaporating, because that is all it was, you get in line put down the deposit and hope that someone will take over the contract at a higher price, the premium, the value of the underlying asset just has not risen in is at 2004 prices, sill a pretty good deal. Another factor is that of all the Condos built, they are not al in the most desirable areas, so it may be thee is actually a high level of demand for certain areas, South Beach and Brickell.