Highly Motivated Seller of Two Latitude on the River 2 bedroom/2.5 Bath Condos – $395,000!!!
The owner of two condos at Latitude on the River contacted me earlier this week. He is highly motivated to sell both of his 2 bedroom/2.5 bath condos and is willing to consider all reasonable offers. He has already closed on both of these B12 units and is willing to accept a loss on each of them.
One of the condos is located on the 17th floor while the other is located on the 20th floor. He went into contract on both of these units in Summer of 2005 but paid the original prices that were offered when sales were initially launched. The contract price on the condo located on the 17th floor was $455,000 while the one on the 20th floor was $461,000. His closing costs were approximately $10,000 for each unit. The slideshow below will show some pictures that I took of the unit on the 17th floor.
The unit on the 17th floor is listed at $459,000 which currently offers the best price per square foot of all 2 bedroom condos at Latitude on the River. There’s a two bedroom listed on the MLS for less but the square footage is inaccurate. The listing agent of that unit decided to include the terrace space as well. The interior space of that condo is actually only 1,179 square feet.
The amenities at Latitude on the River are highly impressive and is a huge selling point for this building. It has some of the best amenities that I’ve seen of the newer condo developments. At this price point, I haven’t seen any that match the quality of amenities that can be found at Latitude on the River. The lobby, landscaping and water features of the building are quite impressive as well.
2-story state-of-the-art fitness center and yoga room
4 high-speed elevators
If you’re in the market to buy a 2 bedroom/2.5 bath at Latitude on the River then this is your chance to score a great deal. Contact me today if you’d like to submit an offer on one or both of these condos.
Both of the units come decorator-ready with concrete floors. The following slideshow will show you a few pictures of a fully decorated unit so you can see what one of these can look like.
Update: This condo closed on December 27, 2008 for $546,000.
South Beach Condo Index – September 2007
As with the Brickell Key Condo Index in August, I have included some key statistics about each of the 19 developments that comprise the South Beach Condo Index. The third set of statistics below will reveal the number of available listings in each development, the percentage that those listings represent of the total number of condos in the development, the number of pending sales as well as the number of closed sales within the past month.
The average price per square foot of condos currently listed in the following 19 developments in the South Beach Condo Index has once again dropped. The August South Beach Condo Index revealed that the average price per square foot of available condos was $892.32. This month, the figure dropped to an average price per square foot of $887.60. The weight-adjusted average has also dropped from $777.86 in August to a weight-adjusted average for the month of September.
The average price per square foot of condos sold over the previous six months has gone up slightly despite very little activity. The figure has increased from $776.55 in August to $783.25 for the month of September. The weight-adjusted average is now $693.71 which is also higher than last month’s weight-adjusted average of $689.30. A significant jump in the average price per square foot of units sold at Murano at Portofino over the past six months has much to do with the increase. A closed sale seven months ago that held its average down has fallen off, thus bringing its average higher.
Murano at Portofino – 1000 S Pointe Dr | 33139 | $1,040.34
Murano Grande – 400 Alton Rd | 33139 | $761.17
Portofino Tower – 300 S Pointe Dr | 33139 | $938.87
Setai South Beach – 101 20 St | 33139 | $1,721.27
Waverly at South Beach – 1330 West Ave | 33139 | $473.83
Yacht Club at Portofino – 90 Alton Rd | 33139 | $650.36
Below you will find the new statistics that I have included in this month’s South Beach Condo Index. The first number directly to the right of each development name represents the total number of active listings. The second number, in parentheses, is the number of currently listed condos expressed as a percentage of the total number of condos in the development. The third number represents the number of pending sales while the fourth is the number of closed sales within the past month.
1500 Ocean Drive – 5 (4.46%) |0 | 1
Bentley Bay – 47 (27.65%) | 2 | 1
Bentley Beach – 15 (13.16%) | 1 | 0
Continuum South Tower – 40 (12.58%) | 4 | 0
Cosmopolitan – 28 (12.56%) | 0 | 0
Courts at South Beach – 4 (4.00%) | 0 | 0
The Decoplage – 57 (9.12%) | 2 | 0
The Floridian – 54 (16.17%) | 1 | 3
Grand Venetian – 16 (11.94%) | 0 | 0
Icon – 44 (15.22%) | 4 | 1
Il Villagio – 6 (4.72%) | 1 | 0
Meridian Lofts – 16 (14.41%) | 1 | 0
Mirador 1000 & 1200 – 105 (11.34%) | 9 | 3
Murano at Portofino – 11 (5.82%) | 1 | 0
Murano Grande – 51 (18.89%) | 1 | 3
Portofino Tower – 35 (16.99%) | 1 | 0
Setai South Beach – 30 (18.40%) | 2 | 1
Waverly at South Beach – 41 (10.28%) | 3 | 2
Yacht Club at Portofino – 39 (10.80%) | 2 | 0
There were a total of 15 closed sales from August 12, 2007 to September 11, 2007. 11 of these transactions took place in four developments: The Floridian (3), Mirador 1000 & 1200 (3), Murano Grande (3) and Waverly at South Beach (3). Four others had one closed sale each while the rest had zero. Last month there were a total of 18 closed sales over the previous 30 days. I’ve calculated that there have been a total of 161 closed sales over the past six months in the above 19 developments. That tells me that the previous four months prior to last month had an average of 32 closings each. The recent closed sales figures reveal that there has been a huge drop-off in activity. It is difficult to say, however, how much of this is due to the market slowdown and how much is due to seasonality since the summer months are the slowest for the South Florida real estate market.
The good news is that there’s now a total of 35 pending sales in the above 19 developments. I’ve definitely seen an increase in activity within the past two of months. However, I, as well as many other Realtors that I’ve spoken with, have encountered problems with condos appraising for the full purchase price. A pending sale doesn’t hold as much relevance as it once did. I wonder what percentage of the 35 pending sales will actually close.
Corus Bank – One of the Many Publicly Owned Real Estate-Related Companies to See Trouble Ahead
In previous posts, I’ve revealed that Corus Bank is a prominent lender to condo developers in Miami Miami Beach. A recently published article by TheStreet.com entitled “Corus Swept Up in Florida Condo Undertow” may reveal that my analysis of Corus Bank was actually conservative. The article revealed that, for good reason, “55 percent of the stock’s float is being sold short, meaning that investors are betting on a decline in the stock’s value”.
Since August 4, 2007, when I mentioned Corus Bank (NASDAQ: CORS) in one of my posts, the stock has lost a little over 22 percent of its value. I am definitely not saying that I had anything to do with that. Much of the loss was due to two articles about Corus Bank that were written by TheStreet.com towards the end of August. People have begun to see that Corus Bank has troubled times ahead if condo developers in Miami and Miami Beach have difficulty closing on their units.
Recently, Corus Bank paid its shareholders a cash dividend of 25 cents per share. At first glance, this news may sound promising for Corus Bank since it shows that they have extra cash on-hand. However, my sources tell me otherwise. Joseph Glickman, Chairman of Corus Bank, and his family control about 50 percent of the company. The cash dividend may be a way of getting cash out of the company.
If Mr. Glickman and his family had confidence in the company’s future and felt that the stock was undervalued then they would instead use the company cash to buy back its own stock. The family would then control a larger stake in the company. Earlier this year, the board authorized a share repurchase program but they have yet to repurchase one share of stock.
My source has disclosed to me the following: “Years ago Corus used to include in their 10-K Annual Report an analysis of their loan losses should a serious real estate recession occur. 2004 was the last time they performed the analysis (by the way, interesting to note is that they stopped providing this disclosure to shareholders). You can find the one from 2004 here. Just go to page 70 of the Annual Report for the “Commercial Real Estate Risk” section. Back then they were estimating that they would incur $143M in loan losses from their $5.3B loan portfolio should such a serious real estate recession occur. Well, fast forward three years and their loan balance has grown to $8B for the most recent quarter (6/30/07). Applying the same ratio from the 2004 analysis, I estimate that their loan losses could exceed $200M today. That’s more than a quarter of their book value. Now of course this is all hypothetical. Corus did not disclose how they were arriving at those numbers, or how they were defining a ‘serious real estate recession’. It’s garbage-in garbage-out as they say, but at least the analysis they used to perform gives you some numbers you can work with. I honestly think it could be worse though.”
It will be interesting to see in the following 12-24 months where shares of Corus Bank will be given the large amount of money that they loaned to Miami and Miami Beach developers. The following is a list of the Miami and Miami Beach condo developments that they loaned money to, as well as the amount of each loan:
Emerald at Brickell 3 Bedroom/4.5 Bathroom Penthouse Looks Like a Steal
This past week I came across a 3 bedroom/4.5 bath Penthouse condo at Emerald at Brickell that is priced at $975,000. I had to do a double-take when I saw the listing because I know that the 2 bedroom residences at Emerald at Brickell are listed in the $900K’s to as high as $1.45M. The listing shows this 3 bedroom/4.5 bath condo as having 2,847 square feet of living space.
I believe there are only 4 Penthouse units at Emerald at Brickell. Currently, this is the only Penthouse condo that is available on the market at Emerald at Brickell. The Penthouse units have a spiral staircase which lead to the rooftop pool and fitness center. The views from the pool deck are the best that I have seen from the pool deck of a condo building in Miami. (Unfortunately, the picture below shows only a bit of how great the views are from the rooftop).
Penthouse condos are supposed to sell towards the high end of a building’s average price per square foot. The August Brickell Condo Index revealed that condos at Emerald at Brickell had an average list price of $535.01 per square foot while condos sold over the previous six months had an average price of $474.85. This 3 bedroom/4.5 bath condo at Emerald at Brickell is listed at $342.47 per square foot. This seems like a steal to me.
I haven’t been able to get a hold of the listing agent, however. The only contact number that accompanies the listing is that of his office. I’ve called and they have told me that he is out of the country and are not sure when he will return. The price may be a misprint but if it it is not, then I assure you that this is a fantastic deal.
A 3 bedroom/3.5 bath Penthouse sold for $1.25M in October of 2006. That unit has 3,098 square feet. That amounts to $403.49 per square foot. With the views that the penthouse units offer at Emerald at Brickell, I think anything under $1M is a bargain. This is an east-facing penthouse condo by the way.
Questions to Ask Your Lender
Many of you may currently be shopping around for a mortgage. There have been many reports, as of late, about borrowers who didn’t fully comprehend what they were getting themselves into. As a borrower, it is your responsibility to understand what you are signing. Don’t be afraid to ask questions. After all, a mortgage may be the biggest debt responsibility that one undertakes in their life.
Kit Mueller, licensed mortgage planner, and author of the Mortgage Planner blog, is very knowledgeable about the mortgage business. The wealth of information that he provides on his blog has made me an avid reader. He is more concerned with his clients obtaining their financial goals than just closing a mortgage loan. Kit Mueller is licensed in Florida, Illinois, Wisconsin, Michigan, Indiana and Ohio. When it comes to finding a reputable lender he advises clients to ask the following questions:
What is the average number of days it takes for you to issue a firm loan approval?
Are the rates you are quoting today good 30 days from now?
If we are locked-in and rates go up, what is your policy if our rate lock expires?
What is the index on the adjustable rate from which you are quoting?
Can you give me a 24-month history on the movement of that index?
What is the margin associated with this loan?
Is this the best index to have? If so, why?
What are the total fees associated with our loan?
What is the difference between points and an origination fee?
How will this loan affect my financial goals?
How do I know what loan is best with regard to how long I’ll be in the home?
Are you closing at least 100 loans per year and/or how long have you been in the business?
Can I be pre-approved prior to submitting an offer on the property that I wish to purchase?
What is the APR on this program?
What percent of the loans you take actually close?
Bonus Questions (if a lender can’t answer these – run!)
What are mortgage interest rates based on?
What is the next report or event that can cause interest rate movement?
When Bernanke and the Fed changes rates, what does this mean and what impact does this have on interest rates?
What is happening in the market today and what do you foresee in the near future?
I think Kit’s questions will help borrowers become more educated about acquiring a mortgage in the future. Thank you Kit for your much appreciated advice!
Villa Regina – 3 Bedroom/2 Bath – Motivated to Sell Now!!!
A few days ago, I acquired a great listing for a 3 bedroom/2 bath condo with direct bay views from the 19th floor at Villa Regina. I normally don’t discuss my listings on this blog. However, due to the motivation of the seller, I decided that this could be a good opportunity for a buyer looking to buy a beautiful condo at Villa Regina at a great price.
The owners of the condo recently accepted a job offer in another state and need to sell right away. It would make their lives much easier knowing that their Miami residence is sold so they can concentrate on their new move. They are planning to relocate within 60 days.
The listing agreement was signed on Monday and I input it into the MLS later that night. We listed it for $685,000. At $685,000, the condo is well priced, given the competition in the building and the fact that the owner is willing to pay two years worth of monthly maintenance fees. This amounts to a savings of $27,134.40 over the following 24 months after closing. The next best priced condo in this line is priced at $699,000 and is located 11 floors below the condo that I have listed. That unit did not convert its space to three bedrooms, nor does it offer any type of buyer incentive.
Okay, okay…so a $14,000 ($41,134.40 with the two years worth of monthly maintenance fees paid) difference in price doesn’t make for an outstanding deal. How would it sound though if a buyer could acquire this property for $600,000 even? Sound more enticing? The owners are so motivated to have their condo under contract within the next 30 days that they are willing to accept an offer that would net them $600,000 before, not after, commissions.
This newly listed condo at Villa Regina has 1,895 square feet of interior space and two large balconies. It was formerly a 2 bedroom/2 bath but was converted by the current owners to a 3 bedroom soon after they purchased the condo in 2002. It is the only currently listed condo at Villa Regina to be converted into a 3 bedroom. I’ve seen a lot of condos at Villa Regina and this one is a fantastic buy. The condo has hard wood floors throughout all living areas except both bathrooms and the master bedroom. Both bathrooms have marble flooring while the master bedroom has Berber carpet. The condo also have a dry bar with wine cooler, upgraded kitchen cabinetry and appliances, upgraded washer/dryer and upgraded master bath and second bath. The furniture that currently resides in the condo is negotiable.
I received a phone call from a local Realtor Tuesday evening to find out if she could show the condo Wednesday at 5pm. She doesn’t know that my client is motivated to the point to accept a $600,000 offer. The fact that I received a showing appointment within 24 hours of it being listed at $685,000 goes to show me that the condo is well priced. At $600,00, it is priced phenomenally.
My clients hope to have their condo under contract within the next 30 days. For that peace of mind, they are willing to accept a much lower price. They realize that an executed contract normally takes 30-60 days to close so they are only willing accept a $600,000 offer if it is presented within the next 30 days.
Villa Regina recently had a special assessment to modernize its lobby, hallways, marina, fitness center, club room and landscaping. The special assessment has been paid in full by the current owner.
I am encouraging all buyers who have an interest in purchasing a 3 bedroom on Brickell Avenue to take a look at this condo. I dare you to find a better 3 bedroom condo in a building that resides on Brickell Avenue for $600,000 or less. I constantly search the MLS for great deals and I just don’t think you’ll find a better deal. Contact me if you would like to take a look at this condo in person.
Four Bank-Owned Condos in Miami & Miami Beach to be Auctioned September 19, 2007
Four condos will be auctioned off Wednesday, September 19, 2007 at approximately 3pm. Three of the four condos are located in Miami while the fourth is located in Miami Beach. All four condos have gone through the foreclosure process and are currently owned by the bank.
1. Meridian Place – 325 Meridian Avenue #6 | Miami Beach, FL 33139
This is actually a townhouse. Of the four units being auctioned, it will probably hold the most interest because of its fantastic location. Some of South Florida’s most expensive condominiums reside in the South of Fifth neighborhood of South Beach. Built in 1994, this 3 bedroom/2 bath townhouse has 1,300 square feet of interior space, as well as two parking spaces (one garage space and one driveway space). County records indicate that the bank is owed $549,000. The opening bid is $100,000.
Let’s just say that I’m not surprised. I’ll leave it at that. This 1 bedroom/1 bath condo has 818 square feet of interior space. The bank is owed $610,000. I guess they’re in for a rude awakening come September 19th. The opening bid is $100,000.
3. Venetia Condo – 555 NE 15th Street #16-H | Miami, FL 33132
Venetia Condo is located at the entrance of the Venetian Causeway in Miami. The building was built in 1980. The condo up for auction is a 1 bedroom/1 bath with 800 square feet of interior space. It faces south and has views of Biscayne Bay as well as the cities of Miami and Miami Beach. The bank is owed $410,000. The opening bid is $50,000.
4. Blue Lagoon Condominiums – 5091 NW 7 Street #705 | Miami, FL 33126
Of the four condos that will be auctioned on September 19, 2007, I think the 2 bedroom/1 bath at Blue Lagoon Condominium will hold the least amount of interest from the people attending the auction. However, this makes it a great candidate to be acquired at bargain prices. Blue Lagoon Condominium is located near the airport, about 12 minutes from Brickell. It’ll make for a great investment property if it can be obtained for $175,000 or less. The unit has 862 square feet of interior space. The bank is owed $305,000. The opening bid is $50,000.
Contact me for more information regarding this auction featuring the above four condos.
Neo Vertika 2 Bedroom + Den on the 29th Floor – $303,000
Two Mondays ago I reported that a 2 bedroom + den loft at Neo Vertika went up for auction. The auction had a dismal turnout and the highest bid was quickly rejected by the bank.
Since that time I have submitted two offers to the bank. The bank has recently stated that they would accept an offer of $303,000 if the closing can happen by September 20, 2007. They want absolutely no contingencies, such as financing or inspections. The unit has never been lived in and comes “decorator-ready”.
The loft faces south and has views of the bay and overlooks the swimming pool. The unit is on the 29th and 30th floors and has 1,255 square feet of interior space as well as a large balcony off the main floor. It has 20-foot ceilings and comes with the upgraded stainless-steel appliance package.
The lowest that a 2 bedroom at Neo Vertika of this size has sold for in 2007 is $400,000. If you, or anyone you know, would like to make an offer then please contact me. A pre-approval letter must accompany the offer.
Governmental Intervention in the Housing Market
Yesterday, President Bush discussed his plan to aid homeowners at risk of losing their homes. Most of the plan focused on assisting borrowers to refinance their adjustable-rate loans to more conventional loans provided by the Federal Housing Authority.
I took a look at his recommendations and of particular interest to me was his proposal to temporarily suspend the tax liability that is owed by homeowners when performing a short-sale. As of now, the IRS has the right to tax the loan amount that is forgiven by the lender. It is considered a forgiveness of debt.
Short-sales have become very popular, as of late, because home prices have dropped in recent years and adjustable-rate mortgages have begun to reset. It has become more common for the value of a home to be less than what is owed to the bank. For example, let’s say that you purchased a 2 bedroom condo in 2005 for $500,000 and financed 90 percent of the purchase price. Two years later the value of your home has dropped and you have fallen two months behind on your payments. In the past, when homeowners were in this situation they would tap into the equity on their home by refinancing to take cash out. This is no longer an option, however, to most, because home prices have fallen. Oftentimes, two possibilities exist: lose your home through foreclosure or sell your home through a short-sale.
In the example above, let’s say that the price of your 2 bedroom condo has fallen to $400,000. You owe the bank roughly $450,000. You’ve talked to some knowledgeable acquaintances and they’ve advised you to do a short-sale. Basically, a short-sale means that the bank is willing to accept a pay-off amount that is short of what is owed to them. You contact a local real estate agent to list your property and within a few weeks an offer of $380,000 is submitted.
What is important to note is that two parties need to accept the offer: the seller and the bank. The reason why the seller has to sign off on the offer is because the IRS has the right to tax them on the amount of the loan that is forgiven. In this case, a tax on the $70,000 forgiveness of debt will be due the following April.
The bank also has to approve the offer because they are the ones who are accepting the shortfall in the original amount owed. The banks will ask the homeowner to have an appraisal performed at their expense. Banks are not stupid. They realize that the market has declined but they aren’t going to accept just any offer.
Recently, I’ve come across a few short-sales in the MLS that just don’t make any sense. For example, there’s a 2 bedroom/2 bath listed for $295,000 at Vue at Brickell. There’s also a 1 bedroom/1 bath listed for $217,000 at The Club at Brickell Bay. I’ve written about both buildings in the past and how prices in each building are inflated due to the mortgage fraud that has occurred. However, these prices are a step in the wrong direction and are unjustified. The 2 bedroom at Vue at Brickell is the best priced unit in the entire building, including the 1 bedroom units. The 1 bedroom condo at The Club at Brickell Bay is better priced than even the studios.
Listings like these are a waste of time for everyone involved in the transaction: the seller, the buyer, the bank and the two real estate agents. Just because it is a short-sale doesn’t mean that you can list a property at a price that will get you an offer within a week. As of right now, it is also doing a great disservice to the seller who will have a large tax bill come next April should the offer get accepted by the lender.
As I mentioned earlier, however, President Bush has proposed to temporarily suspend the tax that is owed to the IRS on the amount that is forgiven when a distressed homeowner performs a short-sale. If this becomes a reality it will alleviate a lot of problems for distressed property owners. Short-sales will become more common.
It wouldn’t surprise me, however, if we start seeing mortgage fraud occur in reverse. Appraisals will start coming in very low to justify the offers that are submitted to the banks. It’ll be a nightmare for banks. Accredited local appraisers need to be in place for these banks to be able to cleanly wash themselves from the mortgage mess at hand.
