One Bal Harbour Condo Closings Appear to be Troubled
Last week, a client called me to let me know that he would be flying into Miami and would specifically like to take a look at One Bal Harbour. He wanted to schedule a showing for Monday afternoon. I contacted a WCI agent today to find out if we could get in to see some units on Monday. I was told that WCI has decided to take a holiday leave until Wednesday. Unfortunately, my client will be flying back to Canada on Monday evening.
After hearing this, I was thinking to myself “Wow! WCI must have closed a lot of condos these past couple of weeks in order to take a vacation”. I was curious to find out what their latest closing rate was since closings began on condos for this Bal Harbour development. I got back to my office and checked it out. The following graph reveals that 33.51% of units have closed at One Bal Harbour. December 8, 2007 I revealed that only 23.24% of units had closed since November 16, 2007, the first day that closings began.
Does this look problematic to anyone else? If I were a developer in this position I would be holding 24/7 open houses and not taking a holiday leave. Oh well…my client will return in a few months when those who do close are really struggling and condos will be much more aggressively priced. We’ll see if WCI can remain afloat until then. It looks like prices at One Bal Harbour will only go down over the next six months.
The most humorous quote to me was a Realtor saying in an article published on August 17, 2007 that she was “very confident that every single unit will close”. I hope she meant eventually every condo will close. If she meant that every contract holder will close then I think she was being way overly optimistic.
The closing rate cited above was obtained from public records. There can be a 2-3 week lag in getting a closing recorded although most closings are records within the first 7 days.
A Year in Review for the Miami Condo Investments Blog
As a year-end post, I decided to go through all of the posts that I’ve written about the Miami condo market in 2007 to highlight my five favorite posts. This blog was born on May 12, 2007, so it’s really a 7 1/2-month review. It’s amazing that I’ve been able to find the time to write 180 posts since that time. The following five posts weren’t necessarily the most popular, although a few were, but rather just my own personal favorites. These are the blog posts that I felt were both insightful and well written. Is there a Miami Blogging Pulitzer Prize in existence yet?
I’d love to hear which Miami condo post was your favorite of 2007.
Miami Condo Developer to Miami Condo Vulture?
Earlier today, the South Florida Business Journal published an article entitled “Related Considering Fund to Buy-up Condos“. It reveals that Miami condo developer, Jorge Perez, is considering to create a fund to buy condos throughout Miami at a discount. The article states that a source disclosed that the funding would come from Latin America.
Much of the The Related Group’s condo inventory is located in Brickell and Downtown Miami. Jorge Perez, CEO of The Related Group, recently stated on NBC6 that his only regret is not buying more land around his first condo development, One Miami. While many condo developers in Miami are now regretting ever getting into the mix, Jorge Perez regrets not buying and developing more land.
As the article points out, I think there will be a [huge] conflict of interest if Jorge Perez’s fund acts to buy defaulted condos that arise at Related developments throughout Brickell and Downtown Miami. I don’t think the banks that loaned the money to The Related Group will find the situation too appealing. I, for one, would feel a bit suckered. Additionally, buyers who do close on condos in Related developments might feel a bit suckered as well if they later hear that the developer himself acted as a principal to buy defaulted condos at much lower prices.
Marina Blue – A Repeat Performance for Hyperion Development or a New Chance to Shine?
A very interesting article regarding the condo development called Marina Blue was published yesterday in the International Herald Tribune. The article focuses on Hyperion Development, the developer of Marina Blue, and its damaged reputation as a result of the large “delays and unhappy buyers” at its first development called Blue.
Some residents at the first tower, named Blue, are threatening to sue the company for not delivering on amenities while other owners at the 330-unit complex are trying to sell their condos for less than they paid.
Blue’s problems have hurt Hyperion’s reputation enough that consultants say that some buyers who put down deposits at the company’s second tower, the 516-unit Marina Blue, may decide not to close. Other Marina Blue buyers have sued to get their deposits back.
The problems raise questions about the ability of Hyperion to repay a $110 million construction loan as well as its ability to develop future projects in the Miami market.
It will be interesting to see if Hyperion Development has learned its lesson and delivers all amenities and common areas completely done at Marina Blue. I know from reading the comments that are left here, that this is a HUGE concern of contract holders of condos at Marina Blue and those who have an interest in purchasing a condo there. Sales agents at the Marina Blue sales office have assured me that all common areas will be delivered when closings begin but I won’t believe it until I see it. Closings are scheduled to begin within the next week, so we won’t have to wait long to see if those promises were kept. You can be sure that I’ll be keeping a close eye on how closings go at Marina Blue in the upcoming months.
Miami Condos in Brickell – Red Hot Foreclosure and Short-Sale Condo Deals!
Before anyone takes me seriously, let me first just say that the headline above was meant to be a joke. Once you see the “hot” short-sale and foreclosure deals in the Brickell condo buildings below, you’ll know what I mean. Goes to show that just because a condo is listed as a short-sale or foreclosure doesn’t mean that it is priced well.
I’m not sure why listings like the ones above even make it into the MLS. It’s a complete waste of time in my eyes.
How to Sell Your Condo or House in the Current Real Estate Market
The following video provides great insight as to how sellers in the current real estate market should be realistic in pricing their home or condo if they are truly motivated to sell.
Oh yeah, and in case you missed it….DON’T OVERPRICE YOUR HOME! If you interview three agents and you decide to go with the agent that is willing to list your home at the highest price, then good luck!
Miami Condo Investments Joins the EWM office in Brickell
I am pleased to officially announce that I have decided to join the EWM office in Brickell. The office is centrally located in the recently developed Mary Brickell Village which has great shops and restaurants and has become the focal point of Brickell. It was a logical choice for me since I conduct most of my business in Brickell.
EWM has been in existence since 1964 and has become one of the top real estate brokerages in South Florida. EWM is owned by HomeServices which is wholey owned by world-renowned Warren Buffett’s Berkshire Hathaway and is also affiliated with Christie’s Great Estates.
EWM is a pro-blogging real estate brokerage. It even has their own widely read real estate blog which has great information pertaining to neighborhoods stretching from the southern tip of Florida to West Palm Beach.
You might be saying to yourself “Congrats Lucas, but how is this move going to benefit me as a reader?”. There’s just one word that comes to mind – statistics. I know that you love statistics, as do I. EWM has the best software that can break down the market like no other can. The software dates back 5 years while the MLS data only goes back 2 years. You can get a taste of the software here at the Facts & Trends link. This is just a taste, however. The full software, which I have access to, allows me to break the data down by city, zip code, development name, single family vs. condo, waterfront vs. non-waterfront, price, square foot and date. I was in heaven when I accessed this software. I’m a big statistical buff, as many of you already know, so having this type of data at my fingertips is sensational! I can now tell someone the average price per square foot that XYZ development was selling for back in 2002. How great is that?!
I’m also now able to provide IDX pages for individual developments. I plan to incorporate all Brickell, Brickell Key, Downtown Miami and the Arts District developments onto my blog. You’ll be able to click on a condo development name to view available units as well as recent sales. This should be implemented within the next month.
You may or may not have noticed that I neglected to publish a December index for Brickell, Brickell Key and South Beach. I have no intentions to do so. The holiday season is upon us. For the rest of December I plan to pretend that the real estate and stock markets are functioning superbly. What a joyous fictitious month it will be!
After the New Year, the Brickell and Brickell Key condo indices will return. The South Beach condo index, however, will not. I plan to focus this blog on condos in Brickell, Brickell Key, Downtown Miami and the Arts District. I know South Beach well but don’t plan to focus my efforts there.
Let’s just say that he’ll take everything east of Biscayne Bay and I’ll take everything west of it. A fare trade in my eyes.
New Construction Condo Deals in the Arts District, Brickell, Downtown Miami, and South Beach
As closing dates for some of South Florida’s newest condo developments quickly approaches, the motivation from contract holders to sell is becoming increasingly apparent. I’ve been receiving a lot of phone calls and emails from contract holders, within the past couple of weeks, who are looking for me to help them find a replacement buyer.
In some cases the contract holders are willing to accept a loss on their contract price in order to retain a portion of the deposit that was made 3-4 years ago. Below you will find some of the better deals that I’ve come across:
Unit ??? – 2 bedroom/2.5 bath NW corner unit – 1,491 SF – $1.86M
Unit ??? – 2 bedroom/2.5 bath NW corner unit – 1,922SF – $3.35M
Unit ??? – 3 bedroom/3.5 bath NE corner – 3,497 SF (4 balconies) – $4.2M
If you’re a contract holder and you’re motivated to sell then feel free to email me details of your condo and the price that you are willing to accept. Most developer contracts do not allow you to market your unit outside the sales center, so I will post general information here on the blog to see if a buyer emerges.
I’ll match buyers and sellers together. The sales centers are in some cases charging higher than normal sales commissions and transfer fees which make it virtually impossible for contract holders to get their units into the hands of end-users. I’m hoping that this blog will help contract holders to get some of their money back, end-users to find a great deal and developers to have less defaulted units. The way I see it is a win-win-win situation for everyone involved.
By the way, I’ve added a link to this post on my “Deals” page and will be adding to the list above intermittently.
Some Great Deals at Today’s Real Estate Auction!!!
I wasn’t able to attend this morning’s real estate auction, held at the Miami Beach Convention Center, but did learn the results of several condos that were auctioned. From what I’ve heard, there were more people in attendance at this auction than the Hudson & Marshall auction held on October 21, 2007, which I did attend. However, properties auctioned today sold for much less.
Below are the results of some of the condos that were auctioned this morning:
Courvoisier Courts – Unit 2312 – 3/2.5 – 1,655 SF (Brickell Key) – $540,000
Isola – Unit 1509 – 1/1 – 735 SF – (Brickell Key) – $185,000
Jade at Brickell Bay – Unit 502 – 2/2 – 1,460 SF – (Brickell) – $625,000
The Club at Brickell Bay – Unit 2603 – 1/1 – 825 SF (Brickell) – $175,000
The Club at Brickell Bay – Unit 3102 – 3/2 – 1,232 SF (Brickell) – $225,000
The Club at Brickell Bay – Unit 3202 – 3/2 – 1,232 SF (Brickell) – $270,000
The Cosmopolitan – Unit 2603 – 2/2 – 1,010 SF (South Beach) – $405,000
Vue at Brickell – Unit 811 – 1/1.5 – 796 SF (Brickell) – $180,000
Vue at Brickell – Unit 3606 – 3/2 – 1,551 SF (Brickell) – $290,000
It’s interesting to note that the units at The Club at Brickell Bay and Vue at Brickell sold in the range of $187-$226 per square foot. I think we’ll be seeing much more of this in the months to come. The high bidders of the units in these two buildings at the Hudson & Marshall auction simply overpaid.
The two units at Jade sold for around $425 per square foot. I think the BL45 unit is a terrific buy!
In June of this year, I submitted an offer of $440,000 for a client on unit 2603 at The Cosmopolitan when it was a short-sale. The bank rejected our offer. We were prepared to close within 30 days. It sold today for $405,000. This happens all the time! It really frustrates me which I why I rarely will deal with a short-sale. Banks just don’t get it yet! It’s a better use of my time to wait until the bank takes it back and have my client buy it for much less.
There’s Never Been a Better Time to Throw a Party
Three years ago, it seemed like every week that there would be a party thrown to commemorate the launch of sales for a new pre-construction condominium project. The parties were grand – open bar, all-you-can-eat buffets, firework shows, flamingos walking around, synchronized swimmers, half-naked cocktail servers, the finest wines, talking parrots – you name it and it was there.
Nowadays, it seems like hardly any developers want to throw a party and I personally think that this is the best time to throw a party. Three years ago, parties were thrown because it was expected (even though people would have signed contracts regardless if there was a party or not). These people signed contracts based on developer reputation, architectural renderings, and merely because the market was hot! It’s no secret that the market has cooled considerably since that time.
Why not stand behind your development and launch a party to show the public that you’re delivering a great product? Get potential buyers inside the building and let them reminisce about the party and how great your building is to other potential buyers. In my eyes, it sends a strong message to the consumer that you feel that you are delivering a great development to the public and that you are confident that they will feel the same way.
Even the best condo developments will have at least a 15% default rate in this market. Once this becomes a reality, why not hold a weekly open house to showcase your building and available units to the general public? I’ll even personally do it for you if you don’t have anyone on staff to do it.
The Related Group of Florida is the only developer that I know of that is throwing grand-opening parties for their developments. As I said before, this shows me that they stand behind their product. In fact, their latest development, Apogee South Beach, is having a grand-opening party on December 19. Unfortunately, I won’t be in town to catch the party, but the fact that they are having one shows me that they are confident that they will be delivering a spectacular product.
