The chart above will show you the percentage of total units that each development has closed since closings began.
One Bal Harbour is the newest edition to this monthly update. Closings began November 16, 2007. The percentage of closings may seem very low but keep in mind that it can take up to three weeks for closings to be recorded. However, it normally takes about five days for closings to be recorded. I know for a fact that several extensions have been granted at One Bal Harbour. I have a client who is planning to close on his unit this upcoming week. He will then sell it for a sizable loss to a replacement buyer who contacted me a few weeks ago in a simultaneous closing. I can tell you that WCI has delivered a fantastic product. An investment group that I met with today told me, after seeing a large variety of condo developments throughout South Florida, that One Bal Harbour was by far their favorite. I viewed a $5.7M condo there this past week that was simply amazing!
If you compare last month’s graph to this month’s you will see that there hasn’t been much of a change. Latitude on the River went up about 2%, Star Lofts on the Bay has remained unchanged (they’re in trouble), Onyx on the Bay has gone up about 3.5%, Ten Museum Park has gone up 7.5%, 2 Midtown has gone up about 4.5% and 50 Biscayne has gone up about 6.5%.
I’m actually quite shocked that more closing haven’t occurred since last month’s numbers were released. I realize that the market is slow but I would have thought that 1 or 2 other condo developments would have hit the 70% mark. I especially thought that 50 Biscayne would have had an increase of at least 10%. These figures, when compared to last month’s, are quite an eye opener.
The $400K Price Point for 2 Bedroom Condos Has Been Breached
Only 12 months ago, finding a 2 bedroom in a desirable condo development throughout Brickell and Brickell Key for less than $500,000 seemed like quite a bargain. How times have changed! Nowadays, the new figure seems to be $400,000.
Neo Vertika currently has 11 two bedroom condos that are priced for under $400,000, Isola has 2, Courvoisier Courts has 3, One Miami has 7, Solaris at Brickell has 1, The Club at Brickell Bay (surprisingly only) has 2, The Mark on Brickell has 3 and Vue at Brickell has 11 (with 2 of the 11 two bedroom condos priced for under $300,000).
With the additional inventory, from the soon-to-be completed condo developments, I think the $400,000 price point for 2 bedroom condos in desirable condo buildings throughout Brickell and Brickell Key will become more commonplace in 2008.
Of course, the size and square footage of the condos needs to be taken into consideration. Most of these new condo developments are delivering 2 bedrooms that have 1,145-1,300 square feet. Anything larger will, of course, fetch higher prices. It should go without saying that 2 bedroom units at ultra-luxury condo buildings such as Jade, Four Seasons and Santa Maria are exempt from this discussion.
I’m actually looking forward to the opening of Plaza on Brickell in January. In my opinion, it offers the best value in Brickell. I think within 3-4 months after it opens we’ll see aggressively priced 2 bedroom condos throughout Brickell approach the $350,000 mark.
I was at the Plaza on Brickell sales office last week with out-of-the-country clients and we were both shocked by the prices that were offered. The prices had come down considerably since September, when they last visited the sales center with me. One bedroom units now start at around $210,000 and two bedroom condos start at around $340,000. Investors have become more motivated to sell as their closing date approaches.
A few days after I visited the sales center with my clients they told me that “at these prices we would regret not making an offer”. They are looking to hold for about 10 years. Where else in Brickell can you get such prices, much less in a brand new development? I think Plaza on Brickell will act as the buoy for the Brickell condo market.
This is why many investment groups have their eyes set on Plaza on Brickell. They all want to buy units in bulk at a deep discount to get positive cash flow. However, I don’t think that this will happen at this development. I think prices offered, at the present time, are appealing enough to end-users. They, too, have their eyes on the Miami condo market because it is in their own backyard.
I know from reading your comments lately that you all are very opinionated. So I ask you, where do you think 2 bedroom units will ultimately be priced? More specifically, where do you think the top 10% best priced two bedroom condos in the well known Brickell developments will be priced by the end of 2008?
The First of Many Big Bulk Purchases to Occur
I realize that I’m late to disclose the following information but I thought I’d write a post about it anyways.
There are many of you out there that read about this major transaction on Monday, as I did, in the Wall Street Journal or the many other online and print publications that were released that day. However, I’m sure there are some of you that are unaware of what transpired Monday morning.
Lennar Corp. (NYSE: LEN), a major Miami-based homebuilder in the United States, revealed Monday morning that they sold a substantial portfolio of properties at a large discount. These properties were previously valued by Lennar at $1.3 billion dollars as of September 30, 2007.
The portfolio, consisting of “about 11,000 homesites in 32 communities nationally, consisting of raw land and both partially and fully developed homesites in California, Colorado, Florid, Illinois, Maryland, Massachusetts, Nevada and New Jersey,” was sold to a joint venture which consisted of an 80 percent stake by major Wall Street bank Morgan Stanley for $525 Million, or about 40 cents on the dollar. Lennar Corp. will own the other 20 percent stake and receive fees for managing the properties.
I think we’ll see more and more of these bulk deals occur in 2008. A major hedge fund analyst that I spoke with on Monday told me that Lennar has traditionally been the first to acknowledge and act on given circumstances. It’ll be interesting to see, in 2008, which other developers make the same acknowledgment. It’ll be even more interesting to see which major bank is the first to dispose of properties in a major headline sale.
Bentley Bay – 1 Bedroom Bank-Owned Foreclosure – $449,900
A 1 bedroom/1 bath bank-owned foreclosure with 777 square feet of interior space at Bentley Bay recently had a $100K price drop. At this point, it fell onto my radar as being a good deal. It is currently being offered at $449,900. The condo is located on the 12th floor.
The unit faces west which, in my opinion, offers a better view than those facing east. The units facing west have a view of Biscayne Bay, Star Island and the Miami skyline. I haven’t viewed this unit in person but from the MLS pictures it appears that the appliances are still in place. I’ve noticed in a lot of other foreclosures that the appliances are oftentimes removed from the unit.
A unit in the same line sold for $550,000 in June 2007. That unit was sold furnished, however. There’s usually a price difference of $3,000 per floor in Miami and Miami Beach. If the foreclosed condo is in good shape then I think acquiring it in the low $400K’s would make for a great deal.
The following units in the same line at Bentley Bay North are currently listed at the prices below in the MLS:
