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Wow, Nice new post AJ! Whats not to like here?
Unit looks nice.
As a side note, Lucas, you’ve got ~ 40 pictures on the front page of your site right now. This site is getting tougher and tougher to visit on a regular basis when on a computer, and almost impossible to visit on a mobile device. You might want to start posting one or two pics per post on the front page, and then use a “More …” link for the rest.
Very nice indeed but not that nice to pay $447 per sq ft as it is $322 per sq ft overpriced
To Post #2
Dude you shoulda bought a Dell
This is a great unit Lucas. TOC 2BR (Exuma) sale prices ranged from $1.1M to $1.750M last year and we’re looking at 2009 selling values from $1.1 to $1.4M. In the last 6 months, TOC finally began dropping in value with it’s Southern counterpart having speculator competition (21% inventory) driving down values. Deeply discounted units are averaging 22% off list in some cases but the biggest deterant are the maintenance costs from $2200 – 3600 (No tipping allowed at TOC). Today, the average 2009 TOC selling PPSF is at $550 (6 sales) with an average asking PPSF at $699… Limo Anyone? It’s included.
We made an offer on a short sale. The lender is requesting a $2500 non-refundable deposit to stop the foreclosure sale. Is this a typical request in a short sale process?
Nice. It even has a separate tub and shower for RT 😉
Yep – TOC is a very nicely done project albeit a bit still over priced. The 2/2.5 is very nice but lacks any west facing windows….the other floorplans all have west facing windows in addition to the great east views. Not a really big deal though. The high HOA fees are the biggest downfall for this building, especially if you only use the unit occasionally. If yo used it just 3 months out of the year, the effective HOA fee per month is something over $8K or even a lot more. The competition from the Trump Towers next door should continue to drive prices down as the number of unit in that price range is in the hundreds and hundreds.
And, of course, the floorplans are nicely planned and have a separate tub and shower as to be expected. Altough for the Exuma floorplan the second bedroom only has a nice walk in shower. One other comment, the TV in the jetted tub is a bit stupid as it looks like a very dated TV and one wonders if it is compatible with the new digital TV signals.
Overall, a very nice unit.
TOC is not my cup of tea but it is certainly upscale or at least trying very hard. Under $500 per sq ft for luxury oceanfront is a not expensive. The HOA fees are high because the units are huge and they have a ton of amenities, again if that’s what you are looking for. If someone can afford this and likes this kind of living they will probably think it’s a great opportunity. I just don’t like Sunny Isles to begin with but that’s just me.
Skeeta – Just curious about why you don’t like Sunny Isles Beach. I find the location so convenient to everything…airports, malls, other shopping, nice well maintained beaches, etc. I agree it doesn’t have a “nightlife” per se.
At $250 a sq. ft. I’ll take one for sure…..and I’m sure Renter Tom will too.Guess we’ll have to wait a bit longer Renter Tom.I’d say by Feb. /March 2010.
Hi everyone, I have been searching for a condo to buy in Brickell, I went to 500 and the Plaza but they dont have nice views..any new building around the area for around 220 psf with nice views??
#8. The Southern counterpart was in reference to TOC newer South Tower. Trump Tower I, II, III has such a bad reputation I couldn’t even compare it to the TOC development or use them in the same sentence (although I just did..lol).
#10. Is there something beginning with Newport’s Kitchen 305 trying to boast a nightlife? Been waiting for something.. there was a rumor that the old Da Vinci parcel purchased by RK would be a new Nicki Beach styled complex which may or may not happen.. I tend to doubt it.
I did here an outstanding rumor from a valid source yesterday in which the land on 193 Street (Collins on West side) is now (or in the process of being) owned by the City of Sunny Isles Beach and in the works of becoming the new City park!! The City traded the owner for an oceanfront parcel with a 21-Story height restriction. Halleluyah for the jinxed conversion known as Ocean View aka Ocean Reserve with the highest # of REO’s in Sunny Isles Beach. There’s the turning point on future OV/OR values.. Anyone know?
#11. In review of MLS Sales STATS (Collins Avenue, Oceanfront)
Feb1/March31 2007 -32 Closed Sale PPSF Averaged $527
Feb1/March31 2008 -50 Closed Sale PPSF Averaged $474 (10% drop from 07)
Feb1/March31 2009 -37 Closed Sale PPSF Averaged $370 (22% drop from 08)
Hmmm.
Ashton Coleman – I clicked on your name thinking it would be a link to your website but got a link to the Jades in SIB….and to be honest, I had to think “are you kidding me”. Maybe you can update everyone on the success of the Jades with stats. As I understand Jade Beach was hit with foreclosures right out of the gate and Jade Beach hasn’t exactly been hopping with ZERO lights on many nights. I had heard a rumor about the Jades, more specifically about Jade Ocean, but won’t repeat here since only a rumor. So, I am calling you out on promoting these two projects….now your turn to tell us. Also, what is sooo bad (the good, the bad, and the ugly) about the Trump Towers? Thanks.
Renter Tom- Sure bud.. I’d like to soon see you as ‘ProudOwnerTom’..!? I’m friends with Lucas and a BIG fan of this blog. I’ve always learned a lot from you all and had zero to contribute; until now.
The Jade site you clicked on is mine and thank you for exploring as each of my links on this thread contain three of the 4 sites. I own & operate 2 blogs and 2 sites all which pertain to the beaches. I guess you could say I’m a fan of anything Miami oceanfront, Jade Beach & Jade Ocean especially for that new flashy design some happen to like. The buildings & amenities are unique for SIB. Stats you want, I’m ready… Jade Beach is at 85%+ closed (13% Inventory as MLS resales) and I just sold (PS) a B2 model this week as a dev. default. It’s unfortunately taken 9 months but feel as though Jade Ocean will have the same absorption time frame with a correction in values (PPSF) during this time. So far, only the TCO is in place at Jade Ocean and 30 have closed (as per dev. rep) with closings scheduled each week. I have an unbiased approach to values comparing apples to apples and Trump Tower I, II, III aren’t comparable to JO, TOC or Acqualina.
I’m also clarifying the Feb/March values above as SIB specific (oceanfront, Collins) and not pertaining to TOC in which those same sale figures are 2007-4 @ $665PSF, 2008- 4 @ $640PSF, 2009- 2 @ $577PSF respectively in which I’ve seen the biggest drop since last Sept. when I sold an Abaco model at a $1.975M high while now there’s 6 or so sellers fighting for the $1.8M mark.
Let me also say Trump Palace is A+ (financially) while Trump Royale has had a rocky start. The amenities and security stand among the very best of SIB. Trump Tower I, II, III no comment but you can read here: http://miamibeachrealestateblog.us/2008/06/18/trump-towers-lawsuit-for-100m-in-cancellations/
Still a glut of inventory but consumer confidence is better on the beaches.
Lucas – Are you posting a Miami condo closing update soon?
I was born and raised in Brooklyn and I have lived in NYC, Rio, San Juan and now South Beach. I am comfortable in an urban environment where I can step out and go for a walk, shop, catch a movie etc without getting in my car. I have to admit that Sunny Isles is very convenient for getting around but the environment is too sterile and it is overbuilt and poorly designed for a beachfront setting. The building are way too tall and I do not get a sense of community. I prefer smaller condos. For me the area is permanent memorial to a city that sold it’s soul to the devil and allowed greedy builders to do whatever the heck they wanted to do (not unlike downtown Miami) and ended up with miles of 50 story condos on a much too thin strip of beach that is in danger of disappearing. If I had to choose I would prefer Surfside where they have a 12 story height limit and a small walk around shopping area adjacent to the Bal Harbour mall.
Court docs for Jade Beach are under Fortune Beach LLC. Is this correct? What kind of legal action are these buildings having? Why no street level neighborhood photos? Do they have a Publix?
Skeeta – I think SIB had to allow tall buildings in order to make it financially feasible to buy out the existing structures/motels. So, I would probably characterize the city people differently than you did. In land re-development you have to allow for higher density buildings and that mean taller buildings…they also took into account view of buildings on the west side of collins too. For land re-development you buy the cheapest stuff first…hence the little motels went first, then the slightly larger ones…but you won’t find anyone buying the Newport Resort to knock it down in the next 10+ years since the land cost would be too high. SIB was incorporated in 1997 and has actually done a lot in the 12 years that followed…impressive even if not perfect. SIB is younger and more family oriented than say Surfside….maybe in 50 years it will make sense to knock down those 12 story buildings in Surfside to build tall buildings…who knows. But I agree with you that lower rise buildings are better when feasible. SIB seems to be a big product of the real estate bubble and probably won’t be repeated in decades.
Ashton Coleman – Thanks for the additional info. I like TOC. I also like from the outside the Jades…..85% closing on Jade Beach is surprising but I very seriously doubt Jade Ocean will do nearly as well since a lot of people were still in denial when Jade Beach started to close, not sooo much now. I had heard that Fortune was trying….desperately…..to unload Jade Ocean. Maybe my source is wrong, but it was credible enough for me to mention it. I do think prices will continue to fall significantly for these luxury buildings…I know some inside stuff on one of the newer luxury buildings in SIB which I can not post and the funny business that is going on. Developers are desperate. A lot of buyers in SIB were speculators….and their ability to hold out, even with renting…is finite. In my opinion, the luxury/ulta-luxury condo market is in for additional substantial pain. I have a price point that would get me interested in some of these beach front condos…..we are getting closer…..I have my eye on one that is a short sale…..but the rest of the building owners scare me and I haven’t looked at the HOA books yet…. Who knows, I might just pick up a little pad down in SoBe for the heck of it in the interim. Soooo many choices……sooo many choices.
skeeta #17,
you just put words to my very uncomfortable feeling regarding SIB. I always hated it and I tried to explain it but I could not describe it. You just hit the nail in the head.
I went with Lara to see her La Perla flat ( Lara, thank god you are out of SIB. Please don’t reinvest there. a sincere advice from a friend). The beach is so narrow in SIB, I will be scared to sleep in any of those buildings thinking that my building will be washed away by the high tide.
All other valid reasons to dislike SIB such as lack of nightlife, traffic, unsophisticated people, retirement ghetto, aventura on the beach, sterile, senile etc are all trivial compared to danger SIB is in.
Do you guys remember the devastation of Hutchinson Island, Jenson Beach etc just north of Jupiter in the last storms? It was not even cat 3 and the thin and narrow beach similar to the SIB got severely eroded and water came up to the buildings. Any retaining walls got crumbled. Some buildings had to be abandoned. Insurance companies washed their hands off. You cannot even insure the buildings on this beach anymore.
Be very concerned when you consider buying on a thin barrier island sand bar like this so very close to the high tide line. Spend more and buy in SOBE where the astronomical high tide line is a minimum 500 meters away from any settlement.
short sale advice
that’s borderline insane. the lender controls the foreclosure process. all the bank has to do is call its counsel and say reset the foreclosure sale for 90 days out to see if we can sell this place. frankly, i’d tell the bank to go f%^k itself if they insisted on this fee.
I don’t know where the narrow beaches in Sunny Isles comes from but Bal Harbour leads the pack in narrow beaches (to the point of major concern): http://miamibeachrealestateblog.us/2009/06/15/bal-harbour-beach-erosion-the-2009-replenishment-project/
Sunny Isles Beach width: http://www.flickr.com/photos/ashtoncoleman/3625681863/
Bal Harbour width: http://www.flickr.com/photos/ashtoncoleman/3350183358/
AJ #20…. seriously, tell us what you really think! Man o man, you really have an imagination. I honestly think you are a kook…..why would you go to all the trouble to see Lara’s unit in La Perla? If you hate SIB so much, why even look. Didn’t know Lara sold the La Perla unit. What floorplan was it again? An “06” line or something. SIB doesn’t have the problems you envision…utter nonsense. Unlike most of SoBe, SIB was built recently and to much much tougher building codes.
The Whole Foods that was supposed to go into Met Miami but didn’t pan out, is there a replacement tenant for that space? There used to be rumors of a Trader Joe’s. thanks
Ashton,
Since Ocean Veiw/ocean reserve was mentioned.
I have heard that it has highest number of REOs in SIB which is a bad thing for those who own there right now but might be a good thing for someone looking to buy.
What do you think about buying there either as a vacation home or rental property? What would be good price per sf? Is it hard to rent out an apt there?
Thanks
yes sunny isles does suck in many ways but so does most of miami for many of the same reasons ??
and why am i spending a million on a condo ??? whats the maint ??
maybe someone saw the article in the herald on miami $$ today ?? or saw that the top banking anaylyst predicts 13 percent unemployment
which is realy 20
so lets keep worrying about million $ condos in a city which could look like the movie escape from ny in a few years
AJ, how are you? Partially I agree with Skeeta but a lot of people like SIB. IT is not a pure retirement community anymore. AJ, I think your thoughts about buildings being washed out by the ocean in SIB are your pure rich imagination. I appreciate it but far from reality. IT is really a matter of taste here. The beach is nice and the water is great when it is clean. I like some little cafes and restaurants in SIB.
RT, yes I sold my apartment 07 line. Actually I invited AJ to visit it and look at it. so it was no trouble and it is not that far from other areas.
At the same time I look at all these areas as an investor. Try to separate my emotions from an investment decision. I think that from an investment point of view all ocean front apartments are extremely overpriced. If you buy one for yourself then it is a very different story. there are a couple of buildings even on the oceanfront when money can be invested now starting from surfside to Hollywood.
Some opportunities in NMB. Some in Downtown and Design area.
Lara said: “it is not that far from other areas.”
– Yep that is one of the good things about SIB. Close to a lot of stuff. SIB is decent, is it the top of the top? No, but decent.
Lara also said: “I think that from an investment point of view all ocean front apartments are extremely overpriced. If you buy one for yourself then it is a very different story. ”
– Why is it a very different story. I think that is were we differ on opinion. From a wealth preservation and accumulation perspective, there is no difference. Hence I rent.
drew299 – If we get to 13 percent unemployment, then it will get very ugly. Let’s hope not.
drew299 – Where is that article about possible 13% unemployment? I’d like to review it to see if in the realm of probabilities. Key words or a link would be helpful. Thanks!
Lara,
Hi. Been extremely busy renovating an old house to rent it out as the rental market is quite good in NY right now.
Regarding the part of “My fertile imagination”, it is not. The sea will come up to the collins avenue in a major storm. The buildings maybe built like a tank but that is immaterial when the lobby would be covered under water.
Why wait for a storm, There will be no beach in SOBE in 60-90 years. In case of SIB, the beach should disappear in 30-40 years in a high tide and the water would be lapping the retaining walls. While the SOBE incident is outside the scope of my lifetime, I will be seeing this happen in SIB in front of my eyes in my life time and many people will see that even before their 30 year mortgages are paid off!
Beautiful condo!
Y’all gotta take a step back and take a deep breathe. Life’s too short to take this stuff so seriously. True the economy sucks right now but it will get better.
If you like a particular apartment in a particular neighborhood go for it. In the long run you will be fine if you do a little homework. You can spend your life analyzing this stuff and never make a move.
“The price is gonna go down, the tide is gonna come up, I’ll wait another year, I’m gonna lose money, he’s gonna make money”…it’ll paralyze you!
I’ve bought property in Rio de Janeiro, San Juan, Miami and New York and never lost a dime. Lived in all those places and enjoyed them and made money when I sold them. That wasn’t my plan but hell if I sat around analyzing every aspect of the market the way you guys are doing I’d still be sitting at home in Brooklyn!
Property taxes and maintenance fees make Miami a losing market. Just because something in the past worked out doesn’t mean it will work in the future.
Don’t forget property tax increases are up for a vote soon. Good luck with that. Mass exodus coming soon.
Skeeta said: “I’ve bought property in Rio de Janeiro, San Juan, Miami and New York and never lost a dime. Lived in all those places and enjoyed them and made money when I sold them. That wasn’t my plan but hell if I sat around analyzing every aspect of the market the way you guys are doing I’d still be sitting at home in Brooklyn!”
– It is different this time…..previously, for the more part, home prices went up (at least in nominal dollar terms). Now they are not and are in fact falling very hard. We can all live in la la land and pretend that all will be right on a $1M condo, but truth be told not a lot of people can bring $300K to the closing table to unload their now $700K condo…. People’s lives are changing for the worst because of this….real pain…..no retirement left. This is serious stuff.
I know some people who walked away from deposits rather than close on units in downtown Miami and yes it was very painful. Interestingly, not one of them however was planning to live there!
I agree that if you want to buy a million dollar condo in one of those new buildings in SIB you are living in la la land, And yes if you bought a million dollar condo in the last couple of years you are probably upside down at this point. Fortunately the vast majority of homeowners are not in that predicament.
If you bought four or five years ago chances are you are just fine.
By the way, there are lots of stable older condos here in South Beach where there are no speculators, very little delinquency problems, they have reserve funds and they are in what I would consider excellent locations. I’m not a real estate agent nor am I trying to sell an apt but I would consider them good investments.
Skeeta,
Your #31: You cannot argue with those bloggers, it isn’t worthwile.
They sit the whole day behind their PC’s, crunching numbers and celebrating their pessimism.
They don’t know how to live. If you wait the whole life for the luck to come, it will never happen, because in your blindness you already missed it.
wild bill #32,
Yes the prop taxes and maint are high for Miami. But that is expected as people living here expect the sky. The same is not true with the denizens of other cities. For some reason, miamians are the prissiest bitches (both genders) I have ever seen. They cannot tolerate a single eyesore around them, they want super duper amenities in their building and so on. In fact they are the biggest wasters on the planet, more than any other American (who BTW are the biggest wasters of all). All that costs money. Lots of money. If they decide to live less lavish, things would not come to such a pass. Excess living brought civilizations down. Miami’s downfall would be the excess of its citizens.
Prices are actually coming down. Today I saw in La Perla which is an oceanfront new building in SIB. BTW I like it. But this is besides the point. 2bd. (I think aprt. 902) almost 1,700 sq.ft. for $400,000. At the end of 2001 beginning of 2002 pre construction prices for 2bd.units were $360,000. Considering closing, developer’s fee and floors that should come to $400,000. This is for the first time I see price going that low in this building. If you want to live there I think it is an excellent price. Though I do not know that particular layout.
Lara – That 902 unit sold for $707,616 in 1/2007. Odd price. Wonder why $400K now?
Visionary – You have to admit that the whole real estate bust is a very fascinating thing to study. I find it very interesting. But then again, I like Bob Shiller’s work in behavior economics…and of course people’s ability to comprehend the situation or their desire to go into denial, bury their head in the sand, etc.
Anyone familiar with Ocean view/ocean reserve in SIB and can share their opinions?
Based on listings a just saw looks like HOA went up from 500 to 700/month
Lucas is listing a condo (#510, 3 bed 3 ba) in Continuum South Tower, SOBE, at $542 psf. That’s at least 20% lower than any other unit there. Does anyone know whether there is a reason for this price, specific to that unit? Or is this where the market is heading, given that no-one is buying at the asking prices for the other units?
re: Continuum 510
Low floor and a North-West view. ie. nice view of nothing.
Also, there is a detached adjacent 5 story structure with a pool on top that you have a straight view into and they have a straight view into you.
I always knew Miami job market is bad but this sucks. We are dead last along with Detroit for new job postings per capita. I absolutely hate it. At least Tampa and Jacksonville are doing much better than Miami in Florida. The city pols are the worst scoundrels in America. Instead of attracting business and industry by giving incentives, these arseholes are busy trying to build a ball park and raise our taxes. Do we ever get relief from these SOBs?
Family Businesses Are Reeling in Recession
http://www.nytimes.com/2009/07/14/us/14flag.html
Miami is disproportionately dependant on discretionary spending so it’s more vulnerable during a recession.
RE: # 37,38
The 400K for unit 902 at LaPerla is a joke. I have already called the agent and was told that there are several offers over 100K from listing price. For a total oceanfront unit it would have been a steal. Unfortunately the agents throw in a price and expect a bidding war.
thanks Goerge for clarifying the issue. You see if it is not a foreclosure then if someone offers asking price the seller is supposed to accept it. Is not that the rule? I know that for $450,000 you can buy 2 bd in this building. There were such sales in the past. If it is a foreclosure then it is a different story.
If it’s not a foreclosure than the seller has to accept an offer at asking price? That doesn’t make a lot of sense. Why wouldn’t the seller be able to do whatever he wants with his own property?
AJ,
The job issue has been raised here before. Its a major problem in Miami. For such a large metro area there are few legitimate ways to be a local with wages high enough to buy many of these luxury units. And the pols obviously continue to operate the region like a banana republic, where fraud and payouts are an accepted part of society. This place is a great area to move to once you have made your money elsewhere. But to make your lot in life here, through legitimate means, is extremely difficult. You find very few self made millionaires, through legitimate means, in south florida. It is what it is, and the system is hard to beat!
Legacy Park town home association in the Central Florida city of Davenport filed for Chapter 11. They owe Comcast cable $105,305 for a past-due cable bill.
I can only imagine what the dumb investor controlled boards in Miami are going to pull. Probably not even paying any condo bills and spending building money on hookers and blow.
DJ – It depends if the list price is an “offer” which someone can accept. I don’t know the specifics about FL real estate contract law, but I would hazard that a list price is not an “offer” in contract law terms….
DJ I heard that if you list your unit for a certain price on MLS and someone offers you this price and you deny it then you are responsible to pay commission to realtors. May be Lucas can clarify that issue for us because I am sure he knows.
Lara – I think that is between the seller and the realtor/listing agent. Typical in RE listing contracts….but seller has no obligation to sell at X other than having to pay commission since realtor did its job. Although, if higher offers….realtor gets more.
RT/Lara, a list price would definately not be considered an offer. The buyer makes an offer once he sees the advertisment on the MLS. The the seller can then either accept or decline.
I guess if there was a contract between the seller and the listing agent to accept at a certain price, that would be a different story and the seller could be liable for breaching that agreement.
Lucas, can you clarify that issue for us?
Lara,
The listing agreement states that “Seller will compensate Buyer as specified below for procuring a buyer who is ready, willing and able to purchase the Property or any interest in the Property on the terms of this agreement or on any other terms acceptable to Seller”. It makes no mention that the property needs to close so yes a commission would still be due if the seller decided not to accept a full priced offer from a buyer who is willing and able to close.
gables,
I am very disappointed with Miami regarding job creation. Granted, it is a resort town and for starters, there were only service jobs here. But Miami grew from a beach town into a metropolis. In 2005, it was the either 4th or 5th largest metropolitan area, larger than Houston, Philly, Atlanta etc. Now it is 8th and may soon be out of the top 10.
What I do not understand is that, how can a city’s metropolitan area be one of the largest in America and yet does not have a significant job creating industry? How are all these people living? Cutting each others hair?
It is given that all the new condos were never meant for the locals. But I was hoping that if not the waterfront and brickell, at least the wind/ mynt and ivy sort of buildings could be absorbed by the locals at $150/sf. Looks like it is going to be a tall order.
I don’t think Crist or Jeb never gave a shit about Miami-Ft.Lauderdale area. They knew they would never get votes from here. The Cuban Mafia that runs Miami and Miami-Dade is busy lining its pockets. So we have no visionary politician who lobbied to get a technology park or some other sunrise industry to our area to get the economy going and we ended up totally dependent on tourism.
Two attempts I made to start a business in Miami came to croppers. So I will take your advice and make my money in New York and move down there. I guess I have to delay my moving to Miami by another couple of years.
skeeta why will the economy get better, because you want it too ??? or because in the past it always did ???
we are half way thru a 17 year cycle……………..so be patient…………things dont happen because we humans want it too……………
unemployment going to 12-13 percent which =20 in real terms and even people with jobs have to ask themselves why would i buy aproperty with no real upside ?? just’
to pay condo fees and expenses >>>>>its a great place to visit in the winter and
i just love to be harassed for no reason by mbpd but at least i did not get shot
dont worry after obama bails out cali,nevada,ariz. ny, nj he can bail out miami
oh ashton my man whats going down ??? besides prices/
AJ-state and local gov’t is not entirely to blame for poor job creation in South Fla.
Multinational or Fortune 500 companies see no reason to expand in South Fla due to the high cost of living, astronomical commercial property taxes and the fact that the workforce is generally uneducated and unskilled.
People make a company successful and if the people quality is poor then poor company performance will follow. South Fla is the land of small businesses. Why? Because large companies stay away or decide to leave. And in a recession, the small is businesses are the first to collapse hence the rising unemployment.
What about Miami’s Smartgrid program announced back in April? I thought it was supposed to help creat 1000’s of new jobs in Miami.
Thank you Lucas. Let’s see in reality what 902 in La Perla is sold for.
AJ,
It takes a vivid imagination to understand how Miami works. Legal and legitimate business practices are outnumbered by the illegal and illegitmate ones! As long as rich tourists, visitors and second homers flock to Miami, you can be unskilled and uneducated and still make a buck sucking up to the well to do any way possible. I too wish the Ivy, Mint etc buildings could sell for $150 sq ft. You could get 2B units pushing $150k and that is a reasonable price for a working couple. We may get there, just not yet as the banks in particular are balking at letting the price collapse once again. We will eventually get there, but the buildings may be in bad shape by then. I see short sales and forclosures leaning that way, jut not in great numbers yet. Not sure if they are actually processing sales at those price points.
AJ — Last I knew, Jeb Bush was from So. Fla. and now lives in Miami, so your “Jeb Bush never cared” accusation is true.
The reality is, Miami is its own worst enemy. Miami is corrupt to the core, but in typical Latin America, banana-republic style, not only do most people not care, but the few people who *do* care get ostracized as snitches or troublemakers, etc.
The State of Florida, and Uncle Sam, shouldn’t be subsidizing squat in Miami. As it is, Miami is one big welfare community. Between the estimated hundreds of thousands of illegals, the so-called “refugees” milking the system for every handout under the sun, and the government fraud — there’s an estimated $1 million PER DAY in Medicare fraud in Miami — I’d say government is doing plenty for Miami.
Personally, I’d like to see Miami Beach and the other beachfront communities try to secede from Miami-Dade County and form their own county government, but that won’t ever happen. But people at the beach are paying WAY, WAY more than they receive in services. The rest is being sucked up by the riff-raff on the mainland. (Sorry if that sounds harsh or non-P.C.; just calling it like I see it. But when individual condo buildings are paying $5 million or $10 million in property taxes per year, something is wrong with the system.)
“Last I knew, Jeb Bush was from So. Fla. and now lives in Miami, so your “Jeb Bush never cared” accusation is true.”
Oops, little typo there. I meant to say: “… accusation seems untrue.”
“riff-raff on the mainland”….kind of a hasty generalization, no? Joe you seem to have some strange obsession with Miami Beach, particularly “SoFi” (I hate that stupid moniker) and characterize it as some sort of elitist Utopia above the fray of Miami and Miami-Dade County. Keep in mind that Miami Beach residents are mostly part-timers who really have no interest in local economics/politics so including them in a discussion of local-centric Miami issues is pointless. Also maybe you’re not aware but Miami Beach politics is no different from the mainland (corruption, waste, incompetence) so trying to differentiate between the two is a mistake. There’s “riff-raff” all over the area (north, south, beach, west, rural, urban) so your classification of Beach residents as victims from freeloading citizens on the mainland is ignorant.
Jeb’s office is in Coral Gables, I believe. So I’m guessing that he gives at least a little bit of a fuck about what goes on down here.
Lara,
You are making a mistake the 02 & 03 units in La Perla are the front corner facing units.. The cheapest sale in that line sold for 600k. There is a 1,7000 sq/ft 2 bedroom on the 14th floor for sale @ $465k. I just sold my 06 unit in that building (1,700 sq ft on 21st floor for $480k 60 days on the market). I paid 565k for the unit + 50k for renovations on this unit in feb 07. I ended up upgrading to a better building. La perla is cheap but you get what you pay for.
Denis, where did I make a mistake? I was not speaking about particular units but in general. I also sold my apartment in o7 line for $500,000 but I purchased it in pre constr. so I did not loose anything and it was 45 days on the market. Unlike you I actually liked the building. Yes some of the finishes could be better.
If someone knows about so called new Bal Harbour(it is condo conversion) and developer gives financing. Now prices starting from $169,000. They also give you a tenant. It has been converted by Related.
Please all your comments will be appreciated.
#66
Lara -if I am correct the converted building has a central chiller compressor air handler AC system-not a more modern freon based unit adjacent to the apt.
Years ago I lived in 2 buildings with the older system and found it was difficult to control the temperature and more importantly to keep the humidity down-
It was a sort of do it yourself system to dye shoes stored in the closet a greenish hue :)whether you wanted it or not.
Your HOA/maintenance will cover the building’s cost of the electric to operate the sytem -which is a wash if you live there- but if an investment then a higher hurdle for the owner to cover.
Also remember unpleasant times when the condos had to redo the plumbing lines that brought the chilled water into the unit by smashing through walls replacing pipes replastering-a nasty lengthy EXPENSIVE time for unit owners .
Speaking of ac units I toured the 1800 Club yesterday and found that the placement of the freon based ac unit WITHIN the unit-at the model sales office at least-was distractingly noisy-
I would rule out the building formyself on that basis alone UNLESS the developer could soundproof the storage area
why they did not place it outside with its own access from the hall as most condos do?
The bay views from the east facing units were fine though the largest 2 br felt a tad smaller than the stated sq footage.
The largest inventory is of the 1 br lines facing west and understandably so because when you look out you are hemmed in by the east west section of 1800 to the south and by the Quantam building to the north.
..and when another wave of building hits this crazy city a real possibility that the property just to the west of 1800 that appears to border the 1800 rec area might contain another monster condo and you will be viewless.
The good surprise was the gym-very well-equipped for a condo and located in a high ceilinged bayview space.
Denis said: “You are making a mistake the 02 & 03 units in La Perla are the front corner facing units.. The cheapest sale in that line sold for 600k.”
– Not true, La Perla 2602 sold for $575K on 4/29/2009 with marble floors already installed.
george – Don’t most systems today use chilled water and the chilled water is what circulates in the unit’s A/C equipment (already chilled by the building’s chillers, usually located on the roof). No freon in the unit’s A/C/ equipment.
I believe that there are still systems that use freon -or a combi of the 2-mine has freon and building supplied chilled water and does a fine job .
The inadequate systems I refer to were in older buildings-1960 era- in miami like bay park towers, biscayne 21, clipper club, and several oldies on west ave in sobe plus the older arlen houses in sunny isles
Lara, do you mean Harbour House in Bal Harbour? If so I asked that question myself and someone on here said they cuts corners during construction and the building has Chinese drywall. He said a Cat 3 would take the building down. Whether that’s true or not I am not sure, but too bad because I was really interested. Beach front in Bal Harbour for those starting prices…I still may check it out when I am down there in August.
Condoswindler said: “Harbour House-should crumble in the first cat 3 storm, as cost cuts, bankruptcy cut the quality in the finishe work…Can anyone say Chinese dry wall?”
Drew — “Riff-raff on the mainland” was probably a little harsh, but let there be no doubt: Crime and corruption in the city of Miami is about 20 times higher than it is on the Beach, while the average Beach resident — including many or mostly “part-time residents,” as you say — are paying probably 5 times what the average person in Miami pays in taxes.
I don’t view the Beach or SoFi as any sort of “elitist Utopia,” but I do object to Beach residents basically subsidizing tens of thousands of freeloaders in the city. Everyone in Miami seems to want things both ways: They want an unlimited number of Cubans and Haitians and other legals and illegals from anywhere else (in Latin America, anyway) to be allowed in, but they don’t actually want to pay for anything.
It’s unbelievable, when you look at how Miami operates: It’s simultaneously one of the poorest, if not *the* poorest, metro areas in the country, but it probably ranks #1 in the average number, per household, of designer handbags and fancy SUVs.
I’m sorry to be so negative, but it’s coming up on 20 years since the first time I stepped foot in Miami, and I don’t see much progress. The people are just as poor, the government is just as bad and corrupt, and there’s just as much crime (though more of the fraud variety than the old “Miami Vice” variety). Miami reminds me a lot of Mexico: It could — and SHOULD! — be an incredible place, but it’s mostly a story of wasted potential and lack of progress.
If you took away the poverty (being able to pay an illegal $10 to hand wash your Rover) and the corruption (being able to get 30 days for DUI manslaughter… or on a smaller scale being able to get out of any ticket with the right lawyer) and the criminal element (concierges being able to hook you up with any drug or ho better/quicker than craigslist), then we would be in a normal city and not this Zoo next to the Ocean.
The weather doesn’t make Miami special… it’s the Zoo.
Joe, I look at it this way. There’s a lot of truth to what you said, but you gotta take the bad with the good. Miami is far from perfect, but that’s apparently the price we have to pay to live in a major subtropical metropolis smack dab on the ocean. I can’t think of anywhere I’d live besides Miami except maybe Socal, and that’s too far away. So to enjoy all that Miami has to offer, we gotta deal with some of the bad elements as you mentioned above. We got plenty of problems here, but as far as I see it, the good far outweighs the bad. And hey, maybe things will get better. I kinda doubt it, but why not look on the bright side.
JL, I need to find some of those concierges you’re talking about!
Hey. A little off topic I know. I live in a high rise condo that closed about 2.5 years ago. The ceilings are the concrete structure covered with stucco type hard texture except where the soffit areas are which are drywall. I have recently noticed two hairline cracks on the concrete ceiling near the corner of the building starting at the windows and run around 4 feet each. I do not know how deep the cracks go and perhaps it is just the stucco material that cracked due to expansion and contraction differences in the materials. Does anyone here have experience with such an issue? Thank you. I am not sure if it is serious or normal.
Re #73 “It’s simultaneously one of the poorest, if not *the* poorest, metro areas in the country, but it probably ranks #1 in the average number, per household, of designer handbags and fancy SUVs.”
True…but why? BECAUSE, you have such a diverse convergence of race, ethnicity, culture and socioeconomic status in such a small geographic zone that creates the interesting, unpredictable, dichotomous environment down here, which many people enjoy.
But Joe you seem to imply that poverty is correlated to gov’t corrpution or inefficiency that I don’t really understand….I think its much simpler: you have a huge immigrant population that is willing to take jobs and perform services for wages far less than most other people in other locales would ever consider. Couple that with a relatively high cost of living even in the poorer areas (Hialeah, Homestead, City of Miami proper, Sweetwater, Miami Gardens, etc etc), and you have a perfect storm of widespread inescapeable poverty.
Perfect example: the lack of unions down here. In the midwest, northeast, construction workers make $25/hr…for the same services down here they make $11/hr. Why? Because people are willing to accept it. Look at all the Mexicans and Central American guys hanging outside of Home Depot 7 days a week willing to work for $6/hr so they can feed their kids and send home a few bucks to their family in Nicaragua. You would never see equally poor white guys in rural Arkansas do the same thing. In that regard, I repsect these Miami guys hungry for work.
Joe I am equally frustrated with local gov’t but more so because they only cater to private interests and don’t do much that benefits the public…in EVERY great city (US or otherwise), clean public spaces (parks, museums, etc) are necessary. Down here, all the city commissioners just saw $$$$ signs and approved atrocious condos instead of developing a coherant, functional, public-friendly urban environment.
What a sham, 5% cut and the cops have their nickers in a bunch! It takes more than 5% cut and slashing a few hundred posts. The top heavy Police and Fire should be trimmed from the top.
AJ, you check out the picture on that article?
Holy shit, Johnny Cochran is alive!
Drew — Are you suggesting illegal immigrants should unionize? I don’t see how Miami suddenly would be a better place to live if illegals were making $25/hour instead of $11/hour. Just like with the condos we debate here, markets tend to be efficient in pricing things.
I don’t necessarily equate poverty with corruption, but I do equate Latin America with corruption. I don’t believe the ingrained nature of corruption in the Miami area is just an accident, or was caused by the heat. The local mentality seems to be that government is just a big ATM machine, and to grab, grab, grab as much as one can grab before getting caught. That’s why I object to the comments above that taxpayers, either local taxpayers or those from anywhere outside Miami-Dade county, should be asked to pay even more in taxes to subsidize these leeches. Taxes already are thru the roof, every form of insurance is thru the roof because of the massive amount of fraud and crime (and uninsured drivers), etc., etc. Enough is enough.
Joe, with all of those uninsured drivers, we clearly need a national auto insurance plan. Why have people actually pay for their auto insurance? I mean, think of the children… The poor can’t afford auto insurance so let’s tax the rich (people who work had and earn money). How many people had a bad auto accident and now lost their homes, their cars, or went bankrupt after having a judgment placed against them because it was their fault but had no insurance. Clearly, this is a job for Obama.
Joe
The way Miami operates is directly attributable to the culture/system the operators and their families knew previously. Latin America and the Caribean were/are corrupt…not a shock that Miami displays a striking similarity.
JL
Don’t you dare screw with the golden goose who has gotten me out of every speeding ticket over the past seven years. Ten speeding tickets….aside from a small fee and court costs, nothing on the record.
jcrimes, your avoidance of traffic tickets is certainly a pet peeve of mine. not against you personally, but the reason we have such poor traffic behavior in this city is you have few long term ramifications-you can always buy your way out of a ticket. points with legitimate suspensions and jail time would cut back significantly the dangerous driving in miami.
jcrimes — I agree 100%, but that shouldn’t be an excuse for allowing it to continue in Miami. If the locals can’t police themselves, how come the feds aren’t more active? E.g., did it really need to take 10 years to figure out Medicare fraud was running rampant in Miami?
I pulled this from an article I recently read…
——-
“Why do so many Cuban immigrants become Medicare fraud perpetrators? Andy Gomez, a senior fellow at the University of Miami’s Institute for Cuban and Cuban-American Studies, has a theory.
Gomez said some immigrants came with survival instincts cultivated under the totalitarian regime of Fidel Castro. They distrusted and cheated his communist government as a way of getting around the system, but they did not shed that behavior when they came to Miami simply because they were living in a free country.
”They are a product of their element,” Gomez said. “It’s a very difficult habit to break.”
——-
Of course this is no excuse for the behavior, but I think it helps explain the causation. Ingrained mistrust of gov’t and the perception of it as a victimless crime.
Drew — Thanks. I remember those quotes from the Herald from a few months ago. The professor’s point is basically an affirmation of my less-P.C. comments above — all too many Cubans (and Haitians, and others from Latin America) see government as a giant ATM. Unfortunately, that ATM is connected to my checking account, and yours, and Renter Tom’s, etc. Enough is enough.
The worst thing is, when they get caught, the idiot judges let them escape. Some of these Medicare scum have stolen $10 million or more but been granted $250,000 bail. How stupid is that? These idiot judges should be kicked off the bench.
Condo association residents continue to battle over millions in unresolved claims from the hurricanes of 2004 and 2005.
Condo boards cannot rely on insurance immediately after a hurricane. They need to assess millions of dollars before the insurance checks ever comes.
I can see the smoke from this from office window.
Can we say insurance fraud?
http://www.wsvn.com/news/articles/local/MI126159/
Here’s the listing: http://www.nelsongonzalez.com/Real_Estate/Property/M1277467/Miami-Beach-Homes.html
But Wild Bill, AJ says “NO” to reserves…and he is so wise about condos after having visited so many and with his DJ experience and all.
Problem is AJ isn’t the only one who believes insurance will save them. Insurance= welfare checks for condominium boards. Unfortunately an entire building might be a little upset when the welfare check doesn’t arrive five years later. The residents spent five years in a garbage bin hoping for a welfare check. They will be in their tenth year before they finish. Only to have another storm wreak what they just completed.
Joe- Many (former) South Fla residents had the same views on immigration but they chose to leave a long time ago. And I think you wrote somewhere that you have lived here 20 yrs so you must be either very pissed off or maybe it doesn’t really bother you that much, minus some Internet rants.
I think that to enjoy oneself in Miami one needs to have (or develop) a more liberal or tolerant attitude regarding such issues, immigration in particular. Does it really irk me that my 7% sales tax on a 12-pack of beer may be indirectly tied to some sort of welfare benefit for a family of Haitians in North Miami who may or may not be here legally? No. They need it alot more than I do.
Ever see the movie The Rainmaker…..some insurance companies play a lot of games regarding payment of large claims. Once a policy holder is in such a desperate situation, the insurance company holds a lot of cards….
joe – the usao down here is sharp. frankly, outside of the office in new york (bouth southern and eastern), it’s probably the best in the country in terms of getting in the trenches and going to trial. but the office takes its direction from DC, and what DC makes an issue of is what the office down here will then focus on. medicare fraud is only now (or in the past few years) in the spotlight.
Drew — I haven’t lived in Miami for 20 years. I’ve lived in Miami for long stretches but it’s never really been my official home. That’s why I’ve been hanging around on this board — I’m trying to navigate the current r.e. mess with the goal of Miami Beach becoming my home.
Beyond that, I’d say your attitude is exactly why Miami is the banana republic it is. Nobody said anything about kicking down-on-their-luck single mothers off welfare and into the streets. I’ve been ranting about the huge, widespread corruption that seems to affect almost every facet of Miami life, from the government to the police to illegal immigration to billions in Medicare fraud. I don’t care about the 7% sales tax on beer. I care about being asked to pay $50,000 per year in property taxes for a box in the sky, with every indication that next year’s bill might be $55,000, and the next year’s $60,000.
—
jcrimes — I’ve heard the same thing, but that doesn’t change the fact that someone, somewhere, has been willingly keeping the Miami office severely under-staffed, and willingly turning a blind eye toward the widespread fraud, crime and tax evasion.
I mean, if it’s legal for the cops to run checkpoints for speeding and DWI, and to run car tags to check for unpaid parking tickets, why isn’t anyone poring through the local property tax records and DMV records to see who is buying what, or running the people arrested for crimes through immigration to see if they’re in the country legally?
When I go to Chili’s and meet some Cuban guy who tells me he arrived last year, and then we walk out and he gets into a new 7-series BMW, something is amiss. If I forget to put $400 in interest on my tax return, the IRS notices. But somehow, people in Miami amass millions and it never hits anyone’s radar. It’s unreal. There’s probably a billion dollars in money laundering, and thousands of illegal immigrants, right on the Miami-Dade Clerk’s web site just waiting to be found, but no one seems to be looking.
So getting back to the Miami-Dade budget proposal. Does anyone know what the proposed new millage rate would be? We know that the assessed values between 2008 and 2009 have to be down, although perhaps not as much as measured by the inclusion of distressed sales. But I imagine that there is a 15-20% decline year over year even with the official assessment ideology and to get the tax revenues up, the millage rate would have to be higher by slightly more than the decline in assessed values.
Millage rates will need to go up as the values went down and state sales tax collections have nosedived. Taxes will go up.
Joe – wouldn’t say the office is understaffed. rather, there’s just certain stuff the office turns a blind eye to and relies on the state to police and enforce. problem is (as you point out), the state is corrupt, moronic or both. down here, i’d say the usao cares about the following things (in order) – drugs (suppliers and wholesale sellers), political corruption, financial fraud and medicare fraud. terrorism is a nice sideshow. i remember a few years back acosta tried to push a porn agenda. it, and he, was laughed at.
anyway, for better or for worse, the state system, or perhaps, the local system is broke and probably will never be fixed. people here are too happy with it, too sick and tired to complain about it (me) or just ignorant about it. i fear the day when i have children and am forced to send them to miami public schools. undoubtedly, my daughter will end up dancing on a pole while my son will be managing the velvet rope and some dump club. at least i’ll have my miami condo investment (plug for lucas) and 80 degree weather. good times.
Well I could have gone to Borders today and picked up a good novel. Came to this site instead and saved 25 bucks! I live in Miami purely for the entertainment value. The non-stop revelations of greed, lust, chicanery, cronyism, debauchery, glamour and the like, amid the surf and turf of of a sweltering tropical seaside locale filled with desperate refugees from Central and South America, amid the locals – I find well worth the price admission price. The flavor here – the aroma of differing food, languages, musica and cultures reminds me that thank God I am not in Kansas any more.
I have to ask…..what is up with all the “pain” clinic ads with onsite dispensing…..and “pain” infomercials in spanish? I can only guess it has to do with “doctors” on the take who charge medicare, medicaid and insurance companies for services AND pain meds which are promptly re-sold on the streets. The game is probably the “doctor” agrees that you have cronic pain as long as you are covered by the govt and keep returning to his clinic for his services in exchange for getting scripts that you can immediately re-sell on the street because of onsite dispensing. Costs the govt $1000 for the “patient” to make $50-$100. The ads etc are shameless.
anyone see suze orman today?
Diana from miami owes 315K on a condo that is currently worth only 150K. That’s nothing new, the kicker is she has a 1st. 2nd and 3rd mtg on the condo. I must admit I never knew you could actually get a lender to give you a 3rd mtg. I have never heard of of that before. I wonder what was the going rate on a 3rd mtg in the hey days. Those guys really went nuts.
Renter Tom — Hey, those clinics have only been in business for a decade or more. The police or feds will notice any day now!
What about those infamous car-accident clinics? Are they still around, or did the rumored changes to Florida’s auto insurance laws finally put them out of business? They were an even bigger scam than the stupid pain clinics.
(And if you think those things are bad now, wait until ObamaCare. Half the people in Miami-Dade county will be able to retire with the blank checks ObamaCare will bring to So. Fla.)
“the entire 35-story facade is being constructed with ”large missile” impact glass, an upgrade adding millions to the $250 million project”
Would suck if the small missile windows of these new buildings had to be converted to large missile if they failed. Instant condo death spiral if the building department ever rewrites the code.
Lucas,
I’ve noticed some changes to the web site, particularly better layouts for each individual building with description and stats on sales, list, etc. Great additions. You noted a while back you would provide an update on sales activities but have not seen anything. In particular you said some of us would be surprised by the numbers-with a teaser the bears might want to rethink their position.
Just from glancing at the numbers you have provided for each individual building i do not see anything positive. Maybe its just the bias towards buildings i have an interest in following. But most of the buildings have essentially zero sales since the new year, give or take a couple of sales in early spring. The past few months sales in many of the buildings have been zero. And prices are listed at $300+sf, but I keep finding the sale prices near $200 sf with several under. It seems as though prices are still showing significant sings of dropping. Am I seeing the same things you are, or am I looking at an incomplete database skewing my view?
If this is the case, a $200 sf price target is becoming more realistic. Great deals may be had at $125sf in the future, but they will not be the best units, views etc. Seems to me if you can find a unit between $150 and $200 sf then you are probably getting a good deal with less risk to losses in the future, and a great place to live over the next few years. If I buy a 2B at $220k total, even if I budget in large HOA assessments at $20k over the next few years, I probably end up with an affordable home for living in Miami. Are we finally turning a corner in value?
makes me think – Yep, saw the Suzy Orman show. She is the one person that gives solid advice 90%+ of the time. It amazes me that people think they are entitled to buy things on credit that say 100 years ago only a king could own. Oh well. Diana from miami with the 3 mortgages was in for a wake up call…..I have a DVR had to rewatch the part were Diana looked so smug with a smirk and all about seeing a short sale as the salvation to her debt problems. Then Diana’s face changed as Suze explained that she probably couldn’t get all three mortgage holders to agree to a short sale and that Chapter 7 was probably her only solution. Apparently Diana had been watching too many of those get out of debt infomercials and didn’t realize banks won’t willing become the bag holder esp if you have a little bit of cash left. The debtor lifestyle is over folks….
Another funny comment…..yesterday the local CBS news affiliate kept saying the new baseball stadium would cost $2.4 TRILLION…….maybe in the old pesos but not in US dollars. It was said twice by two different anchors….. $2.4 TRILLION hahahahahahahahaha….. I guess they will be buying the state of Texas with that money.
RT, just goes to show nobody has any sense of the magnitude of debt we have piled onto this country since the 1980’s. Whats a billion or a trillion? Doesn’t mean anything to anybody. The numbers are too big for us to get a sense of scale. Especially since nobody really expects to pay back all the debt. Either find another sucker to pass it onto, or just declare bankruptcy and get out of jail free.
gables,
Congrats on finding the new features on the website. I’m planning to write a post within the next day or two to highlight those features but I first want to fix a couple of bugs and make a few minor adjustments. The data from the condo graphs comes from sales data found on the MLS. Unfortunately, closed sales of developer condos do not appear in the MLS and very few resales have taken place in newer buildings. Those graphs will provide more insight for buildings that are already established and have had recent resales in the MLS. I will definitely write a post once the bugs have been fixed.
I took most of the day off today to work on the website and also write a blog post about the closing rates for the new condo buildings in Miami. Expect that to be published later tonight.
jcrimes, your last post cracked me up. So true.
gables, I tend to agree with your assessment.
RT, so dramatic bro. You’re worse than my girlfriend only I image your tits aren’t as nice. As far as the debtor lifestyle being over….basically people don’t have the option to be idiots and make horrible investment decisions at the moment. And by people I mean everyone from armchair investors ,to the banks that lent them the money, and everyone in between. But our current situation is only as temporary as our next upswing. Not saying that’s gonna be anytime soon, but we’re on the bottom of an economic cycle right now. Sucks, buts it wont last forever. Once things are back on the up and up, people will be free to be as dumb and reckless and they were a few years ago.
RT, you are right about the debtor lifestyle being over but that is only temporary. As soon as things settle down you will get banks or other lenders going back to their old tricks. I don’t think we will see the level of crazyness we have seen in the 2002-2007 timeframe. Gradually after lenders realize the world isn’t coming to an end. They will open the spigots then private lenders will gradually start making risker credit decisions hoping the larger intrest they charge will justify the risk then the banks will try to get some of that action. Eventually we will be back to a debtors nation. It is the american way.
As I posted probably about a year ago, I view the economic problem as a credit bubble collapse, not a real estate collapse. Real estate just got the most goofy and collapsed first is all. As such, we are not returning to previous leverage multiples as equity is replacing debt. Everywhere you look (EXCEPT for the fed govt) deleveraging is occurring….debt for equity swaps, bankruptcies with debtors taking equity positions afterward, etc… Basic finance is that cheap debt results in higher returns for equity holders. Well, now the opposite is true as deleveraging results in less return on equity (and hence lower stock values). Deleveraging is happening across the globe. It took decades for consumer debt to get where it got…..so it won’t get back to that level anytime soon so you are kidding yourself if you think this is a typical recession type of thing….it is a credit bubble collapse and a shift down in the demand curve. Credit, particularly unsecured credit, won’t be coming back to those levels again for at least a decade. Consumer debt, education debt, housing debt, etc…. all have to come down. You don’t lend money to people who can’t pay back the principal anymore…..well, unless you are the fed govt. LOL
Lucas,
Any chance we can get info on the sale price of all those closings performed by the developers not appearing on MLS? Would be great to see at what price people are buying their units at. I have some suspicions developers are closing at prices much lower than people realize. This is just from some anecdotal evidence i have seen while viewing your condo listings. there are several buildings with low priced units which claim to be not shorts or foreclosures, and recently purchased from the developer-1800 club had one of these units. Others on this blog have also said they saw success haggling with the developers. Trying to see the ballpark they have been playing in…
DJ
it won’t be so funny once my friend brags about getting a lap dance from lil’ jcrimes.
btw, i have to say, although i think the units and floorplans in most related projects are a joke, the common areas are so damn nice (note to reader – this observation stems from my being in 3 related projects this weekend for various events). typical of miami…style (the common areas) over substance (the units).
gables,
No. I can calculate the sales prices for those units but that would takes days to compile all that data. It’ll take at least 4-5 hours just to calculate the closing rates. Don’t have the time to include sales price information.
Lucas,
Since most of the sales are occurring in the dark, this lack of transparency tends to hurt the market. I realize the extra work and not pressing you to perform it. But the fact of the matter is, transparent markets are open and active. You may at least want to provide some samples of the info. Otherwise people stay on the sidelines because the rules of the game are unclear.
Developer info is already difficult to use because one does not know how much in forfeited deposits are used bythe developer in determining a sale price. There may be a $50k fudge factor in the process which a prospective buyer in resale must account for.
Pipe broke at the Plaza. 34 units with damages.
Here is an interesting real life example of the impact of the lack of credit in the Miami market today:
My brother in law made an offer for a 2 BR unit in one of the older buildings in Brickell and after a few counters, he finally agreed on a price and signed the contract. That happened about 2 weeks ago. Since then, he has been calling several banks (Chase/Wamu, Wells/Wachovia, Citi, etc) and ALL of them have told him that they are not providing financing in Brickell, even though he wants to close with 50% down. Mortgage broker has been working on it as well with little success.
Like I said, this is an older building which is not affected by the newer Fannie Mae guidelines, so that is not the reason.
I helped him research the 2009 sales for the building and we only found 1 sale that was closed with financing by Great Florida Bank. He is calling them this week. All the other 2009 sales (not that many, probably 5) were closed all cash and of course, at lower prices.
This example clearly shows the gravity of the situation. You have a buyer ready to put $100k+ on a downpayment and he can’t close because no lender will give him a mortgage.
I am guessing this is happening in other buildings, and if so, this will continue to have a negative effect on prices.
gables
I believe the best way to get that data is to find out the developer entity that is closing the units and then search the recorded documents in the clerk’s website and look for the deeds issued in 2009. You can then back into a sales price by taken the deed tax and dividing it by 0.006 (I think that is the rate for MD County)
This will give you a much better indication of the developer prices which are probably lower than the stats Lucas is showing from MLS
I think a lot of people who’ve posted today haven’t been paying attention. This is not an ordinary recession, with easy credit right around the corner again. When the Chinese government goes public with its concerns about the U.S. govt’s massive debt, including rumblings about being more cautious about buying more U.S. debt moving forward, that was a seismic shift in reality in and of itself. Moreover, the U.S. money supply has DOUBLED in one year. The impending inflation that will cause all but assures credit will remain both tight and unaffordable for years to come.
By the way, I haven’t crunched any of the numbers on Lucas’ spreadsheets here, but people need to be very careful accepting such info. at face value when obtained from a realtor. Kevin Tomlinson’s site has a fairly extensive set of spreadsheets, but his sales numbers are pure fiction. Last time I checked, his “sales” price-per-square-foot info. was based on ASKING PRICE and not the actual sales/closing price. How absurd is that? It’s like telling people that 2+2=6.
gables,
Hugo P (#116) is absolutely correct. You can back into the sales price by dividing the deed tax by .006. The deed tax is 60 cents for every $100 in Miami-Dade County.
OK – One more time for you inflation worry worts. Yes, you will have significant inflation for reasons mentioned here. But, that inflation is further down the road. First, as RT keeps reminding us , is a current de-leveraging process on all assets on a massive scale world wide. Hate to use the D word but we are in one and only at the beginning stages im afraid. Significant ongoing deflation – then when most of us have been picked clean will the hyper inflation ensue – but not until we are all broke first. Tell them again RT.
“Hugo P (#116) is absolutely correct. You can back into the sales price by dividing the deed tax by .006. The deed tax is 60 cents for every $100 in Miami-Dade County.”
— Is this just for the original deed from developer to first owner, or for each property transfer?
Lucas and Hugo P,
Thanks for the tip. Very curious about the developer prices being used versus what we hear in the world of sales.
Kramer,
I agree. You really will have a very difficult time producing inflation when we have government measured unemployment over 10%, and real world unemployment/underemployment between 15% and 20%. As I have said in the past, i would buy a 2B unit in Brickell at $200k in a heartbeat a year ago. Now they are available at that price, and it just appears like an average deal, not a steal. This is due to the risk of a continued downturn into the future. A $200k mortgage, while not a sinking ship, is a bit of a hardship in a down economy.
I’m going to need a few more days to compile the closing rate stats. The county made changes to their website. A few of the changes have made it easier to compile the data while one of the changes have made it much more difficult. I think it’s just a bug in their site but I doubt that anyone will discover it anytime soon.
gables,
I just got off the phone with my website developer. We made about 4-5 changes that make the graphs much easier to understand. I didn’t even realize that he created these graphs for both sales and rentals. I thought these graphs were only for sales. I’m excited about the rental graphs. Take a look at the following link and scroll down to the rental graphs towards the bottom: http://www.miamicondoinvestments.com/for-lease/Downtown-Miami/900-Biscayne-Bay/. I haven’t found any real estate website in the nation that has these types of graphs (especially for free).
gables — Neither falling r.e. prices in arguably the worst r.e. market in the country (Miami) nor rising unemployment disproves the likelihood of inflation. Again, the U.S. money supply is now DOUBLE what it was a year ago. Stagflation reminiscent of the Carter years is well within the realm of possibility.
Lucas,
I noticed your new and improved condo listing page a while back and I am very happy the way it turned out. I was just too busy to congratulate you though.
I have a problem with one feature. If there are no sales in a particular month, the graph dives to “Zero”. I know what it means and a few others might too. But to a layman it will look very foreboding. Maybe you should consider flatlining the graph at the last sale level until a new price point is set and then the graph can curve up or down depending on the new sale price that has been set.
Lucas,
Can you confirm #1711 in 1800 Club listed for $210K ( MLS # D1347993 ).
That is an incredible price. The Sf listed is 837 but in reality the SF for line 11 is 1100. It is a 1/1.5 with partial bayviews from the unit. It is the best 1 BR line in 1800 Club and the largest too.
If the list price is real, it will be an excellent deal. Lara you should jump on this.
Zilbert has #1711 in 1800 Club as a short sale.
Amazing Opport! Reduced over $200K from original pricing! Panoramic Sunrise 2 Sunset View of Bay, Pt of Miami & Downtown Highlights! Walk 2 Arsht Ctr for Perf. Arts, parks, downtown, minutes 2 SOBE & MIA! Outstanding unit w/ wood floors, granite counter tops, st.less steel appl, washer, dryer, spacious tiled balcony* Cooperative tenant is mo to mo. All luxurious amenities! Fabulous “11” line on 17th floor = breathtaking balcony view! Don’t miss out! Ck resent sales & Show!FNMA approv. coming soon.
I am not an economist and I don’t play one on the blogs but all you guys calling for inflation seems off base to me. You say the money supply has doubled but I’ve heard economist say that the money supply has never been an indication of inflation. I’ve also heard economist say that as long as the fed has plans to remove the excess liquidity then there is a chance things won’t reach the dire predictions some here envision. I tend to agree with kramer about unemployment effect on inflation. Most will tell you labor is one of the largest expense for most businesses. I have seen it in my business dealings.
Go visit a store and compare how much cheaper goods and services are today than last summer when gas was over $4/gal or 2 years ago. The us is in a jam right now but guess what most of the rest of the world is in even bigger jam. I think is is senseless to worry about inflation in 4 or 5 years when we are in a delfationary environment today. That’s like worrying about getting alzeimers 30 years from now when your blood pressure and cholesterol is off the charts today. Ass backwards!
Joe (#121)
You can do that calculation with any propert transfer, not just the original from the developer. This is the best way to get the latest sales information as the property appraiser’s website has a big time lag.
Two comments:
(1) Interest rates will be going up over the next few years which means, for most purposes, existing home prices will decline since as interest rates rise, existing home prices must fall to make homes affordable, absent some incredible increase in incomes.
(2) The August 2009 edition of Money magazine projects the bottom for Miami single family home prices to be … the third quarter of 2011. Moreover, the projected price drop from Q1 2009 to Q3 2011 for Miami is a stunning 43.6% for single family homes. Note, that is a further drop from Q1 2009 prices, not total drop from peak prices. I would expect condos to perform more poorly than single family homes. That projection exceeds my best guess by quite a bit, ouch.
RT,
That drop in price is scary and has an outside chance to occur. A current 2B condo at $250k available for around $140k? Its possible, look at club, vue and solaris for examples.
Joe,
Inflation effects must be looked at carefully. By far the largest consumption of my income is in housing and automobile. As long as those items, in particular housing, drop then the inflation, or hyperinflation, issue will not occur. Particularly with unemployment so high.
Actually here is an interesting idea. We may have parts of the country subject to inflation, and others deflation, simultaneously. People living in Miami are currently experiencing deflation, and will for quite some time as housing prices drop. Food and other items, even if rising in price, cannot compete with the extra dollars in my pocket from cheaper housing. But in other parts of the country, like the midwest where housing never really bubbled, increases in food and energy will make it appear very much like an inflationary era. How will the economists decipher this conundrum in terms of inflation/deflation definitions?
gables – I don’t think Money magazine is a fringe publication and so I would give their estimate more than an “outside change to occur’.
Other drops from Q1 2009 prices to projected bottom dates listed include:
Atlanta 5.9% Q3 2010
Boston 11.9% Q4 2010
Charlotte 3.9% Q2 2010
Chicago 6.5% Q3 2010
I can list the rest of the 25 if you want…..but as you can see, the numbers look pretty fair and reasonable for the other cities, Miami is the worst.
RT, how was Money Magazine in predicting this housing bubble collapse in 2005?
If they couldn’t see it back then, why should we listen to anything they have to say now?
Their guess is as good as anyone. I do believe Miami as a whole still has a way to go but to put a percentage and date on it is just silly. The true bottom may not come for another 5 years. I guess they have magazines to sell and payrolls to meet so I can’t blame them.
Here is the complete list of 25 cities (note this is for single family home prices as of Q1 2009 to projected bottom time and percent of further price drops):
Atlanta 5.9% 2010 Q3
Boston 11.9% 2010 Q4
Charlotte 3.9% 2010 Q2
Chicago 6.5% 2010 Q3
Cincinnati 3.7% 2010 Q3
Cleveland 3.1% 2010 Q2
Dallas 1.2% 2010 Q3
Denver 15.0% 2011 Q1
Detroit 6.8% 2010 Q3
Houston 1.1% 2010 Q3
Kansas City 4.2% 2010 Q4
Las Vegas 24.7% 2010 Q4
Los Angeles 25.7% 2010 Q2
Miami 43.6% 2011 Q3
Minneapolis 4.6% 2010 Q3
New York 22.3% 2011 Q2
Philadelphia 15.6% 2011 Q1
Phoenix 25.4% 2010 Q4
Pittsburgh No Decline N/A
Portland, OR 12.6% 2010 Q3
St. Louis 2.5% 2010 Q4
San Diego 10.7% 2010 Q1
San Francisco 7.2% 2009 Q4
Seattle 6.7% 2010 Q1
Washington DC 14.8% 2010 Q3
makes me think – Money magazine had been reasonable in its coverage and like most was behind the curve and underestimated the price drops. If you examine the numbers for most cities, they seem credible….the Miami number though is disturbing.
RT,
The problem is the statement is just too broad. What the list says is that Miami has much more to correct than the rest of the country. But with such a diversity of homes, condos, locations, etc that 43% drop number is fairly meaningless. How does the top half of the spectrum drop compared to the bottom half? Which is weighted more in the analysis? I dont dispute the trend, but the accuracy of the numbers and timing is meant to sell magazines, not provide investment advice for buying a home.
What i see from the list is that Miami is behind the curve in price correction and still has a ways to fall compared to the rest of the country. With so few units moving on the MLS and, until recently, not a great amount of price correction, the list is revealing. I do thank you for providing the list.
gables – I do think the estimates are telling. Again, their analysis is only with respect to single family homes according to the footnotes. I certainly think it is a serious factor to consider that single family home prices won’t bottom for 2 more years and a whopping 43.6% further price decline… That number caused me to do a triple take for sure. My thought is that if that is the expected decline for SFHs what about condos??? Money magazine’s est. is pretty darn bearish for Miami to say the least.
Being master of the obvious here…
Florida Millionaires Vanishing
http://www.jaxobserver.com/2009/07/20/florida-millionaires-are-vanishing/
http://newsroom.bankofamerica.com/index.php?s=43&item=8483
(BTW, “Capgemini tracks what it labels high net-worth individuals (HNWIs), people with more than $1 million in investible assets excluding the value of a primary residence”)
Being master of the obvious here…
Florida Millionaires Vanishing
http://www.jaxobserver.com/2009/07/20/florida-millionaires-are-vanishing/
newsroom.bankofamerica.com/index.php?s=43&item=8483
(BTW, “Capgemini tracks what it labels high net-worth individuals (HNWIs), people with more than $1 million in investible assets excluding the value of a primary residence”)
Hey All. From a NYC perspective, the co-op form of hi rise ownership pre dates the condominium form of ownership. In the very beginning of co-op ownership, there was nerver a price for the real estate because there actually was no “real” real estate. Only “KEY Money” was paid. Many times co op leases were passed freely, without any cost. In other words owning a co op was not at all different than renting an apartment, except there was much more paper work and added risk if you opted for the co op. Co op’s were valued soley on precious finishes, rare carpets and unique views they might offer. Some key money might be exchanged to make up for what was being left behind. Historicaly, high rise ownership, was never a good investment. The recent boom was an anomaly. A “Donald Trump fiction, very similar to his cotton candy hair style. Bottom line is that condominiums are only worth what they might rent for (plus a few dollars of key money) minus all the unanticipated expenses and anticipated risks. In the short or medium run renters might be wiser?
JL – Capgemini’s annual world wealth report is a must read…..and the best thing is it is FREE every year. I’ve got the last 10+ years of reports.
All these predictions about bottoming-out and further % declines are just speculative guesses by a bunch of economists who think they are alot smarter than they are. If their predictions are right, then they commend themselves as being geniuses when in fact they were just lucky. If their predictions are wrong, then they will just blame the error on some unforeseen and unaccounted for event that caused the result to substantially deviate from their original prediction. They would never attribute a correct prediction to luck, when in fact that is the strongest factor.
Take anyone with 1/2 a brain who lives in South Fla and they can probably predict a bottom better than some jackass economist commissioned by Money Magazine.
MMT #135- exactly. Where were all these guys when the market was humming? Few if any predicted such a monumental collapse so I have a hard time accepting any similar converse predictions and estimates.
Why is miami so far behind the curve in both percentage yet to drop and date? We are both the largest drop and the last to bottom. My guess it is due to so much mortgage fraud, and a foreclosure system which does not allow the process to move forward. Hence the lack of activity in the marketplace compared to places like California, which have speedier legal processes. This delay tactic may actually allow such large percentage drop to occur, because we may have units sitting vacant much longer than most locales. Risk of damage, vandalism, fire, etc may leave these units in much worse condition once they do go to sale-pushing prices down even further. Interesting times in SoFlo.
Gables-(not in any order)
1. Fraud/Flipping
2. Slow foreclosure process
3. Unemployment
4. Overbuilt
5. Property taxes
6. Homeowners insurance
Drew – Economists are like weather forecasters. I’d rather at least factor in their forecast then just bury my head in the sand, throw my hands up in the air and say it is all random and all opinions are equal. Money magazine had been too bullish throughout, like most people probably including yourself, now are they being too bearish for Miami when they appear to be fair for the other cities? If so, why?
“St. Regis Monarch Beach seized by Citigroup
Resorts such as the St. Regis, which cater to wealthy travelers and the high-end corporate retreat business, have seen some of the steepest declines in revenue.
The resort, which will continue to operate under its current name, is an indicator of the troubles in the high-end hotel market.”
– The high-end market is at the beginning of the downturn….
RT I think it is pointless to give any thought to these prediction about how much farther the market has to go to reach bottom. If you look at these economist prediction they have been wrong from day 1 and continues to be wrong. Most of them missed the bubble, then when it started they denied it and even after it was obvious the bubble burst many of them were calling for a bottom by spring of this year. Now we are to believe they can see into the future and tell you in October of 2011 the market will be down by %43.6.
They have it down to a 1/10 of a % point. Why not %40-%50, give me a f’ing break. They lost all cred with that call. They have all cities down to a 1/10 of a % point.
Huston will be down another 1.1% in Q3 2010. Come on RT, these guys are fucking with you and you should know better. LOL!
Well, I think one thing you can glean from the Money magazine article is that the Miami single family home market has a long ways to go before reaching a bottom. My personal opinion is that the mid to upper end homes will be the ones taking the most of the hit going forward. Sorry MMT, I’m just not as dismissive of their projections as you are even if I am not one to project such a substantial decline.
Drew,
The question really begs why is there such a lag in the bottom, as in why are we not getting there faster. Item two may be a contributor to the delay. But the other items are immediately felt and should have been driving prices down faster, considering most items (insurance, HOA, taxes and unemployment) have been a problem for quite some time, and are of greater magnitude than most other parts of the country. What is occuring behind the scenes that is so effective in delaying the inevitable decline in property values?
RT,
My guess based on the data that you posted is that whoever wrote the article built some relatively simple model of the publicly available data for individual metropolitan markets. The numbers are to the nearest .1% because they just pasted them out of Excel not because of some detailed local knowledge of each metro area. We of course don’t know what their exact inputs were but it means that whatever they used, Miami has the worst data relative to other cities. It could be such measures as historical affordability, price-to-rent ratios, local oversupply conditions, etc. Without knowing what data set they’re using, it is pretty hard to determine just how effective their predictions might be. I do agree with you that just the fact that Miami appears so overvalued on some measure is interesting in itself.
gables,
Item 2 seems to explain a lot. People could be unemployed, not paying HOA, taxes or insurance but if the foreclosure process does not run its course in a timely manner, the property never reaches the market. I have tracked a couple of cases where the time between the initial delinquency filing and the transfer of title to the bank were separated by almost 2 years. Not sure if the fault for this is with the banks, the courts, government efforts at modification, or something else but it seems far too slow to provide the price clearing mechanism needed.
gables-
My points relate to the estimated “bottoming out” date that will likely be longer than other areas. But I think your assumption that price declines are not fast enough or lagging/delayed is incorrect. Values have deteoriated almost 50% in Miami-Dade from a few years ago…how fast and hard do you expect them to decline? I’d say that values have fallen substantially and they probably have a few more years to decline even more.
Gables, if Miami is going to be the last to bottom, then it figures it has the furthest to drop percentage-wise.
What I think is going on here is that the Miami housing market can not bottom until out of towners start buying second homes again in Miami as the local market can not afford them.
With most cities, there is no crazy housing oversupply, and the question is when will the local market get back on it’s feet enough to buy up the depressed housing… with Miami, there is the largest of oversupplies (that locals can not afford to a large extent) and the question is when will wealthy out of owners get their balance sheet (and mindset) back to a point where they will buy second and third houses in Miami again.
I don’t necessarly disagree with the premise of miami having more to go but I wonder what makes miami much worse than Las Vegas? They are both built on speculation las vegas may be more so than Miami for sf homes. They both depend on turism and has a large percentage of unskilled workers, At least miami has some shipping, banking and agriculture. Vegas is almost completely dependent on gambling and was pretty much a dump before the real estate boom. Miami has always been a place people dream of moving to. I could be wrong but I think if prices fall in miami to another 30% down you will get another influx of folks from the north east buying at those prices. Maybe the reason miami hasn’t fallen as much is because when prices drop new demand enters the market to help stabilize prices. I don’t know but I have a hard time beliving miami sf homes will drop another 45% from here. if it happens I’ll buy myself a home miami shores for less 200k
Would a 45% drop take us to like 1996 pricing? I remember when the Waverly in Miami converted to condos around 2003 and announced their pricing, a lot of “smart” RE investors (smart investors not mindless speculators) thought that signified a Bubble top…
I like to think of 2003 as the top of the normal RE bubble and 2003-2007 due to complete fraud. If the complete fraud era never happened, maybe we would have retraced in 2003 back to 1996 pricing?…. Maybe.
I don’t think its unrealistic to think that values could roll back to pre-boom levels- which is to say that the fraud/flipping/oversupply fuc*ed up the market so much that values will effectively dip below the normal home value appreciation (1.5-3% yr) that would have occured if the boom had not taken place.
Read the second page, less about the show and more about Miami itself. You can find many snippets such as “people don’t have to go to the Beach anymore to have fun. A lot of great places have opened on the mainland.”
MMT #154, you sum it up the best.
I love both cities. Miami and Vegas. I go once or twice a year to Vegas. When I first planned to buy a vacation home either in Vegas or Miami, One thing was strikingly bizzare.
A flea infested closet size hotel room in Miami was renting for $150 average per night. A decent 4 star prop is $350-$400. It is still the same even now.
A five star hotel room in Vegas could be had for between $35 and $65 a night (if you plan right, even the epitome of luxury, Bellagio and Venetian could be had for $89 and incidentally I am staying in Vegas in August in Bellagio for $89). Similar luxury does not exist in Miami and somewhat decent rooms in Lowes and Tides and Victor go for close to $400/night.
It was a no brainer. Buying a vacation home in Miami makes a million dollar sense to those who go to Miami often.
Anyone who would buy a vacation home or second home in Vegas need to get their head examined. The gambling industry subsidizes your hotel stay between 50% to 75%. Why the hell would you want to buy a place there unless you are moving there for good? In any case after 3 days, I get very antsy in Vegas. I feel like I am in a hicktown with a lot of unsophisticated tourists from Middle America coming to see Elvis impersonators (Yuck).
I can stay for months in Miami with out getting tired and still shed a tear when it is time to go back to New York.
Some arsehole predicts that Miami will drop twice as much as Vegas in the next couple of years and our resident anarchists are going to town with it. Any surprise?
And why not? I would jump on it too, if I can buy a Home East of Biscayne Blvd in Miami Shores, Biscayne Park, Key Stone or San Souci for $200K.
Right now a 2/2 in these areas is still over $400K. At this rate, you mean I can buy a top Coconut grove, gables or Pine Crest prop for .5Mil?
That cnut who wrote the article maybe referring to the little Haiti houses next to the I95 which shot up multiple fold during the boom. A $50,000 house was selling for $150-$200k during the 05-06.
AJ, based on hotel occupancies, someone is gonna have to subsidize Miami/SoBe hotels too. At least Vegas has the casinos. I don’t know why you like deny the housing problems and call people who are discussing the reality of the market names. Oh well.
A MUST READ (which may explain why Miami area has the most to fall):
http://www.heraldtribune.com/article/20090719/ARTICLE/907191031
RT, I’ve been railing against the mortgage fraud and our lack of prosecution for some time. This was a huge cause of the housing problem faced in florida. Not only did the fraud occur and banks left on the hook, but the sales were used as comps to drive up the price in legitimate sales. This created the bubble in which the average joe participated in. The unsuspecting fool also gets beat again by the fraud, because taxes and insurance are a percentage of housing price. This is why rules and regulations are on the books. If only the government would have enforced the laws which exist. A small, maybe 2% of transaction, had the same leverage effect on the bubble that mortgages had on debt. Why if i steal $500 dollars from you they try to throw the book, but if you fraud $200k the authorities dont seem to even investigate?
RT –
Could the Money article be a contrary indicator? All the hype when prices were going up up up and missing the boat and now the opposite?
I think we have a ways to go still but predicting that much of a fall strikes me kind of like the old adage “buy when blood is in the street.”
Without even looking at the numbers, one of the reasons Miami has so much farther to fall than Las Vegas is that Miami became much more overpriced than Vegas. Even at the height of the bubble, huge McMansions in Vegas in good locations were far cheaper than a comparable place in Miami. Beyond that, look at where the oversupply is located. I mean no offense to anyone in saying this, but very few people who “dreamed of moving to Miami” dreamed of living on Brickell, and with half-empty buildings on the Beach, it’s going to take a long time for the mainland’s oversupply to get absorbed.
Dave — There are like 20,000 or more condo units available in Miami right now. Whether prices fall another 5% of 50%, they’re going to keep falling.
Sorry, typo above. I meant to say: Whether prices fall another 5% *or* 50%, they’re going to keep falling.
Article on why Vegas has so much farther to fall then Miami:
http://online.wsj.com/article/SB124804383363363397.html#
With no more new hotel/caisnos opening Vegas essentially does not have an economy.
Good read with good stats
http://seekingalpha.com/article/150029-the-housing-crash-isn-t-over-here-s-how-to-profit
I have a simple exercise which could provide insight on legitimate prices for condos in the future. This is targeted towards those who have been involved in Miami real estate for a while. What was the going rate for a nice 2B/2B 1150 sf in Brickell area in year 2000? Assume that Plaza existed in year 2000, in nice condition by not selling through the developer-just a basic resale. What would a unit in a complex like that run for?
I understand we really did not have any of these “luxury” buildings in existence at that time, but as an exercise from those who new the market back then what would the unit have gone for? This will give us an indication of the lower bound to the market going forward, in my opinion. I dont think prices will recede much below year 2000. Not even saying they will recede to this level, just trying to create an upper and lower bound on prices over the next few years.
Dave – You can’t be serious….a contrary indicator??? LOL The bubble has burst, the greed and fraud has been exposed, no one will lend money on an over priced asset, the demand is gone, supply is still at historic highs along with shadow inventories and sooo many foreclosures to come for years.
The Money magazine Miami SFH percent seems high to me but is possible… Read the full Herald Tribune series and all I can say is WOW. Long way to go down.
Well in other news, I just got back from the inspection on my condo. No problems at all, as I would have guessed for a new building. Looking to close next month between Aug. 10-14.
Had a nice long talk with the property manager and went through all the specifics. Overall, got a great feeling about the building. I obviously didn’t do a full audit of their books, but the building seems very well run, and from what I can tell economic waste is non-existent. Apparently the building is 75% occupied, although that factors in the ~28 people that have signed up for the lease-to-own program the developer put into place recently. Either way, there were lots of people coming in and out of lobby and they were all friendly, smiling and saying hi to me.
I see a few short sales are currently listed at great prices, and I’m sure the developer is looking to make deals, so if anyone is currently in the market I definately recomend checking out the Lexi.
DJ-
I told you Lexi is a good deal!!!
Yeah dude, especially at the price I’m getting it for, I feel good about it. The unit is sick!
I’ll upload some pics to a photobucket account and post the link here when I get it.
Lexi is chocker full of Chinese drywall.