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L@@K at this “investors”…..
7700 COLLINS AV # 1, Miami Beach, FL 33141**
Price Reduced: 06/30/08 — $500,000 to $480,000
Price Reduced: 07/07/08 — $480,000 to $460,000
Price Reduced: 07/15/08 — $460,000 to $440,000
Price Reduced: 07/24/08 — $440,000 to $400,000
Price Reduced: 08/04/08 — $400,000 to $380,000
Price Reduced: 08/07/08 — $380,000 to $360,000
Price Reduced: 08/11/08 — $360,000 to $340,000
Price Reduced: 08/18/08 — $340,000 to $320,000
Price Reduced: 08/28/08 — $320,000 to $300,000
You know what that is? That is the sight of your investment turning into a nightmare. It’s eating your lunch. You see, if you have a millions of milkshakes(or money which can buy milkshakes), and I have a condo….and you give me your milkshakes (or enough to buy millions of milkshakes) for that condo….well, you overpaid for your condo….and I….DRINK…..YOUR…..MILKSHAKE. I DRINK IT UP! SLURP!
I love that movie. And the message rings true. You are losing money, you’ll continue to lose it. FOR YEARS. I take pleasure in that fact. I love to see the fool separated from their money. I will be buying your “luxury” condo at no more than $150/sq foot. Maybe less….
Yo, I heard a rumor that Michael Phelps was buying a condo at 900 biscayne. If so, that could buoy….keep them above $400/sf at 900 Biscayne. So you’re wrong interested. You don’t know what you’re talking about bro.
Phelps and Daddy Yankee too.
If I had a cool 2 Mil, I’d buy that pad.
Interested… milk shakes…. geez the guy problem scoops ice cream for a living. Your financials would be best suited for purchasing condoms, not condos. JH
You could use better pictures. That condo is gorgeous.
There is one thing I like about the condo I am in, the views are great but with the layout of the building and angle of the coastline, I have complete privacy and never have to close my master bedroom blinds but can still look down the beach for miles…. With this unit, looks like there is a building next door that can peak in, I guess it depends on which rooms.
So… in another post, I read about how 900 Biscayne is the first of the ULTRA Luxury buildings to open, with the following building following in late ’08 and ’09.
1. Icon Brickell
2. Epic
3. Infinity
4. Everglades
5. Marquis &
6. Paramount Bay
What are the boards thoughts on the following:
– Will being an early entry Ultra Luxury brand vote well for 900 Biscayne?
– Is there room today, even a possibility of success for Ultra Luxury in Miami’s condo economy?
– How will the later entries into this category of product quality affect 900 Biscayne?
– In your opinion, do you think that 900 has a better chance of being “successful” in todays landscape? On this front, define what you would view as successful… high closing rate, low default rate, healthy HOA… etc.
– And finally, do you think this project justifies $400psf today? How about 3, 6, and 9 months from now… where will they be at $psf?
–
Jerry Harper….you’re a tool. He’s talking about “There Will Be Blood”.
$1.9 million for $3,493 comes out to $543 / ft. asking for a true Penthouse unit right now in what is thought to be an Ultra-Lux building in Park West.
My guess -if it does not sell- it’ll be asking high $400’s sq foot in 6 months.
Relatively priced, that would put the regular units at 900 in the $300-$400 sq/foot range which would put Marina Blue in the $250-$350 sq/foot range.
Write it down, my Crystal Ball prediction for the area 6 months out… Assuming of course Doc loans can be had with 10-20% down.
Renter Tom,
I hear ya. Some of the Related Condos are ridiculous that way. Right up against each other with half the condo facing each other.
This penthouse is saddled with an awkward floor plan and a very jarring linear spaces . I am disappointed with the bowling alley confined potentially Irish pub kitchen layout .The bathrooms are “okay” at best .Where is the Wow factor in this penthouse , There should be a seamless expanse of glass with a 180 deg. view .Thanks to the obtrusive badly though out floor plan the living room leaves much to be seen.Why do all these condosreplicate the monotonous designs from the floor plans and the decor .How is this different from every other “luxury condo ” that I have seen besides the cubic floor plan .
Phelps just started to taste what money is and I don’t think this is or would be his first impulsive investment especially in Miami . Why would anyone one want daddy Yankee as a neighbor , do you know what kind of scum would follow .
“Why would anyone one want daddy Yankee as a neighbor”
This is Miami, if he brings the Ho’s, then he’s welcome with open arms. Would sure beat a Capponi lounge.
Have a happy Labor Day Weekend everyone!
I’ve been reading this blog for a while and thought of a question that I think hasn’t been brought up before. I see that there are TONS of new luxury condos for sale and many more to hit the market soon in downtown and brickell. How will this affect real estate in other parts of the city. If all the young professionals and wealthy folks who traditionally bought condos or homes in coconut grove and coral gables are going to flock to downtown and brickell. Is real estate going to be hit the hardest in places like coconut grove.
I’m a young, single gal who banks a little over 100k a year and an looking to buy a 1/1 next year (I rent now in North Beach). I don’t think the downtown luxury market is really my scene, but would love to buy a condo in coconut grove. I’m very bearish on real estate as a whole in Miami, so if downtown and brickell really take off (which i think it might), how will this affect property values in other nice parts of the city. Thx.
What is up with Miami and the tacky cylindrical columns in every building. They should just stick a huge sphere right next to it and then we could listen to Duran Duran and just pretend we’re in the 1980s. Are they hoping for a 1980s fugly architecture revival? Lord almighty. The design language is terrible in all these crappy “luxury” condos. Just because something is made of gold or Italian marble doesn’t mean it its classy. Its like those tacky ladies that wear Louis Vuitton print track suits with Louis Vuitton print shoes and a Louis Vuitton print handbag with fake nails and fake eyelashes and extensions. Sure it costed a lot… but money can’t buy you class.
In case you need an education in class, look at Manhattan, or Paris, or London. Even the over-the top sheiks in Dubai don’t demand this gaudy crap.
Jane Q.,
I seriously doubt Brickell is going to attract many residents from Coral Gables or Coconut Grove, unless it is a young professional moving from apartment rental to apartment rental. Those communities are established and well-planned. And the commute from either of these to Brickell is not particularly bad.
Brickell is not being built as a community. there are no parks, few shops, few groceries, few dining options outside MB Village. Brickell Key is nice, but other than that quality of life is relatively low. Brickell is being built entirely for naive speculators who at one time has too easy access to too much credit. If only a few buildings had gone up, then it might have been quite nice. but the overbuilding is such that, should these buildings ever reach even 50% occupancy, then living here will be quite miserable.
So Plaza on Brickell is going to start charging residents $200/month to park their second cars. This is outrageous, as there are literally floors of available parking on the higher floors of the parking garage. (building is, what, 25% occupied at most.)
what a way to screw the few residents this building has. Won’t be long before they start charging gym memberships and pool memberships for the use of those ammenities.
but this is also no doubt a sign of things to come with Brickell condo living…..
Wooowwwww, Plaza is charging now too. What c**p. Good to know, thanks!
900 Biscayne will do fine. Downtown has a better living standard than other areas mentioned. It is like living in a resort style community. You have excellent schools and a highly regarded neighborhood. Crime is nonexistent. You can walk to your CEO job in shorts and a tank top and not sweat to death. Even if your making mega bucks you can ditch your high end car and ride the Metromover. I would definitely recommend anybody with a half a million to consider one of the 1 bedrooms at 900 Biscayne. It truly is a value building in a great neighborhood.
JL,
A penthouse unit at Ten Museum Park resold for $622 per square foot in June 2008. I’d much rather be at 900 Biscayne Bay or Marina Blue than Ten Museum Park. How are you coming up with your numbers?
Lucas,
From my post:
“$1.9 million for 3,493 comes out to $543 / ft. asking for a true Penthouse unit right now in what is thought to be an Ultra-Lux building in Park West.
My guess -if it does not sell- it’ll be asking high $400’s sq foot in 6 months.”
Relatively priced, that would put the regular units at 900 in the $300-$400 sq/foot range which would put Marina Blue in the $250-$350 sq/foot range.
Write it down, my Crystal Ball prediction for the area 6 months out”
——-
I’m assuming the listed price is an asking price so the $ sq/ft was just a calculation. The high $400’s per sq foot asking price estimation if it doesn’t find a buyer in 6 months is a 10% reduction in asking price essentially in 6 months.
I do think the penthouse units are substantially nicer than normal units so it should carry a $ sq. foot premium as most penthouse units do.
In 6 months, IF this particular unit is asking in the high $400’s per sq. foot, then the “regular” units should be asking $300-$400 on a relative basis.
Just a guess for 6 months out if the market stays on it’s downward course. With the extra supply of high end, ie. Icon and Epic around the corner, that’s what I predict in $sq foot asking prices half a year out.
The post was basically about relative values. If a penthouse unit in 900 now is asking $543/ sq ft. I think the normal units need to be asking $450/ sq ft. and under right now (few are BTW).
Regardless, it doesn’t seem like many people are in a condo buying mood now so lets see what happens with the actual sales prices.
Lucas, before you get too smug consider that 40% of the NATION’s fraud is occuring in Florida. That sale was fraud or stupidity. Either way the resale will be lower.
can we stop calling these buildings luxury? really, so you have a nice business center and a ping pong table…so what. the balls will be lost within the month, the paddles stripped and the computers will be down with a virus.
that said….jane q., no rush to move into the grove. depending on what you’re looking for (i’d go townhome in the grove and avoid the condo buildings imho), there will be deals for the foreseeable future. hell, today’s foreclosures alone are going to take a year to clear out of the system. and there are more to come.
I would pay a $100 per square foot premium to be closer to Bayside Market Place. Just like paying more to live near Lincoln Road. It’s worth it.
Is that the real wild bill? You sound more like wild bull today. Very bullish indeed.
Jane Q,
I agree with cynical. It is not as much as the grove and gables people are moving downtown. It is those from Kendal and Doral and the likes. So if anything, these new condos will affect, those outlying areas of Miami.
900 or Bust,
I was the one who posted that post you mentioned. This is my take on the subject.
Luxury buildings such as 18, Q, 50 Biscayne, Plaza etc will survive because, the prices the owners paid are reasonable to start with. They can rent out these flats by only subsidising 15 to 20% of the carrying costs. At that level, there are plenty of renters who can fill these flats. These owners can ride out the storm.
But in the Ultra Luxury segment such as 900, Icon, Epic etc the pre-con prices itself is very high. People paid exhorbitant price per sf for these in the year 2005. So when a 2/2 in 1800 or Quantum owners can rent them for $2000-$2500 and survive, the same cannot be said of these Ultra Lux buildings. A 2/2 in these would have to rent for $4000/month to even make any sense to carry them by the owners.
Unfortunate truth is that as there are many middle income people who can afford a $2250/month on housing, there are almost none who can afford $4000/month.
You have to understand one thing, people are only willing to pay so much for the bells and whistles. Just because 900 or Icon may have a Miele refrigirator and 1800 has a GE profile, does not make a difference to the renter. They both do a great job in keeping your food cold. It basically comes down to affordability.
Even if the Ultra Lux owners want to deeply subsidise the renters to a tune of 40% and ask only $3000 for a 2/2, they still cannot attract the young professionals that the Lux buildings are able to attract. That is because, at $2200-$2500, the young professionals are tapped out. Every $100 extra over that will be a strech for them.
So the owners who paid $400K for a 2/2 in Lux segment have these renters as saviors. But the owners who paid $600k or over for a 2/2 in these Ultra lux segement will have a tough time carrying them unless they are very rich.
So I see trouble for this Ultra- Lux segment.
The second tier buildings may just do fine.
People from Kendall and Doral should sell their 2/2 units and buy 1/1’s downtown. Downtown is more family friendly. Natural progression for families is to move to downtown areas with lower crime and better schools. Downtown is the place. Trust me.
In Doral you can spend $358,900 for a 3/2.5 townhouse with a one car garage with 1600 sq. ft..
900 Biscayne 1/2 with 1,050 sq/ft can run $465,000.
What to ask before buying condo
http://www.chicagotribune.com/business/chi-condo-buying_chomes_0829aug29,0,4725826.story
Article was unexceptional except for this gem.
“One gimmick to watch out for is when developers advertise a building as 80 percent or 90 percent sold.
That sounds good, but sometimes what developers are really saying is they’ve sold most of the units they’ve put on the market, rather than most of the units in the building.”
LOL, I’m not surprised but man, that is pathetic.
Jane Q., what do you do for a living if you dont mind me asking?
Everyone seems to be real sure of these young professionals moving downtown. Hopefully they are not about 50-75K upside down on their Kendall/doral homes. Hopefully they never plan to get married or have children or overnight platonic visitors for that matter. Hopefully their degrees did not include economics, finance and common sense. Get real the condo/home recession for south Florida is only beginning and there are no plausible reasons why the prices should then return to the unsupported previous prices. What kind of investment is it that you can maintain with only a 15-20% negative subsidy for as long as you care to so you can then take the big loss.
Things went wrong. This is a correction, not a dip, temporarily or otherwise. It is a correction that has only begun.
JD, not one bit. I’m a project manager for a large cell phone company. I have an BSEE degree from a top 10 school and experience working for a federal law enforcement agency. I moved down here from Washington DC 2 years ago and love the area, but still getting use to not having a change of season.
AJ, would the downtown market attract people from the ‘burbs? I’m a pretty ‘with it’ person, but I don’t think I could really feel comfortable living downtown. Maybe a little too smug for my liking, kind of reminds me of living in Boston or DC. I could be wrong though, I don’t go there too often. Still, seems like everything is pretty expensive.
“Maybe a little too smug for my liking, kind of reminds me of living in Boston or DC. ”
I never heard of downtowm Miami described as smug… what would you mean by that.
Anyway, alot of the interesting areas in Boston and DC cater to the heavily educated grad student/YUP crowd. There really is nothing like that in Miami and certainly not downtown.
..think your chances of finding the cambridge/boston ambiance and intellectual brio-if that survives in this climate -might be the grove..but not in downtown..
way back when in the BC days-Before Condos- the Grove had an artsy fartsy sense with neat small cafes galleries sorta like cambridge in the 1970s, the west village nyc before it was overrun with drugs. and georgetown area of dc…
now grove seems less artsy and more Big Name chain stores-don’t know if the old time grove characters just gave up and left after these changes.
Lucas –
As much as I think 10 Museum is a horrible building throughout the entire design, didn’t the penthouses have private pools up top? I know 2 did. That probably drove that high price.
Have you actually been in 900? I have, and so has Lucas….don’t you remember his blog saying it was the finest of all the new developments he’s seen in several years???Living at 900 with a future Museum Park, a future Miami World Center, a future Island Gardens Megayacht marina, walking distance to all concerts/ Heat games/ Performing Arts center….Who wouldn’t pay extra for this? I like to live in an area with a future….the city of Miami will not let this area go to waste…they won’t make themselves look bad and let the Arsht Center die…they have a MAJOR investment in the arts center and will MAKE IT HAPPEN for development in the surrounding area.
All the doom and gloom you guys love to post is getting old…fact is, there is always a demand for a high end condo with water views you can’t find in other cities. Men have egos, they will always want to take their woman into their fabulous condo to impress them.
Real men will not nickel and dime and wait their entire youth for the market to turn.
By the way, Lucas, I agree with a previous poster that these pics don’t do 900 justice….wish you could comment about your current thoughts regarding the building.
Re: the parking at the Plaza. The $200 per month is for VALET of a second car – you can’t even rent a second spot that you can park yourself. Otherwise, you have to park in a different building, or on the street. They are also charging for valet now too, for guests.
Hang tough or hand fire the smart money don’t need no aggravation, hang tough at $125.00, hang tough at $125.00 or hang fire.
The smart money.
I can remember when THE penthouse was the whole top floor not the top 5 floors with 3 or 4 “penthouses” per floor. I also remember when a new building didn’t necessarily mean luxury building. That said, the 900 penthouse floor plan and views are fantastic in my mind–except for part looking in windows next door
bc,
The self-coined “rock-star architect” that designed 10 Museum Park is going to be very hurt that you don’t like his design.
Jane Q Renter
Jane unless you want to go into the residential north grove or south grove stay away from Coconut Grove- The Grove curled up and died about 10-12 yrs ago or more. The center Grove from thursday thru sunday becomes at night a drunken frat boy party from UMiami guys. From soeone whose been there and done that. If you dontwant something too edgy try either downtown brickell or a great alternative is the Roads Area close in but not in the middle with a great location and great value. Good Luc.
Had a nice chuckle with the brain renter tom who rents in Sunny Isles- the $600-$700 per sq foot – the ambiance is about as attractive as visiting a hog farm strip malls no sidewalks you are on the beach bu theres no reason aside from the beach that that makes you want to leave your apartment- not to mention the age requirements for Sunny Isles. Hilarious.
Lucas,
Have been reading your blog for about one year. Moved here from NYC. Your site greatly helped me with my finding the right condo in Miami. Thank you.
I bought in Ten Museum Park. I LOVE IT. Amazing architecture, stunning water views and deluxe finishes. A pool deck that could rival any other in Miami, SOBE, wherever.
Valet Parking: Love it!!!! Just call down. When I arrive, the car is waiting for me. Who wouldn’t like that? When entering the building, I just walk away from the car. DOWNTOWN: Anyone who thinks downtown will not be the place to be within the next several years, is a FOOL.
Coming from NYC, I believe I got my place for a very good price. Now listen to this folks……………. I bought my condo for my HOME. Sure, it’s an investment, but it’s where I live, a HOME. I’m not going anywhere soon, so I’m in it for the long haul. I think a lot of people do buy for the long haul.
All of you BITTER blogers need to realize this. IT’S NOT ALL ABOUT MAKING A BUCK! It’s about the quality of life and what one likes and wants.
A lot of us buy into a building to enjoy it!
I think it’s sad that so many of you sit around and complain and criticize others for the decisions they make.
YOU are the ones who will never buy and will watch the pleasures of life pass you by, hating others who do. Once again, how sad.
Lucas, keep up the good work.
Most sincerely,
HSM
If you have to buy now then you have to buy now. If you don’t have to buy now then it’s prudent to wait because:
1) It looks like condo prices are still falling with a tremendous amount of inventory finally coming online in the next 6 months
2) It appears lending has gotten distinctly tougher over the past 6 months ago so people trying to close in the near future or even wanting to buy a distressed resale might have a much tougher time.
3) Most of the people who bought downtown condos pre-construction were flippers and most of the people who buy now will be flippers and most of the people who buy distressed resales later will be flippers. People might not be professional flippers, but very few will buy a downtown condo with a serious intention to live there 5+ years.
Miami condos are about transient living. There are tons of units available to buy now, there will be a ton in 6 months and there will be a ton in 6 years. It’s not about being unable to find a unit you want, you will always find several for sale that would fit any criteria. It’s about how much do you think you will have to pay now versus later.
Things might be different if Downtown Miami were fully developed out like people are hoping it will be in 5 years… then it would be about buying to live in the NOW. However, what if development in the city grinds to a halt?
Who knows how much of an impact declining property taxes will have on city/state budgets. Would you really be surprised to see a headline in a year saying Museum Park and just about every major public works project gets shelved for the time being?
Kramer,
My e-mail address is [email protected]
Question for HSM…
Congrats on your unit at 10 Museum….any news on the Clinique Spa???? And how did your gym turn out??? Are they finished????
HSM
quality of life? in downtown miami? you friend, are quite witty.
Not my cup of tea as an area – and the price seems a litle overegged But, the prospect of $50-60k a year in property tax/HOA just makes it laughable
HSM,
I agree with you. It is always a gamble and yet you have to like the area. I also strongly believe that the area is going to be great. We constantly watch different areas in big cities. those who bought earlier win. Look what happened to Soho, Meat Packing District and later to Williamsburg and etc in NY. Prices go up much faster than the area changes. Every City is different and has its own charecteristics. I believe that Downtown, Design District… Wynwood have all ingredients to become great areas of Miami. They are not may be perfect now but changes will come.
New York is New York and Miami is Miami and they are worlds apart except for the velvet rope.
What is the HOA for this 900 condo unit anyway?
JL,
I dont agree with you on two counts. Why are you assuming everyone to be a flipper? There are quite a few people who bought to live.
In 1800 I met 31 different owners who came to the association meeting. Almost all of them bought to live for good. Even young couples who are planning either one or two children down the road said that they would not trade this for a single family home in a million years.
It is possible that such a resolve might change down the road, but they are extremely bullish that they can raise a family in a 2/2 in downtown area. Among those home owners, I have also met Young couples with out children, Empty nesters, Retirees, Gays and lesbians who are both single and couples, all gung-ho about living here and never leaving. Most of these owners bought the flats pre-con.
Maybe you know something that I dont know? If so please let me know, how come your views are different from my experiences?
Secondly,
You said, “people are expecting downtown to be fully developed in 5 years”. Maybe so. In 5 years, I will have a choice of 100 restaurants instead of 20. In 5 years, I will have 10 spermarkets instead of 1 at present. In 5 years I will have a choice of 20 lounges/clubs instead of 2 as of now. In 5 years there may be 5bums in the area instead of 50. But who cares? Really!
I have lived in downtown in the present “wretched” “underdeveloped” state as according to you for 3 months from April to June. I have had a better time, more conveniences at my beck and call, more facilities and more of everything than I have ever experienced in my life either in New York or any other city I have lived before.
So I just don’t understand what you are saying or why you are saying these things.
When I make downer comments they have nothing to do with the advantages of downtown and near downtown living for saving time and gas, plus the views, possible excitement and other interesting and positive aspects. I only feel value wise there is trouble ahead, but granted many buyers who got in at pre-construction prices a few years back, not to mention their deposits long ago paid are not in the same position as would be purchasers at the insane and unsupportable prices recently asked and which will continue to be asked even though that day is over.
The areas benefits are real and future benefits are exciting and likely to materialize but in no time frame that a buyer should factor in.
If I was the first to plunk down my deposit for a nice unit at Quantum (for examle) way back when, I wouldn’t be sweating it. I’d say so what!
Its the current market that’s drastically out of whack and there is the major diffrence between a home and an intelligent investment.
Either as an investment or as a home, prices are too high. Lets consider that condos are 100% (150K-200K) over priced at least. You can sure buy a lot of gas and take a lot of hours off work (driving) for that money. How much do you ballers earn an hour? Probably not more than $20-30 dollars/hr after tax. Do the math. location isn’t worth the 100% premium.
You people denied there was a bubble, then you denied prices would decrease (the would just appreciate slower) , now you deny prices will drop drastically. You were wrong before and you’ll be wrong again.
Has anyone ever compared the NAR ongoing analysis and explanations as to why all of the crazy price increases made sense while they were going up at insane rates with other analysis over the same time frame from other analysts wh’s bent was the stock market. It is sickening how you can not believe anyone or anything but reality is here and is beyond obvious. $150/sq. ft. for “luxury condos with decent views’ Let’s see.
AJ,
“People might not be professional flippers, but very few will buy a downtown condo with a serious intention to live there 5+ years.”
I bet more than 50% of the resales for these downtown condos will come within 5 years of the first closing… and further, I bet more than 50% of the 2nd resales will come within 5 years of the first resale.
People might not be professional flippers, but there is no industry in Miami to support this type of growth. Unless Miami goes from a travel destination to a living and working destination, there will be a revolving door with these condos. Miami will always be the city to go to when you’re not ready to grow up. When you grow up, you flip the condo and go to Lauderdale, a house in Coral Gables, or back to the NE. It would be different if Miami had a large educated working class in the Urban Core ie. high paying technical jobs, but right now that’s a fantasy.
“if Downtown Miami were fully developed out like people are hoping it will be in 5 years…”
AJ, you might be the exception, but few people would be content if Miami’s public works projects stopped now. A lot of the marketing with these building is not about the “NOW”, it’s about … well when Park West develops out there’s going to be.,.. or when Biscayne and the Performing Arts center gets cleaned up it’s going to be…
Have you ever thought what if it never comes to be? Watson Island may stay a dump. Museum Park may stay a dump and Biscayne may stay a dump. Sure, you’ll be OK with it, but I doubt most condo owners will be. A lot of people buying these condos aren’t from Miami and therefore are not used to how inept and untrustworthy public officials are down here.
The city made all these plans for public improvement when Real Estate Prices and RE value projections were maybe 50% higher than they currently are. During the RE boom, was the city and state running a surplus? Did the Performing Arts Center get built on time and on budget? Because if they weren’t running a surplus when tax money was raining down, how are they going to manage over the next 5 years when tax appraisers get to reality and adjust the appraisals to true market value?
When all these condos are finally built out, the city will still be livable and enjoyable, but it just might be blander than people are counting on right now.
This downturn and the credit crisis are going global. The U.S. lead into and will lead out of it with the others tethered on various length strings behind. The U.S. is like the big speed boat and the others are tire tubes being pulled behind is with different length ropes and different weight people on them…all the tubes will follow the down turn but will enter the turn at different times and will follow a similar, but not exact, path with the BRIC countries swinging the most wildly.
It ain’t gonna be pretty and with home prices going to be set by incomes (instead of the asset appreciation of the very same levered asset — that is what makes it a bubble) and an actual substantial down payment required we are in for substantial price declines. As I previously posted, the return to the long term trend line will be overshot to the downside. There is little doubt with dual housing asset declines and stock market declines. Earned income has returned as an important factor.
Until after the end of the year, some people will still be in denial. I keep hearing now from people that in 5 years these places will be worth twice as much….that’s around a 14% pre year increase….yeah right.
Until then, be sure to have your cash covered by FDIC.
If your going to raise a family in this area you should look at the district 2 or 3 schools. I’m not a real estate agent so I could be wrong about this. The proper district and public schools should be posted by the many real estate professionals who visit this website.
I looked up two middle schools and one elementary school within this area. It looks to me as if these new condominiums are still in the poorest zip codes for the area.
These buildings are going to be filled with a bunch of single divorced men. Not a prime target audience for many business either. With the tight credit market I suspect many small business in the area will be gone in a few years. Maybe a Chinese takeout will survive.
South Pointe Elementary in Miami Beach is rated A+. That’s were your ex-wife and child will most likely reside when they ditch you because you refuse to move out of a crappy neighborhood.
WildBill.. zing!
I find that whole ‘Biscayne Wall’ area pretty fascinating. The area is full of extremely impressive and expensive condos. Some of the nicest buildings in Miami are there (TMP, MB, 900, Marquis, etc.) Yet, the entire area around it is dead. Most of the land to the west is vacant and the area isn’t pedestrian friendly one bit. I would really like to see that area come along nicely, but i’m not sure what can be done. Maybe someone in urban planning can chime in here.
Tell me your thoughts on this. During the whole construction boom over the past few years, it seems that Miami and San Diego probably had the most new condo buildings out of any city I have been too. Miami seemed to go the tall skyscraper approach, while SD had more mid-rise building (10-15 floors). SD seems much more pedestrian friendly and downtown has more of a ‘flow’ too it. Like Miami, I have a feeling that SD will be hurting pretty soon as well. Thoughts on the 2 cities?
San Diego’s downtown has been in transition for a lot of years and attracts the tourists and locals with large draw destinations such as the huge Horten Plaza, new baseball park, convention center, gas light entertainment area, waterfront villages. The authentic trolly systems takes you to the door. Miami has the Performance Center with a new name nobody can pronouce split in the middle by US1 that probably 90% of the population will never see inside. The arena is dark by day–the baseball stadium is going back across from public housing with no public trasnportation. My big hope is the Park West project mentioned here last week.
Seattle is being touted as one of the less affected places yet the Broker/flippers are bailing out of their condo investments at a loss before the masses catch on. Some at a 20% discount off their original purchase price. Builders are burying the early presale buyers. A penthouse that went for 1.2M in 2007 had a carbon copy one floor above listed at 899k.
First the builders bury the flippers. Then when the Option ARM’s reset the banks will bury the builders.
Keep your powder dry until 2012.
With my urban planning hat on, as I’ve stated in previous posts, Miami went through a huge Renaissance, but growth from here on will progress at a more normal rate until the next boom. That doesn’t mean, as other people have implied, that our city will stop progress or digress.
Several catalysts have been put in place- such as Midtown, Mary Brickell Village, and some smaller scale projects. The catalysts are everywhere actually, we just need to be patient now. When the retail center planned between Met 1 and Met 2 comes into fruition, it will transform the 3rd world feeling of downtown and spur a better caliber of retail growth too.
Large infrastructure projects will progress at a slower pace, but the momentum still remains for them to happen. I look forward to growing old with Miami, we always seem to forget what a young city it is.
San Diego’s strength is Peter Calthorpe and the TOD that is being implemented (Transit Oriented Design.) That’s a huge difference and as I’ve stated before, what Miami is sorely missing. Getting a strong transportation plan in place would be amazing…I have high hopes for that too.
Overall I am amazed and heartened at the huge steps Miami has taken in becoming a “real” city. Ok, I’ve covered my head, all the naysayers can beat me up now.
Richard said: “San Diego’s downtown has been in transition for a lot of years and attracts the tourists and locals with large draw destinations ”
Both you and Jane Q. forgot to mention my favorite SD attraction: the Zoo and Animal Park. Nothing like it anywhere in US.
San Diego’s biggest problem, aside from the the pressure being put on the public infastructure by illegal immigration, is the fact that it is locted in Cali (being from Cali, I can say this!).
In the Miami Herald this morning, there was an article about “Gov. Terminator” which mention that Cali had a MASSIVE and GROWING state deficit, despite the fact that the State INCOME Tax is 9.73% and the SALES TAX is 7% and may be on the way up.
Other than that, if I didn’t live here, I would live in SD!
la la
you won’t see public transportation ever taking off here. the real cost is too steep, the funding sources too expensive and the local politicians too inept. factor in that any public transpo plan would be on a limited scale in the first instance, and the reality is that it would appeal to a limited subset of folks.
JL (#46). I agree with you about downtown miami area (and surrounding area) being a transient place. Peopel move there not to live for a long time, but to move to something else when to find it. I know a lot of people who move via corporate relocation live in Brickell area for 6 months or so till they find a “real” place to live in.
AJ: I respectfully disagree with you. In 5 years, there may be fewer restaurants in the downtown area then there are now. I have taken so many out of town people to Brickell, Design District and other surrounding areas and without exception, none of them would want to be caught dead living in that area. There are too many undesirables there and that area does not appear to be safe to walk around in.
Our economy is headed for a nasty recession that we will not pull out of for a long time. Crime rate is already going up as the econom is worsening. The hurricanes are scaring people off as well. I dont see a recovery in the real estate market anytime soon. In fact, a direct hurricane hit in Miami will destroy the RE market that is on live support rigth now.
Check out this link for crime stastics in miami area: http://www.spotcrime.com/fl/miami
Jcrimes, Well, that’s why I threw in my caveat…
For anyone interested, Fairchild Tropical Gardens is FREE on Sundays through September…except for the 14th which is dog days…people bring their dogs…
If the weather clears up anytime soon, it would be good to take advantage of since it’s usually quite pricey to get in…
Jane Q. Renter,
Let’s just say what they planned in downtown Biscayne/Park West area and what they got are completely different. I’ll try to put together a presentation and post it on the web somewhere. It will be shocking to say the least.
People still don’t realize that the plots west of Biscayne might not be developed for another twenty years.
I’ve heard San Diego was hurting badly an was in a complete downfall. So are many other areas in California. Which is still not a problem is you bought at a reasonable price before the boom.
I would not recommend a condominium to anybody. Single family homes are the only way to control your budget and future expenses.
I think that a good point was raised here:
If we are counting on people from the West (Doral, etc.) to move and occupy the increasing inventory of units, how can we expect that prices are OK today? These people are paying probably 30% or less in those locations and with inflation and transportation costs, they probably want to pay even less if they’d move! (If they can sell their places and not be upside down)
There aren’t enough European or Latam investors to buy these units and lose money carrying them for a few years. Those people read the paper too, and yes, some are actually able to do a simple calculation and figure out that the numbers just don’t work for an investment right now.
All comes back to simple economics… demand and supply. Until the rent to own ratio gets back somewhere close to historic levels, we are in for more price cuts!
Thanks for that spotcrime site carbonblackcab. After looking at that map, why would any law abiding citizen venture outside of Miami Beach. Miami proper is worse than Detroit, because at least in Detroit all the victims are mostly criminals themselves (criminal on criminal crime). In Miami it is professionals attacked on their way to work – businessmen, lawyers, doctors, etc (criminal on innocent). Watch “First 48” on A&E and that will put the fear of god in you. These animals will murder you for a couple of bucks. Common motives include: needed money to bail out friend or needed money for drugs. WOW.
HSM post #45
Thanks for your post #45. As someone else here who purchased pre-construction quite a few years ago -and to those who say nobody bought to live here 5 plus yrs, then count me in as one who purchased a “Home” . I lived four yrs in NYC and always wanted to find an urban area in the tropics-multi cultural- that one person described once as-Living in a foreign country-allmost-not quite. You cant compare northern US cities with Miami because they all have around a 200 to 300 head start. Im with la la -I would much rather be here now in Miami and watch the evolution rather than say NYC where for the most part the evolution for the most part is over. For sure a few bumps in the road along the way but hey its all the more interesting that way. Cheers- as we sit on our balcony with a glass of wine and watch the cruise ships on one side come and go and on the other side watch the huge cargo containers as the little tugboats strain to get them pushed up and down the Miami River. Thousands of runners gather for the numerous long distance corporate and charity runs where the begin and end the races at the downtown Torch Of Freedom. Walk over to a Heat game on Friday night and on Saturday night -a night over on 12 street to hear the Cleveland Orchestra symphony. Sunday we will walk down to Bayside Marketplace and rent a boat for my out of town guests for a tour of Biscayne Bay. And finally my wife and I get to sleep in late on Monday because my office is only a 5 minute walk. Anyway- You get the point.
BTW- And remember this- Most of these doomsday guys in here-(you know who you are) probably work for the many condo vulture firms. These guys are paid employees who are required to moniter this and other sites and will rip you a new one when you say anything positive. If you dont believe me watch the insults and venom ensue.
Kramer, you are wrong about the doomsdayers. i am not part of any RE or vulture group-just your average professional working in miami. i love the new condos-great amenities, clean, etc. most buildings are completely adequate to live in-on this blog we sometimes gripe about issues which are not really all that important.
but most realists have a low opinion about prices, just that simple. the days of $400k and $500k 2B condos are gone for a very long time. the prices must become affordable to the upper middle class income group, simple economics. $500k condos are a disaster, but a $200-$300k condo turns this naysayer into a buyer.
Kramer
I’m presuming I’m one of your targeted doomsayers. My day to day encompasses helping developers get out of the mess their in, not hawking condos. As for my perceived negativity, sorry man, but the reality today is bad and it’s only going to get worse. Many developers are holding on by a string, with the lender refusing to declare a default because of their own capital limitations. Now that the fdic and ots are clamping down on the banks to move these loans to special assets – becasue they are all in default – the situation just goes from bad to worse. Once this wave hits, you won’t see any major development, whether residential or retail for some time. As for the former, it’s pretty obvious why. As for the latter, banks won’t lend on it, few developers are willing to put the necessary skin into the game to go forward and retail corporate america is not looking to expand these days, but rather, retrench.
As for all of your activities that you can do living wherever it is you live, wow, I’m completely underwhelmed.
I love Miami, but can we please stop comparing it to NYC! Not even close. Yes the climate is great but come on, it is nor will ever be NYC. Again, I love Miami and will eventually live here. Reality check…
So, a young couple making 125,000 combined with 20 percent down can buy in the 400,000 range. People in Kendall and Doral and South Miami and Pembroke Pines and Coconut Grove and Coral Gables and Morningside and Palmetto Bay have been paying 500,00 and up for at least the last ten years. Even in the Roads area you cant get much for 500,000- even now. These are brand new and the views are some of the most incredible you will see anywhere. I would rank some of the views in the new buildings better than a Sydney Harbor view or a Hong Kong Harbor view allmost as spectacular as a good San Francisco apartment. The large inventory will hold back prices for 1-3 yrs tops . You guys are playing this like the stock market and dismiss views like AJ and HSM who purchased a “Home”. Your missing the point.
jcrimes
Good to see you come out of the closet. Dont you feel better now.
Maybe you all need to wake up and smell some cow dung. This is not the America you knew from the 50’s or the 60’s.
Back in the days, single people lived in cities, most likely in a flat, then got married, moved to a suburb to raise children and then retire or move to a warmer place or an urban center of convenience.
Unless you have been living under a rock, you will know that such quintessential American lifestyle is changing very rapidly or has already changed for the most part.
Compared to other earthlings, Americans used to move a lot. In most parts of the World, you either move once or in cases of many Asian countries, you may not even move once! Many in these countries, actually die in the same house they are born!
This is where I am getting at. American lifestyle has slowly started to mimic the rest of the World due to globalization. We are no longer a country of 10% rich, 10% poor and 80% middle class. We are becoming like the rest of the World, where there are super rich, a small middle class, very poor and working poor.
Those who are stuck in some kind of time warp should really open their eyes and see the writing on the wall. It is no longer possible for a high school drop out in this country to go out and get a assembly line job, paying 30-50 times of what a fellow earthling would earn in say Mexico or China. The days for the uneducated to make it to the middle class lifestyle in this country are over. In 20-30 years, Americans would be living just like anyone else on the planet.
So don’t be surprised, if people start living and rearing families in flats just like their counterparts have been doing in the rest of the World such as Europe and Asia.
And by the way, get that notion that the house prices are out of whack. People in Peking, Bombay, Rio, Hong Kong have been routinely paying 30-50 times of their annual salaries to buy a flat with out the world falling apart. So you guys are predicting an Apocalypse when the home prices in America are 5-10 times the annual salary? I am not talking about the short term anamoly that has been created in Miami by the way of excess inventory. But in the long term perspective, the prices are affordable or even ‘dirt cheap’ compared to some major cities of the World.
The naysayers have missed the bus (either due to lack of knowledge or a desire to buy RE or simply for the lack of money) during the preboom years of 1999-2001.
Naysayers have again missed the bus during 2003-2004, to buy a new preconstruction flat with a million dollar view for a realtively affordable price.
Then came 2005, 2006 and 2007. All these people have watched with total dismay, the end of their dream of ever owning a flat.
Comes 2008, 2009 and 2010 and life gives them an incredibe second chance to redeem their mistakes of never buying a home for themselves. But instead of saving up and looking out for a deal, they are convincing themselves and trying to convince others that if they wait and wait and wait, they will find a pot of gold at the end of the raibow somewhere.
Good Luck!
AJ.. Interesting. I sadly have to agree w/ you when you stated that the middle class is dissolving in America. This is a huge issue and should be addressed by the next president (whom ever it may be). The cost of energy, groceries, and regressive tax structure are doing a great job in destroying the middle class across America.
However, I find one incredibly large flaw in your reasoning. Where does supply and demand come into play? While the population in Miami has steadily increased over the past 5 years, the number of units on the market has far outpaced the population growth. I don’t have the stats to back me up on this, but I guarentee there are many more (20x perhaps) vacant properties in Miami now, then there were back in 1998. Supply is insanely high. Coupled this with a recovering dollar, rising mortgage rates, and tighter lending standards, I don’t know how properties could have any appreciation at all over the next 3-5 years.
Concerning the other cities you mentioned, Hong Kong, Bombay, etc. In countries whose population have exploded over the past 20 years, I imagine there isn’t as much supply (relative to the population) on the market in those cities as compared to Miami.
The only thing that can take Miami to the next level is to start becoming a larger player in the financial world. I will use the old analogy with Chicago-Detroit back in the 30’s. The two cities were running neck and neck in terms of economic stature. Detroit’s and Chicago’s economies were always largely dependant upon manufacturing and other blue collar professions throughout the 1930’s – 1970’s. Once those professions took a nose dive, Chicago decided to become a major financial centre, while Detroit did not. Take a look at the two cities now. The same can be said to Boston-Philadelphia, but to a much lesser extent.
AJ,
Well spoken !!
AJ: And by the way, get that notion that the house prices are out of whack. People in Peking, Bombay, Rio, Hong Kong have been routinely paying 30-50 times of their annual salaries to buy a flat with out the world falling apart.” This is because demand greatly outweighs supply in these locations. These cities have seen explosive population growth. Miami Dade and Florida in general are seeing a decline in its population. Couple this with excess inventory and it is easy to see how your logic is flawed as it does not take supply and demand into consideration. The two main factors which impact RE prices. You cannot compare Honk Kong and Bombay to Miami because the supply and demand numbers are not even close.
actually Kramer….i felt pretty damn good before i put post #75 up. business has never been better and will only get better in the next two years. factor in the cash i’m making and the fact i’ll be able to buy something nice on the cheap (notwithstanding your irrational cheerleading about the state of the market), and really, i can’t complain.
jane
don’t ask AJ about economics. that’s not part of his consideration when espousing the virtues of owning miami real estate.
btw kramer, your math with respect to your ideal couple simply is unrealistic. and the fact that you compare some of these new buildings to waterfront property in sydney, san fran etc., good god man, jonestown could have used you back in the day.
hahaha, Jamestown.
Hey Ahmadinejad, why stop at 30-50 times income? Lets make it 100 times annual rent too.
Interested,
That is exactly the problem with many of your compatriots. That is exactly why, we need someone exposed to the world and not a gun toting bimbo as a VP. You are exactly the reason why the rest of the World laughs at Americans for their utter ignorance and lack of knowledge about the world. Probably you are one of those millions of Americans who think Santa Fe, New Mexico is in a foriegn country and who cannot pin point either Washington DC or Russia in a map!
Just an example,
Per Capita income in India $500/annum
In the city of Bombay it is $3000/annum
Cost of a decent (not a luxury) flat in a OK location (not the swankiest) in Bombay is $150,000. That is 50 times the annual income. If you want to buy the same flat in a slightly upscale location, the cost is 100 times the annual income ($300,000).
If you want to buy it in the best areas of Bombay, you only have to be a multi Millionnaire. So stop laughing and learn something!
AJ: “That is exactly why, we need someone exposed to the world and not a gun toting bimbo as a VP. You are exactly the reason why the rest of the World laughs at Americans for their utter ignorance and lack of knowledge about the world.”
So, it’s the “EMPTY SUIT ANDROID” that has you all riled up. It’s not going to happen so get over it!
Jane Q and Angel,
I agree with you guys. Miami is not Bombay and Hong Kong. I mentioned them as a reference of what can be a housing pressure mean to us. The oversupply in Miami is a temporary phenomenon. What should have been built between 2003 and 2013 (10 year supply) has been made available by 2008 (in 5 years). So it is not the end of the world scenario. We will catch up to it very soon and the excess inventory will all be consumed by end users by 2013. But there is an interesting thing happening which no one is talking.
Because of a knee jerk reaction, 50 odd projects have been scrapped. Just in the upper East side and edgewater, up to 25 buildings have been shelved. Mark my words, as 2013 approaches, and there is not a sigle flat or home being constructed, it will be a completely different story then. This credit crunch is also a temporary phenomenon. It will blow over next year. So combined with a better economy, loosening credit and drying up of all availble housing by 2013, I will be watching the fun. I may even do the ‘I told you so’ dance.
Unrelated,
From your mouth (or key strokes) to gods ears!
AJ,
True, most of the world laughs at the U.S. But, at the end of the day I am still an American living a great life while they are still living in (insert country here). After traveling extensively throughout Asia and Europe, you couldn’t pay me enough money to live anywhere else. Sure, Paris and Lyon are great for a visit, but I would never want to live in a country like France. Quality of life for a driven, career minded professional isn’t all that great elsewhere.
Oh yeah, and if you are looking to laugh at someone, laught at the Japanese. Take a look at their real estate market throughout the 80’s to present. During the peak in the early 1990’s, families were taking out 100 year mortgages and had their children sign off on it. Most homes were selling for over $2,000 sq ft. Guess what happened next, AJ? Over 15 years of home price depreciation. Imagine taking out a 100yr mortgage for 3 mil (in yen), then 15 years later seeing the same place sell for 400k. Ouch.
Jene Q,
And the point is????
1. Ok. America is a great country. That is why I am here in the first place. But since I came here in 1996, It has been downhill ride in this country ever since.
Don’t tell me about the glory days of America. Tell me what our great country is doing to catch up with the rest of the World? Power grid failures, bridge collapses, crumbling roads, kids who don’t know from their ass to their elbow – leave alone how to add 2 & 2, slipping in sports, slipping in sceintific innovations. OK I am as proud of America as you are about individual rights, privacy, right to life and liberty, due process of law etc. But what happened to all of these lofty principles in the past few years? What can you say about idiots who inhabit this country, who rename French fries as Freedom fries?
So instead of saying “I would never live anywhere else in the world, you should be wondering and thinking, how can we as Americans keep America, the great leader and a great nation it has been for the past 100 years and let it not go to dogs”
2. You answered your own question by taking a wrong example. JAPAN.
Do you know it is one of the very few countries and the only industrialized country with either a single digit or sometimes negative population growth? Do you know it is the oldest country (people wise) ? Do you know that Japan will never import outsiders and give them citizenship, even if their factories are struggling to find workers?
And now, you tell me, why you think Japan’s housing is doing so poorly and then also explain to me what is that got to do with Miami?
AJ said: “Unrelated,
From your mouth (or key strokes) to gods ears!”
I have a feeling you misinterpreted my statement. The “EMPTY SUIT ANDROID” I was referring to was Barack Hussein Obama II.
It doesn’t matter who the VP is.
AJ said
“The oversupply in Miami is a temporary phenomenon. What should have been built between 2003 and 2013 (10 year supply) has been made available by 2008 (in 5 years).”
I think the phantom ‘buying interest” that fueled the constructon boom from 2003-2008 is the thing that was temporary and speculative. Unfortunately for developers, you can’t “undo” the condos that have been built and are already in the pipeline.
Fortunately for urban planners and middle income families, this oversupply of condos will get absorbed, but unfortunately for developers and flippers and banks, the absorption will occur at a much lower price-point than “market rate”.
This fraud boom-bust thing is bad for developers but good for the city and families in the end. The city gets to fill up a blighted area with modern housing and families will eventually get to move in at less than developer costs.
JL,
Exactly what I have been saying. It does not matter, on whose backs and misery, some ordinary families will get to enjoy top class housing at less than market rates, the benefits are accrued to a larger group of people than the losses for a smaller group of developers, fatcats and flippers.
I have said this a few months ago on one of the posts. “let us raise a toast to all the greedy developers, scumbag realtors, flippers, low life mortgage brokers, corrupt politicians, SOB appraisers and so on. If not for them, these brilliant and beautiful condos would never have come up in Miami.”
It transformed the city to unbelievable heights and gave an ordinary bloke like me a chance to buy a flat with a Zillion dollar view in a luxury building, which otherwise would have been an exclusive domain of the rich and super rich.
AJ – Why are you so eager to encourage people to enter into the biggest financial mistake of their lives? Prices are going to continue to decline substantially for sometime. Thankfully, banks are (mostly) putting the breaks on this and not lending to those that can not afford it.
Kramer: I dont know if you would lump me into group of naysayers. 🙂 I work in IT and have nothing to do with the real estate market. I own a townhouse and benefit from the prices of real estate staying high. When prices drop, I lose as I am a home owner living in coconut grove.
About your comment: “People in Kendall and Doral and South Miami and Pembroke Pines and Coconut Grove and Coral Gables and Morningside and Palmetto Bay have been paying 500,00 and up for at least the last ten years”, I dont know what type of places are you are referring to. 2 Bedroom condos with ocean view in south beach were going for under 500K ten years ago. I think you could have bought a penthouse in Grove Towers (in coconut grove) for 500K ten years ago. Check out zillow.com for historical prices.
Hi Tom,
I have mentioned previously the criteria for those who are in the market to buy. So I am not putting a blanket buy sign accross the board. I will repeat those criteria again:
1. You must be the end user
2. If you are not the end user in the immediate future, you must be at least having enough means to enjoy the flat as a 2nd or vacation home.
3. If not having a means to keep it vacant for 2nd home usage, be prepared to rent it at a subsidy if required as long as the subsidy does not exceed 15 to 20% of the carrying costs.
4. By buying now (provided you have the cash or qualified for the loan), you are having the pick of the litter. You get to buy the best line on the highest floor with the best views in the most luxurious building in the most desirable location. You do not have to compete with everyone and their mother when the buying frenzy begins.
5. Just by not clamming up and crawling under a rock, waiting for some bottom to occur, you must be actively in the market, scouring the deals. There is always some desperate sale out there, which is better than a foreclosure and a bottom price. Why do you want the people not to benefit from such an opportunity?
And people are going to pounce on me for point #3. We have discussed ad nauseum, why it is Ok to subsidise the reneter by a small amount. You buy this dream flat of yours because you want to live in it one day. So it is a small price to pay to keep it warm and occupied until you are ready for it.
In any case there are 2 schools of thought about carrying costs. In many parts of the world, people save and buy a flat or house outright with out a mortgage on it. So the carrying costs are only the maintenance and taxes on it. in a similar sense, if you do not count mortgage payments as part of the carrying costs, you will actually be making money on the rent.
And why should the mortgage payment be considered as a cash out flow? The principal component is going to build your equity, the interest portion is tax deductible. You are benefitting at the end.
I reiterate my point again, If you are an end user, there is no better time than to be on the lookout from now until 2010 when time is on your side. When you find a flat of your dreams and if you think it is a great price and you can afford it, go for it. Timing the bottom is not for individual buyers.
If you have not bought something by 2010, then you should have a sense of urgency until 2012. After 2013, I think it will be very unpredictable.
AJ, I have to agree with Renter Tom (maybe my long lost brother). I wouldn’t push 1st time buyers into making the biggest financial mistakee of their lives. Even the banks, who were the biggest RE cheerleaders, are now starting to wake up.
The only reason I can see for buying a place now, is if you plan on living in it for a long time (> 10 yrs) AND if you get a place for 30% off of the asking price.
Jane Q. Renter – We should go out for a drink…I live on the beach, great condo and would buy it once prices settle, right now it looks like I won’t consider it until my lease is nearing an end (have a renewable lease option with a tenant only early termination clause….) since right now I am paying 1/2 the price of owning, not including the cost of falling prices!
AJ – You need to look at what the “real cost” of things are. Just because you buy a house for $500K and 15 years later it sells for $1M, doesn’t mean you made money on it. The opportunity costs of simply putting the money in no-risk inflation adjusted treasuries would probably give you a better return without the risk of tying up your investment money in an illiquid asset. Just as you tote that neighborhoods are going to improve (where you live is some sort of future fantasy land I take it) the opposite can happen too. Real estate can be very high risk long term since there are sooo many factors out of your control such as insurance rates, taxes, neighborhood changes, traffic changes, business relocations, etc. It is a LOT of risk for taking on things outside of your control and getting so little back. In this market, unless you can buy at 1999 prices in a predictable area with a stable and established HOA, be cautious.
I sure wish I could find an updated graph of this:
http://www.nytimes.com/imagepages/2006/08/26/weekinreview/27leon_graph2.html
since the last update was 2 years ago.
Most people, when they get near retirement, find that their home is their largest asset. Why? Because the 30 year mortgage was a really forced savings plan. With HELOC’s etc. and other Housing ATM loans we’ll see a lot more retirees without substantial home equity. Who is gonna pay for their old age when the fed govt can’t borrow more???
Not quite 10 years ago, but close.
http://www.time.com/time/magazine/article/0,9171,985690,00.html
This one is for AhmadineJad (AJ).
Let’s Get Real about Real Estate
By Peter Schiff
Once again, real estate market watchers have pounced on a shred of seemingly positive news to proclaim that the long sought “bottom” is in sight. The routine is becoming extremely stale, but somehow the media never seems to tire of it. This time the “good” news was that the percentage declines in national home prices (according to Case Shiller) in July where not as large as they were in June. Although the report contained many other negative data points, including increased inventories and a spike in foreclosure sales, it was the slowing declines that got spotlight. Talk about grasping at straws. The truth is that real estate has been grossly overvalued for years, and the adjustment process back to realistic pricing has only just begun. The problem is few among us seem to appreciate the magnitude of this adjustment and its implication for an economy dependent on inflated assets values.
By most accounts, the decade long housing boom began in 1996 and finally went poof in mid-2006. In January 1996, the Case Shiller 10 city composite home price index stood at 76. By June 2006 it had tripled to 226, by far the largest increase in U.S. history. Since then, the index has pulled back by 20% to 180. For those who believed that home prices could never retreat nationally, this 20% correction is more than enough. In reality, it’s just the down payment.
When real estate prices were expected to rise in perpetuity, the price of a house had two components, one representing shelter and the other investment. The shelter component was the actual utility and desirability of the house and the investment component was the expected future appreciation. My guess is that at the peak of the real estate mania, a $500,000 house might have been comprised of $250,000 for the shelter component and $250,000 for the investment component.
In effect, the appreciation potential, and the ability of the homeowner to tap into it though refinancing and home equity loans, offset the real costs of home ownership, such as mortgage payments, taxes, insurance, and maintenance. So the main reason a buyer would commit to a mortgage that would soak up 50% of his disposable income was that he expected to recover most of that outlay through future appreciation. Absent the expectation of that windfall, buyers would not have been willing to pay such staggering prices for houses or commit to burdensome mortgage payments.
Lenders were caught in the same delusion. Since they too believed prices could only rise, lending standards were thrown out the window. If the collateral (the house) were to always rise in value, what difference would it make if the buyer made the payments? In effect, instead of relying on the borrower’s ability to pay to mitigate its risk, lenders merely relied on the house’s ability to appreciate.
However, now that real estate prices are falling, lenders are beginning to rely solely on the borrower’s ability to pay. As this trend continues, lending standards will tighten and mortgages will be brought back into line with the incomes of borrowers. In addition, down payments will be larger to reflect the greater likelihood of losses should loans end up in foreclosure. When prices were rising the foreclosure risk was negligible. However, now that foreclosures are soaring and recovery rates are less than 50 cents on the dollar, those risks are enormous.
So with falling real estate prices, mortgages are much less appealing to both borrowers and lenders. The only solution is for home prices to fall to where they are cheap enough for buyers to afford the mortgage payments (both interest and principal) without relying on appreciation, teaser rates, or negative amortization, and save enough for a down payment that would protect a lender in the event of default. In addition, the collapse of the mortgage securitization market means houses must be cheap enough for our limited pool of domestic savings to supply the funding, as we will likely lose access to much of the foreign funding that fueled the bubble.
Of course we need to be honest about the winners and losers of this credit crunch. Just because mortgage money becomes scarce and lending standards tighten does not mean people will not be able to buy houses –it simply means they will pay a lot less for them and that fewer new houses will be built. Therefore it is sellers, builders and those holding or insuring existing mortgages who lose, while buyers win big. That is because despite higher interest rates and larger down payments, they end up borrowing a lot less money. In the end they will become true homeowners rather than indentured servants. If home ownership is truly is the American dream that so many realtors profess, then the ongoing collapse in home prices will be a dream come true.
Gosh i am close to abandoning my search for a place.
JL’s article (# 105) made me shiver. It confirms my pre-existing view that the fiscal situation of the state is terrible. Like in California, i don’t know how they’re gonna get out of this mess.
I think real estate prices will bottom by early 2009 as i said. The question is now more ‘do i want to be in Miami at all rather than the price.
Not only the state and municipalities are broke, but also the prospect of being in the same city as someone like ‘interested’ (or any other of his aliases) is frightening.
That’s good bye from me folks!
Argue all you want, just have enough class to refrain from name-calling and racial slurs. You only discredit yourself and your arguments by reducing yourself to that level.
la la, aren’t you Iranian also?
la la,
I went to elementary school together with interested.
I remember well, he thought all countries over the ocean must in the empire of Iran.
Though he couldn’t read well, he loved the fairy tales of the Arabian world.
He was quite a dreamer.
interested,
Thank you !
I didn’t understand today’s world anymore.
But you helped me very much.
Now I see, the economics are much simpler and life is easier than I thought.
You have only to wait until the good times come (again).
Dont’t spend today, everything will become cheaper.
Hey moron,
What’s this: “I remember well, he thought all countries over the ocean must in the empire of Iran.
Though he couldn’t read well, he loved the fairy tales of the Arabian world.”
You talk about lack of diversity don’t seem to recognize or respect the fact there is a vast difference between “the Arab world” and the “Persian” (Iranian) world.
Ever explored the difference between Sunni and Shiite ? Your bad.
Hey, why is being called Iranian such a “slur”. A little defensive are we?
Sup Guys,
This is the text of the e-mail I recieved from Rich Strell of NEAR regarding the tomorrow (6:30pm) meeting at the 30th street starbucks.
If any Pace Park resident or anyone who wants to preserve the integrity of the Arts Center like to attend, that would be great.
Agenda:
Communications Specialist from Miami Police to talk and answer
questions about what happens when you call 911, and victims efforts at
follow up on police reports, calls to officers, etc.
Discuss Walmart in negotiation, across from Performing Arts. Semis
making deliveries, ie, traffic problems from it, etc, how will it
effect our entire area?
(Residents in the area of 1800 Club, Quantum, Plaza Venetia, etc are
already organizing against it).
Update on Parks, Billboards and more. Bring your questions,
suggestions, and info.
Thanks,
Richard
[email protected]
Is Housing Bottoming? Don’t Bet On It (August 18, 2008)
http://www.oftwominds.com/blogaug08/false-bottom8-08.html
Frequent contributor Harun I. provided a cogent summary of the fundamental forces weighing against those anticipating a near-term bottom in housing prices.
More Home Loans on Edge Interest-only and Alt-A borrowers may be in the next wave of foreclosures. (Merced CA Sun-Star)
“Prices likely won’t increase if supply vastly surpasses demand, but they will only fall so far before hitting a natural bottom, he said. California’s growth rate, rental rates, construction costs and income levels help determine that level, and O’Toole said he thinks some communities, such as Stockton, which leads the nation in foreclosures, might already be near the bottom.”
This is like saying that your injury will stop hurting when the pain goes away.
The mantra many others and I have been repeating is that home prices will fall until they are in line with income. But I realized that is, perhaps, a gross miscalculation which I must address. I have new hypothesis: Prices will fall below the level of median income support; they will overshoot to the downside and bottom at “market clearing” prices. (emphasis added: CHS) The reasons are high inventory, high unemployment, scarcity of credit, scarcity of qualified buyers and poor sentiment.
Alt-A and Interest Only mortgages are going to be the next big wave of RRE defaults, which will dump more inventory on the market. The number of homes on the market in the US will take several years to clear in a normal environment but bubbles are obviously not normal. High inventories will demand lower prices.
In other words, if builders flooded a normal market with inventory, prices would have to lower in order to sell those homes regardless of incomes. This factor alone is the most important. Regardless of wages, prices will overshoot downward because there is too much supply. One may argue that population growth will create a greater demand and I would reply that that population must have employment and wages and be creditworthy in order to qualify. Which brings us to the employment factor.
Don’t look to BLS numbers for any realistic view of employment. By the time the numbers are high enough that even the BLS numbers look bad, that means the problem is already very deep. Unemployment is at a historical low, and we like to think we can exist as a service economy but as this illusion unravels, as it is presently, unemployment will increase. The trend will be like any other, it will persist longer than and further than anyone thinks. High unemployment will create a shortage of qualified buyers. This will be another factor pressuring prices. I do concede that this implies an income factor, that factor being zero.
It is no secret that banks are in need of cash and RRE losses are nowhere near over let alone the coming CRE debacle. Currently they have been raising money just for losses, their ability to lend is greatly reduced. Securitized products may not be dead forever but they are dead for now. Banks that have to keep loans on their books are going to be discerning along more traditional lines than they were during the bubble. It will be difficult to get a loan under normal lending standards. This will play a role in decreasing the pool qualified buyers, which in turn, will keep inventories high, which will pressure prices lower.
Market forces will propel long-term lending rates (risk premiums) higher regardless of the Fed. Home prices must fall to offset the difference, as this once again will impact the number of qualified buyers at any particular price point. The low saving rate in the US says that most don’t have a 10-20% down payment. Saving up an adequate down payment will be harder with high unemployment and low wages. The current wave of foreclosures will create a pool of ineligible buyers for at least 4-7 years after the event. Even if they are considered, interests rates will be such that prices must be lower in order for them to qualify.
Finally, poor sentiment will take hold. At some point, people will not want to have anything to do with real estate. The losses will have been so great and gone on for so long that the widespread idea of RE as easy road to riches will fade. This is good, as it will mark the beginning of the bottom. When magazine covers highlight the permanent death of the housing market it will be one of many signs that the sector trend is about to reverse. But don’t expect this anytime soon. Japan was in much better shape to weather their bubble and though the bubble has deflated, in reality, they still haven’t recovered.
In summary, prices will fall to market clearing levels and that level is not singularly tied to incomes. Even in normal markets prices oscillate around the mean. After such a great distortion (bubble) it is somewhat unrealistic to think that prices will fall right back to the mean. The deflation of home prices is nothing more than a trend, and it will persist. Affordability is a factor in the clearing of inventory but it is not the only factor. It is the other factors that I have mentioned here which form a positive feedback loop which increases inventory, a combination of factors that I believe will cause RE prices to slip below median income support.
Thank you, Harun. Housing Bulls believe certain “backstops” are already in place which will arrest housing’s free-fall. One is low interest rates, which as Harun observes, will be rising regardless of the Fed’s attempt to change the tides with its Fed Funds Rate sand-castle.
The second one is income, which as Harun notes, will be pressured by rising unemployment and stagnant wage growth.
The third “backstop” is no-down/low-down payments, enabling a large pool of households with no real savings to qualify for a mortgage. But with credit drying up and standards rapidly being raised to limit risk, a paucity of savings will greatly reduce the number of households who truly qualify for a conforming loan.
Recall that many households are so burdened with debt (auto loans, student loans, credit cards, etc.) the notion that they are low-risk candidates for immense new mortgages does not align with the new “recognition of risk” lending realities.
A fourth backstop is “replacement value,” a notion which I have seen used recently to justify the purchase of still-overpriced properties. For instance, “you couldn’t build this for the asking price.” Perhaps, but in a nation with some 15 million vacant homes, who will be risking capital building more luxury homes in markets glutted with vacant luxury homes and condos?
Bottom line: replacement value shows up in appraisals, but not in the market price, which is set by the demand of willing buyers, the ready availability of mortgages/ money to borrow and the inventory of available houses.
Supply and demand do not respect replacement values. Homes in highly desirable urban areas with walkable neighborhoods and nearby public transit and retail are still commanding bubble-era prices here in the San Francisco Bay Area, as these qualities are still attracting buyers who are qualified by virtue of huge cash down payments–vast cash positions which in many cases were created by selling their previous homes at the bubble top 2005-2006.
These few homes are still fetching prices far above replacement, while their exurban counterparts are slumping toward “market clearing” prices–the price at which cash buyers appear.
Meanwhile, the stock market is “discounting” further declines in housing and forecasting a “bottom.” Take a look at these charts of the Housing Sector Index (HGX) and the S&P Homebuilders ETF (XHB).
Housing Bulls can certainly point to this technical evidence in making their case that homebuilders have bottomed. But with all the traditional “backstops” of valuations crumbling, we have to ask: as the recession finally tightens its grip in 2009, who will be left who A) wants to take on a huge mortgage as their income/employment gets iffier B) is qualified for a huge mortgage by conventional lending standards and C) doesn’t already own a house (or three)?
I have been writing for two years about “false bottoms” created by speculators overly-anxious to “bottom feed” and a media primed by its advertisers and handlers to seek a “bottom” at the earliest possible point. This certainly looks like just such a “false bottom.” The real bottom in these indices will be closer to zero.
I think I posted a while back (week or so) that I now believe prices will fall below the long-term trend line. The supply simple can not be absorbed fast enough to prevent the bottom from simply stopping at the long-term trend line. Hence, we are going to over correct on the downside….the degree to which is uncertain.
Yes, I am half-Iranian, other half Swedish and Danish if you care to insult them too. And being called Iranian is not a racial slur, being called Ahmadinejad, the most hated “villian” to the Western world is. As someone who was teased and called the Ayatollah when I was a kid, it does raise hackles actually. It also seems to reflect the maturity level of some people, since like I said, this was done to me as a KID.
Lucas,
I do not believe in censorship, but when you have certain a$$holes trying to destroy your blog, you may want to take some action.
Some people may actually get turned off by the language used by this dumbass ‘interested’, who has been using a different alias every other week.
Like Craigs list, you can give the readers, a chance to flag the posts that they think are offensive or inappropriate or irrelevent.
Alternately you can do it yourself and I trust that you will be fair.
If this guy still does not mend his ways, you can just block his IP address from posting any more.
Please let us know what you plan to do with this situation, as maintaining the status quo is not a solution.
AJ,
I completely agree. I just became aware of the racial slurs that have taken place over the weekend. I try to remove offensive comments as fast as possible and ban the users but they always pop up with new handles and new IPs.
I would love to have a Wal-Mart within walking distance. They sell the same stuff as Target and most grocery stores at cheaper prices. I am for cheaper prices in food and housing. Why would people be opposed to this?
I agree about the Wal-Mart. Some of the condo tycoons fear that this will reduce the property value of their overpriced condos. The laws of economics will do that anyways.
Thanks Lucas.
Tom,
Walmart is welcome. But why should they be on a waterfront location next to the Performing arts center.
I have been asking everyone to mobilise to some how let the Walmart see the light and move 2 blocks west to the Bayview market at 17th and NE 2nd ave.
BDB is building bayview market in a 7.35 acre lot. Lowes is on board. Walmart will be the perfect fit for them. It is more convenient and walking distance to most buildings in Pace Park, actually closer than the present proposed location.
So once again, We are not advocating the cancellation of Walmart altogether. Just asking for a realignment of location.
Also the area between Maimi Herald and the arts center is just fine and very safe. I can also wait another 10 years for the City Square project to finally become reality. No rush at all. But if Walmart decides to join Lowes in the BDB’s Bayview project, it will electrify the NE 2nd ave. It will do wonders for that area as no one can imagine.
The location is 3 blocks to West and 3 block to the North of current proposed location and also with much easier access to the highways.
Great story in the NYT about miami:
http://www.nytimes.com/2008/09/01/us/01miami.html?pagewanted=2&_r=3
Oops, this is the proper link:
http://www.nytimes.com/2008/09/01/us/01miami.html?_r=3&pagewanted=1&oref=slogin
AJ,
How concrete is the Bayview project ?
When is it going to be realized ?
I didn’ hear anything about it in the last months.
AJ, I cannot believe you want a Wal-Mart anywhere near downtown. I don’t want to knock Wal-Mart or the folks who shop their on the 1st and 15th of every month, but I don’t think it belongs downtown. Why not bring in some small mom-n-pop restarants or speciality shops (bike store, Apple store, etc, etc.). Shopping for specialty items is part of a real downtown experience. Folks that shop at Wal-Mart usually just care about acquiring junk they don’t need on the cheap. Lets keep it classy (or at least try to).
Also, no need to resort to racist remarks on here. It is easy enought to put the HousingHeads in their place by just throwing some facts at them 😉
From Mark’s link:
“As of last week, 24 percent of the roughly 34,000 single-family homes for sale in Miami-Dade and Broward Counties — and 20 percent of the 47,000 condominiums — were listed as potential short sales. ”
Is there a public site that breaks down listings like that?
Also, re: WalMart location. I think the current location would make it less of a traffic problem if the intended target is Miami Beach.
Also, the retail space they are talking about is quite large. They need WalMart as an anchor to ensure it’s success. Behind the Performing Arts center next to the overpass in a sketchy gloomy looking area. It’s a perfect recipe for build it and then see it die in 5 years if you try to create a Merrick Park in there.
Jane said
“Why not bring in some small mom-n-pop restarants or speciality shops (bike store, Apple store, etc, etc.). Shopping for specialty items is part of a real downtown experience. ”
There’s a lot of room for those stores all up and down Biscayne. I’m not an urban planner, but I think downtown would be pretty cool if that is how it plays out.
Having a Walmart in a huge shopping space along with a bunch of moderate priced stores tucked behind the Performing Arts Center while you have restaurants and eclectic shops up and down Biscayne. That works for me.
If you see downtown right now, adventurous stores are popping up on Biscayne. Why not keep it that way. Do we need to jam a bunch of eclectic shops in a shopping center hidden next to the Performing Arts center? Why not keep the status quo as these shops are starting to fill up Biscayne and use the Shopping Center location for Shopping Center kind of stores.
Maybe I’m in the minority, but I think a thriving shopping center 2 blocks off of Biscayne will encourage more niche stores to open up on Biscayne and
that’s what downtown really needs.
The shopping center is a side issue. The Performing Arts Center is a side issue. If downtown is going ot prosper, it needs to fill up Biscayne with retail and get rid of the blight.
So, if we get the Walmart then prices will start appreciating again at 10%/year? Better start buying properties now.
It is a terrible idea to place a walmart in and around a ” luxury community “.
According to the new york times 2/3 of properties for sale in Miami-Dade are non-owner occupied. Renting is about to get a whole lot better…..
Jane Q,
Unfortunately, it is not up to us anymore. We have no say in the Walmart decision. If Walmart really decides to bulldoze its way next to the Arts center, there is nothing we can do to stop it. A law suit against them will fail. One cause they have billions and secondly, the law is on their side.
The present commissioner Sarnoff said that “My hands are tied as the previous administration approved the City Square project for retail without specifying the kind of retail”.
He is trying to say that there is no specific ban on big box retailers when the previous admin gave the go ahead. That is the unfortunate thing about our lousy politicians who did not see the implications of their actions.
Now, the only thing we can do is try and pursuade walmart by reasoning with them that, if they move a bit away from the exalted arts center, it will be good for the City of Miami, The locals, for the Walmart itself. Other than that there is precious little we can do at this point.
Marc Sarnoff already said that “Even though I cannot stop the project…..” meaning, with out saying in so many words, he implied that walmart will have a tough time executing the project as the commissioners office will give a million objections for many things or even the slightest changes that they propose. In other words, he will be a thorn on their side. So walmart may ultimately decide that in their own best interest, it is not worth rubbing everyone the wrong way (or maybe not, as usually they are really pigheaded).
Visionary,
Even I like to know the fate of Bayview Market. I tried to dig deep and find out more on BDB to no avail. If anyone knows anything about bayview, please post it for all of us.
I know that Lowes is on board bayview but Walmart signing up with them will get that project up and running in exactly 2 seconds. Also it should be much cheaper for walmart to join hands with BDB’s Bayview. The City Square parcels of land are being bought by Terra group for $190 million and being resold to the Indiana Developer for a profit. So that makes it a very expensive piece of land compared to the Bayview market’s 7.35 acres of land which was aquired for a song by the current developers BDB and they can offer much sweeter terms to Lowes or Walmart.
All this may never come to pass if Terra group decides not to close on the contract with McLatchy’s by the end of the year to buy up the 4 parcels of land for $190 Million. So we all have to wait and see what happens by December.
lian said:
“It is a terrible idea to place a walmart in and around a ” luxury community “
There is no luxury community in or around the proposed Walmart location/Performing Arts Center, just blight.
My two cents worth as to how I see things,
During the roaring 20’s people bought stocks on huge margins using money they didn’t have. Abusing credit they couldn’t back up with the help of lending standards that were lax at best by banks who thought that they were going to make a killing. Well, the market eventually gave way; the credit markets, along with many of the banks, disappeared; consumer confidence was decimated; unemployment skyrocketed and the rest is history…
I certainly hope this doesn’t happen again to the same degree or it’s really financial armageddon, but it certainly parallels some historical facts doesn’t it?
I don’t have anything to gain by a collapse of the market; in fact, plenty to loose, but I can’t say that I am not seeing the writing on the wall. I hope I’m wrong…
Would everyone object if it were a Target instead? I like both Wal-Mart and Target and really like the Super Targets, but Wal-Mart does have better prices. Wal-Mart also has different stores and can make the exterior look just fine. The amount of money Wal-Mart saves the average U.S. family is truly unbelievable. As for people buying things they don’t need…..well that happens at more than just Wal-Mart, think of all those extra condos people bought! LOL And of course, the overpriced designer clothes that AJ must wear to his neighborhood activist meetings. Those empty condos cost tremendous amounts of resources to heat and cool which contributes to global warming. At least Wal-Mart, in its quest to cut costs relies on solar lighting through skylights (supplemented with electric as needed – they use a computer controlled system that is pretty cool) and is about to embark on the largest solar panel project in history. Wal-Mart also uses the most efficient distribution system of any retailer in the world which allows for less burning of fossil fuels. They also work with manufacturers to reduce packaging too. Plus, people can do most of their shopping at a Super Wal-Mart which cuts down on trips. I sure hope the people that are on foodstamps shop at Wal-Mart since I’d hate to see them waste money at a Publix or Target. I have a lot of money, but I shop at Wal-Mart because I save money and am a stockholder…..a double win!
I’m not too proud to shop at Wal-Mart or clean a toilet, it is my midwest upbringing I guess.
Tom, The cat is out of the bag. You are a beneficiary of Walmart’s success. I hope your company treats its employees better. Thats all I ask.
Regarding the Wal-mart issue, there is a general meeting that is going to take place at the lobby of the building located at 1000 Venetia Way at 7 pm on wednesday. It is being spearheaded by the president of the Venetian Isles association president. The neighborhood is coming together in the fight against the present proposed location of Wal-mart. We are not against it per say, but just against its proposed exact location.
AJ – You are free to not shop there and to donate money to employees there if you want. Retail jobs in general are not a high paying jobs so if you point a finger at Wal-Mart know that it is above average in most categories…scrutinize your precious Starbucks too if you want. Yes I am biased toward Wal-Mart because they really are an incredibly run company, perfect no, but better than the competition. The Wal-Mart price competition has reduced prices at all the competing grocery stores too resulting in savings for people that don’t even shop at Wal-Mart…so don’t be an ungrateful hater
Also, my company, doesn’t need to do anything….retired at 35………. 🙂
Homeowner fraud exacerbates mortgage crisis
http://www.pe.com/business/local/stories/PE_News_Local_S_cheaters31.45b183a.html?ref=patrick.net
Some homeowners tempted to buy a more affordable house in a declining market have committed fraud to ditch the supersized mortgage they no longer want.
This month, Fannie Mae, the giant government-sponsored enterprise that buys and guarantee mortgages, began enforcing new guidelines that could help stop the practice, called “buy and bail.”
Freddie Mac, another major government-sponsored market for home mortgages, and the Federal Housing Administration, which insures mortgages, are expected to follow suit.
The abusers are homeowners who could afford their mortgage payments but didn’t want to keep a house whose value had dropped below what was owed on it.
If they just walked away, their shattered credit would prevent them from buying again. Instead they continued making timely payments on the first home. On the loan application, they led the lender to believe they intended to put a tenant in the first house so they could afford the two mortgages. But once escrow closed on the new house’s purchase, they stopped making payments on the first house, letting it go into foreclosure.
“This adds an element of fraud to a market that is already out of control,” said Inland economist John Husing.
Under the new Fannie Mae guidelines, in most cases, a borrower now must have at least 30 percent equity in his house to buy another. Otherwise, he cannot use the rent he says he will get to prove he can support two homes. The deterrence is that no one would want to walk away from a house in which he had a large amount of equity.
Also, the rental income the borrower claims now must be fully documented.
Phony ‘Short Sales’
In another scam on lenders, homeowners have been lowering their mortgage payments by arranging fraudulent “short sales” at prices less than what they owe their lenders. The buyer whom the seller chooses, who may be a relative or friend or a “straw buyer” paid for his service, agrees to transfer ownership back to the seller, who winds up with a smaller mortgage on the same house and never has to move.
In such a short sale, the seller commits fraud by having a side arrangement with the buyer that he does not disclose to the lender. When lenders accept short sales, it is because they think the price is the best they can get. Mortgage industry officials say lenders would reject a sale in which there was a special relationship between seller and buyer on the grounds that the selling price most likely was not the best one available.
Michael Pfeifer, an Orange County lawyer who specializes in recovering losses from mortgage fraud for lenders, estimated that one-quarter of the “short sales” in this market would fail to meet the criteria of arm’s-length transactions.
“Many of the brokers think it is OK, which is ridiculous. It is out and out fraud,” Pfeifer said.
Although the seller quickly regains ownership of his house, the short sale destroys his credit. But real estate agents said within a few years, he may rebuild his credit enough so the mortgage on his house can be refinanced in his own name.
Sued or Prosecuted
A borrower who takes part in one of these scams can be sued by the lender or criminally prosecuted. The real estate agent involved can be prosecuted and lose his or her license.
And a lender who discovers he has been bamboozled into approving a loan with phony information can require the agent or borrower to pay off the mortgage immediately.
However, neither the lending industry nor law enforcement has aggressively punished such offenders.
Larry Roberts, who leads the real estate fraud unit of the San Bernardino County district attorney’s office, said lying on a mortgage application is a prosecutable crime, but it has low priority. He said the office is more eager to prosecute scammers who profit by deceiving consumers into believing they can help them avoid foreclosure than it is in catching consumers who defraud a lender with the intention of buying or keeping a home.
Wrongdoers are further insulated by California law, which greatly restricts a lender’s ability to sue borrowers to collect the money they’ve lost in a foreclosure or short sale.
Pfeifer blamed the abuses on homeowners desperate to keep houses on which the mortgages have reset at higher interest rates and on “brokers who are out to get a commission and don’t particularly care how.”
Putting License at Risk
But real estate agents and brokers can be held liable, said John Giardinelli, a lawyer who represents nine Southern California real estate associations.
“I am telling them, ‘If you put your handprint on something deceptive or fraudulent, then you could lose your license or conceivably be brought up on criminal charges,’ ” he said.
Joe Cusamano, broker/owner of Pro-One Investments in Riverside and president-elect of the Inland Valley Association of Realtors, said he knows he has clients who have lied to lenders to “buy and bail” and done short sales between parents and children.
He said he tells them what the law requires but still works with them because he believes they are good people caught in a collapsing market who are not getting sufficient help from either lenders or the federal government.
Cusamano described one client as a young law enforcement officer and family man who was buying a bank-repossessed house next door to one he already owns in Moreno Valley.
The client could afford his current $1,900-a-month payment for his mortgage, taxes and insurance, but he saw “buy and bail” as a way to improve his family’s lifestyle. He had bought his house in June 2005 with a $294,000 mortgage, and since then, its value had fallen to about $155,000.
He noticed that the bank-owned house next door was bigger and had more upgrades, and he put in a winning offer of $145,000.
The client’s plan is to let his original house go to foreclosure, Cusamano said, and probably the only adverse consequence he will face is having bad credit for the next five years. Meanwhile, he will save $700 a month on his house payments.
Why They Cheat
Real estate experts blame the walk-away phenomenon on “nothing down” financing during the recent housing boom, which has given borrowers no incentive to ride out the real estate downturn.
Also they say more people now than in the past consider their house primarily as an investment rather than a home they cherish and for which they would sacrifice everything else.
And today’s homebuyers seem less inclined than their parents or grandparents to value their promise to repay a lending institution, Cusamano said.
Peer pressure is partly to blame for today’s profit-driven ethic, said Larry Calbers, director of the Center for Accounting Ethics at Loyola Marymount University.
“First you are a fool not to get in (the housing market), and then you are a fool not to get out,” Calbers said.
Pfiefer said he believes many people who are duping lenders do not think it a crime as they would consider robbery to be.
“The classic characteristic of mortgage fraud is that people think of it as a game,” he said.
Earlier this decade, the same scofflaw attitude in real estate transactions contributed to the current rash of foreclosures, Pfiefer said. People inflated their incomes on mortgage applications to buy homes they now find they can’t afford.
“Lying is the reason we have the economic crisis to begin with,” he said. “People thought it must be OK because they could get away with it.”
7 Money Orders
A 55-year-old man said he let a house in southern Corona go to foreclosure and bought another in Lake Elsinore, lowering his monthly payments from $5,200 to $2,100. He wanted to remain anonymous because what he did “could be construed as fraud,” he said.
He had seven money orders for $500 apiece made out to himself and asked a friend to sign a rental agreement so he could deceive the lender into believing he had rented out his first house and therefore could afford to buy a second one, he said.
His Christian beliefs told him lying was wrong, and his parents had taught him to pay his debts, he said.
“The only way I can justify it (lying to his lender) is that I think a lot of people made a lot of money selling bad mortgages to anyone who walked in the door,” he said.
Sandra Gloshen said after her husband, an airline baggage screener, was transferred to Boise, Idaho, by his employer, they were unable to sell their house in Lake Elsinore, which was then worth less than they owed on it. But they had no trouble buying a home in Boise after they told the lender they would rent out the Lake Elsinore property, she said.
In actuality, she said, it would have been impossible to charge enough rent to cover the mortgage payment, which had ballooned when their interest-only loan reset. She said their original lender ultimately seized the Lake Elsinore home.
“Some of the people walking away may have their reasons that seem good to them. But I know if I was the mortgage holder, I wouldn’t be happy about it,” said Wil Herring, president of the California Association of Mortgage Brokers and broker/owner of Moreno Valley-based Mtg. Experts Inc.
I swear this blog has A.D.D. Every entry by Lucas has to end with posts by the greatest economic thinker of our day. PLEASE, some of these posts are terminal. Get to the point or provide a link.
If anyone still reads these posts and has pertinent information on the Miami Condo market it would be greatly appreciated. If so, you can start with my question.
What is the current status or future plans for the retail/restaurant space on the bottom floors of 900 Bisc. and Marina Blue? I remember Lucas once mentioning the possibility of Gardner’s Market leasing some space. Is there anything new to report with them or anyone else?
OMG,
In this market, I wouldn’t make a decision on plans or even signed leases. To lure retail in a time like this, I’m sure they are providing liberal OUT clauses. Just wait and see if it gets built.
Lucas,
When will you update recent CLOSING STATISTICS? It’s been awhile and I need to know how some of my “favorite” buildings are doing. Perhaps, they have cracked the 10% level after 3 – 4 months in closing!
I apologize if there were NO closings anywhere in the last two months and you didn’t want to flatline your last report’s graphs!
lala # 68
Fairchild Tropical Gardens is FREE on Sundays through September
Thanks!, did not know!
Well, well, well…looks like major market forces are starting to have their effect.
—-
Unthinkable Happens: Manhattan Apartment Prices Fall
‘This Clearly Indicates That the Market Is Not What It Was’
By CANDACE TAYLOR, Staff Reporter of the Sun | August 29, 2008
The old adage that one can’t lose money on Manhattan real estate doesn’t seem to be holding up.
Recently released city records indicate that apartments in prime Manhattan neighborhoods are selling for less than their purchase prices — a phenomenon that until now was virtually unheard of in the seemingly invincible New York City real estate market.
http://www.nysun.com/business/unthinkable-happens-manhattan-apartment-prices/84900
i’m not exactly sure why that’s an old adage. manhattan re in the 90s was lackluster.
There is an op-ed for every opinion. Here is one:
Home builder shares up on valuation, broad rally Tue Sep 2, 10:36 AM ET
NEW YORK (Reuters) – Shares of home builders surged on Tuesday, outpacing a broad-based rally as investors decided builder stock prices could not fall much further.
D.R. Horton Inc (DHI.N), Lennar Corp (LEN.N) and Centex Corp (CTX.N) , the top three U.S. builders, led the rally, with shares rising about 9 percent at the market open.
The home builders’ index was up about 5 percent in early trading (.DJUSHB), ahead of the broader market’s Standard & Poor’s 500 index (.SPX), which was up only 1.4 percent.
“It looks like there could be some longer-term money heading into this group,” said Kevin Quinn, a managing director of equity trading with the Stanford Group Company. “They’ve spent a couple years in the cellar. They seem pretty cheap.”
The sharp slide in oil prices after a rally in the U.S. dollar and news that Hurricane Gustav had spared major Gulf oil facilities also boosted home builder shares.
Lower oil prices means a diminished chance the Federal Reserve will raise interest rates to contain inflation, and a lower cost of borrowing is good news for home sales.
(Reporting by Helen Chernikoff, editing by Dave Zimmerman)
Carbonblackcab post# 97
Carbon-your just angry because your stuck in one of those crummy townhouses in the Center Grove -where way too much mortgage fraud occurred. Read the Miami Times magazine articles by Elena Carpenter about 6-8 months ago about the fraud in the center grove townhomes. Or ask Mark Sarnoff.
Kramer,
What’s this: “Or ask Mark Sarnoff.”
Be nice to him. He is the commissioner who stuck his finger in “Big Gourge” Perez’s eye to stop the proposed Mercy Hospital zoning change (and got sued by Gourge for it!). So far Miami won’t have to find a way to absorb a bunch more condos which block the views from Viscaya!
Sorry Carbon-I apologize- after i reaed my own post i realize I was out of order.
I know Mark Sarnoff- and the best thing I can say about him-aside from the Viscaya vote- is that he is no friend of mine. Did you read the New Times article about him a few months back where he had claimed on his website that his grandfather was a David Sarnoff of NBC NEWS division at Rockafeller Plaza- the founder of NBC or some nonsense-and when questioned on it immediately zipped it from his website.
Here’s a tasty tidbit that should kill the few remaining housing bulls
Say ‘Goodbye’ to 95% Fannie/Freddie Loans. 10% Soon to be Required.
…On top of it all, S&P downgraded three of the mortgage insurers last week, Radian being one of them. My sources say that Radian will stop insuring loans over 90% by October 2008. If this happens, say ‘goodbye’ to less than 10% down loans or less than 90% refinances for a long time. While you are doing so, say ‘goodbye’ to the ability of many in the largest target home purchaser groups, the first-time home buyer and current renter, to buy a home…
http://mrmortgage.ml-implode.com/2008/09/01/say-goodbye-to-95-fanniefreddie-loans-10-soon-to-be-required/
History will tell us that this housing bubble was a classic liquidity/leverage bubble and not a demand bubble.
Take away the 10:1 and 20+:1 leverage in housing and let’s see what happens.
Las Vegas homes for $60 a Square Foot?
“Since the beginning of the Las Vegas housing downturn back in 2006, I’ve told folks to expect Las Vegas home prices to revert back to 1999-2000 levels – an average of ~ $60-$65 a square foot. Early on, many laughed and thought it impossible. These days however, though we’re not quite there yet, many are alarmed at how quickly my outlook is panning out to be future economic reality.”
http://economicrot.blogspot.com/2008/09/las-vegas-homes-for-60-square-foot.html
Mark, interesting link. However, that can’t happen here in Miami. Even though both areas went through the roof at the same time from similar -if not the same- speculative 2nd and 3rd home buyers, Miami is different.
We are so much more like New York. Have you ever been to Peter Luger in NY and Prime 112 on the Beach. We both have great steakhouses! What other evidence do you need that Miami is the 2nd coming of NY?
I doubt Walmart would ever go behind the Arts Center with a parking garage like that and pay rent when they can buy and build on 2nd. Can you imagine the line of cars behind someone waiting for a coveted space while the Walmart customer loads their packages, changes a diaper, buckles the kids, dumps the trash out the window etc. Walmart multi level parking garage would be disaster
Mark,
Good news !
Next year, you will get some condos in Miami for free.
You will only have to pay the HOA fees !
The developers will be glad to unload inventory to people like you.
The “worst case” housing price scenario just keeps getting worse. Larger downpayments are being required when savings are at an all time low, debt burdens are high, people can’t sell their existing home or refinance because they are underwater, etc. You used to be able to use the equity in the house you want to sell in order to move up….well when people have no equity and lending standards are strict again housing sales drop like a rock. Even if prices go way down, there are still only so many people that have the cash for a downpayment or can sell their existing homes…..buying a second, third, etc. home makes no sense since it will be a lousy investment and you can always buy one once you retire…..
This is getting worse everyday….I think I will request a rent price reduction at renewal….hmmmm
Hey Renter Tom,
If you have so much money and are retired at 35, why would you have so much interest in constantly bombarding this blog with negativity??? Why would you even care to visit this site if you are so sure prices will continue to plummet….???
What’s interesting is the divergence between For Lauderdale and Miami in the mid to Hi-End Condo market. They both went up at a similar rate, but on the downside, Miami has gone soft while Hi-End Fort Lauderdale has been doing much worse this past year. A few years back, most expected Miami to fare worse than Fort Lauderdale in a housing bust due to the much bigger Condo pipeline/inventory in Miami.
Miami’s condo market has been kept relatively afloat by the higher percentage of foreign interest and by several large projects delaying coming to market.
These next 6 months should be telling with the inventory of condos hitting. I think Lauderdale shows how bad domestic demand for 2nd homes in Florida is right now. Is there still enough foreign demand to keep things in check?
Jade below $150 psf?
WaMu sells unit 211, a 1/2 with 1293 sf for $190,000.
Is this real? This isn’t one of those quit claim deeds to a family member or straw man.
This sold for $670K last year, and is taxed valued at $618K. I’m not saying that is the current market value, but has it really fallen below $150 psf in Jade?
DLJ, I agree.
Tom, You say that you are in the market for a 1-1.5 million dollar condo on the beach. Obvioulsly you are well off. But you are going to haggle for a couple of hundred dollars off the rent from your landlord at the time of renewal, even though he is willing to give you a very liberal opt out clause and a very favourable lease terms? Something is not adding up.
Thank god, all my renters from all 3 condos I own in NY and Miami are real gentlemen. We are all very considerate towards one another and we do not take advantage of one another.
I am glad that you or someone like you are not my tenant. In these unfortunate times when landlords are already deeply subsidising the renters, If my tenant blackmails me to either reduce the rent or threatens to leave, I will just show him the door.
Perez,
Welcome back! Where have you been all Summer? Nice to hear from you again.
dlr – I came down to Florida from the midwest to buy a condo on the beach and ran right into this mess when trying evaluate what price to offer. Where I lived we didn’t have the big bubble run up in pricing and homes pretty much were priced at construction costs with cheap lot prices. In other words, where I lived didn’t get out of whack and so far from the long term fundamentals. It didn’t take me long to figure out that I just could not put a value on anything out here and wasn’t willing to lose $200K+ by making a stupid purchase decision no matter how much I wanted to buy something and settle in. The housing crisis wasn’t on the radar screen for most people in the midwest since it was really a CA, FL Las Vegas, Phoenix thing. Then I came across this blog which was helpful to get a grasp of what was going on here. I am fascinated at what happened and why…the economics/human behavior that drove up prices and what all had to occur for that to happen. Bubbles of this magnitude don’t happen easily or often. Anyway, I still am following everything since I will eventually buy and also because of my equity investments that I have and will be moving from cash into….the housing mess really has far reaching effects. One question is, stocks overall look cheap on P/E basis but that E might be too optimistic until the whole real estate matter unwinds completely. The denial out there is incredible but completely understandable. I now consider myself fairly well versed on what happened and the probable course on how this will unfold. I have helped several people avoid financial disaster because of what I have learned studying this. This blog was helpful
Here is another example of a recent short sale for $400K, bought a few years ago for $640K and put tens of thousands into it to update and remodel. A loss of over $300K. Ouch. I met the owners and they filled me in. This home, huge, nice, screened in pool, large backyard, best schools, is now selling at midwest prices…. WOW. As I have previously stated many times, toward the end of hurricane season is when we will see the capitulation where the denial is mostly over…. then maybe I can buy, not!, this thing as a long painful, way to go after that………
Oh, by the way, I have frozen my tenants rents for the past 2 years. Not because, I am afraid that they will leave, not because they asked me for it, only because I thought it is the right thing to do. I have absorbed every special assessment, maintenance increase and tax increase and did not pass it to my tenants.
In fact, all my tenants love the flats they live in so much, that even if I asked them for a 4% increase, they would have gladly obliged.
What I would never tolerate is an opportunist and luckily there are none in my life.
AJ – I wrote that tough in cheek! The owner of my unit absolutely loves me and so does the building HOA management….they are hoping I decide to buy in this building. I have heard from both the owner multiple times that she is lucky to have me as a tenant. When I vacate, the place will be better than when I moved in, guaranteed. The building HOA management has even told me that the owner is lucky to have me as a tenant and they have been very helpful doing things I don’t think they would even do for an owner!
Don’t hate on me AJ, I am very low key and shop at the dreaded Super Wal-Mart down the road on North Miami Beach Blvd. If you ever read the book “Millionaire Next Door” it does a good job describing me, except I do buy new cars and resell them every 2-5 years and the people that buy them always comment that they are just like new….
AJ –
“I have absorbed every special assessment, maintenance increase and tax increase and did not pass it to my tenants.” That’s probably because the lease doesn’t allow for that! LOL
I guess not having a COA clause for a modest price increase to cover increases like property taxes, etc. was an oversight, or you’re just a saint of a guy who is too snobby to shop at Wal-Mart, but a saint nonetheless. Keep up those neighborhood meeting you activist you…… LOL
AJ,
“I have absorbed every special assessment, maintenance increase and tax increase and did not pass it to my tenants.”
That’s nice to know because you wouldn’t have been able to pass it on to your tenants even if you wanted. By not doing something you couldn’t do in the first place doesn’t make you a good guy.
I absorbed them not because of any lease language constarints. I did so because I wanted to. I could have justified a rent increase at the time of renewal by presenting to my tenant, how much sharply higher the carrying costs have gone up. But I did not. When I draw up contracts, they are usually well thought out and takes into account all contingencies. But luckily, my tenants are like my friends and we never have to refer to a piece of paper to define our relationship.
AJ – What are you a girl or something? Seriously, you seem so emotional. The landlord-tenant relationship is defined in a lease. Glad you have great tenants which makes up for the potential hassles. Have you ever thought that your rental units helps to bring down property values in your building for the other owners? Just curious.
AJ, if you like doing business on a handshake or on goodwill, you want to get as far away from the 305 as possible. AS FAR AWAY
JL and Tom,
Do you guys read the full posts or just skim through? Pay attention.
I said that I froze the rents for the past 2 years. I dont need you guys to tell me that I cannot pass any increases mid stream. I did not say that. I had a chance to do it at the times of lease renewals but I chose to absorb all those increases.
If you are feeling sleepy, just go to bed. Dont mish mash what I am tring to say.
Tom, Obviously you must have done a great job in sinking some property values in your building in Sunny Isles.
Luckily, both my flats in Miami are in fantastic buildings and keeping up their values pretty well. The owners are well aware before they bought in these buildings that the flats are allowed to rent (long term basis only). I dont know what kind of hot sheet motel type building you are living in (maybe they rent the flats by the hours and by weekends), mine are not those kind. In fact in both the buildings that I own, you cannot tell apart a renter from a owner. Everyone is long term and everyone is very responsible.
Oh AJ, you are so entertaining at times. Don’t be mad. Seriously, pouting is for women. LOL
I know, I know, it is hard to watch real estate investments go down the toilet. You feel so helpless and alone. Where do you turn to in such times? Maybe start a “shadow” condo government or rally against a Wal-Mart, those activities are always fun and so satisfying. You really are making a difference in this world you know. Still. there is nothing you can do about your condo price declines except for the warm fuzzy feeling of being friends with your tenants…that is priceless. No one can put a value on that no matter how much prices go down. But my tenants love me, they really and truly do!
..by the way, the I lose a little each month but I make it up in volume approach doesn’t work…or maybe I can pay in hugs and kisses….. LOL 🙂
You know I’m just funnin’ here.
Hey DlR
AS an avid reader on this blog , I can’t understand why you would question Renter Tom’s presence and reasons for posting .It’s not your place to make such a thoughtless comment .
Tom, actually I used to have some respect for you. But of late, the more you open your mouth the more you are proving that you are in the same league and mental level as ‘interested’.
After reading what you have to say, I would rather spend an hour talking to a bum in lummus park than spend 5 minutes talking to you. That bum most likely will have more manners, respect and integrity than a self described “tight fisted millionnaire next door from the proud Mid-West” who would nickel and dime with everyone around him.
AJ,
If your tenants weren’t locked in for a 2 yr. term, they’d probably be trying to negotiate you down right now.
If you had tried to raise rents significantly 2 years ago, your properties probably would have gone unrented.
You do realize that?
Let’s play a game, out of these upcoming properties, who do you think will be the most and least successful to close?
1. Icon Brickell
2. Epic
3. Infinity
4. Everglades
5. Marquis &
6. Paramount Bay
Most successful- I say Epic
Least- I say tie between Marquis and Paramount Bay.
JL ,
Stop talking nonsense. If you dont know, just ask instead of assuming all wrong things.
Where the hell did you get the info that I signed a 2 year contract with my tenants. Is that the news of the year to me or what! I never sign more than 1 year leases with anyone. In fact my SOBE condo building HOA does not permit that.
I renewed 3 of my leases recently as follows:
June 2008
July 2008
September 2008
I kept the rents same as they have been in 06 and 07. I repeat once again, If I asked for a raise during the recent lease renewals, I would have got it.
So I may not be the Millionnaire from MidWest but I will do the right thing if I can afford it.
I won’t add any more to this. There’s a leap of faith in the reasoning that doesn’t wash that most people should recognize.
JL, I like you more and more these days.
Tom, keep on shining you crazy diamond. You wouldn’t have money for very long if you were the profligate spender that AJ wants you to be. Everything you say is 100% true. You are the voice of sanity here.
To everyone, business is business. I won’t pay one red cent more out of the goodness of my heart. I don’t care if my landlord is an angel or a demon. I get the best deal possible. It’s a cruel world out there, and I don’t intend to be taken. Anyone that feels otherwise never had money, or won’t have money for very long.
Consider this: if Tom saves 200k and then donates that money to charity, is he nickel and diming people? Any landlord (accidental or voluntary) in Miami is a mark. Just give it a few years. Rents are down 25% since last year(source: miami business review). They will be down another 25% by July 2009.
I haggled my rent from $2000/month to $1500/month. With the $500/month I save I bought a bedroom set for $11K. I was originally going to spend $5K. Do you see? I’d rather have a nicer bedroom set than be friends with my landlord. I think I made a good choice.
AJ’s latest journal entry to himself:
Whew – I just got back in from my “shadow” condo government meeting. It was a huge success. Three other owners showed up and they thanked me for my hard work and dedication. I take full credit for the two additional little mirrors in the parking garage….pat, pat, pat. I could have just saved someone’s life that lives in the building (those that work at Wal-Mart and the bums don’t count really) In addition, none of us could believe that Wal-Mart might be opening up nearby either. We plan on meeting again on Thursday at 1900 hours for our next move. Everyone synchronized their watches accordingly. Can you believe that someone is actually going to sell or lease their land to Wal-Mart…for a profit! How dare they do what they want with their own land! I for one think all landlords should subsidize the cost of renting and not increase the rental rates year to year….what are those guys thinking? Were they finance majors or something?!?!? UNBELIEVABLE! We have added to the agenda, at the suggestion of the two guys in the white coats, the possibility of getting our shadow condo government members special uniforms so that other owners can easily identify us. The first item suggested was wearing distinctive metal hats, aluminum foil was suggested. We’ll decide that at the next meeting. In the meantime, we are going to conduct a secret investigation into what is happening to all the ping pong balls in the games room. It may not be a large expense but they add up, esp. when you don’t pass on the HOA increases to your tenants. We’ll get those thieves. Everyone just love the distinctive cologne I spray on all the flyers that I put on their car windshields and a lot of feedback has suggested I must be a movie star or something from some bird movie….something about flying over a nest or something. All I know is that Jack Nicholson is in it so it must be a great movie! I just get those little goosey bumps thinking about….oh, how am I ever going to sleep tonight…
————–
OK OK , just having some fun here at AJ’s expense. If you read the recent posts, he started it! Oh well, I will stop now……LOL
Dear friends, for your consideration:
1. House price crash goes global
The property crash that began in the US is spreading across the globe, according to international estate agents Knight Frank, which said today that steep declines are now taking place across Europe and into Asia.
http://www.guardian.co.uk/money/2008/sep/02/houseprices.property?gusrc=rss&feed=networkfront&ref=patrick.net
2. Foreclosures selling at bargain prices in Miami
http://eyeonmiami.blogspot.com/2008/08/foreclosures-are-selling-at-bargain.html
Dear friends, links are now banned so google these titles for yourselves:
1. House price crash goes global
The property crash that began in the US is spreading across the globe, according to international estate agents Knight Frank, which said today that steep declines are now taking place across Europe and into Asia.
2. Foreclosures selling at bargain prices in Miami
AJ, you ask where I’ve been all summer, because I haven’t posted much lately. But the truth is I’m still reading the blog, but lately there has been too many irrelevalent, childish comments that do not interest me.
For example, my comment #162 about a recent low-priced sale at Jade, gets followed with b.s. about whether some one is wealthy, greedy, or a nice landlord … I don’t give a **** about that. Let’s keep personality out of this.
perez,
I completely agree with you !
You speak out of my heart.
Is the said Jade condo with bayview ? What floor ?
Mark – That was a good article. Who knows, maybe wealthy Americans with their soon to be stronger dollar will bailout the other country’s real estate market!
When we look at this housing bubble, what is interesting is the psychology and group think behind the run up in prices. Robert Shiller has some very interesting comments on this subject. Economics really is the study of human behavior and “belief systems” whereby people become so invested in a particular paradigm that they ignore reality around them since to face it would cause such cognitive dissonance that they simply could not handle it. We see this today, albeit not as much as last January. People were saying that the run up in prices was just not sustainable. Same goes for a lot of Ponzi schemes. Apparently group think and greed are powerful human thought processes….maybe that is why casinos always do well.
One thing that seems to hang on is rationalizations that even though I loss money each money I am better off. From a wealth accumulation standpoint, that probably is not the case, esp. with the level of risk owning an illiquid asset. One non-Miami example is Chicago which I also looked at buying in…still might. The last argument is we are going to see a huge run in housing prices if Chicago gets the Olympics. It would simply be better to make a bet on that separately and not tie that into a real estate play. Relying on asset appreciation in housing in the long-term does not seem to be realistic given the long-term Shiller studies…and of course the current environment. It will take time to change this belief system as people go through the denial phase and finally just give in to a fate that is out of their control.
With regard to this thread, how much “should” someone really value the views, that is, what is the view premium in an owner-occupied, 20%+ down payment market?
A lifestyle lived on debt accumulation instead of wealth accumulation is crashing all around us. Auto manufacturers are cutting back if not eliminating a lot of new car purchase loans. Credit card interest rates just went up again. Just as extending credit expands the economy, this major contraction will overcorrect the situation. I maintain that the house price declines will over correct on the down side. I have been hopeful, until about a month ago that that would not be the case. All signs point to the worst case scenario or those that are leveraged.
What bank would loan money to purchase this $1.9M condo and under what terms. Will it have to be owner-occupied? Will it have to be the primary residence? Will you have to put 40% down???? Anyone in the banking/mortgage business can chime in here. Thanks.
“for” those that are leveraged….
I fell into a burnin ring of fire
I went down down down
And the flames went higher
And it burns burns burns
The ring of fire
The ring of fire
——-
Pick-a-payment loans turn poisonous
Defaults on option ARM mortgages are expected to double in the next two years, driving foreclosure rates even higher.
By Les Christie, CNNMoney.com staff writer
September 3, 2008: 11:40 AM EDT
NEW YORK (CNNMoney.com) — They’re known as “pick-a-payment” mortgages or option ARMs, but their detractors call them pure poison. Now their default rates, which are already high, are about to explode, according to a Fitch Ratings report issued Tuesday.
http://money.cnn.com/2008/09/02/real_estate/pick_a_poison/index.htm?postversion=2008090311
Tom, I’ve been to Chicago. From the looks of it, they joined the party quite late. I think established markets like Chicago, NY, and San Fran will be the last to see huge declines, but they will all see eventual losses.
A lifestyle based on unsecured (and even secured credit) seems to be evaporating more rapidly than anticipated…….. The debt pushers are going under rather quickly and the debt junkies are sobering up to the reality that is.
I realize that real estate is still heading lower and the economy stinks right now. However, the housing correction is a good thing. We need to get back to reality. Florida used to be a state where you could buy a nice home for little money and save it for your retirement. I remember in the mid-80’s you could pick up a new home with 3 bedrooms, inground pool, etc for 115K in a nice area easily. We need to get back to what real people can afford(not closet millionares like renter Tom..lol). I own property in Europe and that economy is in deep @#$% as well.
On the other hand I have seen many improvements to the Miami downtown area in particluar. Has anyone read the Hearald article on the upper east side restaurants? I, like Renter Tom, will purchase a home down in Miami or Miami Beach. However, I am not in a rush and things seem to be coming back to reality. Waiting it out is to our advantage, don’t you think?
Mark (post 193)
You shouldn’t compare San Francisco to NY, Chicago or even LA.
SF (IN THE CITY) housing has been hideously expensive for decades; whether you build, buy, or rent. The overall cost-of-living for SF (city) has ranked in the top 5 or top 10, both domesticallly and internationally, since the 1980’s.
Oil prices are 25% off their high….should we bailout oil investors too???
Why is housing different?
No one bailed me out of bad tach stocks…
AJ
Construction is to begin on Bayview Market at 17 st and NE 2nd Av in the first quarter of next year, developer Ignacio Garcia Du-Quesne says-with Loews and a “major grocer” signed on in the projects 525,000 sq. feet of retail. (Miami Today September 4th, 2008 edition.)
The only way to know how “real” that Jade sale was is to wait a few months and see the next couple of sales.
If you had a bad line (211 sounds awful) plus maybe the flooring was never done and the appliances were all stripped… maybe 150 is reasonable for a quick sale?
I have to imagine by now that Hi-End end users would avoid the building because of the stigma.
People looking for a leading indicator of a market bottom might want to search Miami Dade RE on craigslist for the term “foreclosure”. If things trend worse, no good. If things trend better, then good.
http://miami.craigslist.org/search/rea/mdc?query=foreclosure
Perez,
I absolutely agree. Sometimes I too wonder, If I am wasting my time here. It is because of 2 or 3 wise asses with ulterior motives (obviously ulterior motives and not any benign concerns, as they have admitted on this post that they are cut throats) who keep repeating a million times that the market is going down. They have absolutely nothing new to say, nothing worthwhile to present, no useful information for any of us to use. They are trying to thrust their life style, beliefs and points of view on everyone else and even resorting to calling names and insults at those who dare say anything different than what they want to hear.
Instead of becoming a dialogue and a forum for all points of view, this blog is in the danger of getting hijacked by some unscrupulous elements. But please don’t stay away, you will be letting the unscrupulous guys win if all sane and honest people stop contributing to this blog.
Kramer,
Thanks for the info. I will read the full article too.
A reminder again-Most of these guys who come in here to “talk the market down” probably work for the many condo vulture firms and are paid to monitor this site and bash anyone who strings together more than 2-3 words that are positive. Otherwise why would the genious renter tom sit here all day long with his negative tone and post continuously. get out of the house tom. Dont you have any kind of life at all. And to read your post a few days ago to Jane Q Renter actuallly in here trolling for a date? How embarrassing. Btw- tom is renting in Sunny Isles where their still asking 600-7oo per sq ft to buy – a place with no ambiance at all-none- and he says the new buildings in downtown and brickell are overpriced at 300 per sq ft. Tom- get out of the house -take a break. Also anyone who has to come into an anonymous blog and brag that their rich has no class and probably no money-especially someone with mid-western values.
Kramer,
I cannot find the article about the bayview market !
Is it only in the printed edition ?
Those vultures are just realtors with a different name. If anything they are trying to get people to BUY NOW. That way they can get their commission NOW. No one can make money by encouraging people to wait. We’re just observers. You RE bulls are really starting to get paranoid. I have an interest in the market like this: if it crashes (which it is) then I will buy. I’ll give Lucas my 6% and buy a condo. If the market holds up (which it won’t) then I’ll rent. The rental rates are fine by me.
Afterall, no amount of an idiot (like me) squawking about a crashing market can make a healthy market crash right?
I guess Kramer is who AJ was referring to in #201? Ironically, AJ attacks others then complains when someone puts it right back into his face. I may be nice since I’m from the midwest, but don’t mistake being nice for weakness.
I’m renting since it would be stupid, yes stupid, to buy right now. If you can get a short sale or foreclosure at 1999-2001, then maybe you’d be OK. As far as $700/sf in Sunny Isles, I’m waiting for $250/sf I recently saw one listed at $300/sf in my building, decent unit too. Patience will have its reward. Prudent use of debt will also be rewarded.
Actually I have been on the phone and monitoring some investments so stuck in my condo with a great view all day…beats the midwest. Gonna go for dip in the ocean in a bit.
———-
Again, to get back to the blog and appease the AJ, anyone have any comments on this:
What bank would loan money to purchase this $1.9M condo and under what terms. Will it have to be owner-occupied? Will it have to be the primary residence? Will you have to put 40% down???? Anyone in the banking/mortgage business can chime in here. Thanks.
Another indicator things are going down down down….
THE ASSOCIATED PRESS September 3, 2008, 4:16PM ET
GMAC slashing work force, reduces mortgage lending
sssssssssssssssssssssssssssssssssssssssssss
Listen, did you hear that? That’s the sound of the housing price bubble deflating even more.
Oil is down 25% and people celebrate. Housing is down 25% and people get all upset and cry. I’m sorry that some people invested in oil at the peak but that is a risk of investing. I’m sorry that some people invested in housing at the peak but that is a risk of investing.
Come on, would any bank give a mortgage on this thing and under what terms???
How do I search only REO properties on MLS?
Visionary
I saw it in the printed edition.
I told you Tom the renter has no life. Having trouble finding a date Tom? Anyway we all know your a phony. Because anyone with the money you claim to have wouldnt spend July and August in Miami. And dont you have to be 65 yrs old to live in Sunny Isles? Yeah- you retired at 35 but that was 30 years ago.
Perez,
Is the JADE sale you referenced published online? If it was bank owned then, sure it’s real. But being Miami, I wouldn’t be surprised if the Bank representative is took a kickback to get it approved while not presenting competing offers to the bank. This is Miami after all.
But bottom line is that, if Wamu owned it, then that’s what they were willing to let it go for. Whether it was sold competitively is a separate question.
“Jade below $150 psf?
WaMu sells unit 211, a 1/2 with 1293 sf for $190,000.”
Mark,
It just goes to prove that you are not in the market to buy a flat or you do not have the faintest idea how the mechanism works. You wont be paying Lucas anything. The seller pays the listing agent and your agent (If it happens to be Lucas) 6% and they divide it equally (3% each) or by any other agreed factor.
Ummm, no, you are confused. Who is paying money for a house or condo? That means the buyer is paying. The buyer of anything is putting up the money, therefore the buyer pays. If you are buying a TV with free shipping, guess what, you’re paying for shipping. Perhaps this is confusing for you.
Also, a smarter strategy than using a buyer’s agent (who works against you to maximize their 3%), Is to offer the entire 6% to the seller’s agent (so that they will work for you BECAUSE NO MATTER WHAT THEY WILL MAKE MORE THAN IF THEY WERE JUST GETTING THE 3%). Therefore I will pay Lucas the entire 6%. Understand that AJ?
I find it funny that the man that wants to be friends with his tenants is lecturing me on business…
Oh Silly Kramer. If you’re lonely you can get a dog and walk it in the park with AJ, after all AJ lives in some sort of urban utopia or something. Don’t be jealous and don’t hate. Yes, I am uncertain if Sunny Isles Beach is the place to buy for certain, just another reason to rent. It is midpoint between SoBe and Ft. Lauderdale so seemed like a good place to start. I don’t have to prove anything to you so just keep posting the hate…it is funny. I am in the market to buy and that was my first inclination but after studying the market it was obviously not the prudent thing to do. One accumulates wealth by making prudent financial decisions.
Anyway, back to topic, would any bank finance this $1.9M condo and under what terms? Is the building blacklisted? Etc.
Let’s see…. pay Y for a brand new prof furnished place that is move in ready or pay 2xY for a place that will have to be furnished and decline in value….hmmmmm pretty obvious.
Mark-
But wait, what do you mean I got free shipping. Are you actually saying that the shipping isn’t free? Is this another one of those basic economics trick questions. Oh well I am going to go check out the last great line bayview apartment. You know my good friend and realtor told me all the units with good views would be gone soon and that I should buy now. Can’t wait to see that pocket listing. On my on the way down here I just couldn’t figure out where they could build another building on the bay like the one he will show me…
More info on the Jade unit (#211) sold by WaMu to an individual for $190,000.
WaMu only acquired it in June, after they foreclosed on the $536K first mortage. They also had a second mortgage of $134K. That’s 100% financing on the $670K purchase price in March, 2007. So WaMu’s total loss was $522,000 on this sale!
Zillow has it valued at $789,000, County has it assessed at $618,000. Same floor plan 2 floors directly above is currently for sale at $632,000. These are probably well off the true market value; but how does a bank that only held the unit for 2 months sell it for $190,000?
Did they list this unit?
Now if someone on this blog had pointed out the availability of this unit, it would have been of much more interest than whether so and so is really retired at 35, or summers in Miami, or spends too much time on this blog.
perez — WOW! WaMu can’t take that many big hits. No wonder they offer a 12-13 month CD at 5% APY last week…they need capital and bad.
By the way, the summer in Miami has been great! The breeze from the ocean makes it seem much cooler. I went inland a few times during the day and ouch, hot, humid and no breeze. That ocean breeze makes all the difference….
Unnamed buyer chosen for coveted land near Mary Brickell Village
By Scott E. Pacheco
There’s a buyer for the 5.65 acres at South Miami Avenue and Eighth Street once targeted for a high-rise development of more than $2 billion.
But the buyer’s identity and offer are under wraps until the deal is completed, said Larry Stockton, senior vice president with Colliers Abood Wood-Fay.
He did say the buyer is a “very logical, capable purchaser” who made a “very reasonable offer.
“We had about five to seven offers on it, some verbal, some written,” he said. “We have picked a horse. I am not at liberty to say who it is. We are very optimistic that we are going to close on it.
“It should be closed probably in about 60 days if everything goes according to schedule.”
The mixed-use zoned land at 700 and 701 S Miami Ave. was to be home to the $2.2 billion Brickell CitiCenter and the tallest building in Miami-Dade County before the residential real-estate market fell. It has been on the market about three months this time around, Mr. Stockton said.
“It is prime area, but obviously there’s overbuilding in residential,” he said. “I think that they’re two things we could use more of. The restaurants we have around here are all high-priced — there doesn’t seem to be much of the medium price. I think we could stand some sort of middle-priced restaurants. The other thing I think we could use some sort of a retail complex that wasn’t fancy — maybe a Target or something.”
Bayview Market, approved by the city in May, promising more than 650,000 square feet of retail, at 1700 N.E. Second Ave. BDB Miami bought the land for $11.7 million in February 2004. City records estimated the cost of construction at $251 million.
I cant believe BDB paid a pittance for that land in 2004. That land is worth easily 5 to 10 times that at the present time. Obviously BDB saw the potential in an area which many nincompoops in this blogs deride as edge of Overtown. Consider the fact that Terra group is paying $190 million to McLatchy and then selling it for a further profit to the Indiana Developer to put up City Square (with or without Walmart).
These two projects should be up and functional in 2-3 years . OMNI mall is all set and ready to open in 6 months, so does the shops at Paramount Bay. These 4 projects will electrify the Pace Park area.
Good for those who can see the future like BDB.
“does the shops at Paramount Bay.”
How much retail space do they have? What kind of stores are going in?
900 and Everglades have large retail spaces which I think is a neat idea… as long as it’s occupied.
JL,
The difference between 900 and Everglades retail and that of Paramount is that Paramount will serve an area from 14th st to 36th st, which is very well populated but utterly under-served.
I also do not figure why you put Pramount Bay among the least succesful and Epic as the most successful among the ultra lux list I put forward.
Any reason?
Epic because the developer Columbo has a great track record with Santa Maria and Bristol Tower and he doesn’t have a ton of projects out there like Related. In other words, I think Columbo still has a “brand” that people might go for in uncertain times.
I have problems with Marquis and Paramount since they are both being billed as Ultra Lux when neither seem to have the best location in their immediate vicinity and apparently are going to try to price themselves above competing new construction.
I think the 1800/Quantum spot is better than Paramount’s and I think the 900/Marina Blue spot is better than Marquis.
I don’t see how much nicer they can make either to compensate for a less desirable location plus ask for a premium on top.
OK, I see the point. But I fervently wish that the Paramount Bay does not become a failure (Less than 30% closing in 3 months from the opening date). We are all waiting with bated breath to see what will happen as it is very important for Pace Park residents that Paramount does good, especially after the debacle of the Opera Tower. As I said before, all the luxury flats with a sub $400/sf price will do OK.
I will be concerned with the Super Six coming out in Six months priced $500/sf or above. Those who close on these flats must keep it for themselves as there is no rental market existing for these beauties as the rental rate must be between $3 to $4/sf per month to make any sense to carry them. That is almost 1.5 to 2 times the asking rate of existing rental market for comparable neighborhoods.
The Super Six are:
1. Icon Brickell
2. Epic
3. Infinity
4. Everglades
5. Marquis &
6. Paramount Bay
I am glad Soleil is cancelled.
I just dont get it, The average rents are wildly fluctuating between building to building.
50 Biscayne 1 BR’s are asking for $2.75/sf which is the same as 900’s 2 BR’s!
Marina Blue 2 BR’s are asking for an average of $1.85 which is less than its own 1 BR’s and same as than 1800 clubs 2 BR’s.
So why is it that high end buildings are costing more to buy but do not rent for that much? Does it mean that the theory I put forth before that no matter what the amenities are, the renters capacity to pay is topped off at a certain point?
Developers—> have a minimum sales price until bank loan paid off then prices can go lower
Banks —> loans for sale
Costs to build = $170-240/sq ft
First quarter of 2009 distressed sales will begin when loan delinquencies pile up and banks can no longer hide problems
Bottom will last 3 years while foreclosures are being sold off
Banks are circulating lists of RE loans to be sold
Still a gulf between what banks ask and vulture funds bid
Bid price is 40-50 cents on the dollar (or even lower if land was purchased cheap ie non expensive location)
Ocean Bank –> 15% of Miami loans not being paid (2.4% a year earlier)
BankAtlantic – 1.5% NPA vs 0.3% a year earlier (5 fold increase)
Vulture Perez —> purchased 120 units at 50 Biscayne in Feb 2008- Downtown Miami(235/sq foot – 50% off on 4th quarter 2007 individual sale prices)
I don’t care if edge of Overtown is the greatest investment in history. I am purchasing to live in the unit, and my life is more valuable to me than all the money in the world. Miami Beach is the safest area by the ocean (anda million times safer than the mainland) and still barely safe enough for me.
Downtown is the place to be. Met 3 announced that the first phase of their project – a pedastal with a Whole Foods Market and a 30,000 sq foot 24 hour fitness (Shaq Oneill) is in its preconstruction phase with a first quarter 09 groundbreaking.
The banking crisis is getting worse each day. Looks like the federal government is trying to take over the bad mortgages and move the deposits to other banks. They are splitting the good bank part from the bad bank part to allow the system to continue with minimal disruption. They don’t want another IndyMac Bank headline so they are taking the bad part for ultimately the taxpayer to take the hit while giving the good part to another bank on the condition that the acquiring bank honor the full deposits even if above FDIC insurance limits. In other words, the federal government is backstopping the FDIC by not forcing them to pay out claims with money that they would end up not having since the loses are so large. Meanwhile, banks are raising capital/assets per the govt. demand and the FDIC will be raising its insurance premium rates to increase its reserves. This is probably the most orderly way to do this which maintains confidence among the clueless citizens and prevents a cascading panic. Smart way to do it even though I detest that all the costs aren’t being put on those responsible for the mess. Meanwhile, responsible homeowners will need to hold on since the FDIC is setting up real estate liquidation offices in the bubble markets to get rid of the real estate that it has now taken over. So, instead of the banks marking to market the bad loans (which would show a lot of banks as being bankrupt) the fed is taking those problem loans off their books via a take over (head management will be gone, shareholders wiped out) so that the real estate price decline stubburnous will go away. Looks like the short sale / foreclosure purchases will be the way to buy and will set the market prices going forward.
Keep on renting until this shakes out some more…
……and it burns burns burns.
Poor rentertom
He is waiting and waiting and waiting for the market to bottom (sounds like Robert Prechter) because he doesnt have the money to buy right now and at his age will be dead when the the market does bottom. Which vulture fund do you work for tom?
AJ
Are you familiar with the project called Max Miami. It is a 31 story production facility for video and film – commercials etc. plus a 200 room upscale hotel. State of the art production facility with 70,000 sq feet video and audio studios. Construction to start soon according to Jordi Verite the developer and president of Verite Distributors, a distributer of professional audio and video equipment with offices in five countries. He plans to establish the companys headquarters at MaxMiami. They are establishing and targeting this area as a media and entertainment center of the new downtown Miami. Btw- its located right across the street from the new Bayview Marketplace which just announced groundbreaking for first quarter of 09. Five years from now the downtown area area will have a synergy unmatched anywhere except maybe Toronto or Dubai.
Actually Kramer – I have a great unit that is costing me less per month than when I end up buying so no rush. It really is a fabulous rental. Whoever the designer/decorator was did a great job complete with Ralph Lauren sheets and towels. It is like living in a huge luxury hotel suite each day. With this deal there is no reason to buy. I feel bad for you if you bought at or near the peak, but when that new Wal-Mart opens up near AJ, you and him and be greeters together in your old age as long as a drugged out shoplifter doesn’t take you out. Best wishes and good luck.
My impression is, the bottom, at least in real dollar terms will last at least a year and possibly three years. It will be one of the long drawn out painful things that once it is over the belief system of get rich quick in real estate will be gone for good.
By the way my bitter friend Kramer, I am “retired” so no I do not work for a vulture fund. I am looking to buy 1-4 modest homes/condos, probably 2 in this country and two in other countries. But that will take some time to figure out where exactly.
Why would Infinity be in the top six? Inland with no decent water view.
tom the renter- the hater and vulture fund demagogue-needs the market to go way down so he can buy a tiny studio to spill his venom here all day. Anyone who brags about their having money is a classless boor.
Regarding this article:
Does anyone see the conflict of interest presented by Perez buying out his OWN CONDO’S for %50 off???
“Perez made the bulk purchase, the largest in condo-glutted downtown Miami, in the 50 Biscayne Blvd. tower with Lubert-Adler Partners LP, a private equity firm headed by Dean Adler. The two firms raised $1 billion to buy condos, mortgages and land in Florida, according to a Feb. 13 news release. The price was $30.3 million, about half the cost of individually sold units.
Bulk Purchase
Perez’s partnership bought the condos from his own development company and a partner, Atlanta-based Cousins Properties Inc., which built the 54-story tower.
In an earlier bulk purchase at 50 Biscayne, Perez and Cousins sold 26 units in May to 50 Biscayne Suites LLC for $6.1 million. Perez and Cousins paid off their construction loan with LaSalle Bank with the proceeds, according to Zalewski of Condo Vultures.
Paying off the loan allowed Perez to do the recent 120-unit bulk transaction at below-market prices, said Bruce B. Baldwin, a partner with the Miami-based Mase & Lara PA law firm who was not involved in the deal. ”
I’m sure the current owners who paid twice as much 3 years ago (pre-construction)…and then waited patiently for the building to be constructed really happy!!!! I just find it comical he’s using his own money (with the help of some friends) to bail himself out (at the expense of others)!!!
Mike K. – All I can say is real estate can be ruthless…especially when things go bad.
Bloomberg reports on Related Group’s bulk purchases of units in their own buildings – 50 Biscayne and the Plaza at Brickell
Condominiums are the bottom of the real estate investment chain. Makes me wonder why Wall Street would take such a risk on owning this Miami junk.
Is this the classic hiding inventory scam?
My building is now a rental building scam?
Lets turn the building over to the condominium board even though we still own the majority of units scam?
i said this before. how do the minority shareholders in related (assuming there are some) let this fly? there must have been some heavy disclosure before the sale or alternatively, all the minority shareholders are also players in the fund
What do you think about the removal of the constitutional amendments of the November ballot by the Florida Supreme Court, first of all the tax-swap amendment ?
Wild Bill asked: “Lets turn the building over to the condominium board even though we still own the majority of units scam?”
It is a loophole made possible by their questionable of making anyone who closes a member of two separate HOAs, the “regular” one and a “Master Association” (run by Related). It is a really slick and is dependent on their timing of an “exit”.
The timing of the 50 Biscayne bulk sales is pretty awful. They have yet to start Icon Brickell closings and now you have a concrete example of a new Related building where people who closed may have paid 2x more for units than a group headed by the developer himself.
That’s bad karma for non-closed Related Group projects.
Again… This whole back and forth between some people here on personall attacks is getting old and just plain stupid. Please just keep this professional and not personal.
Lucas, how about a new post? 247 posts should be a limit! lol
Hugo P – I agree, not sure why AJ seems to get into that on nearly every post. This time I got dragged into it. Won’t happen again.
Anyone know under what terms a bank would finance this unit at $1.9M?
Gotta Say I like reading posts from both the proud Renter T & proud owner AJ….To each his own..I want to own again in Miami but am petrified to overpay by several hundred thousand dollars and there really is no way to hedge……….Still waiting for Renter Tom’s question to get answered about financing on the 1.9 unit…..assuming 20% down how much more to bring to the table to get a bank to actually fund the loan? If banks won’t lend then we know what happens to pricing eventually……Good Luck to all!!
Kramer,
I included Infinity as it is one of the supposedly high end constructions and among the last to come on the market along with the other 5 biggies. I could not slot it any other way. I wonder why there is such a limited buzz on the INFINITY.
Mark,
You say “Miami Beach is the safest area by the ocean (anda million times safer than the mainland) and still barely safe enough for me.”
I just dont get it. Are you a 100 pound white woman or something (I Do not mean to be disrespectful to a 100 pound white women. I know some of them are ferocious enough to kick some serious ass), your statements are so ridiculous. If you are afraid of innocuous and docile Miami, you should be living in Finland or Iceland 🙂
SwissLuxury.Com – I don’t think a bank would loan money based on 20% down. My understanding from a WaMu dude was that they wouldn’t, but what bank would and under what terms? Maybe someone in banking or RE has a better idea. Is the building blacklisted? Do you need 50% down? I don’t know….
…and the flames went higher.
Seriously, I think the view is grand, but even the celebrities have been dumping real estate (or going into foreclosure). If Ike smacks this area prices will plummet even faster as people exit for good….might be good for Las Vegas…
Natural gas prices are off 45% from the peak…where is the fed govt bailout for that? What about those invested their life savings into natural gas and can’t afford a house, car, food now??? What about my friends who’s houses were on a huge natural gas field and were banking on selling their natural gas rights? Where is the bailout for them? Heck gold is down 20%+…where is those investors’ bailout? I mean, come on, they didn’t actually read all the disclosure forms now did they???
I am not a banker, but Renter Tom is right… no way you can get 20% financing in this building with no sales and prices going nowhere but down. Probably blacklisted by default.
I would say that based on the recent sales prices (not listing prices), the low absortion rates, and the excess of supply in the market, the bank would have to underwrite the property at $300-$350 per A/C sf max ($1 – $1.2 Million value ) and they could only justifiy 80% of that for a decent loan ($1 Million).
That means you would need $900k or close to 50% downpayment to buy this unit.
Just my thoughts…
Blacklisting varies from bank to bank. You can not say this building is blacklisted in general. All of this hype about blacklisting came out after Bank United’s list was published. They practically blacklisted every single building in all of South Florida for one reason or another. Other banks have still been lending. Banks are just more cautious and do better in their due diligence. How do you think some buildings are hitting their 50-70% closing rates and higher in some cases. Are all of these buyers buying cash?
Renter Tom – Someone buying this condo is not going to be searching for financing. They will be paying cash. They also will not be looking at this as an investment. They will be looking at it as an opportunity to purchase a penthouse in a brand new building and to use as a home for the next 5-10 years. You have to realize that not everyone cares about market timing. Some people ultimately hate leasing. They like to own everything in their lives. 1.) Home first 2.) Investment Second.
Also look around. There is one thing to take note of, whether you agree or disagree about the pricing there is one thing you have to realize. Look up and down the strip in Downtown (Biscayne Blvd) All of these buildings are brand new. In this market most of the current buying is taking place by end-users and long term investors. The speculators are being driven out. Once they buy the penthouse units, or unique units with intention of holding as a family home for 5-10 years the only other opportunities to buy an equal quality unit is to buy in a rare new development. I count only 2 possible buildings in the future which will have this opportunity. Paramount Park (if it is ever built) and 600 Biscayne. If these developers expected prices to come down so drastically for residential sales and to limit their profits (I would expect) they would just flip the land to another entity who would develop something commercial on those lots. This would limit our future inventory on premium lots.
Some think the Park West / Downtown Area is scary and that you better carry a gun. Look at it this way. The advantage that these buildings have over others are that most units in these buildings have unobstructed bay views – there is no compromise on your view. The buyer for this will not settle for a unit in a more developed area with a partial bay view. They will ultimately buy their view which can last a lifetime and wait until the area is developed around. (my 2 cents)
Renter Tom asked: “What about my friends who’s houses were on a huge natural gas field and were banking on selling their natural gas rights?”
Tell them to hold on. Soon, we will be drilling everywhere, especially for natural gas. If they can’t “hold”, tell them to call T. Boone Pickens.
“Renter Tom – Someone buying this condo is not going to be searching for financing. They will be paying cash. They also will not be looking at this as an investment. They will be looking at it as an opportunity to purchase a penthouse in a brand new building and to use as a home for the next 5-10 years. You have to realize that not everyone cares about market timing. Some people ultimately hate leasing. They like to own everything in their lives. 1.) Home first 2.) Investment Second.”
I don’t know about that for certain. I could buy in cash today, but I am not stupid, and yes I do care about the money that would be lost. Even if you’re in the $100M networth club you got there by not making stupid decisions with your money (unless you’re a trust fund baby I suppose, they go through money like they didn’t earn, which of course they didn’t). Moreover, interest rates are low so why not finance??? I don’t know how long it has been on the market, but so far no carefree cash buyer has stepped up to the plate yet. Moreover, “market timing” is one thing, buying something that is certain to go down in value is another thing. The whole “market timing” thing has gotten overblown with people making the analogy to stocks and how you can’t really time the market for the most part, while mostly true, you can and should time your real estate purchases….afterall that is how fortunes are made…and lost! I don’t apologize for looking after my wealth and won’t be cavalier about willing throwing away $200K-$500K. Would I take a risk that could lose me that much? Yes, but only if there is a significant upside potential which in the case of this condo, there is not one.
Anyway, I appreciate your reply. But the question is at what point WOULD a bank provide financing?
Un-Related – My friends have been approached over the last year to sell the rights. Well, those natural gas rights probably are worth less right now with nat. gas off 45%……
Just got confirmation today from 900 Biscayne that 190 out of 500 units have closed up to this point. Lucas or Samir….would you still consider it early in the closing process for 900?
I consider it still early. But developers usually have a process on how the closings are scheduled. International buyers may take longer to close. Cash buyers may close first to set comparables within the building, etc.
Like other buildings some initial investors still are unsure if they should close or not because they are not afforded the opportunity to tour the property prior to their pre-closing walk-through. Some wait for other units to close which will test the market in rentals or resales.
Many of the 190 I would expect to be initial round sales or early preconstruction resales. Some of the recent resales (on paper) are probably still sorting out financing. Example if someone was scheduled to close next Friday and they found a replacement buyer the developer would probably give the new buyer 30 more days to close thus delaying the closing numbers.
Also one thing to note. I believe 900 Biscayne is so far the best new development (which has opened) in the Downtown area. And also that some of the buyers who are in the market to buy this calibre building are not comparing to the step below Quantum, 1800 Club, Midtown, Marina Blue. They are most likely comparing to Epic, Icon, Paramount. The preconstruction pricing at 900 was superior to those other projects. So on that level I believe buying at preconstruction pricing in 900 is a bargain compared to the other luxury product.
SAMIR PATEL—–post #255
Samir, you seem to understand where I’m coming from. I bought in TMP to enjoy it all…..views, building, etc……..not to live on the street, but in my unit……the area will come around.
I’m so sick of people on this blog talking about stuff and such. So stupid. I don’t want to hear if someone is going to buy this or that. When I read comments, I don’t want to read anything personal. Keep it on topic! Comments should be like reading cnn.com or a text book.
Samir,
One of the best perspectives so far (#255)
There is a “Millionnaire” who says he is waiting. Waiting to save. He says if he waits 6 months, he will save 200K. He says if he waits 1 year, he saves 300K. If he waits 2 years, he saves half a million bucks. Nice going. Thanks for a hearty laugh. Reminds me of that joke:
The Husband and wife talking at home after they got back from work.
Hubby: Hon, I saved $2 today
Wifey: Howz that?
Hubby: Instead of taking the bus, I ran behind it.
Wifey: Hon, I saved $20 today
Hubby: How did you manage that!?
Wifey: Instead of taking a taxi home, I ran behind it!
“Frank”!!?
Seeing this name for the first time EVER in this blog. Obviously you have been here a while by a different name but do not have the guts to criticise me with the regular name you have been going by.
Now who is the fruity tool?
At least I do not resort to hit and run posts like you guys do. I use my name and stand by my post. I could have used a different alias every time like the other gutless guys do. But I don’t. If you think that my picking the inconsistencies in the ramblings of some self serving individuals looks like a tiff to you, you have some growing up to do.
By the way, I am not here for a popularity contest. I will call a spade a spade.
If all those guys who want to sow fear among the buyers and frustration among the sellers and hope to bring the housing market to a complete and grinding halt, so that they themselves can steal a flat for next to nothing for themselves, want to hate me, I will take it as an honor.
That means I am doing my job very well to balance the one sided view that these self serving individuals put forward.
In any case unlike these guys who talk nothing except how the prices are going to go down and cut and paste some news from the internet (as if the rest of us dont read the news),
I talk about:
1. Yes My beloved 1800 club. But also
2. The Pace Park area
3. Downtown in general
4. Quality of life issues
5. Neighborhoods ranging from Homestead to Fort Lauderdale
6. Development news
7. Future projects
8. News, views, culture and some gossip too
and ofcourse I do talk about
9. The wretched housing market
10. The weak economy
11. Banking woes
12. Thepros and cons of individual buildings.
13. What might hold value and which buildings might decline
14. Advise to those who seek my opinion on certain projects or neighborhoods.
And what do these self serving guys talk about. The same one point and flog the already dead horse. Unless you are a complete moron or living under a rock, even a 90 year old grand mother will tell you that the housing has been in a decline and will be so for a little while longer.
So instead of taking advantage of the situation and advising those who are seeking a home and residence for themselves, all that these guys do is to say:
Just dont buy. Not even
1. If you have the cash.
2. You are in need of a house.
3. You found the house of your dreams
4. The seller is offering the deal of a life, willing to suffer significant losses because he does not want to live there and you actually want to.
Whay are these guys really here. Two of them have already proclaimed proudly that they are heartless, cut throat and will do anything to save a buck from a seller or a landlord. So they are not hear for any love for those buyers out there. They are hear for themselves. Either working for a housing bear firm or just here simply to scare everybody (competition). If the competion is absent, then they can get their flat that much cheaper.
Shame.
And how can you not understand the frustration of realtors like Perez or Samir and Lucas. They reasearch hard and bring a deal that they think might benefit someone on this blog looking for a home and then can you imagine their exasperation by the relentless negetivity.
Who are these self appointed appraisers to challenge if the price is worth it or if someone will get a financing for this.
Crappy units in SOBE went from 2 million to 16 million. So why is an almost 5000 sf flat (including terrace) in an ultra luxury building with never ending views is such an abberation in these self appointed appraisers eyes?
Maybe this is not for them. Maybe they dont have 2 red cents to rub together. But have you considered that there are people out there who want to live life and they have earned it and they are not scrooges?
If I had that kind of money maybe I would have bought this flat. May not be at 1.9 mil but I may make an offer 1. which I think it is worth, 2. the seller may accept and 3. which also might take the further downturn into consideration.
So if you think this flat is not worth it for you, you may also remember that it might be worth it for someone else.
Because of these self interest guys unrelenting bullshit, perez stopped posting the killer deals he finds once in a while. Samir also was absent for a while. Lucas has to grin and bear as this is his blog and he cannot run.
So guys let this blog be for what it is meant to be. There are people who want to take advantage of the housing downturn. This blog is a wonderful blog towards that objective. So be part of a solution, dont be a problem. If you want to wait 1 or 2 or 3 years or maybe even a lifetime to buy a roof over your head, suit yourself. But do recognize that there are people who have a different view towards life than yours.
This is by far the best resource for discussing the South Florida condo market. But the infantile bickering going on is really turning me off. Hopefully we can keep on topic from here on out.
I know I am going on and on but I will make it my last post on this matter.
This blog used to be so much fun. There was info on everything from flats to floozies. There was a general light heartedness. People were sharing jokes and experiences on their housing travails. There were housing bulls, housing bears and then there are the others who are here just to find a roof over their head and have nothing to do with anything else. Then there are some like me and a few others who are neither looking to buy a flat nor to sell one. They are here for general interest and information.
Everyone was entitled to their opinion. The bulls and the bears had their say. But some where down the road, the housing bears started to get extremely vocal and militant. Instead of just posting their views, they started to trash any opposing point of view and shouting down anyone who dare say anything positive about – well anything. The situation has become so vitiated that you can get beat up by these guys just for saying “roses are beautiful”. Something positive!? How dare you. Nah Nah Nah. You are not allowed to say that.
I do agree that I have shouted from the top of the mountain the virtues of my building, my flats, my neighborhood and so on. But I have never dissed the bearish views expressed by these guys until now. I have opposed those views but did not diss the posters.
After being called names and epithets, subjected to insults, I jumped in the ring to play the game with the same coin. I joined the mudslinging and the dialogue has degenerated into name calling. I am not at all happy about it.
In the best interest of this blog, I hope this bullshit will stop.
I post things the way I see it. So far, the reality hasn’t sunk in to the paranoid and manic few that are on a mission of some weird sort constantly stating a reality that does not exist. Being evangelical about something doesn’t make it so whether one is on one’s meds or not. Some areas have a long way to go to improve and their prospects in 10 years are not certain. Those with a vested interest can post as much positive stuff as they want, that’s fine, since most people will see through it all. Oh well.
As I have previously posted, I am waiting this thing out and seeing how it unwinds before buying. I wanted to buy but quickly realized that was not the financially prudent thing to do. I went from maybe things would plateau, to maybe 10% decline, to the present of an overcorrection. So, far, I hadn’t been negative enough… All fundamentals point to substantial further price declines in this area. This credit/leverage unwinding makes for a very uncertain and challenging time for many.
Times are tough for realtors, mortgage brokers, etc. Hopefully when times were silly easy and money was being thrown at them for arguably little value added, they saved up for tough times. The reality is 1/2 the realtors and 1/2 the mortgage brokers are going away. So many people jumped into real estate that the reverse is no surprise now.
The question remains, would a bank finance the purchase of this very nice condo? Under what terms (of course an all cash buyer can by anything but that isn’t the question)? Would a buyer have to put down 40%, more? Is the HOA stable?
Shouldn’t we be celebrating the return of more affordable housing? Won’t that be good business for the realtors that survived?
is anyone else a wee-bit frightened of the looming Ike?…
it’s comin’ right for us!
bringing my previous post into topic:
does anyone living in a new condo (preferably east of I-95 (in the evacuation zone) know what their respective condo’s hurricane plan is, or if they even have one?
AJ, I think Lucas will be fine. I plan on utilizing his services when the price is right. By the way unemployment jumped to 6.1% today. You think that’s good for housing? Unlikely
Renter Tom said: “Un-Related – My friends have been approached over the last year to sell the rights. Well, those natural gas rights probably are worth less right now with nat. gas off 45%……”
Trying to time the the future price of natural gas reserves isn’t as dicey as it once was. The domestic and international trends are up and for the foreseeable future will remain so. 20-years ago, nat gas was an “annoyance” discovery to those drilling for oil. (The Saudis and others just “flared” it at the wellhead…it’s the “fires” you see in the pictures of oilfields.)
Since nat gas is usally found where there is oil, have your friends seen any geology relating to potential oil reserves? If not, I will guess they are out west.
Nat gas prices in 2005 ranged between $2 and $10 for the commodity “unit”, thanks to Katrina.
The long-term reality is that we will have to spend the money necessary to not only pull it from the ground but to “compress” and distribute it for commercial use. We will probably have to power cars and trucks with nat gas (In Utah, nat gas car owners are paying the equivalent of $0.87 per “gallon” to fill their tanks. , so if I had known reserves I would sit tight or lease to an operator on a “market value” basis.
I was looked at as “dumb” for missing the tech stock “boom and bust” cycle because the only stocks I owned were oil & gas and oil services. I am stiil there after 10 years.
I just wished I had “missed” the Miami condos even though I spread my bets through partnerships. The tables in Las Vegas would have been more fun, win or lose, and I would have “won” because I would not have taken on the extent of risk I did with these concrete boxes. Live and learn.
Probably too Cynical commented: “is anyone else a wee-bit frightened of the looming Ike?…
it’s comin’ right for us!”
“Big Gourge” Perez was seen wearing a large campaign button from the 1952 election which reads: “I LIKE IKE!”
Eisenhower would be spinning in his grave! LOL
Homes in foreclosure process set another record
California, Florida continue to drive national numbers in MBA survey
CHICAGO (MarketWatch) — The rate of mortgages entering foreclosure hit another record high in the second quarter, as did the percentage of loans somewhere in the foreclosure process, the Mortgage Bankers Association reported on Friday.
http://www.marketwatch.com/news/story/foreclosures-mortgage-delinquencies-hit-record/story.aspx?guid=%7B21015C68%2DEDCF%2D4E8B%2DBB4E%2D4259C721F9C1%7D&dist=hplatest
renter tom and those questioning bank financing
We all know that no money down loans are gone. The lenders are even more careful now than they were 10 years ago. As an example-ten years ago the norm was 5-10% down. But, yes you can today get a 20% down loan owner occupied with a Fico score above 700. As someone earlier mentioned that is how you are getting 70% closing rates on the more recent buildings. The point your missing is that there are a lot of these buyers who purchased originally at preconstruction prices with the intention to make this their home because of the location-the views- and the enormous amount of synergy happening now in the area of Brickell and downtown and is in the planning stages. Most of these are people who have decent incomes and decent credit scores and decent net worth and are mostly younger and middle age with college degrees and are visionaries and have progressive attitudes who hope and pray that some of the doomsday negative haters in this blog dont move downtown. The only way I would move from this area is if I found out rentertom had moved next door-LoL. Onward and upward.
If Ike hits us directly as a cat 4 watch for an immediated 20% spike. My prediction.
Kramer – Where are you getting your stats from regarding who bought pre-con? I talked to some bankers, a condo in downtown Miami is requiring more than 20% down. Don’t hate and don’t shoot the messenger. I’m just trying to get a handle on what the reality is out there. By the way, Ike will more likely expose the problems out there like HOA’s not being able to afford the new higher insurance premiums, Ike won’t be a positive in IMHO.
Well, the financial crisis caused by the housing mess is pressing the fed govt to take over homes and liquidate them in order to avoid a systemic financial meltdown. We can thank the criminal (not all) real estate community for this mess….realtors, appraisers, mortgage brokers, and stupid banks. This is a gravely serious mess and anyone who thinks otherwise is s fool. Why? Because of the huge contraction in credit that this mess has brought on via the banking system’s exposure to real estate assets.
“Most of these are people who have decent incomes and decent credit scores and decent net worth and are mostly younger and middle age with college degrees and are visionaries and have progressive attitudes who hope and pray that some of the doomsday negative haters in this blog dont move downtown.”
Wow, this is like a profile on e-harmony. I think I’m in love with Mr. Imaginary Miami Condo Buyer.
Mark – You are funny. This blog need more comments from you for sure!
No amount of jawboning down the market on this blog is gonna affect the market. Stating the reality of the situation does a service to all…unless you’re a bitter condo floplord. Maybe if I jawbone H. Ike it’ll go away!
“Most of these are people who have decent incomes and decent credit scores and decent net worth and are mostly younger and middle age with college degrees and are visionaries and have progressive attitudes who hope and pray that some of the doomsday negative haters in this blog dont move downtown.”
i would say that this is certaintly the truth at least in my case. mid- twenties gross over 67k a year and in college FIU. good credit score. i did in fact buy into pre-con for those reason stated above. we are out there just not many of us
Most of these are people who have decent incomes and decent credit scores and decent net worth and are mostly younger and middle age with college degrees and are visionaries and have progressive attitudes who hope and pray that some of the doomsday negative haters in this blog dont move downtown.”
I guess I fit into this category as well. Did undergrad and grad school at FIU. I just turned 30 and gross a bit over 120k a year.
I bought a townhouse in Kendall five years ago for 120k and just sold it last week for 210k. Now I am looking to move downtown and invest the proceeds from the sale of my home.
However, I refuse to buy into a declining market so I will rent, rent, rent until things get more in line with the fundamentals.
Well my wife works for BofA in NY and all mortages are now screened by a live person. No more computer generated approvals. Also, home equity loans are being frozen due to “declining market values”. Not sure what it would take to finance this condo as Florida condo situation is a totally different senerio than NY.
Angel – Smart move. Congrats on doing well on your townhome…looks like you bought before the huge peak! There are some great rental deals out there….you have your pick!
Angel – Smart move. Congrats on doing well on your townhome…looks like you bought before the huge peak! There are some great rental deals out there….you have your pick!
That is exactly why I sold. I saw the equity in my townhome erode month after month from a peak high selling price of 235k (March of 2007) to 210k (recent selling price). Holding out longer would have just resulted in less money in my pocket. I knew I had to get out. It took over 6 months to sell the place. My neighbor is not as fortunate. She bought at the peak 237k and is trying to sell today for 237k. The place is worth less than 200k. I would hate to be in her shoes. I realize I am very fortunate to buy when I did but was also smart enough to know when to cut my losses and get out. Had I sold sooner I would have gotten more out of the place, but would have been paying a great deal more in rent.
Angel – You should pat yourself on the back…not only are you going to pay less than owning, you aren’t losing every month too PLUS that townhome probably will never be worth $210K in real prices ever again. The fundamentals of this housing bubble are not going to be repeated again anytime soon….
“Most of these are people who have decent incomes and decent credit scores and decent net worth and are mostly younger and middle age with college degrees and are visionaries”
That works for the $250K and under condo market. Who’s going ot fill up the $250k and over condo supply?
Also, I’m saving $30K-$40K by renting instead of owning. I pay just a bit shy of $40K/year in rent. Given the price declines of this $700K-$800K condo unit, that could add another $70-$240K this year in savings by renting versus owning (10%-30% price decline). Hence, I’m ahead $100K-$280K by renting…..A NO BRAINER!
Renter Tom …
I concur…
Is $390psf a good purchase price TODAY for a 1/2 at 900 Biscayne (direct bay view)?
How low do you think it will go if above is too high?
Hi Angel
If you purchased in 2003 at 120k and sold in 08 at 210k which proves that at least in your case prices did not slip back to 2003 prices. Correct? As you state the peak price of 235 has declined approx. 10-12%. Prices for lets say a good quality building in a good location downtown or brickell on the water with a high floor and direct water view peaked at about 600 per sq foot probably sometime in 2006. I was on two different occasions offered just under 600 per sq foot. for my preconstruction purchase in 2004, which I declined because I purchased as owner occupied with the intention of being there for at least 5-10 yrs if not longer because of the views -the location- the activities within walking distance etc. Both my wife and I can walk to work in less than ten minutes. If prices here regardless whether its a studio or one bedroom if thats all you can afford – have by all accounts dropped at least 30% from those peaks right now and your kendall townhouse only dropped 10% why would you wait if you like the area? Dont get caught up with some of scare tactics that its gonna crash another 20-30%. Its not going to happen. Also you get a better selection because when the market does turn up you will be in a mad scramble for the best building-best high floor-best view-best located building with all the other people waiting in line. Thats why i bought pre-constr in 04. I have locked in the exact building I want for location-quality-high floor with a direct east water view. If your townhome went down only 10% from 03 to 08 why would any of these new apts go much lower when they have declined lets say 30-40% allready from the peak. Also rates 0n a 30 yr fixed at 6% will drive your costs higher one yr from now at 7 maybe 8%. Just food for thought. Good luck on whatever decision you make.
$390psf might be a good price if………….
the building is completly occupied and it has a small amount of renters. The developer has no liens and the new owners don’t have liens.
The condo boards budget is adequate and the maintenance fees don’t go through the roof. Only when you’ve answered those question can you make a judgment about $psf.
Anyone here willing to give me odds on my prediction that if Yike Ike comes into Miami-Dade County as a Cat 4 that there will be an immediate 20% jump in asking prices on the new condos in Brickell and Downtown Miami that were built to the newer more strict building codes? You still have 3 or 4 more days to call Lucas and sign a contract.
Kramer,
While you do make some very valid points my townhouse continues to drop in value to date. I luckily sold it for 210k last week as I am sure it will be worth less than 200k in 2 months. In fact , Zillow.com has steadily shown a 6k month over month depcreciation on my old home for quite some time with no end in the near future. I hear what you are saying but I just cannot see myself buying something today for 300k which I can probably pick up for 225k in a year or so. I am not like others in this blog which have excess capital to throw around. A 75k savings for me represents a significant chunk of change. You may be right in the sense that the most sought after views and flloors may no longer be available in the future, but then i think about the amount of inventory on the market and the many more units about to come on line and I can’t imaginre all of the best units being all bought up in an instant. I think you all will agree that there are a bunch of qualified buyers waiting on the sidelines to see how this thing pans out. Just my 2 cents.
On a side note… this blog is great. Good job Lucas!
Kramer – 2004, not bad, not great, but your damages won’t be too great if you wear nominal dollar blinders for the long term AND got locked into a low interest rate. Then not bad. The key is owning for the long term with an under 6% fixed rate mortgage with no prepayment penalty and own for at least 1/2 the mortgage term….the payments will be low since we still have fairly low mortgage rates.
“when the market does turn up you will be in a mad scramble for the best building-best high floor-best view-best located building with all the other people waiting in line”
– I don’t think I will be able to stop laughing all night about that quote though…. I can see it now, lines of armored cars for those cash only buyers. There won’t be a “mad scramble” since the “shortages” in the past were creations of marketing strategies only, not reality. There still are some great Ponzi schemes in Jamaica you can “invest” in too….oh how people can be so easily manipulated I suppose.
angel/jr56
thanks for the breakdown of age, salary, education (even though fiu is not really noteworthy). you forgot to mention tacky and tasteless in your little bio
angel/jr56
thanks for the breakdown of age, salary, education (even though fiu is not really noteworthy). you forgot to mention tacky and tasteless in your little bio
Drew,
That was only metioned in reference to the previous post mentioning the demographic of the type of person who may be looking to buy into or live in a building in downtown Miami. Sorry if you were offended and had to turn to personal insults to hide your insecurities.
Cheers!
In fact, most of my friends I went to grad school with fall within this same demographic and will more than likely be your neighbor if you decide to move downtown. Get used to it. Degrading a school by not calling it not noteworthy shows real class.
Drew says….
Hello pot this is kettle…
Just wondering,
What height is the flat located? If it is on a high floor (25th or above), then $390/sf is a good price as 900 is a class A+ building.
Why dont you throw an offer of $350/sf and see if it sticks. If the seller accepts, You probably would be getting not only a pre-pre construction price, you might get it for pre drawing board price!
Usually $350/sf is the good price to pay for a direct bayview flat in Class A- buildings such as Q, 18, 50 etc. So if you are getting a A+ building for the same price it should be a good deal.
I dont know if the seller wil accept. But you never know until you put an offer in writing. Good Luck.
$350/s.f. you can get new beachfront…..right on the beach, seems to be a better value since they aren’t building more beachfront (although they are building more units higher) and they ARE building more downtown by tearing down stuff…..
Kramer,
You might have a point there.
God forbit if a major cyclone threatens Miami, it might do different things for different areas and different buildings.
The older buildings will get walloped by higher insurance costs due to the damages.
If all the brand new buildings in downtown manage to withstand the storm with little or no damage because they are built for a higher standard, that actually might be a reversal of fortune for the new buildings in the greater downtown area.
I own a flat in a brand new building (2008) downtown and a 1971 building on the beach. So either way, it will be a mixed reaction for me. Hope the bastard Ike goes away. I am also debating cancelling my plans to come to Miami this weekend.
Angel – I find that those that are invested in the local real estate market get snippity and blame the messenger, they don’t seem interested in helping people from making a big financial mistake. I guess they are hopelessly frustrated which is understandable, esp. when a mental paradigm is shattered…there is confusion, denial, and anger….and name calling. Oh well. You did well and made a smart financial decision. I’m going to save a ton of $$$ without worries this year and probably next year too. When renting be sure to investigate the owner since you don’t want one of the units were it goes into foreclosure later.
angel/jr56
Actually, unlike Drew, I find buyer background -with income- very useful and interesting.
Everytbody thinks they can afford a unit if they can barely cover the monthly payments. Miami has a long way to go still on that versus the rest of the country. It’s interesting to find out if buyers are getting back to rationality down here and if they can get mortgages for a rational purchase.
I’m curious what type of loan jr56 is able ot get for downtown Miami and for what amount based on his stated salary.
Yeah maybe $350/sf in Sunny Isles Beach, the retirement destination. Not SOBE or other desirable beach fronts where sf run from $500 (partial beach view) to $1000 (direct beach view) in a so-so buildings and $1000 (partial beach view) to $2000 (direct beach view) in good, new buildings.
Can someone get me a flat in Bentley Hilton or Continuum II or Il Villagio for even $500/ sf? Views not required! I will buy in a heartbeat.
JL,
That’s exactly right. We all know we are in this mess because banks did not bother to look at the finances of their potential borrowers. I think there is a time and place for everything. In the examples above I dont think neither JR56 or myself were trying to show off. Please far from that… I was simply trying to paint a picture of the type of person who will be living (either renting or buying) in a Marina Blue or 50 Biscayne.
I repeat my post #244
What do you think about the removal of the constitutional amendments of the November ballot by the Florida Supreme Court, first of all the tax-swap amendment ?
Visionary,
I am in favor for the tax swap. I think it can only help the shabby state of our local RE market. We all know property taxes are a huge obstacle to home ownership in the state of Florida. A few pennies here and there will surely be less painfull than thousands of dollars in property taxes every year. Furthermore, you can always curtail your spending to save a few bucks on the proposed sales tax increase. Unfortunately we cannot say the same for property taxes. Property taxes are almost completely out of our control.
Angel,
That is exactly why the Pols would not have the tax swap. If the spending goes down, they wont be able to collect more. I really like the tax swap idea as well as the fair tax in lieu of the federal income tax.
But AJ, Sunny Isles Beach is an up and coming area….at least we don’t have a Wal-Mart!!!!!!!!! hahahaha
Maybe Sunny Isles Beach isn’t the place for me to buy, I don’t know yet. But great place to rent. The whole SoBe thing might not really be the place in 10 year anyway. Who knows.
AJ,
Do you think spending would go down that much? I dont think too many people will stop going out to dinner because their bill will be less than a dollar more expensive. Thoughts? I can however see a bit more restraint on the purchase of big ticket items such as cars and plasma tv’s. But then again I think Florida (read Miami) needs a long overdue lesson in restraint.
Angel – Everything happens “at the margin” in economics. The numbers have come in and yes restaurants are hurting….Darden went bankrupt recently, Linens & Things shuttered stores, there is a lot more to go down. People tend to do things like combine shopping trips, go out less and/or eat at more reasonably priced restaurant, share portions etc. It all adds up. For those with a ton of money, their lifestyles won’t be affected greatly just like those that had little won’t either….but we are in an economic time where there was little savings and people went on a debt accumulation binge so small changes (such as a quick gas price shock) reveals a lot of problems. People are on fragile tipping points. I am very cautious about the economy right now.
AJ said: “If all the brand new buildings in downtown manage to withstand the storm with little or no damage because they are built for a higher standard, that actually might be a reversal of fortune for the new buildings in the greater downtown area. ”
Only if all the new buildings hold up better than the 1-year old Bentley Bay did when Cat 1 or 2 Wilma hit miami in 2005. Every deck on both the buildings had to be re-glassed and it took almost 18 months. I heard, but can’t confirm, that the tab was $14,000 per unit.
FIU has an international business program that rates higher than Wharton. It’s also top three in hospitality, and just got its Med School accredited.
Cool guy over here that thinks he’s economically saavy is insulting a school that is one of the cheapest in the country for in-state tuition. Some people get paid to go there.
What complete trash. Put yourself in a dumpster.
Unrelated,
I agree with you about the substandard Bentley Bay. But when one of the the storms eventually hits, it will expose the good buildings from the bad ones (which only look good cosmetically but are infact just shells inside).
Another reason I am very gung ho about 1800 is because, I was told that it is one of the just 2 or 3 new buildings which is union built. It is supposed to have been built to exact specifications and stringent code. A storm like IKE will test those kind of claims, even though I pray that we never get tested by cat 3 or 4 or 5.
Hey Just Wondering!
Shoot me an email….I’m looking at 900 as well….I can tell you my experiences with the sales office…let’s compare notes.
Thanks
[email protected]
Better hope this hurricane doesnt direct hit and cause any damage to new buildings.
Take this example a 3 bd condo 1792 Sq Ft condo in ONE MIAMI HOA fee is over $1200 a month.
Boy those people must be ready to commit sucide funny thing when they bought pre-construction maint fee was est at $500 a month.
Feeling the pain now! Who in their right mind would want to buy a unit w/ a maint fee of over $1200 a month for a bldg like One Miami??
C’mon what a joke. These fees and special asssestments wil lcontinue to hamper these new buildings. It wil lhave to be dirst frickin cheap to make me buy.
Take fo rexample you paid the whole mortgage off you’re still stuck with payinng $1200 + about $800 – $1000 in taxes a month.
So end of the day you work hard to pay off the unit but still have to pay about $2000 a month. Makes no sense!!
To Brian – seriously, in what UNIVERSE is FIU better than Wharton? Please, do share…
I have to think damage from a hurricane would not be good for HOAs or owners.
Does anyone have an idea of the deductible that buildings carry on property insurance? Maybe someone on a board can share.
I assume if there is major damage there would have to be some kind of special assessment to cover the deductible.
teepee hes probably refering to one ranking by some magazine or editor that ranked it in a specific program FIU over Wharton
I know what he’s referring to…I was curious as to which specific one. I am very protective of my alma matter, and I can’t imagine any reputable publication ranking FIU over Wharton.
Perez Posted on Comment 221
“…Now if someone on this blog had pointed out the availability of this unit, it would have been of much more interest than whether so and so is really retired at 35, or summers in Miami, or spends too much time on this blog.”
On Post Number #41 and #42
Alejandro Diaz Bazan // Jul 22, 2008 at 10:32 pm
Where do you guys think price will bottom out at the jade? I recently saw an apt at the Jade Corner Unit 1 bed plus Den 2 bath 1293 SqFt on the corner but low floor but you see the bay drom the balcony. I havent gotten the pricing from the lender yet but its coming at around 200K if I had the cash I would pick it up at 200K that would be $154 a Foot for Jade
42 perez // Jul 23, 2008 at 6:15 am
Alejandro, price is very good, but don’t forget to add $750/month maintenance fees. With building’s foreclosure notoriety and corresponding budget shortfalls, possibility of fee increases and assessments have to be factored in.
Other than contacting the condo association, is there a publicly available resources which tracks condos’ fees and assessments?”
Perez are you a realtor?????? Why are you attacking the people in this Blog and why are you such a hypocrite posting that it is an aweful deal and blah blah and then complain about not knowing about it? You are wasting everyones time more than anyone else
Also Please note that posts #41 and #42 are on the Blog Miami Condo Rankings Page Goes Live
Regarding Jade (1331 BRICKELL BAY DR) #211.
There’s 2 websites that provide nice tabulated sales data. If they are both correct, then apparently the unit was on the market/MLS for 6 days with a listed asking price of $194,900 before the sale at $190K.
Obviously, there’s more to the story but that’s all that is public knowledge.
I originally tried posting the links but the post is getting flagged so I have to leave the links out.
Thanks JL. Yeah, this is a curious sale. Banks have typically been pricing their REOs at close to what they believe to be the market, then all the sudden this one is listed way low at ~150 psf, and it is gone in 6 days, when the median days on the market is more like 140 days, maybe longer for REOs!
The buyer is in the process of getting her agents license, so she may have had some connection or inside info. The kind of real estate insight we should be getting on this blog. Instead, in about 50 more comments, we should know whether FIU’s business school is better than Wharton.
Wharton and FIU are not in the same league. FIU is a great school to get an MBA and make 150k a year in Miami or elsewhere in Florida. The school is very affordable and heard that their engineering program is also pretty good. My coworkers daughter goes there for practically nothing. Much better than myself forking over $1000/month for my student loan payback.
Wharton, however, is in a different league. Most Wharton grads I know were making 150k as IB’s straight out of undergrad (and working 100 hours a week). Most will be retired millionaires by the time they are 35.
To claim that FIU has a better international business program just because US News says it does is laughable. The company that I work for would hire a Wharton grad to work in our Tokyo office over an FIU graduate any day of the week.
Guys, lets not insult colleges here. It’s not right. Those two FIU grades had better sense than all the Wharton and Harvard grads running all the Banks like chuck prince, stan o’neil, fuld, etc. So your pedigree definitely opens more doors, I won’t argue that, but doesn’t make you better than anyone.
skbi; Typically the condo hurricane insurance goes with a 10% deductible. Our building had an assesment value of 66,000,000.00. Therefore the unit owners had to divide the first 6.6 million dollars among 168 apartments again in my building. One then has to hope the insurance company remains solvent to pay the claim which I always felt was unlikely due to the extensive damage which would be incurred in multiple buildings. An owner could be in for a big surprise if the worst happens. Any special assessments would be in addition to the amount incurred after the deductible is met.
Impact glass is not the holy grail people think it is.
Glass balcony railings are costly to replace.
Roof top palm trees can do a ton of damage.
Insurance companies will become insolvent once a powerful storm hits Miami. Special assessments will have to cover the lack of insurance payments until the government can bail out insurance companies.
People who own multiple units in one building will be wiped out. That includes my Wall Street vulture fund buddies.
Is the HOA or the individual Owner responsible to reapir the following in a hurricane damage?
1. Balcony railings and glass.
2. Glass windows and glass sliding doors.
330 posts in one short week!
This is one of the most successful blogs I know.
Lucas should start accepting online advertisements and make some money.
Samir
sad to say but if you think the area will not scare of anyone who wants a new apartment with great views your are delusional . I have been looking for a condo to rent and eventually purchase
I saw the pictures of 900 biscayne and I was impressed , loved the views the fixtures the layout hte kichen etc .My husband and I live in both Florida and NY and I told him this is a beautiful building people are raving about it and he should come down early for us to preview .
I dismissed all the negative photos I previously viewed from this site concerning the safety of the area .Finally “the day ” came ,the building is superb the ambiance in the lobby and within the building is a worlds away from what I saw on the outside and surrounding areas .The state of this area was shocking to me ,reminiscent of India with the dirt poor areas a mile away an upscale condominium.This area is borderline war zone and I could not get past the way it felt .No amount of luxury or Bay views could convince me to live in and around this slum .
I remember telling my husband about renter Tom’s comments about carrying a gun and knives …. we had a good laugh and thought it was hilarious .Until the unforgiving reality check we saw this week .
Lian, Or what ever maybe the name of the week,
This Looks like another hit and run post.
The area is not even remotely what you described. When you make such outlandish claims, the laugh is on you. The whole spiel about you, your husband, living in FL and NY and you wanting to rent to buy and other stories………. How much are you asking for the Brooklyn Bridge by the way?
Dirt poor? Borderline War zone? Guns and Knifes? I am actually cracking up laughing at your state of mind.
Do yourself a favor. Just check to see the tag on your wrist. The name of the institution from which you wandered away should be on there.
AJ said:
“This Looks like another hit and run post.”
This blog would be much better if you’d stop jumping on people and accusing them just because they state their opinion. The paranoia is getting tiresome and you’re not a victim of anything, you invite insult. You seem NPD to me if not BPII.
doc T- thanks for the info. Just to be clear the insurance policy wont even kick in(due to the deductible) until there is 6.6mil+ worth of damage and even then residents would get a 40K assessment and insurance would hopefully pay for damage over 6.6mil. That is much higher than I expected so I guess its there for the catastrophic event.
AJ- good question regarding glass balcony, who is responsible? I could see those being VERY expensive to replace.
AJ- you do seem to attack anyone who doesn’t call your neighborhood wonderful. I have lived in the area and tend to agree more with Lian’s opinion than yours.
Renter Tom,
What do you think about the several Oceania buildings ?
What is their quality ?
Are they still under partial German ownership ?
I rember, when they startet with the first towers, the developer was a German lady.
I think the three Oceania buildings on the beach look nice, but fairly empty although they have more lights on then the new buildings. Maybe once a week I will look out and see someone in the pool. I think there is a restaurant in there too and large workout room….haven’t toured it yet. I think they were built just a bit over a decade ago so the units probably need some updating and maintenance items are probably getting larger. They have been replacing all the balcony glass railings. Other than someone’s parrot on a very low level balcony that whistles and does cat calls all the time confusing beach walkers it looks like a decent building that is more modestly priced. It is worth a look.
Renter Tom,
Thanks, do you have some additional information about the developer ?
Visionary – No idea, it looks to be an established group of buildings and looks decent. Have no idea about the developer since it was 10 years ago. I don’t have anything negative to say about them at all. They do use hurricane shutters so the glass must not be the super thick new glass but from my understanding the new hurricane glass can still pit in a hurricane and would still need replacing so the hurricane shutters may be the cheaper way to go in the long run since replacing these huge glass windows would be a challenge I’m sure.
Hehehe, one of these days AJ is going to be lecturing the mugger stabbing him. He’ll inform him politely that, “you shouldn’t be stabbing me because of what an up and coming and vibrant neighborhood this is.”
Well, a top 10 international business program that is pretty much free to attend, or a program that costs 150k to graduate from.
Do those Wharton grads make 30 grand more out of the gate?
As I said, with a new Law School and a new Medical School, where do you think Miami’s lawyers and doctors are going to be coming from?
I think it’s in pretty much everyone’s best interest for FIU to continue to grow and improve.
AJ
how is that a hit and run post? the neighborhood sucks. it’s a dump. there is nothing to do there. venture into the park at night and you invite trouble. how is lian’s post wrong? really, please enlighten me.
at any big name firm, i can guarantee you that miami’s lawyers will not be coming from FIU. the lowest they’ll go is UM, a third tier toilet with strong alumni support in this town.
AJ –
Regarding your post #306 inquiring as to condos in South Beach for $500/sf, you can, you know, buy in South Pointe – with spectacular ocean and Cut views – for low $500’s/sf. Yeah, its not Continuum/Il Villagio, but….views to beat the band.
jcrimes
Lot of nerve calling the kettle black. It was you just last week on this post who admitted that you are an ambulance chaser – didnt you or am I mistaken? Where did you get your degree-wasnt it University of Phoenix Online? Imagine that -the pond scum er I mean “lawyers” critical of one another.
I do my best to avoid these name-calling, insanely off-topic bits, but I just can’t help myself on this one.
whoever is saying FIU is anywhere near Wharton in anything (except maybe mortgage fraud studies) is simply delusional. No one outside of a 30-mile radius of FIU has ever heard of the place. you’re embarassing yourself to take one this any further. Just stop it.
I’m sure it is a fine school. We have people in our accounting group from there and they are competent and nice.
this is the same line of reasoning used by those who call Miami “a cosmoplitan world-class city.” It’s not. Miami is a genital wart near the tip of America’s dangling appendage.
Kramer sounds a lot like AJ! LOL
Most schools teach the basics the same, use the same textbook, etc. “Prestigious” schools, of which I am a graduate of undergrad, grad, etc. aren’t really that special, limited seats and charge a lot yes and you get to hang out with people of similar caliber, but each school teaches calculous the same and the “non-prestigious” schools probably teach some things better since the instructor/prof teaches versus some grad student who is busy and may not have the best english skills. So, for undergrad, where you get a more general education, the school is just a name for a club, the real test is the graduate programs and degrees.
With that said, Wharton has a top notch MBA for sure but like most things what you put into it is what you get out of it.
calculus…. (typo)
I don’t know, I’m going to let the experts discuss school rankings. Like the people on this board. I wouldn’t trust the actual rankings and data. I’m going to go by completely anecdotal information.
I agree with SBKI, AJ the cheerleader just seems to attack anyone with a viewpoint opposing.. he’s so defensive about it..
I’m renting for the next couple of months until my condo is ready at the icon and a while back i was actually considering renting at the Marina Blue. After looking at the area I realized that’s not somewhere I would want to live.
Gentleman; the glass balcony is covered by the HOA. We had radial glass in our building and it cost over $2000.00/panel to replace. The glass had to be ordered and took almost two years to mfg. and get installed. You see in a hurricane everybody’s glass is breaking and everyone wants it replaced at the same time. Demand exceeds resource capability. Other common areas include your sliding glass doors and exterior walls.The cost therefore is borne out by the condo assoc.
With these policies you are basically self insured but at a high cost.. Unfortunately you can’t self insure your building in S. Fla because the bank won’t give you a mortgage without the windstorm damage policy in place. So you have to go to the insurnce companies. By the way for our building the premium was $450,000.00. This was $200,000.00 more than the prior year when Katrina and Wilma hit. As these storms come through no matter where they hit you can anticipate higher and higher premiums. I also doubt in the future many of the large reputable firms will even be willing to write such policies. Just look at the current situation down here. Most communities are currently relying on the state funded program, citizens. Woefully under capitalized for a major storm.
I stand by my earlier statement. It was indeed a hit and run post. I am sorry that some people “conveniently” do not see it that way as it subscribes to their notions.
Just like you build a credit history with financial institutions, on this blog you build a ‘Credibility History’. Credibility History is not how credible your posts and your views are. It is about how authentic you are and how consistent you have been. Probably Renter Tom may actually be Owner Jones in real life. But at least I know that the person is real and there is a pattern that we all can refer to or fall back on.
But then once in a while you come accross a name or a handle that you have never seen. That post is either extremely critical with outlandish claims or outright lies. You never see that person again after that post. Do you guys actually think it is real?!?
The same goes with a hit and run post which is extremely positive about something too. I am wary of such posts also. Just because someone touts my line of view does not make them less of a hit and run post.
But 90% of hit and run posts here are very negetive. The housing bears love that. But I have to point out the anamoly in such posts. After that if you still want to believe it is genuine, it is your call.
Coming back to “Lian” post, if any of you guys actually think the area represents any of the following, then I do not understand why you are even living in Miami in the first place or wanting to buy here.
These are the outright lies (or maybe you have no idea what these words mean in the first place. Someone should actually send you guys to such areas around America or the the World and you would come back running saying what a paradise Miami is)
1. Dirt Poor
2. Borderline Warzone
3. Guns and knife (Territory)
I am not sure about what is and what is not covered by your condo HOA. You would need to check the condo docs and insurance policy. If you ask the agent a question or whatever, GET IT IN WRITING. The balcony glass should be a condo expense but may be charged the deductible to the individual unit owners that are affected. It could be a “limited area” that is your expense to maintain. Best to have a unit owner policy with the same company as the condo HOA so there is no bickering back and forth, which is never fun.
What also amazes me is renters that don’t get a renter’s policy for just general liability, regardless of content insurance.
Rob Roe said: “i was actually considering renting at the Marina Blue. After looking at the area I realized that’s not somewhere I would want to live.”
Why not? You could don your body armor, holster up and walk down Biscayne to visit Pace Park at 3:00 AM.
Just cam efrom the are cause I have an event ther tonight. Yeah buddy I’ve lived here all my life and I still have to walk like I gotta swing at someone when I walked aroudn that area in the day and night. Bototm line PArk West…right now is decrepit and shaddy. Smells like piss and is overrunned by bums. Withou the club kids coming out to party on Fri and Sat night no one would hang around Park West cause there is nothing to do unless you liek to hang out at Gold Rush strip club.
In the future it “May” be different but right now to think that it is safe or a nice place to walk you are wrong buddy.
The condos are nice but behind them all is trash. Go down the block on Sunday morn behind Marina Blue. You’ll see over 100 bums laying around. Just what I want to see from the corner unit from my luxury condo.
To those discussing about the college. Save that shit fro someone elses blog this is a condo blog.
kramer…your post really reveals just how dumb you are. i know i never said i was an ambulance chaser (i challenge you to point to the post in which i stated as much…perhaps #75?). in any event, when i did practice law, i was a corporate m&a type up north…not a plaintiff’s tort lawyer (i doubt you even know the difference but i digress).
as for my degrees, lucas can attest to the quality, or lack therof, of one of the schools. as for the other, i won’t reveal it, but suffice to say, it’s from a top private school up north which was way too expensive.
Please stop debating about school degrees !
This blog shouldn’t be a kindergarten.
Miami has nothing over San Diego,
http://www.sddt.com/Finance/EconomicIndicators.cfm
People, please please please go to this link. I cracked up for like 10 minutes when I saw it. click the enlarge image link. Even AJ, you’ll find it funny:
RAPID DEPLOYMENT ARMOR BAG™
When a tactical response is necessary, but waiting for a tactical unit is not an option, the Rapid Deployment Body Armor Bag is the solution.
With Point Blank precision, this revolutionary new product rapidly converts from weapons carrier to protective body armor. No other product in the market allows for the concealed carry of a long-gun with instant ballistic protection within a matter of seconds. This Rapid Deployment Armor System provides first responders with immediate access to a long-gun, additional ammunition, soft armor and ballistic plates that can protect against rifle ammunition. This multi-functional tool is the first of its kind and is ideally suited to handle the growing crisis of the “active shooter”.
http://www.pointblankarmor.com/RDAB.asp#
Everyone rate the hilarity on a 4 star scale. Lucas what do you think for the Miami professional? You have to wear a suit most of the time right?
Aj
If I were a Cuban or Haitian immigrant who just got off the boat (dry foot and all) I would think that Miami was Disneyland .However I have always lived in upper tier neighborhood and I appreciate luxury.I love Florida for the weather and the easy commute and their are some good parts of Miami but that area is undeniably one of them and that is a fact .
Our graphic description of the area are our honest perceptions of what we saw .Don’t get emotional and upset because your reality is unreal to us .It ‘s okay to voice our opinion on this blog about miami .Post after Post you sound like a overzealous fickle whiner who takes negative comments to heart .
If someone sent me to a third world country I would know what to expect and under the circumstances I would not be shocked .I have been to third world countries and the area around 900 and and MB are very reminiscent of those places. Miami is undoubtedly better than some places but that area simply is not good and I dont want to live somewhere and convince myself that I am safe by saying “at least I’m going to get my face bashed in but I’m not going to step on a land mine.”
Ps .I have been reading this blog for months on a regular basis , an equal bystander I have posted probably 4 times . Does that make me a hit and run? What’s wrong with a person stumbling upon this blog reading the comments and inserting their 2 cents ,be it negative or positive .You resent the posters but the posters on this blog are the least of the real estate market’s issues .
Lian,
If you are afraid to live in Park West, You should be afraid to live in 90% of the big cities in America.
In fact there is another poster, he says that South Beach is barely safe enough for him!!!
My head is spinning thinking if we have become a nation of chickens. Is this the wussification of America? Infact it is quite embarassing to read such posts by fully grown men implying that they pee in their pants even passing through a neighborhood. It is beyond pathetic.
You say that you only live in top shelf neighborhoods. You also said that 1 mile from 900 is undesirable areas. Let me know what luxury neighborhood in America you live and I will show you a ghetto 1 mile from it, including Beverly Hills and Upper East Side.
All you like minded people should live together and build a wall around yourself. You will be doing a great service to the rest of the soceity.
I have value for my life and I don’t want to dare myself to dare walk outside .” wuss ” ha if I wanted to do something daring I would go white water rafting or hang gliding maybe bungee jumping.
The more you yelp and cackle in an attempt to incite the unsuspecting and ignorant masses that it’s ok to take a gamble and walk around there or face being called a school yard name as chicken or a wuss, will not change the fact that it is a very bad neighborhood.
You are grasping at straws to validate the area and sounding really fruity .What’s wrong with a grown man having value for his life .Many have lost their life at the hands of bums ,robbers and addicts but your saying take a chance with them ..Could it be you are trying to bring some comic relief to the the blog .Perhaps you grew up in a really rough grimy desolate neighborhood and what presents itself in and around 900 is all too common and standard for you .
Your diverting your ideas in the wrong direction,a wall needs to be built around the dangerous miscreants that flutter around the area and like minded people who have no value for their surroundings and their lives such as you
Lian, Trawling the internet at 3 am! Doesn’t sound like a whole lotta married woman to me. The whole tenor and content of your first post made me wonder that your name/story is just a front.
Another dead give away; a woman does not call another man “Fruity”. It is very rare. Even if some women use the word, it is the trash that do, definitely not a “rich lady” like you who lives in luxurious neighborhoods!
I am really curious as to know what luxurious neighborhoods have you lived in.
Do not even try to buy in my Manhattan Co-op (that if you can afford it). The likes of you do not even get a chance for an interview with the board, leave alone an acceptance.
AJ you are out of your mind plain and simple. Have you read the Miami Herald recently? These animals kill taxi drivers at red lights. They shoot at random people in the streets. They are schizophrenics and criminals. They have no regard for you or your children. They would crush your baby’s head for 7 dollars. Think I’m exaggerating? Watch “First 48” on A&E. You could be one of those victims.
AJ – You need to lighten up here on attacking people that disagree with your neighborhood assessment…it is juvenile and smacks of a very desperate flipper in trouble. I realize the burden of subsidizing your tenants rent can be stressful even if you pretend you’re a better man for it. Obviously you can’t afford your real estate holdings or you wouldn’t be so desperate and attack everyone here. Banks are working with owners trying to do a short sale, you may want to look into that. We get it, you made some bad real estate investments and are trying to shore up the “vision” of the area that you were sold in the marketing brochures, but the problem is people just aren’t buying that bull anymore now that the greed blinders have been lifted. Foreclosures and bankruptcy are other options, but you should try the short sale route first especially before you have to start picking up the condo dues tabs for non-paying owners. We also get it that you fancy yourself living the “glam” lifestyle based on a real estate “empire”…just another Trump mini-me. We get that. You should focus your efforts at shoring up your personal balance sheet and increasing your income to help get you out of your financial troubles. Here is the Miami help/suicide hotline number if you start getting manic or depressed again: (305) 358-HELP. Best wishes and good luck.
Now back to topic, under what conditions would a bank finance this $1.9M condo, owner-occupied required? Primary residence required?
The homeless shelter about 2-3 blocks behind 900 Biscayne is closing up and moving a couple of miles west past I-95. The transition is in place and this area will develop rapidly. The moment of change will come in about 6 months when the new Miami Art Museum is scheduled to break ground. The architects are the world renowned Swiss gentlemen Herzog and DeMoroun-excuse my french- but if you havnt seen the design I presume its on their website. Imagine the view of this Miami icon from your balcony at 900. Their money is in place regardless of Miami Grand Plan. I believe the science museum next to it is close with their funding also. The early bird gets the worm.
Btw- I agree with Aj on big city living- Being intimately familiar with NYC- some of the most expensive residential real estate in Manhattan is – among others – upper 90,s Fifth Avenue -just a few blocks from Harlem. Can we all agree that people like Mark belong in Fargo and fervently pray they never make it downtown. One other observation-doesnt jcrimes sound like a legacy baby. Anyone whose daddy has a fewbucks can get into an Ivy league school. Look a the C student sitting in the White House. For God Sakes jcrimes all Angel and jr56 said in their post was they graduated from FIU. Yet you managed to turn negative once again and trash them plus University of Miami grads. You must be a joy to live with. Maybe Angel and jr56 and people like them went to FIU because – even though they had the stats to go Ivy League – they went to FIU because of the money involved or maybe they had a sick parent and needed to go local or a million other reasons. I hope you and your kind dont make it downtown either. Also when I have more time this week I will post my reasons and OPINION- yes its just my opinion- on why the bottom has arrived and people need to pull the trigger within the next six months if they seriously want to be downtown. Finally the end is in sight. We win-you lose-game over!
Are AJ and Kramer the same people? Sure sounds like it to me. Defending ghetto areas and personally bashing people. So sad, so very very sad, but that is what happens to desperate flippers turned floplords. Perhaps jcrimses can help you with your short sales or bankruptcies?
Hey Renter Tom, how can these people draw a comparison between Manhattan and Miami?
New York is one of the safest cities in the US. It is safer than most suburbs. Parts of Miami are on par with Atlanta, Cleveland, Detroit, St. Louis, etc. Are these people unable to search “murder rates per capita” on google? Miami is #25 but certain parts are much worse. Miami Beach is just barely safe enough. It is the 35th most dangerous city in the US. That is dangerous. I have a very pretty and young wife, and I don’t want her dead or raped like those two teenagers that were on a date 2 years ago and abducted raped and murdered by 3 men in Miami Beach. That is just one notable case of murder. BMWs are regularly broken into. Homes are regulary robbed. This happened in Miami Beach. I won’t give too much personal information, but a relative of mine was murdered during a home invasion. I carry a concealed weapon like many sane people in Florida. Two days ago, Miami Herald profiled someone that killed two attempted robbers at a gas station by FIU. The other two robbers are now being tried for murder (new law that makes criminals responsible for any of their fellow bandits killed during the commission of a crime) If someone invades my home it is two 45ACP rounds in the mediastinum. That is 100% legal. There have been people shot in the street like dogs (like in the movie Scarface) in Miami Beach. There are regularly car accidents on the causeway because people are intoxicated. Miami has one of the highest mortality rates for MVAs. I consider this crime. The most likely cause of death for someone 25 to 45 is MVA or murder. AJ/Kramer, you probably don’t value your lives because you are unhappy, depressed, broke from RE speculation. The suicide hotline should be helpful. Please troll other blogs.
Renter tom, I think we should have a “don’t feed the trolls” policy from now on.
can we get a new post? I’m tired of hearing all this elementary back and forth Bull$**t
Oh by the way, Harlem has Columbia in it, and it is not as dangerous as you presume. I should know, I went there for undergrad.
Lucas,
Please give everybody a dose of reality and post the CLOSING RATES for all of these shiny, half-or-more empty phallic symbols. It’s been two months. THANKS
I have spent the morning reading the posts from this blog. And while sometimes entertaining I have to agree that more time should be spent on the actual market and not the typical degeneration of name calling the anonymity of the internet allows us.
That said, AJ you seem exactly like the type of poster you seem to detest (market bashers) yet only in reverse.
As for me I bought a townhome in the Grove around the end of 2005. Perhaps not the best time investment wise to get into the market but I love living in this area and I have a place that I consider my home. However, I would like to move more towards Brickell or the arts district.
Obviously now isn’t the most ideal time to sell so I’ll cool my heels for awhile here in shady Coconut Grove until the timing feels a bit more right. I share the general sentiment that the housing prices and specifically condos are still WILDLY overvalued and have a long way to go before they reach any kind of equilibrium. The current monthly costs are much higher the wages of the average home buyers. Add to that the supply is far greater than the demand and the current situation isn’t so tough to figure out.
The reality is the area near Marina Blue (which I would like to live in some day) is not a good one. Though I personally don’t find it outrageously unsafe I can easily see why certain people would not want to live there at this point. You can’t exactly leave your home and walk to many desirable destinations nor enjoy a ‘lovely’ stroll. Although if Walmart is built (which I support) there will be at least one more place to go to.
There seem to be good things in the future of said area but not everyone is a maverick and is willing to live there while things improve.
I am not a ‘hit and run’ poster (ie troll); Just someone who is interested in the market and interested in tossing in my two cents. Incidentally, I am not in real estate and did graduate from FIU so I hope this won’t be held against the validity of my comments too much.
If any of us could ‘predict the market’ we surely wouldn’t find ourselves posting to this blog rather we would be enjoying the spoils of our omniscience.
Best to all.
Kramer said:
“new Miami Art Museum is scheduled to break ground… Their money is in place regardless of Miami Grand Plan. I believe the science museum next to it is close with their funding also.”
I believe the Bicentennial Park makeover is projected around $60 million itself not including the costs of the 2 museums.
How guaranteed is any of the funding for these projects? Is there an escrow somewhere or were these projected costs just loosely earmarked into a future budget?
I’m not sure why people aren’t talking about this more, but basically, one would have to assume a fairly massive budget shortfall in the upcoming years unless people are OK owning a $600K condo but getting tax assessed at $1million to keep the government budget on track.
About 30 years ago NYC was a laughing stock to the world and on the verge of bankruptcy with a lot of chaos –and yes, very cheap RE that people were afraid to own-. A little more than 10 years ago Miami got close and was declared by the governor to be in “a state of financial emergency”.
It seems pretty obvious to me that every condo/house that sells at $300K is still going to have to be tax assessed at $500K (or the equivalent action of a lower assessment at a higher milleage) or the city won’t be able to stay afloat. Am I way off base here? People that buy a property at 30-40% off the bubble prices, are they expecting and prepared to get taxed at bubble values? If not, how is Miami planning ot deal with this looming shortfall? Maybe Manny Diaz is planning on bringing in Jack Welsh to infuse Six Sigma into the Miami bureaucracy and get a 30% efficiency in the budget in a couple years?
I have a few slightly off topic remarks:
1. Miami area seems to be deserted for the last week and a half. Coconut grove (where I live) is dead. Parking is so easy to find and there is no wait at any of the restaurants. Sobe also seems awfully quiet.
2. Check out this article in Time about a Cat-4 hitting Miami: http://www.time.com/time/nation/article/0,8599,1839219,00.html
AJ,
This is a quote from your posting #269:
” Instead of just posting their views, they started to trash any opposing point of view and shouting down anyone who dare say anything positive about – well anything. The situation has become so vitiated that you can get beat up by these guys just for saying “roses are beautiful”. Something positive!? How dare you. Nah Nah Nah. You are not allowed to say that”
This is a quote from your posting #333, in response to Lian’s opinions:
“Do yourself a favor. Just check to see the tag on your wrist. The name of the institution from which you wandered away should be on there.”
Blatant hypocrisy undermines any credibility that you thought you had.
I have been reading this blog regularly for the last 10 months but this is my first post. I don’t know your neighborhood well, having only been there once briefly. However, as an objective observer, it seems that the majority of posters who have expressed an opinion on your neighborhood consider it to be somewhat decrepit and dangerous. You have accused these posters of being crazy or “wusses” or of trying to negatively affect the condo market via this blog (as if). The only possibility that you haven’t considered is that they’re right and you’re wrong.
This blog is far more interesting when you’re not posting on it. Please consider keeping your fingers off of the keypad for a while. Thanks.
Dover and Native,
I will only go ballistic if someone tells outright lies and outlandish claims as “Lian” did. I have been critical of Park West before. Read my posts. It is always not a gung ho cheerleading.
Anyway I am enjoying a fabulous drink and a fine weather on Ocean Drive. Going back to the good life . Next stop, Bayside Marina.
Renter Tom, I am very happy with my life. Keep hating.
The Great AJ Mutiny of 2008…
In general, I’ll scan his posts. If they look long, or there are too many in succession, I just don’t read them. And, though I agree with Renter Tom on most points, the same holds true for his posts.
You guys have interesting opinions that bring value to this thing. They just tend to get a bit repetitive.
Anyway, for those not in the area, park west isn’t really dangerous. At least it does not feel that way to me. It’s just gross. AJ’s probably right, if you think you’re going to get stabbed…well, you’re prolly a little paranoid. But to pay those prices and walk/drive out to blight every day, just does not seem to make sense– never mind the economics of purchasing in these uncertain times.
Lucas, JL, jcrimes, Wild Bill, AJ, and countless others, thanks for keeping this thing going. These are fascinating times…real estate became such a big piece of the US economic puzzle. It’s great to see professionals from different walks of life share their perspective.
…and you should all be reading this:
http://calculatedrisk.blogspot.com/
Ok Tom, I give up. If I can’t put sense into you by reason and logic, Letme use some TLC.
Firstly you should get out of that club room, playing canasta with your other retired buddies.
Next step, stop buying frozen dinners from Walmart and get out once in a while, open up that tight fist and enjoy life for a change. ll those depressing thouhts are no good for you. One day you might go Postal.
If you have tough time spending $100 or so for a evening out, Join me and my friends on Tuesday. I will pick up your entire tab and show you what it means to live life and also be diligent about your one and investments. I am really serious.
Have you ever thought why you may have aquired a million bucks but you dont have a girl frend (or boyfriend) or wife or just friends? No one wants to be around a scrooge. You may call youself a millionnaire next door but at the end of the day that is the sad truth.
I do not understand some negetive posters here. Wat are the trying to achieve?
1. Some are so poor, even if you want to sell them a flat in MB, 900, Q or 18 for half price, they still cannot afford it.
2. Some like Tom will never buy anything in life because, nothing seems to justify the VFM factor for them. (value for money)
There are real people who have genuinely posted objective negetivity here. I do applaud them.
Regarding some critisism that I am doin exactly same as these other posters, I have tis to say:
I do not challenge these peoples assertion that the market is going to tank or SF is going to hit $125or $5 or some suchthings. After all some are as clueless as that bum Alan Greespan. In any case allthee are future predictions and you can say anything you want. I will just laugh and move on.
But when they try to tell blatant lies such as describing a place as warzone, dirt poor etc, I will rip their lies to shreds.
So bring it on.
Last night I parked my car in front of 900 (I usually park infront of MB or 900 to save $20 on parking, Thanks Tom for teaching me frugality where it is necessary). I walked to the clubs behind, Had a great time. Did not see more than 2 bums! I even checked out the Park West Metro Mover station. I walked back to my car, sat on the steps of 900, marvelling the beauty and grandeur of that building, enjoyed the dazzling AAA and walked to the waters edge. The night was so peaceful at 2 am and so spectacular. For a minute I forgot all the nasty things these haters said about the place. I thought to myself ‘the people who live n this building are truly blessed’.
I went back to my own home in Pace Park area happy, safe and peaceful as always.
I just remembered that Somebody called me a frustrated flipper. I have some news for you. After I closed on my flat, I was offered a sum higher than I paid for that flat and I rejected it. I bought to live. Not to sell or make a profit. In fact do you want to know how I put my money where my mouth is? Recently after reading all the negetive talk on his blog, I went ahead and bought 1 more parking space and 4 storage rooms in my bulding (rooms, not cages). I have never felt more confident about the future of this city and Pace Park and my building than ever before. In fact my main purpose of this current trip is to purchase a 3rd parking space in the building so that I can park 2 of my beloved Crossfire SRT roadsters when I bring them from NewYork.
Go ahead and hate all you want. Some people just live their life to the fullest extent and some others just gripe, gripe and gripe.
It seems that quite a few Marina Blue units just came up on the MLS this past week or 2.
Is Everglades on the Bay the next major building to start closings next? I thought contractually they “had” to close starting September but a realtor on craiglist -who seems to have good ties with CABI- is saying 70 days. I assume Icon won’t be ready by then.
As an aside. The Everglades website says the rooms will all be carpeted so if you’re looking at renting in the area, I’d hold try to hold off until this building comes online. A person who closes can immediately rent it out without having to do any flooring and the developers themselves could immediately rent unsold units out. One would think this building will be a heavy rental place with 870 units.
I agree with AJ on the safety and desirability of the Park West area and the area around Q and 1800 Club — the area around PW is not pretty but it is definitely not a war zone and safety is not an issue. As he said, if you find these areas unsafe, you should not be living in a major city. I’ve lived in London, the West Coast and the Southeast and visited many cities worldwide, and can say with certainty that these areas are not more dangerous than most downtown areas after dark. If young, single women can walk from parking lots to nightclubs in the area after midnight, “Lian” should have no problem surviving the round-the-clock RPGs, howitzers, and anti-aircraft artillery fire “she” seems to have witnessed in these areas.
I strongly agree with “Tom” on the huge potential for declines in Miami condo prices, real and nominal. Anyone who doubts we’re in for a rough ride should read about the Fannie and Freddie bailout. Also see blogs by Mish Shedlock, Mike Morgan, Mr. Mortgage, etc. But Tom is way off base on Park West.
That said, both AJ and Tom seem to have personal agendas. IMO, AJ seeks to promote his neighborhood and protect his RE investment and Tom seeks to help talk down the local condo market to speed the correction and enable a reduced price purchase. They are both valuable contributors but the sniping is getting tiresome!
Also, it appears that Performing Arts Center and American Airlines Arena patrons (including those who dance the night away at Gloria Estefan’s nightclub) somehow have been able to survive the constant automatic weapons fire, anti-personnel mines, anti-ship missiles and bioweapons deployed in the Park West area. Dunno how they do it but these brave souls keep coming back for more. Maybe they like war zones or perhaps they think it’s all a video game.
Wow…just read that a Loft Downtown unit that sold for $248,000 in 2006 just went for $97,900. That’s a pretty hefty drop.
eyeonmiami.blogspot.com/2008/09/deutsche-bank-foreclosure-sells-at-40.html?ref=patrick.net
That comes out to $124 sq/ft.
FWIW, Unit #204 -which I believe is 1 floor beneath this one- sold for $135K = $172 sq/ft in 11/29/07. Not sure if it was a regular sale or foreclosure.
Great link Shelley, the author gave the most balanced view of downtown Miami I’ve seen yet.
Quoting: “Oddly, hardly anyone lived in this area prior to 2002. Miami’s downtown is bustling with workers during the day but devoid of pedestrians and amenities (restaurants, grocery stores, etc.) at night. It is slowly starting to change — a Cultural Arts Center has been built — but the area is mostly populated by tourists and homeless Miamians at night. Brickell (a few blocks further South is now a hotspot) so the gentrification is creeping in. I feel safe walking in the area at night but some don’t. I would live downtown — I lived in Manhattan so I am fond of grit.”
AJ – Your posts are pretty schizoid. Seriously there is medication out there that works. I do hope you continue to go “all in” in the local real estate market….that way you will have to shop at Wal-Mart, which would be good for an uppity, elitist, snotty guy like you. I currently own outright over $1M in real estate holdings, not in this market! So, yes I do know a thing or two about real estate. I have also owned over $5M in real estate (again not in this market).
Just FYI – I’m pretty sure I haven’t commented on Park West directly.
My posts are more of a coming to understand THIS market. I’m from the midwest and we didn’t have this craziness and the whole thing is fascinating. Why did it happen in certain markets, and not others? Interesting too is that the big bubble markets also had a large immigrant – non-resident (or whatever you call it) population. In my area, people from Africa got taken by over paying (by other Africans by the way). I guess it shows you the supreme importance of understanding real estate and the LOCAL market before committing to purchase.
I don’t think my posts (well maybe there are a couple out there! LOL) are really to talk down the market, but to show a sober reality (keep on drinking those drinks, it may help you avoid reality). My conclusion is that the real estate market will over shoot on the down side of the long term trend line. We will see. The Fannie Freddie thing may help soften the decline a bit (but market forces will ultimately rule), not sure yet since I need some time to digest the move. For most people, the purchase of a home is one of their largest purchases, prudence is important as we all can see from the imprudent bubble.
This is an incredible economic time right now. Be prudent, not impulsive.
I’d take you up on that drink offer AJ, but I haven’t even returned several phone calls to go out over the weekend since I was so busy…gotta call back since I hate seeming to be rude. So, I will have to decline at this time.
Key purchases of parking spaces or storage spaces can be prudent IF AND ONLY IF you buy them at the right price….you make money in real estate at the time of purchase.
Shelley and JL…This is the info I would to see more of on this blog! Thank you!
What do you Guys/Girls think about Emerald at Brickell? I see prices for some units below 200/sqft. Building looks high end. How sound is the HOA?
AJ and Renter Tom… you gotta stop.
You both have good insight, but it looks like all you do is name calling insetad of posting good information and staying on topic!
Like I said many times to Lucas… either this stops or this blog is dead ina few months
BTW, how about a new post?
Lucas,
Thanks to the bullying and whining of Renter Tom, AJ, Un-Related and others, you’ve just lost me as a reader…..
“Lucas,
Thanks to the bullying and whining of Renter Tom, AJ, Un-Related and others, you’ve just lost me as a reader…..”
I’ll be with you soon. This board is becoming unreadable. It’s a shame.
AZ88 and Shelley… I will probably join you soon …
And I think that unless Lucas or the readers start taking this more seriously, this blog will be dead in a few months.
Lucas… You know I am a strong supporter of your work, but this needs to stop!
BTW, here is an excerpt from a newsletter from John Mauldin which I found very interesting:
Delinquencies and Foreclosures Spike UP
Phillippa Dunne (The Liscio Report) sent me this note a few moments ago:
“The MBA delinquency numbers just came out. In Q2, foreclosures were started on 1.19% of outstanding mortgages, up from 0.99% in Q1, and nearly three times the pre-2000 record. The total stock in foreclosure was 2.75% of all mortgages, more than twice the pre-2000 record. Seriously delinquent (90 days or more, plus those in foreclosure): 4.50%, also more than twice the pre-2000 record. Most of the previous records were set in the 1980s, when both unemployment and interest rates were considerably higher than they are now.”
If 4.5% are 90 days or more behind, it is likely that foreclosures will rise precipitously. If you think there is a crisis today, just wait six months. Mortgages past due by 30 days are more are now at a nose bleed 6.35%
Think about this. Freddie and Fannie guarantee 50 times their capital in mortgages. What would a 2% default rate do to them? 8,000,000 homeowners now have negative equity in their homes as of the end of the first quarter. That number is rising as home values drop.
Some cheered the fact that home sales rose last month, and that is a good thing. But the number of homes for sale rose even more. There are now 11.4 months of inventory in the existing home market. New homes show an inventory of over 8 months versus an industry norm of 4.3 months.
As I have been saying for almost two years, the housing market will not normalize until some time in 2010. It is going to take a long time for the markets to work off the excess inventory.
Hugo P. – All is not lost, I hear there is utopia somewhere in downtown Miami and now is the time to increase your exposure to res r.e. (sarcasm).
Overall, there is a 2x’s inventory of used and new homes on the market….and the numbers are going lower. Foreclosures haven’t peaked but hopefully someone out there will refi this stuff. 1/3 rent, 1/3 own with no mortgage (true owners if you pay your taxes), and 1/3 “own” with a mortgage. I had read somewhere the number of behind loans was 9%….
All point to lower home prices going forward. The fed govt can’t really do anything about the asset price of homes, that is set by the market.
As the level of discourse this blog suggests, on the internet, no one knows you’re a teenager.
By 2x’s, I meant twice the normal healthy market typically defined as 6 months supply….
AZ88 and Shelly,
You both quoted:
“Thanks to the bullying and whining of Renter Tom, AJ, Un-Related and others, you’ve just lost me as a reader…..”
Sorry, but I am a minor, fringe player in the “board war”, which I consider unnecessary. I post only during regular “human hours” and average less than one post a day. Two of my last three posts have been asking for an updated “Closing Rate” thread.
If offended, by my caustic sense of humor on “neighborhood issues”, I regret stirring up your feelings, however, I have memories of Miami stretching back to 1991. It is evolving, but “it is what is is” as it progresses up that evolutionary curve.
Miami 2008-
I assume you are talking about unit 802. I am not sure that line is 1500 sqft. The other 02’s listed for sale are 1,110aq ft. If it is 1.1k sq ft that would make it around $260/sq ft.
I have seen an 03 line it had great views and the building’s finished seemed very good and I like that its a small building. I believe this is the same developer as Bristol Towers.
I too am curious about the association since some of the fees seem really high.
As a general question how does one go about finding out about more about an association and buildings finances?
Miami 2008, SBKI.
I can’t tell you much about purchasing a unit at the emerald, but I signed a least to rent a an 03 line 2bd/2bath unit at the Emerald a couple of weeks ago: I am very satisfied with my decision. The finishes and views are fantastic, and for what its worth the building seems to be more occupied than some of the still empty husks in downtown/brickell.
Just had a $16.95 executive lunch at the Brazilian Churrascaria on Biscayne and 22nd st. I think it is called Maino or something like that. The steak is superb and the Sald bar is outstanding. Check it out Mon-Fri 12 to 5 pm.
Sorry guys (and gals). I’ve been on vacation for the past week. I’ll try to get a new post up by tomorrow night.
AJ, is it a Brazilian Churrascaria in the sense of a “red light, green light” all you can eat deal like Porcao?
Just curious.
Can’t we all just get along! lol BTW – This blog is turning into an AJ/Renter Tom show of ‘who is right’… getting tougher to sift through the good stuff -thanks to those!
IS ANYONE AWARE OF OTHER BLOGS OUT THERE WITH POSITIVE/OPTIMISTIC VIEWS ON MIAMI CONDOS? or is it really this bad??????
Rodney, surely you jest. FNM and FRE were just seized by the government. Unemployment is rising. Inventory is high. Credit is tighter than a duck’s ass.
Who is going to buy these slapdash faux-luxury rentals dressed as condos? More to the point: who has the 20% down to buy?
What did you jackasses think was going to happen?
Rodney,
you should check out: http://www.hopelessnaivedreamertoostupidtoseereality.com
or any realtor’s personal web page might also feed you the b.s. you are looking for.
Reality Police,
linky don’t work 😉 hee hee hee
Comon’ folks… there’s got to be others out there (besides AJ) who are bullish/optimistic on Miami Condo’s???? I’m I wrong?
BTW – I was told 900 Biscayne closed 200 units already. Any of those folks in here?????
The vulture fund special interest paid bloggers here (since your posting effort has to almost be a full time anonymous job :0) are serving one agenda… “keep feeding the panic and drive the price down”.
Does any one can recomend a law/tax firm to dispute the property tax on the home and on a rental condo.
thanks,
gustavo
Hey Rodney King – If you had read ALL of my posts you would realize that I was a buyer at first, but after examining the market, decided to rent instead….the home debtors apparently are offended by that on look down on me. But hey, my goal is wealth preservation and accumulation, there must be to throw money away or bury one’s head in the sand and pretend all is fine.
The fact is, this is the worst housing crisis since the great depression, in fact it could be worse. No denying that.
There are some bargains out there now. But those seem to be in single family homes, with condos you are in the same boat as all the other owners whose interests may not be aligned with your and whose financial condition may be very bad. As such, with condos, I am still very very hesitant to buy. Just do your due diligence, there is no rush. If you like something (talking about a single family home) and can afford it, go ahead and buy if you can get it at a great price and don’t mind even the great price going lower. Interest rates are low, lock in a 30 fixed rate mortgage with no closing costs and no pre-payment penalties and you’ll be OK (even if you have the $$$ still put down as little as possible in this market if you can still get a good interest rate).
The way I see it, we are more than 1/2 through price declines (the rate of decline has to be declining) but NOT 1/2 way through the foreclosure and still have an enormous inventory to work through. With that said, in real dollar terms, even buying a great price, it will be a dog of an investment…..but homes are a place to live, not an investment.
Until the “a home as an investment” and the “get rich quick” mentality is completely wiped away, we won’t see a bottom in housing. Second half of 2009 at the earliest, but that is optimistic for Florida and California.
Good luck…..and if you see police lights, just pull over like the rest of us, that way the cops won’t get made and beat you. Oh, and stay away from drugs and alcohol.
rodney
i’m not sure what you mean by pushing an agenda…i think the stats clearly speak for themselves. what silver lining is anybody missing here? the fact that 200+ units closed at 900 means all is well?
Renter Tom,
Thankyou for the advise. My nose is clean and my driving skills improved lately. 🙂
jcrimes,
I’ll add to my remark the following: “… and attnys wanting to charge 30% contingency when floplord joe buyer can get 5% back anyway” clause….
Just making a point… I know 200/560 units at 900 is nothing/drop in the bucket. My point is that in the anonimity of the internet and since there is no role call here or “what do you do for a living”, folks (not always) skew their posts (some factual / some speculative) to their point of view… and their point of view is influenced by what skin in the game they have in today. It is not a morality/correctness issue or anything, this is a “public” forum but personal agendas are very real here….IMHO.
who is the attorney on this board wanting to charge 30% that is pushing an agenda? don’t think i’ve seen that poster around these parts.
as for personal agendas, my own take is what i see everyday. and what i’m working with everyday tells me things are not all quiet on the western front. first the RMBS and CMBS market crashed. that was painful. then lending standards tightened at all levels, from residential to commercial. that was a stomach punch. the next wave is shortly upon us…i.e., the banks that can’t hold on anymore and our forced to cut the developers lose. many of you just don’t realize what role the FDIC and OTS are now playing in this whole game. regardless, once this plays out, it’s a kick in the mouth.
RK – I just call it as I see it. A lot of people apparently are pretty clueless these days. They think they can just walk in and do an impulse buy of an $800K condo with no money down and watch the money roll in…
See this link from today, govt can’t do much about the asset price:
http://www.marketwatch.com/news/story/drano-its-not/story.aspx?guid=%7BA6575BF4%2D9052%2D4A82%2D8512%2DC14FDB10856C%7D
Lesson is to FIRST negotiate price, THEN negotiate financing….
fj, In Executive lunch, the meat is limited and the salad bar is all you can eat. But if you elect the dinner for $29.95, the meats come flowing in. Instead of red light green light, they have Yes and No cards on the table. The service was really good. Also try the Salad Creations in the Cite Building on Biscayne and 19th. It is very good.
Ok Folks, I’v been on the sidelines of the miami-dade housing market for about 4 years and a vocal housing bear for a long-long time but I’m getting ready to jump back in. Why, I believe the Federal government is about to do something unheard of in US history. They are probably going to give people instant equity. Either by facilitating the forgiveness of mortgage balances to give homeowners more equity. Or by giving every homeowner a check for 50K or something along those lines. Also, given the fact that the US treasury will be purchasing assets of financial institutions tied to mortgages and homes, this will increase the probability of foreclosed homes being unloaded at the highest bid.
What am I going to to do? Scour the foreclosure market and make low-ball offers till one hits. In fact, I’ve already located a single family target
Just curious: What opinion do you have on the attorneys who help their clients receive a percentage (higher than 5%) of their deposits back?