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the parclofts price is amazing. always was a big fan of that building. really is one of the good looking projects down here. prices there, however, make absolutely no sense when considering the hood (no AJ, regardless of what you say about pace park, you cannot walk around the parclofts neighborhood w/o seriously risking your life).
this does not bode well for those people that hold contracts at filling station. that could get REAL UGLY!
Lucas,
This is my opinion of your great deals.
-Jade Unit I would consider a good deal.
-Blue – not a favorite of mine, if you follow this building you will know why, plus very high maintenance fees. Also take into consideration that the unit was sold in September, which means that they were under contract either late July or early August. Alot has happened since – we are in a different World now.
-Lucas $169/sqft for Vue at Brickell, I wouldn’t classify that as a great deal. As a matter of fact there have been other units that have sold for under $150/sqft. Not sure why you would use the sale of 2204. Having recently visited there is alot of deferred maintenance. Of the agents we spoke with they both had mentioned that alot of the units have water damage and that they are even having trouble with the Trash Chute. Some floors have that familiar musty odor… good indication there could be water damage. Upon entering building you see the walls and hallways… just a mess. Pool area and gym also lacking upkeep. The building just has this sad feeling about it, no energy. Seems that Association can’t keep up. Also not helping is lack of financing options for buyers in this building.
-Neo Vertika and Parc Lofts – Do not follow those buildings.
I agree with JCRIMES. Parc Lofts is one of the nicer more original industrial loft developments in Miami. I went to go check out a few of these units last year and then I saw the neighboorhood. That killed the deal for me on the spot. It’s not like Park West which I will dare walk through at night and often do on the weekends when I go out in that area. The area where the Parc Lofts is located is in the middle of the hood. Much gentrification still needs to happen in that area before people start moving in without fear for their lives.
JoeL,
I’m not saying that these are the 5 best deals of the year. In my opinion, they are the 5 best deals of the 25 that closed through the MLS in the month of September. In November, I will write a post for those that closed in October and so forth and so forth so we can see how prices for these distressed sales are going.
To judge if these are in fact “good deals,” you need to look at the current state of the each’s condo association and the maintenance fees tacked onto these units. Is the Jade at $215k such a good deal if your fees are $700+ per month and face a real risk of a crippling special assessment at any given time?
Parc Lofts’ association probably has the most stable financials.
I am surprised that Jade condo commands such a premium over others. There is no view from the Jade condo. I know Juan Pablo Montoya has a condo there, but why is there a premium for jade?
Lucas, Good stuff. I think specific transaction examples like these (done every month) give a better gauge of the market than broad inventory surveys when very little of the overall supply is trading.
Lucas,
thx for the post.
Lucas,
One of the best posts ever. Please keep doing this on a monthly basis along with your condo closing statistics.
Jcrimes,
Parc lofts location will be good in 2-3 years from now. After the NE 2nd ave gets revamped and the Bayview Market gets functional in a couple of years it will be gold.
I think $174.sf for a 1/1 on the 2nd floor is a not a sell out at all.
I am deeply offended by the racist comments being made on this site.. one of you bumbling idiots said that “much gentrification” has to take place before the area around parc loft is safe. Lucas, I can not believe that you allow this type of racist and ignorant commentary on your blog. It’s an outrage how everyone else just follows along and doesnt see this as offensive. I’ve spent a lot of time around there at night, I often go to Circa 28 a couple blocks over, I go to Target at Midtown, I go running at the park around there and I have several friends who live in the area and I’ve NEVER been a victim of any type of violence. You guys need to seriously examine your thoughts and what you post – It’s sickening.
Are there any Segafredo type places or OK bars/clubs/restaurants with liquor licenses within walking distance to Pace Park?
Sorry, slightly off topic, does anybody know if a 2 year rental agreement normally carries a 2 month rent commission or does it stay at the usual 1 month?
Stay away from the area around parc loft. It is GHETTO war zone!!
Monday night I was driving north on Brickell at the height of rush hour and I caught the Brickell Bridge going up- yes, I would agree it’s stupid to raise it during peak traffic hours. But, I think it’s a big exaggeration to say traffic was at a standstill for a long time. I probably waited tops 5 minutes before we moved. Was it annoying? Yes. Annoying to the point where I would complain to someone? No. I just got to send a few texts safely while I waited.
I’ve always said they should do the bridges here like they do in Chicago – ON A SCHEDULE. In Chicago it was (don’t know if it still is) on the hour and half hour and the BOATS had to wait! You’d see all the sailboats waiting, it was quite beautiful…with a schedule you then would know when to avoid the area. I know it’s used as a working river, but so is Chicago’s, they just prioritize better.
I also walk the area all the time, although there are not shops and restaurants (YET) in the base of every building, I still find it to be a pedestrian rewarding experience. The sidewalks are wide, there’s very nice landscaping, good lighting, I don’t feel threatened by automobiles as a pedestrian, and there are destinations to go to if you desire.
Who ever called it a canyon with a parking lot was a bit too harsh in my opinion.
Great info Lucas. Would definitely like to see more of this on a monthly basis.
Kyle,
Sorry if you are offended but Parc Lofts is in the ghetto. Its is not like Q and1800 in the Pace Park area. If you think the few blocks surrounding Parc Lofts are safe you are crazy, again this area is not Pace Park. The area is currently undergoing gentrification. Like it or not it’s happening. There are various definitions of gentrification so it is not necessarily a bad thing. How that was a racist statement is beyond me. Here is one defintion of gentrification for your edicifation. I personally jog at Pace Park and hang out in Park West on the weekends but would not walk around Parc Lofts at night by myself. That is asking for trouble. I friend of mine lives there and had his car broken into the first week he moved in. Safe area? Hum not so much.
* The process in which a neighborhood is transformed from low-value to high-value properties.
http://www.ezrealestatesolutions.com/Real-Estate-Glossary-G.htm
JL,
It is my understanding that Florida leases are only legally valid for one year. One should pay commissions on that one year and when the second year is signed, the second commission should be paid at that time.
Looking to invest in Miami…On these examples (and others similar) is EVERYONE at risk for assessments in each building? What happens if the condo building is only 25% full? How does the building afford to keep up if only a few are paying maintenance? Can they elect to raise monthly maintenance fees? Are there condo’s the prohibit that activity or have strong cash backing? Looking for some background as I see these look on paper like good deals, but not sure what kind of money pitt they could become..thanks
UENYC – You highlighted the risks of owning an illiquid asset that is expensive to hold and almost powerless against increasingly being taxed (by govt, by HOA). It is a real risk in this environment that one’s financial analysis needs to take into account at the time of purchase. Those amenities need to be paid for and deferred maintenance can only be deferred for so long and then it starts to bring down property values. Also, most renters, not me of course, do not treat a property like an owner and so you should also look at the rental policy and inquire about the number of units that are rented…including those units for sale and those for rent. Good luck.
Lucas, EXCELLENT post. Like many people have said, this is the best information to have.
Even though these distressed sales might not really reflect exactly what the market will be, they certainly give you a better indication of where prices are heading.
I understand that banks have an incentive to offload these units quickly so that they don’t carry the taxes and HOA fees, but with the recent developments in the financial markets you have to assume that things will get worse and not better.
On the Parc Lofts comment… I agree with jcrimes and Angel. Probably the only true loft style building in the area. Amazing building, but just sitting in a bad area. Kyle, I don’t believe the comment was racist, but you have to agree that the area still needs to grow a bit. Can you imagine a mother strolling a baby in that area?
Kyle /Oct 28, 2008 at 11:19 pm Vote:
“I am deeply offended by the racist comments being made on this site.. one of you bumbling idiots said that “much gentrification” has to take place before the area around parc loft is safe. Lucas, I can not believe that you allow this type of racist and ignorant commentary on your blog. It’s an outrage how everyone else just follows along and doesnt see this as offensive. I’ve spent a lot of time around there at night, I often go to Circa 28 a couple blocks over, I go to Target at Midtown, I go running at the park around there and I have several friends who live in the area and I’ve NEVER been a victim of any type of violence. You guys need to seriously examine your thoughts and what you post – It’s sickening.”
–
As someone that has lived in Miami for 40 years, I’ve got to ask: what are you smoking?
la la
i called it a condo canyon with a parking lot in the middle. and if you don’t think it will be that in a few years with all the buildings going up, well, you’re in for a rude awakening if you’re a commuter. as for the pedestrian friendly element, i’ll just disagree with your assessment and leave it at that.
also, the time for the bridge solely depends on how much boat traffic is coming through. you were lucky…it was only a few minutes. i can tell you that i’ve sat at that bridge for twenty minutes at times. to disable a main artery road during peak hours is beyond absurd. it’s miami.
AJ
two to three years? i think it’s going take a bit longer than that before the parclofts neighborhoood becomes livable. has there even been a ground breaking for the marktet? don’t forget, it took (and still is taking) years to get mary brickell village functional. that said, if a unit at parclofts (or better yet, FS) went below 180k, i’d snap it up in a second.
On another note… I heard a speach from Paul Volcker yesterday in ULI’s Fall meeting in Miami Beach.
Without getting into any specifics of what he said (Consumption is at an all time high at 72% of GDP when the historic average was 62%, Savings got to 0% of GDP compared to 8-10% average, etc.), he believes we have a 2-3 year recession in our hands for things to get back to “normal” and that the only way we can get out of this is by people recovering their trusts in financial institutions which will take some time. The bailout money will take time to trickle down
Remember, this happened in the Great Depression and the only way to get out of it was when FDR implemented the Bank Holiday.
Now… with this eminent recession in our hands, incomes coming down, inflation going up as well as unemployment…. how can we not expect a significant price correction for housing? And, if Miami is one of the most overbuilt markets in the country, how can the correction not be larger here than the national average?
Long way to go people… long way to go.
somebody asked why Jade has a premium over other buildings. for one its the nicest building in brickell, quality wise and location wise, its right on the water and if you have a view of the bay it will never be blocked. most buildings in brickell are holes with too many units in the buiding and lots of problems. jade is the only “luxury” building i think. It had lots of fraud problems and thats why prices got out of hand but in the long run it will be the best residential building in brickell. $240 sq/ft in that building i think is a great price.
What type of rents are people getting in these nice buildings…say a one bedroom with semi water view? You have to go through an agency or does the building management help out? Thanks
DOES ANYBODY ELSE SEE $ 125 a sq. ft. in MIAMI????I think it’s coming sooner than later.
Last lowest sale @ Jade was unit 211 1/2 for $190,000 , 1293sqft = $150,73 per sqft. Is crazy!!!!!! This sale was reported on 8/12/08
you guys know why i dont think prices will get to $125 sq/ft? because with all this money the govt. is pumping out we are going to have some serious inflation in the next 2-3yrs. that $125 will be $300. so if you have cash its going to get burned by inflation, thats why I for one am getting rid of most of my cash and buying hard assets. Renter Tom if you are saving and saving I hope you are not keeping it as cash in the bank. I have had many conversations with people and everyone agrees that there will be big inflation, to what extent is up for argument. so dont hold your breath for $125
Hugo P – I have to agree with Volker but would add that the consumption level was driven by debt and hence the savings rate was negative and the current savings that people are doing are mostly, on net, just going to pay off debt and is not actual savings per se. Moreover, we are transferring debt incurred by individuals to the govt which will have negative effects for decades. Top that with even larger govt spending (which will off set some of the consumption spending drop off) and deficits never before seen, the country must must must cut the fed govt. When GDP is not rising we can’t just keep piling on fed debt nor can we cut into tax payer earnings more and more through taxes. This will be a very long drawn out recession.
*** READ THIS SIMPLE PARAGRAPH ON WHAT FINANCE IS IN A NUTSHELL ***
On another note, something I have not seen anywhere, we need to understand the differences in capital, that is, between equity capital and debt capital (as a capitalism, I understand this and so should you). We are coming off a time when debt capital was used to such a degree that it actually became, in practice, what is traditionally the roll of “equity capital” but did not charge an interest rates at the level of the risk of equity capital. That really is THE fundamental issue here. Debt capital interest rates were too low for the risk, plain and simple, and hence it assumed the roll of higher risk equity capital…now we are deleveraging out of debt and in need of equity at a time when the return on equity is taking a hit. Low interest rates in banks should drive capital back into equities as there are few alternatives (not condos, not commodities, not gold, etc.). Equity capital is the capital that is supposed to take on the higher risk especially the risk of default but mistakenly cheap debt capital stepped in and took on a larger roll then it should. The same analysis regarding capital can be made to housing where debt capital went to the extremes. Historically, one needed 20% of equity capital in a house and leveraged the remaining 80% upon purchase. What happened was cheap debt capital took on the roll of that equity capital resulting in no money down, negative amortization loans, HELOC’s, and the like. Equity capital is supposed to take the hit, not debt capital, but when all there is is debt capital then debt capital is the equity capital and needs to charge the interest rate accordingly. Junk bonds need to charge a high interest rate since they are almost capital equity. Toxic mortgages were worse than junk bonds and should have charged interest rates closer to credit card debt than traditional mortgage debt. Now debt capital is being reevaluated for the risk that it took on which is painful when it is done after the debt is issued and not before like it should have been.
Raffi – I am monitoring the inflation possibility and am moving cash around accordingly. As I just posted, low interest rates will cause cash to go somewhere else esp. once this short term scare is over with. There are deflation factors too so over the next 12 months inflation should not be a factor but after that it may very will come home to roost.
Raffi – Oh, and if inflation comes, it will not be the friend of many people. Real estate taxes will rise and to will HOA fees. You may be able to inflate your way out of low fixed rate mortgage but the other holding costs will dog you.
Renter Tom, I agree but “if inflation comes” should be “when inflation comes” its going to come fast and furious and whoever is holding cash is going to get burned like its happened in many other countries around the world, perfect example, Argentina. I believe the govt. is creating this inflation on purpose to get rid of the debt burden that they have which is impossible to pay back. everything will go back to zero, put it in writing cause i guarantee it.
Raffi – Keep us posted on the inflation watch…I know I will be watching that too….it is a concern for me for sure and am staying ahead of the curve. At this time I am reeveluating cash holdings……
CD’s have been opened not more than 12 months out…..anything more was too much risk at too low a rate. Some OK 6-12 months CD’s are out there, but to go long in this environment is probably unwise given the level of uncertainty.
Hoa Fees?
Hoa Fees = Condo Home Owner Association dues, special assessments, etc.
$800. per month HOA fees on lets say a two bedroom new condo are no more per month than you would pay if you owned a single family home with a yard and a swimming pool in Surfside-Morningside-Roads Area-Coconut Grove-Coral Gables. This high HOA fee argument is a false argument.
Except for Jade- the other four examples are ininferior buildings in inferior locations.
Kramer… are you saying that just because $800 is what it costs to operate a single family home then it should be OK for a condo?
Damn… that’s some good Kool Aid!
That is precisely one of the advantages of living in a condo… shared ammenities = shared (and lower) expenses
That weasel Mark is sneaking back in with different names this week.
JOHN /Oct 29, 2008 at 12:22 am
Stay away from the area around parc loft. It is GHETTO war zone!!
WHO KNOW’S /Oct 29, 2008 at 10:07 am
DOES ANYBODY ELSE SEE $ 125 a sq. ft. in MIAMI????I think it’s coming sooner than later.
The posts look exactly like his previous posts including the calligraphy.
Thats not what I am saying. Everyone here is arguing that $800. per month will drain you as if the same single family owner is not paying the same amount per month. My burden is no more than his. And from a safety point of view- my apartment on the 35th floor is never going to be broken into and robbed and during hurricane and floods my car wont ever be under water like a single family owners car will.
WAIT TILL OBAMA GET’S IN……..PROB. GO DOWN TO $99 a SQ. FT.What do you think djr?????
Mind you ,I have to agree with MARK or whatever his name is this week. Prices could drop to a new low, and $125 is not out of sight at all.
Kramer,
You observations on Jade are appreciated.
Your logic on HOAs is faulty.
As homeowners go into foreclosure, special assessments are a real possibility.
An assessment of 8-10K shoots the monthly HOA by $277 if spread out over 3 years or less.
On your comment on safety. There is truth to what you say.
However, since I’ve lived here for 40 years+ I can guarantee you that if a CAT5 comes around I do not want to be on the 35th floor. That day or for a couple of weeks (or much longer.)
As far as floods, yes many will be under water because they were to lazy to go to FEMAs website to look for flood zones (for that matter, Goggle gives the elevation of the land in feet. After you get a sense of the topography, I really just go to FEMA to verify what I think. Maybe 1 in a 100 do what I do. Execpt close to a river or close to the shoreline (because of storm surge,) there’s a lot of dry land in South Fl.
Raffi
come on…we won’t be seeing the argentinean inflation model here.
djr
maybe so….but whoever wrote the statement about the neighborhood surrounding parclofts, he/she is right.
jcrimes, I’m not saying to that extent but its going to happen. the only reason our dollar is gaining strength right now is because everyone is scared and running to the dollar. once the nerves calm down a bit and people start to really notice how much money has been pumped these last few months reality will start to sink in. on top of the war they have approved about 1 trillion dollars and that doesn’t include any existing deficits that we have on a monthly basis. and when that socialist becomes elected and decides to pump up more spending then you can add that to the equation. there is no fundamental reason to why our dollar is strong. give it 2-3yrs and then let me know. what was a million worth 10yrs ago vs today? well that same gap is going to be made up in about 3yrs max. write it in stone cause i guarantee it.
posted this elsewhere, but seeing as how this is the most recent:
Just curious: What opinion do you have on the attorneys who help their clients receive a percentage (higher than 5%) of their deposits back?
That SOB Mark is using my name on post #43. That is not my post.
Kramer, $800/month expenses to run a single family home looks steep. I could run a pool home for $300/month excluding utilities and taxes (HOA excludes utilities and taxes too).
There is a lot of SPECULATION on here that prices are going to DROP below $125 a Sq. Ft.What do you think Renter Tom j crimes ACE djr Mr. Waverly???Anyone hear from MARK (not Zilbert) lately??
the problem with HOA and special assessments is that you cannot control them very well. if i own my home, i can do much of the mainenance myself and help to control costs. i can also better control the insurance cost, even if it means reducing my coverage somewhat. with condo HOA you cannot make these reductions as easily. you are at somebody elses mercy. thus if this month it costs me $800 to run my home, i can do some things which maybe cut that cost by a third over a period of time. such cost cutting does not occur with HOA.
If anybody is even considering buying a condo in Miami today……..I think they have more money than BRAINS.I believe that renting would be the way to go…at least for the next 2-3 years. jim
Hi there-
Long time reader, first time poster…
Kind of off topic, but I’m not only curious about the residential aspect of miami real estate but commercial real estate as well. i was wondering if anyone knew what restaurant-like space is going for in the brickell/mary brickell village area. i’m guessing somewhere in the 30s to 60s psf, but i really have no idea, which is why i’m asking all you bright minds. I figure a good bench mark is blue martini at mary brickell village, 900 S Miami Ave. Anyone have any idea how many sf that place is or what the lease rates are like for that spot?
Thanks,
Kris
Commercial,
I looked to buy/rent a lounge-club-bar. Forget about Mary Brickell Village. You will lose your shirt there. Biscayne Blvd from 17th st to 36th st is also very expensive but if you have money and willing to take a chance, that is a good place to start. If you want a relatively cheap rent, start off with NE 2nd ave from the 15th st to 32nd st. It is just beginning to take off. 18th st cafe at 18th st and Vlada NY at 31st street and it is just beginning and it is going to change the face of NE 2nd ave and the entire area from OMNI to Midtown, also straddling the Park West to the South and Morningside to the North. If you manage to sign a 10 year lease in this recession in an area which has such a potential, you might snag a great deal. You may drag for a couple of years but when it takes off, you will be the envy of Blue Martini and such.
COMMERCIAL……yes there will be a LOT of sorry condo buyer’s crying in there martini’s.
Parc Lofts is one block away from a Rinker cement mixing plant. You can view the satellite photos or goto http://www.rinker.com to get a better feel for what you are up against if you own in this area. I believe this area is zoned commercial. The condo itself was marketed as industrial. The surrounding vacant lots and empty commercials building have already been vacant for the last twenty years. They will remain empty for an additional twenty years.
The fence on the back part of the property is easy to climb. The CCTV cameras don’t prevent anything.
Anybody who is interested in living in a industrial area in Miami should be single, male and have a concealed weapons permit. They should also watch Assault on Precinct 13 to get a better understanding of how daily life will be.
Wild Bill
I’ve lived here 40+ years.
They’ve tried this before in the 1970s (albeit on a smaller scale) and it didn’t work.
Some people mention “gentrification” as it were a natural process like osmosis or stalactite
formations or whatnot.
When that stupid building, “lofts on the river” or whatnot on Flagler right across the bridge was opened I laughed myself silly. Today there’s a 2/2 today for sale for 170K and some fool will buy it.
What to go downstairs and buy some crack?
Please, I lived there in that area in the 60s (even then it wasn’t a nice place)
–
Some want to convert this into Manhattan, we’ll see.
Funny part is that it’s obvious what will hold / increase value 5-10 years from now.
Kyle,
Sorry if you are offended but Parc Lofts is in the ghetto. Its is not like Q and1800 in the Pace Park area. If you think the few blocks surrounding Parc Lofts are safe you are crazy, again this area is not Pace Park. The area is currently undergoing gentrification. Like it or not it’s happening. There are various definitions of gentrification so it is not necessarily a bad thing. How that was a racist statement is beyond me. Here is one defintion of gentrification for your edicifation. I personally jog at Pace Park and hang out in Park West on the weekends but would not walk around Parc Lofts at night by myself. That is asking for trouble. I friend of mine lives there and had his car broken into the first week he moved in. Safe area? Hum not so much.
* The process in which a neighborhood is transformed from low-value to high-value properties.
http://www.ezrealestatesolutions.com/Real-Estate-Glossary-G.htm
Well I’m not so much offended because you said a PL is in the hood and the Gentrification, however to stay a neighbor is not safe because it’s in the hood is just really ridiculous, and because a friend of yours car got broken into. Crime can happen anywhere, but I guess you grew up in a bubble.
Crime has happen (cars getting broken into) in Sunny Isle, Bal Harbor, oh I’m sorry since those affluent areas they are immune from crime. You better check the facts son, before you ever post any comments on this site again.
In all fairness, here are three samples of the crime that took place in Miami Beach last week. Knife and gun robberies are weekly events in Miami Beach now. Pick your neighborhoods wisely.
A man armed with a knife robbed another man walking in the 200 block of Ninth Street at 4:15 a.m. Oct. 15. The robber first approached the man asking for a dollar. When the victim took out his money, the robber said, ”Give me your money,” and pulled out a knife. The robber then took the man’s $62 and ran away east on Ninth Street.
A gunman robbed a man walking in the 7600 block of the beach at 10:15 p.m. Oct. 14. The robber approached the man from behind, ordered him to turn around and then flashed a small revolver. The gunman then took the man’s cellphone and wallet with $25 cash and a driver’s license and ran away. The cellphone was valued at $200.
Thieves stole a 2008 Fountain power boat valued at $250,000 from the Miami Beach Marina, 300 Alton Rd., between 10 a.m. Oct. 4 and 1 p.m. Oct. 11.
Wild Bill,
I agree that crime is all around us. But to have my car broken into while parked at home in what is supposed to be a secured lot with video cameras speaks volumes about the hood the building is in. Not to mentiion the various crackheads and bums walking all around the Parc Loft. As someone posted earlier… Could you imagine a single mom pushing her baby around in a stroller by herself at night in this area? The answer is no. That sight is commonplace in Brickell, the Gables etc. Areas which I consider safe.
Regentrification does not have to be racist. Ideally in a healthy community you include a mix of uses and a mix of incomes by incorporating several different housing types from single family, to townhomes, to condos, and finally apartments and “granny” flats for lower income, the elderly or students all in one neighborhood.
The new urbanism movement incorporates these principles and these principles are based on how cities were formed throughout history before the advent of suburbs and automobiles which is what caused the segregation by income we see nowadays.
I want to hear peoples thoughts and ideas and to talk about if their are deals happening etc. If I disagree great. I just want to talk about real estate in Miami. As i see it, the high end stuff on the beach is maintaining its value. Trust me. It is the mid market apartments that are taking a beating. At least here on the beach.
Commercial,
Rates in Brickell for restaurant space go from about 50 – 75 NNN
Also regarding Parc Lofts it is geared towards a completely different crowd. They are not targetting the same crowd as Brickell or Downtown.That place gets ALOT of action. The reason being that it is zoned Live/Work. Alot of the people that occupy it are Design Firms, Artists etc that use it as an office. It’s the same thing with Wynwood Lofts. It’s 100% sold and ALWAYS occupied.
You guys have to realize there are different markets for different people. The place might look ugly to you, but those “ugly” warehouses are filled with millions of dollars of art and cool businesses. Wynwood is an area that not everybody “gets”, but alot of stuff is going on there.
I completely agree with Juan about Parc Lofts. It definitely attracts a different crowd. Miami never went through an industrial revolution like major cities in the north so if someone is looking for a “true” loft then their options are very, very limited in Miami.
S. Fla. condo loans take toll on Corus Bank
South Florida Business Journal – by Brian Bandell
Half of Corus Bank’s condo loans in South Florida were either in arrears by at least 90 days or had unfavorable prospects for repayment in the third quarter, including one unspecified project that the bank intends to foreclose on.
According to its third-quarter earning release, the Chicago-based bank, which was one of the largest condo construction lenders in South Florida during the boom days, struggled with losses and problem loans during the third quarter, when it didn’t make a single loan nationwide.
In South Florida, Corus held loans on 18 condo, condo conversion and apartments projects totaling $1.38 billion as of Sept. 30. Seven of them with a balance of $405 million were nonaccrual, meaning that they were at least 90 days late.
Another two condo loans with a $281 million balance were classified potential problem loans, which means they were performing but the bank has “serious doubts” the borrowers can repay them.
The nonaccrual South Florida loans included a $90 million condo loan, where the bank was in the process of taking possession of the property. The earnings release didn’t name the property and an official with Corus didn’t return a call for comment.
South Florida court records don’t show any pending foreclosures by Corus and none of its mortgages were written for exactly $90 million. However, there are some projects that had loan balances that could have been paid down to $90 million.
Corus holds large notes on Jade Ocean Condominiums in Sunny Isles Beach, Paramount Bay in Miami, The Mint at Riverfront in Miami, Trump International Hotel and Tower in Fort Lauderdale, The Ivy in Miami, Artech Residences at Aventura, Tao in Sunrise, the Caribbean Miami Beach and Edge Condominium in West Palm Beach.
The Edge project plans to auction off 41 units on Nov. 15. On Tao, Corus bought out the mezzanine loan on Oct. 10.
During the third quarter, Corus showed one less condo loan in South Florida compared to the last quarter, and a total of $125 million in balances less than the previous quarter. Its amount of potential problem loans remained the same, but the balance of its nonaccrual South Florida condo loans grew by $60 million.
Corus also reported that a Miami condo loan it classified as troubled debt restructuring was paid down from $51 million to $33.6 million during the third quarter.
In many of the bank’s problem loan situations, either the borrower or the mezzanine lender subordinate to Corus has supported the condo project with additional cash, but the weakening residential real estate market is hurting chances that such support will continue, Corus stated in its earnings release.
“We have recently seen situations where mezzanine lenders are experiencing financial difficulties and have been unable to support projects,” the company stated. “For these problem loans where the borrower or mezzanine lender chooses not to, or is unable to, take the necessary steps to resolve issues, we will not hesitate to foreclose.
Corus recently foreclosed on a condo project in Panama City in northwest Florida.
All of the problem loans took a toll on Corus’ earnings in the third quarter, when it lost $128 million, or nearly eight times the $16.2 million it lost in the second quarter. In the third quarter of last year, the bank reported a $35.5 million profit.
The bank took a $182.2 million provision to reserve for future loan losses and charged off $128 million due to troubled loans. It also didn’t collect $20.6 million in interest income in the third quarter due to nonaccrual loans.
However, the bank’s earnings would have been worse if it had a higher reserve for its bad loans. Corus had $902.8 million in nonaccrual loans, representing a staggering 20.7 percent of its loan portfolio, as of Sept. 30, and a reserve allowance for loan losses of $191.3 million to cover them.
The coverage ratio of 21.2 percent is well below industry standards and could lead to future losses should those nonaccrual loans need to be written down by a larger amount.
Corus had $628.1 million booked as potential problem loans not included in that figure. But the bank had enough equity capital set aside to remain in well capitalized status and the parent company, which has been infusing the bank with cash to completely cover its losses, had another $113 million, with $51 million of that earmarked for the bank.
In its earnings release, Corus stated that it hasn’t decided whether it will participate in the U.S. Treasury Department’s Troubled Asset Relief Program to raise money.
Shares of Corus (Nasdaq: CORS) remained flat at $2.10 Thursday afternoon. The 52-week high was $13.16 on Jan. 31 and the 52-week low was $1.64 on Oct. 24.
djr
This site gets more interesting every day. The amount of MISINFORMATION in here is astounding. djr says he can run a pool home for $300. per month. Lets take a typical pool homeowner with a yard in Surfside selling around $500,000. First of all your flood insurance and windstorm will run you about $5,00o annual. Figure $125. per month for the yard guy and another $125. for the pool guy. Not even close to $300. per month.
Secondly, I currently pay around $80. per month at the Downtown Athletic club (basketball court but no pool) which I can now deduct as an expense – while using my own gym and pool in my building, so my HOA just went down almost $100. right there.
Thirdly , I agree with Muir that im subject to an assessment but am willing to take that risk to live in place with a spectacular water view able to leave town and just close my door without any worries and not have any maintenance headaches that a single family owner does, with the proximity of ten minutes to the airport-ten minutes to South Beach- ten minutes to my job -and the ability to walk downstairs and walk no more than 2-3 minutes to get a haircut-pick up my dry cleaning-walk to the pharmacy-dentist appointments- pick up a fifth of Dewars at the liquor store – walk to the bookstore or go see a movie or a play or a concert or Miami Heat game.
On another subject- as I believe that ther are a lot of PHONY people in here- pretending that when prices reach $200. per sq feet that is when they will pounce to buy all cash-lol. So my question is why havent you guys (you know who you are) pounced on the Jade unit Lucas mentions here at $240. per sq ft. or the one at Santa Maria on Brickell a month or so ago at around $250. per sq ft? Pretty nice buildings huh? Where were you to snatch those units up? I will tell you why later buy cant wait to hear the excuses! LOL.
Kramer
if you want to buy into a building with association difficulties, i.e., Jade, be my guest. not sure about the santa maria unit, but, regardless of the sq ft price, i’m presuming the price was at least 500k or more. at least for me, that’s way more than i would want to expend on a condo. you might as well go single family home then.
btw, i must have schooled your ass on the basketball court at the DAC a few times. that makes me smile.
Im Back. here are the three reasons you wont see these people I mentioned above buying a unit that they have waited for for over a year now and prices with the Jade unit coming in near their fabled $200. per sq ft.
( 1 ) You dont have or never will – the cash or credit worthiness to purchase anything and are in this room just playing with yourselves.
( 2 ) You have a vested in interest in prices being distressed. Like tomtherenter and jcrrimes who are on the other side of the equation.
( 3 ) And finally when a great unit in a great building in a great location in Brickell-Downtown-Park West – Pace Park does become available at around $200. per sq ft. only if your an insider will you be able to take advantage. The guy at the bank holding the unit will always call his brother in New York or his cousin in Chicago or his next door neighbor before you will ever ever ever snatch a quality unit in a quality building. So unless you consider the Vue or Opera House you guys would be better off spending your time in here in a more productive manner. Lastly, if prices do come down over the next six months to a year and they end up being bought in bulk from a developer – the vulture fund then has to mark it back up to you after factoring in his cost of money-his carrying charges- cost of commission to sell it and finally a reasonable mark up. Get Real!
Visionary,
Thanks for sharing the story about Corus Bank. I wonder which condo development they intend to foreclose on as mentioned in the article. Could it be Onyx on the Bay?
Damn, if i were a developer and corus wanted to give me a loan that would have been my sign to run. they picked the absolute worst projects, mint, ivy, artech. then you have projects that are way too late in the game, jade ocean and paramount bay. If i didnt know any better i would say that corus is a curse hahaha.
Kramer
you’re back alright…and dumber than ever. any potential purchaser has a vested interest in prices being as low as possible when they buy. i mean, do i have to explain to you why? does the concept of “buy low, sell high” even remotely resonate in your small brain? i presume the answer is no. more importantly, if jade is at 200 sq/ft, why pounce now? maybe it goes lower…it definitely ain’t going higher anytime soon. i take it you’re an anxious, instant gratification type, willing to jump in regardless of how dumb the decision to jump in to begin with was.
Why buy Jade now when it will probably go lower? Why buy into a building with an association quite possibly on the verge of imploding? Current price is just one factor to consider when deciding whether to pull the trigger or not. Current and future states of the HOA and potential for further price drops are much more important IMHO.
I consider Brickell Key to be a very safe and upscale area. The family and I walked around the island after a nice dinner at Cafe Sambal. How are property values holding up there?
Miami2009,
There have been a lot of distressed sales in Isola and Courvoisier Courts. There’s also a good number of them in Carbonell and St. Louis.
I don’t mean to put words in Kramer’s mouth, but you can’t sharpshoot a bad market. It all depends on your intentions as an investor- as stated in many edifices before. The market is beat to hell so anyone looking to buy and hold onto their investment (0r home as in my case) is gonna be ok long term.
That said, you do have to take precautionary measures in what building you decide to invest in and make sure you are not in a “distressed” building…any good realtor like Lucas will stear you clear of those follies I’m sure…
I bought my unit at 265psf when the average in the building was 384psf in Dec of 07. One year later it’s about 300psf, so you can still get good deals if you are wise about your investment. Perhaps in the next year to five years it will sink to 100psf, that’s OK. Because it will be a long-term “capital gain” and investment, maybe I will keep it forever, so in the end, I will have made a good investment. If I tried to sell it now, I’d be screwed.
You just need to look at Lucas’s condo rankings to know what buildings to stear clear of…
But, at least I’m not paying rent=the mortgage of someone else.
And sorry to belabor the point, but I also believe in the long-term of investment of investing in a city that is on the cusp of truly being magical. I was driving over the Brickell Bridge going south today and seeing Brickell key to my left with all its residential towers, 500 Brickell to my right with its “beam me up” circle, Icon and all the beautiful high-rises in a row just made me think, with my urban planning hat on, “Damn! This city is on the verge of becoming f***ing awesome!” And that is my professional opinion.
I’m waiting for prices to drop to a level that is reasonable for incomes and compared to rents along with traditional financing versus 100% no doc bank loans. We are still in bubble pricing and there is no reason to “pounce” now. As it stands, I save over $35K per year renting…that doesn’t include the asset price decline. I have no headaches or worries whatsoever and have the flexibility to either renew, rent a different place, or buy. Prices will come down. I don’t want to live in downtown Miami since the only reason I can think of to live downtown is if I worked downtown…which I don’t. I want to be on the beach and new construction on the beach, while holding up better than inland prices, will continue to slide with all the rest….as I have posted there was at least one new unit under $300 s.f. I’d buy at $250 s.f…..in cash unless 30 year fixed rate mortgages were still really cheap.
Jade Beach must have started closings since about a month ago a security guard has been standing at the entrance and cars are in the garage at night. Jade Ocean has a ways to go and I suspect with all that glass will have higher HOA fees than Jade Beach…all other things being equal. Interesting looking buildings but who will buy at $600-$800/s.f.? Not me.
In the end, the inventory and shadow inventory needs to be bought by end users…we are a long long way from end users absorbing the volume of units that have been built in South Florida.
By the way, the beach was great yesterday…today only went for a walk in the evening with the beautiful layers of clouds, was nice. I’m sure downtown with bay views and parks are nice too, but the beach is what really makes the difference.
I did not know this:
Juan
“Also regarding Parc Lofts it is geared towards a completely different crowd. They are not targetting the same crowd as Brickell or Downtown.That place gets ALOT of action. The reason being that it is zoned Live/Work. Alot of the people that occupy it are Design Firms, Artists etc that use it as an office. It’s the same thing with Wynwood Lofts. It’s 100% sold and ALWAYS occupied.”
AND
Lucas Lechuga
“I completely agree with Juan about Parc Lofts. It definitely attracts a different crowd. Miami never went through an industrial revolution like major cities in the north so if someone is looking for a “true” loft then their options are very, very limited in Miami.”
–
thank you
I knew my comments would bring you out of the woodworks Renter Tom…glad you’re not sleeping on the job.
la la said: “The market is beat to hell so anyone looking to buy and hold onto their investment (0r home as in my case) is gonna be ok long term.”
Sorry to be blunt, but you are simply wrong. In real dollar terms you will just be a bigger loser in the long run. If the prices do go to $100 s.f. that’s not OK….you never know when your plans may change and need to sell. In real estate, as with most illiquid assets, the key is to buy low since when it comes to sell you will have no control over the market since illiquid asset markets tend move slowly. With stocks 6 months, 2 years, etc. can make a big difference, with real estate it could take a decade or longer for a bear market to turn around and we are in probably the largest bear market ever. Hopefully, you won’t need to sell ever la la, but your statements were not correct advice for getting into real estate now, even for a place for your own personal shelter. Fortunately, renting in this market isn’t paying for the landlords mortgage….it pays SOME of the expenses is all. In a normal rental market it costs more to rent than own and then you would be paying the landlords mortgage….but not in this market, not at the prices they paid….not by a long shot.
Beaches on the east coast of FLA suck. I prefer the powdered sugar texture flat beaches of Sarasota. You can’t even walk on the beach on SIB without looking like a tripping moron because you sink and it’s sloped. I know firsthand- I used to live there. Have had a condo in Sarasota since ’79…will take it over east coast beaches any day. Unless you’re a snow cow and don’t know any better.
Well, Renter Tom, you have your priorities (and levels of financial security) and I have mine. To know that I never have to move unless I choose to, I am settled, I can paint the walls, add crown moldings, add built-ins, sustain a quality of life and lack of feeling in a “transient” postion is worth more to me than dollar and cents in the grand scheme of things. As we’ve had this exact discussion before, why don’t we agree to disagree? Life to me has never been, and will never be solely dollar and cents. Others are more than free to disagree, but I feel “richer” for it. It seems like a concept you will never understand.
I mean, I could be dead tomorrow, and then, what will I have saved?
hahaha, very funny, seriously I did chuckle at your post. I’m sure the beaches are nice on the other coast too. Will have to get over there too. Not sure what a snow cow is, but it sounds funny. I have noticed the beach is pretty sloped now next to the water, it wasn’t a few months ago so must be the tide, erosion, or something. Perhaps it is a seasonal thing or they pump sand each year to rebuild….I don’t know. The sand in SIB is pretty course but they have kept the beaches clean and just agained screened the beaches which really cleans it up…..so many people just leave cigarette butts on the beach….yuck.
Snow cows will be heading your way in full force come two days from now, you’ll see them in the increased traffic up there. I am signing off as I have no incentive to monitor this blog other than pure entertainment. Beat me up all you want Renter Tom, I will be sure to digest it in the morning…since I have a life.
re: “But, at least I’m not paying rent=the mortgage of someone else.”
lala,
I wasn’t going to get into this morass until you said this because I believe this is all so much silliness and prefer to get information from others. (see post above)
–
However, your statement above is the most asinine statement I have heard here yet.
Beats Tom’s statement about BIC (just before plummeting) and statements by others with absolutes like taxes are “2% of selling price.”
–
You win!
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Assuming you are living in your bought unit there are two possibilities:
1. You pay cash for the condo: your cost–> is the price paid by NOT having THAT money to invest.
2. You have the mortgage: your cost–>the mortgage
–
In either case you add –> taxes & HOA + (if applicable) special assessments
–
Lets take #2 first:
If the guy in an identical unit to yours, is paying about 1/2 for rent for what it costs you to “own” in your unit, then the formula above changes to:
paying mortgage = losing 25%+ over the smart guy who rented next door over the life of my 15 year mortgage.
–
Let me be crystal clear: He will come out ahead CASH more than your paid off balance + down payment!
–
Here’s an example:
After 30 years assuming neither rents go up or appreciation on a typical 30 year mortgage:
Cost of “owning:” 2.6M
Coast of renting: 1.2M
–
That’s on a 350K with an equivalent rent of $1800 (seen a ton of those)
Oh, but it will appreciate.
OK, assuming a 2% annual appreciation and a 3% rental increase (PER YEAR)
2.5M BUYING
1.8M RENTING
However lala,
The biggest reason you win the first price is this:
PRICES ARE FALLING!
Jezz,
This is not brain surgery.
The gulf coast sks. Near stagnant water, near cesspool.
How can anyone continue to say that paying rent is lost money compared to paying property taxes, hoa fees and interest is beyond me. Without worrying about the serious possibility of massive price depreciation, its simply a numbers comparison factoring in any tax benefits that may be available. Not to mention the illiquidity aspect in one of the most transient areas of the US.
Muir,
As I said, it is a matter of priorities, I believe in this present moment that there is more to life than dollar and cents, it’s something I’ve vaguely grappled with since I began reading this blog. It’s ok. You can have your priorities, I can have mine. I’m ok with it, why can’t you be? I am not out to be the number one smartest investor EVER.
I am GRATEFUL for my blessings. I am grateful I was raised to value more than money, but tranquility and quality of life in its many forms, and what truly brings “richness” to a person’s life. I have said repeatedly that ownership at this moment is the right decision for some people, and I do believe in the long run my investing now will pay off. Let’s check back in 10 years and see if I’m right. I have a feeling I will be.
By the way,
Muir :
“Oh, but it will appreciate.
OK, assuming a 2% annual appreciation and a 3% rental increase (PER YEAR)
2.5M BUYING
1.8M RENTING”
–
Renter is 700K ahead of you.
You cant sell it for more; it appreciated 2% annually.
–
(just in case this was not clear)
Apparently, I’m not clear, or do you even read? Peace out.
la la
“Muir,
As I said, it is a matter of priorities, I believe in this present moment that there is more to life than dollar and cents, it’s something I’ve vaguely grappled with since I began reading this blog. It’s ok. You can have your priorities, I can have mine. I’m ok with it, why can’t you be? ”
–
lala, I am OK with your position.
–
You said:
“I am GRATEFUL for my blessings. I am grateful I was raised to value more than money, but tranquility and quality of life in its many forms, and what truly brings “richness” to a person’s life.”
–
If that’s your position then God bless you.
–
Just please not make asinine statements like “But, at least I’m not paying rent=the mortgage of someone else.”
Why do this?
To bring RT out?
–
re: renting
By the way, there are no absolutes . This too will change.
re: Your 10 year window
“and I do believe in the long run my investing now will pay off. Let’s check back in 10 years and see if I’m right. I have a feeling I will be.”
–
I have written a bunch of posts on the possibility of a strong inflation. If/when this happens, a cash position is the worse place to be.
I have demonstrated intellectual honesty.
–
Right now I am doing fine (better than fine) by renting.
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If in 10 years your unit went up 300% doesn’t mean you came out ahead.
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Not, if what you take out at closing buys LESS than what your initial down payment + added costs due to being an “owner.”
la la /Oct 30, 2008 at 7:37 pm Vote:
Apparently, I’m not clear, or do you even read? Peace out.
–
Your post showed up after mine.
7:33
7:35 and I am writing a post.-
I read.
la la – Why do you try to put a dig on me? I do have a life, you know nothing about me, just a weird comment from you trying to put me down when you know renting is far cheaper in this market, fortunately I am “retired” or basically don’t have to work and can do a project if I want to or not.
Muir – What comment are you referring to regarding BIC? Please advise where I may have erred…. Thanks.
Lastly, buy a $1M home is a big financial decision in this market…at least it is to me. Hence, the analysis is FINANCIAL and INVESTMENT oriented…. of course there is more to life than money silly la la, but that isn’t the point of this blog really. You could justify any bad purchase decision with your logic….”oh well, I lost $500K since I’m an airhead, but there’s more to life than money….” you won’t have money for very long with that thinking.
Does the snow cow migration season start on 11/1 or something?
Thoughts of the day. I see like 4 or 5 valet guys at Jade–do they have self parking?? Park Lofts does have cool exterior look and pretty authentic industrial feel insdie–heard a rooster in the hood on my visit. Friend has nice place north of Daytona Beach on water with tax milage rate 15.2—thats a real plus. Seems like any purchase at or below replacement should be great buy long term.
just logged on to read any new posts…..something strange happened, i keep reading about “more than money” I value this and that. this website is called Miami condo INVESTMENTS. so this is ABOUT dollars and cents. arguments should be about investment ideas, pros and cons, etc. not if i feel good inside cause i can paint the walls.
Lucas, is it possible to add a filter to the comment section of the blog (similar to what is used on Yahoo Finance message boards)? I barely read the posts anymore because your site has become a forum for Renter Tom & Co. to argue renting vs. owning. I admit that I used to read their posts until I realized that they’ve been communicating the same message in different words for months. The worst part is that most of them post back-t0-back and sometimes even three of four consecutive posts.
Renter Tom, Muir, La La, etc…, get a life or get your own blog. Or just exchange e-mail addresses and/or phone numbers. Most readers just don’t give a sh*t about what you have to say at this point. Unfortunately, it is likely that all of you missed this post as you were posting back-to-back.
There are at least two people who post on this blog that almost always make 100% sense….jcrimes and Raffi.
There seems to be two camps…..those that have already bought (usually during the bubble years) and those that are looking to buy but realize prices will continue to decline and so are waiting on the sidelines. Those that already bought apparently are still in some sort of denial phase and need the affirmation that others buy now since they want prices to not go any lower…the buyer’s regret must be pretty severe.
GT3,
Buyers remorse crowd, I gather?
What POS did you buy?
–
I’m new to the forum.
(I’m in no crowd)
Lucas,
Thanks for the info. I like Carbonell, mainly because it is newer and seems more “luxury”. I haven’t toured the units, however. I may look you up to take a tour early next year.
I have been looking into buying since 05 -06, but never let my emotions get the best of me to make an impulse buy. While I am not really waiting for a bottom, I do have to agree with some people on this blog about buying and loosing big money shortly thereafter. Just doesn’t seem justified to me, especially for a second/vacation home. Why not continue to rent/hotel it until things settle down? Hey, if things really go south I may be able to get a place sofi for a reasonable price. First quarter next year is my target. Let’s see what happens.
Raffi – It is far cheaper to go ahead and paint the walls in a rental unit then paint them back upon move out then lose 10%-30% more in this market. It might even be cheaper to rent and remodel the kitchen with the savings!!! Crazy isn’t it? And to think people are trying to look down on renters….I’d be ashamed to admit I bought during the tail end of the bubble since it was pretty clear that there was a bubble. Oh well, live and learn…..there’s more to life than money, right?!?! hahahaha
La La,
Your words of wisdom are like pearls before these swines. What do these guys who live out of a suitcase know about life? No wonder none of them even have girlfriends. Which girl wants to hang out with a loser. What can you expect a transient to pocess? A decent book? An artifact? A thing of beauty? I dont think so. They should be able to pack their suitcase and move to another home when the landlord gives them a 30 day notice.
How about A futon or an air mattress? Yeah. More like it.
Above comment is directed towards habitual lifelong renters. Not those who are renting in a city because they are students or in a job that is going to move them anytime or any such situations. If someone is a renter for more than 3 years in a city in which he/she has no plans for any immediate relocation plans, they most likely will never be homeowners. It takes a certain kind of person to love a home, be proud of it and will not live in someone else’s home.
Does anyone know about the HOA situation of 900 Biscayne? Last estimates on this site were that it was 34% closed and about 10% occupied. The management office just changed hands and now I find out that their loading dock for moving in/out of units is closed on weekends??? Is this standard in most buildings or a sign of the times and future cutbacks? When are people supposed to move in? Are these buidlings designed for those who don’t need to work?
UENYC, Angel – where do you rent now? The reason I ask is that I am eyeing a 1/2 unit in 900 B 1020 sf for $2000 or $1.96/sf. Any thoughts?
Kramer,
Nothing is going to hit $200 in Pace Park/Park West/ Downtown. I dont know how you got that number. I know you meant a foreclosure or some such extreme deal.
Lately I started to soften towards $150/sf for a low end building flats with no view and $325/sf for a high end waterfront building with water views as the absolute bottom price. But the more I examine what is about to happen to the Dollar, the more I am convinced that in 2-3 years, the inflation will make it impossible to get anywhere close to those numbers. So if anyone is waiting for a bottom, think of the shaving their dollars in the bank is going to experience.
Perfect example. Europeans who held off on good deals thinking that the bottom will deliver them even more cheaper flats are now stuck with the Euro losing 20% of its value against dollar. So even if the prices fell by 10% since the beginning of the year, their purchasing power has been reduced by a similar amount.
It is so friggin cold in New York on an October night! My car shows that the outside temperature is -1 degrees Centigrade. Freeeezing cold. I so longingly wish I was in Miami’s balmy WX. Guess what, Nothing is going to kill Miami housing market. It will weather this housing storm. Where else in the World can you find a place like Miami? It is an Utopia that most people wait for a lifetime.
Lala rightly puts it “Isn’t this city awesome”
Shwin,
It is so eerily scary when I read your post #113. In Fact I addressed post no 113 to you and stopped midway to write a different post. This is how far I went before I discontinued to write about another subject…..
” Shwin, did not hear from you for a while. If you are still reading this blog, tell us what happened with your rental search………”
That is one hell of a coincidence dude. Mind blowing! Looks like somehow you read my mind from 3000 miles away.
Anyway, I believe you were looking for a place under $1800. So why are you willing to pay $2000 for a 1 BR? Also regarding the moving in/out, it is universal in all buildings Miami or NYC, weekends are a strict NO-NO. The management does not permit it. You are supposed to take a day off from work/school to do it on a weekday. They do not want to disturb the people who live in the building on their days off and subject them and their weekend visitors to moving hassles from the movers and tying up the elevators. Hope that answers your Q.
Oh AJ, so very silly. I probably have more equity in real estate than you do….and yes, I do own a home, but not in Florida. You see I actually OWN real estate (no mortgages), and am not just a bank debtor pretending to own it. So many pretenders in the big cities….Miami, NYC, etc. leveraging themselves pretending they own things but are just another broke, negative net worth pretender. I would venture to say that where I am living for HALF the price of owning is better than anything you own or live in…… When one has mortgage debt, car loan debt, credit card debt, their lifestyle is really just a lie and one little economic blow and poof, its all gone. You see, an investment is supposed to have a positive rate of a return, not a negative one…silly concept I know but that is how one accumulates wealth and is basic finance 101, I’m sure the offer that at some community college in your area if you can get in for that assuming you even have your GED. If you have to supplement the costs of a renter each month, then you paid too much and that investment is a loser. I don’t know what informercial out there lead you to believe that riches can be made in real estate by having to cough up money each month so others can live in your condos. The great thing about being a renter is that in this market the renter has control, the poor b*st*rd landlords are desperate for renters at any price….I hate it when they grovel for a renter but I guess that is the price you pay for owning an illiquid asset that drops in value and you’re just helplessly and hopelessly watching the value go down and down and down… All you have to do is rewind back to 2001 prices and see what your properties are worth and hope and pray that your little pearls hang onto even those values…in real dollar terms, they won’t. With unemployment rising nationally and more sharply locally, we’re just going to see more and more foreclosures, fewer and fewer buyers, and lower and lower prices. Oh how it is good to be a renter……so very very good!
Basic Home Owning 101:
A house can do two things. (1) Provide the OWNER with shelter (at an imputed rental cost) which is a value you place on it. (2) Provide the owner with rental income.
The magic bubble market days of appreciating asset prices above inflation are over and are actually in reverse until they settle back to the historic norm.
If the owner does not live in the house, then the asset investment must be evaluated based on its rental income. Until such rental income exceeds the costs of owning, it is a bad investment especially given the nature of real estate as an illiquid asset with high fixed costs, some of which are out of your control (taxes, HOA, insurance, etc.), and very high transaction costs.
Somehow bragging about owning a bunch of rental residential real estate that one has to supplement the cost of each month is one of the silliest and most delusional investment ideas I have ever heard of.
A discussion of whether to own or rent on a real estate blog is not off topic. I do apologize for giving in to my impulse to write last night because I should know that this topic is just continuing to beat a dead horse that has happened between Renter Tom and various posters ad nauseum and also because I should know you will never win this argument in this market climate. What I tried to explain last night, you either get or you don’t.
In the spirit of going around in circles repeating the same topics and arguments repeatedly, I think we should argue new construction vs older buildings next and then we can circle back round to whether it’s safe to live in Pace Park or not…for those unclear on the concept, yes, that was complete sarcasm.
Scwhin writes;
“Does anyone know about the HOA situation of 900 Biscayne? Last estimates on this site were that it was 34% closed and about 10% occupied. The management office just changed hands and now I find out that their loading dock for moving in/out of units is closed on weekends??? Is this standard in most buildings or a sign of the times and future cutbacks? When are people supposed to move in? Are these buidlings designed for those who don’t need to work?
UENYC, Angel – where do you rent now? The reason I ask is that I am eyeing a 1/2 unit in 900 B 1020 sf for $2000 or $1.96/sf. Any thoughts?”
Schwin,
AJ is correct. All of the buildings I have moved into in recent years have always made me move in or out during the week so as not to disturb the other tenants. I am currently renting at Solaris but my lease will be up in a few months. Much like yourself I too am looking for a 1BR at 900. The price you stated seems ok for a 1 BR in that building but I think we can probably get a 1BR for 1900 or 1950 if we play hardball. Lucas has a bigger 1 bedroom (1206 sq feet) unit listed for $2199/month or $1.82 a foot. If that unit could be had for $2000.00 a month (1.65 sqft) I think it would be a good deal. For the smaller units I would probably pay 1950 tops. I am also looking at a 2 bedroom loft at Marina Blue or a high-floor 2 bedroom unit at MB.
I am looking to make my move to the Park West area and try that out for a bit. I really like living on Brickell and like being able to walk to everything or just take the people mover everywhere. I want to try out something new and MB and 900 look like great buildings. I have friends that live in both and have heard very little complaints thus far.
Keep us posted on your rental search as I will do the same.
Muir,
No buyer’s remorse, only reader’s remorse. I got nothing against renters or owners. I just want information regarding Miami Condo Investments, not renting vs. buying, and not Economics 101. There are much more superior forums for that. BTW, the only POS I’m exposed to is you and your “crowd’s” back-to-back-to-back-to-back circular posts. Now calm down, and maybe you can put everything you need to say today in one post as opposed to 4 consecutive ones. Need Ritalin?
GT3,
Well spoken, my compliments !
Inflation vrs deflation
http://www.marketwatch.com/news/story/Is-gold-market-sensing-deflation/story.aspx?guid=%7B02F9D40F%2D80FA%2D41C3%2DA719%2DC9F059FEDA48%7D
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GT3 “There are much more superior forums for that. ”
agreed.
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But where else can I see so many f*cked buyers?
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First.: Amen Prof. Smith. With everything getting back to historic norms and even worse, why should Real Estate be anything different? Also, considering that Miami is probably the most overbuilt City in the country, shoudn’t it over correct to account for the extra risk? I feel it has to.
Second:
Angel: $1.82-$1.90 psf might sound like a good deal today, but I can guarantee that you will see rents getting back to $1.50-$1.70 in no time as all these condos are finished and the crazy investors and vulture funds put their units out for rent. Remember, it’s all about competition for tenants. If you want to rent a unit for $2,000 a month but it takes 2 months to do it, why wouln’t you lease it for $1,700 and get someone in now? (Do the math, same calculation). Every month the unit sits vacant the owner is efectively losing all that potential income.
Finally: Lucas, can you post a few examples of the distressed properties in Carbonell?
Thanks
La la
no, you can’t sharp shoot a market. nor am i telling anybody they should. however, this market shows no signs of moving upward, only downward. if that’s the case, why pump any money into any of these units? moreover, why buy anything in any new building when the ass’n has absolutely no track record? last year’s great deals look like garbage now, right (pull some of lucas’s earlier threads)? how will we look at lucas’s so called great deals listed on this post a year from now?
my take is that even after this market bottoms out…you’ll be moving sideways for years to come. if that’s the case, and you buy now, you’ll be spending years before you even have a dime of equity to call your very own. the analogy would be don’t go running while you still have the flu. wait until your better and then throw on the shoes.
finally, understand, i’d love to buy something. really, i would (my kadir nelson prints are sitting in a closet waiting to be thrown up on a wall). however, the move upward over the past years made no sense and now we’re moving to a period where it simply makes no ECONOMIC sense to jump in (don’t waste my time with the “well, i really like having a place that i can say is mine” or “i get to do whatever i want to the walls” argument…i get it). it will in a few years, i don’t doubt that. and maybe in the interim, there might be something that strikes my fancy and forces me to make an irrational economic decision, e.g., buying a spot at parclofts, FS, epic or one of the loft buildings on collins in mid beach. we’ll see.
as for AJ’s inflationary concerns…sorry, there’s too many other factors in play that will keep RE prices down in S. Florida for the next several years. the lack of credit in of itself will serve as a ceiling on sales. couple that with the massive overhang of inventory and all i see is down, down, down.
Second:
Angel: $1.82-$1.90 psf might sound like a good deal today, but I can guarantee that you will see rents getting back to $1.50-$1.70 in no time as all these condos are finished and the crazy investors and vulture funds put their units out for rent. Remember, it’s all about competition for tenants. If you want to rent a unit for $2,000 a month but it takes 2 months to do it, why wouln’t you lease it for $1,700 and get someone in now? (Do the math, same calculation). Every month the unit sits vacant the owner is efectively losing all that potential income.
Hugo,
Very valid point. I guess the real question is how low will rents go in A+ buildings (900 Biscayne) vs. other buildings such as MB or 50 Biscayne? Will the top tier buildings be see less of a drop in rental prices than their neighboring lower tier, yet still very nice building?
Angel,
please e-mail me at [email protected] – i have an idea.
One only needs to look at other real estate bust areas such as California and Las Vegas. The newer developments furthest away from the urban core and destination areas are going so far down that no buyers at any price for some homes has occurred. The newest developments also had the highest composition of risky loans. The closer to the work location urban core and the beach will hold up the best since these are the destination locations whether for work or vacation homes. With that being said, it is clear that all areas will decline in the Miami market through 2009, it is just a matter of how much for each area. Of the two locations, downtown and the beach, I would speculate that the beach will hold up the best since the market for buyers is substantially more broad and is not as dependent on the local income levels. Condo flippers would do well just to be able to sell at the lowest pre-construction prices in the building since prices will probably end up falling below the best pre-construction prices when all of this deleveraging is done. Being anchored to imaginary prices and profits will continue to hurt many condo investors just as it has over the last 12 months.
The other day i picked up a copy of “foreclosures for dummies”.
It had a whole chapter explaining how the price you see is NOT indicative of the actual value.
That’s because the foreclosure might have been brought about by a 2nd (or 3rd or 4th) lien holder.
When the bank who holds the actual mortgage puts the property up for sale in an auction, that’s a price that will be free-and-clear, but when you see in the MLS that a property sold for X per sqft you dont know if it was a junior lien holder who got his money back and the property is hence still encumbered by other liens.
Even when you assume that the property was sold by the senior creditor and it will have no other liens, still often the state of the property might be so bad that a big price adjustment is in order. There may not be much to destroy in a condo unit, in a house this adjustment could be really big, sometimes even the doorframes, knobs and the piping could have been stolen.
Any comments on this? I am not expert but seems to me people are not taking these factors into consideration. They all see a price in the MLS and go “oh, so that’s the clearing price per sq ft for that building”. Maybe yes, maybe not even close.
Kramer,
$300-$400/month tops and I could run a pool home. That would include insurance but not taxes and utilities. My mother in law is a grand mother and she runs a pool home very efficiently. She cleans the pool herself and mows the lawn too. So an able bodied person can do the same and need not hire a pool boy or a lawn care guy. I still think condo HOA fees are a rip off.
I live in Manhattan but am running the numbers on a possible purchase in Miami…These rents give my an idea of what a return could be…but am certainly nervous about the volume of units severly affecting those prices in the near future, early 2009. It seems the safest bets are on Miami Beach…thoughts? The rental market is SO different than New York now…so slowly learning.
Has anybody heard from MARK?
I HAVE A CONFESSION TO MAKE TO ALL YOU OTHER POSTER’S.I WILL POST IT TONIGHT AT 8:00p.m. djr
mark was banned. He comments at another blog now. Likely his Ip was blocked. He can’t post anymore.
Lucas,
I have an idea. Liberally dole out a 3 day IP ban when people get out of control, then maybe a 2 week ban then a permanent one.
I think you can get people to start acting more reasonable this way.
UENYC,
Here’s the problem with the Beach, it hasn’t gotten significantly hit yet with the rest of the market.
You can look at it 2 ways
1) It’s got real strength and is “immune”
2) Investors believed #1 and in these times chose to park their money on the Beach but in general it’s no more immune to a run than any other area and will get hit later in the cycle.
Here’s the problem when any bubble bursts, people always keep looking for sectors in the deflating bubble to rotate into… so anything that has a relatively good story can do well temporarily, but in the end it’s still part of the deflating bubble and gets swept out with the tide.
During a stock market crash, you always have rotations into different sectors on the way down making people think they found the story that will be relatively immune from the rest of the market but that never pans out… it’s just a game that always ends as bad as every other sector.
In housing if you can rewind 2 years… It was the West coast of Florida that was overbuilt and getting hit while the East Coast was different and relatively “immune”. Take it back a year and it was Sunny Isles and Lauderdale that was getting hit while Miami was supposed to be relatively “immune” because of being infinitely “cooler” to internationals.
Now we have Miami falling apart and the story that sounds in vogue is the Beach is immune and prime Bay waterfront.
It’s all sector rotation my friends and in a prolonged housing recession all sectors get flushed. The Beach is the last good story in the cycle.
Does anyone know if condo sales on a daily basis are public?
Jim, what do you mean by daily basis?
Once its recorded, the sale becomes public. This an take some time.
posts # 131 and 132 are not mine.
I am changing my handle from here on. I will no longer be posting under my initials “djr” as it got hijacked by Mark. F*** U Mark. Rot in hell.
Sign just went up on the Epic building for a place called RITA’S LOBSTER HOUSE. It looks like this area is becoming the hub or epicenter of the new downtown Miami as it is surrounded by a huge collection of new apartments including Epic-Met One-Met Three-One Miami and the hotel commercial aspect including the new Marriot Hotel Beaux Arts-new 40 story office building-the Met 2 project with a CocoWalk Mary Brickell Village style project that includes more restaurants – bookstore – and a movie house with 14 theatres. Throw in the recently opened Prime Blue Grill – Mannys Steakhouse – anew Italian restaurant in One Miami and the eventual Whole Foods at Met 3 and the synergy points to this area as the hub so to speak. Within a 4-5 block walking distance from Everglades On The Bay and 50 Biscayne and the Lofts to the north. Then an easy walk over the Brickell Bridge for Icon- Plaza-Brickell On The River and 500 Brickell. Then a long walk for Pace Park and Park West buildings but only a 5 minute ride on the Metro mover train near their apartments. Right across the street from the Hyatt Hotel – the Intercontinental Hotel – and the 55 story Wachovia office tower – or is that the Wells Fargo Tower now? Any other opinions?
Way over paid!
Catching falling knives, can’t say that you’ve not been warned!
The Smart Money
djr
Do you really make your grandmother mow the lawn and clean the pool? You must be a Republican -rofl.
jcrimes
Have you looked in your closet lately? Saw some kadir nelson prints at The Pawn Shop on NE Second Av for $100. bucks a piece.
JL,
The problem is that everyone keeps changing their handle once they are banned. IP bans aren’t always too effective either. You would think that some people could show some restraint when commenting.
Time
The Housing Bust: Signs of a Bottoming Out?
By BILL SAPORITO Wednesday, Oct. 29, 2008
“The last piece of the last residential construction crane in Miami is coming down this week. Don’t expect to see another crane in this city for a decade, says Peter Zalewski, a real estate broker and founder of Condo Vultures, a realty intelligence service. Miami is both a metaphor and model for once torrid real estate markets that melted in the subprime debacle. Miami developers threw up some 23,000 units beginning in 2003, many of them bought by speculators who thought they could flip them for a quick profit. Some did.
Then the music stopped. “Our best guestimate — and we’ve talked to lenders and developers — is that you will not see a residential construction crane in the sky in downtown Miami for a generation,” Zalewski told TIME. “Well, at least seven years,” he said before modifying his forecast yet again. “Let’s go with a decade,” he finally concluded. Let’s. The latest Case-Shiller Home Price Index for a 20-city composite showed that prices recorded a 1% drop in August and were down 16.6% for the past 12 months. Miami had a 1.8% monthly drop and a 28.1% tumble over the past year; in San Francisco, it was -3.5% monthly and -27.3% for the year”
More from Time Magazine:
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Time Magazine. “Today in the greater Miami area, there are 110,000 single-family houses, condos and townhouses for sale. Some 55,000 new foreclosures were filed in the first nine months of this year, and an additional 19,000 properties were taken back by lenders.”
“Miami developers threw up some 23,000 units beginning in 2003, many of them bought by speculators who thought they could flip them for a quick profit. ‘Our best guestimate — and we’ve talked to lenders and developers — is that you will not see a residential construction crane in the sky in downtown Miami for a generation,’ Peter Zalewski, a real estate broker, told TIME. ‘Well, at least seven years,’ he said before modifying his forecast yet again. ‘Let’s go with a decade,’ he finally concluded.”
“Zalewski is looking at purchasing a 1,800-sq.-ft condo with floor-to-ceiling windows overlooking the waterfront in a place just north of Miami. That unit sold to a speculator for $940,000 in 2006. The bank is asking $389,000 but will probably settle for $300,000, he says.”
New construction is one thing, but foreclosures will be the really big inventory overhang. We may be half way through the price declines but we are not half way through the foreclosures. Even in non-bubble markets like the midwest, enthusiasm for residential real estate has ground to a halt….. Zalewski has it right…… 68% off peak prices for a place you will actually live in ($940K versus $300K) is probably worth grabbing…no need to wait until it is 70% off. 🙂
Looks like everyone is busy with the Halloween weekend and the Halloween parties (including me). I see that the posts have become a trickle in the last couple of days. I Never experienced Halloween in Miami. How is it there? The best Halloween party in the World is of course the Village Halloween Parade in Manhattan. Total craziness.
Muir and Carbon,
If you are not going to see another crane in Miami for 10 years, then my condo holdings will be worth their Cubic Space in gold.
You see, this is the exact type of knee jerk reaction that stupid people are making. When the times are good, they overbuilt 22,000 new flats and when the hiccups started, they just want to completely clam up. This extreme swinging is the cause of all problems.
But no complaints. Bring it on (the prediction). When all these excess inventory dries up in the next 3-4 years (for what ever ridiculous price that the banks are willing to dump them at), and there is no further construction for another 5-6 years thence, I can name any price for my 2 Miami condos in 5 years from now. I didn’t buy them to sell them for a profit, but just making a point. So anyone with a capacity to hold their unit, rent it or enjoy it for the next 5 years will definitely benefit if what Peter Z says comes true.
Kramer,
I see your enthusiasm for Downtown. You are as gung-ho about downtown as I am about Pace Park. Storm used to be an advocate of Midtown but I no longer see his posts. Lala is all for Brickell. One notable omission is that there is no champion of Park West. Is There no one in TMP, 900, MB or a contract holder in Marquis who is a fanatic of their n’hood? dlr used to talk about 900 but not Park West. I don’t see his much of his posts either.
We need a passionate champion for Park West and Midtown. When you have such people, the rest of us get educated about that n’hood and it’s future plans which otherwise will go unnoticed. Any takers?
AJ,
There’s no doubt that at some time in the future, say 5-15 years from now, that prices will be nominally above the prices of today, 2008.
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Yet, you will still lose money that way.
And quite a bit.
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I’ll give you the BEST case scenario.
What a lot of people do not get is that even if they recoup the the down payment+carrying costs+closing costs and net money, they still lose if the dollars that they are paid with are worth less than today’s dollars.
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Actually an argument could be made that if someone owns a condo and believes that the dollar is overvalued relative another currency, it makes sense to sell now and take a “loss” and convert to this other currency while the dollar is strong.
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And live under a bridge.
Well, I will consider the money I may potentially lose from buying and living in a place I own for the next ten years the opportunity cost of choosing to do so. I don’t see how you can put a dollar value on the peace of mind of ownership (no mortgage) but that “value” more than makes up for me due to the feeling that I am settled where I belong.
And I also am glad that I will be an eyewitness to Brickell, Park West, Pace Park, Midtown etc…evolving into a unified kicka** city. I’m patient (unlike most people in Miami it seems by the driving) and I am willing to live my life in my condo I own while it happens:p
Please don’t attack me with numbers again, I get it. I just place more value on being settled, don’t attack me for my personal preferances. Besides I don’t want this blog to get too one-sided with all the pro-renters. Yippee for you when you finally make your wise investments, in the meantime, I’ll enjoy living in mine.
lala
“Please don’t attack me with numbers again, I get it.”
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Hmmmm….
This site/blog is “Miami Condo Investments.”
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It’s not “I feel good and let’s all feel good.”
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It is evident that you are a f*cked buyer like so many here.
Schedenfreud.
Sweet.
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I AM looking for an investment condo(s) at some point.
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Maybe you and AJ and other f*cked buyers should start your own “let’s feel good” blog.
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There is no doubt in my mind that I shall buy. I suspect that MANY that visit this site will also.
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Yes and you are giving your opinion and I am giving mine. I have every right to be on this blog too. I happen to not agree with you, but that doesn’t mean I don’t have the right to state my opinion even if it’s not the same as yours so quit trying to stifle me.
Why don’t you go find a blog where you can all jerk off to all the people suffering right now? Instead of trying to make it what this one is. And THAT DOES NOT INCLUDE ME. I don’t consider myself a sucker, I consider myself a person who chooses to live in Miami and chooses to own. Historically ownership is a good thing and always will be. We can’t all be renters and people who have different priorities than you have a right to express their opinion too.
And the right to express on an investment blog that there is more to life than simply dollars and cents and if that’s what guides all your decisions in life than you are a sorry, simple, shallow person.
Muir,
You are such a piece of shit when you use such foul language when you address a woman. I am not a chauvinist. I am very confidant that Lala can very well stand on her own from filthy verbal attacks from a low life like you. But I believe that you have to draw a line somewhere. You say that you lived for 40 years in Miami and also address other as “Son”, making yourself some kind of a wise guy. What you prove when you address a lady you do not know as “f*cked”, there is no difference between you or other dregs such as Mark. You are a disgrace and another pieza de mierda who should not elicit response from any right thinking people.
Check out Sarah Palin imitator with a kid in the NYC Greewich Village Halloween Parade. She is Hilarious
I know a person who has been looking to buy a condo for his whole life.
During his first experienced downturn of the RE market in the 70ties he said: I have to wait until the bottom is reached, sure he missed the bottom. When the RE market flourished again, he said, the prices now are to elevated, I have to wait until they will be cooling off, the next downturn started and he was again waiting for the next bottoming out, sure he missed it again and …
He is now 65 and still renting and waiting.
This is a true story.
Visionary — Oh if only that old man (AJ?) had only read this blog and followed the advice when to rent and when to buy (or at least my advice! j/k)…..oh well, renting is probably better for the guy anyway seeing how he must not be good at making a descision. You can not perfectly time the market, but in real estate there is no rush at all…we’ve seen what the false urgency via marketing has done. As it stands right now, prices are continuing to drop and just when you think it can’t get any worse something comes along and hammers down the demand. I feel bad for the owners that paid too much and have to supplement their tenants housing each month, probably for the rest of their ownership. But that is the risk one takes in investments.
Tom,
Your rent is only paying half the carrying costs of your landlord because your silly landlord bought in ’06. Your analysis is so myopic thinking that everyone is in the same situation. All those who bought pre-construction at 03-04 prices are recouping 75-85% of the carrying costs when they rent. Those who bought outright with no mortgage on their flats are reaping handsome positive cash flows. I have documented so many cases before in this regard. So do not tell us your stories like a frog in a well. You dont know what is going on in the rest of the outside World.
I am renting my flat to a tenant and “subsidizing” it to a tune of $600/month. But I am actually making more than that by depreciation. I am not even counting the $350/month that is getting added to my equity.
If I had bought the flat outright with all cash, I would have been making $400 cash every month on it. Either way you look at it, it makes great sense to me.
And all you do is sound luck a stuck record.
AJ – Please, please, please take a course in finance. You don’t understand depreciation. The structure, fixtures, and the like depreciate since they will need replacing sometime in the future….the land does not. It is a real COST and will get recaptured when you sell. Moreover, money has a “cost” whether it is your money or the banks money. I don’t know about what weird frog in well tory you grew up with where every that may have been, but I AM basing my rental versus cost on the PRE-CONSTRUCTION price…..the owner bought direct at a decent pre-con price (well, in the bottom 25% of prices compared to others).
Hmmm…
Guess that when people make very bad financial mistakes they are bound to be a little testy.
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I for one would like to hear about condo investments in Miami.
I, and probably others, would like to hear about HOA fees, taxes, financial stability of an association, and some many other things, such as, are South Americans still buying, what percentage of a building has closed, you know, data that may actually be useful.
There could even be a lively discussion of when it makes no more sense to wait anymore.
Others may already be making a return on their investment. I’d love to hear from those folks!
For example, I did not know about Parc Lofts and the very high occupancy rate until others including Lucas mentioned it.
It’s not for me, but I would never have found this information elsewhere.
In that sense, this site rocks.
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I never agreed with Mark’s manner of communicating his ideas (and said so) however, in all honesty, you whiners are much worse.
Anyone with just the smallest bit of experience can see through all your trite “the money doesn’t really matter because I am really loving me pad….”
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If you did not care about the $$$ you would not be in a site titled “Condo Investments.”
Period.
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Tom,
If your landlord paid a decent preconstruction price and he is only getting half the carrying costs from you, then you are a great con artist who is ripping off your landlord. Maybe your landlord is an out of towner who does not know the worth of his condo and fell for a smooth talk and scam from you.
I am realizing 79% of my carrying costs from my renter. I have known many others in the new buildings in greater downtown who are realizing even up to 85% of the carrying costs depending on the price they paid, loan terms and other criteria. So stop with the bs.
And if I give you the benefit of the doubt that you are not ripping off your land lord, then that means only one thing – never buy in that retirement ghetto Sunny Isles Beach. No matter how much you pay for a flat there, you will never get corresponding rents there. Who the hell wants to live there in any case except loners and those that are waiting for a call from heaven.
“If I had bought the flat outright with all cash, I would have been making $400 cash every month on it.”
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Does that include taxes?
Any reserves for repairs, even if just for paint after the renters leave?
Do you calculate a 52 week/ year occupancy or have factored into you $400 some time for unoccupied?
I assume you are taking the tax advantages into consideration. Is that part of the $400?
Of course, the most important question is just what does that $400 / month represent as far as a return?
Is that $400 a 2% return on the investment after taxes?
Is that $400 a .5% (one half percent) return?
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Can anyone out there claim a 5%+ return on their investment, cash on cash?
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Of course, you are either underwater or have seen most of your equity wiped out; however, that’s a different matter.
Housing Crisis Affects Luxury Home Prices
Prices Slashed On Multimillion-Dollar Homes
http://www.local10.com/houseandhome/17860588/detail.html
Not much specific evidence in the report… but give it a couple more months. The real high end and ocean front/direct bay is the next shoe to drop.
It’s the last real estate sector in Miami that people may still be sitting on profits or not be underwater by much. It’s about as recession resistant as the high end art market which is getting set to implode. In fact, the same arguments about hi-end ocean front real estate and high-end art were made.
… the recession doesn’t affect the truly rich … the demand from Russians and Europeans can take up the slack… they aren’t making any more ocean front condos (and neither are they making any more Picasso’s BTW)
AJ said: “then you are a great con artist who is ripping off your landlord” “never buy in that retirement ghetto Sunny Isles Beach” “Who the hell wants to live there in any case except loners and those that are waiting for a call from heaven.”
– Why do you post just dribble AJ? Calling me a con artist, SIB a ghetto, and loners & old people. My building has tons of young people in it including some college students of wealthy locals. It is trite comments like that that cause people to hate you and make fun of you. Seriously, I realize being a bipolar h*m* is difficult for you, but please take your medication. As I said, the owner got a good pre-con price.
….oh I forgot “pretentious” too.
Aj and La La I hope you don’t mind a republican being your neighbor soon. I know several people that are looking at buying in Miami. It’s not all doom and gloom, unless of course Obama kills this economy with higher taxes and wealth distribution. God help us all!
Tom,
Again skirting the issue with stupidity? You did not answer a single question. The issue is your harping on the subject “I am renting for half that it costs to own”. You are a big bull shitter. So it does not matter. You will never back up your lie but only hide behind total irrelevent bs. Not even worth arguing with you. When you decide to come to the table with the facts and real numbers, we shall talk. Until then FO.
And by the way what is “h*m*”? And if I think what it is, you are the biggest bigot on the blog. All along I have been saying that ” I do not agree with renter Tom but at least he does not abuse people like the scum Mark etc” But this is the first time you have shown your true colors and I am actually surprised. I did not think you would stoop this low.
So come out and say what is h*m*. Lucas does not mind. He will not censor you. I just want to know if you belong with the other low lifes who deserve to be ignored.
OK, here is an example of rent versus own Sayan 01 line (2,600 s.f. direct ocen view with private elevator lobby) was asking $1.75M could rent for $4K/month. Dues are $2K/month and taxes are around $2K/month too. So, that is ONE THIRD the carrying costs! There are sooo many examples but 2/3’s off is a good one.
Sometimes AJ you’re like the little prissy boy who runs to teacher when people make fun of them but the teacher knows that little prissy boy had been taunting the other kids first. Silly. And, by the way, IP banning is dumb since most people are on DNS so unplug modem, replug in, and new IP. Not exactly rocket science….or Finance 101 for that matter.
I don’t even know which Mark you’re talking about, there were several hit and run Marks. Listen, if you dish it out, then you better learn to take it since I won’t sit back and be called “loser”, “loner”, “con artist” or any other name. I’m pretty sure that if you look back you are the one that starts these very silly pissing matches with the name calling. Others have made it clear that they don’t want that on this blog so from here on out I’ll just ignore your name calling. Seriously though, even if you are feeling “normal” you need to take your meds just like the doctor has told you otherwise you’ll have another one of those involuntary psych ward….er, “vacations”, again (wink wink). Being a bipolar homeowner is tough. LOL LOL LOL
This is better than the movie I just saw which cost me $40+ (2 + popcorn etc)
Change your clocks if you forgot.
Good night.
Tom,
h*m* is not = homeowner. You just realized that you screwed up big time by exposing yourself for what you are. Many have accused you as a racist due to your constant rants on certain people. I didn’t pay much mind to that then. Now I am quite convinced that they do have a very valid point. Bigotry and racism does go hand in hand. You should just join the many hate blogs out there and beat up all the groups that you dislike with out any pretenses. This blog is for civil society. I am just upset that I engaged you in a conversation for all these months.
You have lost all respect and credibility here. But if you do stick around shamelessly, do not ever pose me a query, answer to my post or quote me. You are a persona non grata.
For LaLa: Your point of ownership vs. renting is valid……we sold our unit at the top of the market and then rented for a year and a half and it just didn’t feel right……It is up to each individual however, to decide if that “feeling” is worth the price/risk……AJ asked about park west and that area really won’t settle until, if, when and how nice the park is redeveloped. Folks on this board will probably settle down after Grumpy Grandpa McCain gets his butt kicked on Tuesday.
Hey Swiss,
Increased taxes, increased spending, wealth distribution, etc…Doesn’t worry you? Especially as a business owner? What about Obama do you feel will help us? Where I come from he is called a Socialist not a Democrat. I am no McCain fan by the way. Just being selfish, I guess, by wanting to keep my hard earned $.
I do however agree about renting vs. owning. Not the same by a long shot. The reason my family came to this country was to be able to prosper and actually own something without fear that the government would someday take it away!
I see lucas has the St. Louis in Brickell Key with one of the highest rating for views. Anyone know how that building is doing as far as HOA, etc? How about Carbonell? Any input would be greatly appreciated.
been looking to buy while renting for the past couple of years. every time i get ready to pull the trigger to buy, the units i am looking at seem to drop in price again. keeps me from following through with the sale. a year ago i was ready to buy if a 2B unit of interest was under $400k. Then i felt that way for $350k, until a flood of Brickell condos fell to that price. I felt $300k a couple of months ago would be a great price. Saw some units a month ago at $280k and started having my RE look in more detail, was willing to offer at $250k to see what they said. Now I see a unit offered at that price. Should I offer $200k and see if they take, or wait it out?
Throughout all of this, I have seen the rental rates decrease by 25% which I am in a position to capitalize on as well. Problem is the new rental rates cannot carry the cost of the discounted condos i am seeing-indicating yet more price decline. wicked world to be in if you own a unit-and too volatile of a world if you are looking to put cash to work. I am sure this exact scenario is playing out a million times all over the country and is why the RE market is still in free fall. i am just your average joe in a position to actually put cash on the table for a unit. until i am convinced to make a move, i do not see any significant improvement in the market. with job losses continuing to mount, $300k homes are too much of a future liability for the average american to digest.
Miami 2009,
Don’t be shortsighted. You have to know, appropriate wealth distribution also stabilizes the society and in consequence also the economy of a country. According to new economic studies and research, growing disparity of wealth (as happened in the USA) in a society results in lower economic productivity and higher overall social for the country.
Miami 2009,
…. and higher overall social costs for the country.
I am a first time poster but I have been following this for quite some time. Does anybody know if there is a sight like this for the Lauderdale/Hallandale area? We are interested in the Beach Club in Hallandale and have been watching it for a while. It seems like that property has some problems. Does anybody have any info? By the way, I TOTALLY agree with most of Renter Toms remarks.
Hi Visionary,
Yes in theory that is fine, but I came from country that distributed wealth. My grand parent and parents went through it. The country was no better before during or after. People scrambled to hide their wealth, which back then was everything from livestock to land. This is why people came to this country in the first place, wealth preservation. This actually scares me to no end. I can’t believe people in this day and age actually believe this stuff. Socialism in America is something I never dreamed could ever happen. Funny thing is my Uncle is a member of the Socialist party in his country and a Parliament member. He doesn’t even believe in wealth distribution…lol
Anyway I don’t want to turn this into a political blog. I am still trying to decide where I want to live in Miami…Beach, Brickell, Downtown. I really like the feel of Brickell Key. Any comments on the buildings would be greatly appreciated. I can’t afford Asia unfortunately…
Miami 2009,
I don’t speak of classic socialism and outdated socialist models like they existed in eastern Europe. I speak of modern societies with appropriate infrastructures and decent quality of life for their citizens.
If you want good public schools, good healthcare, well maintained highways, good mass transit etc., you cannot starve out the public sector by lowering the taxes for ever, as the Bush administration did !
Miami 2009,
I would focus on the 900 Biscayne Bay, but still hesitate to buy now (bottom not reached).
I think this place and high quality building will have quite a upward potential within the next 3-5 years.
I estimate a higher potential for the downtown region than for the almost saturated Brickell area.
Don’t worry, under an Obama administration we’ll all be renters! LOL Click on my name about Obama proofing your portfolio….it involves taking capital out of the U.S. That’ll really help the income distribution in the U.S….. we’ll all get poorer! Don’t eat the cow that you need the milk from!
Success should not be punished so we can put more illegal Aunties on the public dole…welfare, housing, healthcare, etc. You can thank that guy for parading his illegal aunt when convenient, even having her by his side at his senate swearing in. Now where is Rev. Wright, and all the other wackos that provide guidance and marry you??? I just hope we don’t elect a make believe cult leader as president. Save the hope and change for church….like houses, don’t buy on emotion. In 2010 under Obama unemployment will top 10% by 2010….offset ONLY by artificial jobs from the govt based on ballooning deficits. I know what I’m talking about here, so if you don’t want to hear it, don’t come crying to me for a bailout again. waaaaa waaaa waaaa.
AJ – we all know you are a big fat homeowner that goes around advocating a reckless multi-city homeowner lifestyle living beyond your means with your negative return investment properties. Why don’t you just go on a parade about it or something. Quite frankly, if you shove your multiple homeownership agenda in everyone’s face some will challenge you right back so don’t try this PC bull on me buddy. NYC, SoBe…. it is sooo so so obvious that you just want to overpay for real estate and want everyone to agree with your choices regardless of the consequences.
Visionary – Why are most of those things Federal Government concerns??? Can’t state and local govt do these things? Trust me, the amount of taxes I pay, the govt is starving nor are all those obese people on the public dole. Seriously, it is absolutely absurd that the majority of people in poverty in this country are obese. Let’s all pay for “free” electric scooters for them and automatice butt wipers.
“If you want good public schools, good healthcare, well maintained highways, good mass transit etc., you cannot starve out the public sector by lowering the taxes for ever, as the Bush administration did !”
the govt is NOT starving… oppppps
Visionary,
I really like 900 and have been sitting on the sidelines waiting for some good deals. Although, I have not seen any units in 900 it certainly looks great in pictures. I did visit Ten Museum, but was disappointed. Views and quality are my first priority. Have you visited 900? Agreed Park West, being an up and coming area, will probably have the most potential in the long run. Especially if that project behind 900, Marina, Ten, etc ever gets built.
As as far as politics, we’ll have to agree to disagree. We can still be friends. That’s what makes this country great! As for me , I have dual citizenship. If things get really bad here I’m out…lol
Miami2009 – After Tuesday, I may be coming with you……or at least my money will! LOL
RT…very funny!
Man, I really hope I don’t have to change my handle to “Miami-post Obama”…lol
Ted, What do you want to know about Beach Club? My mom lives there.
As far as some of the economic policy discussions here, let me weigh in by saying the we need to change the the US economic model from debt driven expansion to equity driven expansion in the private sector. When we expand our economy by creating debt in the private sector in order to consume we hit a point of diminishing returns where the private can no long service its debt. Monthly payments become suffocating.
This will sound unorthodox to the laymen, but in order for the private sector to increase its equity in aggregate, the FED’s must increase their deficits by 1) reducing taxation and maintaining spending or 2) maintaining taxation at current levels and increasing spending. Neither political party is talking about doing this because they are stuck in the wrong economic model. (They think we are in a Gold Standard).
Until policy-makers get a better grasp of the fundamentals of soft-money I think we will continue to see boom-bust cycles.
Miami2009,
I agree, let’s stop talking about politics. At least until the elections are over.
BTW, I don’t take anything personal as others of this blog do.
I am the rational guy.
I didn’t take a look inside of the 900, but a friend of mine (no broker) did.
He was overwhelmed.
TO MIAMI 2009 & RT:
Increased taxes, increased spending, wealth distribution, etc…Doesn’t worry you?
I would prefer a more efficient government at all levels and think we will get it by the lower tax revenues that we are likely to see going forward….BUT our country has been looted and hollowed out to the point where there is a lack of opportunity for too many of our citizens and the systemic crushing of the middle class is not healthy either socially or financially.
“wealth distribution”
We have had extreme wealth distribution over the last eight years and it has been very good for a very small number of Americans and not so good for most. We do not need to have kidnappings as a growth industry in the USA.
Especially as a business owner?
As a luxury Swiss watch online retailer we have reaped huge benefits from the financial wizardry on Wall Street, Housing Bubble, etc as folks with fresh new money have often spent in our arena. Our business will be down 20-30% this year and don’t have high hopes for 2009-2010, but we are lean and mean and will be a survivor and have saved up during the Clinton & Bush boom years.
What about Obama do you feel will help us?
1. Republicans have to go for complete mis-management. Period. If you won’t clean house now, what kind of ineptitude threshold would one require?
2. Obama is cleary the more energetic, articulate, and intelligent candidate…..just check out the difference in quality of the campaign leaders and in the quality of campaigns they’ve run (David Axelrod vs. Rick Davis, Uber-Lobbyist)
3. Lobbyists within the last two years will not be given positions in the new Obama administration.
4. Obama has brought a lot of new people into the process and citizen engagement is a good thing.
Whomever wins on Tuesday has their work cut out for them……Good Luck to all!
Gables,
Couldn’t have said it better, perfect analysis.
Same boat here. I too suspect many are in the same boat.
–
AJ, h*m* = lowlife deviant but you know that already.
RT, it’s DHCP not DNS and it does take some work and knowledge to shake an IP address to get a new DHCP lease. IP bans do not work against those in the know.
RT, I think you’ll find that, after he gets into the White House, Obama will turn out to be more of a centrist à la Bill Clinton. Let’s revisit this subject in six months after he has selected his cabinet and jousted with a Democratic congress for a while. I’m voting Obama for president and Republican for every other job opening.
Inside Bob – Clinton had no choice with a republican congress…. You are whistling dixie my friend. Obama will make huge blunders in the first year…..we don’t need an ivory tower socialist president with training wheels. The “oh sh*t, I got elected now what do I do” would happen. The ONLY real hope is the conservative democrats from the south tap the breaks. You are correct it is DHCP but most do assign new sub IP’s upon reset.
With potential for substantial increase in taxes (ordinary and cap gains) it is going to hit the “condo investment” crowd hard, very very hard. Prices will fall because of increased taxes……add that to what has already happened and the real estate depression will be rearing its nasty head on the luxury market like never before. The $1M+ condos will pile up, and up, and up.
Ted,
I’m sitting on the sidelines waiting to purchase a unit in either The Beach Club, Duo, or Tao in Sunrise. I’ve visited TBC and am not too keen on their unit layouts or lobby, but the spectacular views almost make up for it. Without the views I wouldn’t consider the building. It’s also very “busy” feeling. When I’ve stopped by, there’s lot of activity at the valet and seem that kids (teens and 20-somethings) coming and going at all hours. This leads me to believe that there are lots of renters here and that makes me nervous about buying into a building with a large percentage of people there who aren’t owners.
Duo is a much more inexpensive alternative that has pretty nice views if you’re in the east building facing east. However I’ve heard rumors that the east building is going to have some problems with assessments soon – but I don’t know that firsthand. Tao is a beautiful building but I have no information on it since they haven’t started closings.
Anyone have any new info Duo or Tao?
I do agree that owning is a nice “feeling”, but saving $250K made me get over that pretty quick. If I want to spend a few grand improving the place I’m renting, so what, the owner will like it and I’m still $248K ahead! Paint the walls, put in granite in the kitchen if you want….better to rent then own. And if you rent a new place, you’ll probably just need to paint since most have granite, marble etc. already.
Thanks for your comments Swiss. I am done with the politics for now so I will not comment further. I will look you up when I am ready to purchase my Daytona, however 🙂
How is the area around 900 when an event is going on at the AA? I usually stay on the beach when visiting. Obviously, prices will go down, but what do you think is likely for 900? I think it is overpriced now, cheapest 1bd is 400k on MLS. Also, did they rent the retail space?
DHCP, DNS, IP…Now you’re talking my language…lol
Shwin,
A 2/2 in 1800 Club direct bayview on high floor dropped the asking rent from $2500 to $2200. The unit # is 3707. That is an excellent deal for that building and those views. If you are seriously considering paying $2000 for a 1 BR in 900, This deal in 1800 might be of interest to you.
A 3/2 + dent at the 900 Unit 3502 was on contract yesterday for $650k
Also unit 2602 is renting for $4000 (2300sq.ft)
And at the Quantum unit 5101 is renting for $3k Penthouse with 3/3 about 1900sqft
Giuseppe,
Great info! We need more of this. I see 3702 listed for 1.15MM. the fact that 3502 sold for 650K puts things in perspective.
Grazie!
RT, Obama has backtracked on a capital gains tax increase. I like politicians who “flip flop” to the positive… we need more of this. McCain, on the other hand, does not seem to have an original idea, and he is an unreformed high stakes gambler, and he does not appear to have the intelligence to devise appropriate solutions to current and future problems, and he has screwed up every management problem he’s faced including this campaign. And Palin? Look around you… there are house plants and highway signs smarter than McCain’s pick for custodian of the nuclear trigger. As some folks have pointed out, beauty is fleeting, ignorance can be fixed, but stupid is forever.
Anyone who’s been paying attention has seen the current Republican administration engage in spending policies that would embarrass the Politburo. McCain seems bent on piling on a few unworkable socialistic policies of his own.
Jumbo financing is dead. Most real estate priced above the $417k conforming loan limits (i.e. RE which requires jumbo financing) will see severe downward pricing pressure and price distribution will coalesce around $400k to $500k even for (especially for?) condos in the $700k to $1.2 m range. These condos will be particularly affected because they are below the price targets of most rich cash buyers and there aren’t enough upper middle class cash buyers to absorb existing inventory. This is not Obama’s doing.
To those who prefer to rent from their mortgage company instead of renting from a landlord, think about the dollar cost of that nice feeling. Then think of all of the nice things and services and experiences you could have acquired with your monthly losses. In Econ 101 this is known as opportunity cost. And before someone says that I don’t understand, I own elsewhere and rent in South Florida.
What is djr going under now??is it TED?
By the way, I hear that 900 Biscayne has serious problems and lawsuits galore. Is this true?
Also, which, if any buildings out there have thin walls.
Hi Kung Fu.
No…
Ted Is actually a new guy that has been watching this for some time just wondering about the Beach Club and the HOA problems it may have. Bubblerefuge, since your mom lives there, can you help me with that? It seems like alot of the common area is not up to par and that there is many foreclosures.
I’m in the same boat.I must admit……at this point I think RENTER TOM is 100% right.RENT RENT RENT, that’s the only safe way if you want to make the best decision.Thanks Renter Tom for you valuable information and thoughts on the problems with Florida R.E.
Hey Kung Foo – Thanks for the shout out! Despite the occasional fireworks on this blog, I do think it is helpful for people. We have those that are looking to buy who have one perspective and those that had already bought who have another. There is no rush in this market like the false rush during the bubble….that false marketing created urgency. I shop for most of my groceries, household cleaners/detergent from Wal-Mart since it saves money, so the last thing I would want to be is penny wise (most spending) and pound foolish (real estate). Real estate should be looked at as s cost first (shelter), preservation of wealth/savings account second and a possible investment third. Do your homework since the asset is declining, inventories are high or rising, and there are very high fixed costs to get out. If you decide to wait, spend your time looking for a great rental to “love” and you won’t regret renting…….HALF PRICE…. For the same cost as owning I can rent the same place and get a new luxury car every year! Crazy…..
Hi RENTER TOM, do you (or anybody else) have a good idea of where I could find a short term furnished rental in Miami ..Sunny Isles .. Aventura area for a month or two ? Something like Dec. 15-Jan. 15 maybe longer.In a nice building.Dosen’t have to be Ocean front neccessarily. Any help would be greatly appreciated.
Well, the min for rentals seems to be 3-6 months that I am aware of in the buildings that I have looked at. That doesn’t mean owners may be cheating directly but the problem would be finding a realtor that that would be worth their time and effort (unless the realtor owns it). I would check on craigslist.org for leads. Another source would be vrbo.com. Sorry, but that’s all I know for a short term rental. Good luck.
Thank you TOM.That vrbo.com had a wealth of information.I very much appreciate it.
Mr. Foo
Just talk to a person from Cervera about 900 Biscayne. We can expect a 25% price decrease on the upcoming months. So far only 10% has move in and just about 40% of units available has close contracts…let’s wait and see
Giuseppe said:
A 3/2 + dent at the 900 Unit 3502 was on contract yesterday for $650k
Also unit 2602 is renting for $4000 (2300sq.ft)
And at the Quantum unit 5101 is renting for $3k Penthouse with 3/3 about 1900sqft
————-
I think the 02 is 1,712 sq. feet. Corresponds to layout C/CR I believe so $650K would put it at $380 per sq/ft correct? I did not see 3502 listed for sale so that would have been a sale from developer inventory and not a resale, correct?
(Also, I see 5502 and 4302 offered at $4K rent but not 2602 fwiw.)
If 900 were to have another 25% drop from that pricepoint, then you are talking about $285 per sq ft for a great high floor in a top luxe building with unobstructed views.
If so, I dont’ think Icon or Everglades or anything in Downtown, Uptown, Middle Town, Any Town has a prayer of making it.
Kung Foo, try posting a short term “housing wanted” ad on craigslist
https://post.craigslist.org/mia/H/hou/
Another 25% drop from 900’s current prices and I am all in. If this actually happens at 900 one can only imagine what will become of prices at Marquis and Icon.
Kung Foo – Someone I ran into during my search is in the know about a few short term situations – Bluewater Realty [email protected] 305-672-0772, 305-299-0108 talk to Joe.
AJ – thanks for the info about the 2/2 at 1800… You’re right, it’s a good find. I’m going to follow up.
Well if 900 had so many units unclosed on unmoved in add the 27 or so other units on the MLS and the situation is grave.
See this bldg happening to what happend to JAde. Got to high priced then comes crashing down and expensive maintence fees. I still think Jade has a bit to go down and 900 has stil not fallen but it’s about to fall of the mountain once the others open up Epic, Icon, etc…
Angel said: “Another 25% drop from 900’s current prices and I am all in. If this actually happens at 900 one can only imagine what will become of prices at Marquis and Icon.”
– Could you elaborate and why? Do you think 900 is better….I am not as familiar with each building in that area. Thanks.
RT,
From all the buildings in Miami I have recently visited 900 is defintely my favorite. The finishes are top notch, the units are sized nicely and the views are to die for. I see 900 as a notch above Marina Blue and TMP. I have not seen units at Icon or Marquis yet so I am basing my judgement on only the buildings I have visited thus far. I think we may see 150sqf in most of these buildings but part of me also thinks that an A+ building such as 900 may command a slight premium over the other products available in the downtown / Brickell area. My only concern would be further price declines (even past the 25% drop we care discussing here). Potentail price declines are something which in the current environment seem almost inevitable considering how far we need to go before reaching an equilibrium in historical fundamentals.
Angel
I’m not sure if it’s fair to equate Marquis and Icon. Sure, they are both presented as high end luxury (although, I’d say that Marquis presents itself as more unique and exclusive), but the location for each by itself ends the comparison. If Leviev had only put Marquis where Icon is…might have been something special.
Expect no better than a 50% closing rate for Marquis. What happens after that will be fascinating since it cannot run as a hotel (not enough units) or a rental. Somewhat disappointing, since from the outside, the building looks really nice (except for the fact that it’s on the expressway).
Lucas
Are you going to talk about Icon or what? You must have seen the place by now. This is the premiere Brickell project.
JCRIMES,
Good point. I have a feeling we will all be watching the Marquie and Icon dramas unfold very closely. However, I must agree Marqui’s expressway location is a deal breaker for me.
AA
Jorge Perez on Icon
http://cbs4.com/local/icon.brickell.miami.2.854384.html
Icon Brickell looks a bit strange and over the top from the pics.
Lucas, any updates on this?
Rental distresses….
Miami Herald (click on my name for link).
Landlords working hard to keep tenants
– It is a buyers and a renters market!!!
RT, Miami
Good links, thx.
Jcrimes & Angel,
If the proposed realignment of I 394 happens, and the expressway touching the McArthur gets buried Marquis will be hot. The question is how long. It might take as long as the port tunnel project itself. So we are looking at 10-20 years.
Even the buyers of Everglades, 900 and MB should expect chaos and disruptions until the port tunnel and the Museum Park are completed.
I’m getting a tour of Icon Brickell tomorrow. I should have a post about it with pictures up either tomorrow or Wednesday.
GM sales down 45% in October making it the worst performer in a bad-news sector. Ford sales were down 30% and Toyota dropped 23%.
Sales of high-end Mercedes and Porsche are off 34% and 50%.
Ummmmm…..looks like the “high end” buyers are pulling back and I would suspect that as luxury autos go so goes luxury condos….cars are a leading indicator of condos.
So, we are in a real estate depression (residential now, retail soon, commercial to follow), an auto depression, and a major capital equipment depression. Asset prices will continue to fall in this environment.
I was in Adventura Mall last evening….a ton of people but mostly in restaurants (and of course the Apple Store…had to wait to pay!). I was surprised how busy it was. But when I looked in the stores as I walked, many of the smaller boutique stores had ZERO customers despite all the people in the mall. You know it is a tough economy when the only customer in Victoria’s Secret is some fat lady. LOL Most of the sales clerks looked pretty bored in the other stores.
Consumer and mortgage (used for consumer purchases via HELOC’s….oh that home ATM) credit had really propped up this economy and too many people got over extended and now the pull back in demand is gonna crush a lot of businesses, esp those with high debt levels and little cash. This is going to be a nasty recession….probably worse than I had thought, certainly far worse than I thought last year. High end SoBe will really start to feel it soon…..
Ummmmm. I just listened to this (click my name) on Market Watch….thought I’d share. If you thought Roubini was bear, cover your ears.
One of the greatest blunders of our time is made by those who blindly assume home prices are so low they couldn’t possibly go any lower.
In reality, home prices don’t stop going down at some particular level that appears to be “cheap.” Nor do they stop falling because they match some historical price that was previously a low.
The end of the decline in home prices will come only when there are no new economic forces driving them down.
When will that be? I’d love to say it’s just around the corner. But everything I see tells me that, despite the sharp declines already recorded, a steeper plunge in home values is dead ahead.
The reason: So far, most of the troubles in the housing market have been caused by bad mortgages going sour. Meanwhile,
* the more common causes of housing slumps — high interest rates, rising unemployment, and recession — are just starting to kick in. And …
* the most powerful causes — depression and deflation — are still on the horizon.
Conclusion: If the U.S. sinks into a depression, home price declines could be as deep as, or deeper than, those of the Great Depression, especially in the hardest hit regions of the country.
It is a frightening thought. Yet, on the positive side, a sharply reduced price for the average home is the only fundamental, enduring mechanism for making homes more affordable and restoring demand — especially if the days of easy credit are gone.
Already, in 2008, one in ten American homeowners has defaulted on their mortgage or lost their home in foreclosure. Nearly four in ten owe more than their home is worth.
And all this is before the recession deepens and before we experience the next phase of the Great American Housing Nightmare.
No one can tell you with precision how far U.S. home prices will decline, when they will hit bottom, how many homeowners will lose their homes, or how soon a real recovery will begin. Getting to a recovery could take many years.
Debt is the fuel of speculation. Without it, speculative bubbles cannot emerge. With it, prices can be inflated beyond the wildest imagination.
But in the frenzy that preceded the Great American Housing Nightmare, millions of Americans bought homes with zero money down!
So it should come as no surprise that the majority opted to make the smallest payments allowed, while the lender added the unpaid amounts to the loan balance. As with credit cards, the more that time went by, the deeper into debt the borrowers fell.
In each case, millions of investors and speculators — most with little experience in the market — were caught up in a wild buying frenzy, only to dump nearly everything in an even wilder selling panic. As the buying frenzy heated up, homes and condos were flipped faster than hotcakes. Prices were driven through the roof.
Once set in motion, the speculative fever spread quickly. From Miami to Phoenix to San Diego to Las Vegas, investors camped outside housing developments to snap up three, four, five, or more units at a time. Condominium developers built gleaming towers in major cities, based almost exclusively on anticipated bids from investors and speculators and with no evidence of real underlying demand. From coast to coast, investors signed on to millions of pre-construction contracts, only to flip them before the first shovels touched the ground.
How much could home prices ultimately decline in the Great American Housing Nightmare? We have no way of knowing with certainty. But we can draw some lessons from similar bubbles and crashes throughout history:
* In the Dutch Tulip Mania, investors lost nearly all of their money if they bought for cash; more than all of their money if they bought on the slim margin of just 2.5%.
* In the South Sea Bubble, the cost of the shares investors bought fell from a peak of 1,000 to less than 100, a loss of 90% or more.
* In the Crash of 1929 and the ensuing 3-year bear market, investors lost 89% of their money even in America’s largest industrial stocks.
* In the tech wreck of 2000-2002, when a myriad of Internet and technology companies collapsed, investors lost 78% of their money invested in the average Nasdaq stock; and 100% in companies that went under.
* In Japan’s long bear market, which stretches from 1990 to the present, investors have lost 82% of their money from peak to trough in companies that make up the Nikkei average, and much more in smaller companies.
* And in the financial crisis of 2008, investors lost 99% or more of their money in some of America’s most respected financial institutions.
My argument: The speculative bubble in U.S. homes is as extreme as each of these historic examples; and in the most hard-hit regions, the resulting price collapse could be equally extreme. Indeed, the Great American Housing Nightmare is progressing in three phases:
Phase 1. The bust in the subprime mortgage market. This is now history.
Phase 2. A severe U.S. recession. As of this writing, this phase is just beginning.
Phase 3. Depression and deflation. Still ahead.
Therefore, no matter how far home prices in your area have already fallen and no matter how cheap they may appear, they could still fall a lot further.
In the hardest hit regions, an individual home that was once priced for $400,000 at its peak could fall to as low as $200,000 by the end of Phase 1. But don’t blindly assume that’s the bottom. In Phase 2, it could fall in half again, to $100,000. And in Phase 3, it could fall by at least half for a third time, to as low as $50,000 or $40,000.
Homes with peak prices of $1 million could sell for as little as $100,000; some, originally priced for $10 million may have no buyers at all — even with asking prices as low as $1 million.
Never before in history have we witnessed home price declines of this magnitude! But that fact alone does not make them implausible, let alone impossible.
Remember: Never before in history has so much debt, speculation, government manipulation, fraud, corruption and consumer abuse been heaped onto any housing market! And if there’s one thing that history teaches us, it’s that unprecedented causes lead to unprecedented consequences.
Lessons To Learn Now Before It’s Too Late
Lesson #1. Don’t blame yourself. Virtually every realtor and expert in America told you that investing in homes was a “sure bet”; and any lender in the country that accepted your loan application was, in effect, telling you that you had the means to make the payments.
Lesson #2. Don’t look back. Forget what your property was worth at its peak. And try to forget what you paid for it as well. That’s water under the bridge. Instead, look at what’s happening today — in the headlines, in your neighborhood, at companies in your area.
Lesson #3. Don’t count on the government to save the day. There are bound to be a series of public programs to help some people some of the time. But they will be spotty; they won’t turn the housing market around; and you may not qualify.
The most important lesson of all: Don’t underestimate the potential depth, speed and duration of the decline. As the debts are unraveled, the economy comes unglued and the deceptions are uncovered, home prices could continue to plunge much further.
If you are able and willing to sell your properties, do so now. Don’t wait.
Good luck and God bless!
Renter Tom said- Sales of high-end Mercedes and Porsche are off 34% and 50%.
———
I’d venture to say Bentley and Ferrari are much worse. They can’t move inventory in Ultra Hi End autos at all.
I’ve always felt the best leading indicators for the mid-high end housing market would be boats/yachts and then cars.
People pretty much stopped buying $1 million yachts about 2 years ago and now the real high end and regular boats are getting creamed. I’m hearing well-established boat brands like Concept and Contender have come to a complete halt. It’s amazing when you consider they were Red-Hot 2 years ago. Red Hot to zero in a flash.
Renter Tom,
It seems you are looking forward to encounter a deep recession.
A severe recession will bite all of us !
AJ,
Did you know, Quantum changed the management company ?
Visions,
A deep recession will not affect me in the least.
–
Hyperinflation would wipe out most everybody.
A depression, nobody knows.
–
Giuseppe Molinari,
That guys even more bearish than me 🙂
Giuseppe Molinari (post #232)
Could you please post a link or cite to your last post. Thanks.
So I saw the story on Icon Brickell yeah looks nice way over cluttered but nice so where do you start. Obviously the prices from pre-construction no longer are valid. So where is the starting p/sq ft point for this so called lux tower?
We can say to date $125 – $150 p/sq ft for shabby bldgs like Vue and Brickell Club that we know cause that’s whats out there selling “somewhat” but this is a nicer tower and we can expect most to default even if they think it’s nice because they overpaid.
So what does eveyone on here value thsi place taking into consideration any other market collapse?
I’ve unofficially toured Icon very recently and I think it’s way over the top and gaudy. Nouveau riche kinda stuff. Not for me. I think a market collapse the likes of which we have not ever seen is immenent. That’s just my opinion, don’t attack me please.
Once Again
all depends on what Jorge does. i get the feeling that somehow Related is masking trouble at 500 and Plaza (the number of listed units on MLS simply doesn’t add up to the sheer size of these project).
i don’t see why 300 sq ft or less won’t happen. jade is well on its way there…why should icon be any different?
AJ
re: post #172
JustIgnore him and hopes he goes away.
people with attitueds like that are obviously not well travled or educated socially
http://www.moneyandmarkets.com/the-great-american-housing-nightmare-next-phase-27880
Visionary,
Yes, I speak to my friend in the Q North Tower Regularly. He updated me about the change in the management. He does not know if it is good or bad as the new management co. has connections to Terra group.
The 1800 Club Management which is ‘Miami Management’ jacked their yearly fee from $800K to a proposed $1.2 Million for the calender year 2009. After they heard that the Board of Directors are negotiating with 2 other management firms, they put their tail between their legs and accepted the same fee as last year. Even then $800K for a staff of 22 is a rip off.
My full service SOBE condo with gym, sauna, pool etc (which incidentally has the same management company) is run by 1 manager, 1 super/handyman, 2 janitors and 3 frontdest/security shifts for 200 flats. I do not understand why 1800 club with 450 flats need 22 staff (it is still reasonable compared to Quantum which had an army of staff to the not too long ago).
These management companies need a kick up their arse. They are inept, rude to the residents, unhelpful and overcharge for their servises. When I move to Florida, I will definitely straighten up the waste, pork and pocket lining happening in my buildings.
I’m very “well travled” and “educated socially” and I agree with Renter Tom.
makes me think said: “AJ
re: post #172
JustIgnore him and hopes he goes away.
people with attitueds like that are obviously not well travled or educated socially”
– Spoken like a try soft handed liberal elitist.
Jcrimes…I agree with you that there is some masking goign on at both Plaza and especially in 500 Brickell. There’s got to be alot more units for sale that are just not listed on the MLS that are developer held.
Depends on what George does…the question is what can he do. Basically, not much…I think the comment in the report was that he’s now trying to negotiate people to get second mortages so they can close. Thats’ kind of dumb why would I want to close to land up with a 2nd mortgage if I could barely afford the 1st mortg.
I think Realted build some good buildings and they usally finsih them well and feel that Icon will be finished very well. The only thing he can do is if he wants to sell it all is sell them for what they should be. Lower the prices and peopel will buy. Don’t BS with a $40k drop….. drop it to where peopel can afford and they’ll sell alot faster.
The legacy will be there and that is by offering affortable luxury to Miamians. What will be a disaster is a legacy of a guy who built it all and then went bankrupt cause he couldnt sell or built it all and then offered the people of the city to live the dream that they always wanted miami to be.
IF you’re looking for a legacy and not about the money then that’s what it should be not for greed and profit now.
I would buy but need it to be affordable.
“IF you’re looking for a legacy and not about the money then that’s what it should be not for greed and profit now.
I would buy but need it to be affordable.”
Jorge gave up the affordable housing a long time ago for the Greed and Profit industry… can’t really blame him. He’s got to pay his tailor.
The main problem I see with Icon Brickell is I dont’ think there are more than a few end-user contract holders. Everywhere you look, it seems nearly all investors with each holding multiple units in that building.
“Everywhere you look, it seems nearly all investors with each holding multiple units in that building.”
–
And, this… is going to end up… how?
Question
What is the average difference in dollars per sq ft between a brand new condo and a condo which is say 20 yrs old and has not been upgraded since? Assuming both are in same location same views etc. Can one of the experienced realtors in here give me an idea.
Parc Lofts is in a very interesting area. Just four block away this happened. The body was actually discovered by a Parc Loft owner walking their trained attack dog through the hood.
Burned body found near train tracks in Miami
“The gruesome discovery was made at 9:30 a.m. near the train tracks just east of Miami Avenue and Northwest 21st Street.”
over the past few weeks i have turned quite bearish on the economy and miami condo’s in particular. i have been looking to buy for over a year, waiting for prices to settle, which have not. but world and national economic conditions indicate a mild to severe downturn lasting at least a few years. terrible conditions to take on new debt when you are debt free. i actually have significant financial incentives in play to buy a home in the near term, and yet the downturn i see coming will wipe out those incentives. government and bank programs are being created to stall foreclosures, but all this is doing is keeping me on the sideline. until our leaders let the market correct itself, things will linger and steadily get worse. a depression seems more likely to me know than just a month ago-not a good direction to be headed. unless taxes and HOA can be reduced, the condo market in miami is dead as far as i am concerned.
JL
one, perez’s tailor is top notch. really, whoever the guy is, he does an impeccable job (no joke).
two, icon brickell was a little bit more stringent with the investors, or at least they tried to be compared to earlier efforts. not saying that people still didn’t get around this…just not entirely sure the “investors with multiple units” issue is as rampant as some might think.
either way, the building is still investor heavy and i can’t imagine how anyone will seriously think that closing will be a good idea. let’s see what the lechuga has to say. considering what the hoa and taxes will be, along with your way too expensive preconstruction price, i will arbitrarily say that you will have to sit on this thing for ten years before you’re near breakeven (although AJ’s telling me that miami condos are about to boom based on some inflation argument – sorry AJ, but i had to throw that in).
gables – I second that. But I would add, a “mild” recession is off the table now. I too would like to buy but see that things will get significantly worse in the foreseeable future for home prices in the big bubble markets… Banks and financial firms needed liquidity to get through this crisis, the govt is shelling out tons of liquidity at low cost to prevent a systemic collapse (the govt gets the money back…with a bit of interest so it isn’t welfare per se) and a severe over correction on the downside of asset prices. But asset prices will return to the historical norm regardless of what the govt does….the govt can only help prevent a collapse that would be so far below the norm. Roubini just came out with statement that China will have a hard landing….their economy was based on producing a ton of consumer goods so no real surprise, just a matter of how hard a landing. This is a time to think more seriously about acquiring good hard assets that are not declining in value….hard to find since the easy credit drove up so many things….. What really sent us into a protracted crisis, one that would have been painful but made it much more painful, was the oil shock. causing an inflation spike. Stupid OPEC and others….they shot themselves in the foot on that one…..and now their non-oil investments got hammered like the rest of us….
At least I will probably get the enjoyment of blaming Obama for every ache and pain going forward….that arrogant, no achievement, condescending liberal better learn to take what he has given since it will come right back at him…what gets me is the arrogant criticisms of an ivory tower liberal who has never faced the challenges of making real world decisions, we don’t need a Nintendo quarterback in the real world. Unfortunately, we are all going to have to suffer far more than necessary.
jcrimes,
for your sake, I am rooting for $300/sf (less than my predicted bottom price of $325 for a high end building with a water view flat or loft), so that you can get your dream river loft in Epic. Let’s see.
I’m sure jcrimes can afford the $325/sf AJ……but why would he pay that knowing prices are going down. Your condescending posts are pathetic. Face it, renting beats owning.
RT.
Your arrogance is only outmatched by your ignorance on economics as your recent comments about Obama testify.
The ability to copy and paste does not signal higher intelligence or knowledge.
Muir – Whatever, I am right 99.9% of the time so feel free to disagree with me. LOL
i hate to get into the political argument on a condo blog, but why the hate for obama? he has yet to do anything wrong, and he does not have a history of bad leadership. if he is elected, please give him a fighting chance. you know, bush had a clear history of poor leadership. ever see his operating business history? bankruptcy or the equivalent was prevalent in his past. and look where our current account deficit is now! right wing conservatives have failed us miserably over the past decade. i am not saying the left wing liberals will be any better, but convervatives had their chance and failed. how many more chances do you want? just a middle of the road american here wondering how our country has been hijacked by both the left and right wings…this polarizing viewpoint we have is just terrible.
RT
I don’t think AJ was trying to be condescending (AJ…if I’m wrong, well, damn you to hell).
In any event, I’m not sure 325 sq/ft is so good for me these days. I might have to save up all my extra cash for all of these Obama taxes coming my way. Sigh.
Renter Tom /Nov 4, 2008 at 1:24 pm
“Whatever, I am right 99.9% of the time so feel free to disagree with me. LOL”
–
But most of all, Tom, you are humble.
–
–
Gables,
You missed the point.
We should give more Billions to Wall Street. It will trickle down.
–
I feel, I mean, I really feel for those who have to suffer this year.
How do they summon the courage to open the Christmas bonus letter?
“Do I open the letter now? Or, should I take a drink first?”
Then the anguish of realizing that they will have to scale down. Yes, the ferrari is still a go, but, alas, no new sailboat.
Oh, the inhumanity of it all. Don’t the fools see the riches created since Reagan.
Do they not realize all the bubbles we created for them?
Yes, the tech bubble, housing bubble, commodities bubble….
It seems only yesterday that Enron was with us, my how time flies.
As Tom will probably answer to my post, no need to be humble when you stand in greatness’ shoes.
Finally Gables, you fail to realize that it is those with a sense of “entitlement” not Wall Street executives that are to blame for this mess (with due credit to ACORN)
But this great nation, favored by God amongst all, will rise and we shall abide by his will!
All “true Americans” know this at heart.
–
jcrimes,
that was sincere.
RT wrote: “the govt gets the money back…with a bit of interest so it isn’t welfare per se”
When banks have difficulty getting market financing even at double-digit interest rates, Treasury’s bailout of banks at rates far below market meets every sane definition of corporate welfare. Clearly, you only have a problem with welfare when minorities are involved. And your hatred of Obama seems to have the same roots.
If you have a problem with government intervention, argue against it across the board. This year alone, we have pumped over a trillion dollars into corporate welfare and this blog has heard nary a peep from you about the injustice of such waste. Yet you huff and puff and spew gallons of vitriol at the thought of any person of the dark variety getting sustenance or more from the government teat. Your approach smacks of racism.
And “Tom”, you are obviously more intelligent than average, and you claim to have attended top schools, but don’t fool yourself, your analysis and conclusions have so many holes, it’s clear to me that you don’t begin to approach the scary smart level. Over the last eight years, our esteemed fuhrer in DC has provided ample evidence that even dummies can graduate from first tier schools. So pipe down and prepare to be schooled by Obama, a darker, smarter, more empathetic and very effective leader.
RT, forget about going head-to-head with Obama. I’m a person of the very dark variety and I’d go one-on-one, mano-a-mano with you any day. Intellectually of course. And I’d wipe the floor with your ego.
Obama’s either going to come out of the closet as a Centrist or go liberal like Carter and get kicked out in 4 years with lower ratings than W. Either scenario is kosher.
RT = Self aggrandizing clown.
for those hating on Obama need to stop because success speaks for itself. Winners find a way to win, I believe it the natural order of the universe.
If you look at he way he has managed his campain and contrast that to McCain,
really is there even a question who you would want to lead your organization?
You would have to be a complete moron to choose otherwise.
Bush has 8 years of experience, whould you re-elect him for president?
McCain is a “war hero “but really how hard is it to finish 5th from the bottom of your class and get shot down 3 times , get captured and spend 5 years as a POW. How does that make him a hero? Was he able to escape his captors during those 5 years?
I just don’t get the war hero part of the equation maybe someon can educate me.Since when do Americans ceclebrate failure?
Sorry if I come of a bit harsh but I’m from a culture where only the best is rewarded the rest are shown the door. McCain/Pailn needs to be shown the door!
Inside Bob – Don’t be silly, I could post a lot more about Odumbo if you’d like and your comment about racist seems to be the attack when you are intellectually bankrupt. Oh well. Let the vote go through on emotion, just like tech stock buys and condo purchases. The regrets will come home to roost for sure. I’m sorry, but if you knew me, you’d know that calling me a racist is utterly laughable…I’m not afraid to call it like it is and that is something that needs to be done since the PC enabling cr*p has gotten nowehere. And yes, I do have a problem when able bodied individuals sit back, live off the public dole, and complain…..they can go climb a roof and wave a white oversized t-shirt for help all they want…they need to GROW UP and take responsibility for themselves. It applies to all races. Being a non-urban midwesterner who doesn’t mind physical labor, it’s time that people stop pointing fingers and fix their own d*mn problems. And it starts with getting a high school degree…. It reminds me of the song Grow Up by Bishop Lamont (click on my name). And the double standard that a white person can’t say these same things just shows the double standard. Oh well.
….it is hard to be humble I know.
Obama has been telling you what you want to hear (anything to get elected) and McCain has been telling you what you need to hear (not good for getting elected).
“but really how hard is it to finish 5th from the bottom of your class and get shot down 3 times , get captured and spend 5 years as a POW. How does that make him a hero? Was he able to escape his captors during those 5 years?”
Of all the dumb things posted on this blog… this goes straight to #1
———–
McCain requested a combat assignment,[23] and was assigned to the aircraft carrier USS Forrestal flying A-4 Skyhawks.[24] …
By then a lieutenant commander, McCain was almost killed on July 29, 1967, when he was near the center of the Forrestal fire. He escaped from his burning jet and was trying to help another pilot escape when a bomb exploded;[27] McCain was struck in the legs and chest by fragments.[28] The ensuing fire killed 134 sailors and took 24 hours to control.[29][30] With the Forrestal out of commission, McCain volunteered for assignment with the USS Oriskany, another aircraft carrier employed in Operation Rolling Thunder.[31] Once there, he would be awarded the Navy Commendation Medal and the Bronze Star for missions flown over North Vietnam.[32]
…He was flying his 23rd bombing mission over North Vietnam when his A-4E Skyhawk was shot down by a missile over Hanoi.[33][34] McCain fractured both arms and a leg ejecting from the aircraft,[35] and nearly drowned when he parachuted into Truc Bach Lake.[33] Some North Vietnamese pulled him ashore, then others crushed his shoulder with a rifle butt and bayoneted him.[33] McCain was then transported to Hanoi’s main Hoa Lo Prison, nicknamed the “Hanoi Hilton”.[34]
… In March 1968, McCain was put into solitary confinement, where he would remain for two years.[42] In mid-1968, John S. McCain, Jr. (father) was named commander of all U.S. forces in the Vietnam theater, and the North Vietnamese offered McCain early release[43]
vs.
Obama, I was a community organizer…
makes me think = makes me wonder???
Your analysis is absurd!
RT: “if you knew me, you’d know that calling me a racist is utterly laughable”
RT, if you are referring to your previous assertion that you are biracial or multiethnic, you are being silly. I hope you don’t think that any one racial or ethnic group has a monopoly on racism. I’ve met racists of EVERY racial and ethnic extraction. You could be darker than coal and still be a racist. Put that in your crack pipe and suck it through your sphincter!
I am a right of center independent on social and fiscal issues and I used to be a McCain supporter. But the more I learned about McCain, the less inclined I was to vote for him. His evident cluelessness on economic matters and his willingness to do anything to win, including putting the country at risk by selecting Palin, cooked his goose.
Initially, Obama wasn’t even in my top three picks, D or R. That’s right, this African American was NOT going to vote for Obama. But the more I learned about Obama, the more inclined I was to vote for him. When it comes to raw intelligence, I don’t yield to many but this guy impressed me with his non-showy smarts. He somehow managed to not to be “uppity” while exuding restrained confidence and running circles around his detractors. He reminded me of Bill Clinton at the top of his game. And we all know that Bill is no slouch.
If you would like to learn more about McCain the war hero, click on my name. Or google the following: McCain Vietnam POW truth.
Then thank your lucky stars McCain will not be president.
I think tonights decision will mean the difference between $125 a sq. ft. and &$100 a sq. ft. which one will it be??? Too many people will wing the wong number.
Please accept my apologies. I do not fully understand the term “war hero”. I may be somewhat confused because 4 years ago John Kerry ran for the same position that John McCain is running for today. John Kerry was called a war hero with 2 purple hearts and a silver star for his actions during the Vietnam war. during his run for president many consertives began a smear campaign against him (maybe you rember the swift boat ads) calling him a bum and a coward and proclaimed that he was no hero and some even called him a traitor. Well today McCain is applying for the same position isn’t it fair to question his service record?
“A lot of people don’t know … that McCain made a propaganda video for the enemy while he was in captivity,” wrote Americablog.com’s John Aravosis
“Getting shot down, tortured and then doing propaganda for the enemy is not command experience,”
Was it so absurd when the same was asked of John Kerry?
http://www.politico.com/news/stories/0608/11429.html
OK, looks like it’s finally over, we can go back to the housing recession now
My prediction is housing bottoms in late 2010 and goes sideways for a while. I know a lot of Florida businesses and persons that are about ready to go under. This doesn’t feel like the end of anything, more like the beginning of a crash.
Obama wins by landslide. Now we can talk about condos. From my observations, I agree with JL #275. Please don’t attack me, that’s just my opinion.
The “ugly” condos e.g. Vue at -$75 sq/ by 3rd quarter 2009.
We’re in better hands starting tonight.
Isn’t this the greatest country on Earth or what?
As an optimistic sort of guy, condos in Miami will now be much less expensive under an Obama presidency as he removes some of the last possible buyers from the higher end condo market! Those $100/s.f. condos in Brickell are coming! As a future buyer, this is good news for me!!! 🙂 Yahoo!!! Even though I would have preferred to have McCain win and spend more on a condo, I will enjoy paying much much less!!!
Go Obama!
Just as I predicted, Odumbo would immediately back peddled…. now we hear in his acceptance speech that the “challenges” are so great change may not be achieved in one year or even one term (isn’t that a line from Fidel Castro????). I thought every problem would be solved today?!?!? hahahahahahaha …… you got suckered and condo prices will fall. Oh well.
buying luxury condos for $75/sf? yes, we can!
buying jade condos for $85/sf? yes, we can!
Icon for $90/sf? yes, we can!!!!
Here’s to Obama and sub $100/sf condos in Miami! Cheers
Agree with JL… beginning of a crash… a crash seeded before this election and a crash in which most of us were somewhat complicit.
In the near term: ongoing deleveraging, a self-reinforcing deflationary spiral and an accelerating drop in bubble states’ real estate prices.
Yes, Fortune Cookie MARK, $125 per square foot is not out of the question. Unlikely but possible.
Recent and ongoing fiscal and monetary policy have primed the inflation pump but IMHO will not have a perceptible upward effect on bubble states’ nominal prices until 2010 at the earliest. Despite Paulson’s worst efforts, the U.S. cannot borrow it’s way out of this crisis.
Obama has won the election; now the really hard work begins. I do not envy him. But we are all better off with his hand on the tiller and were are likely to emerge from this crisis sooner rather than later. Now it’s time to move forward together as one nation (RT included).
Taxing people who earn $250,000 or more, umm I mean $200,000, no $150,000, oppps $100,000 or more will only result in fewer potential buyers in the $500,000+ condo market. That can only mean more inventory and lower prices. It will also mean lower rents as people’s take home pay will be less.
I just hope the guy isn’t a complete whack job….no one really knows which is why he should have gotten a few terms in the senate under his belt first. Oh well, it is what it is and I do sincerely hope that he can inspire kids to stay in school, study hard, and graduate…the graduate rate is of grave concern for our country. In the meantime, we can all start blaming him for everything like he did for Bush…sucks to be in charge I guess. LOL A $1 Trillion deficit is in the making along with hyper inflation in a few years……….maybe the ZWD will be the new refuge currency for safety???
RT,
Haha! ZWD as a new refuge currency! I know you were being sarcastic when you wrote that. That was a good one though! I hope we don’t start printing new bills every month like them in 2009. God help us if that happens! I take it back…it wasn’t a good joke!
Oddly, Florida goes to Obama yet looks to pass Amendment 2…62%??? Just so you know AJ, I voted against it! I am a strict fiscal conservative (and reasonably frugal) but a social libertarian for most things… So much for the bigot comment eh? 🙂
BTW, Icon Brickell post is coming tomorrow (Wednesday). I have over a hundred pictures to go through.
“Depsite Paulson’s worst efforts”
please…he’s the only reason why things have held together in the first instance.
Muir – Wow….I like how you paint me as some homo racist mulatto….that is sooo funny it made me chuckle out loud. I guess I am an enigma to you and have captured your unwanted fascination. It really is simple, I am a straight fiscal conservative with a libertarian social bent who sees through stupid “shows” of “wealth” and “activism” that don’t have any real affect at creating wealth or solving problems and of course the federal govt should have little everyday impact in our lives. It is a sad day indeed when masses of Americans vote on emotion instead of platforms and positions and place their “hopes” in the federal government instead of their own liberty and hard work for self determination. We are a weaker country now I am afraid and the decline of America has begun…let the socialist world rejoice at the fall of America and welcome Obama to the world of Old Europe. The PC double standard was amazing to see in the exit polls….if you are white and vote against Obama you are a racist but if vote for him (esp. if you are black) because he is black you are not. Real change in American won’t come until that double standard changes. That is all on politics that I will post other than to say that with higher taxes comes fewer buyers of condos in Miami….hence the price declines will go even lower as demand continues to get hammered down.
Oh Muir – Just got up and was reading emails, reading 20 newspapers, and checking a few blogs….am retired you know. Thanks for the additional personal attacks…..they are very entertaining…and just shows your bizarre fascination and apparent upset with me…perhaps you voted for Obama and now realize your condo will go down in value as a result and are in voters regret mode? There will be a lot of you coming out in the next few years. You really need to enter the world of technology…….I can multitask on the go and keep up with US news, world markets, various blogs all at the same time…..(maybe you need to figure out how to use these new fangled browsers) I do feel better when I see that renting was a great decision that just keeps getting better. I would have normally not even really considered renting but am a recent convert I guess. The renting advantage won’t last forever….probably at least 5+ years though, so need to monitor events for the price declines which just keep reinforcing the decision to rent. In the meantime, I’ll just keep banking $3K+ per month in savings (not including the asset price declines). Now what new car should I buy with all that savings….and with auto dealers desperate to sell??? Cash is king….perhaps an Escalade to really burn some gas?
Again, stop it with the personal attacks!
I am a follower of this blog, but this is getting insane!
Everyone has their own opinions on the way the see RE going, but when you start attacking people personally, your valuable opinions get lost…
Lucas, the Voting buttons don’t work. Maybe you can add an option that if a certain number of people vote against a post then it gets deleted.
I’m with Hugo P – a ‘Digg-Style’ vote system that buries comments that are below a certain threshold would be phenomenal… Then the RT vs. the World saga could continue between the interested parties (they can opt to view all posts) while the rest of us can vote them down, hide them and focus on the RE-related topics.
I’m living in Singapore at the moment, but I do have a 2-3 year horizon for returning to the US and ideally would like to live in Miami if there’s a place in the anemic S. Florida economy for me.
This site has been the best point/counter-point discussion I’ve found on the net… gets a little off-topic at times, but as of late has become personal/political.
Keep talking/posting the good ideas. And if you think Miami has a condo bubble – you need to see what we have ready to burst here in Singapore!
Ohhh Peggy….what were you thinking?!?! Click on my name for link. I have ran into a lot of Peggy’s lately, have you? Oh the disappointments to come….Daddy Barrack isn’t gonna replace Uncle Sam anytime soon in the real world. The strength of America is the opportunities it provides, my hope is that this enthusiasm can be channeled toward education, hard work, and self-determination for the Peggy’s of this country. If people are putting their hope that Obama will be paying your mortgage (and I’ve heard that from a LOT of people….seriously I have) then the desperation is so great it is delusional and not rational….that only means one thing……MORE PRICE DECLINES! Yahooo! It is good to be a renter, so very very good! 🙂 Thanks Obama! Yes we can. Yes we can. Yes we can have more prices declines in housing!!!
Ernst – We are entering a time of global asset price declines and at the very least a global real estate recession…if not depression overall. This is serious stuff. While there was a bubble, clearly, the financial mess was greatly exacerbated by the massive oil spike. It pushed marginal mortgage holders over the edge…and really pushed all over leveraged positions over the edge causing a credit panic and people went into wealth protection mode instead of investing in the future. We haven’t seen the full effects of this and we’re not even halfway through it yet. I do have a legit concern that higher taxes now will cause additional flux and further distortions in the capital markets. We need calm and steady, not uncertain change. But hey, that is my opinion, feel free to disagree. I do see that in times of uncertainty, we will have less investment in businesses. If you see the oil spike as similar to a tax increase then you will see that a tax increase will have a similar effect on the economy and in this case will directly impact households making $100K+ much more substantially than just a $1,000 yearly increase in gas costs. So the negative economic indicators are stagnant incomes, fewer jobs, higher taxes, greater uncertainty, less business investment, more federal govt debt, which will all lead to more pressure on home prices. The proposed tax increase will have the effect of a massive oil spike on the very core of America…..the very hard working upper middle class (and above) income EARNERS…. It couldn’t come at worse time really. That is my concern and it is a legit one. The affects on the Miami condo market will be the fatal blow. I’d like to hear why I’m wrong here instead of personal attacks that have no basis in reality. Thanks.
And, yes, I know mortgage resets were a substantial factor too. My point was to compare the oil shock to taxes and what affects it will have on potential buyers and investors in Miami condos.
Different take:
http://www.atimes.com/atimes/Front_Page/JK06Aa01.html
jcrimes says of Paulson: “please…he’s the only reason why things have held together in the first instance.”
jcrimes seems to think Paulson has saved us. Those who would like to learn how Paulson has saved us should google: paulson subprime crisis contained
Or simply click on my name to see what a leading conservative thinks about King Paulson, the robbin’ hoodlum of Goldman Sachs.
Ted, regarding Beach Club. As you can imagine, there are many foreclosures because the project attracted many a flipper. But the amenities are quite nice. I live @ 360 which has nice amenities but there is no comparison to the beach club. They have a real Gym with a full array of free weights and the pools are magnanimous.
http://www.signonsandiego.com/uniontrib/20081105/news_1b5fed.html
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“WASHINGTON – The former chief risk officer at investment bank Bear Stearns Cos., which nearly collapsed in March, is now a senior official of the Federal Reserve division that supervises U.S. banks.”
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No, I’m NOT making this up.
BubbleRefuge, Thanks for the information. I have been to the Beach Club several times and would agree that it has many nice amenities, however the times I visited it seemed they were not being well maintained. ( just my observation) I was just wondering if anybody else had any more REAL information on the property other than just my observations. How healthy is the HOA? What is the % owner occupied? And I know this really isn’t in the Miami area that is why I was asking if anybody knew if there was a blog like this for the Lauderdale area. Lucas provides an excellent service here.
JL – Scary. From subprime borrows to subprime voters….stop screwing up the country please. And no that is not racist, it applies to all the people who borrow or vote without having a clue.
Inside Bob
you cite to malkin…who’s business background consists of…nothing. there goes your credibility.
jcrimes, once again, all I ask is that you google: paulson subprime crisis contained
then judge for yourself. That’s what I did. And Malkin’s was the first result. Malkin simply quotes Paulson. She uses his own words to make the case against him.
Google has ranked Malkin’s article first for that search for a reason: hundreds of web sites have linked to it thereby boosting its Google page rank; other sites have linked to it because it is relevant. One need not agree with or even like an author to link to his/her article. For the record, I’m not a Malkin fan.
Inside Bob
Fair enough with respect to Malkin. As for all the other punditry, I’m sorry, I’m not buying it. I don’t disagree with the contention that Paulson has contradicted himself over the past several months. I’m certain he would admit as much if he could speak off the record and not have some shmuck on Fox or MSNBC spouting off about it. Nor does Paulson strike me as a gov’t should cure all type. He hails from the ultimate dog eat dog firm in the world.
That said, the reality is that Paulson’s had to improvise as things got detrimentally worse. The simple fact is, the past few months have turned into sort of a life altering two minute drill where the stakes are absurdly high. Maybe some don’t like the idea that we’re forking over $700 billion to a host of companies that helped create this fiasco. However, it was necessary. The alternative wasn’t just a probability – absent a bailout, the global financial system would have collapsed.
jcrimes, I guess I should have been clear.
For well over 24 months, Warren Buffett, Nouriel Roubini, Mish Shedlock, Peter Schiff, Karl Denninger, Mark Hanson (Mr. Mortgage), the Mogambo Guru and a HOST of others have warned that a credit bubble had formed and it was going to lead to serious consequences for the world’s financial system. They warned of unprecedented systemic risk that would lead to a cataclysmic implosion if not remedied. No one in power heeded their warnings.
Many warned that Fannie and Freddie were in serious trouble ($5 trillion worth); pseudo insurance contracts known as credit default swaps ($50 – $60 trillion notional value); other nutzoid derivatives ($500+ trillion notional at the end of 2007 according to the Bank of International Settlements); moral hazards on a grand scale; and a horribly misaligned system of rewards in the traditional banking and shadow banking systems were bound to lead to serious problems.
I’m no expert but, last year, even I knew that we were in serious trouble. Unfortunately, Treasury’s and the Fed’s resident experts (Paulson and Bernanke) failed to comprehend the seriousness of the situation OR they simply chose to lie about it. Regardless of their motivations, the result is that we have come very close to blowing ourselves back into the stone age. At every step of this still unfolding crisis, they have claimed surprise. They say no one could have known. BS. The entire bailout plan is a grand con game designed to let those in the know (Goldman Sachs et al) get their chips off the table while Joe InvestForTheLongTerm and Jane BuyAndHold get cleaned out.
And still P and B continue to ignore and/or obfuscate the underlying problem. They have called it a liquidity crisis; not true — it’s a solvency crises; many financial institutions are broke. If you want to know why our markets stay afloat, google plunge protection team
I could go on and on but it’s not my job (see Paulson / Bernanke) and if these guys did not think to listen to the people I mentioned above, why should they listen to me.
Icon Watcher said: ”
buying luxury condos for $75/sf? yes, we can!
buying jade condos for $85/sf? yes, we can!
Icon for $90/sf? yes, we can!!!!
Here’s to Obama and sub $100/sf condos in Miami! Cheers”
With the “Odrama Dow” at 5000, we won’t be able to afford that! Day One after election, DOWN 480. I could hit “zero” before the Inauguration! I can hear the broken record now: “It’s GW Bush’s fault!!!!”