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A few months ago, I was really looking forward to this building. It was definitely one of the projects I was giving serious thought about. However, based on all of the pics, outside of absolutely wanting a bay/city view (I don’t really care about that), and based on the common areas, I just don’t see why anyone would pay a premium to live in this building. The units look cookie cutter and no different than what you can purchase at Plaza or 500. Maybe the appliances are nicer and the finishes a little more refined. That however, doesn’t warrant paying a significant premium when compared to the alternatives. Mark my words, all of the one bedrooms in this building and the units facing Brickell avenue will take a major beatdown in terms of price.
Lucas – although you don’t want another Tibor situation…what’s your take on Icon overall? There’s a lot of product online or coming online in this stretch. Would you recommend this building over the alternatives? If so, why? Do the pictures not tell the whole story?
It’s seems that all I have to look forward to is Epic, Ugo never disappoints.
Keep up the great work Lucas!
When I look at these pictures and any others of condos, i can’t help but think they are just boxes in the sky. As a home one won’t be much different than another. A decent lobby would certainly be nice, but i’d only be pasing through. No hassle parking is important, but it is just a box and other than the quality of the views there is no significant reason to pay too many extra dollars for overly fancy or artsy fartsy trappings in a lobby. How much of a premium is someone going to want to pay to be in this building for a unit without the best views. I wonder.
For the majority of people working hard for their money, no matter how much they are making, I can’t imagine them wanting to blow it on this building as a home. With investment a goner, prices will plummet and closing will be incredibly slow.
No offense to anyone intended, but anyone who closes on their pre-con contract on this building doesn’t deserve to have themoney they used to close.
Who agrees or disagrees with my assessment?
I’ve got to agree with jcrimes on his point that these condos dont look any nicer or are in any way more appealing that whatever is already on the market. I was expecting a lot more to be honest. The first condo looks like something someone just threw together using clearance items from the Home Depot. This is a big disappointment for me considering ive been sitting out the market for almost 2 years now. I think this is final nail as far as me investing in anything in the Brickell area.
Coral Gables, here I come!
RCR – i agree – I still havent heard how much theses units are going for, either way I dont think i’d be interested. This one DOA as far as I’m concerned. This building belongs on the Jersey shore.
Why all the junk and trinkets in the model units? It looks cluttered and messy.
The first model does look like someone stopped by the Linens & Things store closing and pick up a few items of what was left and perhaps a few store fixtures to go with it! Maybe it was decorated as “Modernist Addams Family” for Halloween? The decor in the second one was nicer but you’d think there would be a separate water closet. I don’t like having all the plumbing fixtures in a row…esp at those prices.
This is a really good looking hotel. I would definitely want to stay here for the week. Can’t wait until the weekly rentals show up on Craigslist.
Also, forgot to mention it looks like the Trump Tower in Chicago (yes, the one that Apprentice Bill choose to work on a few years back) is in big trouble with the bank refusing to extend the loan a second time. Stay tuned. It is 486 condo units and 300 hotel rooms….small compared to ICAN’T. Chicago was not a big bubble market compared to Miami, nor did it have nearly as many condos being built, still overbuilt though.
A very nice Condo Building that the Smart Money will be looking forward to picking up at least a half dozen of these for $125.00 per squre foot.
Keep yer powder liquid!
The Smart Money
Ace,
No! Don’t do it! You’re overpaying!
i agree this building is no different than plaza on brickell. just kitchen is more pumped up and common areas.
but location of plaza of brickell is better. if i would be on the market right now i would buy at the plaza on brickell. better location and better price. u can always upgrade kitchen and flooring
Lucas,
Hey, how come you did not tell me that the little eyes of the moai light up at night!!
–
For me that makes all the difference, I’m ALL IN!
wow, that decorator should try another profession. lol look at all that junk
I like the safari hat on the bed in the first unit photos….the guy must be tired from shooting all people whose trophy heads are on the wall behind the bed…spooky. In the other photos it is clear that this designer has a problem with “scale”….yes, it gets noticed, but it just looks dumb.
2nd living room looked nice with the corner floor to ceiling windows—but hello neighbors with the scopes
LOL!
That has to be the worst decorated unit I have ever seen. You could tell they are trying to make it look “Rich and luxurious” with bizarre art pieces but it just looks tacky and cluttered as all hell.
We should not judge Philippe Starck for the outcome of these horrible units as he is only satisfying the request from his client Related.
I would not even pay the prices they are asking for at Vue for this new units!
I disagree. Philipp Starck is as guilty as JOrge PErez in creating this monument to excess. One would say, hey, it si private money… No, it isn’t, it is loans to banks, and when they defaulted they afffecting everybody..
I cannot understand why anyone would pay up for these no-view condos, regardless of the amenities or location.
Oh my goodness this is a funny video….
http://www.youtube.com/watch?v=bNmcf4Y3lGM
1. The flats and the bathrooms look exactly the same as MB and 900.
2. The views are absolutely horrible. They just suck! If these are the views from “Model” flats, can you imagine what the views are from the rest of the flats? Looking into each other or at the Brickell Avenue? I don’t think any flat in this concrete jungle has direct/unobstructed bayviews.
3. The second bedroom looks tiny. Made for a 10 year old kid perhaps.
4. The first flat looks like it is decorated with someones discarded junk in front of their home before the trash picking up day. The second model flat is decorated a la IKEA. The Related marketing team did not pay attention here. Well they must have thought any effort will be like putting lipstick on a pig.
This is the most hopeless building I have ever seen. The building should be handed over to all the Universities in Miami so that they can house their students in them.
This one can be officially written off along with Marquis. Yet, I am eagerly anticipating the arrival of Paramount Bay, Everglades and Epic. Hope they don’t disappoint.
AJ
with respect to the views, i think the combo city/river view is actually pretty cool (although i wouldn’t shell out the cash they’re asking for it based on this type of floorplan) and the downtown brickell view for the corner 2/2s facing south is somewhat nice as well if you’re used to that type of view a la chicago (although you can get this view at a much cheaper price in several other brickell buildings). aside from that, i agree with the rest of your assessments.
btw, if that’s white carpeting in the hallways, then that’s another bad idea. give it a year, and all that stuff is gonna look awful.
I would have to agree with the views. Not that great here.
I’m sure the top floors are much nicer, but the lions share wont see much.
What’s the deal with all the goddamn chandeliers in the units and common areas? Stupid.
jcrimes,
For those of us from Chicago, NYC, London etc, the view of city lights and concrete buildings do not matter much. We want to look at Azure blue skies and Turquoise blue waters. That is why we all salivate at the choice waterfront Miami RE. If paying $600/sf in ICON gets you a sliver of water view or not even that, it just wont cut it, especially in the light of available A+ buildings in Park West, Pace Park with direct unobstructed water views for $400-$500.
Even if the price is slashed to half in ICON to $300/sf, I would still not recommend that building to any friend of mine. Getting in and out of that building will be a major deal with 1700+ cars trying to do it on a daily basis. Parking will be a nightmare for being south of the draw bridge. Living among 1700+ units, a majority of them looking into each other will make it feel like you are living in a big city low income project, not withstanding the fancy swimming pool. That project is 3 towers too many. It should have been ideally 2 towers only. Greed got in the way of good judgement. I dont know how many policy makers benefitted from approving this monstrosity. Mr. Jorge Perez, I know you are reading this. Sorry dude, you screwed up on this one.
My not liking this project has nothing to do with the ghastly decor. Decor can be gutted and fixed down the road, albeit at a considerable expense to the homeowners. The first time I saw the artist’s rendering of this project in the sales brochures, I said to myself, who ever books a flat in this craziness is a fool. (With sincere apologies to all those who booked a flat in ICON)
Nothing says you’ve got money and class like Icon Brickell and marble columns.
http://www.truveo.com/Marble-Columns/id/139289156
People are going to look at your condo and say “Who lives there; the pope?”
I actually really like the decor. The lobby has a cool, eerie feeling to it. Reminds me of being stuck in the movie, The Nightmare Before Christmas. However, I agree with most of the other posters, that all the rooms are way too cluttered. The views seem decent at best, but nothing that could command such a high price tag. I would be tempted to dive in if the price was around $200/ sq ft. I would be tempted to decorate the rooms pretty similar, minus the raindeer head in the kitchen and the lavender rooms.
And who ever said that all developers are not responsible? 1800 Club got permission from the city to build 700+ flats and lofts. The developer wisely chose to scale it down to 450 flats as he realized that it will be very foolish to build 700+ flats in that plot of land and the location with out sacrifising safety, comfort, luxury and sanity. The result, an impeccably planned delight of a building called 1800 club. Bravo to at least one responsible developer.
Such a thin line between finer living and yard sale furniture.
I definitely would feel awkward in that one bedroom with all the faces on the wall looking at me.
AJ
I think a direct water view with nothing else to look at gets boring fast. Although not exactly similar to Icon, some of the best views in Miami can actually be found in the 2/2 units at Akoya facing south. You get the ocean, beach, view of Miami Beach and downtown Miami on the horizon (with the causeways filling in the gaps). At twilight, it’s spectacular.
Depends on preferences I guess…
Jcrimes,
Direct ocean view is pitch black, eerie and deppressing at night. No doubt about that.
But direct bayviews on mainland Miami such as the ones from Park West and Pace Park buildings all have the twinkling lights of the causeways, Port, SOBE in addition to the water views. I agree with south facing lines of Akoya. Also North facing lines 7 & 8 of Continuum II are the best.
This place really needs a Blimpie or Subway for the renters. The roof top nightclub is going to rock. It will be as peaceful as the Gavensport.
I heard Luther Campbell is going to manage the lounge. Should be nice.
Note to developer or owners who will be attempting to rent all units: include a specific tenant-responsibility damages provision in your lease agreement pertaining to all the faux-Renaissance Era portraits throughout the premises. I can already see the drunken college-aged renters defacing the life-size prints in the lobby with drawn-on moustaches and devil horns.
The building(s) are not that bad. An oversupply of units like anything else right now in Miami maybe. But look pass the excessive bad or good taste décor but at the units themselves.
Having a more modern interior design especially for the lobby may change the minds of some people. I really like the exterior of the building but the interior design well the design accessory components of the buildings are what some people may have a hard time getting over. But it seems odd to have a post modern design building, and then decorate units with rococo ornamentation furniture for showing. You can decorate in your on unit how you want but this style of décor is not for everyone.
Unit D, and Unit A in tower 1(north) face east may have a better view of the bay and Miami Beach than the ones we have seen, but Brickell Key sits right to the east so having an unobstructive view may not be possible unless you’re on a higher floor of T1 or T2. Living on Miami Beach seems to have the best views to me. You can see the ocean, the bay, and Miami.
The third tower is supposed to be part Viceroy Hotel?
How do you guys figure out if the walls are thin in these condos? I rent in a new construction unit currently and I can hear my neighbor talking on the phone, having sex, talking to her cats, watching TV, listening to music, opening draws….pretty much everything. I wear earplugs every Fri and Sat as she brings home a new dude on those nights….
Do you just have someone go into the unit next door and scream???
opening drawers…
All these condos except Apogee have the same construction. The concrete block or poured concrete divider walls do not offer good sound insulation. Concrete is very dense and any vibration will transfer through the walls.
http://www.kineticsnoise.com/arch/isomax/index.aspx
You need to isolate the wall and floor materials. Many ways too achieve this. All of which are too costly for the average box condominium.
Wild Bill, does that stuff work? How well? How much would you estimate installation in a typical 1200 sf 2 bedroom condo would cost?
Questions,
Yes, it does work. Cost will probably run you from $5.00 a sq. ft. and up. It depends if you want to do just your common wall or also the ceiling. Sound vibrations will tend to “leak” around and find a path of least resistance. You have to factor in isolation clips, drywall, acoustical caulk and additional items. It gets costly.
If these buildings used additional soundproofing it would be in their brochures. These buildings all stink acoustically. It is very common to hear a slamming toilet bowl lid from neighboring units. Listen carefully at night and you will be able to recognize what that slamming sound is.
It’s also easier to install these improved drywall products. Nobody does.
http://www.quietsolution.com/html/quietrock.html
http://www.supressproducts.com/products/
i dont think pictures do the icon justice…. you really have to see it for yourself…
The Icon is not a mere condo… it’s an experience. It is metaphysical. It can not be quantified in mere dollars and cents because it is pure essence like water and fire… and like beauty and youth… priceless. The Icon is a new paradigm. Not last year’s new paradigm nor this year’s new paradigm but the Future’s new paradigm. In fact, it is so far in the future, it loops back to the past. But let’s not digress. To argue against the Icon is to argue against all change that is good in this world.
Can we all love this condo? YES WE CAN. Can we all agree yellow tint on windows is the future? YES WE CAN. Can 1700 of us find it in our hearts to pay $600 sq/ft? YES WE CAN. Oh YES WE CAN because at this defining moment in the Miami condo crisis, change has come to America. Each and every one of you reading this blog, take it upon yourself to purchase a unit in Icon. This is our moment. This is our time; to restore condo flipping; to reclaim the American Dream of sitting on your butt while getting wealthy by purchasing and flipping multiple condos on credit. YES WE CAN.
Questions – I have seen several noise dampening products and the link looks to be something I hadn’t see before but looks to be an improvement on resilient channels for drywall installation. For sound dampening/abatement you need to consider the different frequencies and this looks like a good product to use in conjunction with others. I have seen where resilient channels are installed incorrectly thus negating a good amount of their effectiveness. In noise abatement, the most important thing is designing a floor plan that to avoid conflict on adjoining walls between units (such as putting closet along the common wall), but that can not always be done….it is one of those things to look out for but most people find out too late….after they move in.
Anyone wanna trip on shrooms and go hang out in the common areas?
JL,
#42- f***ing hilarious! Thank you, I needed to belly laugh!
Wild Bill & Questions,
Thx!
That was a great question, Questions and useful info Bill.
JL,
NO WE CAN”T!
Muir,
Thank you.
Every building should include one of these at the closing. Least they could do.
http://www.walgreens.com/store/product.jsp?CATID=100328&id=prod2244551
Are they kidding-while I do say I enjoy the living at 500 Brickel right across the street as a RENTER-I as a developer wouldnt even consider paying two hundred thousand for a one bedroom anywhere as the finishes are all cookie cuttter obviously a developer deal and kickback from the manufacturer and what the price is any different-you want view well soon you will be looking directly at yourself and if you let these idiots decorate it reminds me in heinsight of a bad movie reality I once saw Groundhog day but this time with apts….
Icon Brickell is not the hope and change I was waiting for 🙁
I’ve lived in three newly-built miami condos in the past five years (always a renter, thank goodness) and I can say sound seepage through walls is just a given. used to be a real problem in my previous home as the aspiring DJ next door sent a throbbing base line into my skull at all hours on a daily basis. (my revenge is revelling in the knowledge that he has a $420K mortgage on a unit he’d be lucky to get $125K for today….)
as for my current digs, the walls are paper thin. luckily my neighbor girl doesn’t listen to music, or else we’d have problems. but I hear her every move, when she is in her closet it sounds like someone is rummaging through my closet, and I am awakened probably once a week to the sound of her getting humped. (this is probably too much info, but I think I can tell when she has a partner and when she is self-srvicing.) I am afraid to turn my lights on at 5am as I think it might light up her room as well.
It seems to me that noone here has actually been in the building or in the units. This is a beautiful building and gorgeous amenities and plenty of them at that. I HAVE BEEN IN THE BUILDING AND THE UNITS. The views are gorgeous and most of the ones I saw all had beautiful water views. I think before people make comments based on a couple of pics they should really do their homework. Go on a tour of the building and then post your comments.
Jennifer B. – The pictures only make want to tour it in 2010 during one of those historical tours of what are now bankrupt condo buildings….”and over there we have the new Miami prison with 1700 private cells and room for 3400 complete with large outdoor recreation yard….”
Of course I am just kidding, would actually like to see this in person since there are only so many laughs I can get from the photos. It is like the obese women with all the make up,overly tan, manicured nails, hip hugging jeans with bulges popping out….it just isn’t right and if she just spent half the time that you do on your face and spend that time just walking, you’d look a lot better and not need all that makeup and clothes…. This place isn’t just over the top, it looks ridiculously over done.
I just toured the icon brickell and i have to say that I am floored with that building. i have been looking around to buy an apartment on the bay, and really wanted something that was not only beautiful with gorgeous views, but something that could offer a lifestyle. The spa is outrageous! i have stayed in only five star hotels, and have NEVER experienced a spa like this before.
Jennifer
I’m going this week. That said, regardless of how nice you think it is, I’m sorry, but cookie cutter decorator ready units in a mega complex simply don’t command a premium in this market. Business is always about being a cost leader or product differentiation. This building is neither.
Michelle
i suspsect you’re a troll…but if you’re not, that’s even worse. a lifestyle? are you serious? you define your own lifestyle…a building, or for that matter, shiny brochures (with skinny beautiful cartoon people), don’t do that. alas, only in miami would someone look to a building as an inspiration for how to live. as for the elegance of the spa…book multiple visits with all the extra scratch you save by buying somewhere else.
re: sound problems
–
Is there anybody here who is living in a condo who does not have a problem with sounds from adjoining unit(s)?
I thought South Beach had strict city rules as far as sound insulation for tile work, I knew Miami did not. So far posters have mentioned adjoining rooms, but how about above you?
Everyone has their opinion and this building may not cater to everyone but it DOES cater to people that want to live in a social environment and make use of the beautiful spa and fitness center. I happen to love Starck and i adore Kelly Wearstler , the designer who is taking care of the tower on Brickell Ave. / Viceroy Hotel. The pool deck pictured above is truly grand and must be seen in person to be appreciated. That view exists nowhere else and is truly overwhelming. The pool and spa are being run by the hotel which includes five star service. I think the prices reflect the amenities, location, design and uniqueness of the project. Not to mention, you never have to leave the building due to the total of 5 restaurants on property! In regards to the units, they do have some that are lofty and have 16′ ceilings.
Obviously, Jennifer, Michelle, and Natasha are the same person. They used adjectives, such as gorgeous, overwhelming, and beautiful excessively. They also have similar tones and have the same underlining meaning in their posts. Time stamps are all within an hour and a half of each other. Gee, I guess my years in federal law enforcement finally paid off.
I expect a quarter of all restaurants in the area to go out of business. The five in this building will fair no better.
as far as all these people go that say this building is beautiful and provides a lifestyle (not sure what they mean) you guys are nuts. I went this weekend for a tour, i said it when i saw the pics and ill say it again, what a crapholeeeeeeee. over done, exaggerated, and looks tacky as hell. the entrance, lobby, and pool deck are huge, no doubt. but huge doesn’t mean nice. the units are like every other unit size wise. i think this building is going to fail, big time. too many units and the decor is seriously out of a bad movie.
WTF is with the deer head on the wall in the kitchen? I live in Nebraska and we would all point and laugh at that!!! My wife has been waiting to buy a condo in that building for a year since we last visited the sales office. She is now laughing at our good fortune that we never put money down. The sales gal told us they would all be sold before the building was complete. Scottsdale here we come…
Lucas, any chance you can check the IP logs of the 3 new female Icon lovers? With nearly unanimous disapproval from all the regulars, it’s somewhat strange that Jennifer, Natasha, an Michelle all post extolling reviews of Icon…
Muir,
900 requires super upgraded floor soundproofing. I believe I had to install 3/4 inch rubber material. I also have 18 inch solid concrete walls (part of the support of the building) between me and the neighbors. So far, I have never heard any noise.
Lofty? Wow lucas…you’ve hit the big time. Related/Cervera is trolling your site.
Natasha/Michelle,
nice try, but you are in way over your heads with this crowd.
a few hints for next time: try to be a little bit more creative in your names. Look at the names of other posters, and don’t use the two most common names of sales girls. you stood out like a sore thumb.
maybe you can use stripper names for next time, like “candy” or “destiny” or “syphillis.”
Probably too Cynical —- LOL I laughed out loud on that. Too funny. But but but, she ONLY stays at five star hotels and have NEVER experienced a spa like this before….does that mean this one is good or bad? She doesn’t say…….
Well, the luxury goods market is getting hit hard now…..American Express had been on some shacky ground as a credit card issuer without being a bank, etc. … well, now it was just announced that they are now becoming a bank holding company, not a surprise but does show where credit card defaults are headed….. Please leave home without it in the future since I am getting more concerned about backstopping companies, esp. those that jump on the bank bandwagon now for govt backing… Just goes to show the clientele for these 5 start amenities are dwindling,, esp without the home(s) ATM as a second income.
Ernst,
Same IP for Jennifer and Michelle. Different IP for Natasha.
too bad they were fraud posters as it would be interesting to have some detailed defense of the project rather than just a string of over-used adjectives.
“Michelle”, is the spa already fully operational?
Jennifer = Jorge PerezNatasha = Stephen Ross
Michelle = Phillippe Starck
I didnt think the chinese housing market would collapse like this….given that they have more than a billion people. Here is an excerp:
“The property bubble is already starting to burst,” says Yan Yu, a business management scholar at Peking University, researching the export center of Dongguan in southern Guangdong province. “House prices here in Dongguan have fallen by up to 50% this year,” leaving many homeowners owing more on their mortgages than their homes are worth.
“People have worked all their lives and believed the hype and bought overvalued properties, then saw their savings vanish,” says independent economist Andy Xie in Shanghai. “That carries more political risk” than rising joblessness.
Question to all. Is the luxury condo market in Miami immune to a downturn in the economy?
I ask this because in a lot of parts of the country, it is. In NYC, wealthy folks will buy a 20 million dollar brownstone regardless if there is a real estate bubble or not. The same holds true in prime Boston and San Francisco neighborhoods. These areas are less affected by the ebb and flow of the economy.
Now, I was at the Fort Lauderdale International Boat Show (very cool, btw) 2 weekends ago and I talked to some of the sellers. They stated that business was a VERY slow this season. I thought that folks who would buy a 5 million dollar yatch wouldn’t give a crap about the economy, at least that is my experience w/ the super rich.
Lucas,
Sorry go stray from the main topic, but I have a question regarding Emerald at Brickell. It seems that a couple of the 1 bedroom units are going for a very reasonable price, while some 1/1 are going for over 400k. What is going on here? The building looks very nice and upscale. Why such an inconsitancy in pricing? What direction is this building going?
Thanks,
JQR
It sounds like everyone is hearing everyone around Miami having sex…damn, and I bought in old construction! I don’t even hear a mouse fart.
900guy,
thx! That’s good to know.
–
JQR,
“I thought that folks who would buy a 5 million dollar yatch wouldn’t give a crap about the economy.”
No, they do.
Nice posts, I enjoyed them.
Jane Q. Renter,
The hi-end toys are in meltdown. You are not talking slow, you are talking about multi-million businesses getting wiped out with ZERO orders. I think it might be hard for many people that read this blog to really know what’s happening in the “upper end” down here.
If you are reading this blog, you most likely don’t live full-time in Miami and probably have a steady stream of income -even now- or have money squirreled away so your personal experience is not going to be close to what’s happening down here.
I mentioned this a week ago. My radar tells me this is the beginning of the real pain and not the end. A lot of outwardly wealthy people I know were very leveraged and praying for the economy to come back in 2009, but in all likelihood, it’s going to get worse and you’re going to see some people and businesses go under that you never would have guessed.
Also, this notion about the “super rich” needs to be kept in check. Most super rich people are down 50% in net worth since so much of their net worth is tied up in Real Estate or Stocks or leveraged businesses. Anybody who gets cut in half is going to drastically reign in their budget, no matter who you are, and this very upper upper end tends to go after $4 million+ houses on the water, not 500K-$1million condos.
About the 3 new women who are commenting on this blog, it is nothing unusual. I have heard of stories about builders hiring beautiful women to walk around the building and hang out by the pool area when prospective owners are touring the building.
It is hysterical these three women got busted on the blog. What idiots! I am still laughing!!!!!!!! OMG WHAT RETARDS!
I think you guys mean one woman. And who knows if she’s actually a woman, she already got busted trying to post under different names.
The tip off for me was the comments about the restaurants. Restaurants turn into lounges and nightclubs. Having five restaurants in a condominium is not a positive thing unless your using it as a sales tool. The ignorant out of towner eat this stuff up. I can’t imagine the extra traffic and security issues just from the workers alone. Icon needs to cancel all contracts and apply for a hotel license.
Unless these buildings all have finished tile floors from the developer it is easy for the owners to install flooring without the required soundproofing. The under layment will cost more than a cheap tile. Most contractors know how to work around cost issues for people who just want to flip a unit.
I’ve even had a guy try to pass laminate flooring off as African hardwood. Nothing in Miami amazes me anymore.
Does anyone think those girls could have been MARK????
Carbon
go to forge on the weekends. at least as of six months ago, the owner was still paying models to sit at some of the tables just to beautify the place.
JQR
the price disparity in emerald is based upon a simple reality. some folks are stuck in a higher mortgage and simply are now only starting to graps reality. they need to suck it up and start looking at a short sale or let the property go.
Wild Bill
you said African hardwood. that’s pretty funny. ha ha.
Man,
Im ok with some of the over the top design but jeez the picture of the bedroom with all those eyes/faces on the wall is just way to crazy. That shouldnt e a model maybee 1 in 30 would liek that. Preety bad if you’re trying to sel units and your supposedly marquee model units looks like like a scene from SAW.
Either way i like the idea of the big ammenities but can u imagine 1000 people at the pool? how many peopl ewill be fighting for the 50 person table.
Then again they’ll be lucky if they get 100 peopl ein that bldg.
Wild Bill is correct. Lots of condos require some sound proofing floor materials. But the speed limit is also 55 on I-95. Both rules are rarely followed. Try proving it when the renters move in above you with tile laid down by the cheap investor.
I wonder if they will show the movie “The Silence of the Lambs” in that theater room? If so, I wonder how long people will mill around before leaving the room or will they have to leave in groups?
JL – I’m glad you posted. I think the HNWI (high net worth individuals), esp. those with less than $12 million in NW are very concerned esp. if they had a large exposure in the stock market and real estate…..and esp if they were using a bunch of leverage for their real estate and/or businesses. The UHNWI with $50M+ usually don’t have a lot to worry about but really don’t need to buy a new $10M jet or yacht right now so they will wait. The HNWI with less than $5M have to be a bit scared right now….and the crazy spending on $1,000 purses has nose dived and a lot of high end items are now finding their way in pawn shops according to one article. Also, American Express which caters to a higher net worth client is hurting…..so much so they became a bank holding company to access liquidity. The American lifestyle is going to be adjusted downward for the next few years. What is it that you do anyway (sorry if you had already posted it, I must have forgotten)?
And I also agree that the $500K-$1M condo market is going to take a sharper hit going forward. I just wonder how the $1M-$2M market will do???
It will also be interesting to read the next World Wealth Report put out by Capgemini in 2009, 2010, and beyond. I suspect that there will be a drop in HNWI in 2008, probably the first time since they have done their reports (will have to review the ones I have). The 2008 report regarding 2007 already had HNWI’s being defensive……for 2008 in the 2009 report it should go from defensive to bunker! I know I am…
Jcrimes, you said “Lofty? Wow lucas…you’ve hit the big time. Related/Cervera is trolling your site.”
Just confirms what I said before. Jorge Perez and The Related staff are monitoring this site. But some silly avocado republic beeyoch from Related sales office is not even capable of doing some serious online bluffing. Jorge, you need to appoint better (educated and well versed in English) to act as your surrogates on this site. If not you will be exposed, chewed up and spit out by the ever vigilant wolfs out here.
Jane Q. Renter and Renter Tom,
You two should be hookin up!
RT
anything entry level luxury, i.e., 500k to 1.5m is getting crushed and things will only get worse. after that, there’s more movement/flexibility although the last few months will change that going forward. 2M buyers are just a different kind of buyer than those buying into the entry level luxury market. it’s partly attributable to the fact that there are usually a very limited amount of 2M condos compared to the number of entry level luxury units available. drilling down further, you will still see premium units in premium buildings continue to move (i.e., high floors, good views in continuum for example), albeit, at a slower pace. i wouldn’t expect any huge discounts with these units. high priced units in crap locations, i.e., marquis, will not stand a chance.
I follow asking and closing prices in the top half dozen buildings in South Beach. My sense is that prices are falling in the $500K to $1.5M range but holding pretty steady north of $1.5M on up to $3-4M+. So my answer to RQJ’s question as to whether the luxury condo market is immune to the downturn depends on how “luxury condo market” is defined. The more expensive the units, the longer it will take for them to fall in price. It took a long time for the $500K to $1.5M market to weaken (but it has) and it will take longer for the $1.5M-$3-4M market to weaken (but it will as things worsen). The over $3-4M market segment may well weather the next two years of trouble. Look at the phenomenal success of Apogee. Practically all 65+/- units closed at $4M and up and closed during the past 6 months, no less.
jcrimes…..I’d like the $500K-$1.5M market to come down substantially…..I’d love to pick up a former $1.5M for $750K. Some of the buildings that I have been watching have the same listings for 10 months since I have been watching. Prices will need to come down to move inventory. Direct ocean view on the beach for under $300/s.f. will be nice, it just needs to get here sooner.
I’d be interested to know how the NEW luxury car and the NEW luxury boat market are doing right now…. Anyone know?
The world’s largest Lamborghini dealer, Lamborghini Orange County, has closed and owners aren’t saying why.
Italian yacht builder Ferretti bought Allied Richard Bertram Marine Group in a $50 million deal that allows it, in effect, to sell directly to buyers
So about soundproofing. Would you go to the people upstairs and offer to soundproof the floor for free if you could hear them walking?
Do you guys have any idea how much it would cost to soundproof the walls of a typical 2 bedroom, 1200 sf unit?
Can you stop with this sound proofing madness. Go and get yourself some noise cancelling headphones. If not, do some rigorous work out or hard labor so that you can have a sound, good night sleep and even an elephant snoring next to you will not bother you.
Such whiners! Complaining about every petty thing. If every little sound around you makes you jump out of your skin, then get out, condo living is not for you. Buy an acre of land in Loxahatchee and live there.
And all those lucky bastards who are actually complaining that they can hear the girl next door having sex and are actually bothered by it, either you must be gay or an extremely crochety old coot.
Strip away the wall coverings and furnishing and what you have is an average looking apartment like so many others being offered. The best part of theat apartment is the view. You will soon tire of that too especially due to the fees you will have to pay to maintain to keep it month after month.
For some reason however J Perez just closed another piece of land in brickell . See Miami Herald today. What does he see and or know that no one on this blog seems to envision.
if the building does fail, they can always sell the decor as set furniture to the touring company of the off-Broadway semi-hit: “Liberace: one creepy-ass old dead dude.”
I also do think the high-net worth see this downturn as something different and far more severe than normal, and have reined in their spending accordingly. (and the ones I deal with were so over-levered to finance their lifestyles, and that debt financing is dried up and knocking on the door.)
doc T – Assembling large pieces of land at reasonable price without a holdout owners is very difficult. Either Perez had some interest in it already and/or he sees that he may be the only one that can put together a large project in 15-20 years from now since all the other people will only have small parcels for small projects. Land acquisition in high density areas is tricky.
I am curious how the famed Brickell financial district is holding up in this financial crisis? Anyone know.
Also PTC, I agree, HNW individuals do see this downturn as different from just a momentary pause, but a real threat to their hard earned wealth. Also, half the HNW individuals are new to the wealth and are the ones who actually EARNED it and so they can switch off the spending tap pretty quickly and be content with what they have already purchased….and many also did leverage their wealth, esp in businesses and real estate, and are freaked out because the leverage potentially exposes all of their wealth…having that at risk was not something they were planning on ever happening. A promise of higher taxes doesn’t help either…wealth is taking a hit from all sides right now, lower incomes, very tight credit, real estate asset deflation, stock market losses, etc. Did you see that video (click on name) that I had posted about the end of WWII….pretty funny and I’m sure applies to a lot of HNW people….. I know I am concerned and am planning 1-2 years in advance of the economy and it doesn’t look pretty and may acquire a property in a foreign country as back up.
900 flooing. Ok guys, its not that easy to just lay down any flooring. At 900, you MUST have the building look at the whole unit when the soundproofing has been installed. They take photos and the manufactur’s information and keep it in your file. Also, the balcony has be to waterproofed using only certain approved materials. It would be every hard to have anyone just install whatever they felt. In the contract, it states that if you bypass these requirments, your unit’s flooing will be ripped up at your expense.
There is no exceptions at 900. Its all part of the approval process when you want to start on your build out.
“The last rights they obtained for themselves was the privilege of being the last to starve.”
Jared Diamond
Good info 900guy.
thx.
Condo Conundrum
Condos are a problem, no doubt, because that market was driven to a large degree by speculation. “That’s still the $64,000 question,” Hardin quips. “Who will be the end-user in the condo market?” (Of course, the joke, courtesy of the Daily Show, is that “thanks to Lehman Brothers, Morgan Stanley, AIG, Freddie Mac, and Fannie Mae, the $64,000 question is now worth $1,324.86.”)
The predicament is a vast oversupply. Heuson says it took about seven years for the 1980s condo glut to be absorbed. She figures it will take less time to absorb today because economic cycles move faster now. People are looking for the market “to become something other than vulture-condo buys,” says Heuson. “With the condo boom, there were so many nearly identical units that they defied the usual logic in real estate, that location [makes a property] unique. People were trying to sell condos as a commodity.”
On the plus side, falling condo prices will attract buyers at a certain point, just as undervalued stocks attract investors. “That will add some liquidity, which is good, and pricing transparency as well,” Heuson notes.
Hardin says many Miami condos are a good investment long term because the infrastructure for urban infill is there. Eventually people will come. But in the short term, the savvy buyer has to weigh whether it’s better to invest in a fire-sale unit at one of the big new buildings, or pay a little more in an established building.
“The risk in some of these large buildings is that they aren’t all sold, or you have a number of units in foreclosure and they aren’t paying their assessments,” he says. “So you may get a good deal but you’re buying into a management problem. Some of what we built is too large. I think there’s more of a market for smaller buildings, say 8- to 10-story buildings, rather than 40- or 50-story buildings.”
He sees tough times for a mega project like Midtown Miami because it’s too big, too isolated, and a little too far from the Boulevard and Biscayne Bay to compete in this market. That’s why much of the sales effort there has turned to the rental market. “It’s a great project,” he says. “The question is the scale of it. Can you draw in literally thousands of people to that area? In ten years, it will happen. The question is what it will look like between now and then.”
But this is Miami, where the normal rules of real estate don’t necessarily apply. We wondered if there was anyone — anyone not currently trying to sell us a distressed condo — who could open for us a window into the near future of the communities along the Biscayne Corridor. This is, after all, where the gold rush became emblematic, as the glittering glass-and-steel towers jutted out of downtown’s scorched earth and began to march up the bay, leaving us with a half-finished and unruly gentrification project now uncertain in its momentum.
We tapped two experts: William Hardin, director of real estate programs at Florida International University’s Department of Finance; and Andrea Heuson, professor of finance at the University of Miami. Both are, to steal a phrase from the now-culpable Alan Greenspan, cautiously optimistic.
FIU’s William Hardin: “I’m not trying to be all gloom and doom, but the government can only do so much.”
“In the big picture, we are in a recessionary period,” Hardin admits, sipping coffee at the Upper Eastside’s Starbucks. (I cashed out what was left of my 401k to join him.) “We have negative job growth. On the upside, Miami is a unique place in that real estate doesn’t correlate with jobs or employment data. The assumption is that people from Europe and South America will come. So there’s a disconnect there that’s unusual for a metro area as large as this one.”
The bad news, Hardin says, is that the federal bailouts are aimed at “owner-occupants, not vacation and part-time owners,” which is a huge percentage of the local market, particularly in condo sales.
“My worry with the top end,” he continues, “is when you have the [stock] market go down 20 percent in two weeks, even if I’ve got 10 million, with losses like that, I’m not really excited about buying a condo.
Great read by the way, on topic with many posts here.
And finally:
“The migratory patterns to South Florida, particularly this [Biscayne Corridor] area and Miami Beach, are a lot of people from New York. If that’s who we’re ultimately selling to, they are going to have less of an ability to pay. In parts of Europe, they were highly leveraged as well, so some of those markets aren’t as strong.”
Dear questions, 900guy and wild bill,
Thank God, you brought the theme about poor insolution and noises in your place!!! And is great to learn something from it!
I used to read the blogs in this site and always find them very interesting with very good and useful info but never wrrte in it, just a month or so ago in the marina blue section, after experiencing not so nice noises from the unit upstairs.
900guy, I live in MB and the management also approves and inspect all units, especially those with wood floors; they even have records and files of it too; but still soundprofing is not enough.
I just moved two months ago and I love the building!, The management, security, concierge, etc they are all service oriented.
I moved two yrs ago to Miami and now renting, because I want to make sure I like the building, area before buying.
Unfortunately in MB I can also hear the lady in the upper unit when she walks with her stilettos all over the place!! And believe me in her wood floor at 3am is annoying because I get to wake up, especially when she takes her shoes off and throws them in the floor!! The unit has wood floors and after complaining with management, those floors were approved, therefore there is nothing to do about it. They just can send her a consideration letter, which I believe that girl won’t mind at all what I can hear.
I’m not the only one experiencing this, I knowed about an owner who went to management office asking them to show him those records on the flooring approval.
Imagine when you are a buyer, experiencing this, and no way out!
At least I’m renting and hopefully next year if I move I’ll make sure of those details, even when time to buy a unit for myself!
As for the walls, next two my unit the 2 bedroom is empty and the other side is rented to a couple who travel much of the time and are not noisy at all. Thank God!
Although when they are in the bedroon, yes I CAN listen to their TV, but I can’t live with it.
What happened in the 1980’s Miami market was minor compared to today. Most these buildings will be almost valueless as the maintenance fees grow to make up for the half delinquent owners. It’s only a matter of time before the developers start to go belly up and abandon their projects.
The soundproofing issue is a major problem for most people. When our paying a premium to hear your neighbors having sex or to listen to barking dogs all night, it’s a major problem. The cost to do a 1200 sq. ft. unit properly would require an extra $15,000. 900 Biscayne is not better than other buildings. It meets basic code. Which will not help because half of all Miami residents are inconsiderate assholes. The pounding noise from a 1000 watt surround sound system will leak down the concrete walls all the to the adjoining units.
Just like Deutsche Bank rated GM shares at zero yesterday, I’m rating 50 percent of new Miami condos as worthless. Buy them for zero and pay the taxes and eventual $1,500 maintenance fees for a one bedroom. Any building that has over 50 percent renters and is still controlled by the developer is at a risk for failing.
It’s a very slow bleed in real estate. Eventually the water bills won’t be paid and the electricity in these buildings will be turned off. Eventually you will see people cooking on their balconies.
http://www.sterno.com/consumer/consumer_gels_faq.aspx?kwid=1&descid=2&pg=consumer_gels_faq.aspx
Ok Bill.
Now, tell us how you REALLY feel.
I’m beginning to think things will be worse than I thought. Even Roubini is being too bullish. U.S. unemployment is going to hit 10% sooner than I thought. And housing will continue to take a hit even more….yes we can.
Oh, yes we can.
And, yes we could have hit 30% with McFossil and his daughter.
Oh silly Muir, we’ll never know now will we? The tax increases coupled with larger deficits will kill us all. There will be no govt social security when I get old….thankfully, if I am wise, I won’t need it.
Oh, RT, you silly boy.
Did the big boys pick on you in school?
Is this the need to constantly tell us all why and how you are so intelligent, wise and everybody else is not?
The Ace will take $125.00 per square foot the rest of you can keep the “change”.
The Smart Money.
But “The Ace” I thought the $125.00 and high monthly HOA fees included the models? Am I mistaken. That’s what the sales girls told me, and they don’t lie, do they??? Trust me, I’ve already got shag carpet on the walls and mirrors on the ceiling….oh yeah… (just kidding).
Icon Brickell has enough rooms to be turned into a casino or time share property. Clear the five empty restaurants and put in slots. Hire the boys from AIG to do a magic show. They can make things disappear.
As someone who caters to extreme high net worth individuals let me confirm that (at least most of them) are getting crushed. Starting around the beginning of October (no coincidence) a sea change in their demeanors and habits changed. Some of them are in shear panic and one more market downturn away from the abyss. Those throwing money around like it meant nothing now can even pay their outstanding balances.
Obviously the ones who were the most high-flying and leveraged are the ones that are getting hurt the worst. Those who are more old money and conservative may not be on the brink of the abyss but they are have certainly been given pause and are watching from the sidelines for signs that this thing is over. Which we know it is no where nearso.
I brought up a few weeks ago the credit card crisis which was on the horizon. Turns out just like banks were giving away mortgages to people with no ability to actually afford them so they could roll them up and securitize them for fees the same thing has been happening for years now with credit cards. Consumers could sustain themselves as long as their residential ATMs were pumping out the equity but now the piper knocks and demands to be paid. I hate to say it but I thinks *could* get far far worse although I sincerely hope that I am just being overly pessimistic.
It’s getting much cheaper to shag in Mayfair and Knightsbridge. Get a used Ferrari at half off:
http://www.wealth-bulletin.com/home/content/3452447395/
Hey Native – Interesting. I think 2008 will see the first pull back in HNWI (and VHNWI and UHNWI)…can’t wait for the 209 World Wealth Report. As fugal low end VHNWI individual I am happy that I stayed over 2/3’s in cash after selling off some investments a couple of years ago. Now I am concerned both to buy a condo (I’ll wait some more) but also just making sure cash is secure and won’t USD won’t devalue. The big spenders I know are getting hurt. We are seeing, from what I can tell, a huge pull back on upper end which was an area that most people thought was immune. Keep posting what you see out there…
We’ve seen mortgages hit, obviously, but credit cards will be a heavy shoe to fall (see AmEx) and of course the student loans are a pretty big deal when there won’t be jobs. Just look at how twenty somethings had credit available for living large….no job but take out HUGE student loans (so colleges could charge you more and give you lifestyle amenities), credit cards without a job, and of course every twenty something needs to buy a new condo with little down….. The unemployment is going to hit these people hard…..so much for living large among this group.
Another ‘theory’ I have on this credit card thing. I think Visa and MC saw this as an eventuality. The hedge was going public recently to disperse the pain amongst share holders vs. having their private entities swallowed whole. Just a thought.
Native – Aren’t Visa and MC just processors? The banks hold the bad here. But yes with less transactions, Visa and MC will get less fees.
Crystal ball question time. When will it be a good time to buy a nice downtown condo in Miami? I’m leaning toward Spring 2010. I think most people will be on their knees by then. I have a feeling this whole thing is just starting up. I remember seeing a 2/2.5 in NeoVertika listed at 450k back in 2005, now you can pick it up for 250k. How much would it be worth 2 years from now, 100k? What are your thoughts?
RT, let me take a wild guess. VHNWI is very high net worth individual and UHNWI is ultra high net worth individual?
Since other investments have been discussed in comparison to residential condos I think commercial real estate is worth discussing. CRE is already starting to see price declines that will continue throughout 2009-2010. There will be some good buying opportunities for those that have the cash. The days of 85% financing using 6% cap rates are over. We are starting to see lenders underwrite to an 8%-9% cap rate and lend up to a max of 60-65% of the value. Unfortunately you need to be sitting on a decent amount of cash to jump into the CRE world. It is not a suitable investment vehicle for the small investor.
For those that do have the cash to invest I would consider monitoring this asset class as place to park your money. Granted you are subject to the same illiquidity issues as residential real estate but this is an investment that will actually cash flow as opposed to condo “investments”. As long as you can pass thru the expenses to your tenants, it’s another option to hedge against the massive inflation that is sure to come.
Hi, this site makes for interesting reading! What are your thoughts on Collins Avenue in Bal Harbour?
I am looking to purchase a small 1 or 2 bed condo.
I am from the UK and it will be a vacation home. Lock up and leave sort of place.
Any thoughts?
Thanks in advance
Jane Q. Renter – Spring 2010 isn’t a bad time to wait for…..I have written off until hurricane season 2009 at least unless someone comes to me with a great short sale or foreclosure. HNWI is at least $1M in investable assets basically net worth above $1M not including primary residence. VHNWI is $5M or more not counting primary residence and UHNWI is defined as $30M+ or $50M+. Once you reach the UHNWI club, they live different than 99.99%+ of people in the world. Sometimes people define mid level multi-millionaires as $5M-$10M since these people don’t have to worry about having to work for money, but don’t live the carefree extravagant lifestyle of the uber-rich…that is they would own a jet (although an Eclipse 400 looks nice…) but might charter one on occasion. The World Wealth Reports by Capgemini are great read.
that is they wouldn’t own a jet… but the UHNWI might.
jet ownership simply doesn’t pencil. unless one is so wealthy that they can take a $40M hit just for pride of ownership, it makes much more economic sense to charter. the operating costs of ownership will eat you alive, unless you have a slew of HNW friends willing to charter the plane when the owner isn’t using it.
and once one has ridden in a Gulfstream-V, it makes all other jets seem just pathetic by comparison.
MIA
small time investors can get exposure to CRE through a host of various companies. REITs as well as property managers (e.g., CB Richard Ellis). i’d stay out for at least another year though. the tenant situation is in a major state of flux.
as for those with sufficient cash to make a direct purchase, the problem today is the same as yesterday…sellers’ prices are still unrealistic. that will change soon enough. many of the boom era buyers bought using 3-5 year financing. the gig is almost up and the banks won’t do a refi and eventually will foreclose. i do a significant amount of work with developers doing deeds in lieu with the banks and it’s safe to say, the banks have no appetite to hold onto this stuff.
jcrimes, any info on the percentage of lenders requiring a personal or corporate guarantee on CRE financing?
AJ SAID:
Can you stop with this sound proofing madness. Go and get yourself some noise cancelling headphones. If not, do some rigorous work out or hard labor so that you can have a sound, good night sleep and even an elephant snoring next to you will not bother you.
97 AJ /Nov 11, 2008 at 5:36 am Vote:
Such whiners! Complaining about every petty thing. If every little sound around you makes you jump out of your skin, then get out, condo living is not for you. Buy an acre of land in Loxahatchee and live there.
And all those lucky bastards who are actually complaining that they can hear the girl next door having sex and are actually bothered by it, either you must be gay or an extremely crochety old coot.
AJ,
For someone demanding respect and sensitivity and consideration, you sure are a rude hypocrite. As multiple posters have indicated, this is a legitimate concern. Perhaps you have forgotten that these units must eventually be bought or rented by end users. You being a real estate agent/speculator would have no idea about this.
Jet ownership makes little sense but those $1.5M ones look pretty darn cool though. Too bad Eclipse Aviation is having such a difficult time…. Was looking forward to doing one of the DayJet things on a splurge….but DayJet is outa business for now. Chartering or prepaid jet time makes more sense, but then again for those prices why not just do first class? Personally, for an hour or two coach is just fine as long as you’re not sitting next to a really big person or a drunk. With DayJet out of business for now and Eclipse Aviation halting production….the HNWI are taking a hit for sure. As jets go, so do high end condos……esp. ones that aren’t justifiable. What amazes me are the people that have a lot of stuff…high end stuff….but use credit to get it and never really sit down to look at their NET worth. I guess more are looking at that as each day passes….
Does anyone have any advice?
The condo building I am in supposedly made people do the required floor underlayment and had to get permits with inspections (I saw the permit that was pulled for my unit from Sunny Isles Beach). I think the unit above me has adequate sound proofing since I don’t hear much unless someone has hard shoes, they drop something hard, or they drag a chair or furniture across the marble floor (that is the only real annoyance). Not bad though and don’t hear the neighbors on the same floor so far (the one adjacent unit people are never there). The only thing that has woke me up is a few times at around 4 a.m. drunks go out to swim in the ocean and need to hoot and holler it up…..despite the very thick hurricane glass, the high pitched noise does come through and at 4 a.m. it will wake you up since everything else is so quite except the sound of the waves.
interesting. http://www.urbandigs.com/2008/11/condos_the_latest_unkind_cut.html?ref=patrick.net
IB
not sure what you’re asking…if it’s what percentage of banks are demanding a corporate/personal guarantee, every bank requires one. that said, guarantees weren’t a big deal if the loan was packaged away (CMBS is non-recourse unless bad boy acts occurred) but in today’s market CMBS is dead.
if the question is what do banks want to see in terms of wealth as a pct compared to the loan amount, coverage has definitely increased. in the past year, i’ve had three refis fall through because the guarantor simply didn’t have the liquid net worth to make the banks comfortable (even though the total coverage, including the collateral, was well over 2 times the loan amount). the common retort (and frankly, i can’t disagree with it) is that banks are insisting that the guarantor cash flow enough on a monthly basis to cover the debt service. that’s some serious scratch once you consider how these developers are already tied up. back in the boom, banks paid, at best, lip service to this analysis.
Great link Mr Waverly.
Kelley, not me.
Jane Q, anyone’s guess, probably not before 2010 as you guessed.
–
The real wrench in the works is, I still believe, the PTB may yet still be able to create massive inflation down the line. (see page 3 in pdf chart from the FED if you click my name)
But for the time being I am really enjoying this deflation, I’m not richer than I was a year ago, but everyone I know is poorer.
I’m still predicting -$75 sq /ft
What happens after that, I haven’t a clue.
Lucas,
Please tell your webmaster that the width of the site column is overflowing. Cannot read the posts with out having to use the horizontal slider. Major hassle and headache.
RT, those small planes are much more dangerous than commercial planes. At least one of those crashes each week.
Lucas,
The column width overflow happens only on Mozilla Firefox. On IE it is still the same old pattern with out any problems. So your webmaster need only to look at optimizing the site in Firefox, which is used by 20% of the public including me.
AJ/Lucas,
I think that’s only a FireFox display problem (IE7 is OK). I posted a super long link -#134 – which I think is causing the overflow.
jcrimes, thanks for your response. I was referring to the bubble years’ practice of nonrecourse lending for commercial properties. I would have thought that a personal or corporate guarantee would not be required on a building which has a solid equity position with good debt service.
If, as you point out, CMBS is completely gone and every CRE lender now requires a personal or corporate guarantee, the CRE market is about to crash even harder than I expected. It would seem to me that, after Harry Macklowe’s well-publicized experience and General Growth’s travails, no sane commercial real estate investor would be interested in taking on new debt if it’s all recourse all the time. Not in this market.
This means that CRE lending is about to come to a screeching halt and only cash buyers will be able to play. Of course smart cash will wait for the ensuing crash before pulling the trigger on any purchase. If you combine that fact with increasing cap rates and declining retail sales, CRE may crash harder and faster than residential.
JL,
Mystery solved! Now Lucas has to erase your link or the entire post #134 to correct the problem.
Anyone attend Bike Miami? Looks like a nice showing from the pics I happened to see.
Kelly Thomas:
Collins Avenue in Bal Harbour is definitely (in my opinion), one of the best places to buy a condo as I think it has a different sub market. People want to live in that area and the addition of the St Regis will drive values up eventually. However, prices there went through the roof and I believe all units are way overpriced as with condos in other areas. I think One Bal harbour is selling units at over $600/sf which is way too high.
Prices have been going down and I think they have a long way to go. But once they sabalize a bit, I think it will be a great place to have a unit.
Thank you so much Hugo P!! (massive thumbs up) your knowledge on this has been really useful! I am looking at a condo 2 bed 2 bath for $350k, it is built in 1970, so it is a much older smaller building, although it may be over priced, I think I will wait a little and see if the price drops, at the moment the pound is taking a beating against the dollar.
Ace, your comments are bigoted and anti semitic about the skank real estate agent in NYC. Her religion has no bearing on her lack of ethics or underhanded techniques. I am not trying to be politically correct, your comments go beyond that and cry out for public censure. Your remarks are just plain wrong and show ignorance and promote hate.
Kelly Thomas, you may want to look at the harbour house in bal harbour, they re-did it from the ground up so its all new. they had some issues at that building so prices are coming down a bit. might be a choice if you want something newer in that area without paying full price.
I agree with dobieman. I think that Ace has to be banned from this blog unless he recongnizes his mistake.
Thanks Raffi, I will look into Harbour House also!!
Kelly Thomas:
For that price, I guess you are looking at buildings that are not on the water (I don’t think I have seen a 2/2 for $350k on the waterfront). Any idea of the price per square foot? # of parking spaces? (some buildings only provide one space and the second one is a problem)
I personally like these buildings, although they are a bit old. If you are able to get a good price and a unit that has been fixed up, it’s a no brainer. I think old buildings have much better spaces than newer ones.
KT
hugo and raffi are both right. i’d also advise looking at the 70’s stretch on collins. some nice buildings. also, surfside has a few nice projects although they’re a little overpriced (e.g., azure).
IB
i’m not sure what the pcts are, but historically, i don’t believe CMBS constituted a majority of commercial lending. thus, a good chunk of lending has always been your vanilla recourse loans. that said, the big thing for CRE these days and it’s obvious, cash is king. no bank will do a deal without the human beings behind the transaction putting up a chunk of equity (mezz debt no longer will be considered equity…it should have never been in the first place), the collateral appraising using conservative estimates and the guarantors having resources (read – cash) on the back end to cover the debt if things go bad. when deals are getting done, which isn’t often, the guarantors don’t mind signing on the dotted line because they got the muscle in the first place. up until a few months ago, the insurers and some banks were still making deals for properties. haven’t seen much of that though in the past few weeks.
Thanks again Hugo and jcrimes, I will take all of your advice on board. I think I am going to do more reading and listening to what you all suggest, this board is totally informative, although it can be heavy reading at times mainly because most of you are pretty smart!!
Doobieman and lara,
thank you both so much for your self-righteous moralizing. If there is one thing the viewers of this blog are looking to read each time they log on, it is a stern lecture on the rights of the oppressed.
lara, I especially like your thought that, “he should be banned until he sees the errors of his ways.” Reminiscent of how things were done in Stalinist Russia.
I am always amused by those who are so quick to point out the intolerence of others are usually quite intolerent of those whose thoughts differ from their own.
PTC,
I fully agree with you. As a Jewish, female realtor living in Manhattan, I didn’t take offense to it one bit. I think a little razzing on this board is fine. I don’t think anyone has really crossed the line (except maybe one of the ‘Marks’ a while back).
You know, I had a thought. (Don’t jump on that sentence RT, too easy)
There are three types of buyers here:
1. Buying to live in the condo and, of course, would like the best deal possible.
2. Speculators, buying not for the return on the investment via rents, but rather, buying with the believe that they will sell the units later at a markup.
3. Investors, buying for the return on the investment, i.e. rent.
Of course, many would consider that they are doing more than just one of the above.
But, if you are honest with yourself, you are primarily in one category.
For #1 above, providing you have the means, happiness should be the return. I do not knock it; rather, I congratulate these individuals. If they are in the process of finding their ideal condo, they probably know it would be best to wait a bit to see how things settle out, not only for moneys sake, but also to see how the building works out. For them late 2009/2010 seems like a good time frame, that is, unless they find their dream property today.
For #3 (That’s me and maybe others, I wouldn’t presume to know, I’d guess Gables) it’s easier but not easy, as one takes into consideration the buildings future problems with HOA, taxes, lowering rents, general economy, who’s buying (exchange rates) etc.
Price per sq ft would vary only as a function of rent and a buildings’ stability. But, yes, you want to like the building and even aesthetics come into play, but are not willing to pay a big premium for those things, returns and security trump all else.
Then there’s #2. General consensus here, and most everywhere else, is that this group is in error. But even here I would not presume to judge too harshly. If one could buy a condo and miraculously mothball it for 10 years (no taxes, no expenses, no deterioration) I’m sure that a paper profit would show. Of course, the loss would be what else could have been done with the money and what the money itself will be worth at the end of 10 years. As in a lot of things, it’s a timing issue.
Seen this way, I do not see much disagreement.
Kelly #153
Have friends who have lived happily at oceanfront condo Corinthian 5825 Collins for several years.
The C is a very well- constructed building from late 1960s that the association has maintained both structrually on the outside with new balconies railings etc and a fine looking updated lobby-of course assessments were required but the work is finished.
My friends commented the other day how pleased they were that there were only 2-3 foreclosures in the project out of 200 +- units.
I recall that the maintenance was very reasonable-no idea what is available there now but perhaps lucas could find some units for you to see .
Hmm, PTC is engaging in “self-righteous moralizing” because he is intolerant of those who refuse to tolerate boorish behavior.
I guess, one man’s racist lout is another’s razzer of the oppressed.
For the grade schoolers here who don’t know the difference, attacking a person for the way the Creator made them is very different from attacking another for his/her behavior.
So, being intolerant of blacks or Jews is not OK; being intolerant of bad behavior is OK
The second type of intolerance separates us from other mammals. The first is more reptilian than mammalian.
See the difference?
Ace’s -now deleted- post could have come off in a better light if there were some genuine sarcasm or humor in it. I say it ain’t sexist, racial or intolerant if it’s genuinely funny (because if it makes you laugh, there’s some truth in your eyes to what is being said).
Regardless, “The Ace”, “The Smart Money” obviously does not take himself too seriously. The post was awkward, like a joke missing the punchline.
Well said Inside Bob!
JL
How can calling somebody the “N” word ever ever be funny or humorous?
Kramer
uhh…chappelle show seems to be pretty funny.
in all seriousness, enough with the PC garbage. if ace is a racist, i don’t care. if ace is a bad joke teller, i don’t care. in short, i don’t care. why the rest of you do is beyond me (however, IB’s post was well said but i digress).
now, can anyone tell me if closings have started at Icon? it’s eerie looking out at my window now with Icon and Epic both pitch black. i wonder how much this image will change in a year from now…
There are some crybabies on here.
Last night I made a joke directed to renter tom, thought it was pretty funny too, and within a minute it got deleted.
“How can calling somebody the “N” word ever ever be funny or humorous?”
Watch Chris Rock, it can be plenty funny without being hurtful.
Berlusconi’s attempt at humor calling Obama “tanned” was unfunny so naturally people label it racist. If you’re going to mention trigger words or talk negatively about religion, sex or race… make sure it’s funny. You can do it, just make sure there’s a good punchline because people will only laugh if it relates or is true in their eyes and we shouldn’t be afraid to talk about things that are true to us.
If you’re going to look at Bal Harbour, you might as well look at Sunny Isles which is right next door with dozens of brand new towers with great deals on the water.
One bad thing about Bal Harbour is that you have to drive through a warzone to get to I-95 or the airport.
Re: 156 = Thank you Muir for recognizing the category I fall in and what I’ve been trying to say all along- I am buying to live in for the long-term and it will coincidentally be a long-term investment- the opportunity cost is the pleasure I am having in this very moment living in it. Although, I’m not worried in the short-term because I plan to live here a long, long time and do not intend to sell any time soon, as I said, if ever…
As a favorite of mine (Tony Bennett sings) “The Best is Yet to Come!” for Miami, I have every confidence of that with my urban planning hat on inspite of all the ripping of poor Icon Brickell, you all will eat your words one day…I look forward to it.
Renter Tom, Snap to attention!
And I am not on Jorge Perez’s payroll! But I’m willing! Jorge…call me! I keeeeddd, I keeeeedddd. I cannot be bought, but I do offer a heartfelt opinion:)
Besides the Bal Harbour Shops, is there anything particularly worthwhile about Bal Harbour … as Brian mentioned comparing it to Sunny Isles.
JL,
It is a great community, super safe etc
Expensive landscaping and bus stops? Actually the best money can buy…
Bal harbour has always been where the wealthy have a place. If you are an out of towner who has money to buy a vacation condo on the ocean, why wouldn’t you buy in Bal Harbour? for one its super safe (as just mentioned) two you have great shopping and restaurants across the street, and three in the long run (since your buying a second home for vacation I assume you are going to keep it for a while) it will never lose its value. It’s always been high end over there and it always will be.
I think lala hit the nail on the head, same shat on the beach with nicer overall landscaping. If you were visiting and driving down A1A from Golden Beach down to Miami Beach, I doubt anything about Bal Harbour would jump out at you.
In fact, I make that drive a lot and nothing ever really jumps out at me lol. Besidesn Bal harbour shops, what should I be looking for to want to stop?
SIB didn’t fork out the money for the landscaping or the bus stops, they went second tier… and their tax base went from 1 billion to 5 billion during the 3 years I lived there…and they chintzed on their beach access signs too! We had designed these cool mosaic beach ball bollards they didn’t do…wasn’t “Aventura” enough:P I said once before, every community gets what it deserves…
Your welcome la la.
Enjoy 🙂
I apologize, I said something I shouldn’t have a while ago.
–
Hello, what about Carlos Mencia???? He is not racist, he hates everyone equally! Even the habibis that should offend me, yet somehow he doesn’t…we all need to lighten up.
Trulia.com has an overview for every city with property crime statistics and violent crime stats. In Miami beach there is like a 1.5%/year chance that you will be a victim oF violent crime…in sunny isles it is only .22% chance….Miami beach is not as safe as I anticipated and therefore I am looking at sunny isles now…rt what are some a that you reccommend?
Some Guy,
Results like that are always skewed because MB has much more (and much later, ie till 4am) nightlife than areas like Sunny Isles, etc. If you were able to get violent crime statistics for all areas before midnight, then I bet things would be a lot more comparable.
The chances of something bad happening if you were taking a stroll on the beach at 9PM in both places is probably similar. The chances of something happening to you if you get out of a club drunk at 4AM in Miami Beach and decide to take a stroll on the Beach or walk home probably skyrockets. That’s what skews crime results.
Not to mention those stats are crimes committed per population. The beach has a “population” of 78,000 but on any given weekend night there are closer to 200,000 people actually in the city at any given time. That is going to skew the stats big time. The majority of crime on the beach is committed by non-residents and is committed against non-residents.
By the way, did any one see the article in the Herald that Swire (of Brickell Key & Hong Kong fame) bought the Brickell CitiCentre land on S Miami Ave & 8th ST? It also mentioned in the article that Swire had tried to purchase the ICON Brickell land years ago but got outbid by Related.
why no love for bal harbour? frankly, i don’t think it’s anything remotely similar to SIB. it’s extremely nice, peaceful, BHS is actually a nice spot with some stuff to do and you’re still close south beach, downtown and the expressway. also, there’s good (at least by miami standards) restaurants within five minutes south of bal harbour. someone mentioned that it’s a warzone to get to 95. well, it’s even worse if you’re coming from SIB. the big traffic jam is always on collins just north of bal harbour. after that, there’s a few short cuts (pine tree comes to mind) to get you where you need to go in good time for the morning commute.
lala…you might have bought your condo to live in but the question is…how long do you intend on living in it? five years? ten? more? my take is anything under ten…and you’ll be lucky to come out with a decent ROI. but at least you’ll have the unquantifiable joy in knowing that you could hang whatever it was you wanted to put on the walls and paint them in nice colors to boot!!! as for icon, i don’t plan on eating any humble pie…although i will be getting a tour shortly and be intellectually honest enough to admit if i’m wrong.
Jcrimes,
I have no plans to move for the next 20 years at least, but you never know what twists life may throw your way. I found what I was seeking- to finally feel “settled” after living in many cities, apartments, even countries, etc for the past 18 years while in school and working.
It turns out I’m just someone who bought a home in the sh***y market in Miami to live in. It’s more than being able to design it how I want, it’s a feeling of permanance I guess. I finally unpacked my china from its boxes after 10 years.
I’m not on here advising people to flip or buy if they don’t plan to live in it, I’m just saying I do not regret for one nanosecond my decision to purchase when I did and I’m not going to worry that I am not making the most 100% wisest decision money-wise by doing so. That was not my top priority when I made my decision.
And I also happen to see the leaps and bounds Miami has transformed urbanistically already, and the momentum it has now to really become a 24 hour city like the older cities in America. I’m not saying tomorrow, but I’m saying it will be constantly improviing gradually, the ball is rolling now.
Thanks for all of your comments about my possible purchase, we are planning on coming out in Jan 09 to look at condo’s with the aim of purchasing.
I should also say, we are in the cat 1 ish – we are looking to buy a place in Miami as a vacation home, not looking to sell or rent it out , just for family and friends to stay. I live in London and I find that Miami is such a varied place to live and remember the weather over there is fantastic compared to London, so….. Its a no brainer.
I understand also that yes, the market has gone south, but it will return, as a society, esp in London, we have it ingrained in us to purchase property, it will take a while to recover, but it will.
I will look at both Sunny Isles and Bal Harbour, we are leaning heavily towards Bal Harbour, I must admit mainly because of the shopping, safe aspect etc. Yes, we could easily buy in Spain or France or Germany, but there is just something about the US that makes my husband and I’s hearts sing when we arrive in the US.
Anyway, thanks for taking the time to reply to my post and I will carry on enjoying reading your comments.
Kind regards
Kelly.x
lala
you could have left it with my “walls” comment…trust me, i understand.
as for miami being a 24 hour city…it already is. i just don’t think, for a variety of reasons, it will ever be a leader in commerce, finance, education, research etc. however, for those who want to strike out on their own…it’s a great place to be. the level of competition compared to up north is simply non-existent.
Dave
The Miami Herald article about Swire Hong Kong seems to indicate that the Brickell-Downtown corridor land values have bottomed. Their price per acre is about what developers were paying in 03-04 but are nowhere near a decent water view if thats their plan.
OT dizzy from today’s ride on the DOW
Here, if you want to feel better:
http://rate.forbes.com/comments/CommentServlet?op=cpage&sourcename=story&StoryURI=2008/11/12/recession-global-economy-oped-cx_nr_1113roubini.html
The above were comments, which are entertaining.
Now as for the article….
http://www.forbes.com/home/2008/11/12/recession-global-economy-oped-cx_nr_1113roubini.html
I predict that mid 2010 Miami Condos will start to make a comeback.
Thanks JL Whinston, I needed a good laugh on this Friday morning. With the amount of supply on the market, I think it will take AT LEAST 5-7 years before we start seeing any real appreciation.
Go back in history and you will see Miami is on a twenty year boom, bust cycle. Miami never had such a credit bubble as it has had today. This is our worst cycle dating back to the Great Depression. Back then people didn’t have car loans, home equity loans, and school loans.
Wild Bill…..or credit card debt…..the real pain is coming, unfortunately.
although I agree with the above statements, I think real estate will be a big asset to have to hedge against the huge inflation we will see. this may not be about make lots of money in the short term with real estate but having something thats going to keep up with the dollar’s loss in value. and it wont be only the dollar, it will be every other currency on earth.
Raffi – While I think inflation is a potential risk, it isn’t on the horizon right now. We are in a major asset deflation with tons of capacity in almost every field except the management and disposition of residential real estate. There is too much capacity to produce, too much labor capacity, etc….too much supply slack in general. Stag-deflation is here and with it will be continued decline in real estate prices. A stagnate economy and incomes couple with continued asset deflation will take a toll on wealth in almost all asset classes.
RT- I have to disagree, the only reason we are having such a decrease in asset value is because people are irrational. Just like there was no reason to why prices should have gotten so high in the first place, prices shouldn’t be so low now. Once things get a bit better it will all go up very fast. And once the amount of money that the world has pumped out in the last few months settles in then people will realize that monetary inflation will be inevitable. this is my theory and I invest according to this, everyone has different strategies but I think that ignoring the huge inflation thats to come is an error.
Most real estate investment books published before 2000 will state that condominiums appreciate slower than single family homes. 2000-2007 appreciation figures are irrelevant due to fraudulent activity. Your stuck with a bunch of delinquent owners and increasing maintenance fees. Do not buy a condominium to try and make money.
Raffi… you might be right about inflation in the mid-long run, but “prices shouldn’t be so low now”?
Come on, this is Economics 101… Supply and Demand.
For example, take Downtown Miami: how can you explain that up to 2003 or so, only 1,000 units were developed in Downtown area (Rickenbacker, I-195, I-95, Water) and there have been 18,000 developed since then? And this is only the supply side of the equation…
On the demand side you have all of this in the horizon: lower incomes, tighter lending, higher unemployment, HOA’s with problems, etc…
This all leads to the fact that prices need to come down even more.
This was all a speculative construction boom, no real demand. Construction costs doubled in 4 years and we are now starting to see these go down back to the old days.
Just wait and see what will happen to prices.
“there was no reason to why prices should have gotten so high in the first place, prices shouldn’t be so low now. Once things get a bit better it will all go up very fast. ”
———
Actually, the reason prices got so high was money was freely loaned to people wanting to buy RE and the reason things reversed is because this easy liquidity of loans got shut off… and that’s also THE reason the Real Estate market will never go up again very fast in our lifetime especially with the eventual Democratic regulation cracking down on the mortgage back securities market preventing a game like this from ever occurring again.
Now if you assume lending standards will be forced to go back to normal and people will now be forced to put down 20% on a house and only purchase a house that requires historically normal payments relative to their income, then you can see how incredibly over-priced the market still is in many areas.
The big problem with Miami is they built things on the Hi-End assuming there were real buyers in the Hi-End and now it’s turning out the buyer’s were just leveraged college kids buying on free loans. It doesn’t matter if a build costs $500 sq/ft and can never be built for less if the market only supports $250 sq/ft. If that’s the case, then it’ s eventually going to go to $250 sq./ft if that’s all the true market can support and that’s what we are seeing now.
It’s funny seeing houses on the water that went for 800K in 2000 and were asking 2.2 million in 2005 and people thinking it’s a crisis that they might have to sacrifice it for 1.2 million now. HELLO!
today’s DBR article about icon brickell
“Robert Cooper has the same complaint filed against every [Related] project, right down to the typographical error, which tells you that there is no critical and independent analyses of the project or the contract or the potential claim,” McCoy said. “He is just throwing things against the wall to see what sticks.”
having seen cooper in action once, i have to admit, that’s a pretty damn funny sentence. in any event, the article makes clear that related ain’t budging. it would be interesting to see how this whole drama played out if the condo buyers were represented by a josephsburg or ervin gonzalez.
Now I can see that the crazy guy …ACE …….dosen’t sound so crazy when he predicted $125 a sq. ft.We might see that soon, anybody agree with ACE now.The so called SMART MONEY guy???
Well I now have to agree that the risk going forward for the next two years is debt deflation. As assets or other positions secured by debt become a larger burden as the value of such assets deflate but the debt, fixed in nominal dollars, does not. Just like people had said that high inflation will allow home prices to increase leaving the mortgage debt behind as inflation causes the debt to represent an ever smaller percentage of the value of the home. Well, with deflation, the opposite is true…the debt burden becomes LARGER at a time when having smaller amounts of leverage is critical…cash is king…with the credit crunch, liquidity problems, and deleveraging, having debt in an asset that is declining is a disaster. As home prices deflate, so many homes are now under water…..what happens when this is applied to a vast number of assets? Commercial real estate, farm land, autos, heck even the “value” (economic return) of a college degree??? Some of these assets are deflating at rates far greater than the debt payment schedule. The ramifications of debt deflation coupled with decreasing demand for many assets and goods is going to cause one heck of a world wide recession…….. On a positive note, granite counter tops will be much cheaper…..the rate of return of recent home remodels just tanked.
I should clarify:
“The ramifications of debt deflation coupled with decreasing demand for many assets and goods…”
Meaning that the current demand levels are continuing to decline in an environment that was already experiencing sizable deflation. The cheaper assets and goods caused by deflation is not enough at this time to spur demand. Nor are there enough able and willing buyers to step in to curtail this continuous decline in the immediate future. There is too much slack everywhere and no easy credit to snap up the supply.
Kung Foo,
He was optimistic.
I’ve said it before, the lower end condos will go for less than $75.
Somebody here ridiculed when someone else, not me, remembered that in the early 80s you almost had to give the damn things away.
With taxes, HOAs and special assessments one of these units could have a negative net worth, entirely possible.
As for inflation, there is none to be seen on any radar, it just isn’t there. Goldbugs would like to see signs, but nada, zippo.
This is the mother of all short squeezes.
And it will last.
That is amazing news MUIR.We can all grab a bargain in the near future….even Renter Tom will probably buy.
Wondering the reason why the rentals are getting cheaper along with the prices of real estate? If people are not buying houses/condos..etc, they have to rent to live somewhere. So this should cause an appreciation of rentals since the number of people in a city or community haven’t suddenly dropped off significantly.
Jim,
The demand for rentals has definitely increased within the past year. However, so has the number of units on the market. Rental prices are going down for the same reason that prices always come down….supply surpasses demand. Most of these new condos were purchased by investors who, in turn, end up leasing their units. In other words, there are many more people renting than we’ve seen in previous years but the number of units now available on the rental market is larger than the demand. Prices will stabilize once an equilibrium is reached.
Kung Foo,
I think the point is that it will not be a bargain.
Forget about price appreciation.
It either makes a return or not.
–
Jim,
You you asked one of these Zen questions, like what is the sound of one hand clapping?
If you find the answer, you find truth.
I’ll help.
Your observation is valid.
It really is that much overbuilt.
By the way, it works backwards and forwards; oversupply of rentals results in lower rental prices and that results in a further deterioration of prices for condos.
A true investor is not speculating in future price increases; rather, he/she thinks in terms of a condo as he/she would any non-speculative investment. What are the returns?
The lower the rents, the lower the price a true investor is willing to pay.
I’ve seen condos (many) that if you paid cash you would get a measly half a percent annual return!
Yes, 0.5%
I think you should embrace your question and stick to that which you have observed and arrive at your own conclusions.
You can always share later.
When I posted, I had not seen Lucas’ post.
Night all’
Muir – The rentals I have looked at have negative returns if you assign even a modest cost of capital to the purchase price (if no mortgage) and don’t take into account the price declines either. So many don’t cover the mortgage, taxes, and HOA feed. Clearly the purchase prices were too high.
Kung Foo – I’ll buy, I want to buy, but the rental deals are so much better now than buying. At this point, it clearly was the smart choice to rent by far. With the macro econ factors that are known, substantial price declines in this market are certain. It is only the magnitude that is in question. I’d buy my unit for $250/s.f. today because I really do like it. But there is no rush. It is probably going for around $400/s.f., some are asking $500/s.f (not selling obviously).
Oh, and the squatters are coming….see the following article for a bizarre tale from CA:
http://www.pe.com/business/realestate/stories/PE_News_Local_S_kingsolomon13.42a940a.html
Hugo P and JL, I may have said something that didn’t come out correctly. when I made the statement that things will go up fast i didn’t mean condo prices, I ment the economy as a whole and with it inflation. As far as economics 101, is that the same school of thought that has tried to convince me that inflation had been 3% every year for the past 20 years? tell me what 1 million was worth in 1998 and what its worth now? also when I say prices are good at the moment I compare to other countries around the world. I have relatives and friends all over and what they pay for properties is far more expensive per price per square foot, and they don’t live in Miami. something is wrong when you can get a brand new condo on the ocean or looking at the bay in Miami for cheaper than a suburub in South America. Just look at the post above, someone is looking in Bal Harbour instead of France or another European country. People around the world always look to Miami for second homes. I’m not a realtor and I make no money if more properties get sold but there are definetly good deals out there. Just wanted to make those points clear.
If the deals are so good raffi why don’t you pull the trigger and buy…lucas is an awesome agent and Im sure he’ll represent you
Raffi Said “inflation had been 3% every year for the past 20 years? tell me what 1 million was worth in 1998 and what its worth now? also when I say prices are good at the moment I compare to other countries around the world. I have relatives and friends all over and what they pay for properties is far more expensive per price per square foot, and they don’t live in Miami. something is wrong when you can get a brand new condo on the ocean or looking at the bay in Miami for cheaper than a suburub in South America”
Finally some words that make sense in an otherwise mindless rants from so many others.
“something is wrong when you can get a brand new condo on the ocean or looking at the bay in Miami for cheaper than a suburub in South America””
That might be true but it’s still overpriced to the rest of the US as a whole. There’s no great influx of Americans wanting to move down here, and apparently it’s moving the other way.
“I have relatives and friends all over and what they pay for properties is far more expensive per price per square foot, and they don’t live in Miami. something is wrong when you can get a brand new condo on the ocean or looking at the bay in Miami for cheaper than a suburub in South America”’
– All real estate is local….. LOL 🙂 Also, you could price homes in the midwest and now CA too for under $100/s.f. easily and that includes newer or new construction homes…with granite countertops.
– Holding nominal dollar debt on deflating assets is not good, especially if you need to sell those assets or even rent them out.
i got to see icon firsthand. my impressions…
1. the size of the place is overwhelming. seriously, i now know how rollergirl felt when she had to go “talk” to young eddie in the backroom of the club. you walk into the place and the sheer size of everything screams out to you. that said, the gym is tiny once you consider that in five years from now, they should have this place at 90% capacity. my recommendation is to either join the DAC or four seasons gym if you live at Icon.
2. the TABLE in the pool area. this is the most absurd thing i’ve ever seen in my life. seriously, i think JL mentioned it would be rusting within a year. i second that, not to mention, it needs to be cleaned daily due to all the dust and pollution in the area. just dumb. but it’s miami, so everyone thinks its genius.
3. the spa areas are nice but really, at some point, does it really matter just how nice the finishes are? i mean, how many residents are really going to use the locker room, when they can just walk up to their place before and after a workout? that said, the steamroom is the nicest i’ve seen in any of the buildings.
4. the overall atmosphere in the common areas. sorry, but italian renaissance paintings are just f%cktarded. it’s not too late to get rid of them georgie boy. also, as a general matter, i just don’t get why they didn’t do the whole south beach chic look throughout the place. seriously, they could have kept the alice in wonderland furniture, painted the walls white, threw down some matching floors and bigass drapes, and absolutely no one would have complained. hell, brickell magazine would have congratulated phillipe and the crew for being so groundbreaking. instead, they aimed for some russian billionaire gaudiness. in short, it’s amusing but grows tiresome fast. one of the people on the tour with me was aghast when he/she saw it. i note that this person is far classier than me (for purposes of full disclosure, my knuckles do scrape the ground from time to time so the starting point for all others is not entirely high to begin with).
5. the pool is alright but not groundbreaking. more or less, it’s the delano pool in brickell but without all the good looking female ass (sorry to the female readers and lucas for ruining the family atmosphere on this blog). in short, yawn.
6. i like the views in the units i saw although AJ did have a legit point when compared to the views in the other buildings up and down biscayne. the floorplans however are utterly mediocre. honestly, if you want bang for your buck with respect to the living space, Icon brickell is not the building for you. did i mention you have ITALIAN DESIGNED CABINETRY??? i hope that got you all excited.
6. the cafe is a cool idea until you realize it’s miami, and thus, the food will most definitely suck. however, most people in miami have peasant-like palettes, so no doubt, the Icon cafe will probably supplant houston’s as a top five restaurant in the miami zagat’s. i’m not sure if that’s a good thing…
in sum, if price wasn’t an issue, not the worst place to be, and no doubt, this will be a central spot in brickell for years to come whether we like it or not. perhaps it will be the flamingo for a classier crowd…or at least, a wealthier crowd (we can hope though f0r the former even if it’s very remote). also, make no mistake about it, you will ALWAYS be aware of your neighbors in this building. there is no privacy once you consider there are 1700 units stuffed in a two city block spot plus all the visitors and the inevitable lounge that will be built on the property. finally, lucas, sorry, but once the association gets turned over, the maintenance fee will double. there is just too much silliness in the building that needs tending to.
Don’t worry, real estate only goes up….. LOL. I mean, Suzanne researched this…all you condo buyers out there can do this…. Just sign here, here, here, here, and here.
jcrimes,
thanks for the superb, no nonsense, unbiased review. Quite helpful.
shwin,
Have you seen ‘Dostana’, released yesterday? I am planning to see it on Sunday. In fact I was there many times during the shooting of the film in April and May at the Ocean Drive, Pace Park, Bayside Marina, Lincoln Road etc.
I love to see my favourite city Miami depicted in the Movies. But that stink ass movie ‘Miami Vice’ showed nothing but dark and dingy warehouses instead of any sights of Miami. But as per the promo clips of Dostana, all of Miami’s spectacular sights and sounds are portrayed in all its glory.
Hopefully after this movie, lots of Indian Tourists will flock to Miami and some of them will decide to make it a second home too. I heard that whenever they show a not so well visited foreign land such as Ireland or New Zealand in a major Bollywood movie , the Indian tourist inflow to those places grow exponentially. So that is a good thing for Miami especially in a downturn like this.
Has anyone else heard of this movie other than me?
It is playing in many NY theaters but only in one theater in Miami! Here is the address
Tower Theater, 1508 S.W. 8th Street, Miami, FL – (305) 642-1264. Show Time 6p and 8:30 pm.
That is at the Calle Ocho at the 15th ave. (I don’t understand why they would have a Bollywood Film in little Havana instead of the Lincoln road multiplex. Are the Cubans into Indian Films!?)
If anyone here likes foriegn films, they might like this film. It is loosely based on “I now pronounce you Chuck and Larry”. The icing on the cake is the gorgeous locales of Miami.
Grasping at straws AJ, grasping at straws…… 🙂
jcrimes said “2. the TABLE in the pool area. this is the most absurd thing i’ve ever seen in my life. seriously, i think JL mentioned it would be rusting within a year.”
I didn’t mention rust but that’s a given unless they liberally apply wd40 every day. If you notice an oil slick in the pool it’ll be from people sitting their asses down on all that aluminum that needs to be protected.
Here’s my problem with “modern design” in general and aspects about the Icon in particular. It’s VERY easy to make interesting looking objects and layouts but EXTREMELY hard to make it that way while being practical and comfortable. Like a sofa with a foot tall back rest, interesting to look at but useless otherwise. What Icon did was take the easy way in the design and went for a shock value and gave little thought to making things practical or enjoyable for an everyday home owner.
A 50 person table might have a visual appeal but has ZERO practical use. That is the first thing that needs to go in the garbage. Why don’t we see 50 person tables in large public areas?
Let’s say you have 3 groups of users for the public table. 2 groups would gravitate toward opposite ends so the parties could easily sit across form each other. The 3rd group would be screwed. If you are anywhere in the middle of the table and want your guest to be across the table from you, then you have to walk around half the length of the big ass table. How stupid is that on an everyday basis? It might be fun at a club at 4 AM, but when else would you want to deal with that?
The Icon is like a pen that somebody spent a lot of money to make peculiar and interesting to look at but that would be uncomfortable to write with… definitely not for me. I like my things modern and efficient, not modern and haphazard.
Lucas, I’ve been doing a lot of work with websites lately and one thing you find is how easily people get lost on navigation issues.
Some of your posts have had a lot of photos lately and I wouldn’t be surprised if some first-time users might get confused by all the photos on the homepage on how to access the discussion or that discussions are a big part of the blog.
A little change like this per topic on the homepage would go a long way:
Icon Brickell Tour – Condos
November 8th, 2008 · 218 Comments
to
Icon Brickell Tour – Condos
November 8th, 2008 · 218 Comments [click to join discussion]
Renter Tom ,
“Muir – The rentals I have looked at have negative returns if you assign even a modest cost of capital to the purchase price (if no mortgage) and don’t take into account the price declines either. So many don’t cover the mortgage, taxes, and HOA feed. Clearly the purchase prices were too high.”
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You are right.
miami condos are headed for a world of hurt. prices are now half of what they were when i began looking little over a year ago. at the time, i would have jumped at 30% off, never dreaming of 50% off. As i continue to observe and ponder the future, you will need to drop prices again, nearly 50% from todays price, for me to bite. this is a bad sign, because i am somebody with desire, means and tax reasons to buy very soon. but i wont-economy and market are way too bad to consider. even extended my lease with a nearly 20% reduction from current rate-and landlord did not hesitate to take the offer.
single family homes with land should bottom in the near term, but condos with unknown future HOA issues are in deep trouble. asset deflation is occurring. anybody with cash will be in great position over next couple of years. anybody with significant debt, you will become a slave to your property and job (if you can keep it). we are not entering the great depression 2, but people will refer to the next 5-10 years as another seminal event, probably as the great deflation years. at least we are making history. those of you still in denial must recognize the worldwide bailout plans under consideration are proof that things are going to get very very bad.
those of you making $150k plus a year have now become financial liabilities. if you survived as a money moving bureaucrat, rather than a direct producer to the bottom line, you best not be looking to buy any of those high end luxury condos in the near term. major changes coming in this world.
Raffi /Nov 15, 2008 at 12:07 pm
“…I have relatives and friends all over and what they pay for properties is far more expensive per price per square foot, and they don’t live in Miami. something is wrong when you can get a brand new condo on the ocean or looking at the bay in Miami for cheaper than a suburub in South America….”
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This observation is correct.
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“when I made the statement that things will go up fast i didn’t mean condo prices, I ment the economy as a whole and with it inflation.”
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This is a prediction.
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Except for some PMs that I have in safety deposit boxes, I’m all cash.
I even have cash in the safety deposit boxes.
I do have FDIC money market deposit accounts (NOT money market fund)
I have more to lose with inflation than anybody else with this blog.
In fact, click my name for some adult fun with St Louis FED and the monetary base (3 rd page graph of PDF)
But the truth is that we are in a severe deflation.
Could your prediction be correct?
Maybe, that is the argument raging in every financial/economics blog around.
But for the time being, it’s deflation.
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Gables or, anybody for that matter,
Looking to move to the Gables soon (renting) and want to be really, really close to the mile.
(grew up there, no logic to it, it’s just what I want)
Any suggestions?
right now cash making 3% is a far superior investment to stocks which are down 40% in past year and real estate which may drop 50% or more, in addition to being completely illiquid at this point. eventually inflation will occur, after we have deflated our asset classes. problem is majority of people will be stuck with deflated assets (stock and real estate) and no cash, in addition to debt which does not deflate. when the inflation hits, and it will, these folks will get hit with the second tidal wave since it will inflate cost of living and not assets. those in cash (very liquid) will counter the inflation with commodities, gold or very cheap real estate. now is the time to preserve capital. incomes will probably not just level off, but actually decrease in the coming years. cash in conjunction with no debt will be crucial to getting ahead. the great deflation is coming. normally i am an optimist, but our political and business leaders have driven us over the cliff this time.
muir,
most of the new construction (after 2000) nearby the mile will probably make you happy. the closest to the mile are andalusia, 55 merrick, minorca and 10 aragon. each have good and bad (the bad is more annoyance than anything). rents are dropping in the area. if you are outside walking distance to mile, best to look elsewhere. I do not know much about the many smaller complexes in the area. downtown gables seems to be a safe, classy and respectable area to live. several new buildings have gone up on ponce north of the gables, but i am not aware of their status. any info on those units would be greatly appreciated
This really is the start of some serious bad times and not the end. Nothing high-end is moving; watches, cars, real estate, boats, planes… and it’s not something that a $700 check or a $4K college tax credit from an Obama administration will change.
It’s amazing to think how little real money people had that used to buy (I mean finance) these luxury items and rather how their “wealth” was leveraged to inflating Real Estate values. Seriously, in Miami what other job is there besides leveraging into Real Estate or catering to individuals leveraged in Real Estate?
The RE smackdown brought them back to Earth, and the Stock market smackdown is putting them on the streets. From Rich to outhouse in a year… pretty common story that you’re hearing more and more and more and with people you never would have expected.
Alot of people aren’t going to make it thru with a lifestyle resembling anything like they are used to. It’s like these last 10 years were all a mirage and people are going to have to start over again and find a way to get a job and earn money for the first time in their lives.
the “real economy” problem for the future relates to jobs, or in particular job description. people over the past decade sponged off of free (or very cheap) credit and spread the wealth by acting as simple bureaucrats who moved money from place to place. this skill set should not command the kind of money these managers demanded. as i said, if you fall into this position you are in serious trouble. those with technical skills which accomplish a productive task, such as medical techs, engineers, production line workers, etc will keep your job.
if you are a finance, accountant or lawyer whose livelihood depends upon creating a complex bureaucracy in which only you can understand and navigate, your days are numbered. if you do not productively contribute to the bottom line, but rather sponge off of others work efforts, the future is quite grim as we streamline and introduce efficiency into the system. baby boomers in their late fifties are at most risk. they just lost half their equity in retirement accounts and real estate, and now their jobs are at risk because they are overpaid with no technical skill set in todays environment. sounds kind of mean to say, but this appears to be the reality.
Gables,
thx.
55 merrick (pleasantly surprised, inside pool view units were nice), minorca (not impressed) and 10 aragon (absolutely poorest construction / quality by far, no surprise as these were rentals) Have not seen Andalusia.
1805 Ponce saw the under 700K crowd, the 8 stories part of the building, the front taller part is the pricier section. It was not impressive. The only exception was the top floor, these had 10′ ceilings and no tap, tap shoes from above and some limited view, so these were ok and there was a decent 1/1 corner. The courtyard/pool units were absolutely claustrophobic. (unlike Merick which was a different pleasant experience)
888 Douglas saw all the PH corner units (same as others except top floor) You can have pass the splenda/creamer to your neighbor by reaching across to his balcony, yes, it’s that close. The corner PH units (South East, South West and North West) were good but that is 3 units of +150
Rents quoted are all under 2K for 2/2s which is amazing because all these were previously 2500 and up. One exception was Andalusia (they are still at 2300+)
By the way, I did do a lengthy write up on 10 Aragon/888 in a previous thread, hope you caught it, lots more info.
The other smaller complexes you asked about were almost all done by the same guy, it’s always “Villa” something. (Did the Ponce 1805 also) They are ok for the most part.
If it were for you to live in, Andalusia or Merick, kinda leaning in that direction?
Raffi /Nov 15, 2008 at 12:07 pm
“…I have relatives and friends all over and what they pay for properties is far more expensive per price per square foot, and they don’t live in Miami. something is wrong when you can get a brand new condo on the ocean or looking at the bay in Miami for cheaper than a suburub in South America….”
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This observation is correct.
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Raffi, I wanted to add something.
Really, I was in bed but kept thinking about this thing.
Again, your observation is correct; however, what may surprise you is the conclusions that many have reached as a result of this observation in many other blogs. It usually goes something like this: “man! they are even more screwed up than the U.S. Even more leveraged” (this is true for every country in EU were income to house debt can be 8x +) Then the conversations go into the unwind of the carry trade and the dollar.
No, it makes no sense for condos in Latvia, Estonia and Guatemala to have $300K condos.
Were your logic is wrong is this: it’s not that the US assets are underpriced, no, it’s the reverse, they were just more insane than us here.
I read this stuff daily, think Tom does so too not sure, I sometimes take it for granted that everyone else has been following this stuff for years, look at Spain now or Ireland, just 6 months ago I had an Irish friend tell me that they would never go down. Look at which countries have their hands out for IMF monies. And for a sick joke, look at Iceland. Their PM told his people to go out and fish (no, I’m not making this stuff up, it’s not a joke.)
It’s an insane world Raffi, best of luck to you and all and may all of us find peace.
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Wow – some very pointed posts guys. Gables….couldn’t agree with you more except we will continue to see govt. bureaucracy jobs as one program after another is introduced and private parties will need to be created to navigate the system on behalf of the public, in other words the govt programs will create a bunch of economic waste. Wouldn’t it be great if we could all do our own tax returns…if only the tax code was easy? Nope, make it complicated and we all have to hire tax pros. As more govt programs get introduced, the more “jobs” that will be created in the public sector. Also, I was going to ask for a 10% reduction on my renewal….20%, hmmmmmm.
Muir – maybe I am having a brain lapse….what is PM?
Also, what is interesting is that as interest rates stay low, people will be more apt to horde actual cash instead of investing it or depositing it in banks. The returns on cash and managed money funds after fees will be low.
JL – Expensive consumer items will continue to get hit in a tight credit environment. Not just high end stuff but a lot of “aspirational” consumer items too especially as credit cards and limits get reduced. And with it, the retail stores…. With easy credit there was no reason to save up for purchases. Now that you do need to save up for purchases (such as a down payment on a condo) purchasers will need to save as incomes stagnate or decline, as interest on money is low, as assets deflate, etc…. We are in for a long road as the fed govt figures out how to borrow $1T each year too….
Cheap home and education loan debt financing only lead to price appreciation with no real value increase. We’ve seen home prices pull back, I suspect people will start to see that the mid to high expensive schools might produce a negative return. I went to universities that probably were in the top 15% or higher regarding tuition. Years after graduating, I saw what they were increasingly spending money on were not things that contributed to the bottom line of improving the education itself…rather it was on fluff really. Just an observation that education expenses will need to take a hit too….
Quote 1 “America’s financial system is completely out of control and headed for either an inflationary or deflationary crack-up (or both) and not one out of a thousand Americans understands or cares — so busy are they partying on the deck of the Titanic. We are seeing the greatest explosion of liquidity in U.S. history, or indeed, in world history as the Fed and other central banks attempt to stave off a deflationary collapse and perpetuate the real estate/ stock/debt bubbles they helped to ignite.
Trillions of dollars of new debt (liquidity) are now created out of thin air by the U.S. government, the Fed, other central banks, the real estate mortgage industry, Wall Street, hedge funds and in the exploding real estate market. This explosion of new liquidity (trillions of dollars each year, or each month or week) is reminiscent of the massive explosion in liquidity in the German Weimar Republic in the 1920s, which begat a classic hyperinflation and a totally worthless currency.”
Quote 2 “The U.S. economy is in an intensifying inflationary recession that eventually will evolve into a hyperinflationary great depression. Hyperinflation could be experienced as early as 2010, if not before, and likely no more than a decade down the road. The U.S. government and Federal Reserve already have committed the system to this course through the easy politics of a bottomless pocketbook, the servicing of big-moneyed special interests, and gross mismanagement.
The U.S. has no way of avoiding a financial Armageddon. Bankrupt sovereign states most commonly use the currency printing press as a solution to not having enough money to cover their obligations. The alternative would be for the U.S. to renege on its existing debt and obligations, a solution for modern sovereign states rarely seen outside of governments overthrown in revolution, and a solution with no happier ending than simply printing the needed money. With the creation of massive amounts of new fiat (not backed by gold) dollars will come the eventual complete collapse of the value of the U.S. dollar and related dollar-denominated paper assets.
“It was horrible. Horrible! Like lightning it struck. No one was prepared. You cannot imagine the rapidity with which the whole thing happened. The shelves in the grocery stores were empty. You could buy nothing with your paper money.”
Quote 3 ” US is following the same exact path as Argentina, Brazil and Bolivia leading to hyperinflation. It is amazing that US banks still offer 30 year fixed rate mortgages”
Deficit spending, Govt spending out of control, Subsidies running rampant, too much supply of money. We are just waiting for the day when China stops buying the US Bonds. They dont even have to sell them, they only have to stop buying to precipitate the catastrophy. The only thing stopping the Chinese is the fear of mutually assured destruction. But someone somewhere around the World is definitely bound to drop the ball. Just don’t know when. So when someone tells me that inflation/hyperinflation is not anywhere on the horizon, they don’t know what they are talking about. It will happen overnight like the Lehman episode. No Warnings. So enjoy your future monopoly money while you can.
PM= Prime Minister.
RT, i agree the govt will try to continue pushing its inefficient bureaucracy as a means to employ the unemployable. but one of two things will happen. either the people of america will wake up and eliminate the scandal, putting us back on a track toward prosperity. or we will continue down the same road-which is a dead end and national bankruptcy. the economical bureaucracy is nothing more than legalized and legitimized welfare for the middle and upper class, and it will bankrupt us far before welfare for the poor, social security, or medicare empty our pockets.
muir,
i like both 55 merrick and andalusia. merrick has the advantage of a pool and thus my choice. problem is both buildings have actually held up on sale price recently-not sure if they are actually selling at those prices or if owners are simply restricted by their debt load (imagine the latter controls). my understanding merrick was built by an out of state contractor who had a lot of issues with coral gables permitting, thus resulting in the delay in opening. curious if this also affected quality of the construction?
AJ,
inflation (although i am leery of hyperinflation) will probably occur in force within the next five years. but we are not there yet. hyperinflation will only occur if we get a corresponding increase in wages, and that is not likely to happen. in fact, i believe a significant decrease in wages is the most likely outcome, which will correspond to major asset deflation. but inflation on everyday items (not investments and assets) will occur.
property values will be the interesting item to watch over the next few years. prices will continue to drop, even below normal standards, over the next year or two. the question is if/when asset inflation occurs. remember this can only occur if demand exists. if the national and world economies fall into significant recession, demand will not exist to inflate the prices. the first 50% drop in house prices was due to deflation from a bubble. the remaining drop will directly correspond to recession/depression economics. keep an eye on unemployment and wages-both will indicate how property values move in the future.
be careful listening to talking heads with skin in the game prior to the crisis. anybody with debt, real estate holdings, stock holdings, etc of significant proportions obtained prior to the economic crisis have an inherent bias towards outcomes in which they benefit.
RT,
“Also, what is interesting is that as interest rates stay low, people will be more apt to horde actual cash instead of investing it or depositing it in banks.”
BINGO!
Yeap, interesting that the FEDs low interest policies have the exact opposite effect isn’t it? An economist bloger pointed out that artificial constraints on the price of money would cause a distortion of money flow.
Why would anyone lend at an interest rate below the risk warranted in that market to the lender?
The velocity of money has everything to do with inflation or deflation and money is not moving, it is being hoarded, hence further deflation.
Interesting story on Dubai Housing Market:
Dubai, UAE, considered the last bastion of the real estate boom, whose property run-up outlasted even that of Manhattan, has finally seen its home prices begin to decline.
A recent report issued by London-based bank HSBC Holdings PLC (HBC) on Wednesday indicated that average asking prices for homes in Dubai dropped 4% from September to October. Prices for upscale “villas” fell by a much greater margin of 19% in the same period, while homes in neighboring city Abu Dhabi fell 5% on average.
gables,
Merick construction seemed excellent. Unlike, for example 10 Aragon whose hall walls were not straight.
That was not a joke.
There’s a beautiful 2/2.5 at Merick asking 425K that underbids the builder (builder’s 1/1 start at 399k)
Scheduled closings will be at pre-construction pricing on re-sales.
Merick also is doing something strange. They are renting are renting units; however, renters are renting the cheaper units which means that those that are left for sale are the most expensive units.
Here’s a tidbit, 1805 Ponce has had 10 closings.
That’s it.
Girl at office said that 10 others are “working with bank” to close.
Anyone can get their choice of a 2/2 unit for under 2000/month.
How’s that going to work out for the developer?
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Oh, you guys are going to love this.
Called on a condo rental on Coral Way, guy asks me what I’m looking for, says “sorry I’m looking for a short term rental because I’m also doing a short sale.”
I know concierge and called him, guys not paying HOA.
So guy is taking in a rental income with no expenses.
Sweet!!
And, due to debt forgiveness, doesn’t get taxed on short sale!
Oh, best part, this is the building I told everyone in a previous thread that the original builder had died, the builder that had taken over himself went belly up and was foreclosed on by Lehman-Brothers.
Last month the management company didn’t know how they would be paid and nobody knew who to present contracts to for the unsold units!
Sweet!
I have a few comments on the economy and the other comments about deflation/hyper-inflation/etc.
There is no doubt that we are in deep trouble as a nation. The rest of the world is in even more trouble as they dont have the financial knowledge, credibility and history of stability United States. Compared to the rest of the world, we are going to do just fine. People are not going to starve to death. Even the poor will be driving cars (like they do today) and will have cell phones. The biggest impact will be the lack of growth in the stock market for a long time (just like japan).
The investment strategy that I have employed in this economic climate is very simple. I am keeping 6 months of reserve cash and the rest goes to pay down my mortgage. I have no debt other than my mortgage and I am paying it off as quickly as i can. I hope to have my townhouse paid off in a couple of years (assuming that I dont lose my job 🙂 ) . If i pay off my mortgage ,I am guarenteed to make 5.3% return on my money. Due to AMT, the tax savings of home mortage interest is minimal for me.
Usually the movie industry and “family” focused industries do well in this economic climate. Expect a baby boom starting in about 9 months and a high dose of awesome hollywood blockbusters to keep people occupied while the economic mess slowly works out the problems.
AJ,
Hmmm….
Nah, not challenging you.
The PTB would love a nice juicy inflation.
Would you like potatoes or salad with that?
The PTB may or may not get their wishes.
Nobody, not you or I or the editors at Asia Times which are always bullish in gold or anyone knows the answer to this.
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I’ve covered my bets with physical holdings of PMs.
Now, as far as Real Estate, let me ask you one question:
Has anyone in History been able to re-inflate the exact same bubble that just burst?
carbonblackcab,
“Usually the movie industry … do well in this economic climate. Expect a baby boom starting in about 9 months and a high dose of awesome hollywood blockbusters to keep people occupied while the economic mess slowly works out the problems.”
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Alright!!!
Hey guys I’m glad my post had so many different point of views thrown at it, interesting to have so many different points of view. Finally a good, constructive argument.
Muir:
PMs = Precious Metals?
For me, it looks like gold is still way over priced…..silver not so much but too bulky.
RT,
gold will be a great buy once the dollar stops appreciating. this appreciation is occurring because our dollar is the best of a bad lot, not because it has any fundamental strength. once the dollar stops rising, gold will stop falling since it is purchased in the dollar denomination. catch it at this point, because it will rise when the inflation kicks in. my guess is gold will begin to rise as an inflationary hedge within the 1-2 year time frame.
silver is an interesting item. not nearly overpriced but historically not the strong inflation hedge either. but i believe we have less silver than gold, and with some industrial uses, this metal could have some play to it in the future.
still keeping my money in an insured account making over 3%, better than the losses others are taking in investment classes.
Muir,
I like the 55 merrick building, but the prices are too high. 2B condos at over $400k are way overpriced in this market. you can buy a 2B next door in aragon for around $250k. there is not a $150k premium for 55 merrick. spent some time in aragon, they are not bad, just not posh luxury. my guess is merrick will have 2B units for under $300k in the near future. possibly down to $250k if things get ugly.
I still have some money in CD’s (about to expire) at 5.25% ….who knew that would be good? 3.3%-4.25% going forward….ouch.
On a positive note, with deflation things become more affordable to those who are ABLE and willing to buy.
RT,
PMs yes, precious metals.
Earlier when speaking about Iceland I used PM to mean Prime Minister, my bad for not being clear.
On silver, I had to smile. You’re right but I couldn’t resist and bought 500 ounces, not my brightest moment.
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Gables,
Agreed with dollar strength being best of bad lot and would add that like the Yen, the dollar was a source of cheap currency for carry trade investments overseas. Thus dollar strength is also an unwind of leveraged positions overseas.
Agreed on Gables pricing.
Interesting that suddenly AJ is now interested in hyperinflation. A few months ago his argument was based on the fact that the rich will always pay more for waterfront views. A few months before that he was certain that prices would stabilize at $400/sf. AJ is a realtor. Therefore does it matter what he says? He has a vested interest in selling real estate. Might as well ask a jewler if today is a good day to buy a diamond ring for your sweetheart.
I don’t disagree about inflation though (not hyperinflation though and it won’t start for another 1-2 years). By the time inflation takes over miami condos will be 50% off today’s levels.
Also, I seriously doubt that Indians will be buying Miami real estate. The dollar went from 39 rupees to 50 rupees in a few months. It is most likely that they will lose money betting on further appreciation of the dollar. The rupee is undervalued. Also, 99.99% of Indians are insanely poor. Further the rich there are getting destroyed. Mittal lost billions. Anyway, he’s building a 3 billion dollar home in Mumbai…not Miami.
In regards to jobs:
Unemployment by industry: Brace for Impact
http://www.itulip.com/forums/showthread.php?p=59666#post59666
Is AJ a realtor? Had I known that, combined with his four rental properties, I probably would have just ignored him. So many realtors jumped on the bandwagon of their own creation….they were too close and were blinded I guess, by the easy money. Easy come, easy go….and go and go and go.
Looks like I need to start doing more homework….normally I am ahead of the curve by a year or two….see headline on MarketWatch.com today:
“Data dive set to continue
Housing starts may be worst since 1940s, deflation also expected
Few observers have ever seen anything like the economic data to be released in the coming week, with the consumer price index and housing starts each expected to breach records dating back more than half a century.”
Another interesting thing will be how higher end shopping areas handle the declines in retail sales. The trend has been to create retail areas as a place to socialize, to spend time at, to get people near the store windows so they will buy something….they turned shopping into a big social event and made it even more impulsive…it is almost like you have to come home with at least one item to make it worth the trip….the old hunting thing that you can’t go back home empty handed. The maintenance and repairs, security, etc. costs are high….well now we will see a lot of people going to these social shopping destinations but not buying anything……they will come back empty handed as people just go through their old motions of going to the mall etc….. Basically, these places will end up as places to just loiter around but the people running them won’t be getting the income for upkeep like they used to. Will be interesting.
Also, high end luxury goods makers are already discounting items….a lot of them never really did discounts and are now doing so and doing so well in advance of Black Friday. Retail…including luxury and aspirational goods retail…..are hurting.
Maybe I’ve been a Pollyanna all along……..time to get bearish I suppose.
You can consider me the canary in the coal mine. My reactions and fears tend to slightly precede the large scale movements of economic markets. unfortunately not usually early enough to capitalize on large profits, but typically with enough time to save my capital from losses. and the past few weeks have turned me very bearish on the us and world economy. i am not predicting armageddon. but things will become much worse than most everybody thought was realistically possible.
i will not even consider putting capital to work in RE or equities in this environment, no matter what spectacular deal presents itself. this country will not recover until people like myself put a toe back in the water, because we are the only ones with free cash to put to work. the scary thing is, i might hold out so long that not only will current homeowners get squashed, but i might kill off the market for myself as well. the stories i heard from my elders about the great depression appear to be closer to reality than i ever thought possible. condos are about to become a financial liability which will be completely shunned except for those who desire (and can afford) a beachfront vacation home. sorry for the downbeat attitude, but i see nothing positive in the foreseeable future.
RT,
was at the new Village at Merrick Park shops in the Gables sat evening. a couple of restaurants were busy. but the remainder of this high end shopping center was barren. this was a very bad sign as far as i am concerned. all shops were open, and nobody buying. not even browsing. and its a shame, because as you said, these locales were designed to encourage visitation and socializing. neiman marcus and nordstrom were empty. this center cannot last long under these conditions.
RT & Gables,
Now we make a trio in opinion.
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Have no idea if that was Fred/EG from Itulip. Most likely not.
Read his article from the link above and some posts. (Hadn’t in months)
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If you are new to his thinking here’s the same but much, much friendlier version from Harpers
http://www.harpers.org/archive/2008/02/0081908
Gables
merrick park has been struggling for years, even during the boom. It doesn’t appeal to the masses, who like dadeland/aventura mall more; and doesn’t appeal to the uberwealthy, who’d rather be at BHS. too bad because the buyer for the mens dep’t there is top notch and far better than the buyer for aventura and dadeland.
oops…i’m talking about nordstrom’s
I noticed a week or so ago on a Sunday evening that there were a lot of people in restaurants and corridors at Aventura Mall, but almost no one in most of the small specialty shops. The Apple Store was busy as usual and had to buy a tool at Sears which was totally dead (they should just close it along with K-Mart and sell off the brands Craftsman etc.). So many little specialty stores in Adventura and not one customer in them. It just made me think that people will still go for the social atmosphere and because they have been conditioned to go and just go through the motions, but not spend much. Sorta like high amenity condo buildings that were built….expensive to carry these malls with amenities. The after Christmas sales will probably include a lot of the retailers themselves as the bottom falls out. 2009 will be ugly for retail for sure.
Gables – I too have come to a much more bearish outlook. Things could get really ugly….really ugly. While I don’t think we will see the Great Depression II, it will be a very nasty long drawn out recession that will take out a lot of people and unemployment potentially reaching a high of 12%….8% is a near certainty with 10% very probable. The people out there that are clueless and keep saying “oh, it’ll turn around soon, it always does” are simply not going to be prepared I have never been one to “fret” over the economy but what has happened and is happening is cause for concern and almost cause for alarm.
The MEW’s are now in reverse….Mortgage Equity Withdrawals. Instead of taking out equity people are having to save to build up equity. This fairly sudden reversal in consumer consumption is gonna hit a lot of countries hard.
Renter Tom: A few observations from my shopping trip today. I had a few errands today and went to Tiger Direct (US1 & 158th), Container Store (opp dadeland mall) and Sound Advice (UM Campus & US1).
First, traffic on US1 was moving along at 1 pm on Sunday. That is not normal. Usually there is stop and go traffic starting from Ponce De Leon to South BMW (168th). When gas prices were above 4 bucks, there was gridlock on US1 on weekends. I have noticed reduced traffic for the past few weeks now. Parking is easy to find on the street near cocowalk ( I live a few blocks away, but take the car to make my latte run to starbucks). 🙂
Sound Advice (aka Twitter – a high end electronics shop) is closing down and had a 50% off sale. I walked around and even the sale prices seem high. I would have loved to pick up a Sony LCD TV or Blue Ray Player, but prices (with 50% off) were still unreasonable. Most people I saw inside were looking and not buying.
Tiger Direct is usually packed and I see lots of people buying stuff. Today, there were a few people there and they were mostly buying small ticket items. There was no line at the check out counter and I was able to pay and get out failrly quickly.
Container store was packed. There were a lot of people there and they were actually buying stuff. I pikced up a few things for my home office and waited in line for checkout. There was a lot of activity at the restaurants (Panera Bread, etc) near container store (i think it is part of dadeland condo complex).
I have been avoiding SOBE area due to the auto show and the Fountainblue opening (and victorias secret show).
On Friday 11/14 the Daily Business Review had an article on 120 buyers wanting out of ICON. Anyone read it or have access to the article?
Maybe there is an out clause for “hideousness”…..no judge or jury would deny that. lol
Here is the article….
Buyers at Brickell Icon sue to leave deals, recoup money; CONDO MELTDOWN
by Paola Iuspa-Abbott and Terry Sheridan [email protected]
1033 words
14 November 2008
Palm Beach Daily Business Review
A1
Volume 55; Issue 29
English
Copyright 2008 ALM Properties, Inc. All Rights Reserved.
Buyers of 120 condos no longer want to be part of an architectural icon that came to represent some of the excess of South Florida’s residential construction boom.
The buyers of units at the three-tower Brickell Icon are seeking to recover $13.7 million in down payments on condos with purchase prices totaling $68.4 million, according to Miami attorney Robert Cooper of Robert H. Cooper P.A.
On Thursday, Cooper filed an amended complaint adding the buyers to a suit by other disgruntled Icon purchasers that’s pending before Miami-Dade Circuit Court Judge Jennifer D. Bailey.
Jorge Perez’s Related Group is building Brickell Icon, a 1,700-unit project in downtown Miami. The project will include a 57-story tower with 715 condos, another 57-story tower with 561 condos, and a 50-story building with 520 condos and 148 hotel rooms to be operated by Viceroy Resorts & Residences. Closings at the second and third tower are planed for early next year.
The new project features giant columns resembling Easter Island statues. A life-size chess set and giant fireplace accent the 2-acre pool area. The lobby welcomes guests and residents with portraits in the style of Renaissance masters.
Closings are planned to start later this month. But the project’s amenities don’t seem to be enough to overcome the deepening credit crisis and declining property values, so some buyers want out.
Cooper’s suit claims Related breached purchase contracts by failing to complete the project on schedule in 2007.
“Now we are in 2008 when the market is tanking, and if they had finished it in early 2007 people wouldn’t be necessarily in the same situation because things were not so bad at that time,” he said.
Cooper is asking Bailey to invalidate part of an amended contract that pushed completion dates to 2009 and 2010. The suit claims contract holders were unaware of the change when they signed the document several months after signing the initial contract.
The Icon plaintiffs are part of a growing number of buyers suing condo developers to recover their deposits.
Yet, few suits have gone to trial so the legal fight over deposit recovery is an uncharted legal territory.
Some developers say buyers aren’t even attempting to get back deposits. They are just abandoning the contract, often because the units no longer are worth the purchase price. Last year, buyers of about 140 condos at Related’s 50 Biscayne building in downtown Miami defaulted on their contracts.
Related is in the process of refunding each purchaser 5 percent of their purchase price as required by federal law.
“We have done more than what we were supposed to because we are not obligated to reach out to people and track them down and offer the money,” said Betsy McCoy, vice president and associate general counsel of the Related Group. “But for about 120 of the 144 of the [50 Biscayne buyers] we actually wrote several letters reminding them” to apply for the refund.
Cooper’s suit also claims Related violated the federal Interstate Land Sales Act, which prohibits marketing condominiums as investments. The suit said Related held seminars and advertised the condos as investment opportunities, even though the developer’s sales contracts included a clause that stipulated buyers were not acquiring the units as investments.
“Developers are crying that, ‘You guys bought this as investment, you took the risk, you gambled and lost. Too bad. Why should we have to eat this?’ But they should have never been promoting this as an investment. This is not a CD or the stock of a company,” he said.
The suit also claims Related failed to provide all the required documents, such as information about the project’s master association, at the time of signing the contracts.
McCoy said the suit misrepresents the facts and said she will argue it should be dismissed on grounds that the 120 plaintiffs should have to file separate suits.
“Robert Cooper has the same complaint filed against every [Related] project, right down to the typographical error, which tells you that there is no critical and independent analyses of the project or the contract or the potential claim,” McCoy said. “He is just throwing things against the wall to see what sticks.”
McCoy said she will cite a ruling by U.S. District Judge Patricia Seitz to counter the Icon suit’s claims about improper advertising.
In August, Seitz dismissed suits by 29 condo buyers against Tibor Hollo, the developer of Opera Tower near downtown Miami. Seitz ruled that condo documents provided at the time a contract is signed trump any advertising pitch by the developer.
Miami Beach attorney Kent Harrison Robbins, whose firm represented the Opera Tower buyers, is appealing Seitz’s ruling.
“Cooper accuses us of a lot of things and so far, he hasn’t been able to prove any of them,” McCoy said. “He never obtained a judgment against us and he is not going to on my watch.
Related scored a victory last month, when Circuit Judge Thomas Wilson rejected class action certification for a suit by a buyer who failed to close on a 50 Biscayne unit. In the complaint, Mitchell Becker said Related failed to return to him about $25,000, or about a quarter of the $101,180 he put down to reserve a condo priced at $505,900 more than three years ago.
Becker’s lawyer, Jared Beck of Beck & Lee Business Trial Lawyers in Miami, is continuing the suit as an individual action.
McCoy said Related plans a claim against Becker to recover more than $100,000 in legal fees the company incurred to fight the class action certification.
She said Related wants to send a message to those who may be considering suing the developer.
“[Contract holders] will have to think twice before filing a baseless lawsuit because there are going to be consequences to recklessness,” she said.
Paola Iuspa-Abbott can be reached at (305) 347-6657.
Document PBDBR00020081114e4be00006
On this one I am with the developers, however sleazy they are.
Don’t try to get out off contracts with frivolous and baseless reasons just because you majorly f’ed up. Suck it up and move on. At least you are getting 25% deposit back.
i fault both sides. buyers need to be aware of what they are signing and buying. but developers who intentionally misrepresent what the final product will be should not be able to hide behind the argument that you willfully signed the contract. if a developer represents certain amenities, timelines, etc and then does not deliver, you should not be able to hide behind the contract. this type of behavior will eventually lead to laws which will not allow presales of condos, and you only commit to a contract purchase when you actually take hold of the unit. and this will not be good for future construction.
I went through a tour this weekend and there is only one thing I can say,,….. GAY GAY GAY,….this has to be the absolute worst, beyond imagination,….I sincerely believe that we will see in the next 24 months, this building be condemned and closed due to it’s inability to support it’s operating expenses, after which, someone with a clue, and not a drug habit will gut the building and bring it some degree of sustainability. The only component I would give a thumbs up would be is on the pool,….but the fireplace and huge curtain walls,….WTF were you thinking? Related Group has really screwed the pooch on this one.