Sales Prices in Free Fall at BrickellHouse as Parking Saga Drags On
September 1, 2016 by Lucas Lechuga
Back in January, we did a check in at BrickellHouse to see how their parking drama was affecting transactions in the almost-new development. At the time, not much had changed. It appears though that we were at the edge of a cliff.
The Real Deal reported an update of the case on Tuesday, explaining that the debacle is far from finished. Apparently the condo association has sued the developer on behalf of the owners because the system is going to have to be replaced. The only available replacement system is configured differently and cannot hold as many cars as the current, defunct system. That would mean that some owners will have to forego their parking spots and they are not amused.
The developer insists that the entire system does not need to be replaced, only the software. And so the lawsuits go on, bouncing the blame around like a game of Hot Potato.
While the bickering continues, sales prices have been in free fall. In January I reported that sales values from Q4 of 2015 were sitting pretty at $641/foot. That is a healthy increase from the $595/foot that we saw from the developer’s pre-sales. It seems the market had not had time to react to the parking issue, but it certainly responded quickly. In Q1 of 2016, closed sales values fell to $456/foot, then down to $419/foot in Q2 and $402/foot in Q3. Yikes. With 79 active listings today and an absorption rate that could compare to pouring molasses in December, we are in for a ride.
There is no telling how long this will last. Nobody wants to buy into a building with a monstrous problem and banks will not touch the building because of the snowballing litigation. Heck, hard money lenders probably wouldn’t even do a deal there. Cash buyers are not as plentiful as they once were, so it seems the best thing for the owners to do is wait and pray.
On the bright side, the rental market has not been affected. Rental values are holding steady at an average of $3.50/foot. I guess the tenants don’t really care about parking. With our “Uber everywhere” society these days, it looks like what people really don’t want is drama.
Monsterous? No, it’s monstrous.
Thank you.
Stop the negativity. You are accomplishing nothing.
Our aim was not to be negative but instead, as we always are, objective. Without objectivity there is no trust. The blog post above is a facts-driven blog post supported by sales statistics for the building. If stats were good, we would have mentioned so. If stats are bad, we don’t sugarcoat them.
It does nothing productive . It’s negative posts. As a realtor you should be propping up the positive benefits of investing short and long term not throwing out doomsday commentary which you’ve done repeatedly for icon brickell house and other prowprties. Lead with the positive not the negative.
hey “anonomous”, you sound like another dime-a-dozen hack of a realtor in Miami…you know, the ones who can’t spell and try to sell ice in the polar ice caps. The building is crap, the investment prospect is crap, and anyone who says otherwise is…crap.
Paul,
Thank you for the advice, but I’ll stick with telling the truth and not sugarcoating it. But by all means, feel free to run your real estate business as you see fit. Good luck with that!
As an interested foreign observer who has relied on this website to keep abreast of the Miami market (keep up the good work Lucas) I can see both points of view here. The post does read quite negative, but given the situation I don’t know how one could put a positive spin on it. Perhaps comments like ” … we were at the edge of a cliff.” just state the situation a bit too dramatically! It is clear that this is not a good time to invest in that building, but it also does not mean that owners should panic… Read more »
Don’t know who Paul is and if you’re trying to expose anonymous posts because you don’t like the comment, you should be careful as that is an ethics violation and just not cool. Insults shouldn’t be part of the conversation and if someone wants to posts their name they will. This is just constructive criticism. Point was tons of negative adjectives aren’t going to help anybody for any reason. It has nothing to do with what your opinion of the property is or the facts of the property. The words FREE FALL represents the prices are going straight down and… Read more »
To put the conversation back on a friendly theme, There is some ceasing of or postponement of newer projects in early pre-construction phases which I think will help reduce inventory faster. Hopefully the big developers will start to realize it doesn’t help them by scaring off people in contract worrying about more and more new competition when they close. I’m not sure if the majority owners trying to sell or rent are really motivated. There is some talk that many of the South American buyers will walk away even from 50% deposits. I don’t buy that. I think the number… Read more »
I agree. No reason to turn buildings into pariahs. I look at this place as being a great steal if you can hold long term.
I’m sorry that you don’t agree with my choice of words. In fact, I do not feel the prices will never recover but we have to acknowledge that the drop was drastic. Selling at $641/ft down to $402/ft in less than a year is an extremely sharp fall…a free fall. Once the drama settles and inventory is absorbed, everything will be fine. The building is beautiful, but there is too much uncertainty for buyers right now & owners are frustrated. If you have inside information about how this is being resolved, please don’t hesitate to let us know. I would… Read more »
Dear Lucas Lechuga and owner thank you! I agree with both of you. No need to add more drama. The owners of Brickell House have suffered enough. We dont need another articles like this. The current board has and is working hard to handle the situation to its best! Brickell House will soon be the best building in town!