I just finished compiling the data for this month’s Miami Condo Index for Brickell. Last month I revealed that the 18 buildings below had a total of nine closed sales from June 19, 2007 to July 18, 2007. That number surprised myself and many others who follow the real estate market in Brickell. Be prepared to be surprised some more because this figure has dropped. There were a total of eight closed sales from July 19, 2007 to August 18, 2007 in the 18 condo buildings below throughout Brickell. Eight!
Of the eight closed sales, one appears to be yet another fraudulent transaction. A one bedroom/one bath condo with 825 square feet sold for $625,000, or $758 per square foot, on August 3, 2007 at The Club at Brickell Bay. It doesn’t even have a direct water view! The same broker represented the seller and buyer in the transaction. What is really crazy is that a different brokerage had the condo listed for $425,000 in May. It was later canceled and relisted with the broker who sold it for $625,000.
If you think that transaction has the word “fraud” written all over it then take a look at the one bedroom/one bath condo that closed on May 18, 2007 at The Club at Brickell Bay. It too had 825 square feet of interior space and a view of the water from the balcony. The buyer of that unit paid the full asking price of $680,000, or $824.24. The Club at Brickell Bay now has the highest price per square foot of condos sold in the past six months of the 18 buildings included in the index because of these fraudulent transactions. When is somebody going to step in and do something about this? Supposedly the Miami Herald and the FBI are investigating the situation but I’ve been hearing those rumors for months. What is taking so long?
The average price per square foot of condos listed in the 18 Brickell buildings covered in the index went up slightly to $529.05. Last month this figure was $528.84. The weight-adjusted average, however, went down to $537.67 from last month’s weight-adjusted average of $540.17.
Average price per square foot of units currently listed on the MLS:
The average price per square foot of condos sold over the past 6 months actually went down slightly to $471.94 from June’s average of $473.95 despite the fraudulent transaction at The Club at Brickell Bay. Take note that The Club at Brickell Bay now has an average price per square foot of $720.15 for condos sold over the past six months. That is simply ridiculous. This average is based on the three transactions that have occurred at The Club at Brickell Bay over the past six months, two of which appear to be fraudulent. A little over 20 percent of the building is available for sale but nothing is moving. Hmmm…maybe it’s because the list prices there don’t make any f@&#ing sense!!!
Average price per square foot of units sold in the past 6 months:
Atlantis – 2025 Brickell Ave | 33129 | $335.12
Brickell on the River – 31 SE 5 St | 33131 | $409.44
Solaris at Brickell – 186 SE 12 Ter | 33131 | 14.30%
The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | -11.98%
The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | 4.41%
The Palace – 1541 Brickell Ave | 33129 | 3.39%
Villa Regina – 1581 Brickell Ave | 33129 | 36.73%
Vue at Brickell – 1250 S Miami Ave | 33131 | 2.85%
I noticed that a handful of fraudulent transactions will be falling off next month so I’m expecting the average price per square foot of condos sold over the past six months to go down in September. That is, however, assuming that other fraudulent transactions don’t appear in the next 30 days to take their place. We shall see.
Latitude on the River – 2 Bedroom/2.5 Bath Condo on 42nd Floor – $407,000
Here’s a great opportunity two own a spacious 2 bedroom condo at Latitude on the River on a very high floor. This 2 bedroom/2.5 bath is located one floor below the lower-Penthouse level and is located on the southeast corner of the building. You will have fabulous views of Biscayne Bay to the south. The following picture was taken from inside the unit in question.
The condo has 1,300 square feet of interior space and a 128 square foot balcony. The image below is the floor plan of the condo available for sale at Latitude on the River. It is a B12 unit.
The view in south facing units will be much better than the north facing units as long as they clear the Latitude One office building. The Latitude One office building is only 22 stories so this B12 unit on the 42nd floor will easily clear the top of Latitude One. Not only that, but it will also clear Neo Vertika to the east to offer fantastic views of Biscayne Bay and South Beach from the living room.
The price per square foot works out to be $368. The July Brickell Condo Index revealed that units sold over the last six months at Neo Vertika, which is a one-year old building right next to Latitude on the River, had an average price per square foot of $375.53. Here’s your opportunity to grab one of the best 2 bedroom units in a brand new building at a great price. The contract holder is set to close in approximately five weeks. She can assign the contract so a simultaneous closing won’t be necessary.
Update: The following slideshow will show you some pictures of the common areas at Latitude on the River. There are also some pictures of a 2 bedroom/2.5 bath condo on the 36th floor.
This is a follow-up post to one I wrote a few weeks ago entitled “Advice to Miami Condo Sellers“. That post has become one of my most widely read posts.
I’ve always been more of a buyer’s agent than a seller’s agent. It’s been that way ever since I started in this business. I’ve never been much of a salesman though. In fact, I initially didn’t even want to become a real estate agent because I always analogized the phrase “real estate agent” to “sales person”. The latter always made me cringe. Thoughts of “selling somebody” or “making a sale happen” didn’t favor well with me.
I finally realized, however, that people will always have a need to buy housing and finding buyers the best deals is a niche within itself. I figured that with my financial background I could provide a unique perspective and a more in-depth analysis of the market than most agents. This blog is a natural extension of that mindset years ago.
Nowadays, it seems like everyone is looking for a deal and the right opportunity to buy in Miami. The million dollar question that I get from the people who contact me each day is “When will be the best time to buy a condo in Miami?”.
The answer to that question depends on your objectives and knowledge of the Miami condo market. If you’re an investor “looking to buy a condo in a good neighborhood of Miami at a significant discount” then the answer to that question is as vague as your objective – “Nobody knows!”. That’s like saying that you want to buy the best stock at the bottom of a bear market. Good luck!
Some of the people who contact me have only been to Miami once or twice in their life. Some haven’t ever visited Miami, but have read about Miami and have seen the gorgeous palm trees and majestic waters in movies. For those of you, the opportunity to buy a Miami condo at the “best” time won’t ever come. You need to have knowledge of what you want before you can ascertain the best time to buy it. A knowledgeable Realtor can’t even point you in the right direction without first knowing which direction that might be.
Having an objective like wanting to buy a two bedroom condo at Ten Museum Park with a direct bay view on a high floor at a 20 percent discount of 2004 prices is much better. An opportunity like that may or may not present itself but at least you know what you want and a local Realtor will be much better equipped to help you find it.
Keep in mind that the “market bottom” for the Miami condo market might not necessarily be the best time to buy for people with such a pinpoint objective as the one above. These people might miss out on better opportunities that will have passed them by. For example, take the 2 bedroom condo going up for auction at Villa Regina that I mentioned in yesterday’s post. That condo may very well sell for the best price per square foot of any condo at Villa Regina from here on out. Someone looking to buy a condo at Villa Regina, but is waiting for the condo market to bottom in Miami, might miss out on a fantastic opportunity. It may or may not end up being the best deal at Villa Regina but keep in mind that only one person will buy the bottom. Wouldn’t you be happy though knowing that you bought at a 20 percent or 30 percent discount or whatever it may be?
My advice for those buyers who will be end-users is the same. Know what you want and the price point that will make you happy. Opportunities to buy condos in Miami at a discount with built-in equity are already present. Foreclosures, auctions and short sales all offer these opportunities. Being happy with the condo in which you will live should be the primary concern for end-users, not price. Having a cushion to weather the storm that lies ahead is an added bonus.
There is no doubt that condo prices will correct themselves from the highs that we experienced in 2005 and beginning of 2006. In my opinion, they already have. I feel that we’re already back at 2004 prices. Every week I get a number of calls and emails from people who bought preconstruction condos as resales in 2005 and beginning of 2006. They want to know if there is any chance to break-even if they close on their preconstruction condo contracts and sell at current market prices. The answer is overwhelmingly “NO”. The current market price is usually at or slightly below the amount of their deposit money, which the majority of the time is 20 percent. This tells me that we are already at least 20 percent off the highs.
The inventory problems of the Miami condo market is old news. Demand dried up over a year ago as a result of this news. The real estate market, however, is not as liquid and as efficient as the financial markets. Buyers have already processed the news about the Miami condo market. Sellers have begun to process the news but can’t simply hit the best bid to get themselves out. Those selling existing condos can, however, lower their prices.
The fate of the preconstruction condo market is different though. The news came out over a year ago but we’re all waiting for the condos to close to see where they will get priced. Nobody knows! It’s like trading has been halted, due to news, and we’re all standing around waiting for the market to reopen.
As a side-note to investors and second home buyers unfamiliar with Brickell, if you’re looking to buy a newly constructed condo in a bayfront building within the next 7 months then you won’t find any. Of the five developments scheduled for completion within the next 7 months in Brickell, none of them are bayfront buildings. Only two, Latitude on the River (which has begun closings) and Brickell on the River South, are waterfront buildings. They both, as their name implies, reside on the Miami River. Of the four developments scheduled for completion in 2009, only two, Icon Brickell and Epic, are bayfront developments. After those are completed only one bayfront parcel will be left in Brickell. Villa Magna was planned for development on that parcel but the project was recently canceled and the fate of that land is still up in the air.
As for the four buildings being developed in the Downtown Miami neighborhood known as Park West, none are bayfront but they might as well be. Ten Museum Park, Marina Blue, 900 Biscayne and Marquis each reside directly behind Biscayne Boulevard and what was formerly known as Bicentennial Park, both of which won’t obstruct views of the bay as long as they are owned by the city of Miami.
Two Brickell Condos up for Auction This Month
Two Brickell condos will hit the auction block later this month. The first is a 2 bedroom + den/2 bath loft residing on the 29th and 30th floors at Neo Vertika. The loft has 1,255 square feet of interior space on tw0-levels with 20-foot ceilings. Neo Vertika is located along the Miami River, west of Brickell Avenue at 690 SW 1 Ct. Neo Vertika is a recent addition to Miami. Closings began in August of 2006.
The loft will go up for auction at 11:30am on August 20, 2007 with an opening bid of $125,000. The July Brickell Condo Index revealed that the average price per square foot of units sold at Neo Vertika over the past six months was $375.53.
The second condo up for auction is a 2 bedroom/2 bath at Villa Regina. The condo has 1,895 square feet of interior space, three separate balconies and offers partial bay views from a low floor. Villa Regina had a recent special assessment to update the lobby, hallways, marina and landscaping. Villa Regina is located at the southern end of Brickell Avenue at 1581 Brickell Avenue.
The condo at Villa Regina will go up for auction at 4:45pm on August 21, 2007 with an opening bid of $100,000. According to the July Brickell Condo Index, condos sold over the previous six months at Villa Regina had an average price per square foot of $316.62.
Don’t miss out on either of these exciting auctions. Contact me today for more information!
Advice to Miami Condo Sellers
I mentioned last week in the July Brickell condo index that only 9 closed condo sales occurred from June 19, 2007 to July 18, 2007, in the 18 buildings that comprise the Brickell Condo Index. A question was left for me in the comments section of the post about whether I felt that the lack of sales activity was a reflection of an overpriced condo market in Miami. A great conversation enfolded and I wanted to expand on that conversation with a post that will hopefully find its way to condo sellers throughout Miami.
In a nutshell, yes, prices do need to come in significantly in order for buyers to be enticed to buy. There are a lot of “motivated” condo sellers right now who have their units listed with a Realtor who are having a very difficult time selling their condo. However, sellers need to realize that their situation will become progressively worse as time goes by and more condo units come onto the market throughout the overdeveloped areas of Miami that stretch from Brickell to the Arts District. Your condition can easily turn from “motivated” to “desperate” within a six month time period.
I will let the numbers do the talking. Within the next 7 months there will be five new condo developments that will be completed in Brickell. These five developments are: 500 Brickell (633 units), The Plaza on Brickell (1,000 units), 1060 Brickell (582 units), Brickell on the River South (322 units) and Latitude on the River (455 units). These five condo developments will bring 2,992 new condo units to the Brickell condo market within 7 months. 12 months after that, another four developments will be completed in Brickell. These developments are: Infinity (459 units), Axis (718 units), Icon Brickell (1,816 units) and Epic Miami (966 units). These four developments will add another 3,959 new condo units to the Brickell condo market. That is a total of 6,951 new condo units within 19 months from now.
Over 6,900 new condo units within the next 19 months in Brickell! If this sentence alone doesn’t make a seller see the light then maybe the following sentences will. The Brickell condo index is currently comprised of 18 condo buildings throughout Brickell which consists of a total of 5,348 condo units. This means that within 19 months we’ll see a 130% increase in the number of units that comprise the index. The total number of condo units represented in the Brickell condo index will increase from 5,348 condo units to 12,299 condo units within a 19 month period.
That is just within Brickell. Include the developments below that are within 4 miles north of the southern tip of Brickell and conditions become far worse. These developments should be completed within the same time period. A few of these buildings such as Onyx on the Bay, Platinum Condos, Midtown 2 and Ten Museum Park have already begun closings. The 23 buildings below will add another 9,119 new condo units residing within 4 miles of Brickell within the next 19 months.
This means that within the next 19 months there will a total of 16,070 new condo units that will come onto the market in the neighborhoods of Brickell, Brickell Key, Downtown Miami, Park West and the Performing Arts District. The bulk of the problems will be in Brickell, Downtown Miami, Park West and the Performing Arts District since Brickell Key will only add 123 units once Asia is built.
Let’s assume that 30% of the condo units in the five new developments that will be completed in Brickell within the next 7 months were purchased by speculators. That is a very conservative number. I have heard people suggest that this number could be as high as 70%. Let’s use 30% though to illustrate a point in a conservative manner. That means that of the 2,992 new condo units to come onto the market in Brickell, 898 of these will be listed for sale. As I mentioned at the beginning of this post, there were a total of 9 closed condo sales that occurred in Brickell from June 19, 2007 to July 18, 2007. This means that if market conditions remain the same, and this absorption rate continues, then it will take 100 months, or 8.33 years to absorb the new inventory in Brickell. This doesn’t take into account the existing inventory of 1,550 condo units on the market at this time in Brickell. It also only includes those units in Brickell that will be completed within the next 7 months, not the units scheduled for completion 12 months after. Nor does it take into account the negative impact that the units scheduled for completion in Brickell Key, Downtown Miami, Park West and the Performing Arts District will have on the condo inventory in Brickell.
My advice to condo owners who NEED to sell is to get out now! Today, Barbara Corcoran was on the Today Show and suggested that people who need to sell now should be priced 5% below the currently best priced property in the neighborhood. She was speaking about homes and the national real estate market, but I think that this advice is a great start for condo owners in Miami. To illustrate, last week, two days after our office held an Open House/Wine Tasting at The Imperial at Brickell, a pending contract resulted on one of the three bedroom units that were showcased. It was the best priced three bedroom in the building and was the nicest as well. By the way, for those of you who haven’t heard of Barbara Corcoran before, she is often referred to as “The Queen of Real Estate”. She is a Realtor in New York who has had tremendous success and has been asked to appear on many nationally televised segments for her invaluable insight.
Sellers may not like the idea of discounting the price of their condo to 95% of the best priced unit currently listed in the building. However, they will like the alternative scenario even less if they don’t. Keep in mind that once the new condo units come onto the market, you’ll end up lowering your price to that level anyways. But at that time, you will be priced in the middle of the pack rather than at the front.
If you are a truly motivated seller, who doesn’t have an exclusive listing agreement with another Miami Realtor, and want to sell your condo before the worst begins, then contact me today so we can devise a plan to get you out of this mess before condo inventories in Miami reach nightmare proportions.
Short-Sale at One Miami – 1 Bedroom/1Bath for $275K !!!
There’s a 1 bedroom/1 bath short-sale at One Miami that was reduced $44,900 today. It is now listed at $275,000 and has 846 square feet of living space. That’s a great deal! The unit is now listed at $325 per square foot. The Brickell condo index for July revealed that the average price per square foot of units sold at One Miami over the last six months is $453.66. There have been 8 one bedroom/one bath units that have closed at One Miami in the past six months. They have sold in the range of $349,000 to $430,000. Like I said, this is a great deal! Prices for one bedroom units at One Miami have come in significantly in recent months but this short-sale unit is the best priced of them all.
The unit comes with one assigned parking space and one complimentary valet space. Amenities at One Miami include: two swimming pools and hot tub, two clubs rooms, two fitness centers, business center, 24-hour security/concierge and valet parking. The maintenance fee is $389 per month. High-speed Internet, basic cable TV, water, sewer and garbage are included in the maintenance fee as well.
Take a look at the MLS listing for more information.
How Bad Can Things Get for the Miami Condo Market?
An article was released today on Bloomberg.com that exposed the seriousness of the overdevelopment problems that we have in the Miami condo market and the ensuing repercussions that will affect the Miami economy. The article was entitled “Miami Condo Glut Pushes Florida’s Economy to Brink of Recession”. To readers of my blog, however, the news presented in the article was nothing new.
As I’ve mentioned before, the bulk of the problems will stretch from Brickell to as far north as the Miami Arts District. That is where most of the development has occurred in the past three years. There will also be problems in Sunny Isles Beach along the beach. There is a ton of development there as well. Condos in Coral Gables have held strong and have actually gone up in some cases. South Beach condos have also held strong. The condos in older buildings throughout Miami will hold strong because speculative money doesn’t reside in those buildings. It resides in the buildings that were recently completed and those that are currently under construction.
Maintenance fees and ensuing special assessments are also an issue with new buildings. Jade recently had a special assessment to cover the maintenance money lost from the 17 foreclosure units in the building. Jade currently has the most foreclosures of all condo buildings in Miami. Imagine buying into a new building where only 50 percent of the units have closed. Could you imagine the type of special assessment that will get billed to those who have closed? The 17 units at Jade only represent a little over 5% of the overall units in the building. Imagine 50 percent! The upkeep of the building will be the first to go in these newer buildings.
I get a number of people who call me every week who are waiting on the sidelines for that spectacular deal. They know that I’ll find it. I have made it my job to find people the best deals possible at that particular time. That will always be my job and my ultimate goal. If anyone knows the seriousness of the condo market right now it is me. There are others in the industry who know it, but won’t acknowledge it.
That being said, those of you waiting to buy a condo 40 cents on the dollar, it won’t happen. For you at least. You may be able to attend a few auctions where you might be able to buy something at a significant discount but, for the most part, the bulk of the great deals will happen so fast that you’ll never hear about them. Let me be the first to spill the beans and let you all know how this will all go down in 10 steps:
A significant percentage of contract holders will walk away from their deposit money.
The developers will be left holding the short end of the stick and receive huge amounts of pressure from the banks in possession of the construction loans.
Developers will fold.
Developers will then pass the short end of the stick to the banks holding the construction loans.
Banks in possession of these construction loans will be in big trouble. They will then in turn look to sell these loans to vulture capital funds that are hovering the skies of Miami.
Vulture capital funds will buy these construction loans at a significant discount. 50 cents on the dollar or more is not out of the question due to the conditions that reside in the Miami condo market.
Vulture capital funds will then list these units with Realtors, such as I, who have a long list of people waiting on the sidelines to buy at a discount. They will then resell these units at a 15-30 percent discount from what they were originally purchased in 2004 and 2005.
Buyers, from all over the world, will buy condos in Miami at a 15-30 percent discount. Those who contact me will be at the top of this list to receive these significant discounts.
Vulture capital funds will pocket the 20-35 percent spread. Vulture capital funds have been hovering the skies of Miami for years. Their time has come. Patience is a virtue.
Miami condo prices will stabilize at the newly reduced level and business will go on as usual.
Condo overdevelopment throughout the country has become a problem. However, Miami is the epicenter of this problem. As the Bloomberg article states, banks were the first to lend money to Miami developers and the first to pull out. I’ve been contacted by at least five large vulture capital funds in the past month looking to profit from the enormous opportunities that will become available in the Miami condo market. All eyes are on Miami. A dark cloud hangs over Miami but opportunities will abound. As the saying goes, “This too shall pass”. But will you be prepared to take advantage of these opportunities?
Miami Condo Index – Brickell – July 2007
You may have noticed that some of the June numbers have changed. This is because I originally took out the closed sales that were obviously due to mortgage fraud. I recently went back and included those sales because I wanted to present things just as they were. However, this made listings appear to be priced more accurately, which they aren’t. To condo owners, and to some Realtors not in the know, these fraudulent transactions have made their listings appear justified. They need to realize that these transactions are just that, fraudulent, and very inaccurate.
The average price per square foot of condo units listed in the 18 Brickell buildings covered in my index dropped $7.44 since last month. A drop in the price of condos listed in Brickell over the last month was highly expected. I actually thought that prices would have come down even more though. These 18 buildings in Brickell had an average price per square foot of $528.84 this month versus $536.28 in June. The weighted average price per square foot was $540.17 for July versus $547.06 in June.
The most shocking thing that the July Brickell condo index revealed was the number of transactions that occurred in one month’s time. There are a total of 5,348 condo units represented in the 18 buildings that comprise my Brickell condo index. Take a guess at how many units have closed from June 19, 2007 to July 18, 2007.
Had enough time to come up with a guesstimate? Nine. That’s the number of units that sold during that time period throughout the 18 buildings that make up the Brickell condo index. Everyone knows the market is slow but I don’t think anyone could have guessed to what extent. Nine! I still can’t get that out of my head. There are a total of 875 units available on the market right now in those 18 buildings. This equates to 16.36 percent of the total units. This number is actually much higher in many of the newer buildings. Many of the older buildings have 20 or less listings in the entire building. The instability lies in the newer buildings; the buildings that were heavily funded by speculators.
The average price per square foot of condos sold over the past six months in Brickell actually went up slightly. But keep in mind that there were nine transactions in all 18 buildings. Most Realtors would focus on the fact that prices are actually going up. However, I will tell you, first hand, that these numbers are attributed to fraudulent transactions. The price per square foot went from $471.76, in June, to $473.95, in July. Most of this was due to a transaction that appears to be fraudulent at The Sail on Brickell.
The reason why I feel that this transaction is fraudulent is for a number of reasons. One, the unit was sold at the highest price per square foot in the building with concrete floors, two, the broker is a discount broker who charges 4 percent per transaction, three, in every transaction he seems to find the buyer and already holds the listing, and four, he finds the buyer within four days. I did a search by the broker’s email to see what other transactions have occurred. I’m not going to name names but let’s just say that this broker has at least six transactions where this has occurred. The same exact thing. He finds a buyer to acquire a condo at The Sail on Brickell within four days at the highest price possible. Let me tell you, firsthand as a Realtor, that it is hard enough to find a buyer in this market to buy something at the best price available. How is this guy finding a buyer at the highest price available? Within 4 days? Like I said, I’m not going to name names but something fishy is going on there. If someone, like the Miami Herald, wants to investigate this thoroughly and name me as the source, then so be it, but I’m not divulging names. I don’t want to have a hit-man after me. Hopefully I’m wrong about what has occurred in The Sail at Brickell, but I doubt it.
Average price per square foot of units currently listed on the MLS:
Solaris at Brickell – 186 SE 12 Ter | 33131 | 14.86%
The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | 2.70%
The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | 1.01%
The Palace – 1541 Brickell Ave | 33129 | 8.68%
Villa Regina – 1581 Brickell Ave | 33129 | 30.64%
Vue at Brickell – 1250 S Miami Ave | 33131 | 1.53%
Imperial at Brickell Open House Tonight – Opportunity to Tour Six Beautiful Condos
Real Living Properties and Arch Realty are showcasing six beautiful condos tonight at Imperial at Brickell from 6pm-8pm. This is a great opportunity to see why Imperial at Brickell is one of the best values in the area. The building is currently undergoing a beautification project which was paid for through a recent special assessment. New owners will be able to enjoy the benefits of these improvements.
The Brickell Condo Index for June revealed that, over the previous six months, Imperial at Brickell offered the second best price per square foot of the major developments throughout Brickell. It had an average price per square foot of $319.56. Imperial at Brickell is well known for its large balconies, spacious layouts with powder rooms and having some of the lowest maintenance fees in the area. All in one of the most architecturally significant buildings in Miami. You have probably seen it on CSI: Miami if you watch that show.
RSVP is required because we will be featuring a different type of wine at each unit. Please call me at 786-247-6332. Imperial at Brickell is located at 1627 Brickell Avenue.
