The following video provides great insight as to how sellers in the current real estate market should be realistic in pricing their home or condo if they are truly motivated to sell.
Oh yeah, and in case you missed it….DON’T OVERPRICE YOUR HOME! If you interview three agents and you decide to go with the agent that is willing to list your home at the highest price, then good luck!
As closing dates for some of South Florida’s newest condo developments quickly approaches, the motivation from contract holders to sell is becoming increasingly apparent. I’ve been receiving a lot of phone calls and emails from contract holders, within the past couple of weeks, who are looking for me to help them find a replacement buyer.
In some cases the contract holders are willing to accept a loss on their contract price in order to retain a portion of the deposit that was made 3-4 years ago. Below you will find some of the better deals that I’ve come across:
If you’re a contract holder and you’re motivated to sell then feel free to email me details of your condo and the price that you are willing to accept. Most developer contracts do not allow you to market your unit outside the sales center, so I will post general information here on the blog to see if a buyer emerges.
I’ll match buyers and sellers together. The sales centers are in some cases charging higher than normal sales commissions and transfer fees which make it virtually impossible for contract holders to get their units into the hands of end-users. I’m hoping that this blog will help contract holders to get some of their money back, end-users to find a great deal and developers to have less defaulted units. The way I see it is a win-win-win situation for everyone involved.
By the way, I’ve added a link to this post on my “Deals” page and will be adding to the list above intermittently.
I just came across a one bedroom/one bath listing at The Grand that looks to be incredibly well priced. It has 1,180 square feet of interior space. It is listed for $299,000, or $253 per square foot. There are a few other one bedrooms in the building that are listed for slightly less but none of them come even close to having the level of quality that was put into this unit.
This is a perfect condo for somebody in search of a spacious one bedroom that is in impeccable condition for under $300K. You won’t find this type of space in a one bedroom in most of the new buildings.
Take a look at the MLS listing for more information and pictures. You can call me for additional details as well or if you’d like me to schedule you a showing.
The average price per square foot of condos listed in Brickell Key has gone down once again, as it has every month since I began this index. The average price per square foot of the ten condos, which represent the Brickell Key Condo Index, fell to $494.61 this month from last month’s figure of $501.55. The weight-adjusted average also fell to $490.87 per square foot versus last month’s weight-adjusted average of $497.82.
Average price per square foot of Brickell Key condos currently listed on the MLS:
This is the first month since I began the Brickell Key Condo Index that the average price per square foot of condos sold over the previous six months has gone up. The average price per square foot of condos sold within the last six months increased to $435.21 from last month’s average of $430.08. The weight-adjusted average also increased to $433.31 from last month’s weight-adjusted average of $424.57. Most of this is attributed to the lack of closed sales at Brickell Key Two. A closed sale of $375 per square foot at Brickell Key Two fell off the average and was replaced by a new closed sale within the past month at $446 per square foot. One closed sale within the past six months encompassed the average in October and November. As I said, the lack of closed sales is to blame.
Additional statistics can be found in the chart below:
There have been a total of 6 closed sales within the past month which is much better than the pathetic 2 closings revealed in last month’s update. These 6 closings, however, were highly concentrated with 4 of the 6 closings residing at Carbonell. Pending sales have inched up to 18 from last month’s 16 pending sales.
Word reached me tonight that the crown top at Opera Tower has been illuminated. I have also been informed that the swimming pool and hot tubs have been filled. Opera Tower is located in Miami’s up-and-coming Edgewater neighborhood.
This suggests to me that closings at Opera Tower will begin very soon, although closings were originally scheduled for September. However, when I drove by Opera Tower this past week, the street-level commercial spaces still looked to be at least one month away from being finished.
I’m not a fan of this development. I’ve made it known in a previous post that I think that this development will have a high default rate for various reasons that are disclosed in that post. I think it is likely that we will see a majority of these condos owned by the bank that loaned money to the developer of Opera Tower by April 2008.
What do I know though? I’m no real estate oracle.
The following data was collected on November 18, 2007. It took me a while to get everything up due to the holiday and work. I made a correction to October’s data. The average price per square foot of closed sales over the previous six months at Vue at Brickell was previously stated at $364.32. The correct figure should have been $469.93. The correction has been made and the overall average for closed sales in Brickell was adjusted to $481.69 instead of $475.16.
The average price per square foot of condos listed has once again dropped this month to $512.14 from last month’s figure of $518.91. The weight-adjusted average also dropped to $509.24 per square foot from last month’s figure of $521.29.
Average price per square foot of units currently listed on the MLS:
Someone recently commented that the average price per square foot of closed sales statistic doesn’t provide much insight due to the lack of activity in the Miami real estate market. This is quite true. List prices need to come down more in order for buyers to be enticed into buying. The condos that have been selling lately are the ones that are aggressively priced. Once each building has at least 5 or more closed sales then the average will begin to show more insight. Below you will see the total number of closings within the past six months in each condo development:
As you can see all of the buildings except One Miami and Neo Vertika have 4 or less closings. The lack of closed sales doesn’t make for an informative average. Nonetheless, I will continue to provide this statistic in hopes that the peak-season months will bring in more closed sales. I have definitely seen more interest within the past couple of weeks. The average price of condos sold over the past six months has gone down to $472.80 from last month’s figure of $481.69. Emerald at Brickell hasn’t had any closed sales within the past six months. The drop would have been less if the average for Emerald at Brickell would have remained the same at $523.78. If that were the case then the average price of condos sold over the past six months in Brickell would have been $475.80.
Average price per square foot of condos sold in the MLS within the past six months:
Below you will find some additional statistics:
As with last month, the first column to the right of each condo development’s name is the difference in the average sales price and list price for this month, expressed as a percentage. The Club at Brickell Bay, The Mark on Brickell and The Palace are the only developments that have a higher average sales price than list price. The former two have questionable closed sales included in the six month average.
The second column is the number of active listings in each development currently in the MLS. The third column shows the percentage that these listings represent over the total number of condo units in each development. The cells highlighted in green reveal those developments that have active listings that represent less than 10 percent of the the overall units in the building. I find this to be a healthy number. The ones highlighted in red reveal those developments that have active listings that represent over 20 percent of the overall units in the building. I would stay away from these condo developments and others that approach the 20 percent mark. The condo developments with active listings less than 10 percent are considered very safe, in my opinion, and anything in the 10-15 percent range is considered normal, even in a healthy market.
The fourth column shows the number of pending sales while the fifth column displays the number of closed sales within the past month. The number of pending sales has dropped this month to 49 from last month’s figure of 51. The number of closed sales within the past month has remained the same at 7, which is still the lowest that I’ve seen in Brickell within one month since I’ve been tracking this statistic.
The sixth column show you the difference in the average list prices from this month’s and last month’s, expressed a percentage. Those highlighted in red reveal those condo developments which had a drop in their average list price while those highlighted in green show those that had an increase. As you can see, listings at Solaris at Brickell had an increase of 7.47 percent within the past month. Much of this increase is attributed to a new listing that is listed at $904 per square foot! What are they thinking? What I find to be particularly funny is that it says “Owner Hardly Motivated” in the broker remarks. Why even list it then? It is a one bedroom with 730 square feet listed for $660,000. I’m going to keep my eye on this one because I wouldn’t be surprised to see it under contract by the wrong type of buyer.
The seventh column reveals the difference in average sales prices from this month’s and last month’s, expressed as a percentage. The 15.49 percent price decrease at Skyline on Brickell is mainly attributed to a closed sale at a high price per square foot that dropped off the average. The large 27.41 percent price increase at Villa Regina is legitimate. There have been two closed sales in the building within the past month and one of them was a 3,060 square foot 3 bedroom/3.5 bath condo with a direct bay view that sold for $1,480,000, or $484 per square foot.
I think next month we’ll see more activity. I did notice that Jade had 2 closed sales on November 20, 2007. Those transactions will appear on next month’s Brickell Condo Index.
I’m going to start including a monthly condo trends report. My hope is that it will help to shed more light on the current state of the market. It is likely to be my most followed monthly piece. After the new year it, along with some other newly added statistics such as a rental market index, will become “premium” content. Just wanted to give you all the heads up. I just finished compiling the numbers and I was pretty shocked.
I basically wanted to find out how many months of inventory we have in Miami and Miami Beach. I created a report for Miami-Dade County, one for Miami and one for Miami Beach. I broke each report down to various price ranges to figure out which category has been affected the most. I took closed sales for the month of October and compared it to the inventory that is now available. Below you will find the numbers for Miami-Dade County:
As you can see Miami-Dade County has about 55 months, or 4.58 years, worth of inventory. I wanted to see how much of this supply resides in Miami compared to Miami Beach. Below you will find the numbers for Miami:
Miami currently has a 48 1/2 month, or approximately a 4 year, supply of condos. That’s actually much lower than I expected. However, keep in mind that there are thousands of condos that will come onto the market within the next 24 months. In fact, in July, I calculated that a little over 16,000 condos would hit the market within the next 19 months in the neighborhoods of Brickell Key, Brickell, Downtown Miami, Park West and the Performing Arts District. Probably about 1,500 or so units have hit the market since I wrote that post. If you add 14,500 units to the Miami figures above then we’re looking at close to a 10 year supply. Now that’s quite shocking!!!
Let’s take a look at the Miami Beach figures:
I was surprised to learn that the supply of Miami Beach condos is higher than that of Miami’s. The number of new condos coming onto the market, however, in Miami Beach pales in comparison to the new condos scheduled to hit the market within the next two years. My guess is that about 1,500 units will hit the Miami Beach market in that time which would put it at around an 8 year supply. Still pretty shocking given that it’s Miami Beach! I was equally shocked by the low number of closings in the $500,000-$999,999 price range. That appears to be a problematic price range if you’re a condo owner looking to sell somewhere in that range.
Despite a number of news stories that have hit the press lately, it looks like the ultra-luxury ($2.5M+) market isn’t moving. It has very few available listings compared to the other categories but it had basically no closed sales in October. There were a total of two in all of Dade-County. Both were located in Bal Harbour.
I receive a lot of monthly phone calls from investors who are waiting for the market to bottom-out. They all want to know when is the “right” time to buy into the South Florida condo market. I’m hoping that a report like the one above can help me pinpoint when that time might be.
A recent Fortune magazine article entitled, “Real Estate: Buy, Sell, or Hold?”, said the following:
The combination of steep discounts to move inventory and a stream of new communities built at a lower cost will keep prices far below their peak levels in the boom towns. And they’ll keep falling until builders work off the massive inventories. The tumbling prices of new homes, in turn, will put enormous pressure on the far bigger existing-home market, already under stress from two desperate groups of sellers, investors and banks. Hence, the adjustment needed to bring the ratio of prices to rents into alignment will happen far faster than in most housing downturns. “In the most vulnerable places in California and Florida, it’s highly possible that most of the correction will happen by the end of 2008,” says (Mark) Zandi, (chief economist at Moody’s Economy.com).
The article was mainly discussing single-family homes but I think the same holds true for the condo market. The Miami condo market is likely to drop lower, on a percentage basis, than other major U.S. cities but I agree with Mark Zandi that the market here will be quicker to correct itself because of the high number of foreclosures and defaults that we are likely to see. 2008 will be a time of readjustment. I’m looking quite forward to it.
Someone who has contracts on two great units at Marina Blue contacted me earlier this week. He wants to sell one prior to closing and hold onto the other.
The first condo is unit 5108. The 08 line is the best line in the entire building since it is situated in the middle of the building and has the best views. This condo has 10-foot ceilings. All units on the 45th floor or higher have 10-foot ceilings as opposed to the non-loft units below that have 9-foot ceilings. The unit has 1,334 square feet of interior space and a 160 square foot balcony. He is asking $740,000 for this unit.
The second condo is unit 4609. It is a very rare floor plan that I didn’t even know existed in the building. There are only six units that have this floor plan in the entire building. The condo has a total of 1,754 square feet of interior space and a 240 square foot balcony. As with the other unit, it has 10-foot ceilings. Both units have amazing water views. You can see the South Beach skyline, Biscayne Bay and the Atlantic Ocean. As you can see from the floor plan below it has a huge living room. He is asking $899,000 for this unit.
Closings are likely to begin at Marina Blue in December. Contact me if you or someone you know has an interested in either of these two units.
The above picture of the progress at Plaza on Brickell was taken this afternoon. The weather was just perfect today, as it has been for the past four days. 80 degrees, no humidity and clear skies! What more can you ask for in November?
Plaza on Brickell is scheduled to begin closings in January of 2008. I’m a fan of this development for two reasons: price and location. Well, actually three. I also like the commercial aspect of the development on the ground floor along Brickell Avenue. I’ve been told that these spaces have already been accounted for and that a few fantastic restaurants and cafes will open there. It will nicely compliment the shops and restaurants at Mary Brickell Village which are only a few short blocks away. City living is finally beginning to transform Miami.
Someone contacted me a few weeks ago who has a 1 bedroom/1 bath condo under contract at Plaza on Brickell. He went to contract on the unit the first day that sales began. The condo has 838 square feet of interior space and a 130 square foot balcony. The unit is located on the northwest corner of the 851 tower, which is the taller of the two towers, and is situated above the 20th floor. The floor plan of the available condo is below:
The contract holder of this condo at Plaza on Brickell is looking to sell it for $282,000, or $337 per square foot. Units at Plaza on Brickell come move-in ready. Contact me with any questions or if you have an interest in acquiring this condo.
