Miami & Miami Beach Condo Trends – January 2008
In the last update of the Miami & Miami Beach Condo Trends in November 2007, I promised that the Miami and Miami Beach Condo Trends would be a monthly update. I hate breaking promises but December turned out to be much busier for me than I had expected. With the holidays on top of everything, it was a promise that I had to break.
I also mentioned the inclusion of a condo rental index. I still plan to include these stats within the next couple of months.
Below, you will find the January figures. The first box to the left shows the total number of condos that are currently available for sale on the MLS in Miami-Dade County. These include condos located in Miami, Miami Beach, Aventura, Homestead, Kendall, Coral Gables, Coconut Grove, etc. Keep in mind that these numbers do not include single family homes, just condos, townhomes and lofts. What surprised me is that the total number of listed condos has gone down since the November report. It dropped about 2 percent. However, the number of closed sales in the previous month fell sharply, down about 22 percent. The current condo inventory now represents 5.72 years of supply. That is roughly a 20 percent increase over the November figure. Thousands of new condos are ready to be delivered within the coming months, so we should see subsequent increases in upcoming months. Most of this increase will be throughout Miami, as opposed to Miami Beach or other areas of Miami-Dade County. You’ll notice that the figures are also broken down by price range to give you a better idea of which part of the condo market has been affected the most.
Below you’ll find the same statistics but these only encompass condos located in Miami. In November, the existing condo inventory represented 4.04 years of supply. Now, just two months later, we’re sitting on 6.01 years of condo supply. This represents approximately a whopping 49 percent increase! This is mainly attributed to a large drop-off in closed sales in the previous month.
The following statistics encompass condos located throughout Miami Beach. The increase of inventory in Miami Beach isn’t so startling. Miami Beach now has 6.15 years of condo supply compared to the 5.89 years of condo supply that we saw in November. This represents an increase of about 4.5 percent. There were only 3 fewer sales in December compared with the number of closed condos in October.
The inventory levels, as of right now, for condos located in Miami and Miami Beach are relatively close. I think by next month you’ll see Miami pulling ahead. What’s your prediction for the inventory levels that we’ll see for Miami condos in July 2008?
New Miami Condos – Closings Rates for January 2008
The chart below will show you the percentage of total units that each development has closed since closings began. Click on the following links to view the updates in November and December:
Below you will find the date that each development began closings:
Before anybody says it, I realize that One Bal Harbour is not a “Miami Condo”. I didn’t want to change the title of the post just to reflect the fact that One Bal Harbour is located in Bal Harbour. I also didn’t want to exclude it from the list because there is much interest in One Bal Harbour, and besides, One Bal Harbour owners would criticize me for not providing an update when the closing rate has jumped since the last update.
The closing rate at One Bal Harbour has hit the 70 percent mark. This is a significant increase since last month’s update. The stock price of WCI surged about 15 percent in the regular session on Wall Street and another 19 percent in after-hours trading on Wednesday after it reported that it has successfully been able to amend its credit and loan agreements. The news story was not publicly disclosed until after the bell. There are currently 55 condo units that have not closed, according to public records. The news reveals that WCI now has a considerable amount of time to sell these last remaining condos.
Ten Museum Park has had about a 7 percent increase in its closing rate while 50 Biscayne has had about an 18 percent increase, since the December update. With the exception of One Bal Harbour, Ten Museum Park and 50 Biscayne, none of the other developments have had an increase of over 5 percent. The two new entries to this month’s update are Loft Downtown 2 and Quantum on the Bay. Loft Downtown 2 should have been included in the November update since closings began in September but it simply slipped my mind. Sporting a 74 percent closing rate, however, makes Loft Downtown 2 appear quite successful in comparison to the other Miami condos. The Grand Opening Party for Loft Downtown 2 is scheduled for Thursday evening.
Closings at Quantum on the Bay began earlier this month and as I’ve stated many times before, closings can take up to 2-3 weeks before they are recorded with the county (however, I have heard that as of January 1, 2008, this is no longer the case. A reliable source told me that a step that sometimes delays the process is no longer required. Closings should now be recorded within 1-2 days after the condo has closed. Can a title agent elaborate on this for me?). Don’t take too much away from the low closing rate at Quantum on the Bay. I mainly included it to act as a stepping stone for next month’s update and let everyone know that it is now on my radar.
Plaza on Brickell – A Look Inside
This afternoon I was able to take a look at about 4-5 condos at Plaza on Brickell with potential buyers. The picture slideshow below will show you a bunch of pictures that I took with the camera on my phone. Keep this in mind because the quality is not that good.
We weren’t able to gain access to the swimming pool deck at Plaza on Brickell today but I was able to see it from a couple of the units that we saw.
Overall, I was impressed with the building and the condos that I saw today. I’ve mentioned before that the condos at Plaza on Brickell offer the best prices that you’ll find of the new developments in Brickell. There will finally be a more affordable option to buyers in Miami. Hopefully, within the next couple of weeks I’ll get some higher-quality pictures of Plaza on Brickell that I’ll post on this blog.
Plaza on Brickell vs. 1060 Brickell
Closings began within weeks of each other. The location is about the same, with Plaza on Brickell and 1060 Brickell each residing just across the street from one another on Brickell Avenue. So, which condo development represents a better buying opportunity? Plaza on Brickell or 1060 Brickell?
About a month ago, I stepped foot into each condo development and was able to take a tour through both Plaza on Brickell and 1060 Brickell. Below are my thoughts. I’d love to hear the opinions of others who also have been able to tour each condo development.
Layouts & Functional Space – I felt that the closet space in the units at 1060 Brickell were much too small. I’ve heard this complaint from several others who have toured condo units at 1060 Brickell. A year-round resident likely won’t have enough closet space in a condo at 1060 Brickell. I was actually pleasantly surprised by the large walk-in closets in condos at Plaza on Brickell. Several of the 2 bedroom units at Plaza on Brickell actually have large closets in both of the bedrooms. I also really like the floor-to-ceiling glass windows in the corner units at Plaza on Brickell because lots of natural sunlight shines through.
Views – The views are about the same since neither are waterfront condo buildings. However, condos located on high floors looking east at Plaza on Brickell have fantastic direct bay views with views of Biscayne Bay, South Beach, Fisher Island and the Atlantic Ocean. I’d have to give the edge to Plaza on Brickell on views.
Condo Finishes – I was actually very impressed with the finishes of condo units at Plaza on Brickell. The kitchen finishes were especially great. I prefer the dark cabinets but everyone has their own preference. I thought I’d like the finishes at 1060 Brickell equally, if not more than the finishes at Plaza on Brickell, but this was not the case.
Short-Sale at One Miami
Last night, I came upon a fantastic short-sale at One Miami. Not necessarily because of the price but because an agent finally did his homework.The listing says the following:
Property is being sold as short sale. All docs already submitted to the bank. Bank approved 272,000, less then 272K will not be considered by the bank.
This is the type of information that I want to see if I’m working with a client that wants to make an offer on a short-sale. I don’t want to waste my time submitting an offer on a short-sale that is going to take 4-6 weeks to be reviewed by the REO department and likely rejected. With a few exceptions, short-sales have been a complete waste of time for me. Hopefully, this will change in 2008.
If you’re a Realtor and have a client that wants to make an offer on a short-sale then make sure you know what the current owner paid for the property. If the current owner paid $400,000 and it is now listed for $200,000, then tell your client to move on and forget about it. As of right now, the banks, for the most part, won’t accept your offer. Why waste your time?
The banks may not want their listing agents to disclose that they are willing to accept “x” amount of dollars on a property because they are hoping that they’ll receive an offer that is greater. Get out of this mindset! Buyers are not stupid! The Internet is filled with a ton of housing information. In this market you won’t get anybody that is going to overpay for your property. Set a price and stick to it for a month. If you don’t get any interest then drop the price next month. Enough said?
Real Estate Connect – The Housing Debate: Bulls vs. Bears
I’m so glad that Brad Inman, of Inman News, posted the following video. This was hands down the most interesting discussion that I attended this past week.
The speakers on the stage were made up of the following:
- Andrew Ross Sorkin – Assistant Editor, Business & Finance, Chief Mergers and Acquisitions Reporter of the New York Times
- Dottie Herman – President & CEO of Prudential Douglas Elliman
- Barry Ritholtz – Chief Market Strategist, Ritholtz Research & CEO; Director of Equity Researh, Fusion IQ
- Noah Rosenblatt – Founder of Urbandigs.com/Licensed Real Estate Sales Person, Citi-Habitats
- Professor Nouriel Roubini – Co-founder & Chairman of RGE Monitor; Professor of Economics at New York University’s Stern School of Business
The most colorful speaker was by far Professor Nouriel Roubini. There were a few times where everyone in the room was saying to each other “I can’t believe he just said that”. He cracked me up because he was so matter-of-fact. That’s one person that I’d love to have a conversation with over lunch. Barry Ritholtz and Noah Rosenblatt were also very insightful.
I also love what Barry Ritholtz says about “anchoring”. Sellers need to detach themselves from anchoring and either delist their properties or be realistic in pricing their properties. What he has to say is so true. I’ve been saying this for months. The real estate market needs to hit the reset button.
Miami – I’m Baaaack
I arrived back into Miami last night. NYC was awesome and I was actually contemplating extending my stay until Sunday but I’m happy to be home. Being in Chicago and NYC for the past couple of weeks reminded me just how many people are in this world. Walking (or driving) the streets of Miami you kind of lose site of that after a while. Walking one city block of Chicago or NYC though and you regain that perspective.
The Real Estate Connect Conference was a good experience. I met a lot of great and insightful people and listened to some very intelligent keynote speakers. I’m not sure if the conference was completely worth the price to me but it was still a great experience and I have no regrets. I’m a very tech-savvy person though, so for a Realtor who isn’t tech-savvy this conference would pay for itself in spades.
I decided to install the “Recent Comments” plug-in onto my sidebar. (You’ll find it down the right-hand side of the screen). I’ve known about this plug-in since I began this blog but I never really liked the look of it. I’ve decided to install it regardless because I know that you all enjoy participating in the latest conversations. I’ll often receive comments on a blog post that I wrote 4-6 months ago. Unless you periodically check that post or happen to stumble upon it via a search engine, then you’ll likely never know about the latest comment on that post. The “Recent Comments” plug-in will reveal the latest conversations occurring on this blog.
Here are a few tid-bits of information:
- Plaza on Brickell will begin closings in the 901 tower within the next week. I think Plaza on Brickell is the most affordable new condo development on Brickell Avenue. About three weeks ago, one bedrooms started at $210,000. I’ve mentioned before that I feel that Plaza on Brickell will act as the buoy for the Brickell condo market. If any of you are strongly considering purchasing in Plaza on Brickell then let me know because I can now get you inside so you can preview the development and walk inside condos that you may have an interest in buying.
- Avenue on Brickell (1060 Brickell condos) will begin closings within the next 7-10 days. This means big competition between Avenue on Brickell and Plaza on Brickell since closings will begin around the same time. They are basically right across the street from one another. It will be interesting to see which offers a better product.
- As most of you already know, Bank of America purchased Countrywide Financial Corp. yesterday morning for $4B in stock (a total investment of $6B when considering its $2B investment in Countrywide in 2007). With this acquisition, Bank of America will overnight become the largest mortgage originator and servicer. BOA is acquiring a HUGE customer base from Countrywide. Countrywide, however, will have huge losses as a result of bad loans and their credit risk will now be passed along to Bank of America. On the bright side, as a few financial articles have pointed out, Bank of America will enjoy huge tax savings because of this acquisition. Bank of America, which has large annual profits will be able to offset these profits with big write-offs from Countrywide. Wall Street, however, didn’t particularly like the details of the acquisition as Countrywide lost a little over 18 percent of its value on Friday.
- The Brickell and Brickell Key Condo Indexes will likely return later this month. I have a million things to get done before that but I should be able to make the time to get that done. It’ll be interesting to see if anything has changed now that we’re a few months into our peak season in Miami.
- I plan to hire a professional videographer/editor within the next couple of weeks. Up to this point, I’ve done all the video work on my own. I’m just an amateur videographer though. Every listing that I get from here on out (and the ones that I currently have) will have a professionally made video tour. The quality will be much better than I could ever do. About 80% of the buyer leads that I get from this blog are from non-locals. I think video will help these out-of-state or out-of-country buyers tremendously when previewing properties. Many brokers may not agree, but virtual tours are a thing of the past. Video may be cost prohibitive to most Realtors when compared to virtual tours but I think the investment for me will separate me from the rest. I’m trying to find a reputable videographer/editor in the Miami area. If any of you know of one then please let me know. I don’t need a production studio but rather an individual who knows what they’re doing and can deliver great Internet-quality video. Also, if any of you developers that read this blog are interested in having your development showcased then let me know because I would love to get inside with a camera crew to tour the common areas and various units. It’s all about eyeballs these days. Get more eyeballs to view your development and you’ll get more closed sales. Miami real estate has become an international market. You’ll also gain insightful comments from visitors of this blog. You may hear someone comment “The lobby looks amazing!” or “The closets are way too small”. This is the feedback that you need to hear, even if you may not want to.
A Year in Review for the Miami Condo Investments Blog
As a year-end post, I decided to go through all of the posts that I’ve written about the Miami condo market in 2007 to highlight my five favorite posts. This blog was born on May 12, 2007, so it’s really a 7 1/2-month review. It’s amazing that I’ve been able to find the time to write 180 posts since that time. The following five posts weren’t necessarily the most popular, although a few were, but rather just my own personal favorites. These are the blog posts that I felt were both insightful and well written. Is there a Miami Blogging Pulitzer Prize in existence yet?
- Will History Repeat Itself in Miami? – October 28, 2007
- Advice to Miami Condo Sellers – July 26, 2007
- Miami Condo Auction a Big Disappointment – September 21, 2007
- An Analytical Analysis of Analyzing Condominiums – June 15, 2007
- Sunday Afternoon Bicycle Ride Through Brickell and Downtown Miami – October 14, 2007
The following was the runner-up:
- Crisis Looming in the Arts District of Miami? – May 29, 2007
I’d love to hear which Miami condo post was your favorite of 2007.
Miami Condo Developer to Miami Condo Vulture?
Earlier today, the South Florida Business Journal published an article entitled “Related Considering Fund to Buy-up Condos“. It reveals that Miami condo developer, Jorge Perez, is considering to create a fund to buy condos throughout Miami at a discount. The article states that a source disclosed that the funding would come from Latin America.
Much of the The Related Group’s condo inventory is located in Brickell and Downtown Miami. Jorge Perez, CEO of The Related Group, recently stated on NBC6 that his only regret is not buying more land around his first condo development, One Miami. While many condo developers in Miami are now regretting ever getting into the mix, Jorge Perez regrets not buying and developing more land.
As the article points out, I think there will be a [huge] conflict of interest if Jorge Perez’s fund acts to buy defaulted condos that arise at Related developments throughout Brickell and Downtown Miami. I don’t think the banks that loaned the money to The Related Group will find the situation too appealing. I, for one, would feel a bit suckered. Additionally, buyers who do close on condos in Related developments might feel a bit suckered as well if they later hear that the developer himself acted as a principal to buy defaulted condos at much lower prices.
