I’m an avid reader of anything to do with search engine optimization (SEO). The algorithms involved in producing search engine result pages (SERPs) fascinates me. I haven’t hired any outside companies to do any of the SEO work for my site. My blog has done the work for me. I began my blog a little over three months ago and the results that it has produced with the search engines in that short time span is amazing.
If you type in “Miami Condo Foreclosures” into Yahoo my sites appear as the first, second, fourth and eighth results on the first page.
The results on Google aren’t as great but they still drive a lot of traffic to my blog. You will find my site by clicking on the fourth, sixth, eighth and ninth links on the first page of Google when typing in “Miami Condo Foreclosures“.
Surprisingly, the search results for “South Beach Condo Foreclosures” on Google is much better. I know that there is a lot of weight placed on key words used in the URL and “South Beach” doesn’t appear in my URL. So, I was shocked that “South Beach Condo Foreclosures” would have my site ranked higher than “Miami Condo Foreclosures” since keywords such as “Miami” and “Condo” appear in my URL. This is probably due to the fact that the keyword “Miami” has more competition than the search term “South Beach”. You will be led to my site by clicking on the first, second, fourth and fifth links that appear on the first Google result page after typing in “South Beach Condo Foreclosures”.
After this post, I’m sure that my site will hold even more relevance to the search terms cited above so you’ll probably find that my site appears even higher in the rankings than what I’ve noted.
2 Bedroom Foreclosure at Carbonell in Brickell Key
There’s a 2 bedroom/2.5 bath foreclosure that just became available over the weekend at Carbonell in Brickell Key. Built in 2005, Carbonell is Brickell Key’s most recent addition. The foreclosure unit is the best priced 2 bedroom unit in the entire building by quite a lot. It is listed at $649,900. The next best priced 2 bedroom at Carbonell is listed at $799,000. It is a bank owned property. Tax records show that there was an original mortgage on the property in the amount of $700,000. At the time of repossession, the mortgage amount owed was $699,627.
The foreclosure unit has 1,558 square feet of interior space, which equates to about $417 per square foot. The next best priced 2 bedroom condo at Carbonell is listed at $544 per square foot, located on the sixth floor, or one floor above the foreclosure unit. Taking a look at the Miami Condo Index for Brickell Key in June 2007 will reveal that Carbonell had an average list price of $592.56 per square foot, while having an average sales price $473.04 per square foot over the preceding six months.
In my experience, I’ve seen banks willing to accept what might seem like a crazy offer just to get the property off of their books. This could be a great opportunity to own a 2 bedroom at Carbonell for under $600,000. This past March, a 2 bedroom/2.5 bath sold for $700,000. It was located in the same line as the foreclosure unit, exactly one floor above it.
Update: Price was reduced to $634,900 on July 26, 2007.
Flashback to 1983
Yesterday I was given the link to an interesting news article that was published in The New York Times on March 21, 1983 entitled, “Auctioneer’s Gavel Finally Moves Luxury Condominiums in Miami”. You can find that story below or by clicking the link above:
Three hundred people spent a sunny afternoon today in the shade of a big white tent listening to the patter of an auctioneer hawking luxury condominiums, many of which were sold at discounts of 30 to 45 cents on the dollar.
As the market for luxury condominiums remains soft, more developers are taking this route to dispose of their inventory to cut their losses.
About 60 units were sold for $125,000 to $190,000 in the first day of a four-day auction at Biscayne Cove, a luxury high-rise complex overlooking blue waters, nestled among other luxury dwellings in North Miami Beach.
“We decided to auction off and give the people a bargain,” said Morton Littlemen, a representative of the developers. “We want to give the people a condominium they can afford to own.”
One two-bedroom penthouse that was originally offered for $248,000 was sold for a high bid of $150,000. Condominium prices in the two-building complex range from $100,000 to $334,000.
Biscayne Cove is the fifth such auction that Martin Higgenbotham, an auctioneer, has handled in the last year for the developers, subsidiaries of Cadillac Fairview Corporation and Southeast Florida Properties. It is, Mr. Higgenbotham said, the largest single condominium auction in Florida: 225 units on the block at a value of $46 million. It is more than the total of 152 units sold at the other four complexes in Miami Beach and Hallandale.
The condominium auction business has been “heavy,” Mr. Higgenbotham said. In the last 12 months his company has sold about 1,000 condominiums at auction. Previously it handled 250 units in an average year.
The decision to auction the properties was not taken lightly, according to Lewis Goodkin, a real estate consultant whose firm conducted a marketing study for Biscayne Cove and recommended the auction for fast results. “The purpose is, let’s get out of this stuff and let’s get out of it fast,” he said. Normal advertising and deep discounting is “like a prolonged agony.”
Mr. Goodkin’s study concluded that, even under good conditions, it would take three years for the market to absorb existing inventory and that it did not pay for developers to hold onto the property. “We have in Miami today the most overbuilt luxury condominium market in the country,” Mr. Goodkin said.
He foresaw more auctions of this magnitude. “When the last recession hit us, we had a lot more inventory, but the inventory was more affordable,” he said. “A tremendous number of the public could respond. It could be absorbed. Today, our big invetory is in the luxury ranges where the market is not deep and you don’t have the response from the South American markets because their economy is weak or low.”
While the glut is most severe in Miami, it is not exclusive to this area, Mr. Goodkin said.
Is this the fate of the luxury condo units that will come to market in the next 12-24 months in Miami? 20,000! That is the number that has been thrown around for the number of new condo units that will close in 2007 and 2008. It is difficult to imagine that a supply of that magnitude can be absorbed in such a short period of time. It will be interesting to see what percentage of people walk away from deposits rather than close. If a significant portion walk then developers will likely be forced to take immediate action which could recall memories of 1983.
Foreclosure Listings at Vue at Brickell Doubles in Three Weeks
On May 24, 2007 I posted an entry entitled, “Vue at Brickell – Overpriced or Insanely Overpriced?“, in which I questioned the average price per square foot of the condo units at a building called Vue at Brickell. I surmised that mortgage fraud may have been partly at fault for prices at Vue at Brickell reaching such irrational levels.
At that time there were three listed foreclosure units in the building. Now, there are a total of six. In three weeks the number of the listed units that are currently in the foreclosure process have doubled. Those are just the ones that are listed. I’m sure there are others. Below you will see those six listings, as well as relevant property information.
(FL#=floor number, #BEDS=number of bedrooms, #FB=number of full baths, #HB=number of half baths, LA=living area square footage, LP$=list price, LP$/SqFt=average price per square foot, #GAR=number of parking spaces, WTRFR=waterfront?)
I find it humorous that two of the listings categorize Vue at Brickell as being a waterfront building. It is far from being a waterfront building.
As you can see, the average price per square foot of the listed foreclosure units at Vue at Brickell is currently $475.81. The non-foreclosure units in the building have a much higher price per square foot. Only one of the six listings penetrated the $400 per square foot mark on the downside. Mark my words, within 18 months the majority of condo listings in Vue at Brickell, both foreclosure and non-foreclosure, will be under $400 per square foot. The availability of such a large number of newly constructed condo units within the next 18 months, in much higher-end buildings, will be the driving force. These buildings already offer price points below $400 per square foot and the growing supply will push those prices even lower.
It now more important than ever that you research various buildings in the neighborhood and receive a comparative market analysis when making a home purchase to ensure that you are making a wise investment. You know what they say…”Buying a home is the most important investment that you’ll make in your life”.
Short-Sale @ Courvoisier Courts in Brickell Key
There’s a 2 bedroom/2 bathroom short-sale opportunity at Courvoiser Courts located in the exclusive neighborhood of Brickell Key. The condo has 1,236 square feet of living space and a 95 square foot balcony. The condo, located on the 24th floor, faces northeast and has partial bay views from the balcony. It is the best priced 2 bedroom in the building at a list price of $450,000, or $364 per square foot. There’s a 2/2 currently available at Courvoisier Courts in the same line as the short-sale unit that is listed at $499,000. It is located 7 floors lower. There’s another available condo located 14 floors lower that is listed at $529,000.
Courvoisier Courts was converted from apartments to condominiums at the beginning of 2006. The building was originally built in 1997. Courvoisier Courts offers fantastic amenities which includes: full-service concierge, 24-hour security, fully equipped business center, bi-level fitness center, racquetball/squash courts, bayside swimming pool and sundeck, club room with billiards table, theater room, and valet parking. Courvoisier Courts has a total of 272 condo units in the building. The picture slideshow below will show you some pictures of the building and amenities at Courvoisier Courts.
Because Courvoisier Courts is such a recent conversion, there aren’t many 2 bedroom resales to use as comparables. There is one closed sale and two pending sales. The closed sale is not an adequate comparable, however, because it is a penthouse unit with 13 foot ceilings and has great water views. That unit sold for $568 per square foot. The two pending sales are better comparables but still need to be adjusted because of the bay view offered by those two condo units and the extra half bath. Those condo units were listed for $555,000 and $575,000 before an offer was accepted, or $441 and $446 per square foot, respectively.For those of you who don’t know, Brickell Key is a 44-acre triangle-shaped island situated just east of the heart of Brickell. It is well known for being a highly exclusive neighborhood with brick-paved roads and is home to the world famous Mandarin Oriental Hotel.
Contact me for more information regarding this short-sale.
Crisis Looming in the Arts District of Miami?
I busted out my camcorder today and headed out to beautiful Margaret Pace Park to take in the nice Memorial Day scenery. Okay, okay…so I had another agenda on my mind. I wanted to give everyone a firsthand look at the condo developments in Edgewater Miami along North Bayshore Drive.
Margaret Pace Park is a large park situated along Biscayne Bay from NE 17th Street to NE 20st Street. (The picture above doesn’t quite encompass the entire park). A variety of activities can be enjoyed there such as tennis, volleyball, basketball, running/walking/jogging, BBQing and condo construction watching. Along this park, from NE 17th Street to NE 20th Street, there are three major condo developments under construction: Opera Tower, The 1800 Club and Quantum on the Bay. Combined, these three condo developments will bring a total of 1,856 new condo units to the Miami real estate market by year’s end. That is just within three blocks! The picture slideshow below will show you a variety of pictures that I took of these three condo developments. The video footage that I shot can be found at the end of this post.
OPERA TOWER Opera Tower, located on the corner of 17th Street and North Bayshore Drive, will bring a total of 635 new condo units to the Miami real estate market. Closings are scheduled to begin in July.
THE 1800 CLUB The 1800 Club, which stretches from 18th Street to 19th Street along North Bayshore Drive, will bring a total of 469 new condo units. Closings are likely to begin around September.
QUANTUM ON THE BAY Quantum on the Bay, which is comprised of two towers and stretches from 19th Street to 20th Street along North Bayshore Drive, will bring a total of 752 new condo units to the Miami real estate market. Closings will likely occur by year’s end.
Last week, The New York Times published an article entitled, “As Condos Rise in South Florida, Nervous Investors Try to Flee”, which discusses how panicked investors are increasingly looking for ways to get out of their preconstruction contracts. When those hopes vanish, many end up walking away from hefty deposits. The article notes that an attorney in Boca Raton, Florida receives two to three phone calls a day from investors looking for some way out of their contract. A second attorney, working on behalf of developers in Miami, also added that “in some projects, up to 20 percent of buyers want their money back”. The article states that 8,000 new condos units are expected to be completed by the end of the year in Miami-Dade County alone. Another 12,000 condo units are expected to be completed by the end of 2008.
It seems that Opera Tower, The 1800 Club and Quantum on the Bay will represent a little over 20 percent of the 8,000 new condo units mentioned in the article for 2007. That is a huge chunk, especially when those units are located within three blocks of one another.
There will definitely be some great deals available in the coming months in Edgewater, as well as other Miami neighborhoods. I will do my best to report these deals as I find them. If you, or anyone you know, purchased a preconstruction condo and is looking to find a replacement buyer to close, please feel free to contact me.
The video below will show you the footage that I shot of Opera Tower, The 1800 Club and Quantum on the Bay. Notice how close the buildings are to one another.
The following is a video of Margaret Pace Park. The park runs along Biscayne Bay, so any condo units facing east in any of the buildings directly across from the park will have unobstructed water views.
A short-sale at Neo Vertika just came 0nto my radar yesterday. It is a one bedroom flat with 638 square feet of living space. It has parquet wood floors and is currently tenant-occupied. This condo unit, located on the 10th floor, faces south and overlooks the swimming pool and amenity deck. At a list price of $260,000, it is currently the third best priced unit in the building, but still has room for a few more price reductions before it is snagged by an investor. The great thing about a short-sale is that you are dealing with a bank. Banks hate having bad loans on their books and risk having the property go to auction where they could lose a large portion of the outstanding loan. With foreclosures on the rise, banks have become more open to accepting significant discounts on properties so they can write off the bad debt and avoid foreclosure. It wouldn’t surprise me if this one goes for around $200,000.
The maintenance on this condo unit is $322 per month. I’m trying to find out how much the current tenant is paying but units of this size tend to get anywhere from $1,250 to $1,450 per month in rent. I am going to try to see this condo in the next couple of days to take some pictures and a quick video so I can post it for everyone to see.
Neo Vertika was built in 2006 and has a fabulous lobby and amenities. There have been some construction issues that have tainted the building in the past 6 months but it is currently one of the best priced buildings in Brickell for sales and rentals. It is located along the Miami River and southwest 1st Court. Many of the condo units at Neo Vertika offer great views of Biscayne Bay and the Miami River. Neo Vertika is considered a loft building, with both flat-level and split-level floor plans which have 10-foot and 20-foot ceilings, respectively.
The video below will show you the common areas and amenities at Neo Vertika.
The Wall Street Journal, this past week, published an article entitled “Securing a Loan Gets Tougher as Lenders Tighten Standards”. The opening two paragraphs are as follows:
Mortgage lenders are beginning to scrutinize borrowers more closely, causing some loan applicants, even those with good credit, to face higher costs and more hassles.
As the number of delinquent mortgages climbs, lenders have tightened their standards for issuing loans, including such well-publicized moves as raising minimum credit scores and cutting back on 100% financing and low-documentation loans. Now, some lenders are probing more intently would-be borrowers’ finances. They are taking a tougher look at how much the property a borrower wants to buy is worth. They are peering further into clients’ pasts for credit problems and requiring more in-depth reviews of borrowers who say they are self-employed. Some lenders are taking a harder stance when it comes to whose credit score a couple can use when applying for a mortgage, rather than simply allowing them to use the higher of the two scores.
A few days ago, I had a conversation, via email, on this very topic with a friend of mine who is a mortgage broker in Miami. One of my earlier blogs entitled “Vue at Brickell – Overpriced or Insanely Overpriced?” was what initiated this conversation. A few of his comments are below:
So you know, most lenders will not do anymore loans in Brickell, especially on investor stuff. All of the new buildings will have problems in the next few years. There was just so much fraud there.
My Opinion: 99% of lenders these days will only lend on the last MLS price, not the appraisal like they did in these cases. Also in Brickell they will do appraisal reviews and BPO’s to be sure on any borrower with less than stellar credit and a 20% down-payment. The cash back deals are still occurring, and the fraud line is getting blurred. So you know the current state of things, if the borrower is being approved by the lender on the MLS price, and they are not falsifying any of the loan criteria that makes them “approved” by the lender for the transaction then there is no fraud. Even if the seller decides to give some cash back to the borrower -typically structured to a third party company (aka the borrower), this is technically not illegal, because the cash back did not affect the underwriters decisions and the borrower was truly qualified and the price was justified by the MLS (market) and the appraisal. So what is occurring is sellers are giving cash to the borrower after the sale, which legally they are allowed to do. Gray area of the law -Yes, and this is occurring rampantly today. There are hundreds of investor buyers – maybe they learn from some info-mercial somewhere about this – I don’t know- but I am called every month from new clients with these “legal” deals. In my opinion the Developers are in the fray on this type of deal with leasebacks, mortgages ad to pay your bills for up to 2 years and cash back at closings this “legal” way. What you will find is this type of thing is “propping up” the market in the short term and creating false market conditions due to buyers paying more in expectation of a large cash back to financially carry the property – or receiving their “profits” on the front end and leaving town or the country. My forecast, is that the lenders will begin to audit buyers and especially the 1 payment default foreclosures for this type of dealing and press the state of Florida to amend laws and prevent this type of dealing. Today its a loophole, I foresee in a year after the scams take their toll, this will also be an issue in the news and another result in excessive foreclosures.
This is very bad news for investors who bought preconstruction condominiums in some of these buildings that are due for completion in the next two years. Many have feared that a large percentage of these investors will be unable to close on their condo units due to the financial burden of having an extra mortgage. Now, if banks are unwilling to underwrite investment loans, there becomes a fear that people will be unable to close because financing will be unobtainable. People will have no choice but to walk away from their deposits, which in most cases amounts to 10%-20% of the purchase price. Developers will have no choice but to offer significant incentives or slash their prices on the remaining condo units in their inventory that were unable to close. Either action will likely bring down prices in surrounding buildings and have a negative impact on the entire real estate market of that neighborhood.
Short-Sale Opportunity in Brickell
Short-Sale Opportunity in Brickell
There’s a good short-sale opportunity in Brickell in a development known as Brickell on the River. The building is fairly new, having been completed in 2006, and has amenities which include: valet parking, a tri-level state-of-the-art fitness center, business center, 24-hour security, concierge, swimming pool, hot tub and club room. The monthly association fees also covers basic Cable TV, DSL, water, sewer and garbage.
I took a look at the unit in question last night and was very impressed with what I saw. Click on the thumbnails above to see full-size pictures of the actual unit. The 1 bedroom/1 bathroom condo located on the 27th floor has 775 square feet of living space, a balcony, stackable washer/dryer, stainless steel appliances, track lighting, blackout blinds, marble floors in the bathroom and hard wood floors throughout the rest of the unit. The unit faces west and has great views of the sunset and the boats passing by along the Miami River.
The current owner is in the foreclosure process and the bank has decided to accept short-sale offers. The owner paid $341,000 for the unit in September 2006 and it is currently listed at $280,000. I took a look at the closed sales in the building for the past six moths for 1 bedroom units with the same floor plan. There were only two closings for 1 bedroom units with the exact same floor plan as the unit in question. Both units were sold “decorator-ready” which means that the unit was sold without any flooring, light fixtures or window treatments. The first unit is located on the 12th floor and sold for $290,000 in February of this year while the second unit is located on the 16th floor and sold for $325,000 in December 2006. Keep in mind that the foreclosure unit is fully decorated and doesn’t require any additional money to make the unit complete. I am relatively confident that the bank would accept an offer in the ballpark of $240,000 to $250,000.
The unit is currently occupied by a tenant who is paying $1,650 per month. The lease ends at the end of July but the tenant has made it clear that he would be willing to terminate the lease early if the buyer is looking to occupy the property prior to the lease termination date. The maintenance fee is $440 per month.
Feel free to call or email me with any questions that you might have.
Judgment Day Just Around the Corner for the Miami Condo Market
There are a number of premier condo buildings that are scheduled for completion in the next six months throughout Miami. These include, but are not limited to, the following:
It will be interesting to see, in the coming months, where prices will go from here. The number of distressed properties has been climbing throughout Miami-Dade County and that number should escalate as these new units hit the market. A year ago properties in Miami were selling like hotcakes. 12 months later the market has cooled considerably in Miami, as has the overall national real estate market. Vulture capitalists have been circling the skies of Miami for over two years, waiting for the right moment to swoop in and scavenge the real estate market here in Miami. 12 months ago vulture capitalists were told that their moment would never come as some real estate markets, throughout the United States, turned in double-digit growth. However, the next six months might be just the moment that they have been waiting for as national foreclosure filings has increased 35 percent over the previous year, according to RealtyTrac. Coupled with the increasing number of new properties that will come on board in the coming months, Miami may be ripe for the picking. The question is “Will the vulture capitalists provide a cushioned bottom for the inevitable judgment day that awaits the condo market?”. “Can their deep pockets provide the support that this market needs or will we find out just how deep the rabbit-hole goes?”
As the day of judgment comes we, here at Miami Condo Investments, will be ready to seek out the best opportunities and pass them along to our faithful blog subscribers. We plan to provide a complete analysis on all condo investment opportunities that meet our criteria, along with a comparative market analysis, pictures of the properties and, in some cases, video so our subscribers can fully grasp the opportunity.
