On May 24, 2007, I wrote a blog post entitled “Vue at Brickell – Overpriced or Insanely Overpriced?“. At the time, the average list price of condos available at Vue at Brickell was over $550 per square foot. As many of you now know, and as the blog post explains, the inflated list prices were a direct result of the rampant mortgage fraud that occurred in the building. Since that time, as more and more people became aware of the situation and as a large number of foreclosures in the building hit the market, prices at Vue at Brickell have come down like a ton of bricks.
There are now indications, however, that prices at Vue at Brickell may be close to reaching the bottom. Buyers are finally stepping in. Since the last week of January, there have been 7 condos at Vue at Brickell that went pending. With list prices of $190,000-$199,900 for 1 bedroom condos and $220,000-$249,900 for 2 bedroom condos, it makes sense that buyers are now beginning to accept the risks associated with buying a condo in a building that has a high number of foreclosures. It will be interesting to see the sales prices of these condos at Vue at Brickell once they close. It’ll give us a better indication as to the level of motivation of some of these banks.
Below you’ll find the best deals at Vue at Brickell:
1 Bedrooms
Unit 2111 – short-sale – $162,500
Unit 1710 – short-sale – $162,500
Unit 1211 – short-sale – $162,500
Unit 1413 – short-sale – $162,500
Unit 2307 – foreclosure – $205,000
2 Bedrooms
Unit 1303 – short-sale – $229,900
Unit 1505 – short-sale – $250,000
Unit 1304 – short-sale – $279,900
3 Bedrooms
Unit 3006 – short-sale – $357,000
Unit 3606 – foreclosure – $379,900
The mortgages of three of the four short-sale one bedroom units listed for $162,500 are held with the same lender. This may be an opportunity for an investor to grab all three for a bargain-basement price. There are currently only 8 condos available for rent at Vue at Brickell. Within the past 12 months, the lowest that a one bedroom has ever rented was $1,300 per month. The lowest that a 2 bedroom rented was $1,550 while 3 bedrooms condos bottomed at $2,500 per month.
Ten Museum Park Revisited
Ten Museum Park was one of the first major condo buildings in Miami to hit the market within the past year. Closings began at Ten Museum Park, almost nine months ago, on June 14, 2007. I thought this would be a great opportunity to revisit Ten Museum Park to see what type of activity its seen since then.
As of today, according to public records, Ten Museum Park has been able to close exactly 75 percent, or 150, of its 200 total units since closings began in June 2007. It’s been a long and winding road to reach 150 closed units. I wonder how long it will take to close out the last 50.
Let’s take a look at the active listings for sale at Ten Museum Park. There are currently 63 active listings in the building at this time.
1 Bedroom units (868 square feet)
05 line (9 listings) – $355,000-$475,000
08 line (10 listings) – $358,000-$560,000
2 Bedroom units (1,239 square feet)
06 line (9 listings) – $458,000-$680,000
07 line (6 listings) – $440,000-$690,000
2 Bedroom units (1,949 square feet)
02 line (8 listings) – $785,000-$1,495,000
03 line (7 listings) – $798,000-$995,000
2 Bedroom units (1,906 square feet)
01 line (6 listings) – $895,000-$1,350,000
04 line (6 listings) – $895,000-$1,385,000
4 Bedroom units (4,500 square feet)
Penthouses (2 listings) – $3,200,000-$3,400,000
There hasn’t been much resale activity since Ten Museum Park began closings. There’s been a total of 3 closed sales in the MLS since that time.
Unit 1105 sold for $295,000 on January 3, 2008
Unit 3408 sold for $350,000 on January 25, 2008
Penthouse 4203, with 4,000 square feet, sold for $2,200,000 on January 31, 2008
Activity seems to have picked up a little, however, as there are currently 4 pending sales at Ten Museum Park.
Unit 1107 was listed for $455,000 and went pending on January 30, 2008
Unit 3706 was listed for $475,000 and went pending on February 2, 2008
Unit 2704 was listed for $748,900 and went pending on February 7, 2008
Unit 1901 was listed for $975,000 and went pending on February 2, 2008
I haven’t been to Ten Museum Park within the past three weeks but I have heard that the fitness center is finally under way. I’ve also heard that work has begun on the Clinique La Prairie Spa and that it should be completed in about six months. I think everyone would agree that these amenities are long overdue. I know of 3 buyers who have been patiently waiting for this work to get done. I’m sure there are many other buyers patiently waiting as well.
Coming Soon: Sushi Siam at Plaza on Brickell
Last week I noticed the above sign, “Coming Soon: Sushi Siam,” as I drove by Plaza on Brickell. This is great news not only for Plaza on Brickell but also the entire neighborhood of Brickell.
Sushi Siam is a very well known sushi restaurant located on Lincoln Road in South Beach. I find it very interesting that more and more establishments are deciding to expand their operation from South Beach into Brickell. A few years ago, Novecento, a restaurant and bar, made the expansion move and recently we saw Segafredo Cafe, a restaurant and lounge, make the move as well. It shows me that these establishments are quite confident that Brickell already has enough year-round residents to justify such an expansion. (I just wish Lime Fresh Mexican Grill would make the jump as well. I heard a while back that they committed to opening their third restaurant at Midtown Miami though.)
Eventually the commercial spaces found on the ground level of the new condo buildings in Brickell, such as Plaza on Brickell, will be a natural extension of Mary Brickell Village, with new retail stores and restaurants. That’s when we’ll really start to see the foot traffic in Brickell.
By the way, I was digging through some old pictures that I took in July 2005. Remember what Plaza on Brickell consisted of back then?
Blue Condominium – 1 Bedroom/1.5 Bath Foreclosure – $229,000
I was stunned when I saw this foreclosure listing at Blue Condominium. $229,000 for a 1 bedroom condo at Blue Condominium!!! In 2006, this unit would have likely been priced for around $380,000. The MLS listing shows it to be a 1 bedroom/2 bath condo but I don’t think that information is accurate, unless the owner added a second full bathroom. It is most likely a 1 bedroom/1.5 bath condo. The listing also makes no mention of it being a foreclosure but I looked it up and it is owned by Deutsche Bank.
This is a great buy for someone who is looking to purchase a 1 bedroom condo in a high-end waterfront condo building in Miami. The location may not be that great (the northern end of Edgewater Miami) but that is already reflected in the price, in my opinion. If this condo sells for around $200,000 then we’re now talking break-even cash flow with 20 percent down. I haven’t heard the term “break-even cash flow” for quite some time. Is that where prices are headed? I think we all know the answer.
Take a look at the Blue Condominium rental listings to get an idea of the type of monthly rent that this condo would bring. Feel free to export the listings to Microsoft Excel by clicking the “Export” link at the top of the grid.
By the way, for those of you not local to Miami, the highway in the picture above takes you right into Miami Beach.
Miami & Miami Beach Condo Trends – February 2008
Below, you will find the Miami-Dade County condo inventory and months of supply figures for February 2008. The first box to the left reveals the total number of condos that are currently available for sale on the MLS throughout Miami-Dade County. The second box discloses the total number of closed sales that occurred in the month of January 2008. The third and fourth boxes show the months and years of condo supply in Miami-Dade County. As you can see, the figures are also subdivided into various price ranges to reveal which part of the condo market has been affected the most.
Since the January 2008 update, the overall condo supply in Miami-Dade County has increased about 10.3 percent. Most the increase, however, was due to a 25.1 percent increase in the $0-$249,999 price range, where about 41 percent of the overall condo inventory resides. The $250,000-$499,999 and $500,000-$999,999 price ranges had slight increases of 4.5 percent and 2.8 percent, respectively. The $1,000,000-$2,499,999 price range had a big drop of 25.6 percent and the $2,500,000-$4,999,999 price range had an even bigger drop of 39.8 percent in its condo supply.
As many would expect, the lower part of the market is experiencing the most problems, mainly due to it now being much more difficult to obtain financing for those looking to buy in this segment of the market. Those in the market to buy a condo for over $1M, oftentimes, can do so without any financing whatsoever.
The following statistics encompass only those condos located throughout Miami (not other areas of Dade County such as Miami Beach, Aventura, Sunny Isles Beach, etc.):
Miami has continued its upward climb in condo supply this month with a 24.3 percent increase since last month. Again, we see that the lower and upper parts of the market have performed quite dissimilarly. The condo supply in the $0-$249,999 price range has increased 20.6 percent while the $250,000-$499,999 price range has gone up a shocking 62 percent. On the flip-side, the condo supply in the $500,000-$999,999 price range has gone down 26.7 percent and the $1,000,000-$2,499,999 has dropped almost 50 percent.
The following statistics encompass only those condos located throughout Miami Beach:
Overall, Miami Beach experienced a 19 percent drop in its condo supply levels since last month. I was a bit surprised but I probably shouldn’t be. Miami Beach did not come close to experiencing the level of development that we recently saw in Miami. Foreign and out-of-state buyers are also much more likely to buy a condo in Miami Beach than they are somewhere in Miami. I think we will continue to see a widening gap between the Miami and Miami Beach condo supply figures in the months ahead.
Miami Condo Market Highlighted by the Major Media
Kevin Tomlinson, of the South Beach Condo Blog, hit a home run yesterday with his post entitled “All You Ever Wanted to Know About Miami & Miami Beach Real Estate: A Video Round-up”. The “Today Show” was in sunny Florida yesterday morning to report about the Miami and Miami Beach real estate market along with Barbara Corcoran, the queen of real estate. Barbara’s words are highly regarded in the real estate industry, so be sure to watch the video to the end to hear what she has to say.
Miami has evolved over the years. It was once regarded by many as a flashy and dangerous place to visit. It still remains flashy but it is no longer considered dangerous. The following video portrays the new Miami:
Prices have come down 25-30% since late 2005 to early 2006. Recently, some foreclosures have been purchased at a 50 percent discount. I receive phone calls every day from investors and end-users who want to buy at 50 cents on the dollar. If they want to buy at a 50 percent discount from today’s prices then forget about it. That would amount to buying at 25 cents on the dollar from the height of the market. There are now opportunities to buy at 50 cents on the dollar from 2005/2006 prices.
Foreign Buyers Finding Deals in the Miami Condo Market
On February 20, 2008, Reutors published an article entitled “Miami Condos are ‘for sale’ for Foreign Buyers“. The article discusses how foreign buyers are stepping in to buy condos at a discount in Florida, where prices have dropped “20 to 30 percent”. The appreciation of their currency is another motivating factor in their decision to buy Miami condos. The story particularly focuses on Canadian buyers, who have a particular interest in buying within the United States, because the Canadian Dollar “has gained 25 percent against the greenback in the last two years”. The article also discusses that these buyers are willing to pay for these condos with cash.
I, for one, have met with a large influx of foreign buyers within the past six months from countries such as Ukraine, China, Russia, Canada, England, Italy, Germany, various countries in South America and territories of the United States, such as Puerto Rico. Many of these buyers came prepared to pay for South Florida condos with cash. In fact, two of the three pending sales that I have scheduled to close in March are cash deals, with no financing contingencies. Great deals in beachfront condo buildings are exactly what these foreign buyers have in mind.
The Reuters article also revealed the following which I found very interesting:
In a study by the National Association of Realtors last year, Florida was the top destination for foreign buyers, accounting for 26 percent of all transactions, ahead of California at 16, Texas at 10 and Arizona at 6 percent.
More than 7 percent of all Florida homes were sold to foreigners, the study found, and 65 percent of Realtors said they had brokered at least one foreign deal.
I would think that Miami homes sold accounted for much higher than 7 percent since Miami should have a much larger percentage of foreign buyers than the rest of Florida.
I’d also like to note that new buyers for Miami condos aren’t only coming from countries abroad. I’ve also found buyers from New Jersey, New York, California, Illinois and Texas. I will admit that local buyers remain a very small percentage of my overall business. In a nutshell, if I had never started this blog I’d probably be out of business. This blog allows me the opportunity to reach people all across the world (including the two people in Ethiopia and Afghanistan who found my site within the past week, according to Google Analytics). The Miami condo market is not a local market…it is a global market. It may not seem cheap to local buyers, but to foreign buyers Miami and Miami Beach condos are bargains to them.
New Miami Condos – Closing Rates for February 2008
This month, I decided to make two separate graphs to show the percentage of total units that each development has closed since closings began. The first graph, found immediately below, reveals the closing rates for Miami condos which had their first closing prior to November 1 2007. The condo developments are also now ordered according to when closings began, with the first to the left.
Below you will find the date that each condo development in the graph above began closings:
Not much has changed with this group of condos since the last update was provided in January. Ten Museum Park and Latitude on the River inched up about 2-3 percentage points. Star Lofts on the Bay remained the exact same and Onyx on the Bay was able to close one additional condo. The Loft Downtown 2 moved up a little over 5 percentage points and 50 Biscayne moved up almost 7 percentage points. A few different sources have told me that there have been about 200 defaulted condos at 50 Biscayne. This is in line with the 239 condos that are currently unaccounted for according to public records. Several people have left comments here stating that the developer has chosen to lease many of the defaulted condos and ride out the storm rather than sell to a bulk buyer. I’m sure other developers will follow suit, which will decrease the expected inventory levels for a few years.
Below you will find the date that each condo development in the graph above began closings:
The graph above includes a group of condos which began closings within the past three months. I was surprised to see that 1800 Club has fared the best, although it should be noted that it did begin closings first amongst this group. Brickell on the River 2 has made much progress since the end of January when closed condos represented about 4 1/2 percent. Quantum on the Bay has done well considering that it has only received a TCO on the first of its two towers. Driving by a few times within the last couple of weeks, I did notice more lights on at night than one would expect from a condo development that just started closings about a month and a half ago. Same goes with 1800 Club. With a closing rate of about 20 percent, Apogee South Beach is off to a good start. Prices there start at about $2.5M. Plaza on Brickell has also only received a TCO on the first of its two towers. We should see much improvement from most of the condo buildings in the above group within the next month or two.
You may have noticed that One Bal Harbour and Midtown 2 are not found in this month’s update. I chose not to include One Bal Harbour because the Regent condo-hotel units have now begun closings and I did not want to intermingle the two. I do know, however, that WCI Communities has been quite successful in closing units at One Bal Harbour. They’ve closed around 150-155 condos out of a total of 185. I also know that several have been reassigned and are currently under contract. I expect WCI to have only a couple developer units left at One Bal Harbour by the end of March.
I didn’t include 2 Midtown because I noticed that a bunch of deeds have been re-recorded there. It would have taken me forever to sort through that mess. The following was written along the left-hand side of the re-recorded deeds: “This deed is being re-recorded to correct vesting on title”.
Disclaimer: The above closing rate information was derived from public County records. There can be a 2-3 week delay from the time that a closing occurs and the time that the closing gets recorded.
Marina Blue – Closings to Begin This Week
The moment has finally arrived. Closings will begin at Marina Blue this week. I’m not quite sure which exact day they will begin but I know someone who has his closing scheduled for this Friday morning. My guess is that the first closing took place earlier today though.
I’ve been looking quite forward for Marina Blue to be completed. Architecturally, Marina Blue is my favorite of the new buildings that have arrived on the Miami condo market within the past 12 months, and of those that will arrive within the upcoming 12 months. Marina Blue is very impressive to look at while driving down Biscayne Boulevard or driving west over the MacArthur Causeway.
Everyone already knows that the views from within the Marina Blue condos are going to be some of the best in Miami. I can’t think of one other building in Miami that offers unobstructed, direct bay views from EVERY unit in the building. (Someone help me here…there has to be at least one other building in Miami that offers this). The 12 line may have slightly obstructed views but this remains to be seen.
If Marina Blue ends up meeting just 90 percent of everyone’s expectations then I think it’s going to be a winner!
