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!
Say It Aint So “O”
Yahoo News! reported earlier today that there are rumors that Shaquille O’Neal will be traded to the Phoenix Suns. I hope these rumors don’t prove to be true but it does sound like the Miami Heat will part ways with Shaq in the near future. I think everyone will agree that Shaquille O’Neal has been a great addition to the Miami community. He will definitely be missed.
Shaquille O’Neal’s Miami luxury home on Star Island, is currently on the market for $32M. There were rumors on November 1, 2007, from the South Beach Real Estate Blog that Alex Rodriguez was looking to buy Shaq’s humble abode. I heard from other sources that the deal fell apart because Alex Rodriguez’s wife wanted to be closer to her family in Coral Gables.
I haven’t fully thought this out yet, but I may, (still need to think about this one), consider stepping outside of my own personal boundaries of only listing condos and consider listing a Star Island luxury home like Shaq’s if his listing agreement expires before his home gets sold. Don’t hold me to this though because I am only contemplating it. I’m a very niche-oriented person so if I don’t return your phone calls Shaq, don’t hold it against me. I need a few days to think this one through.
Miami Condo Index – Brickell Key – January 2008
The Brickell Key Condo Index is back. I didn’t have time to provide a monthly update for December 2007. For those who have newly discovered this site, the Brickell Key Condo Index is a monthly post that provides important housing statistics pertaining to the 10 existing condo buildings located on Brickell Key. I also publish a monthly update pertaining to 17 well known buildings located in Brickell. Condos located in Downtown Miami and the Arts District of Miami will likely have their own index within the next six months. I’m just waiting for more buildings in those areas to be completed.
The average price per square foot of condos listed in Brickell Key has gone down since the November 2007 update. List prices have continued to drop each month since I began this index in June 2007. At that time, the average price per square foot of condos listed in Brickell was $519.97. It now stands at $486.07. That’s about a 6.5% drop in list prices in 7 months. These numbers are in line with the housing numbers that were released this past week. The weight-adjusted average also fell to $481.98 from November’s weight-adjusted average of $490.87.
Average price per square foot of Brickell Key condos currently listed on the MLS:
The average price per square foot of condos that have sold within the past six months has gone down as well. This average dropped to $416.92 per square foot from the $435.21 that we saw in November 2007. In June, this average stood at $445.59. The January average represents a 6.4% drop within the past 7 months. The weight-adjusted average also fell to $414.54 from November’s weight-adjusted average of $433.31.
The average price per square foot of condos sold within the past six months:
Isola – 770 Claughton Island Drive | 33131 | $342.72
One Tequesta Point – 888 Brickell Key Drive | 33131 | $405.28
St. Louis – 800 Claughton Island Drive | 33131 | $421.25
Three Tequesta Point – 848 Brickell Key Drive | 33131 | $435.42
Two Tequesta Point – 808 Brickell Key Drive | 33131 | $446.98
The chart below reveals additional statistics pertaining to the 10 existing condo buildings in Brickell Key:
The first column to the right of each condo development is the difference in the average sales price and list price for this month, expressed as a percentage. Courts Brickell Key was the only development that had a higher average sales price than list price.
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. As I’ve stated before, I find this to be a very 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. Proceed with caution! Condo developments with active listings representing less than 10 percent of the overall condos 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 two months. Since I didn’t have a December update, I decided to show the number of closed sales since November 28, 2007. As you can see, there have been 9 closed sales in Brickell Key within the past two months. There are currently 28 pending sales, however, 9 of these pending sales have been pending since August 2007 or longer. A few of them have been pending for over a year. I did notice that a good portion of the other 19 pending sales went pending within the first two weeks of the new year.
The sixth column shows the difference in the average list prices from November and this month, expressed a percentage. Those highlighted in red reveal those condo developments which have had a drop in their average list price while those highlighted in green reveal those that have had an increase. As you can see, Carbonell was the only condo building in Brickell Key that has had an increase in its average list price since November 2007. This is attributed to a penthouse condo that was listed the first week of December for around $1,500 per square foot!
The seventh column reveals the difference in average sales prices from November and this month, expressed as a percentage. Brickell Key I, Courts Brickell Key and Courvoisier Courts had average sales prices that were up from those found in November. The average at Isola dropped dramatically since November but not a lot can be made of it because only one closed sale in Isola has occurred within the past six months. It’s not a true average. However, three of the condos that have gone pending at Isola within the past three months have an average list price of $358 per square foot. This is close to the $342.72 price per square foot associated with the one condo that has sold within the past six months.
Biscayne Boulevard – Then & Now
I’m not quite sure when the picture above was taken. My guess is the late 1920’s. The Freedom Tower, which you see in the background of both pictures, was built in 1925. I do know, however, that the picture below was taken this afternoon. It’s amazing to see how much Biscayne Boulevard has changed over the years.
