1/1.5 @ Ten Museum Park for $310,000 – Reduced Again!
Someone contacted me last week to see if I could help them find a buyer for their 1 bedroom/1.5 bath condo at Ten Museum Park. He is perfectly able to close but would rather sell it to an end-user than carry it for a while. If he closes on the unit though then he will end up holding onto it. His closing date is approximately 30 days from now but he thinks that he could have it extended if an interested buyer surfaces.
His condo has 886 square feet of interior space and a 143 square foot terrace. It is an “05” line. The floor plan is below.
As of now, the best priced “05” line available on the MLS through the developer is priced at $400,000. Here is your opportunity to buy at Ten Museum Park for much less. Make an offer today!
Advice to Miami Condo Sellers
I mentioned last week in the July Brickell condo index that only 9 closed condo sales occurred from June 19, 2007 to July 18, 2007, in the 18 buildings that comprise the Brickell Condo Index. A question was left for me in the comments section of the post about whether I felt that the lack of sales activity was a reflection of an overpriced condo market in Miami. A great conversation enfolded and I wanted to expand on that conversation with a post that will hopefully find its way to condo sellers throughout Miami.
In a nutshell, yes, prices do need to come in significantly in order for buyers to be enticed to buy. There are a lot of “motivated” condo sellers right now who have their units listed with a Realtor who are having a very difficult time selling their condo. However, sellers need to realize that their situation will become progressively worse as time goes by and more condo units come onto the market throughout the overdeveloped areas of Miami that stretch from Brickell to the Arts District. Your condition can easily turn from “motivated” to “desperate” within a six month time period.
I will let the numbers do the talking. Within the next 7 months there will be five new condo developments that will be completed in Brickell. These five developments are: 500 Brickell (633 units), The Plaza on Brickell (1,000 units), 1060 Brickell (582 units), Brickell on the River South (322 units) and Latitude on the River (455 units). These five condo developments will bring 2,992 new condo units to the Brickell condo market within 7 months. 12 months after that, another four developments will be completed in Brickell. These developments are: Infinity (459 units), Axis (718 units), Icon Brickell (1,816 units) and Epic Miami (966 units). These four developments will add another 3,959 new condo units to the Brickell condo market. That is a total of 6,951 new condo units within 19 months from now.
Over 6,900 new condo units within the next 19 months in Brickell! If this sentence alone doesn’t make a seller see the light then maybe the following sentences will. The Brickell condo index is currently comprised of 18 condo buildings throughout Brickell which consists of a total of 5,348 condo units. This means that within 19 months we’ll see a 130% increase in the number of units that comprise the index. The total number of condo units represented in the Brickell condo index will increase from 5,348 condo units to 12,299 condo units within a 19 month period.
That is just within Brickell. Include the developments below that are within 4 miles north of the southern tip of Brickell and conditions become far worse. These developments should be completed within the same time period. A few of these buildings such as Onyx on the Bay, Platinum Condos, Midtown 2 and Ten Museum Park have already begun closings. The 23 buildings below will add another 9,119 new condo units residing within 4 miles of Brickell within the next 19 months.
This means that within the next 19 months there will a total of 16,070 new condo units that will come onto the market in the neighborhoods of Brickell, Brickell Key, Downtown Miami, Park West and the Performing Arts District. The bulk of the problems will be in Brickell, Downtown Miami, Park West and the Performing Arts District since Brickell Key will only add 123 units once Asia is built.
Let’s assume that 30% of the condo units in the five new developments that will be completed in Brickell within the next 7 months were purchased by speculators. That is a very conservative number. I have heard people suggest that this number could be as high as 70%. Let’s use 30% though to illustrate a point in a conservative manner. That means that of the 2,992 new condo units to come onto the market in Brickell, 898 of these will be listed for sale. As I mentioned at the beginning of this post, there were a total of 9 closed condo sales that occurred in Brickell from June 19, 2007 to July 18, 2007. This means that if market conditions remain the same, and this absorption rate continues, then it will take 100 months, or 8.33 years to absorb the new inventory in Brickell. This doesn’t take into account the existing inventory of 1,550 condo units on the market at this time in Brickell. It also only includes those units in Brickell that will be completed within the next 7 months, not the units scheduled for completion 12 months after. Nor does it take into account the negative impact that the units scheduled for completion in Brickell Key, Downtown Miami, Park West and the Performing Arts District will have on the condo inventory in Brickell.
My advice to condo owners who NEED to sell is to get out now! Today, Barbara Corcoran was on the Today Show and suggested that people who need to sell now should be priced 5% below the currently best priced property in the neighborhood. She was speaking about homes and the national real estate market, but I think that this advice is a great start for condo owners in Miami. To illustrate, last week, two days after our office held an Open House/Wine Tasting at The Imperial at Brickell, a pending contract resulted on one of the three bedroom units that were showcased. It was the best priced three bedroom in the building and was the nicest as well. By the way, for those of you who haven’t heard of Barbara Corcoran before, she is often referred to as “The Queen of Real Estate”. She is a Realtor in New York who has had tremendous success and has been asked to appear on many nationally televised segments for her invaluable insight.
Sellers may not like the idea of discounting the price of their condo to 95% of the best priced unit currently listed in the building. However, they will like the alternative scenario even less if they don’t. Keep in mind that once the new condo units come onto the market, you’ll end up lowering your price to that level anyways. But at that time, you will be priced in the middle of the pack rather than at the front.
If you are a truly motivated seller, who doesn’t have an exclusive listing agreement with another Miami Realtor, and want to sell your condo before the worst begins, then contact me today so we can devise a plan to get you out of this mess before condo inventories in Miami reach nightmare proportions.
Short-Sale at One Miami – 1 Bedroom/1Bath for $275K !!!
There’s a 1 bedroom/1 bath short-sale at One Miami that was reduced $44,900 today. It is now listed at $275,000 and has 846 square feet of living space. That’s a great deal! The unit is now listed at $325 per square foot. The Brickell condo index for July revealed that the average price per square foot of units sold at One Miami over the last six months is $453.66. There have been 8 one bedroom/one bath units that have closed at One Miami in the past six months. They have sold in the range of $349,000 to $430,000. Like I said, this is a great deal! Prices for one bedroom units at One Miami have come in significantly in recent months but this short-sale unit is the best priced of them all.
The unit comes with one assigned parking space and one complimentary valet space. Amenities at One Miami include: two swimming pools and hot tub, two clubs rooms, two fitness centers, business center, 24-hour security/concierge and valet parking. The maintenance fee is $389 per month. High-speed Internet, basic cable TV, water, sewer and garbage are included in the maintenance fee as well.
Take a look at the MLS listing for more information.
Miami Condo Index – Brickell – July 2007
You may have noticed that some of the June numbers have changed. This is because I originally took out the closed sales that were obviously due to mortgage fraud. I recently went back and included those sales because I wanted to present things just as they were. However, this made listings appear to be priced more accurately, which they aren’t. To condo owners, and to some Realtors not in the know, these fraudulent transactions have made their listings appear justified. They need to realize that these transactions are just that, fraudulent, and very inaccurate.
The average price per square foot of condo units listed in the 18 Brickell buildings covered in my index dropped $7.44 since last month. A drop in the price of condos listed in Brickell over the last month was highly expected. I actually thought that prices would have come down even more though. These 18 buildings in Brickell had an average price per square foot of $528.84 this month versus $536.28 in June. The weighted average price per square foot was $540.17 for July versus $547.06 in June.
The most shocking thing that the July Brickell condo index revealed was the number of transactions that occurred in one month’s time. There are a total of 5,348 condo units represented in the 18 buildings that comprise my Brickell condo index. Take a guess at how many units have closed from June 19, 2007 to July 18, 2007.
Had enough time to come up with a guesstimate? Nine. That’s the number of units that sold during that time period throughout the 18 buildings that make up the Brickell condo index. Everyone knows the market is slow but I don’t think anyone could have guessed to what extent. Nine! I still can’t get that out of my head. There are a total of 875 units available on the market right now in those 18 buildings. This equates to 16.36 percent of the total units. This number is actually much higher in many of the newer buildings. Many of the older buildings have 20 or less listings in the entire building. The instability lies in the newer buildings; the buildings that were heavily funded by speculators.
The average price per square foot of condos sold over the past six months in Brickell actually went up slightly. But keep in mind that there were nine transactions in all 18 buildings. Most Realtors would focus on the fact that prices are actually going up. However, I will tell you, first hand, that these numbers are attributed to fraudulent transactions. The price per square foot went from $471.76, in June, to $473.95, in July. Most of this was due to a transaction that appears to be fraudulent at The Sail on Brickell.
The reason why I feel that this transaction is fraudulent is for a number of reasons. One, the unit was sold at the highest price per square foot in the building with concrete floors, two, the broker is a discount broker who charges 4 percent per transaction, three, in every transaction he seems to find the buyer and already holds the listing, and four, he finds the buyer within four days. I did a search by the broker’s email to see what other transactions have occurred. I’m not going to name names but let’s just say that this broker has at least six transactions where this has occurred. The same exact thing. He finds a buyer to acquire a condo at The Sail on Brickell within four days at the highest price possible. Let me tell you, firsthand as a Realtor, that it is hard enough to find a buyer in this market to buy something at the best price available. How is this guy finding a buyer at the highest price available? Within 4 days? Like I said, I’m not going to name names but something fishy is going on there. If someone, like the Miami Herald, wants to investigate this thoroughly and name me as the source, then so be it, but I’m not divulging names. I don’t want to have a hit-man after me. Hopefully I’m wrong about what has occurred in The Sail at Brickell, but I doubt it.
Average price per square foot of units currently listed on the MLS:
Solaris at Brickell – 186 SE 12 Ter | 33131 | 14.86%
The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | 2.70%
The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | 1.01%
The Palace – 1541 Brickell Ave | 33129 | 8.68%
Villa Regina – 1581 Brickell Ave | 33129 | 30.64%
Vue at Brickell – 1250 S Miami Ave | 33131 | 1.53%
Opera Tower Closings to Begin in September
In a previous post I stated that I heard closings at Opera Tower would begin in July. However, I confirmed today that this was inaccurate. Closings will begin in September for condo units on the first 21 floors of Opera Tower. I was told that closings on the remaining floors would begin in October. Opera Tower sent this letter to contract holders at the beginning of June. It provides important information regarding closings.
It will be interesting to see what happens there. Opera Tower has a total of 635 condo units made up of studios, one and two bedroom condos. That’s a lot of units coming onto the market given the current condition of the Miami real estate market. I think closings at Opera Tower will help reveal the true nature of the market at this time. It will act as a prologue to what will happen at other developments scheduled to begin closings in the next 12 months. It will be important to keep an eye on closings, or lack of closings, that occur at Opera Tower.
My prediction is that the developer of Opera Tower will get back a lot of units. It is a shame that the developer charges 13 percent of the sales price to contract holders who want to resell their contract. It would be in the best interest of the developer to help these contract holders, who are primarily investors, get their unit into the hands of an end-user. Many of these investors are looking to break-even or accept a small loss. With a 13 percent resale fee, however, it makes this nearly impossible. This will come back to bite the developer of Opera Tower in the ass. As of now, the best deal through the developer for an east facing unit is one priced at $509,000. It is on the 21st floor. That comes out to $485 per square foot. I think within six months we’ll see 2 bedrooms at Opera Tower priced below $400,000.
Midtown 2 was a recent large development to begin closings. Closings there began about a month and a half ago. Last week the South Florida Business Journal reported that 17 contract holders at Midtown 2, who want out of their contracts, filed a class action lawsuit against the developer. The attorney representing the plaintiffs is also planning a class action lawsuit representing contract holders of Midtown 4. This lawsuit could spell trouble for all developers if the judge rules in favor of the plaintiffs.
Where Will Prices Be 12-24 Months From Now in Brickell?
Most people would agree that as of right now Brickell and Brickell Key are the luxury neighborhoods of Miami for condominiums. This may change in the future as new luxury neighborhoods have begun to emerge, but as of right now Brickell and Brickell Key hold this title.
It is no secret that Brickell has a large number of condo units coming to market over the next 24 months. Some of these waterfront and non-waterfront preconstruction buildings in Brickell sold for prices well over $400, $500, and even $600 per square foot when sales were launched during the peak of the real estate market in 2005. Were these condo units sold too high? Where should prices be trading given that the supply far exceeds the demand over the next 24 months in Brickell? Where will prices end up for the new condo units that are coming to market over the next couple of years?
Let me try to dissect these questions. Most people would now answer yes to the first question. At the time, however, interest rates were low, prices were soaring and the market was fueled by speculators looking to profit from the buying frenzy. Two years later, the market is in a completely different state. Speculative investors are nowhere to be found, interest rates continue to climb and thousands of new condo units are set to close in the next 24 months. Earlier this week, ABCNews.com published an article entitled, “Real Estate Fool’s Gold”, which highlighted the overdevelopment problem that Miami is facing. Many investors have hired attorneys to find loopholes in their preconstruction contracts to find a way out, and in effect prevent them from losing money.
Prices will continue to go down until an equilibrium of supply and demand is reached. The question still remains though of “how far down will prices go?”. The Brickell condo index for June provided insight as to how inflated prices have become in Brickell. Some of this was due to the rampant mortgage fraud occurring throughout Brickell, but it was mainly fueled by speculators looking to flip their preconstruction condo contracts for a nice profit.
The South Beach condo index, published yesterday, revealed that prices there are almost one and a half times that of Brickell. However, prices in South Beach have far more stability due to the supply and demand relationship being much closer to equilibrium. An overdevelopment problem doesn’t exist in South Beach like we have in Brickell. This is largely due to the Historic Preservation Committee in South Beach keeping developers in check with stringent development guidelines. Demand to own South Beach property is also much higher. Less supply/more demand equals more stability and therefore less problematic pricing.
I feel that the buildings currently under construction in Brickell, set to be completed in the next 12-24 months, will have problems maintaining the price levels that units were sold for at the peak of the real estate bubble. There will be many opportunities in the months to come to buy at discounted prices in these new developments. This in turn will drive prices down throughout the overall neighborhood of Brickell. I feel that more pricing stability can be found in the buildings that have been around for over five years such as the ones found at the southern end of Brickell Avenue. These include such names as The Palace, Imperial at Brickell, Bristol Tower, Atlantis on Brickell, Santa Maria and Villa Regina.
Next week, I will reveal the second installment of the Brickell condo index. I have a feeling that prices have come down quite a bit in buildings such as Vue at Brickell, Club at Brickell Bay and Jade where much of the mortgage fraud occurred. As a result, each building now has quite a few foreclosures listings. This Miami real estate blog will continue to provide the unbiased insight that you seek.
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.
Opportunity to Own a 1 Bedroom in Tower 2 of the Luxurious Icon Brickell
A few days ago I received an email from a gentleman who holds a preconstruction contract for a 1 bedroom in Tower 2 of Icon Brickell. He prefers not to close on the unit and wanted me to find out if there’s any interest in his unit from someone looking to acquire a condo at Icon Brickell. Even though the market has slowed, I still think there will be interest due to the reputation that the “Icon” brand has created. The “Icon” brand has become synonymous with ultra-luxury living and the Icon Brickell development will be one of the finest in all of Brickell.
The gentleman was originally supposed to receive a contract for a 1 bedroom in Tower 1 of Icon Brickell but due to high demand that tower quickly sold out. The developer, The Related Group, did however give him a 1 bedroom in Tower 2 at the same price that he was promised a 1 bedroom unit in Tower 1. It is a G floor plan with 984 square feet of interior space and a 137 square foot terrace. The unit is located on a high floor above the 30th.
His price per square foot of $486 is pretty amazing given that units in that same line sold for slightly over $750 per square foot. I spoke with a sales representative at Icon Brickell today to get a feel for how pricing will be once resales begin. She notified me that The Related Group has no plans to launch a resale program for Icon Brickell. I asked her why and she said that resale programs are only launched for their projects when they feel that the market can absorb it. She continued to add that because the market is currently soft they don’t feel that this is the case at this time. Icon Brickell has been sold out of one bedroom units in Towers 1 and 2 for quite some time. I asked her if she could remember what a G line unit was selling for before they sold out. She told me that there was a G line unit on the 46th floor that sold for $750,000.
The gentleman who contacted me is looking to resell his 1 bedroom at Icon Brickell. His asking price is $599,000. A simultaneous closing would need to be done since the developer is not allowing contracts to be assigned at this time. Icon Brickell is scheduled to begin closings towards the end of 2008. If you or someone you know has an interest in acquiring this unit, please drop me an email or give me a call.
Check out the picture slideshow below for more renderings of the Icon Brickell project:
Quantum on the Bay – 2 Bedroom + Den/2.5 Bath
I was contacted last Friday by a lady who is looking to sell her 2 bedroom + den/2.5 bath in the north tower of the development known as Quantum on the Bay. She got in at original pricing and is looking to sell her unit prior to closing. The condo unit that she has under contract is the L floor plan which, in my opinion, is the best floor plan in the entire north tower. It offers unobstructed views of Biscayne Bay and overlooks the swimming pool. It is a large corner unit with 1,460 square feet of interior space and a 237 square foot wrap-around terrace.
The Quantum on the Bay website is a bit confusing when you view the floor plans. For some reason it decided to have the building site plan point east rather than north. Biscayne Bay would be located where the word “residence” is in the picture below.
The purchase price of the unit in question was $512,000, or $351 per square foot. She is looking to sell it for $575,000, or $394 per square foot, and do a simultaneous closing on the unit. You won’t find a better deal in the developer’s resale program since the developer requires that all units are priced at a minimum of 16 percent above the contract holder’s purchase price. In this instance, the price would need to be set at a minimum of $593,920. This is a great opportunity for someone looking to live at Quantum on the Bay after closing.
If you, or anyone you know has an interest in this condo at Quantum on the Bay, let me know and I will put you in touch with the contract holder.
