Existing home inventories are up, foreclosure rates are rising and mortgage rates continue their ascent – talk about bad medicine for the current lackluster real estate market! CNN.com reports that 30-year fixed rates have jumped to 6.53%, their highest level in 10 months. While rates, a year ago, were slightly less than they are now, the state of the real estate market was in much better condition 12 months ago. An increase in rates now only amplifies the problems that exist.
The Mortgage Bankers Association (MBA) expects 30-year rates to hit 7 percent by year’s end. The Mortgage Bankers Association (MBA) and the National Association of Realtor don’t foresee a recovery until the beginning of 2008. This foreseen recovery has been pushed back a number of times, and at one point early this year a slight increase in home prices for 2007 was predicted. In real estate markets, such as Miami, I expect this recovery timetable to continue to be pushed back until early 2009. The number of new units coming to market actually increases next year and doesn’t drop off until the following year. There’s no denying that the South Florida real estate market is a safe long-term bet as it will become one of the top retirement destinations for the millions of Baby Boomers set to retire in the next ten years, but demand has to catch up with supply. That will take some time.
Those people holding preconstruction contracts will soon seek financing to close on their condo units. For those that are questioning whether to walk away from their deposit or to close on their condo unit, the ever increasing rates will make their decision a little easier.
Neo Vertika – Living in a War Zone (pictures)
If the building, Neo Vertika, were a stock, I’d be selling it short all day long! This is a follow-up to a previous entry that I wrote on May 21, 2007 entitled, “Shoddy Construction at Neo Vertika?“. Now, there is no question about it.
When I wrote that piece, I had heard about all kinds of problems from residents including three major water leakages, the sprinkler system needing to be replaced in the entire building and each individual unit, and the air conditioning system being unusually loud. I didn’t realize just how bad it was until today. A client of mine, who is renting a Penthouse unit at Neo Vertika, sent me some pictures of the present condition of his condo unit. He began his lease at the very end of April and still has not been able to move his belongings into the unit. It goes without saying that he is looking to break his lease and get his money back. After seeing the following pictures I don’t blame him one bit. Work to replace the sprinkler system in his unit began last week, and he was told that it would take a total of 2-3 weeks. This is occurring in each and every condo unit in the entire building! Neo Vertika is not even one year old yet.
Imagine how high the cost of insurance will be for the building after all the work has been completed. I’m predicting that within the next six months, the association will increase maintenance fees and/or declare a special assessment. If that happens, which I feel is inevitable, prices at Neo Vertika will surely continue to head south.
Coming Soon: Ten Museum Park
Ten Museum Park is a highly anticipated luxury condo building that will begin closings later this month. Ten Museum Park is located in the recently-dubbed neighborhood of Park West and offers spectacular views of the city, Biscayne Bay and even the ocean and South Beach from high floors. Park West is making way to be the most high-end neighborhood of Miami. Ten Museum Park is walking distance to the American Airlines Arena, Entertainment District of Miami, the newly opened Carnival Center for the Performing Arts and the shops and restaurants at Bayside Marketplace. There are also plans for Bicentennial Park, which will be renamed Museum Park Miami, located across the street in the underutilized parcel of land that you see in the picture above. $13.5M has already been allocated for the new park and the Miami Art Museum and the Museum of Science are collaborating to work on the plans. The pictures below show a model of the design for Museum Park Miami. It will be the premier public park in Miami.
Ten Museum Park will have a total of 200 units on 50 floors and has units ranging in size from 858 square feet to 4,100 square feet with either 10-foot or 20-foot ceilings. Units at Ten Museum Park will have stainless steel appliances by Bosch and Sub-Zero, high-end bathroom fixtures by Duravit and Dornbracht, glass-enclosed showers with body jets and rain shower and much, much more. Take a look at the Ten Museum Park website for more information.
Ten Museum Park will receive its TCO (temporary certificate of occupancy) in the next week or two and closings will follow soon thereafter on units located on the first 35 floors. Condo units located on floors 36-50 will begin closings in 30-60 days. There are resales currently available at Ten Museum Park. There are quite a few people holding contracts in the building that have their units priced at, or slightly higher than, what they paid for them back in January 2004 to prevent from having to close on their units.
I am eagerly awaiting to see the inside of Ten Museum Park. I will try to gain access this week and post pictures and video of what I see.
If you haven’t taken a look at Google Maps in the last couple of days then head over there now and take a look at their new street-level view capability. It is simply amazing! It allows you to view a location from the perspective of a person walking down the street. It also allows you to interact with the photo by turning the view and moving forward or backward in the photo. Both Microsoft and Amazon released similar products earlier in the year, but the one released a few days ago by Google is on a totally different level.
When you get to Google Maps type in an address. For the photo above, I typed in “950 S Miami Ave, 33131”. It then shows you a map for that location. Click on the “Street View” box in the upper right hand corner of the map. You will then see an orange stick man appear on the map. Click on him and a photo, like the one above, will appear of the area. From there you can move forward or backwards in the map using the arrows within the photo or turn the view 90 degrees by using the two arrows in the upper left hand corner of the photo. It also allows you to turn left or right at intersections.
The images look to be about 4-6 months old judging by the photo above. The image at the top is of a new commercial development called Mary Brickell Village. It looks to have been taken around December or January. I navigated the street a bit and noticed that one of the restaurants is fenced off, as it was around that time.
The new street view functionality can play an important role in real estate. People can now “virtually” walk any neighborhood that they want without ever leaving home. Miami is a haven for second home buyers and investors. This type of mapping capability will prove beneficial to nonlocal buyers who can now familiarize themselves with various neighborhoods. I love technology! Just wait until the day when we are able to interact with video and navigate a virtual video map. Now that would truly be amazing!
The Wall Street Journal: Florida Hones Plan to Overhaul Property Taxes
Yesterday, The Wall Street Journal published an article that most of you will find interesting. The article is entitled “Florida Hones Plan to Overhaul Property Taxes”. It discusses a proposed property-tax relief plan that could provide a second wave of buying throughout Florida. There are a number of homeowners in Florida who would like to upgrade to a newer home but are unable to because their property tax bill would skyrocket. For example, Miami Democrat Dan Gelber, who is mentioned in the article, says that his property taxes would go from $7,000 per year to more than $20,000 per year just by moving across the street to a similar home. Several state governments in the United States are working to provide property-tax relief to homeowners but Florida’s proposed property-tax relief plan will by far provide the greatest benefit. The plan could provide over $30 billion worth in property-tax relief to homeowners over the next five years.
In talking with clients in the last couple of months, it seems that most are awaiting word from the state legislature to see what they decide. The last two weeks real estate activity has been quiet as everyone waits for the state legislature to convene in mid-June. There is no doubt that this could be the catalyst needed to reinvigorate the current stagnate real estate market throughout Florida. Let’s keep our fingers crossed. I will provide further updates on this topic as new developments become available.
Video & Picture Review of Platinum Condominium
I took a look at Platinum Condominium today and, overall, I was pretty impressed. Platinum Condominium is located at 480 NE 30 Street in the Design District of Miami. It is not a waterfront property but is situated just one block off Biscayne Bay, so the majority of units have a nice view of the water. Towards the end of this post I will provide my analysis on the building and discuss the availability for both sales and rentals at Platinum Condominium. I will also use the comments section to post any future listings that I feel are priced to move.
I shot a lot of video today and took a ton of pictures. The videos and pictures below will show you the exterior of Platinum Condominium as well as the lobby, swimming pool, hot tub, men’s locker room, and a few condo units. Be patient because the slideshows may take a little while to load, depending on your connection speed. I was able to shoot video and take pictures of a 2 bedroom unit located on the 7th floor. I also gained access to a 1 bedroom unit on the 10th floor but was only able to snap off a few pictures. The amenities and common areas looked about 95 percent complete which is very impressive. I would love to hear your thoughts on the building so please feel free to leave comments.
I found the exterior of the building to be quite beautiful with its curved balconies and high use of glass. The video and picture slideshow below will show you the exterior of Platinum Condominium.
I was very impressed with the lobby. It seems that white and silver are the prominent color themes throughout Platinum Condominium. It made for a very bright and clean looking lobby as you will see below.
The amenities are located on the sixth floor of the building. I found my way into the men’s locker room which had a sauna, steam room, and massage room.
The doors providing access to the club room, business center and fitness center were locked but I did take a peek through the windows. All three were done nicely. The fitness center was a bit small but that is common with most condominium buildings, especially in this price range. I then made my way outside to the swimming pool and sundeck area of Platinum Condominium. Take a look for yourself.
The pictures and video below are of a 2 bedroom plus den with 2 full bathrooms. It has 1,383 square feet of living space and a 386 square foot balcony. As you will see, the unit comes “decorator-ready” which means that the condo comes without flooring, baseboards, light fixtures or painted walls. The unit faces east and has magnificent views of Biscayne Bay. This particular unit is listed at a little under $360 per square foot.
Here are the pictures that I took of the 1 bedroom. This particular unit has 826 square feet of living space. There are also two triangular shaped balconies, one off the living room and one off the bedroom. This unit is only available for rent and is listed at $1,700 per month.
Analysis
Keep in mind that this analysis is based on comparing Platinum Condominium to similar buildings that have units with prices in the same ballpark. I am comparing apples to apples. This is my own subjective review and should be accepted as such.
Overall, I think Platinum Condominium is a great building. I like the fact that it only has a total of 119 condo units in the building. It isn’t a monster building with 400-plus units like we’ll be seeing in the coming months from developments such as Latitude on the River and The 1800 Club. Platinum Condominium has a total of 22 floors with 7 units per floor (the first 5 floors are used for parking). Almost every unit in the building will have some sort of bay view because of the way the building is angled and the fact that there aren’t any tall buildings in that area.
I’ve seen buildings with a lot better amenities and common areas but for a building of this size I think they did a great job.
In my opinion, the condo units were tastefully done. The kitchens are really nice with their granite countertops, stainless steel appliances and custom wood Italian cabinetry. There is plenty of cabinet space and I liked the fact that there is an island with additional cabinet space below.
The bedrooms and living rooms weren’t huge but they weren’t small either. The walk-in closets were rather large though. I liked the floor-to-ceiling windows which extended 9 feet high and spanned the length of the condo unit.
The bathrooms were okay. I didn’t care too much for the marble floors that they went with but that’s just my taste. I also felt that they were a bit small as they lacked sufficient storage space to keep towerls and toiletries.
The only downside to Platinium Condominium is the neigbhorhood. It isn’t a bad neighborhood, but there isn’t a whole lot to do within walking distance but that is slowly changing. A Starbucks is opening at the corner of Biscayne Boulevard and NE 30 Street by the end of the year and the Shoppes at Midtown should also be completed by the end of the year as well. As of now, about half of the stores at Shoppes at Midtown have already opened. These include: Super Target, Loehman’s, Marshalls, West Elm, Circuit City and several others. In my opinion, the area is still about 3-5 years away from being one of the premier neighborhoods in Miami. There are a lot of future development plans for Biscayne Boulevard which will eventually make it a happening neighborhood. Platinum Condominium is only 15 blocks from the Entertainment District of Miami and the new Carnival Center for the Performing Arts, a 5 minute drive to South Beach, and 12 minutes from Miami International Airport by car.
Grade:
Lobby: 8.5/10
Amenities: 8.5/10
Kitchen: 9.0/10
Bathrooms: 7.5/10
Space/Size: 8.5
Neighborhood: 6
Pricing:
For the most part, the units listed for sale are still priced a bit high, in my opinioin, but there are a few exceptional deals. There’s a 2 bedroom on the 16th floor with 1,007 square feet that was just listed yesterday for $349,900. That comes out to about $348 per square foot. For this type of building, that is already a solid deal, but if you can negotiate that down to around $330 per square foot then I think you can’t go wrong. The one bedrooms in the building right now start at $340,000. That is for a condo unit that is 819 square feet. That shows just how well the 2 bedroom for $349,000 is priced. I think condo prices at Platinum Condominium will settle into the $340-$420 per square foot range.
The one bedroom rentals at Platinum Condominium are pretty well priced but I feel that the 2 bedrooms need to come down quite a bit. The one bedrooms range from $1,500-$2,200 per month. I think those will settle into the $1,300-$1,800 price range. The two bedrooms range from $2,500-$3,200. I think those will end up going for $1,800-$2,400 per month. The building is nice but it isn’t located in Brickell, so anything higher isn’t justifiable.
If you would like to receive current listings in the building, please feel free to contact me and I will be more than happy to email them to you.
When the Levee Breaks – Miami Condo Market Springs a Leak
The famous song, “When the Levee Breaks”, was originally written by Kansas Joe McCoy and Memphis Minnie in 1929, then re-worked and re-released by Led Zepplin in 1971. It was a song that focused on the Great Mississippi Flood of 1927. Eighty years later Miami, Florida has a different kind of flood…a flood of new condominium units looking to wreak havoc on the Miami real estate market. Two new condo developments, Midtown 2 and Platinum Condominium, recently began closings. These are the most recent of 8,000+ condo units to come to market throughout Miami-Dade County in 2007.
The pictures below will show exterior shots of both developments. I will follow this post up with an in depth analysis of each building, complete with interior pictures and videos. Each entry will analyze the rental and sales markets for each building and provide my professional insight as to whether these buildings are priced accurately and if any good deals are available.
This may be the first of several leaks before the levee breaks and the Miami condo market becomes flooded as Opera Tower, Latitude on the River and Ten Museum Park are due to open within the next couple of months. The balance of 8,000+ units will close later in the year . I will leave you with an excerpt of the lyrics from the song “When the Levee Breaks”:
Cryin’ won’t help you, prayin’ won’t do you no good, Now, cryin’ won’t help you, prayin’ won’t do you no good, When the levee breaks, mama, you got to move.
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.
I have had a chance to review the revised lease application checklist that is now required by the association at One Miami. There have been a few changes made to the leasing requirements that must be met prior to tenant approval. The revisions were made by the One Miami Board of Directors as mentioned in my previous post entitled “One Miami Notice“. In addition to a common area’s deposit equal to one month’s rent, the One Miami association has implemented a building pet deposit of $250.00 which is non-refundable. The common areas deposit is refundable as long as damages are not made by the tenant during the length of the lease. Another significant change made by the One Miami association is that a maximum of one lease will be allowed over any 12 month period. Previously, they had allowed a maximum of two leases per year. It seems that the Board of Directors feels that eliminating short-term rentals could be a good way of alleviating some of the tenant problems. Lastly, the revised application checklist mentions that all maintenance payments must be paid to date prior to any tenant application processing. All other fees and regulations have remained the same.
Although these changes will put a damper on the rental business that I conduct at One Miami, I feel that this is a move in the right direction for condo owners there. While investors in the building may be negatively affected in the short run, I feel that the long term investment picture at One Miami has improved as a result of these changes.
