Yet Another Auction
I wanted to make everyone aware of another auction that will be held December 15, 2007 at the Miami Beach Convention Center in South Beach. I’ve perused the list of condos to be auctioned and it looks like there are some quality condos on the list. Below you will find some of the condos that will be auctioned:
- Courvoisier Courts – Unit 2312 – 3/2.5 – 1,655 SF (Brickell Key)
- Isola Brickell Key – Unit ??? – ??? – ??? SF (Brickell Key)
- Jade at Brickell – Unit 502 – 2/2 – 1,460 SF (Brickell)
- Jade – Unit ???? – ??? – ???? SF (Brickell)
- Murano Grande – Unit 805 – 2/2 – 1,400 SF (South Beach)
- Neo Lofts – Unit 1006 – 2/2 – 1,109 SF (Miami River)
- Ocean View – Unit 210 – 1/1 – ??? SF (Sunny Isles Beach)
- Ocean View – Unit ??? – ??? – 1,225 SF (Sunny Isles Beach)
- Royal Atlantic – Unit 209 – 1/1 – 654 SF (South Beach)
- The Club at Brickell Bay – Unit 2114 – 1/1 – 818 SF (Brickell)
- The Club at Brickell Bay – Unit 2603 – 1/1 – 825 SF (Brickell)
- The Club at Brickell Bay – Unit 3102 – 3/2 – 1,232 SF (Brickell)
- The Club at Brickell Bay – Unit 3202 – 3/2 – 1,232 SF (Brickell)
- The Cosmopolitan – Unit 2603 – 2/2 – 1,010 SF (South Beach)
- Vue at Brickell – Unit ??? – ??? – ??? SF (Brickell)
- Vue at Brickell – Unit 3606 – 3/2 – 1,551 SF (Brickell)
Contact me if you’d like more information about this auction so I can register you. There’s a 5 percent buyer’s premium and a $5,000 cashier’s check is required the day of the auction. The balance of 5 percent of the total price will be due the day of the auction if you are the highest bidder. Inspections must be conducted prior to bidding.
The Club at Brickell Bay Association Not Paying Its Bills?
Primecast is a cable TV and Internet service company that provides these services to all residents of The Club at Brickell Bay as a part of their association fees. The following letter was delivered last week to all residents living at The Club at Brickell Bay:
IMPORTANT – PLEASE READ
October 31, 2007
Dear Unit Owner,
We appreciate your patronage and want to extend our thanks for being a customer. As you may know, Primecast and The Club at Brickell Bay Master Association have an agreement in which Primecast is to deliver video and Internet service at a discounted price to all members of the Association. Unfortunately, the Association has not performed according to the terms of that agreement, including payment for these services, despite repeated notices from Primecast. As a result, the basic video and Internet services currently being provided to all units under the agreement with the Association will be suspended, effective Tuesday, November 6, 2007.
We apologize for any inconvenience. Please contact your Property Manager with any questions regarding this suspension or call 1-866-xxx-xxxx begin_of_the_skype_highlighting 1-866-xxx-xxxx end_of_the_skype_highlighting to speak with a Primecast customer support staff member.
Sincerely,
Primecast Collections Department
Three words came to mind after I read the letter: “That would suck!”. This not only affects condo owners but also tenants who signed leases under the pretense that they would receive basic cable TV and high-speed Internet services as a part of their monthly rent. You can be certain that rental prices on future leases will readjust themselves downwards within the next couple of months.
It is no secret that The Club at Brickell Bay has a very high number of condos that have gone into foreclosure and are now bank-owned. There are also a significant number of condos that are in preforeclosure that will probably share a similar fate in the months to come. The Association is likely having difficulty meeting its monthly expenditures as a result of the lost revenue from these foreclosed units. How severe is the problem? Is a special assessment or an increase in monthly maintenance fees right around the corner at The Club at Brickell Bay?
Hudson & Marshall Auction Results
Below you will find the results for the condos of interest that were auctioned this past Saturday:
- Cite on the Bay – Unit #110 – 3 bedroom/2 bath – 1,475 SF – $300,000
- Four Ambassadors – Unit #344 – 1 bedroom/1.5 bath – 940 SF – $169,500
- Loft Downtown – Unit #204 – 1 bedroom/1 bath – 784 SF – $128,500
- The Club at Brickell Bay – Unit #1823 – 2 bedroom/2 bath – 1,105 SF – $392,500
- Vue at Brickell – Unit #1215 – 2 bedroom/2 bath – 1,116 SF – $340,000
- Vue at Brickell – Unit #2307 – 1 bedroom/1.5 bath – 814 SF – $222,000
There were a large amount of people in attendance at the Hudson & Marshall auction on Saturday. There also seemed to be a higher percentage of active bidders in the crowd than I have seen at past auctions. Regardless, the first 20-30 properties that were auctioned all failed to crack the $100,000 mark. A condo in Homestead was auctioned for $56,000, which was the lowest that I saw a property go. This auction had a 5 percent buyer’s premium.
Slowly, throughout the rest of the day, properties began to garner higher and higher prices. With the exception of the 3 bedroom at Cite on the Bay and the one bedroom at Vue at Brickell, I was expecting the condos to go for less. I think the three bedroom at Cite on the Bay for $300,000 was the only great deal of the six condos above. The one bedroom at Vue at Brickell for $222,000 was a good deal but given the high number of short-sales and foreclosures in the building I think it went for the right amount.
I was shocked that the two bedrooms at the Vue at Brickell and The Club at Brickell Bay went for so much. I’m not sure about the unit at The Club at Brickell Bay, but I know that the one at Vue at Brickell needed some work. It had mold in the unit and the carpets needed to be replaced. In my opinion, the highest bidder of each of these units paid too much. That’s just my opinion though.
Brickell Condo Index – October 2007
As I mentioned in a previous post, The Sail on Brickell will no longer be included in the Brickell Condo Index. I also made a change to the way that the statistics in the third section of the index are presented. It should now be much easier to make sense of the monthly figures. This came as a suggestion from a reader (Thank you!). My comments on this month’s numbers are also found towards the bottom of this post.
The average price per square foot of condos listed has dropped this month to $518.91 from last month’s figure of $525.88. Last month, The Sail on Brickell had an average list price of $507.11 per square foot, so the drop would have been greater had it been included this month and its average remained around the same. The weight-adjusted average also dropped to $521.29 per square foot from last month’s figure of $530.15.
Average price per square foot of units currently listed on the MLS:
The average price per square foot of condos sold over the past six months actually went up this month to $481.69 from last month’s figure of $467.47. The increase would have been less had The Sail on Brickell been included. Last month, it had an average of $386.41 per square foot. If its statistic remained the same, the average would have been $476.39 per square foot. Much of the increase is also attributed to The Mark on Brickell which I will discuss below. The weight-adjusted average went up to $495.31 per square foot from last month’s average of $486.30.
Average price per square foot of Brickell condos sold in the MLS within the past six months:
- Atlantis on Brickell – 2025 Brickell Ave | 33129 | $298.11
- Brickell on the River North – 31 SE 5 St | 33131 | $415.74
- Bristol Tower – 2127 Brickell Ave | 33129 | $440.18
- Emerald at Brickell – 218 SE 14 St | 33131 | $523.78
- Four Seasons Residences – 1425 Brickell Ave | 33131 | $675.30
- Imperial at Brickell – 1627 Brickell Ave | 33129 | $331.99
- Jade Brickell – 1331 Brickell Bay Dr | 33131 | $723.60
- Neo Vertika – 690 SW 1 Ct | 33130 | $329.67
- One Miami – 325 & 335 S Biscayne Blvd | 33131 | $430.12
- Santa Maria – 1643 Brickell Ave | 33129 | $672.22
- Skyline on Brickell – 2101 Brickell Ave | 33129 | $463.75
- Solaris at Brickell – 186 SE 12 Ter | 33131 | $454.32
- The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | $660.39
- The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | $589.06
- The Palace – 1541 Brickell Ave | 33129 | $388.54
- Villa Regina – 1581 Brickell Ave | 33129 | $316.62
- Vue at Brickell – 1250 S Miami Ave | 33131 | $475.30
The numbers below are a bit difficult to read but if you save and open the picture file it should make it easier.
The first column to the right of each condo development’s name is the difference in the average sales price and list price for this month, found above, expressed as a percentage. You will notice that Emerald at Brickell, The Club at Brickell Bay, The Mark on Brickell, The Palace and Vue at Brickell are the only developments that have 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. I find this to be a 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. This is a very unhealthy figure and should act as a warning sign. Is it coincidence that Jade, The Club at Brickell Bay and Vue at Brickell, which have all been riddled by mortgage fraud appear in red? I think not! I think this statistic is highly important. It provides great insight as to which condo developments will be next to have price cuts and those that may actually go up in price in the coming months. A leading indicator, if you may.
The fourth column shows the number of pending sales while the fifth column displays the number of closed sales within the past month. As I mentioned, last month a large portion of the pending sales at The Club at Brickell Bay are very old. Only three of them have been pending for five months or less. It is good to see, however, that each development has at least one pending sale. The number of closed sales within the past month has dropped to seven, which is its lowest point since I began tracking this statistic. Not good…not good at all!
The sixth column show you the difference in the average list prices from this month’s and last month’s, expressed a percentage. Those highlighted in red reveal those condo developments which had a drop in their average list price while those highlighted in green show those that had an increase. As you see, The Vue at Brickell had a price drop for condos listed of 8.57 percent. Much of this is attributed to the ever-growing number of short-sale and foreclosure units in the building. In fact, I have counted 24 units in the MLS that fit this bill. That represents 7.43 percent of the overall building. Yikes!
The seventh column reveals the difference in average sales prices from this month’s and last month’s expressed as a percentage. The 17.54 percent price increase over last month’s statistic at The Mark on Brickell jumped out at me. Of course, I had to investigate. The good news is that I didn’t find any fraudulent transactions that have occurred within the last month. Thank God! The bad news, however, is that I did discover two transactions that closed in June that I didn’t notice before that appear to be fraudulent. You be the judge! A 2 bedroom/2 bath with 1,200 square feet that was listed at $890,000 closed for $845,000, or $704 per square foot, on June 30, 2007. Another 2 bedroom/2 bath also with 1,200 square feet that was listed for $850,000 closed for $840,000, or $700 per square foot, on June 6, 2007. In each case, the listing agent was also the buyer’s agent. In the second case, the unit previously closed in January of this year for a price of $560,000. Looks like fraud, smells like fraud…what do you think? The average price increase also became more pronounced at The Mark on Brickell because a few other sales that sold in the $300’s and $400’s per square foot fell off the average.
The large drop in prices, over the past month for condos sold over the previous six months, at Neo Vertika were mainly a result of the unit that my client closed on a few weeks ago for $242 per square foot.
100+ Properties to be Auctioned This Saturday
Over 100 properties located throughout South Florida will be auctioned this Saturday in Fort Lauderdale. I’ve known about this auction for quite some time but wasn’t sure whether or not I should write a post about it for a couple of reasons. One, most of the properties are predominantly single family homes while my blog only discusses condominiums. Two, only a handful of the properties are located in Miami and Miami Beach, which is where I focus most of my energy.
I decided to go ahead and inform everybody about it though because a few of the condos reside in developments that I’ve previously mentioned. For example, two condos from Vue at Brickell will be auctioned on Saturday while The Club at Brickell Bay will have one. No surprise there!
Here is a list of some of the condos in some of the more well known developments that will be auctioned:
- Cite on the Bay – Unit #110 – 3 bedroom/2 bath – 1,475 SF
- Four Ambassadors – Unit #344 – 1 bedroom/1.5 bath – 940 SF
- Loft Downtown – Unit #204 – 1 bedroom/1 bath – 784 SF
- The Club at Brickell Bay – Unit #1823 – 2 bedroom/2 bath – 1,105 SF
- Vue at Brickell – Unit #1215 – 2 bedroom/2 bath – 1,116 SF
- Vue at Brickell – Unit #2307 – 1 bedroom/1.5 bath – 814 SF
None of these developments are particularly exceptional but it’ll still be interesting to see at what price they will be auctioned. I think the unit at the Loft Downtown has a good chance to go for around $100,000 or less.
Check out the Hudson & Marshall website for more information about this auction.
By the way, I did noticed that Deutsche Bank is now in possession of a large number of the properties that will be auctioned on Saturday.
Miami Condo Index – Brickell – September 2007
I received an email last week from a potential investor asking me if Miami is now safer than the “Miami Vice days” that he saw on TV. Indeed, the streets of Miami are much safer than they were 20 years ago, but the corruption that infested the city back then is still prevalent now.
Another month, another fraudulent transaction. I guess nobody cares. As I mentioned last month, the rumors are out there that a government agency is on the lookout for such activity but I’ve begun to lose hope that these rumors hold much water. If these rumors are true, then shame on them for allowing such activity to continue, and allowing the reputation of this city to be equated to that of which was prevalent in the 1980s. This past month, I’ve heard that an FBI agent is living at Vue at Brickell and Jade at Brickell Bay. I wouldn’t be surprised if one lives at The Club at Brickell Bay as well.
The continuance of fraudulent activity in Brickell has sickened me. The sooner that the Miami Herald, or some other major newspaper, goes public with this story, the better. The fraudulent activity just needs to stop. It is doing nobody any good to let the fraudulent activity prevail, except those who are facilitating it.
Sorry, but I just had to rant and rave for a moment. Now, back to our regularly scheduled program (but I’ll continue to rant and rave towards the end when I disclose the latest fraudulent transaction).
The average price per square foot of condos listed in the 18 Brickell buildings included in the Brickell Condo Index has dropped to $525.88 from last month’s average price per square foot of $529.05. The weight-adjusted average has also dropped to $530.15 versus last month’s weight-adjusted average price per square foot of $537.67. Both figures are below those that were calculated in July as well.
Average price per square foot of units currently listed on the MLS:
The average price of condos sold over the past six months has dropped to $467.47 per square foot versus last month’s figure of $471.94 per square foot. The weight-adjusted average has also dropped to $486.30 per square foot from last month’s weight-adjusted average of $498.36 per square foot. Much of the decrease is due to the a sizable drop in the averages at The Club at Brickell Bay and Vue at Brickell. Both buildings had fraudulent transactions that fell off the six month average.
The Sail at Brickell had yet another fraudulent transaction this past month. It was conducted by the same broker that conducted the fraudulent transaction at The Sail at Brickell that I spoke of in July. Once again, the broker acted as the listing agent and the selling agent. He must have some luck! He was also able to close the deal the same day that the deal went pending. Imagine that! This guy works miracles. He was able to sell a 2 bedroom/2 bath at The Sail on Brickell for $670,000. Well at least he was able to negotiate the price down $10,000 for his buyer. He has some smooth negotiating skills. He must also have some great persuasion skills because nobody in their right mind would pay $670,000 for a 2 bedroom at The Sail on Brickell.
Average price per square foot of condos sold in the past 6 months:
- Atlantis on Brickell – 2025 Brickell Ave | 33129 | $298.11
- Brickell on the River North – 31 SE 5 St | 33131 | $409.44
- Bristol Tower – 2127 Brickell Ave | 33129 | $440.18
- Emerald at Brickell – 218 SE 14 St | 33131 | $523.78
- Four Seasons Residences – 1425 Brickell Ave | 33131 | $720.15
- Imperial at Brickell – 1627 Brickell Ave | 33129 | $304.56
- Jade at Brickell Bay – 1331 Brickell Bay Dr | 33131 | $690.18
- Neo Vertika – 690 SW 1 Ct | 33130 | $361.99
- One Miami – 325 & 335 S Biscayne Blvd | 33131 | $446.06
- Sail on Brickell – 170 SE 14 St | 33131 | $386.41
- Santa Maria – 1643 Brickell Ave | 33129 | $618.50
- Skyline on Brickell – 2101 Brickell Ave | 33129 | $451.29
- Solaris at Brickell – 186 SE 12 Ter | 33131 | $457.45
- The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | $660.39
- The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | $501.16
- The Palace – 1541 Brickell Ave | 33129 | $363.32
- Villa Regina – 1581 Brickell Ave | 33129 | $316.62
- Vue at Brickell – 1250 S Miami Ave | 33131 | $464.83
This is the first month that a development has had a price per square foot under $300 for condos sold over the previous six months since I began this index. Atlantis on Brickell broke through this barrier with an average price per square foot of $298.11. This figure for Atlantis on Brickell will likely continue to decline as a bank-owned listing has remained on the market for quite some time and will likely sell for around $200 per square foot.
Below you will find the new statistics that I have included in this month’s Brickell Condo Index. The first number directly to the right of each development name represents the total number of active listings. The second number, in parentheses, is the number of currently listed condos expressed as a percentage of the total number of condos in the development. The third number represents the number of pending sales while the fourth is the number of closed sales within the past month.
- Atlantis on Brickell – 13 (13.54%) | 1 | 1
- Brickell on the River North– 59 (18.21%) | 4 | 0
- Bristol Tower – 19 (12.93%) | 3 | 1
- Emerald at Brickell – 34 (23.94%) | 1 | 0
- Four Seasons Residences – 18 (6.67%) | 3 | 0
- Imperial at Brickell – 15 (9.32%) | 2 | 0
- Jade at Brickell Bay – 76 (23.31%) | 6 | 1
- Neo Vertika – 78 (17.61%) | 7 | 0
- One Miami – 165 (18.42%) | 6 | 2
- Sail on Brickell – 64 (42.11%) | 2 | 1
- Santa Maria – 10 (5.75%) | 1 | 1
- Skyline on Brickell – 54 (15.00%) | 2 | 1
- Solaris at Brickell – 21 (15.22%) | 2 | 1
- The Club at Brickell Bay – 145 (22.55%) | 11 | 1
- The Mark on Brickell – 43 (11.62%) | 0 | 1
- The Palace – 25 (9.84%) | 1 | 0
- Villa Regina – 20 (9.62%) | 0 | 0
- Vue at Brickell – 62 (19.20%) | 1 | 0
Two numbers jumped out at me when reviewing this month’s findings: the 42.11% of available listings at The Sail on Brickell and the 11 pending sales at The Club at Brickell Bay.
I knew that prices were high and unjustified at The Sail on Brickell with mortgage fraud having much to do with it, but I never would have imagined that over 40 percent of the building would be available for sale. That’s incredible! However, a look at the current list prices should make those who have visited this building realize that the prices at The Sail on Brickell are ridiculous. Of the 18 buildings included in the Brickell Condo Index, I would rank The Sail at Brickell at the bottom. There are no views and the common areas and amenities are below Brickell standards. The developer, Renzi Development, recently announced that they plan to go forth with their Beacon at Brickell Village development. I sure hope they have second thoughts. The Sail on Brickell will eventually sell for around $250 per square foot (and that’s being generous). If I were a condo owner who is motivated to sell at The Sail on Brickell then I would be priced at the front of the large pack.
When I saw the 11 pending sales at The Club at Brickell Bay I was quite surprised. At first I thought it was my lack of REM sleep setting in. Once I realized that it wasn’t, I had to investigate further. What I found made this number a complete sham. Of the 11 pending sales, 9 of them have been pending since 2005 and 2006. What the….? It usually takes two months, maybe three months tops, to take a pending sale to the closing table. The other two pending sales have been pending since January and March of 2007. Something just isn’t right. Most likely the sales prices couldn’t be justified. Take 6 months, 12, months, 36 months and the prices still won’t be justified. These transactions should be reclassified as “hopeless” rather than pending. A 1 bedroom/1 bath at The Club at Brickell Bay will be going up for auction tomorrow, September 19, 2007 at 3pm. That will give everyone a good indication as to the fate of prices at The Club at Brickell Bay. You can be sure that I’ll report about it within the next couple of days.
So there you have it, that is the latest Brickell Condo Index. The good news is that there were 11 closed sales within the past month versus a total of eight closed sales the month prior to last. There were a total of nine closed sales the month prior to that.
There are a total of 42 pending sales disregarding the 11 at The Club at Brickell Bay since those have been discredited. As long as half of those transactions actually close, then there should be about 10-11 closed sales next month. I guess we’ll just have to wait and see. I’m praying that we won’t have another fraudulent transaction then. If we do, and you thought I ranted and raved now, just wait until next month.
Four Bank-Owned Condos in Miami & Miami Beach to be Auctioned September 19, 2007
Four condos will be auctioned off Wednesday, September 19, 2007 at approximately 3pm. Three of the four condos are located in Miami while the fourth is located in Miami Beach. All four condos have gone through the foreclosure process and are currently owned by the bank.
1. Meridian Place – 325 Meridian Avenue #6 | Miami Beach, FL 33139
This is actually a townhouse. Of the four units being auctioned, it will probably hold the most interest because of its fantastic location. Some of South Florida’s most expensive condominiums reside in the South of Fifth neighborhood of South Beach. Built in 1994, this 3 bedroom/2 bath townhouse has 1,300 square feet of interior space, as well as two parking spaces (one garage space and one driveway space). County records indicate that the bank is owed $549,000. The opening bid is $100,000.
2. The Club at Brickell Bay – 1200 Brickell Bay Drive #2114 | Miami, FL 33131
Let’s just say that I’m not surprised. I’ll leave it at that. This 1 bedroom/1 bath condo has 818 square feet of interior space. The bank is owed $610,000. I guess they’re in for a rude awakening come September 19th. The opening bid is $100,000.
3. Venetia Condo – 555 NE 15th Street #16-H | Miami, FL 33132
Venetia Condo is located at the entrance of the Venetian Causeway in Miami. The building was built in 1980. The condo up for auction is a 1 bedroom/1 bath with 800 square feet of interior space. It faces south and has views of Biscayne Bay as well as the cities of Miami and Miami Beach. The bank is owed $410,000. The opening bid is $50,000.
4. Blue Lagoon Condominiums – 5091 NW 7 Street #705 | Miami, FL 33126
Of the four condos that will be auctioned on September 19, 2007, I think the 2 bedroom/1 bath at Blue Lagoon Condominium will hold the least amount of interest from the people attending the auction. However, this makes it a great candidate to be acquired at bargain prices. Blue Lagoon Condominium is located near the airport, about 12 minutes from Brickell. It’ll make for a great investment property if it can be obtained for $175,000 or less. The unit has 862 square feet of interior space. The bank is owed $305,000. The opening bid is $50,000.
Contact me for more information regarding this auction featuring the above four condos.
Governmental Intervention in the Housing Market
Yesterday, President Bush discussed his plan to aid homeowners at risk of losing their homes. Most of the plan focused on assisting borrowers to refinance their adjustable-rate loans to more conventional loans provided by the Federal Housing Authority.
I took a look at his recommendations and of particular interest to me was his proposal to temporarily suspend the tax liability that is owed by homeowners when performing a short-sale. As of now, the IRS has the right to tax the loan amount that is forgiven by the lender. It is considered a forgiveness of debt.
Short-sales have become very popular, as of late, because home prices have dropped in recent years and adjustable-rate mortgages have begun to reset. It has become more common for the value of a home to be less than what is owed to the bank. For example, let’s say that you purchased a 2 bedroom condo in 2005 for $500,000 and financed 90 percent of the purchase price. Two years later the value of your home has dropped and you have fallen two months behind on your payments. In the past, when homeowners were in this situation they would tap into the equity on their home by refinancing to take cash out. This is no longer an option, however, to most, because home prices have fallen. Oftentimes, two possibilities exist: lose your home through foreclosure or sell your home through a short-sale.
In the example above, let’s say that the price of your 2 bedroom condo has fallen to $400,000. You owe the bank roughly $450,000. You’ve talked to some knowledgeable acquaintances and they’ve advised you to do a short-sale. Basically, a short-sale means that the bank is willing to accept a pay-off amount that is short of what is owed to them. You contact a local real estate agent to list your property and within a few weeks an offer of $380,000 is submitted.
What is important to note is that two parties need to accept the offer: the seller and the bank. The reason why the seller has to sign off on the offer is because the IRS has the right to tax them on the amount of the loan that is forgiven. In this case, a tax on the $70,000 forgiveness of debt will be due the following April.
The bank also has to approve the offer because they are the ones who are accepting the shortfall in the original amount owed. The banks will ask the homeowner to have an appraisal performed at their expense. Banks are not stupid. They realize that the market has declined but they aren’t going to accept just any offer.
Recently, I’ve come across a few short-sales in the MLS that just don’t make any sense. For example, there’s a 2 bedroom/2 bath listed for $295,000 at Vue at Brickell. There’s also a 1 bedroom/1 bath listed for $217,000 at The Club at Brickell Bay. I’ve written about both buildings in the past and how prices in each building are inflated due to the mortgage fraud that has occurred. However, these prices are a step in the wrong direction and are unjustified. The 2 bedroom at Vue at Brickell is the best priced unit in the entire building, including the 1 bedroom units. The 1 bedroom condo at The Club at Brickell Bay is better priced than even the studios.
Listings like these are a waste of time for everyone involved in the transaction: the seller, the buyer, the bank and the two real estate agents. Just because it is a short-sale doesn’t mean that you can list a property at a price that will get you an offer within a week. As of right now, it is also doing a great disservice to the seller who will have a large tax bill come next April should the offer get accepted by the lender.
As I mentioned earlier, however, President Bush has proposed to temporarily suspend the tax that is owed to the IRS on the amount that is forgiven when a distressed homeowner performs a short-sale. If this becomes a reality it will alleviate a lot of problems for distressed property owners. Short-sales will become more common.
It wouldn’t surprise me, however, if we start seeing mortgage fraud occur in reverse. Appraisals will start coming in very low to justify the offers that are submitted to the banks. It’ll be a nightmare for banks. Accredited local appraisers need to be in place for these banks to be able to cleanly wash themselves from the mortgage mess at hand.
The Fate of Prices at Vue at Brickell and The Club at Brickell Bay
For months I’ve been writing about the rampant mortgage fraud that has occurred in certain buildings located in Brickell such as Vue at Brickell and The Club at Brickell Bay.
The August Brickell Condo Index revealed that over the last six months Vue at Brickell had closed sales with an average price per square foot of $522.37 while The Club at Brickell Bay sold at an average price per square foot of $723.35. Both averages have been inflated as a result of the mortgage fraud that has occurred in these two buildings. Both figures seem outrageous to me since both are non-waterfront buildings and, by most, would not be considered top buildings in Brickell.
It is inevitable that in upcoming months both figures will come down drastically. Both have a lot of short-sale and foreclosure units that are currently listed. For example, Vue at Brickell currently has 8 condos that are marked as either short-sale or foreclosures. The Club at Brickell Bay currently has only three but I suspect that many more will arise in upcoming months.
One bank-owned property at Vue at Brickell is listed at $325 per square foot while another is listed at $343 per square foot. These represent an almost $200 per square foot reduction compared to what has sold at Vue at Brickell over the last six months. That is a difference of over 35 percent. Keep in mind also that these are the list prices. They will ultimately sell for less. These transactions will bring the averages down to a more realistic figure. Anyone who purchased a condo in Vue at Brickell about a year ago won’t be able to refinance for many, many years. This will lead to more foreclosures which will bring down the average even more.
The best price per square foot currently offered of the foreclosure or short-sale units at The Club at Brickell Bay is $471. That is a difference of $252 per square foot when compared to what has sold in the past six months, or a little over 34 percent. I feel that there is a lot more room for this figure to drop. There are just too many other brand new non-waterfront units that will be coming onto the market in Brickell within the next 12 months that offer much better prices than those offered by some of the existing Brickell condo buildings that were riddled with mortgage fraud.
My prediction is that a year from now Vue at Brickell will have an average price per square foot of around $325 for units sold over the preceding six months while this figure for The Club at Brickell Bay will be around $375. Of course, this is just an average, so some will sell for less while some will sell for more. I don’t think this will be the bottom though for condos at The Club at Brickell Bay. They will likely plateau around $350 per square foot. The latest foreclosure and short-sale listings shed new light as to the fate of prices at Vue at Brickell and The Club at Brickell Bay.
I feel that other non-waterfront condo developments in Brickell are in jeopardy as well. A lot of people are talking about the thousands of new units that will be coming onto the market in Brickell within the next couple of years but many fail to mention that only two, Epic and Icon Brickell, are bayfront. The rest are either riverfront or non-waterfront buildings. The bayfront buildings will have a slight downward adjustment in prices but will fare well overall. Once those two developments are completed there will only be one bayfront parcel of land left for development.
Miami Condo Index – Brickell – August 2007
I just finished compiling the data for this month’s Miami Condo Index for Brickell. Last month I revealed that the 18 buildings below had a total of nine closed sales from June 19, 2007 to July 18, 2007. That number surprised myself and many others who follow the real estate market in Brickell. Be prepared to be surprised some more because this figure has dropped. There were a total of eight closed sales from July 19, 2007 to August 18, 2007 in the 18 condo buildings below throughout Brickell. Eight!
Of the eight closed sales, one appears to be yet another fraudulent transaction. A one bedroom/one bath condo with 825 square feet sold for $625,000, or $758 per square foot, on August 3, 2007 at The Club at Brickell Bay. It doesn’t even have a direct water view! The same broker represented the seller and buyer in the transaction. What is really crazy is that a different brokerage had the condo listed for $425,000 in May. It was later canceled and relisted with the broker who sold it for $625,000.
If you think that transaction has the word “fraud” written all over it then take a look at the one bedroom/one bath condo that closed on May 18, 2007 at The Club at Brickell Bay. It too had 825 square feet of interior space and a view of the water from the balcony. The buyer of that unit paid the full asking price of $680,000, or $824.24. The Club at Brickell Bay now has the highest price per square foot of condos sold in the past six months of the 18 buildings included in the index because of these fraudulent transactions. When is somebody going to step in and do something about this? Supposedly the Miami Herald and the FBI are investigating the situation but I’ve been hearing those rumors for months. What is taking so long?
The average price per square foot of condos listed in the 18 Brickell buildings covered in the index went up slightly to $529.05. Last month this figure was $528.84. The weight-adjusted average, however, went down to $537.67 from last month’s weight-adjusted average of $540.17.
Average price per square foot of units currently listed on the MLS:
The average price per square foot of condos sold over the past 6 months actually went down slightly to $471.94 from June’s average of $473.95 despite the fraudulent transaction at The Club at Brickell Bay. Take note that The Club at Brickell Bay now has an average price per square foot of $720.15 for condos sold over the past six months. That is simply ridiculous. This average is based on the three transactions that have occurred at The Club at Brickell Bay over the past six months, two of which appear to be fraudulent. A little over 20 percent of the building is available for sale but nothing is moving. Hmmm…maybe it’s because the list prices there don’t make any f@&#ing sense!!!
Average price per square foot of units sold in the past 6 months:
- Atlantis – 2025 Brickell Ave | 33129 | $335.12
- Brickell on the River – 31 SE 5 St | 33131 | $409.44
- Bristol Tower – 2127 Brickell Ave | 33129 | $412.44
- Emerald at Brickell – 218 SE 14 St | 33131 | $474.85
- Four Seasons Residences – 1425 Brickell Ave | 33131 | $720.15
- Imperial at Brickell – 1627 Brickell Ave | 33129 | $319.56
- Jade Brickell – 1331 Brickell Bay Dr | 33131 | $666.87
- Neo Vertika – 690 SW 1 Ct | 33130 | $361.99
- One Miami – 325 & 335 S Biscayne Blvd | 33131 | $450.94
- Sail on Brickell – 170 SE 14 St | 33131 | $373.16
- Santa Maria – 1643 Brickell Ave | 33129 | $643.95
- Skyline on Brickell – 2101 Brickell Ave | 33129 | $471.39
- Solaris at Brickell – 186 SE 12 Ter | 33131 | $450.43
- The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | $723.35
- The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | $478.95
- The Palace – 1541 Brickell Ave | 33129 | $363.32
- Villa Regina – 1581 Brickell Ave | 33129 | $316.62
- Vue at Brickell – 1250 S Miami Ave | 33131 | $522.37
Sold-to-Listed Ratio expressed as a percentage:
- Atlantis – 2025 Brickell Ave | 33129 | -2.56%
- Brickell on the River – 31 SE 5 St | 33131 | 12.45%
- Bristol Tower – 2127 Brickell Ave | 33129 | 19.48%
- Emerald at Brickell – 218 SE 14 St | 33131 | 12.67%
- Four Seasons Residences – 1425 Brickell Ave | 33131 | 25.18%
- Imperial at Brickell – 1627 Brickell Ave | 33129 | 23.35%
- Jade Brickell – 1331 Brickell Bay Dr | 33131 | 23.98%
- Neo Vertika – 690 SW 1 Ct | 33130 | 13.66%
- One Miami – 325 & 335 S Biscayne Blvd | 33131 | 3.51%
- Sail on Brickell – 170 SE 14 St | 33131 | 33.53%
- Santa Maria – 1643 Brickell Ave | 33129 | 10.59%
- Skyline on Brickell – 2101 Brickell Ave | 33129 | 5.99%
- Solaris at Brickell – 186 SE 12 Ter | 33131 | 14.30%
- The Club at Brickell Bay – 1200 Brickell Bay Dr | 33131 | -11.98%
- The Mark on Brickell – 1155 Brickell Bay Dr | 33131 | 4.41%
- The Palace – 1541 Brickell Ave | 33129 | 3.39%
- Villa Regina – 1581 Brickell Ave | 33129 | 36.73%
- Vue at Brickell – 1250 S Miami Ave | 33131 | 2.85%
I noticed that a handful of fraudulent transactions will be falling off next month so I’m expecting the average price per square foot of condos sold over the past six months to go down in September. That is, however, assuming that other fraudulent transactions don’t appear in the next 30 days to take their place. We shall see.
