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First!
“To me, the floor plan felt much smaller than the 1,457 square feet stated in its floor plan.”
Is the city codes office supposed to supervise footage accuracy? What stops a condo from shortchanging feet from the plans? I’ve always felt a lot of Miami condos were smaller than the claimed sq ft.
lucas…does the condo in your pics have a unfinished floor?
I have seen a lot of houses/condos lately where the owner either never got floors installed (bare concrete) or was in the process of getting new floors when they encountered financial difficulty.
Carbon,
A lot of developers have been taking the hip (and cheap) way out by calling their units “decorator ready”, which means you should bring in your own decorator to decide what sort of flooring you want.
The trend started at the higher end buildings when the new unit owners would rip out the ‘standard’ flooring and replace with their own, and the developers realized they could save all that money on flooring and still charge the same amount.
The views are stunning. What about the overall feel of the building? How does it compare to Ten Museum or 900?
Guys, if you think that these views are stunning, wait until you see the views from either Quantum or 1800 Club even from lower floors. It will blow your mind away. It does not have the ugly white round tin AAA in the foreground. Here are some pics I took from the 17,19,24 and 30th floors of Quantum and 1800 Club.
enjoy
http://picasaweb.google.com/biscaynebay/1800ClubQuantum
I would rather get it “designer ready” than with some cheap tile I would end up tearing up and replacing and spending even more money. However I really like how in the Plaza they deliver the Units with Carpet, that gives you a nice option to stay with the carpet and when you decide to put flooring it makes it very inexpensive to take out the carpet.
On another note those views are impressive
I forgot to mention that for comparison sake, I added some pics in that same album, I took from Marina Blue. You can recognize those pics, when you see the the AAA in the foreground. Also another not so great thing about the Marina Blue or Park West Building view is that you have all the port cranes in your face and in 1800Club and Quantum views, you have almost all water and Island views. If you look closely, you can see Samir in one of those pics!
Needless to say I am a complete fan of the 1800 and Quantum as far as location, views, facilities and everything else.
Once you click on the link and open up the Picasa web album, choose the slideshow option and do not individually click the pics. The pics look the largest in the slide show option. The time is set for 4seconds each pic but you can reduce it. there are 110 pics. The best pics are in the end, that I took from 1800 club.
If you have any questions about these 2 buildings, ask me.
whoever came up with the term “decorator ready” should be given a few mil from the developers. really, it’s the ultimate misnomer. nothing’s ready in these places other than you be reading to drop another 50k .
AJ, what do you think about the fit and finish and floor plans of 1800 Club? The views are awesome for sure. The large 1 bedroom unit (#11) on the south side on the building, did you happen to see the views from it?
THOSE ARE SOME REALLY NICE PICS… I AM VERY IMPRESSED WITH BOTH BUILDINGS. ON ANOTHER NOTE I WOULD ALSO LIKE TO KNOW THE ANSWERS TO JL’S QUESTIONS (COMMENT 2). CAN SOME PLEASE IF YOU KNOW, ANSWER THOSE…….
Hi Miami ’08, I did not see the 11 line, but i have seen all the bay facing 2 bed lines and i believe the fit and finishes are the same for all other units there too.
These are the issues I have with 1800.
1. I dont like the decorator ready floors. i wish they at least had a carpet like the units in quantum.
2. i dont like the closet doors. They are flimsy
3. i dont like the fact that there is individual hot water boilers in each unit instead of a central unit for the building.
apart from these minor inconveniences,
a) 1800 club has the best views of all the buildings i have visited (the bayside, the city side is just OK as any other building).
b) 1800 and Quantum has the best amenities and facilities and coneveniences and common areas compared to all other new buildings I saw.
c) these buildings have the advantage of direct opposite location to the completely redevloped pace park which is truly a delightful place to watch, play, hang out, work out. you can even swim in the mini “beach” by the bay. The water is warm and crystal clear. Go a bit deep and you can even pet a manatee!
d) These are located at the entrance to venetian causeway and mc arthur, and puts them 5 mts away to the beach. I 95 is a minute away.
e) Carnival center and Metro mover station are 2 blocks away.
f) all in all it has all the benefits and none of the disadvantages of downtown, parkwest and brickell buildings.
I honestly think that the 5 blocks starting with Venetian, grand, Opera (yes even that failed building opera has the location advantage which will eventually benefit it once the dust settles), bay parc Plaza, 1800 Club, Quantum, Cite and finally Paramount Bay will be the most desired location to live in Miami in 5 years from now. With Paramount bay being very expensive, and opera in doldrums, I see that 1800 and Quantum are absolutely the way to go if you want to get into that area. There are some good deals there. so check it out.
I have a good feeling that these two buildings will weather this current storm pretty well considering all their strengths and if you are looking to get something in these two for $200 or less, you may be disappointed as those kind of rates might be expected in Brickell only.
Disclaimer: NO, I do not have an ulterior motive in plugging these two buildings. i do not have anything to sell in them. i am actually trying to purchase a unit in these buildings.
Lucas – can you update the condo deals page?
AJ, I have always been a big supporter of Quantum, I think it’s the best building out there considering location, views, etc. also the layouts for even the small 1/1 feel bigger than a lot of other 1/1’s. what I dont agree is that they will weather the storm, I think no building downtown will weather the storm, they are all gonna drop in price nose first.
You must be kidding swimming anywhere near near pace park[assuming you are not homeless.] Samir must be sharing his koolaid with you!
Thanks AJ. I do appreciate the pics and your honest observations. Wife and I are looking for a vacation and future retirement home here in Miami. Would love to get something by the beach but can’t afford the $. looking for a safe bet for the next 5 – 10 years+
Quantum and 1800 Club both have fantastic common areas with all the bells and whistles and the decorator left nothing for the new owners to buy. The long hallways got to me in 1800 Club. A lot of the units in both buildings have privacy issues with neighboring buildings close at hand.
AJ,
If you visit the area surrounding Quantum as well as Park West at night, you might reconsider going outside after dark. These are nice buildings in very ugly neighborhoods.
No way either area will surpass Brickell.
AJ,
JGM is not accurate. IT is perfectly safe at night around Quantum and Park West. If you have a 38 magnun handgun or large knife it will deter anyone from bothering you. Also, if you get a gun permit you can carry on a holster as you walk around your property. Very safe, no fear……….
The “Smart Money” may raise there price to $127.50 a sq ft as a premium for the view but don’t bank on it!
Wow, that kicked up quite a storm. settle down guys. You got to give the devil its due.
I have never been a fan of Brickell. I dont know why, but I just dont like it. It feels like paseo de colon in Buenos Aires or Bogota or such minus all the excitement. No views at all for most buildings. It doesnt give a homey feel. So are the buildings in parkwest.
From Key Biscayne to San Souci, the only place that caught my fancy is the Omni area around the pace park. It actually feels like a place you can live peacefully. i could even bike to SOBE on venetian causeway and be there in 5-10 mts. I do not subscribe to any buildings north of 21st street such as Onyx and star lofts etc. They are not the same as the buildings around pace.
Solution for fear or whoever you are, I am not a pussy. Never carried a weapon in my life and I have roamed fearlessly in Bed-stuy, East LA, The mean streets of Chicago, DC, Detroit, New Orleans. Compared to that the people in Miami are almost docile. Maybe you are that white lady who clutches her purse when passing a guy of not her color. Chill out! I have walked all over that area, including west of the Biscayne Boulevard, shopped multiple times at the food market on 2nd av and 19th st and it had always been a good experience.
If you cannot handle seeing a few minorities without clutching your gun or locking your cardoors and bolting through a red light, you should move to Finland or Iceland.
Miami ’08,
I have a pad on the beach, but I cannot imagine retiring there. It is also a 1 bed. That is why I am looking for a 2/2 in a less crazy place but accessible to all the craziness if I wanted to. These 2 buildings fit my requirement perfectly. If you are considering a non bayview unit due to the price factor, then definitely go for the 1800 Club, as that building has the best pool deck with a bayfront verandah and party room with great views. So even if you dont have water views from your unit, you can entertain your friends on the bayfront veranda just like it is your living room, enjoying the great views.
Hi Ace,
I dont want to argue with you. Maybe you are right. May be some units in some building might hit low numbers as you say. But the question is will you be able to get one? Do you have ready cash and the bargaining clout to snag a unit when such a thing happens?
I am talking everyday with industry insiders and there are vulture funds and hedge funds with millions of dollars ready to gobble up these units at pennies on the dollar. they have the money, the connections and the bargaining power. They get the first dibs on the market. All you will be left with is just scraps and leftovers. if you are thinking about financing, forget about it, no one will even look at you.
That is why my advise to those who are looking to buy a place for themselfs (end users), who are financing the loan and are not cash buyers, is to start looking now. You have the luxury of time. If you are waiting for the bottom to happen, and when it does indeed happen, you wont be able to compete with the big money and cash buyers. the big money will buy 200 units at a go, but all you are interested in is just one.
You want
a choice location,
a choice building,
a choice line,
a choice unit ,
a choice height or view and so on.
if you do not want to compromise on any of these, you cannot wait until the end. If you like a unit, hard bargain, ask for a good discount taking the downturn into consideration, and even if it goes down a little more after that, no sweat as you bought it to live in it. It will get its price back up soon.
I cannot compromise on the unit that I want and I am not a cash buyer. So I have to get into the market now.
Ace, I wish you luck, in finding your dream unit for $125/sf with out a view and $127.50/sf with a view. Definitely dont forget to invite me to your housewarming party.
AJ,
You are out of your mind!
The 25 year American credit expansion is over. There are THOUSANDS OF PROPERTIES BEING DUMPED ON MARKET!!! There is a gross oversupply at inflated asking prices. There are condo towers still under construction! Most of these condos have been blacklisted and banks won’t lend to buy. This is total insanity!
Those vulture funds will be crushed under the weight of their carrying costs. Have you ever looked at previous housing crashes? They aren’t V shaped! This isn’t like calling a bottom on the stock market. Houses won’t gain nominal value for at least 7 years! That means inflation is eating the real value of the purchase. These subprime vulture funds will default and the houses will be back on the market within a year.
Hedge funds are not buying Miami property. PIMCO, Blackstone, and Apollo Group are not buying overpriced Miami condos.They are buying and shorting bonds, commodities and the stock market.
George Soros, Warren Buffet, and Carl Icahn are not buying Miami condos. As a matter of fact, Warren Buffet – the world’s richest man- sold his mansion at the height of the bubble in 2006!
Foreigners, in any significant capacity, are not buying Miami condos. Spain, Italy, Ireland, England, Australia, Canada, Vietnam, and many others are just starting along their own deflationary spiral- their bubbles have popped. Do you think they are speculating over here?
We are entering a global economic slowdown. This crisis is going to last YEARS. It will culminate with Fannie Mae and Freddie Mac failing and being nationalized. The United States will lose it’s AAA credit rating and the resulting interest rates will shoot up to 20%. Even if somehow the GSEs do survive , foreigners are already slowing the purchase of treasuries. This will eventually force our govt to raise rates or face hyperinflation. Do you know what high interest rates will do to the resale value of your condo? Why don’t you turn off the American Idol and read some statements by Shiller or Roubini or the IMF.
Also, have you ever looked at the median income in Miami and Miami Beach? It’s like 30 thousand a year! I’m a medical doctor and I can’t comfortably afford these condo prices, what legal occupation can? Are there enough drug lords and celebrities that are buying $300,000, 2 BR condos? Hell no, they are buying $5 million penthouses for $1 million.
All the data indicates this problem is accelerating!
In conclusion, anyone that is buying now is either commiting fraud or will just plain default. Do you know why I am so certain? Because those that can do basic math or understand basic economics are the only ones actually earning enough to comfortably buy, and they are too smart to buy a depreciating, illiquid asset.
AJ,
Maybe these buildings will offer security escorts in order for residents to walk their dogs, or go biking, running, etc, etc…..
The omni area is literally one block away from overtown. Buy Brickell, Gables, Coconut Grove, but who in their right mind would want that area….
JGM, AJ,
With the economy going down, crime is going to go up as it always does. It takes a long time for neighborhoods to improve and given the population loss in miami, it will take even longer. The people who are leaving are not criminals, but average middle class type folks.
If you look at Zillow.com and look at prices for prime real estate on sobe or any area in south FL, you will be very suprised to see how affordabel all the nice areas were until about 2001/2002.
On a slightly different note, my financial advisor told me about a new strategy that I should think about for my investment income. He is advising me to pay down my mortgate instead of investing in the stock market. I have a lot of equity in my house in the grove and I bought in 2004 with 25% down. I have been making 4 extra payments a year for my mortgage and now my advisor is recommending 12 extra payments a year. His logic is that I am paying 5.4% interest on my loan and due to AMT, I am saving very little on taxes due to mortgage interest. If I pay down my mortgage ,I am guarenteed to make money.
Please note that I plan to stay in my house for a long time and even if I have to move, I intend to rent it out and not sell.
QUESTION, did anyone hear of national mortgage intrest rates dropping to about 2% ???? i was informed of this last night.
JR56. The 2% rate is the one that is charged between banks and federal reserve for overnight loans. That rate is not connected to mortgage rates directly.
30 yr fixed is around 5.8%. Check out http://www.bankrate.com/ for latest on mortgate rates
AJ
real hedge funds are not looking to buy condos in miami. the business model and fee structure of a hedge fund would make such an investment suicide. simply, you need to show year to year positive return to justify your 2/20 in fees.
what you’re talking about and from what i’ve seen on my end is groups of unsavvy wealthy people (doctors) saying “let’s start a fund and buy properties in bulk.” these people will get crushed. the big boys, i.e., the vornados of the world, who actually can buy in bulk and make it work, are not even venturing down this way yet and won’t until it makes economic sense to do so. right now the bid/ask gap between sellers and true bulk buyers (who actually know what they’re doing) is just as wide as the gap between individual sellers and buyers.
in all honesty, everyone keeps on talking about “funds” swooping in, but in actuality, how many bulk sales in new projects have been made? TMP supposedly dropped off 20/30 units to a bulk buyer (we’ll see how that plays out). what else?
Mo,
I’m gonna have to disagree with almost your whole argument. first of all you are way too pessimistic, life is too short to be bitter, you should know your a doctor. second of all if you do some research you will see that over 90% of loans are still being payed on time (In the United States as a whole), If that is the case I dont see how freddie mac or fannie mae can fail, and interest rates are not gonna shoot up to 20% . I agree that we are in a global economic downturn but it wont be as doomsday as you make it seem. We are still the most agile economy in the world, when the U.S. gets the flu the world get pneumonia….we just need some better fiscal policys and we’ll be ok. and by the way I can do basic math and undertsand economy very well, I think most people on this blog can too.
Hey Lucas do you get royalties when people post their advertisments here? If not you should charge. haha.
Mo,
I agree with most of your post, but not:
“It will culminate with Fannie Mae and Freddie Mac failing and being nationalized. The United States will lose it’s AAA credit rating and the resulting interest rates will shoot up to 20%. Even if somehow the GSEs do survive , foreigners are already slowing the purchase of treasuries. This will eventually force our govt to raise rates or face hyperinflation.”
I think there will be a global slowdown and the US has always been a safe harbor for investing. So, I don’t see the calamity that you outlined. I do agree that it’ll take 7 years to get out of this thing and we’re about 2.5 years into it. Prices will decline in 2008 substantially, less so in 2009, and then pretty much remain flat (but declining in real dollar terms) for a few years. Peak to trough in the Miami area is already at a 28% decline, probably will end up being 40%+ when all is said and done. Worst case, 50% (or at least I hope that is the worst case). Minimum will be a 1/3 decline.
“They are too smart to buy a depreciating, illiquid asset.” I am that smart too…and decided to rent for a year or two and watch how this thing plays out.
raffi…i agree. Economy is not going to collapse and things will return to normal in a few years. I am seeing people mentioned hoarding food and buying gold coins to prepare for the great depression on other blogs. hahahaha.
No doubt, there will be a lot of pain felt in the miami real estate market, but things will bottom out and people will start buying once prices drop to affordable levels.
Purchased a 1/1 for cash at Quantum and closed last month. It’s a vacation/retirement residence . So far we consider the view, building and location to be great. In the morning it’s coffee on the terrace watching the boaters heading to Picnic Island and in the evneing it cocktails overlooking the evening soccer games in Pace Park. We’re just a small sample in a challenging market but this slice of Miami seems to work for us.
I agree with raffi, Life is too short to be bitter and pessimistic. i used to be a subscriber to the doomsday scenarios but I am a believer in human endurance. Earth and earthlings have managed to survive and prosper against all odds over a million years when theoretically they almost had no chance. barring an Apocalypse Now, we should be ok for quite a while.
Up until the 80’s we were kind of medieval in existance, relatively speaking. Then cam ethe internet and revolutionised the way we live and work. All this prosperity that you see since the 90’s is a direct result of that revolution. We are in a transition period now and hence a lull. When we start deriving benefits from all the experimental stages of Nano technology, Biometrics, stem cell research, Genome project, cloning, alternative fuels etc, there will be next revolution which will carry us through a prosperity cycle for another 50 years until the next big thing arrives and so on.
Economy and economics is basically a play of numbers and perception. It spins in the direction of a spinmeister who can influence minds and attitudes. I am not afraid of a ethereal subject. I am afraid of reality. And reality my friend, is that SOBE might be in kneedeep water at every high tide in 50 -100 years from now. Anyone has a solution to that?
Mo,
What is American Idol?
NJ,
Exactly why I loved those 2 buildings. Can you tell us how much you closed for and how much is the asking price and price per SF. It helps the other bloggers here. tks
The truth is that “some” bought at high price believing higher price in the future-but the contracty happened.
And now “some” are not buying believing lower future price- ….let’s see what will happen.
Many are expecting lower prices to buy, but nobody is taking on account that as soon as sales increase price will go up…Last, nobody is taking in consideration interest rate which is in the low 6 right now and was around 5.5 a few months ago.
gustavo – I think it is clear that prices will continue to decline throughout 2008. There will be no quick turnaround in housing. Price declines were actually ACCELERATING Feb-Mar MoM numbers. The bottom line is SUPPLY is what will determine prices, and supplies are rising as non-owner occupied homes come on the market (for whatever reason, foreclosures etc.). Financing — at any rate — is minimal. I heard a story of a $4.5M condo purchase with 50% down that could not get financed so the unit is back on the market….unbelievable.
Observations: I live in Quantum, is nice to live here next to Pace park, more residential, the sea breeze, close to everything in downtown. BUT, I am paying $701 in maintenance, while in the condo next door, 1800 Club, a similar sized unit pays only $480. An extra parking space will cost $20,000 in 1800, I paid $25,000 at Quantum for an extra parking spot, and got assigned parking on the 12th level, THAT SUCKS! Do you know what is like to get in and out of the 12th parking level? …around and around and around… I think we got shorchanged in Quantum, where is the steam room promissed? Where is public roof terrace? I don’t know what the pitfalls of 1800 are, but they have a steam room, a jacuzzi hot tub next to the pool and lower maintenance fees (for now???). I have furnished my unit, …guess what? The bedroom furniture is from Vietnam, the Sofas from Italy, the LCD TV from Japan, the dining room and living room tables from China…and everything I bought at Beds & Baths is made in China, enough for the wonderful US consumer economy, in particular the South Florida economy, which sucks big time!!!. I am bracing myself for the property tax bill… and thinking of moving to a third world country at some point to afford my retirement.
I think sayig that Fannie Mae and Freddie Mac will tank and get nationalized is a possibility but only if the government steps in and forces these agencies to buy the papaer from the lenders as a bail out since we will see many banks go bankrupt as all these REO’s hit their books. Regular banks thatgive out loans do not have mark to mark accounting as the financial brokerages so this inventory will be coming all this year and going on their balance sheets, which will cause them a liquidity problem and they will fail
Unless that happens I really doubt Fannie Mae and Freddie Mac will fail as they had a limit of conventional loans to $416,000 (this was recently changed to about 720K in some areas by the stimulus package) and they required full doc loans with no more than about 32% of monthly income for Principal, insurance, taxes, interest and Homeowners association so AI dont see them being at risk in fact Im going to pick up some shares later this year
AJ – We paid $350 psf for the 4oth floor and the Atlantic Ocean looks good from here.
AL – Got a space on the 4th floor parking but do understand the round and round thing would get tedious. I don’t recall evers seeing in writing anything about a roof top terrace or steam room, but a yes on the sauna which is in place. Told verbally a small storage locker in the garage was part of the deal, but turned out it was an option at close 4 years later. More life lessons.
Mo, that must have been some good scotch you were drinking while writing your post at 2:45 this morning. Still recovering?
Thanks NJ, That is about right. In this economy, a good water view should be worth between $300-$350/SF. They were initailly priced at $450-$500/SF at preconstruction prices of 04/05. So you got a decent deal. This is how I justify the $300-$350 price tag for water view units:
Sure there is a condo glut and there is more to come. but there is one point that people are forgetting; for every 20 units that are coming up with partial or no water/bay view, there is just 1 unit with clear and unobstructed water/bayview. (alright, I pulled this number right out of my a$$, but if you sceintifically count all the units coming up in Brickell, Midtown, Parkwest, DownTown, Omni, Miami River etc, the number wont be that far off).
The units with clear and good water/bayview will always hold its value, few in number, are more desirable, first to get sold, last to be offered for sale and the views are so hypnotic, that even rational people stop thinking and just want to have it no matter what.
Hence when people like Ace and all talk about 125 or 150/sf, I only guess that they are talking about the 19 out of the 20 units with minimal or no water views. i bet my last red cent that you cannot find a clear unobstructed water view for 200 or 250/sf.
My advise to anyone on the lokout for a unobstructed water view unit, 1. Start looking at a unit priced at $350/sf very seriouly. at this level, you may the only bidder. 2. At $325/sf, you may be the one among 4 bidders. 3. At $300/sf level, you will have serious competition from other buyers including cash buyers.
For clear water view units, I predict the bottom to reach at $300 and no more. But waiting for that bottom, unless you are a cash buyer may result in you not getting the choice unit you want.
As far as the remaining 19 out of the 20 units with out clear water views, I dare not predict when the bottom would reach and at what level of price/SF. It could be $150-$250 anywhere between sept 08 to dec 09. who knows? I am not in the market for one of those units and I do not care.
Al, I am sorry about your predicament. That is one reason I like 1800 more than Quantum. Their pool is really nice, great bayfront verandah, steamroom along with sauna, jacuzzi, Better management, Set more to the bayfront than quantum. But I do not expect the low HOA in 1800 to last long. So breath easy there. as far as the 12th floor, parking, you did not do some hard bargaining. At 25K, you should have demanded that you be accomodated in a lower floor. the developer has them but kept them reseved for some hard nosed customers or friends. Sorry about that. But barring those Quantum is a nice building. If i do get in 1800, I will let you use the steam room, jacuzzi, bayfront verabda, heated pool and you let me use the nice common areas of Quantum and some of the additional gym equipment that you guys have by exchanging the FOB keys! Or even better, as both buildings are identical in facilities and demographics, one day they should put steps to join both pool decks and combine the resources. That would be great. Get on the board and start talking to others!
For those of you that think FNM and FRE can’t fail, you’re drinking the Kool Aid.
http://market-ticker.denninger.net/2008/04/fannie-and-freddie-short-to-zero.html
http://online.wsj.com/article/SB120818189112412691.html
Gustavo,
As sales increase I think you will see price declines until excess inventory is burned off. This is because prices drops stimulate sales increases especially for mid prices and low priced houses and as more mid-end market low-end market homes sell, they influence the average down.
Regarding Fannie and Freddie tanking/failing and requiring a government bailout, it’s possible. And if Congress continues to push these GSEs to take more risk than is prudent, odds of failure are better than even.
Read this to understand why Fannie and Freddie are at risk of failure
The article I linked above to was written well before both GSEs reported billions of dollars in loses early this year.
In 2003, the NY Times wrote ( Fannie Mae’s Loss Risk Is Larger, Computer Models Show): http://query.nytimes.com/gst/fullpage.html?res=9A07E5DD1731F934A3575BC0A9659C8B63
And, last December, Bloomberg wrote (Fannie Mae Has $3.55 Billion Fourth-Quarter Loss):
Most folks do not realize that Fannie/Freddie wrote nonprime loans (aka expanded approval mortgages). Some of Fannie Mae’s traditional agency fixed refinance products did NOT require income documentation or even an appraisal. For people with “good credit” and high declared (but not verified) liquid assets, income documentation AND appraisals were waived by Fannie’s automated underwriting system.
The “smart money” says that Fannie Mae’s risk of default has increased significantly and Fannie’s borrowing costs have increased. That’s why the spreads between Fannie Mae’s paper and U.S. treasuries have widened significantly.
At this time there is an infinite supply of condos as there are more coming on the market monthly than getting sold. I would not be sitting around waiting for a bounce back up to sell and I would not be in a hurry to buy fearing I missed a bottom.
Unfortunately, the incredibly negative “national” housing news is nothing for South Florida because we are so special with all of our celebrities, foreign buyers, yadayadayada…
Take the the negative national news and amplify it accordingly to take into account the gross excesses that took place here.
It has nothing to do with a doomsday scenario but everything to do with a reality check that was missing for years.
Supply is only half of the problem. True demand is all but non-existence. The direction and severity is obvious only the extent is uncertain. Too predict 30%, 40% or 50% is a fool’s game.
Only time will tell and unfortunately, I do not think it will be pretty.
I play the fool’s game. In South Florida, I predict that home prices will drop BELOW 2003 prices in nominal dollar terms. We have seen a historic 28% price drop so far. A total price drop will easily exceed 1/3 for sure…I’d bet all of my money on that. Probably a 43% price drop is what will happen for South Florida when the bottom is reached (note: it is actually much higher in REAL dollar terms). Put me on the record for that. So, take peak prices, multiply by 0.57 and there you go…
By the way, what do people think of direct ocean front new condos in Sunny Isles Beach???
Peak prices are also something not so easy to define. We would first have to deduct for outright fraud and collusion, then maybe take out more simple and basic mortgage fraud “application fraud” etc., and then have to guess at what was a true homeowner, second homeowner, honest investor and not so sharp speculator would and DID pay for the properties at the top of the market.
Renter Tom your prediction of course may very well turn out to be right but I do not think the evidence is in at this time to be able to make any supported predictions.
I likes Sunny Isles when I was 20 and could get a clean room on the ocean for $19 a day
You can’t miss the bottom because housing prices won’t make a U turn. This is a multi year process, look at historical data. Even when the nominal price “bottoms” in real terms the house will still be losing value. PS With the BS that Brazilians and other South Americans have to put up with to get a visa here, it is foreseeable that the Miami tourist economy takes a huge hit.
On South Beach – interesting to note that a certain newly launched trendy hotel/condo on the North end of SoBe is now offering to negotiate with contract holders on prices (the project is 18 months late).
I think this is one of the first signs that hype/expectations of only a few months are coming to earth with a bang.
Anyone know if the 2 bedroom unit at Emerald at Brickell in foreclosure listed at 309K has sold?
To AJ
It is very refreshing for the “Smart Money” to find someone on this Blog that fully understands exactly how the “Smart Money” operates.
One who knows who drove up the price in the first place and then bailed to let the speculators, flippers and armature investors left holding the bag.
AJ dear boy,
The Ace represents the “Smart Money”
Hi Tom, I have the option to pick up a unit at Sunny Isles or The Q/1800 for the same amount of money.
For one I have an issue with Ocean view. At night it is dark and depressing and nothing to look at. Compare that to the views from Q/1800 of the islands, 3 causeways, all of miami beach and the ocean too.
Secondly, Q/1800 are 5 mts from SOBE, I can take a scooter and go down there even for a coffee and be back in no time. Sunny isles is not such.
Finally there is no activity in sunny isles. It always seems dead and deserted. It is as gruesome as living in Aventura, just a place for getting old and waiting to die! it is not for you.
Dont go there.
Ace, the investors and speculators are reeling under the onslaught of continuous price declines.
just pause for a second and imagine if they are not there or some scumbag mortgage brokers/appraisers/realtors did not exist, you would not have this beautiful Miami skyline or a chance to snag a great condo for a song at other peoples expense.
I am on the threshold of buying a clear unobstructed waterview property, I have been dreaming of since 2005, for $300-$350/SF range, which was paid for by an investor/speculator at $400-$500/SF range in 2004/2005 hoping to flip for $600-$650/SF in 2008.
So let us all raise a toast for the scumbag realtors/mortgage brokers/appraisers/bankers that made it possible, with sincere apologies and sympathies to the speculators/investors who’s 20% monies sacrificed, made it possible to erect these magnificent buildings. Cheers!
AJ,
I understand your position. You want to buy…but you need to delay your gratification. HOLD. I promise you that you will pay 200/sq foot if not less. Just rent for a few years. It will come. As Baron Rothschild says,” buy when there is blood in the streets.”
You will have a severe case of buyers remorse if you buy now.
Do not forget the Sandpaper stage….
“First there’s the guillotine stage – the sharp decline. That creates fear. Then there’s the feeling of being sandpapered to death. In place of fear come feelings of apathy, lack of interest, and finally, hopelessness.”
-Legendary market analyst, Bob Farrell
To me, you have properties with a view that are within walking distance to stuff and then you have the rest. I think the market tends to judge likewise.
There’s tons and tons and tons and tons and tons of condos with great views within a short drive of SoBe.
Brickell/Biscayne Wall has some promise not becasue of just the views, but because you have the views and will hopefully have decent attractions within walking distance in the future. If you dont’ have to be within walking distance to anything, Sunny Isles is a perfect spot to check out.
This explains a lot regarding AJ’s persepctive:
“I have been dreaming of since 2005, for $300-$350/SF range”
Truth be told, the only people buying now are people who “discovered” SoBe 2004 and afterwards but were priced out… to them, a 40% discount from 2005 makes things appear cheap.
There’s just not enough of the 2004 and after crowd to stabilize prices, once they get cleared out, you’ll get another leg down in this RE market.
This really is like the Nasdaq bubble unwinding. You had the initial dramatic Tech sellers when the Bubble popped and then you had the initial “smart money” buyers who saw value in the Internet sector due to stocks being 50% off thier highs… once these buyers got done, the stock market really fell apart and truly hit bottom.
Nice analogy JL
Mo, Thanks for the good advice. I will still have some money left to invest after getting into Omni. If you can get me a flat with view in Marina Blue or 900 biscayne for $200/sf, I will be your slave for a year.
JL,
Have you followed the yahoo or amazon stocks after the collapse of the tech bubble? I rest my case.
Nevertheless I do agree that there is a danger of a further slide in prices. But it is irrelevent. I am buying to hold, not to sell. So what ever losses might be, will be recouped in 5 years.
In any case in my SF level, a further slide would have made my flat cheaper by let’s say 20K or 40K. On a 30 year mortgage, the savings on my monthly payments would be negligible. I have more to worry regarding the damn HOA and the hideous property taxes. They are the killers, not the monthly mortgage payments.
AJ,
If you don’t understand why it is a bad idea to buy a condo when price reductions are accelerating, then Ace and Mo are probably wasting their time.
But you seem like a nice person so I’ll try to explain once more: buying a condo today is almost as “smart” as buying a new Ferrari at 5% off today even after Ferrari SpA announces that they’ll hold a 20% off sale two weeks hence. Yes, you get to own a nice car sooner but wouldn’t it make more sense to rent a BMW or a Ferrari for two weeks then buy the Ferrari for even less?
The smart money is really into delayed gratification when it makes financial sense.
If you still want to buy a condo at $300/sf, by all means, go ahead. No need to keep us informed about how it turns out. We’ll know.
AJ –
JL’s tech stock analogy is a valid one. Yahoo was at about $110/share (split adjusted to today’s price) at the peak. It lost 50% of its value quickly after the bubble popped. Plenty of “smart money” buyers bought at that “bargain” price of $50/share.
It then soon fell to about $8 a share and stayed there for almost 2 years (92% drop from peak).
Over 8 years later now since the peak, the share price is still only $28. And that’s assuming Microsoft buys it out. It only jumped up to $28 from $15/share earlier this year on that offer.
To say it “doesn’t matter” how much you pay now because you’re in “it for the long term” is absurd. Yes – prices will eventually be higher someday. Inflation ensures that. And maybe Yahoo stock will be $110/share someday. But there is a big difference between buying at $50/share and $8/share.
The $50 people are still down 44% after 8 years.
The $8 people are up 400%.
People that say “I’m in it for the long term, so it doesn’t matter how much I pay” should not be investing at all. There is a big difference between a -44% return and a +400% return.
And yes – this DOES apply to real estate, as well. If prices continue to decline (which you would have to be a moron to think they won’t), you will overpay and lose money needlessly. It is no different than the idiots that bought Yahoo stock at $50 just because it is half price (what a bargain!), rather than looking at the fundamentals.
BFG,
you can’t compare stocks with a home.
Gustavo is right. There is a ready market for the stocks.
yes you can compare stocks to a home.Timing is everything with all investments.
No need to argue the finer points people.
Home prices will continue to go down. It is a bad time to buy. You will lose real money and purchasing power if you buy now.
By the way, who can afford the HOA on these places! Am I mistaken? Are they 400-700/month or is that per year?!
Also, lets stop calling these investments unless you are renting them out and in the green from day one.
“For example, prices in the Netherlands are about the same as they were 350 years ago, in terms of how many years of work it takes to buy a house. Warren Buffett and Charles Schwab have both pointed out that houses don’t increase in intrinsic value. Unless there’s a bubble or a crash, house prices simply reflect current salaries and interest rates. Consider a 100 year old house. Its value in sheltering you is exactly the same as it was 100 years ago. It did not increase in value at all. It did not spontaneously get bigger, or renovate itself. Quite the opposite – the house drained cash from its owners for 100 years of maintenance, taxes, and insurance – costs that always increase and never go away. The price of the house went up about as much as salaries went up.
My grandmother always used to complain about the cost of milk. “Why, when I was a girl, a gallon of milk cost a dime! Just look at how much people are overcharging for milk now.” I asked her how much people got paid back then. “Oh, about $15 a week”, came the reply. Hmmm, sounds very much like the reasoning people use now when they talk about how much their father’s house appreciated “in the long run” without considering that salaries rose a proportional amount.”
Read This if you think the place you live in is an investment
gustavo –
An analogy is not a direct comparison. The parallels between the dot com bubble and the condo bubble are undeniable. The analogy is a valid one.
Besides, I didn’t originate it – I was simply commenting on AJ’s quote: “Have you followed the yahoo or amazon stocks after the collapse of the tech bubble? I rest my case.”
He was suggesting that those were good investments post-bubble burst. I demonstrated that they were, but ONLY if the investor timed their purchase correctly. Depending on when you re-entered those tech stocks, you could either be way up or way down. That was the point that was being made, and it applies to ALL investments.
Real estate is MUCH easier to time on the way down than stocks. In every previous market burst, property prices declined for several years, and then stayed flat for several more after bottoming. So, there is no reason to be antsy about “missing the bottom”. Simply wait for it – when prices hit bottom they will stay there for quite some time. Buying now will virtually guarantee that you will overpay. Prices are still falling off a cliff. Lucas’s recent post noted that prices have been declining at an annualized 24% clip. That’s not indicative of a “bottom” in prices. Price declines will slow down before they level out at the bottom. We’re nowhere near that point yet.
Another point I was showing was how stupid the idea of “I’m in it for the long term, so it doesn’t matter how much I pay now” argument is.
The point of the stock analogy was that buying something because it is a certain percentage off a previous price is a poor investment philosophy. That is what caused some people to buy tech stocks when they were 50% off their peak, only to see them drop to 90% off or even to zero later.
Would you disagree with this? Do you think buying something just because it is “half off” is a good idea?
And do you really belive that we’ve hit bottom in real estate prices with the economy in recession, the credit crisis ongoing, foreclosures growing at record pace, and inventory still mushrooming? If you do, you’re simply crazy. Sorry to be so blunt, but it’s true.
Actually, this RE meltdown makes it clear that we should compare homes with options instead of stocks. Especially discretionary 2nd home purchases in this instance. We’re talking Miami here, not Boise Idaho.
When you buy a stock, you are in positive equity and always will be unless the company goes BK. When you buy a mortgage “option” on a house, there is no guarantee you will remain in positive equity.
When you buy a mortgage with 10% down, it’s much more like a stock options play.
What happens when a stock option is worth 0 or less than 0? You throw it in the trash and don’t exercise your right to convert into stock.
What happens when a 10% downpayment on your condo gets evaporated by a declining market and thus you have 0 value/equity? We’re seeing these buyers throw their mortgage in the trash and refuse to buy the home.
What’s occurring right now with foreclosures –particularly in the South FL condo market- shouldn’t shock people. It’s actually a logical decision in financial terms (if you can live with the credit score damage). Paying a mortgage on a discretionary second home that is in a negative equity situation is like exercising a stock option that is worth 0 or less than 0… and how many times on Wall Street do you see that happen?
This South Florida bust is in large part due to the dramatic rise in 2nd/3rd home ownership. It’s much easier and financially smart to let the discretionary/investment homes go into foreclosure when they stop making financial sense.
This social change (in addition to the subprime funny money that’s been well covered) is probably what tripped up the bank models. The financial models assumed certain potential worst-case foreclosure rates based on a US housing history when very few home purchases were discretionary 2nd homes.
These foreclosures are coming out a lot worse than the models that financial institutions were using had predicted. In hindsight, it’s a rather obvious fact that a person’s willingness to walk away from a discretionary 2nd home purchase versus a necessary primary house are quite different and should have been taken into account in the financial models. That would be an interesting chart to see. Take people from the same economic demographic and chart the % of second homes owned that are in foreclosure versus primary homes owned that are in foreclosure.
Interesting post I found from a blog about Jose Canseco walking away from his home:
—
“Translation: I decided to breach my moral and legal obligation to repay money I borrowed because I stupidly paid too much for the house.”
Come on there is no moral question here – it is strictly business.
Where is the moral outrage when a business declares bankruptcy and debtors don’t get paid?
Simple business – someone made Jose a loan and as part of making a loan they build in “interest” and part of the interest is a risk premium be because they know that some folks won’t pay the debt back.
People have to get off the “moral” thing here – it is strictly business – trust me – businesses don’t look at it as a moral question when the CEO of a company walks away with millions after being booted from a company he or she lead into the ground (sure we may not like it) – but business people – hey its just business.
Hi JL, Discovered Miami in 1996. 2004 is when I first bought a unit here.
JL, absolutely. But I go further. I think ALL underwater homes are like call options no matter how much you put down. The 100% LTV were especially bad because the banks gave out FREE CALL OPTIONS. And this includes primary residences (perhaps some have an emotional attachement, but when they realize they are 100k underwater…..see ya later primary residence). Once you are underwater, let the option expire worthless. Just move out and rent.
NJ: I have several sales brochures of QUANTUM ON THE BAY, among other features they state: “Steam and sauna rooms” No Steam room was delivered, saunas yes. “Private roof terrace with expansive views”: There is a roof terrace on the 49th floor of the south tower alright (with beautiful views, yes!) but there are no chairs or tables or any indication that this space is a common area, and the “Tranquil Feng Shui Garden” I have not seen. Overall is a fine bulding, but parking on the 12th level for me sucks, I have complained to de developer with no luck, they just ignored me, legally there is no recourse as the contract states they can assign whatever spots they want, regardless of convenience or location. Buyer beware.
Mo, thanks for posting those are great websites. I wanted to post my own two cents on this. I believe this downturn (slowly becoming global) in real estate will be around for 3-5 years. The financial times, london already did a page 3 article on single family homes and how they have gone down in value in one year 27 percent, with more expectations on the way.
I am now renting long term. I just signed a two year lease for a beautiful condo on the beach (3,800 square feet) in a luxury building at a fraction of what is costs to own.
I am now investing in Panama and the Dominican Republic. I just bought a gorgeous condo on the beach in Panama. The government gives you a 15 year tax holiday as a US buyer. When you invest you pay no real estate taxes for 15 years, so it costs little to nothing to hold down there. With health care costs milking and destroying the american dream of retirement many will be moving to Panama and DR to preserve there assets.
I bought a gorgeous condo walking distance to a private hospital and on a golf course for $320,000. 4 bedroom 4 bath. zero taxes. The health care system is first class and it costs under $1,000 a year for first class health insurance. If you don’t want insurance visiting a doctor costs 50 dollars, versus these money grubbing, dollar chasing doctors here in the states. thoughts?……………………………….
finacial times article cited Miami and Las Vegas specifically as the most overpriced and steeped decline in single home values of 27 percent. Condos are stepper decline.
this is a great website, but the answer is somewhere else outside of Miami and it’s condo glut, and high tax, insurance, carrying charges.
If you want to talk about condo gluts to come, the first place that comes to my mnd is Panama.
Although I personally love the place, look out.
Mortgage rates are low and if you can lock in a 30 year mortgage at 5.5% to buy a condo in an established condo building and HOA and you plan on owning it for the duration of the mortgage, then overpaying a bit (5%) isn’t bad considering rates will go up to offset the 5% in waiting. You buy on payments but sell on price, so if you’re not selling you don’t have to worry the price difference if the payments are a true deal.
With that said, I think prices will go down substantially more than 5% from today’s prices. Again, I predict a peak to trough decline in South Florida of 43% with a good chance of it being larger than that…esp in real dollar terms.
I’m glad I’m renting now….one year lease with an option for a second with a tenant early termination option puts me in the right position to buy when the time is right….
Mo,
You’re 100% spot on. 200 per sqft is the max I would pay for any of these condos (including waterfront). Heres Why-
My lease is ending on my waterfront 1/1 on 22nd st. All units in my building have unobstructed waterfront that is SIGNIFICANTLY better than 1800 club Or Quantum. All units have granite kitchens with either marble or wood floors.
Once my lease was up next month I was seriously considering buying a 2/2 in my building for 500k. Then I crunched the #s.
To rent the 2/2 is $2200
To purchase is $2400 monthly (500k -20% @6% for 30 yrs) plus $1300 maintenace + $750 taxes.
so $2200 rent or $4450 to buy!!
I take $2000 a month in cash money directly to the bank by renting! There is no way the owner can even compare- as the rent barely covers taxes and maintenance.
Who needs equity when you could have cash instead?
The owner loses value by the day and I put cash into stocks/bonds/cars/vacations.
He loses sleep over special assessments and HOA problems — I take vacations using only a fraction of the money I save.
as for AJ– You’re heading for disaster, the “It doesnt matter what I pay, because I can hold it forever” mentality is exactly what caused the housing bubble. I’m amazed you have any money left at all. Especially at 2050 a month (if you paid cash!!) just for the priviledge of “holding it” because you couldn’t be bothered to attempt to “time it right”
For a vivid look at the fallout from the subprime crisis, tune in to…
‘Busted: Mortgage Meltdown’ a one-hour TV special report from CNN and Fortune.
The program will air on CNN on Sunday, 8 p.m. ET
JMechanic – I’m in the same situation….I’d rent forever at 1/2 the price… No worries, no headaches, no HOA problems and surprise assessments…….
Nice post JMechanic. But I anticipate that rents will come down significantly as a result of the glut of homes. This will further bring down the price one should pay for a home.
As the economy worsens, more and more people are moving out of the state, going back to their homeland, or moving in with parents/friends. So there will be a decrease of people wanting to rent on the demand side and significant increase in the # of rental units on the supply side. This will bring down rent prices.
Housing will have to fall even further to keep up with rent. I think $2200 rentals will become $1500 and $3000 rentals will become $2000 rentals.
$200/SF is the least it will go down to. I have seen an estimate of $150/SF for the VERY DESIRABLE LOCATIONS. I would pay $100-125/SF if the HOA comes down(in Miami Beach)
Brickell should see lower. Especially with higher interest rates and 20% down payment (which I think will be norm again in 3 years) we could see $75/SF.
There was an economist the wrote that most Miami Condos might be worthless-meaning that the HOA, taxes, insurance should be the only thing you pay to live in the condo. When you move out, someone else pays those fees.
Other than my breathtaking waterview, I can’t even understand why I live in a condo (other than its 2 blocks from my work). I wouldn’t even consider purchasing one that wasn’t unobstructed water view.
I’ve seen several buildings go up that have a real problem– they advertise “water view” but they are several blocks away from water and when something is built 8-10 years from now infront of you — kiss 150k of value per unit goodbye. ie: Platinum Condos, Bay Lofts, Midtown (the top ones are billed as water view… even if they’re 1/2 a mile back).
The noose tightens:
http://www.chicagotribune.com/classified/realestate/news/chi-re-harney-credit-crunch-0504may04,0,5242942.story
Mo,, you are right on about rental rates softening. Many Florida citys have experienced a great building boom that was led by speculators hoping to cash in. Shelter was at the bottom of the list as a reason to build, developers built because speculators were buying. Unlike most of Florida the Miami building boom has one significate difference. FIFTY STORY TOWERS that took 3-4 years to comlete.. Citys such as West Palm and Fort Myers building boom produced garden style (3-5 story) comunities and single family homes. Most of those developments were built with 24 months and completed 2-3 years ago. In areas where there was many newly complete comunities the rental rates started to decline and units sat empty. On average the rental rates droped 20% and more depending on area.
Miami’s towers are now completing and for the last three months we have started to experience a decline.
The following is an Email that I sent to a client this week.
For the last few months we have noticed a softening in rentals, units are sitting on the market longer and price are coming down.
I believe there are two reasons for this.
1. The local economy is softening, service, retail and sales are taking a hit. Less people are upgrading to better units and more than a few are moving away from the area.
2. The amount of new inventory coming up across the bay by year end will total over 10,000 units. Those units are now offered at discounts to fill and they are renting well. The numbers we are seeing in decline on Miami Beach are about the same number that we are seeing rented in the new buildings down town.
I have heard for the last year that “Miami is not Miami Beach and you wont see the same people who live on the beach move there”.. Guess what? it is happening. When you can rent a brand new one bedroom in a waterfront building over there starting at $1,300, why not. The same comparable type unit on Miami Beach is renting for $1,800 – $2,000. No it is not Miami Beach but with the savings you can lease a pretty nice car and pay for the gas to drive over the bridge.
Last week I ran the numbers (from the MLS) for one bedroom units showing a decline in rentals.
History for one bedroom units that rented here in the zip code 33139.
Going back fourteen months you can definitely see a decrease in the number of units that contracted.
0-30 days, 10 units rented
30-60 days, 26 units rented
60-90 days, 54 units rented
90 -120 days 48 units rented
120-150 days, 54 units rented
150-180 days, 63 units rented
180-210 days, 77 units rented
210-240 days, 83 units rented
240-270 days, 83 units rented
270-300 days, 70 units rented
300-330 days, 74 units rented
330-360 days, 70 units rented
360-390 days, 68 units rented
390-420 days, 61 units rented
Right now there are 424 one bedroom units offered here on Miami Beach. The range in size and price vary but overall inventory is up and demand down.
I just completed a fifteen month report showing the rented two bedrooms located on Miami Beach within the 33139 zip code. each segment goes back 30 days.
0 – 30 days, 4 units rented
30 – 60 days, 12 units rented
60 – 90 days, 21 units rented
90 – 120 days, 53 units rented
120 – 150 days, 37 units rented
150 – 180 days, 35 units rented
180 – 210 days, 40 units rented
210 – 240 days, 33 units rented
240 – 270 days, 45 units rented
270 – 300 days, 52 units rented
300 – 330 days, 40 units rented
330 – 360 days, 41 units rented
360 – 390 days, 41 units rented
390 – 410 days, 47 units rented
410 – 440 days, 45 units rented
From both the one and two bedroom activity you can defiantly see a decline over the last few months and compared to one year ago the decline is significant.
On December 22 I wrote on this blog about were I felt the rental rates would go to in buildings like 1800 and Quantum.
Mr Waverly // Dec 22, 2007 at 12:58 am
I would bet one bedrooms will rent for $900 to $1,100 at best, at least for a couple years.
With thousands of new units coming to the market and demand only growing as it sould the balance will be tilted to lower vacancy, lower vacany = lower rent rates.
It is what it is….
MO
the economist you cite to is saying nothing new. 80’s miami, in particular, brickell, they were practically giving condos away if you were willing to pay the HOA and taxes. ask any old school real estate/bankruptcy lawyer down here about it. amazing times.
Check out the housing bubble price decline chart for Los Angeles in late 80s and early 90s. Prices went up very fast, but took a while to come down as indicated by the graph:
http://bp0.blogger.com/_pMscxxELHEg/RyeE7v_5CHI/AAAAAAAABG4/tbkYkIk3T54/s1600-h/PriceBustExample.jpg
Good article discussing how long crash can go (think Japan and think decades!)
http://globaleconomicanalysis.blogspot.com/2008/05/rebuttal-to-smartmoney-housing-bottom.html
This website is hilarious!
http://bubbletracking.blogspot.com/?ref=drhousingbubble.blogspot.com
Just so you know in 1999 I rented a 1 bedroom apartment on South Beach, West Avenue, with a breathtaking waterview of star island, the bay, and the miami skyline in the background for 800 bucks a month.
Thats about 1 dollar per square foot for rent of the condo’s you guys value so highly.
Rent will come down much more.
900 Biscayne…..Has anyone been inside 900? I am one of those people who purchased a 1 bedroom/ 2bath for $452,000….getting ready to close. Building is absolutely phenomenal in my opinion….should I do the smart thing and walk away or can a “high end building” weather this storm? My unit has gorgeous 40th floor direct bay views, with a potential view of Museum Park and the new megayacht marina at Island Gardens…Anyone else been in 900? What do you think???? Does it pay to walk from 90,000 in deposits??? And is any of this money returnable???
DLR I’d RUN away and fast as you can.
DLR,, Either put on your knee high boots on and listen to the BS or get out those running shoes and get.
Mr Waverly said:
“I have heard for the last year that “Miami is not Miami Beach and you wont see the same people who live on the beach move there”.. Guess what? it is happening. When you can rent a brand new one bedroom in a waterfront building over there starting at $1,300, why not. The same comparable type unit on Miami Beach is renting for $1,800 – $2,000.”
The exact same logic will apply to South Beach condos when Brickell/Biscayne wall starts opening up the floodgates.
Right now, let’s say you are looking at relatively equivalent quality South Beach units at Continuum on the Beach asking $1,000 sq ft or Icon on the Bay asking $700 sq ft.
Guess what’s going to happen when Icon Brickell, Epic, Biscayne Wall all hit the market at $250-350 sq. ft. in 2009. You’re going to see Icon in South Beach hit 400 sq ft almost overnight with Continuum hitting 700 just as fast.
This idea that people will pay any premium to be on the Beach or pay anything to live in South Beach proper is absurd. To tell you the truth, I think most people on the Beach with money are just itching for other alternatives. If Brickell can ever build itself up to be like Riverwalk in Lauderdale, then forget about SoBe.
Hi DLR,
Yes, from what I heard 900 biscayne is the bomb. It is the most finest of the new buildings according to my realtor, who saw it. I look into the lobby many times and it indeed is a class apart.
1. Let us assume that you want to close so that you can sell it to recoup your 20%. Absolute worst idea. All new buildings are selling for a 20% discount from their pre construction prices. You will never get your money and more over, you will lose, closing costs, mortgage, Hoa, taxes etc until the unit gets sold.
2. let us assume that, as the unit is so spectacular, you want to keep it for yourself to live in/second home etc, then there are a couple of things you can do.
Ask the developer for more time to close citing financial hardship, lack of financing or whatever. String him along as long as you can and for as many months as you possibly can.
By Aug/sept, it will be more or less clear, where this economy headed nationally, globally, are we in recesssion or out of it, who will be the next prez and so many other things. That might drive the market in certain direction.
Then look at the MLS listings and closings. If similar units are selling for less than $360,000 (What you need to bring to the table to close) You walk . If they are holding value or stable, selling for more, close the deal.
I absolutely agree with Mr Waverly. In fact this is what is happening as per many realtors.
I have spoken to many of my SOBE friends and 9 out of 10 are unaware of an urban utopia rising on the other side of the bay. So obviously the news is slow to reach the masses. Even then there is a great amount of excitement about these new buildings among renters.
Imagine you are paying $1000 or more for a rat/roach infested studio in a 30’s deco building with 70’s kitchen and bathrooms in Sobe. Imagine you have to daily scour for a parking on the street and worried about some hobo peeing on it or even worse. Imagine looking out of your window and seeing the street or the perimeter wall. Imagine, you have either partied out or had your SOBE fix after being there for 1, 2 or 3 years.
You are sick and tired and looking for a quality of life. Then you hear that 5 minutes from SOBE, you can upgrade to a one bedroom for as much as you are paying for your studio. Most with water views, brand new kitchens and baths with miele, subzero, GE appliances, washer driers in the unit, fab pools, which you didnt have before, a gym better than the stinking crunch, equinox or Golds, your own secured, covered parking space, concierge, door man, 100’s of free or included digital TV channels, free high speed internet and endless amenities which even the rich Upper East side New yorkers are not used to.
Would you take it? i guess the answer is yes. And you dont even have to convince half of that to other renters living in the outlying areas of Miami, what with the saving of 2 hours or more travelling time.
I heard that these buildings have just started to come on line and have started to leech out all the renters from Aventura, Kendall, SOBE, Broward county etc. So as there are no new renters moving into Miami, all that is happening is a reassigning of them from other areas. Landlords around the greater Miami Metropolitan area should be very afraid.
Oh, I forgot to add, someone paying $1800 for a 1 BR in that slum called Mirador, with out even a parking space of your own should be able to rent a 2 BR for almost the same in these new buildings. More trouble for West avenue condos!
Some of those units advertised include balcony in Sqft – for example Sail on Brickell advertises 2BR units as 1400+ sf while the actual living area is around 1100 (what a disappointed that was – such a sh*tty building – even the corridor floors are unfinished)
AJ – you are right on the money – for the rent of 2BR in SOBE – I get the same room + high floor corner unit, parking+gym+tennis+cable included resulting savings of about $350 in Brickell
AJ, complete agree with you!!!
Brickell will be the place to be in the next 2 – 4 years, once all the buildings are completed, restaurants, shops, etc…..
Margus… about the Sail:
I recently visited the Sail on Brickell. This building has been criticized here among us before. However, since everyone’s tastes are different, I decided to explore it on my own now that I am currently looking to rent a place to live in that area.
The lobby is small and conservative but then I realized that you don’t live in the lobby. You don’t even spend more than a minute there unless you are waiting for something or hanging out with the doorman.
Sure, a lobby can play a big part to some people’s egos, arrogance or pride. It can be very important for some but not for me. I look for a nice unit with 1,000+ sf , 2 assigned parking spaces (lower floor) and a spacious balcony. In my opinion, at the Sail on Brickell, the largest and best floor plans are on lines 1 and 8. The others floor plans were smaller and less desirable. In fact, they didn’t interest me at all.
The Sail is a 300+ unit building with a high occupancy rate. That’s an awesome thing in this real estate market! It means that the building is filled with owners or renters who pay the association fees and keep it up and running, so the building stays well-maintained. This is way different for instance, from The Vue building where there is a deficit in association reserves due to the large amount of vacancies and foreclosed units. There ain’t no one to pay the monthly maintenance there! That’s a scary thing.
The Sail is located in front of the Conrad Hilton, behind the Four Seasons and one block from the bay path where I would like to jog. The street is quiet and most important, it’s not a pain in the rear coming in or out of the parking garage. The building has only 7 parking floors which means an amazing merry go round reduction. Compare it to the Plaza on Brickell with 15 parking floors and 1,000 units; or the Brickell on the River accessed by one little street where by the way, if you plan to visit, make sure you stop by an ATM for cash to pay the rip off valet service.
The same nightmares and mistakes are being repeated at the upcoming Icon with more than 1,500 units. I mean, I am very discreet person and I want to feel that I’m living in a home and not a hotel or mall.
On the other hand, I discovered that The Sail building is central to everything. Unless you’re a lazy ass or eager to flash your bimmer, The Sail is walking distance to the Brickell Mall and steps from Segafredo and Novecento located just at the corner but on the other side of Brickell avenue.
Lines 1 and 8 have good views, 1,100 square feet of space under AC and 300 square foot balconies. The units are open and spacious, designed in a lofty style and SS appliances. Corridors are friendly – not those endless, hotel style corridors that not only stink but are so large that you might face the chance of seeing a ghost.
The Sail doesn’t seem to suffer from the maniac noise of street traffic, restaurants, lounges etc. The 14th street looks quiet and I calculated that there is no chance to speed unless someone wants to ski right into the bay with their car or crash into the Jade entrance.
Unfortunately, and to end my chit chat, the apartment I saw is available for July 1st and I need something for June 1st. If you happen to know a place to rent in the Sail building, please let me know. By the same token, if anyone is interested, that unit is available in July and it’s furnished.
i’m not sure if it’s fair to say that brickell will be the place to be in 2 to 4 years. i will say however, that the talent at segafredo on friday evenings is impressive. that’s a start.
2 to 4 years… depends how long it takes the smart money to realize they can’t artificially prop up all that supply.
AJ, I lived in the Mirador and disagree. Prices may fall a little but the building still has the best location in South Beach, you’re steps away from absolutely everything that makes SoBe what it is.
Compare that to living next to Overtown and all the other ghettos on the other side of the bay and yeah, you may have a nicer kitchen on Biscayne but you don’t get accosted by crackheads and hookers on West Avenue.
Plus, every unit had parking when I was there – either by valet or self park. And the gym in the south building is over the top, as is the talent that works out there. Having a dry cleaner, bodega, hair/nail salon and poolside cafe all in the building are also amenities that no other building on either side of the bay can boast.
Unquestionably, for the very price conscious, downtown Miami has its allure. You’ll get more bang for your buck there as a renter than in most major cities when it comes to views and the new kitchens. But that area isn’t the only thing that’s dead at night – so is the crackhead hooker in the bus shelter next to the Wendys.
Hi Candela,
There was someone else also in this blog mentioning the about the homeless and seedy elements in Miami. Actually, I saw a few in downtown area and none in Margaret Pace Park. What was striking to me was that in 2004, I could only see the homeless on SOBE confined to Washington. Now they are multiplying at an alarming rate all over the beach. You can now see them on Lincoln, Alton, West, Collins, Lummus Park, Flamingo and even the revered SOFI. I see more homeless and unsavoury elements on SOBE than all of Manhattan and Miami combined!
If I had to pay $1.500 a month to rent an old apt in South beach I would not think twice to rent a beautiful new apt for the same price just over the bridge
I have friends who live in all the different neighborhoods in Miami and for the most part they are happy with their choice. Be it, Sobe , Edgewater or Brickell.
I have lived on South Beach and loved for a time but after a while the constant tourist and shabby, overpriced (IMO) apartments got on my nerves. I have lived on Brickell and I felt claustophobic with all the new construction around me. I moved to Midtown and I feel at home.
I say all this to make the point that we are lucky to live in a city with all these choices for neighborhoods. YOU must make the choice of what will be the right fit for you.
I was informed today that there is a pending class action litigation against Marina Blue that will be filed as soon as the class size reaches 35 buyers.
Sorry, I do not have more details so contract holders may wish to contact fellow contract holders for details!
Unrelated,
When you hear more about class action against Hyperion–pls post. These developers don’t finish their projects so buyers beware! Two yrs later, Blue is still not done after many ‘promises’ to complete over 4000 sf of empty space. We bought all the hype & sizzle now we are stuck with declining r/e prices and an incomplete building. Try to sell the sizzle now!
moreinfo,
I am NOT a contract holder at Marina Blue so I may not get any further info.
You may try this to see what is active. Try this link:
“Search” with name of “seller” on contract to see if anything has been filed.
I heard Michael Schlesinger was looking at contracts at Marina Blue.
http://mjsjd.com
some more great pictures of Marina Blue at:
http://www.miamism.com/visiting-marina-blue-luxury-condo-in-miami
I’ve been reading this blog for a while and now.My lease at the Beach club hallandale is up and I do not want to stay in this building for a another day .From the screaming pipes to broken elevators .I moved into this building when it opened and it’s decline has surprised me.
I am not familiar with Biscayne but I have narrowed my search down to 900 Biscayne and Marina Blue . I found my last apartment on the craigslist .However this time around the real estate agents are different and very dishonest they post one thing and then say another .How do I find a valid agent .Can anyone help me .
I also would like to know if any of these two have a lease to own option .