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Lucas…
While I definitely agree that this project will change that area for ever and become a great area to live in, I don’t think there is anyway you will see any significant development starting on those sites for 5 -7 years or so with the supply of residential units there. You will probably need to wait for about 20 years for it to resemble anything close to the renderings.
Remember, these deals are complex and involve lots of developers, so not easy to get it started.
The renderings are amazing, but its what I like to call “mental masturbation”.
So,my view is that if you are considering buying a unit in this area to hold for about 10-15 years, then yes, you can bet this area will change. If not, I personally don’t like this area for lots of reasons that have been raised by several writers in this blog.
In the bubble market you could sell the vision. In today’s market, you buy the reality.
Of course it would be great if these improvements were made to Miami. But the reality is developers are not getting loans. My advice, buy what exists today and if other improvements come down the road in 5-7 or even 20 years, consider that a windfall, just don’t bank on it.
You don’t pay World Center prices for what you get today
lucas
come on. the comparison to cabrini/gold coast to park west is not even close. gold coast was/is nice, cabrini was a dangerous slum project. here, park west is a dump. period. outside of luxury buildings…not a mile away, but rather, right on your doorstep, you have drek all around you. why should anyone pay a premium for this?
I’m sure AJ is knocking on Falcone’s door as we speak to put down preconstruction deposits on 2 units, 1 extra parking space and a couple storage rooms (which are not to be confused with cages).
i’m going to have to agree with jcrimes on this one. I was considering renting a unit in parkwest but found the area around the buildings to be very unpleasant to say the least: I wouldn’t feel safe walking behind those buildings at night.
In any event, the relocation of the homeless shelter will probably help some, but I understand that this isn’t due to happen until 2010 or so….
Regarding the “danger” aspect of Downtown Miami. Girls see the world with very different eyes so I can easily see why female posters may be alarmed with the area.
I’ve know quite a few girls that would not walk in Miami Beach late at night by themselves so if you can’t do that, no way in heck are you going to feel comfortable walking up and down Biscayne late at night.
Danger is relative. Maybe late at night on the Beach, you have a 1:50,000 chance of something random and violent happening and maybe in Downtown that goes to 1:10,000.
You can either feel (a) that chances are still incredibly low in either location or (b) that your chances of something bad happening in downtown is a multiple greater than in another area… and both feelings would be correct.
Miami World Center has already been shelved.
All that remains is the website.
Wild Bill, has this been confirmed? Any news links to support that it has been shelved?
Wasn’t it AJ that suggested the Department of Homeland Security step in and limit building heights? Maybe that is why Miami World Center got shelved? LOL LOL LOL
Wild Bill,
I’d like to see the link as well. That’s horrible news if that’s true.
Lucas,
CLOSING RATES? Need to see how 500 Brickell is doing? PLEASE.
If you don’t want to post, please let me know a county Internet link?
Thanks!
The area is a dump. It’s a dump with a beautiful facade composed of “luxury” buildings, arts centers, etc… It will continue to be a dump as long as the homeless shelter remains there. The area also needs to beef up its police presence in order to create an even false feeling of safety. At the very least, this should take another 5 years. The Miami World Center would be a great stimulus to this process. Unfortunately, that monster won’t be finished for at least 5 years (if it ends up getting built at all). Hey, it might turn out to transform the area as much as Bayside, the Adreienne Arsht Center, and the AAArena have!!! So everyone hold your horses. Control yourselves from the impulsive purchase of a new condo at 900, TMP, or MB. Wait 5 years, and by then you should have the added benefit of knowing where the neighborhood is actually headed, and saving yourselves from paying three special assessments or watching your condo association go bankrupt.
Everyone keeps talking about the homeless center….what is it, where is it, how big is it, and is a really a den for drunks and druggies or do people really get rehabbed there? Just curious.
Regardless of the Developer’s intentions or “official” project status, it’s hard to imagine a bank that could be able to take a project like that on in the foreseeable future.
The homeless shelter is camillius house. Homeless people line up outside before 2pm to secure a bed daily. There is also a clinic there.
so who the hell would live / work there? it’s not as if Miami is bursting at the seams with demand for however many millions more in office space / residential space. Two new office towers are going up on Brickell and I imagine they’ll have difficulty getting filled. And since the economy here has taken a major hit in all it’s big engines (condo flippers, vacationers, and cocaine.) Lay off the field of dreams mentality.
for those that care… MARLINS GOT APPROVED FOR THE STADIUM… THEY WON IN COURT TODAY! now we will be the Miami Marlins for the 2011 season.
http://florida.marlins.mlb.com/news/article.jsp?ymd=20080909&content_id=3444025&vkey=news_fla&fext=.jsp&c_id=fla
JR56
marlins haven’t won anything yet. the $64k question is financing and that won’t be decided until the fla. supreme court weighs in the coming month.
not to mention, braman will appeal some or all aspects of this suit.
My review of the Jorge Perez book Powerhouse Principles: the Billionaire Blueprint for Real Estate Success:
Related Group’s Jorge Perez on How to Sell a Miami Condo
What might help to take off some “inventory” is when the banks shut off funding developers and construction. It has already started and is going to get even tighter soon. That’s a positive for home prices in the sense that that inventory won’t make it to market, but it is also a sign of how bad things are too.
I see the Jade Ocean and Jade Beach in Sunny Isles Beach continue to be completed. They look nice, but wonder who will close. There are a few other developments with fencing and signs but nothing had broken ground from what I can tell (DeVinci?, Chi, etc.). The Trump Towers are finishing up, not sure if there is any occupancy in #2, but #3 cranes are gone and landscaping is underway. The Solis has been “halted” for something like 2 months now….I was told maybe 2 workers will be there to do something so that it is not technically stopped or something….maybe that is a contract issue? A 5% lights on at Trump Tower #1 is probably a pretty high number on the best night. I did see someone on one of the balconies….and no, there weren’t about to jump…. LOL
Renter Tom, I have a question for you…..
Do you ever see yourself buying a place??? Here you are, renting, renting, renting….waiting for the bottom before you purchase. When that bottom hits, how good will you feel then about purchasing an older product? There will be no new buildings when the bottom is hit, so you will only have the supply of the buildings that are just now finishing.
I would rather buy now for a premium and enjoy living in my own place when it is BRAND NEW, as opposed to buying 2 years from now for a discount and get a used product in a building which is beginning to show it’s age.
Just my two cents….
The real estate market right now is like buying a car…..pay up to buy a new car off the lot, or buy later a cheaper car with the smokers smell and wrinkled leather. I’ll take new.
dlr – I plan to buy within the next 18 months and had wanted to buy a few months back but market conditions clearly demonstrated that was not the wise thing to do. The events over the last 7 months have only reinforced that decision as being clearly correct. Thanks for your concerns even if they were not genuine. But since most of these new places are only “designer ready” I’d need to paint, etc. anyway. My only risk really would be flooring — marble isn’t cheap to rip up and replace if someone choose a really bad marble. I’d rather save $200K-$500K by being a prudent purchaser then to jump in now with the silly argument that it is a “used” home when most won’t have ever even been lived in! You must be a Realtor® or something trying to use that argument to make someone feel inferior…won’t work with me. I already own a home and other real estate holdings.
I do only buy new cars and usually own 2 sometimes more. I don’t lease and I pay cash (personal check really) and would only finance after negotiating the low price if there was a significant advantage (I think one of my cars it saved $4K+ and just had to make two payments then paid off the loan in full). I don’t like to borrow unless it makes sense from a wealth preservation and wealth accumulation standpoint. In this market I would either be an all cash buyer or finance since rates on a 30 year fixed rate mortgage is under 6%. I’d have to run the numbers to decide for sure with initial impression to finance since that is cheap money locked in for a long time. I can’t really deduct mortgage interest and property taxes (thanks to AMT). Right now, renting is the clear winner by a long shot. Heck, under these conditions I’d rent forever! And do you REALLY own your house??? I mean if you don’t pay the mortgage, the property taxes, or the HOA, they can take your home away from you. All homeownership does in this market is expose your wealth to risk….not good, not good at all.
Not only will there be plenty of never lived in units available, there may be some that have the expensive flooring in too which you’d get for free since the units have to compete against each other for sale.
The other thing that makes it prudent to wait, is to see how the HOA is run and the developer problems are resolved. By renting, I could care less really, I have the best of both worlds, HALF the cost and NO market or HOA worries! It is just too good to be true to be a renter right now!!!
As I mentioned, I do already own my own place, I really do enjoy the rental more for the above stated reasons….it is worry free! So, in this market, there is a premium in renting, not owning… Talk about a bubble paradigm shift!
Unless you intend to live in the condo for a long time, I just can’t see how buying makes sense right now. Consider a 1 bedroom at 900 biscayne. These apartments are for sale for approximately 450000, you can rent the unit for 1800-2000!!!! Considering what a mortgage + association fees, taxes, etc etc etc would cost, renting is a _no brainer_.
dlr – If you want I can see if I still have a copy of my research paper that I wrote in business grad school for my Capital Theory course regarding the use of debt financing (leverage) and taxes (including tax rate differentials between ordinary income and capital gains). Debt financing used prudently can be a good thing….unfortunately that isn’t what happened during the 5 bubble years. More people should have taken that course! LOL
The large majority consensus is that a housing bottom is a ways a way in the Florida market and when it does bottom it will be a saucer bottom….long and flat for years (so loser in real dollar terms) before going back to the normal trend line of inflation to inflation+1%. That seems to be a reasonable take on the market that I would have to concur with.
This isn’t a “negative” comment, it is an honest assessment of the market.
I don’t know why people keep arguing with Renter Tom. He doesn’t think its a good time to buy. He seems smart enough to come to that decision all by himself. Leave it alone. The topic is beaten to death.
You will have as much success convincing Renter Tom to buy as convincing AJ that Pace Park is not Nirvana.
How about we discuss the takeover of Fannie and Freddie. What effect will it have on the Real Estate Market. I see interest rates came down in one day.
And lastly, how can I get one of those SWEET golden parachute deals that the Fannie and Freddie exec’s are getting for F@#king the whole thing up. I should have went to business school. DAMN!!!
storm
don’t blame fannie/freddie execs…blame barney frank and company. this thing was set to implode years ago but a host of politicians made sure it played out to the bitter end. the so called housing bill that was passed in the past year indicates the pols’ absurdity with respect to these operations.
as for the role it has on rates, two schools of thought – one, rates will boost up; two that rates drop significantly (some are guessing up to 100 bp). regardless of what happens, underwriting standards are still strict, thus, unless there’s a movement in price, it means much ado about nothing.
Auctioning off some developer-owned units, it’s just a matter of time….
http://online.wsj.com/article/SB122100073257616909.html?mod=googlenews_wsj
Hello Everyone, I am moving to Miami in November. Currently I am looking for rentals with my boyfriend. Last week, my BF (who is local by the way) took me to the nightclub city behind the new buildings in Park West. We had a great time. After we got out of the club, he dragged me to the gas station near the white building against my wishes to buy a gatorade. After the whole process is over, nothing happened. It was like a normal event in any neighborhood. I am actually considering to add Park West to my list of areas to look for rentals.
Covina, you should have a good amount of units to chose from. There’s quite a few units for rent in Marina Blue right now and I suspect more rental listings in 900 will start showing up soon as it takes time to install flooring after unit closings start.
In case you didn’t know, Lucas keeps a track of rentals/sales at the top of the page under “Condo Listings”. For some reason though, Marina Blue is located under “Miami” while 900 is under “Miami Downtown”.
The Miami World Center relied upon the Port of Miami tunnel. The streets in the plans are not designed for tractor trailers from the port.
Until the tunnel is finished they cannot touch the streets in this area.
April, 2007 Herald.com had article had a story about this area…………
“Miami land tracts being sold: Developer xxxxxxxxx, which bought large swaths of downtown Miami property, is set to cut its holdings nearly in half. It has a contract to sell.
For Miami, the development company has two condominiums under construction while it is revamping plans for a third. It owns a Brickell office building and is among the bigger private landowners in the city of Miami, owning tracts of downtown land and near the Carnival Center for the Performing Arts.
xxxxxxxxx said he is exploring projects not initially contemplated for some of his Miami landholdings, like rental apartments or workforce housing.”
They also own a prime piece of land at the entrance of Miami Beach which is foundation pilings only.
so last night the elevators at Plaza on Brickell broke down completely for hours. This is the second time in recent memory this has happened. ALL elevators OUT OF SERVICE!!
I’ve lived in a lot of buildings with elevators, and I’ve worked in a lot of buildings with elevators. I’ve seen single elevators out of service, and I’ve been annoyed with slow elevators. but no where ever, in any place I’ve lived, in numerous cities and multiple countries, have I ever seen a building with as unreliable elevators as this POS building. Is elevator technology really that difficult and advanced?? Probably the same genius that designed this building’s terrible garage entrance.
Renter Tom,
I would be interested in reading your research paper. Is there someway to communicate via private message so I can send you my email address?
Much has been written about the causes of the housing bubble and who is to blame (banks, brokers, speculators, etc.) but we fail to get at the source of the problem. We as Americans have increasingly become reliant on government to provide a safety net when things don’t go our way. When this mentality is applied to a larger scale it affects the efficiencies of free markets and artificially depresses the risks that maintain market equilibrium. Banks were making stupid loans because they knew they could sell them to Freddie and Fannie. Freddie and Fannie bought these notes because at the end of the day, they knew they would have the governments backing. This is precisely what is happening now. The banks and people took stupid risks because they knew the consequences were not grave. Once again we look to government to “do something” about the housing crisis and the politicians give in. It is a temporary patch but the source of the problem remains and will surely surface again in some other form.
Lucas, thanks for providing this blog. It is very informative and entertaining. For those that complain about the off topic remarks and threaten to leave, I urge you guys/girls to stay. I have been reading this blog for a while now and I appreciate all of your opinions. Just ignore the posts you find offensive or irrelevant.
An unidentified woman was found stabbed to death between two South Beach construction sites early Monday.
A passerby found the body on 11th Street and Collins Avenue. The victim, about 5 feet 6 inches and 120 pounds, had multiple stab wounds.
In all honesty both Park West and South Beach are low class neighborhoods surrounded by pockets of wealth. As long as people don’t read the local newspapers everything is fine.
I think the reason South Beach is demonstrably safer is because it has more foot traffic at all hours (although the Beach can be amazingly deserted at times). The downtown condos tend to be more deserted at off hours and that’s when the danger alarm goes up for most people.
The article Wild Bill mentioned was about Leviev Boymelgreen (Marquis, Vitri..etc) not Falcone.
I have friends that work trauma and plastic surgery and there’s quite a few tragedy cases that get dropped off at Jackson (hospital) that you never really hear about or maybe you do but it’s magnitude is never truly conveyed in public. In case people didn’t know, NYC trauma surgeons in training flock to Miami as the trauma training in Miami is much better and abundant than in NYC. Something to think about.
Here is the master plan for Miami World Center which the Miami Planning Board will review and vote on Wed, the 17th.
(37 pages)
http://egov.ci.miami.fl.us/Legistarweb/Attachments/45631.pdf
Realistically, what kind of price tag would this project have?
people keep arguing with Renter Tom for 1 million reasons and the first one is: he has NO money to buy anything, so that’s why he is a “renter”. How boring, what a loser, always the same things over and over and over…
Quote:
Storm // Sep 9, 2008 at 10:28 pm
I don’t know why people keep arguing with Renter Tom. He doesn’t think its a good time to buy. He seems smart enough to come to that decision all by himself. Leave it alone. The topic is beaten to death.
You will have as much success convincing Renter Tom to buy as convincing AJ that Pace Park is not Nirvana.
I was going to refrain from commenting anymore because this horse has certainly been beaten to DEATH, but JL had a good point, communities definitely benefit from “eyes on the street” which is more prevalent on S. Beach with the scale of buildings and its level of redevelopment. Park West and Downtown are a good 10 years behind in that sense.
Lucas’s point is that historically the “best” and “worst” areas are adjacent to each other, that is true in any city, stray a few blocks unknowingly and you might not like where you end up including Miami.
I just returned from getting my mani/pedi at Harmony at around 20th and Biscayne and everytime I go into that neighborhood it seems to just be getting nicer and nicer. I felt perfectly safe.
So as to whether that’s the neighborhood for you to live or not, people just need to know how street smart they are and if they can’t take a little grit, go live in their manicured, elitist, gated communities. I prefer to live with a mix of uses and a mix of incomes personally.
And as to whether to buy or not, we get it, the economy SUCKS right now, the housing market is in turmoil and foreclosures seem out of control. So if you want to buy long term- you can’t sharp shoot a bad market, go for it. If you think you can make a quick buck, don’t do it.
We bought in December in an older building on Brickell, has the value gone down? Yes, I watch closely and it’s dropped. Am I worried, not at all, because I have no intention of moving for at least 10 years, if ever. It’s as simple as that, so we now we don’t need to beat that dead horse anymore either.
Suppose to clsoe on Plaza on Brickell, what do you think of building?
No worries, I got plenty of money….and too many d*mn bank accounts and banks thanks to the FDIC limits…..it is a real pain and CDARS don’t pay a high enough rate. Oh well. I still need one more bank.
In this market and the last two years, the silly decision was to be an owner for 98% of the buyers out there. Just look at all those people running away from their deposits…..
Gerardo,
What do you intend to do with Plaza when you close? I know that’s it has been very successful in its rental program. The location is great. Without further information it’s hard to make a recommendation. Will you be an end-user? What are your carrying costs? Cash deal? Good mortgage? There’s too many components to give a blanket answer.
I hear complaints about the garage and elevators. My husband is a licensed architect and he said they need to get after the elevator manufacturer if they are having that many problems. It’s not the developer, architect or buildings fault…
Look at Lucas’s condo rankings and previous condo closings too.
Jcrime
braman will indeed appeal but it will not have an effect wether this project will move foward or not. it was stated by marlins president himself. the court / county vote 6 for 6 so far …. even if the 7th vote is a NO , it still will not stop this project. Marlins do not intend to use C.R.A funding… tune in AM 790 the ticket or read it in the papers..
also http://www.floridamarlins.com
i do consider this A WIN under their column.
JL,
Why are you so much more bearish all of he sudden? I like it, but I am surprised.
Wild bill, was that murder on Monday? I couldn’t find anything in the herald.
I calculate that I will probably save about $300K just by waiting to buy and renting in the interim. Let me repeat, I will be ahead $300,000.00 for DOING NOTHING. Sorta like the reverse of flipping.
DID ANYONE READ THE 37 PAGE DOCUMENT ABOUT MIAMI WORLD CENTER????
These developers have HUGE MONEY….1 is a billionaire and the other is a former sports agent…these men have egos and will make this project happen. IF this was just a matter of accumulating some land and flipping, not sure they would go to this trouble of developing a master plan, travel to cities with world-renown architects, etc…..
This is the largest of parcels in one area in the city of Miami history…that right there should show you the size and financial prowess of those behind this project.
Very good find about the upcoming meeting Dave!!!
“1 is a billionaire and the other is a former sports agent…these men have egos and will make this project happen.”
Perez is a Billionaire many times over and has a much larger ego. He had to abandon Vegas with Clooney on board (and Icon Las Olas too) when the market turned so that should tell you something about documents and plans versus reality.
The thing about developers is that the smart ones don’t put their own money on the line. I like the plan, but until you get some target dates and financing on board, it’s just a way out idea.
In fact, my money’s on The Vertical City of the Americas. They’ve got a much better looking website LOL (plus they list the elevator consultants for the project so it must be breaking ground like tomorrow)
“The $5 billiion metropolis destined for Miami’s Bicentennial Park”
http://www.etchevarne.net/client/vcamericas/site.html
RENTER TOM is one of the most informed people that use this blog. his comment’s are both appreciated and respected by many many people reading this blog.
Yes, Dave-great find. Hopefully the project will go through. To me the existance of The Performing Center was good enough to change the area but this project and hopefully museums will boost it tremendously.
Lucas, I do not think you updated condo deals recently. Let’s concentrate more on some potentially good deals in Miami like distressed sales.
BTW, since the Vertical City of the Americas aka Verticus already has it’s website up with contractors and engineers and Construction team on board. I’m sure it’s going to break ground soon and get completed in at most 3 years which means everybody looking east from Marina Blue/900 Biscayne/10Museum/Marquis is going to get a great view of a 150 story phallic symbol.
———–
…Hopefully everybody is picking up on my humor here 8^)
2 other competing dreams in the area.
http://www.en.wikipedia.org/wiki/One_Bayfront_Plaza
http://www.en.wikipedia.org/wiki/Empire_World_Towers
Mark,
Woman found stabbed to death in South Beach
Well, it seems people have gone overboard to one extreme or the other…(AJ, I admire your restraint!) But as for me, I’m stepping out of the arena again.
Everyone posting and participating in this blog for the most part seems pretty intelligent, so form your own opinions. I,personally have a comfort level with seeing the glass half full. Guess it’s my cushy upbringing in an awesome city like Chicago. I can see the potential, the catalysts are in place.
Renter Tom,
Life is not just dollar and cents. A very astute friend and co-worker I worked with in Chicago said, “people who are cheap with their wallets, are cheap in their soul. They know the price of eveything, but the value of nothing.” There is such a thing as “quality of life.”
I lived in a piece of shit rental in SIB (luxury by many peoples standards) when I first relocated back here from Chicago in “04. My life felt on hold and in transition.
Now I live in a beautiful condo that I own. I feel settled, tranquil and if I die tomorrow, I will have lived in a gorgeous condo with bay views, a granite kitchen that I cooked a delicious dinner in tonight in and listened to Benny Goodman while I was cooking and it was tremendous.
I would never have gotten that satisfaction in a generic, sterile rental. Everyone has priorities in life. You can have lots of bank accounts and more money than you know what to do with, that’s great. I am blessed in that sense too, as are a lot of people. But there’s a quality of life out there to live and people need to figure out what that means to them.
There’s a great world out there to be explored, give us a break, we know, you saved 300,000 dollars. Good for you. What did you really save if, God forbid, you die tomorrow? And fine, you are renting an amazing apartment on the beach. What average Joe can afford that? Most end up in a carpeted, generic cube.
I wouldn’t bank on new projects right now, only on what currently exists. The financing just isn’t there…. As far as whatever big project people are talking about, sounds like it has more potential to get done then others (except of course we all know the Wal-Mart will get done). If some big names are behind it with big egos that is a bonus, the question is will they put up their OWN money for it? I dunno. The big ego guys might want to move forward, but the money backers and banks want to see a return on their investment. I’m sure it will be good for the city whatever it is, so here’s hoping that it does in fact get done, just don’t bank on it yet.
That Vertical City thing is pretty grandiose to say the least…gotta love the heli-pad. The grandiose plan reminds me of The Spire in Chicago, I understand that is now DOA.
want to learn the easiest way to become a millionaire??
start out as a billionaire putting their own money into Miami World Center.
From what my dad told me Spire in Chicago is currrently under construction.
He lives 2 blocks away.
la la – Wow. You certainly took a leap there judging me. Oh well. I’m glad you find your life’s fulfillment in your condo/house/or whatever dwelling unit you currently reside in.
There are a MILLIONS of Americans right now that are going through the worst mental and emotional distress of their lives right now. Foreclosures, bankruptcies, suicides, divorces, etc. Why? Because they took on far too much debt. The debt pushers shouldn’t have pushed it. The debtors shouldn’t have made an “emotional” purchase of a home and paid too much, they shouldn’t have bought into the lifestyle that is marketed to us that we need status goods and $100 dinners to feel good about ourselves or be shamed that one rents. The rampant materialism and debt accumulation has caused misery and human destruction in a country of plenty. So sad. No matter how much people made, they still spent more than they made and have nothing really to show for it. I guess I am the voice of a large number of people that live within their means, plan for their futures, etc. I have absolutely no money worries and no debts to pay, period. Wealth without debt is freedom.
As far as judging me with your little quote, that is ridiculous. This blog is about Miami Condo Investments, hence it is about the financial aspect o owning condos in the Miami area. If you don’t care about whether or not your large purchase is a prudent financial decision, you do so at your own financial peril. Just don’t come running to me when you’re retired and need govt. handouts because you didn’t save for your future.
I have tithed (10% of PRE-tax income) for over 14 years. That’s a heck of a lot of money. I’d rather do that and enjoy shopping at Wal-Mart with regular people then go shop at Whole Foods and feel exclusive or whatever or spend $100 for a dinner or buy overpriced drinks on Ocean Drive to feel special. To me that is shallow and I am unimpressed with displays of wealth esp. since I probably have much more wealth accumulated through hard work than those that feel the need to flash it. Yes, I can afford that type of lifestyle and then some. But why charter a small jet and spend $8K one way when a $200 ticket is just fine?
The charities that I support are well researched, spend their money mostly in the local community and the money is given “anonymously” with only a couple of top people who know. I also volunteer some of my time and freely give out any advice if asked.
Keep on hating if that is your thing, but you’re way way of base with that.
Cynical, glad to see you living up to your name.
Again, this blog is about Miami Condo Investments. Where are the good Miami Condo Investments now? I would guess the short sales might be attractive soon if you can get into a stable building….that is the wild card. Each condo owners fate is tied to the other and many are desperate and will only look after their own interests.
I heard the Chicago Spire foundation is still being worked on, at a slooow pace. And it may get scaled down significantly if even built.
Renter Tom,
You accuse me of judging you, but look at all the assumptions you have made about me too. My food for my dinner did not come from Whole Foods, it came from Publix. I am not out spending my nights in S. Beach or any other area spending 100 dollars for dinner, I rarely eat out. In fact, my life contains very few indulgences.
My future is well planned for, I will not be a drain on any public services, and I certainly do not spend beyond my means.
I don’t contribute my money to charities, well, acutally when it comes to animals I do, I VOLUNTEER. And I don’t feel the need to list them, it’s none of your business.
Bottomline, you spend way too much time on this website and frankly I skip or scan your posts now because they are too numerous, too long-winded and too narrow-minded and one-sided.
I do agree that people have become way too accustomed to spending beyond their means and we as a society have become a bunch of spenders accumulating debt, rather than savers like our parent’s generation were.
That said, we need to educate society that a home purchase can be the biggest asset and benefit of your life if done properly and wisely. I also said you can’t sharp-shoot a bad market, so for people who are making a once in a lifetime purchase- lay off. For the people who bought into all the bullshit of the last 5 years, YOU ARE TOO late to warn them. They are learning their lesson now as are the people sitting on the fence. So take a break guy.
And you “flash your wealth more than anyone I know by how much you DON’T flash it.
Think of the structure of a cork screw, aside from the core, there is not one column in the entire Spire Structure that is a straight line from top to bottom, of course it’s going to be a slow to figure out the foundation.
There is a strong swelling of support for this project by Chicagoans. It is still set to be completed by 2012.
http://www.chicagoarchitecture.info/ShowBuilding/357.php
OK, so let’s talk business. Anybody here familiar with tax law? People who made purchases as investment properties would they be able to deduct a loss on a sale for the 2008 tax year if they sell before 2009?
I own a condo in another state where the previous owner was selling at a loss of about 100K in 2003 and they were very adamant about getting it closed before the new year for tax reasons (which I never asked about).
If similar factors are at play here, maybe some investor properties might get a little more aggressive Nov/Dec. I would assume if there is a tax angle, Nov/Dec of last year should have seen a nice blip.
la la – I was just throwing it back at ya. The digs you refer to are really about someone else if you had read the posts you’d know who they were directed to. My charities are not for the dogs, they are for people, children, and those that are caught in a tough spot that need some help and guidance to more forward in a positive way. I eat animals and although I love dogs, I am a people first kinda guy.
Here is a link on the Chicago Spire from today’s Chicago Tribune.
http://featuresblogs.chicagotribune.com/theskyline/2008/09/chicago-spire-m.html
I do sometimes post a lot, but it goes in spurts and usually when I am on the phone, hence the occasional bad spelling or bad grammar….multi-tasking.
The only reason I ever mentioned wealth, is because of the constant posts about only renting cause you can’t afford to buy stuff that is non-sense. Oh well.
Renter Tom,
Any chance I can get a copy of that research paper on debt financing. I agree that debt applied wisely can be a good wealth building tool. I’m curious to read your take on the matter.
Thanks
Renter tom, I completely support and agree with you. Keep it coming. Some of these people are missing a few screws. Let them blather on about all these massive projects. Most of them work in the industry (RE agents, brokers, bank, finance, etc) and have a vested interest in forever appreciating prices.
In other news, this escalating crime is scary. I read a study that indicated that violent crime rises a good amount during severe recessions. All it takes is a few high profile murders to make RE worthless.
Miami may have a very bright future, but the next 3-5 years is what concerns me. Thus I want to pay purely for the utility component of housing. I refuse to pay for the speculator/”investment” component of housing. Its like paying for other people’s stupidity because all bank underwriting standards were and still are out the window. I only wish these people had to buy in all cash like you and I plan to. If the govt would stay out of market manipulation we would have been there in March. For now, people with lower IQs will make the price decreases gradual.
JL – Yes, most loses on investment properties can be written off on your tax returns. The sellers of the condo you mentioned probably wanted to recognize the tax loss in that year (if the loss was inevitable) to offset other capital gains in their investment portfolio to lessen the cash outlay for taxes owed that year and would also prevent them from possibly moving up to a higher marginal tax rate of those gains (of course there aren’t a lot of brackets for capital gains, but there is for ordinary income). So, you may be right, there may be people that want to dump their properties now instead of in January it would make sense all other things being equal (plus their losses would probably be larger next year as the asset value of the condo goes down more!).
La La,
I had lunch at the Sushi place (I think it is called sake room) in the Biscayne Plaza Building (18th and Biscayne). After spending $35 for lunch, I was so unsatisfied and so hungry, I had to go and eat a steak elsewhere. The sushi per-se is good but the portions are smaller than I would feed my pet cat. But I guess, that is Miami. They think we are all Parisians here and feed us European portions. When ever I go to Miami, I lose 5 pounds before getting back to New York!
Have you tried the Salad Creations?
Also DLJ and visionary,
You will be happy to know that OMNI mall is shaping up beautifully. It is on course for a Feb 2009 opening. I was told, there will be a Whole Food Market in it. Cant wait. So Even though the Bayview Market and City Square are still 2-3 years away, We soon will be getting a Fabulous Mall/Hotel(Hilton)/Office complex.
Visionary,
I read in news that Quantum and Icon Brickell are among 6 projects that recieved massive tax breaks for the developer. I don’t know how they got the preferential treatment or how it will affect the home owners there.
In other news, I was accosted by 1 beggar per each block on the Ocean Drive (not including bums). The East end of the beach between 5th and 21st is becoming too riff raff. I stayed mostly on the mainland this time.
I am surprised that even in this steamy and sticky weather, there are tons of tourists on the beach. Good for Miami I guess.
More findings later.
I give my time to people. I give my money to animals because I can’t bear to see them mistreated, they are way more defenseless than people. I have more hope for people and more hope for my ability to help them.
You respond too quick and too often for it to be a multi-tasking sidenote. I’m starting to believe the hype that you are paid to monitor this website and beat down any positive comments on this website. You have gotten more extreme lately though.
Perhaps we need a gentlemens bet that the Spire will get built, it certainly has a better shot than the Miami World Center or whatever it’s called.
All I’m saying is statistically I’m thinking at least 50% of the comments (aside from me not restraining myself tonight) come from you a MAJORITY of the time. You have beaten down anyone who has a different viewpoint then you and you are intimidating people.
I agree – it seems like short sales and foreclosures are where the deals are right now and in the foreseeable future. Besides staying tuned to this most informative and entertaining blog, how would you go about finding out which banks hold certain units once the foreclosure market heats up 1st q 2009? Is there any benefit to targeting certain banks that are enduring financial woes? Wouldn’t these institutions be more keen than others to sell? Or is it better to decide on a building/general area? Will there be mass auctions for cash buyers?
It doesn’t make me feel good to be “hovering” like a vulture over the spoils of this depreciating market when so many have lost so much – but med school typically leaves you with what amounts to a mortgage and no home to show for it…
on another note, trauma is my business and business in miami is good. i do an impromptu survey asking where my patients sustain their unfortunate injuries and you may be surprised! Common sense and street smarts go a long way as in any city. God bless and god speed
“intimidating people” — gotta stop arguing like in a law school debate I suppose to make my points. People in law can “argue” without getting emotionally involved while most others can’t, sorry.
On the Chicago Spire, one poster wrote:
“I live in the building just to the right of the built tower shown in the building and it has been quite obvious that construction has slowed over the last few weeks to months. At the beginning, the construction was going 11 hours a day it seemed. Now, no construction noises all day and very rarely are the machines even out there moving around. Rarely even see workers out there. I too am doubting the completion of this tower, thought the hole in the ground is quite charming.
Posted by: CubsFan | Sep 10, 2008 8:18:25 AM”
The nexus of the Chicago Spire is the grandiose plans for whatever is proposed for downtown Miami in this financial environment. The enthusiasm for investing in residential real estate projects is pretty much DOA, so how are they gonna finance it and who’s gonna buy these things once they are built? Investors will demand to know. Regarding the Chicago Spire I’m hearing the same old tired mantra of foreigners and wealthy people are going to buy no matter the economy and that is who this project is marketed toward. My gawd, don’t these people in Chicago know that Miami has first dibs on a residential real estate bailout by the foreigners and wealthy people??? Someone needs to call up Mayor Daly and let him know. LOL
NYC is starting to show some cracks too…… If the wealthy from NYC are under a bit of duress with their own primary residences, then why would they jump into a second home purchase in Miami?
For some reason the AJ post #77 doesn’t sound like AJ. Hope no one was posting using his name…that is, I hope they haven’t installed an AJ posting body double like they did in North Korea for Kim Jong Il….. My goodness, maybe Dr. shwin can check the emergency rooms for us! LOL
shwin – If I were a busy doctor, I would probably spend my time looking for a really good buyer’s agent who is experienced in short sales and foreclosure purchases. They should have the knowledge and experience to help you decide. First, I’d look to what area I want to live in and why? Then narrow down to some buildings and begin to explore the opportunities from their. Short sales and foreclosures will require some time, so best to get an agent with the expertise so you can concentrate on what you do best….fixing the injuries to people in AJ’s neighborhood….(OK I thought that was a funny dig….so laugh OK).
Perhaps auctions will help this market???
http://online.wsj.com/article/SB122100073257616909.html?mod=googlenews_wsj
35 year supply of condos in Miami??? Don’t know where they got that number from. See wsj article above.
By the way, if you’re banking on getting your purchase mortgage from WaMu (or draw on your HELOC, or whatever), you might want to do that really soon, possibly before this Friday at 5 p.m…. While I don’t think WaMu will fold that early, it is not out of the realm of possibilities.
Tom , are you by any chance in love with me? You seem to take my name where ever you go!!
Keep on keeping on Renter Tom!
I rent a 500k place for 1667/mo on a 2 year lease! I don’t have to pay HOA or taxed either. I can afford to pay cash for a condo but why? I have the same hardwood floors, granite counters and stainless appliances that the owners have here in Seattle. I may move to Miami, San Diego, San Fran, L.A. , Austin or just stay here.
That’s the beauty of of being a renter these days…freedom of choice, mobility, and a healthy dose of schadenfreude for the flippers, used condo sales clerks, and out of work mortgage brokers!
Pay no attention to the haters. They’re probably just a bunch of realtors holding condos as flips as are most of the flips here in Seattle.
Give it a couple years and their neg-am loans will reset and they’ll be out on their asses!
Good things come to those that wait.
BTW realtors…how are those paychecks these days? Oh…wait…you are all pretending to be Physicians happy with your purchases.
Go HELOC yourselves an education you dumbass REIC employees. It’s gonna be a long way down from here.
Renter Tom i always agree with your viewpoints and i’ve noticed that the only people that seem to be intimidated by what you say are those that bought using emotions…
but i have one thing to say to you Renter Tom it seems like you are trying to start trouble with AJ, he came on here after all that drama and didn’t write a word about you yet you keep trying to mention his name… i think you should just leave it alone…
Renter Tom,
You are addicted to this website. You write on it all the time. You have WAY too much time on your hands…..TAKE A BREAK!
The FDIC or OTS will be or has set up a real estate liquidation office in Ft. Lauderdale to start pumping out real estate at dramatic discounts. I intend on looking into that soon. Basically, my understanding is, they will be there to simply and dispassionately liquidate real estate holdings at whatever price it takes to unload them….they don’t have any skin in the game. I suspect this will have an impact on what floor pricing is and will help to make a dent in the inventory…..but we will probably start seeing the shadow inventory come to light soon too and that is the wild card, the shadow inventory may be larger than most of us expect. Worth watching….
There were 4,690 in August in Miami-Dade. That is the highest rate to date. Up from the already insanely high 4,523 in July. This rate is high even with Freddie Mac extending the foreclosure process to 300 days. That means some of these homes defaulted in September- December of 2007. Do you guys remember 2007? Prices hadn’t even fallen yet! They had just stagnated. How many flippers will walk when prices actually FALL? Hmmm?? Well?
foreclosures that is….I get ahead of myself sometimes
Schwin, I’m a doc too and watch this blog time to time. Let me give you some advice. Don’t drink the kool aid. Just rent for now and wait for prices to fall. It is easy to catch the bottom in real estate. Look a case-shiller home price chart. Prices bottom for years and years. Once the graph starts to look like that, you still have 1-2 years before prices appreciate in real terms. This isn’t like timing the stock market.
I take it you’re an intern? Do you really want to do trauma surgery? Tough lifestyle. Have you thought about doing a fellowship in asthetics? That would work well in Miami.
Renter Tom,
In your response to schwin (post #82) you said:
“First, I’d look to what area I want to live in and why”
That may be the best piece of advice anyone gave anyone else on this blog.
ATTN – RENTER TOM:
I have been reading this blog for months and made some entries. Of ALL the people that post here, I value your opinion the MOST – by far. You are consistent and, from my impression, seem to have no specific agenda at hand rather than truly speaking you mind and helping folks that venture into this board. Thank you kindly for that!
Further, AND THE REASON for this post: I am on the 11th hour of having to make a close or walk decision on a buidling I bought pre-cons. I would like to share privately with you my details. Could you be so kind to email me so that I can connect with you? If I can pick your brain, it would mean a lot to me!
My address is : [email protected]
Thank you Tom!
Renters win. Renter Tom and others are simply pointing out the facts. It’s economics 101, despite what the REIC advertisers and agents tell you.
“Real estate always goes down,” or so the saying goes.
Wait, do I have that right?
Renter Tom,
Could you please email me your research paper. My email address is [email protected]
Thanks
This is hilarious. It really is. So TNT wants advice from an anonymous blogger who is probably some 16 year old kid from Tulsa who is having the time of his life. If you want anybodys advice here -la la it seems has the kind of WISDOM that makes the most sense. Close on your condo and start enjoying your life.
RenterTom/Palin Power… now that has a nice ring! lol
I’m thinking the kid from Tulsa is really 18 though.
Kramer,
Desperate times call for desparate measures. And, the same spirit expressed in la la posts/yours about enjoying life/it’s not all about $$$$ is in line with why I have reached out to Renter Tom… sometimes, you just has to trust in people (even 17 year olds from Tulsa:)
Thanks Kramer.
AJ, Nope, haven’t tried it or the Daily yet, but maybe someday.
I’m traveling. Decided to fly out for a bit since had to make a trip anyway so thought Ike time would be as good as any seeing how I’m in one of those mandatory evacuation zones. Fortunately Ike didn’t hit Miami.
Will have to dig out that paper, it was good (even if only got an A- , trust me, the prof was wrong on that one, A- my arse). I’m actually a flat tax advocate….simplify, simplify, simplify…..or at least go back more tax simple times of the Reagan era tax rates. Oh well. We live in a time of complicated taxes wasting enormous brain power and resources. A lot of people still think interest on mortgages is tax deductible….oh you silly people that didn’t keep up with the tax codes (as if anyone really can unless you are a tax CPA). With the increased standard deduction and the AMT, the mortgage interest deduction is less attractive and really it is time to slaughter that sacred tax cow. Same goes for real estate property taxes…you really think they are completely deductible…not for many.
We’ve seen what is predictable when certain things/investments receive significant tax breaks….a market distortion with an over investment in that particular tax favored area. It happens every time but this time it is so serious that it could have caused a system collapse of the financial system.
I do like that Palin, she is a neat, down to earth lady. Go Sarah Go!!!
(P.S. Nice bait attempt at trying to say I’m some 16 y.o. kid from Tulsa. I’m not biting.)
The Metromover is a filthy murderer!!!
http://www.miamiherald.com/news/miami-dade/story/681492.html
Renter Tom, I too am interested in seeing how the FDIC prices inventory.
So far I’m unimpressed, $375K for 6917 Collins Ave #707. This is a 952 sf 1/1 a condo conversion from the 70s.
A 2/2 unit at 1155 Brickell Bay Dr., #1709 will soon be available, price is to be set.
Mark, here are the #s of foreclosure filings. The numbers are likely to increase for some months. Unfortunately, these are just the filings, so the affects on prices from a filing in August probably won’t be felt until the unit is acquired and sold ~ a year later.
2005 7,829
2006 9,814
2007 26,391
2008
January 3,544
February 3,984
March 4,240
April 4,480
May 4,260
June 4,596
July 4,523
August 4,690
Renter Tom has a strong economic mind and a strong case for rent vs own, but as for Palin, a vote for “legally brunette” and McSame is breathtakingly ignorant……we have about 1/2 of 1 % chance of our nation making it through the oncoming economic cat 5 ‘cane with a President that is incredibly smart, nimble, and thoughtful…….if either of these two GOP crime family retreads get a sniff of power it’s time to buy farmland and head for the hills or leave the USA. If you liked the last eight years you won’t believe 2008-20012…..whether to close/not close will be the least of your worries.
swissluxury
a common mistake that people make is that they assume the president has significant control over the economy. nothing could be further from the truth. bush doesn’t tell the fed or treasury what to do about monetary policy or the fed funds rate. the gov’t budget is just as much a function of the legislative branch as it is the executive. and the private market is…the private market. the fact that certain industries in the private market may receive perceived favoritism from gov’t is a hallmark of both parties and not just the republicans.
the legacy of bush is his tax cuts…not sure why anyone would complain that paying less taxes to the gov’t is a bad thing. but then again, liberals are known to say obtuse things.
to the extent you want to blame push for the freddie/fannie debacle…you’re wrong. look to barney frank. he’s the one to blame.
JC: There is plenty of blame to go around…….Pelosi, Frank, Dodd, Paulson, Bernanke, Bush 1&2, Reid, Greenspan, even both Clintons…..reality is reality. Our country is broken and broke (perhaps broke twice over)…We need what 2-3 bailouts a week just to keep the lights on and the folks from rioting……..CHINA and RUSSIA and Gulf States have amazing power over our nation due to our own financial weakness….corporate lobbyists, PIMCO, oil pacts, fake wars and politics that divide are not helping…….the only good thing about the oncoming misery is that it will provide a thorough cleansing…….Once the ashes settle we will need some kind of inspirational leader & leadership to get Americans in gear. I still remain hopeful and optimistic in our people, but the last eight years have been a lootfest (Full disclosure our firm sold a lot of product to the top 1-2%) and a crushing blow to the middle class and the fabric of our nation. Choose wisely.
First, Renter Tom – LOVE YOU! Please stick around.
Second, re: the posts above about the Plaza – 100% agree. In addition to the consant elevator issues, we had no a/c in the entire building for the night. Try sleeping in 80 degree Miami heat.
Anyone know what the 1 bedrooms at the Plaza are actually renting for now? Seems like the listing prices are really overpriced… I thought rental prices were dropping??
Letter I wrote to Mr. Frank back in March:
In this case feel that while good intentioned any “housing rescue” will do far more harm than good. The biggest financial issue facing our economy is trust. Trust cannot be gathered by tinkering and manipulation but by sustaining fair, open and free markets. “Avoiding the disaster of losing their homes” sounds noble, but in many cases it is a far greater and longer disaster keeping people in overvalued homes that are likely to depreciate for many years. Renting is sure to cost them less than even a modified mortgage in almost every market in our nation and this provides more income for these families to spend for other needs. If home prices correct quickly enough this same family could even purchase the same quality home in a few years while assuming far less debt. “The steep and destabilizing decline in house prices” is of course the result of the “steep and destabilizing” rise in home prices that occured since 2000. Artificially keeping US home prices at an unsustainably high level is sure to have many if not all of these consequences:
1. Hurt young families trying to purchase their first home.
2. Make lenders reluctant to lend and mortgages more expensive and harder to obtain.
3. Make investors reluctant to enter the market. (If prices were to drop to a normal level quickly enough then investors would buy these homes and this helps prevent blight and loss of city revenues).
4. Reward the incredible greed and destabilizing behavior of Wall Street and US banks. If these institutions are not made to pay an honest price, then we will not get the needed reform that will cleanse the financial system and pave the way for future growth.
5. Continued death of the US dollar value. Every time the FED tries to help housing our currency declines and this hurts average Americans just trying to pay for food and gas. It also kills those have savings. Seniors who worked their whole lives and actually have savings are being looted as the value of their savings is being intentionally destroyed.
6. Any bailout is sure to slow the needed reset/correction to bring home prices in line with incomes. See Japan for how manipulating and papering over losses can hurt a nation for a very long time.
7. Increase the Federal Deficit which eventually will cause interest rates to skyrocket.
8. Bankrupt FNM & FRE (If they aren’t already), as they take on more and more toxic material.
I posted this at realmoney.com yesterday:
Why didn”t one lender pull back and start a war chest of cash? Why didn’t one homebuilder decide the run wasn’t sustainable and cut way back in 2004-2005? Why didn’t the major banks not leverage themselves to the nth degree? I’ll tell you why……because American Business has been built into a system of short term paper profits not long term sustainable enterprise. This allows the higher up execs to hollow out the corporations while looting the till. Why should Mozillo even care if Countrywide survives as he sips DP on the G4 and puts $400-500 mil in the Caymans….Real wages for those who actually do the hard work in the USA have been in decline for several years and the middle class has been sold out several times over and is about to be destroyed completely. Fake and totally biased ratings for fake mortgages and equities, posting fake profits, openly lying during conference calls, off balance sheet vehicles (we need these WHY?), and just plain GREED were the order of the day. Cramer’s solution is a government bailout? Wrong. Let those that reached too far and were too greedy FAIL. Period. It is certain to get nasty and there will be pain for all of us, but it is THE HONEST and FREE MARKET thing to do and is the only way to restore the trust that has been lost.
If a few banks and homebuilders cease to exist then new businesses more prudently managed will certainly take their place. This opportunity for new entrants is the rebirth of capitalism that will take us out of the current malaise.
Please re-think your position on housing as I think you are on the wrong side of this issue, and any bailout while unlikely to work in long run is sure to cause further damage to our citizens and economy.
Sincerely,
Darryl Randall
Miami, FL
Renter Tom,
You know you’re right, I know you’re right, and I even think deep down inside, AJ knows you are right. Why waste the time and energy arguing? Most of the HousingHeads here are just trolling for a fight. They realize that they could’ve bought their condo at a 40% discount if they held out another 2 or 3 years.
Something I have noticed since I’ve moved down here, people love to flaunt money that they don’t have. Sure, I see a lot of rich folks drinking $20 martinis and driving BMW’s. But, that is such a small portion of the populace in Miami. Leased luxury cars and rented luxury apartments, it’s all a facade. It really hit me today when I stopped into a Starbucks in Coral Gables and saw a shift employee get out of his brand new Land Rover and throw on that Starbucks uni.
Tough times ahead, especially for Miami. More fiscally conservative areas, like NYC, Boston, and WashDC will fair much better during the real estate bust than places like Miami and Las Vegas. Just my $0.02
Renter Tom or Perez how does one find out what is on the FDIC list? Thx.
This blog is the real deal … it’s funny, serious, insightful, competitive, theatrical, and way over the top at times… like a reality TV show with some very smart and compelling characters. NOBODY BETTER LEAVE THIS BLOG !!
Miami2008, the list is SEEEECRET. If they told you who the troubled banks were, there would be a run on them. Their list is worthless anyways. Indymac wasn’t even on the list when it failed. ummm, here’s my list : wachovia, national city, wamu
swiss
with all due respect, i don’t perceive the last eight years to be the debacle you forecast. nor do i see our economy in a state of decline compared to the BRICs and other emerging countries. frankly, the BRICs are ready for a drastic fall. the russian and chinese equity markets have tanked. just because the timing of a decline in those economies doesn’t correlate to ours doesn’t mean they’re not going to take a massive hit in the coming years. considering the level of diversification of their respective economies, i think it’s fair to say their downfall will be significantly greater and longer than anything in the US. as for the gulf states, they’re one trick ponies with wealth concentrated in the hands of the few. let’s not forget that in the 80s Japan was set to rule the world. we saw how that played out.
as for the “bailouts”…come on. bear stearns was a function of counter party risk and the effect it would have on the financial system. fannie/freddie is partly a function of keeping liquidity in the housing market and also, keeping the recycling of money going forward from abroad back to the US.
what the hell is your beef with PIMCO? one of my friends is a bond trader there. amazing company.
Are you actually supporting the Republicans jcrimes? Both parties are out to rob you. What’s up with Palin and “I would go to war with Russia”?! Is she that daft? Does she not realize that would amount to the death and destruction of every single inhabitant of the planet? Does she not realize that her darling children would be incinerated?
Miami2008 – A one bank list…WaMu. They may make it, but sure is shaky….can you say shotgun wedding arranged by the FDIC is coming? WaMu offered an online CD (12 & 13 month maturity) late last month at 5%, now it is on their website again….5% APY. That says, WE NEED CASH more desperately then Countrywide Bank. I sure wish I had waited and gotten that 5% with these guys. Learn the FDIC insurance rules….a lot of bankers don’t know it and I just recently overheard a banker give a customer the WRONG information on FDIC insurance. Ouch. Just because you title it POD, doesn’t mean that account gets separate FDIC coverage…..ONLY certain beneficiaries get that, NOT charitable organizations, NOT nieces and nephews, etc. Do your homework on this if you plan on having more than $100K at one bank. Scary that bankers get this wrong. I felt compelled to correct the banker but didn’t want to appear rude or that I was listening….it was an open office without background music and I wasn’t paying attention until I heard the customer say something about POD and FDIC which perked up my ears. That guy is in for a surprise should WaMu go under….
Probably time to limit posting for a while….so much venom out there. Don’t shoot the messenger guys…I didn’t create the bubble. If you had a $100 bill and it flew out your car window, you’d probably be unhappy about it. Imagine that happening a 1,000 times, 2,000 times, 3,000 times….well I think you’d have closed the darn car window after the first or second $100 bill flew out. Right now, that is real estate for many in the South Florida market if you bought over the last 4 years or so.
Personally, I rolled up my window before the first $100 bill got out. In fact, I’m saving $30K-$40K per year just by renting not taking into account the substantial declines in the condo asset price which dwarfs the rental amount. I could take that $40K and take a trip around the world, buy a new car, put together two years of savings and use that as the downpayment for a condo….you get the picture. It is a substantial amount of money that one just doesn’t throw away.
I will be watching this market for sometime, will figure out exactly where I want to buy and will make a prudent decision when the market fundamentals indicate a floor is in place. Florida is not the only market I am looking at to buy in….looking for maybe 2 residences. But for now, renting is absolutely great…..no worries, a fixed cost at half the price, can’t beat it!
If I don’t see ya later, good morning, good afternoon and good night…………………….
I hate the Democrats with all my heart, but if McCain/Palin are elected and go to war with Russia, Miami would be leveled. There won’t be a single building standing. Russia has enough nukes for everybody. One for the Miami World Center, another for Miami Beach, another Hydrogen bomb for Overtown, and another for Coral Gables, another for Pace Park, etc. The temperature in your condo would be 13,600,000 kelvin. Think about it people. Doesn’t that scare you?
Wrapping up my trip to Miami. Will be back in NYC tomorrow. Will pick up with renter Tom where we left off. Just kidding. LOL.
Regarding PIMCO Karl Denninger said it best (In the past he has supported the GOP, but even he seems tired of the insider/corporate ongoing theft of America that threatens his daughter’s and future grandkids’ lifestyles)
Thursday, September 4. 2008
Posted by Karl Denninger at 11:08
“PIMCO’s Bill Gross – “Make My Willful Bad Bet Good”
Here we go again:
“…the U.S. government needs to start buying assets to stem a burgeoning “financial tsunami,” according to Bill Gross, manager of the world’s biggest bond fund. ”
Let’s be clear.
Bill Gross, knowing that this delevering was going on, has gone into the market and bought these “assets” at a fire-sale price.
He was not “stuck” with them due to unfortunate circumstance – he purchased huge amounts of these “assets” after the credit crisis had begun, and the subprime slime, along with the rest of the overleverage in the financial system, not only was known to people like Roubini and Mish, but also reported in the major financial press – that is, it was public, common knowledge that these securities were crap.
Now, having done this, intentionally, he once again comes to the microphone not to ask that America be bailed out, but that he be bailed out of a bad bet that he knowingly made.
This is the mess that we get into when we practice “moral hazard”.
In fact, let’s call this what it is – attempted robbery. It is not an attempt to help Americans, it is instead a demand to rig the market for his firm’s profit, which is supposed to be unlawful.
See, “moral hazard” is the process by which people will tend to take more risk than they otherwise would, confident that the government will step in to help bail them out if things go bad in the future.
This is different.
This is the purchase of securities that one knows are impaired in the present, then demanding that the government come in and make your bet – which you got at a very cheap price because the market believed the securities were impaired or even worthless – pay off for you, not for The People.
Congress, The Fed, President Bush and both Presidential candidates need to get out in front of this issue right here and now and say that there will be absolutely no bailing out of people who knowingly took risk such as Bill Gross did with PIMCO’s “overweighting” of mortgage-backed assets after the meltdown had begun.
In short the government needs to tell Bill Gross and PIMCO to “get f***ed”, in English, releasing that statement publicly to the markets so there can be no mistake what the message and position of the government is, now and in the future.”
Typical Republican mentality: bitch like hell if a wefare Mom cashes an extra $500 check at Publix, but if we need to double the national debt and toss it onto future and current taxpayers or slowly crash the dollar to reward Wall Street or Newport Beach fraud well then, not a peep…..Can’t upset the big donors.
Once we are done bailing out Bear, Fannie, Freddie, WAMU, Lehman, Citi, Merrill, Morgan, GM, Ford and all the airlines what kind of a country, currency and debt market will we have left? The answer is Sarah Palin? Good luck with that.
interested and swiss luxury:
Put down your odrama kool-aid and realize that in the new nanny (socialist) state that you won’t be allowed to own real estate. It’s a “collective thing”. LOL
SwissLuxury.com makes a very compelling case that the nation faces large challenges and that we need a president with the wisdom and experience to guide us through these difficult waters, not some zero experience, zero leadership, zero initiatives, zero legislation, pop star Britney wanna be ZerObama. Obama ain’t the answer, he’s just an unpredictable wild card who would have to learn on the job, much more than George Bush ever had to do. Every argument against Bush can be applied twice as much against Obama. We don’t need a pop star to ride on emotion, we need a seasoned statesman, war hero, and patriot who knows how Washington works and knows how to get things done there. The choice really can’t be more obvious.
Richard,
I would have made a more thoughtful post concerning the subject as you did, however, I was laughing too hard wondering how old these odramaniacs are. If the 2008 version of the “Russian nukes” mania business really scares these people, I venture to say they would have resettled in Antarctica if they had been around during the Reagan years….when the USSR WAS a major threat and didn’t have billions in petro-rubles schloshing around in PERSONAL bank accounts.
The Russians in Sunny Isles Beach would get a giant laugh out of the opinions of some of these people.
Swiss Luxury.com post #110 nailed it. If indeed we are in an economic meltdown I am moving back to my place in Vermont because Swiss Lux comments aptly describe the rape pillage and plunder this gang that controlled the levers from 2000 till 2006. Republican and corporate laissez-faire, hands off, no regulate, deregulate cronyism will be the fault. God help us all if it degenerates into anarchy.
BTW-
You get to know after reading these posts for a while a persons MO so to speak. renter tom has at least 3-4 alias. renter tom -you know the rich guy who has to tell numerous times how rich he is-and how much of a genius he is numerous times and how ignorant the rest of us are numerous times. To read him answering his own posts with another name is comical. To paraphrase la la- I would much rather be considered wise than considered smart.
Kramer – Give it up. I have never responded to my own posts using another alias, name or whatever. I have read your posts and quite frankly they contribute very little and often have no substance whatsoever. I look at the investment fundamentals and what can or can not support the pricing in this market. All signs, aside for the socialist take over of Fannie/Freddie and the subsequent lower mortgage rates, point to further asset price declines in this housing market. It really is that simple.
Renter Tom takes a bow, exist up the stairs and through the door…… 🙂 Cya.
Lucas… I was thinking that it might be a good idea to add a section (maybe could even be a separate post) where people can write ONLY about recent deals they have done, heard about and/or are working on.
Nothing like fresh information to give you a good picture of the market.
For example, I have been looking at a building in Aventura to buy a unit and here is what I found:
They sold a unit last year in the 8th floor for $590k ($370psf) and the unit 2 floors above just sold in June for $460k ($290psf). That’s a 22% drop in a year. The building has over 30 units in MLS and the developer has 50 units unsold (190 total), so they haven’t paid off the construction loan….
How low do you think this will get?
The funny part here is that the units for sale in MLS are selling at an average of $380psf with an average 160 days on the market!
What are these owners thinking??
New “Vulture Offering” from CBRE on some “useless” Cornerstone Premier” condos in Hollywood FL. I guess it’s “LOOK OUT BELOW” not only in Miami………
http://www.cbre.com/USA/US/FL/Miamidt/Property/HollywoodStation
“Hollywood Station offers investors an outstanding opportunity to acquire 88 high-end condominium homes located in highly desirable Downtown Hollywood in Broward County, Florida. Financing may be available for qualified buyers. Completed in 2007, this 10-story, state-of-the-art mixed use building contains a total of 214 condominium homes. The REMAINING INVENTORY is comprised of 88 UNITS and features outstanding unit finishes in nine well-designed floor-plans, which average 1,148 per square feet. Current ownership has sold and CLOSED 126 UNITS to individual owners, with net prices averaging $278 per square foot. The remaining 88 high-end units are appraised for over $30 million and are 80% leased with effective rents of $1.08 per square foot.”
That is a 51% CLOSING RATE after a year! Why did I post this? Cornerstone build “LaPerla” in Sunny Isles and has other projects newly-finished in S. FL.
I find it interesting that the Miami World Center is one of the largest projects of its kind, yet no official press releases from 2008 have been linked to. The vote by the planning board is all we have.
I’m willing to be at least twenty people involved with this project in the coming years get indicted on various charges. I expect several people from the CRA, planning board and various other local government officials to take a dive on this one. Too much money under the table to not drop it on the floor and have nobody notice.
The original parking spaces for the AA Arena have been built on. The dirty deals will start coming once the bids for replacement garages get announced. Such easy money to be made in Miami. The tax payers are clueless.
Hey guys,
I have a unit at Icon Brickell, that I really need to get rid of 2bed 2bath. So anyways, I called the sales office at Icon, and they are going to be leasing and selling the units after the closing. The sales associate I spoke with, said that a 2 bedroom unit could be renting for $3000-$3500/month. That seems kinda high to me, but she was saying that this is a really luxurious building with lots of extra amenities.
What do you think?
IG on ICON Brickell asked: “What do you think?”
For openers, visit:
Click: Standard Case Search and type in: TRG Brickell Point
There are already 10 investor lawsuits against Related on a building six months from completion.
Nice buildings BUT 1,600 higher-end units. Good Luck.
IG,
How does this work. you close then you can list with them and also list it privately? Is the condo unit complete with flooring or will you need to do that?
Does related have a similar program in place at 50 biscayne? How is that wokring out?
IG… If it were me, I would let it go. Here is why:
With over 1,000 units in Icon alone, you will be competing with some owners (those who actually close) trying to lease out their units and some will go low. Also, Related will probably end up keeping a ton of these and putting it into some rental pool which will drive rents down.
Don’t think rents in a 2BR in Icon would go over $2,500/month.
Un-Related,
Thanks for the info. I was really enlightened to see that there is 15 lawsuits agains ICON. Most of the lawsuits are over contract dispute and I found several over mortgage foreclosure. How can there be a foreclosure lawsuits, if the closings didn’t even start yet…….Interesting….anyone knows?
JL,
From what I was told you have to close, and then can list it with them. Not sure what I can do privately. But then again, I can also list it with any agent, who will probably charge less commission. I will have to install the flooring.
I would also like to hear how the 50 Biscayne is working out????
Hugo P,
the $2500 is the number I had in mind as well, maybe even less than that. But the ICON Sales office is still trying to hype up the project. This rent will barerly cover the mortgage payment, but then I got taxes and condo fees on top of that. Sooo something to think about.
Does anyone know people who filed lawsuits against Related, and for what reasons????
JL,
We had the same “opportunity” of closing and letting RCRS rent the unit at 500 Brickell. They CLAIMED they could get $2,000 for a 1/1. That is COMPLETE BULL. Also, IF they found a renter at any price, RCRS gets 6%.
We walked, YOUR effing ICON blocked the view for which we paid an extra $45,000.
RUN, don’t walk.
man oh man, the drama is just startin’. Worst month for foreclosures yet! WOOOHOOOO!
Can you delay closing if the building doesn’t have a certificate of occupancy?
Here is an some news from 2003 about what CRA’s do with taxpayers money.
Good luck to all the projects throughout Miami. Good luck owning in an up and coming neighborhood.
http://www.floridacdc.org/articles/031031-2.htm
IG asked: “Does anyone know people who filed lawsuits against Related, and for what reasons????”
Try the “search” again:
Click: Standard Case Search and type in: TRG
There are 125 – 150 for: ICON, 500 Brickell, Plaza, 50 Biscayne, Harbour House, Trump Towers, othe Brickell properties. These include ONLY Dade County buildings.
Claims I know of:
1. Illegal securities sales in NY
2. “multiple condo associations” claims
3. not disclosures in condo docs
4. failing to retrn 25% of deposit as per contract
God knows what else.
Wild Bill asked: “Can you delay closing if the building doesn’t have a certificate of occupancy?”
That is hilarious! The developer legally can’t have closings unless it has at least a “Temporary Certificate of Occupancy”! A buyer legally can’t move in without the same. No mortgage should be granted without the same!
IG,
I’m very sorry to hear about your situation. Unfortunately it is all too common.
I think it is very improbably that with so many units coming on the market that you would get anywhere near $3000/month for your unit. Brickell simply doesn’t support so much inventory nor do so many people who would live in this area earn enough to pay that much rent. (and there are many less expensive alternatives close by.)
if possible, I would recommend cutting your losses and walking away from the contract. can you do this and just lose your deposit? might be a painful hit, but closing and then carrying the unit may be far more costly.
Looking at cash flows if it rents for $2500 a month it should be worth about $300K for that 2/2 at Icon
Looking at Marina Blue/900 Biscayne right now, the spread seems to be asking $1mill for sale or $5K for rent.
Regarding Icon, another consideration regarding renting feasability is how “ready” will Icon be when it’s time for you close. If Icon is being rushed and still looks like a construction zone, it may be especially hard to find a renter willing to pay a market price.
I can move people in any building in Miami without a certificate of occupancy. It just takes a lot of cash and a brown paper bag.
I can have officials certify the parking garage
http://www.miamisunpost.com/0524briefs.htm
A Matter of Occupancy
Many Units in Luxury Condo Were Never Fully Certified
By Ben Torter
Even though most of the units at South Beach’s Continuum South Tower are being lived in, 315 of the 320 residences don’t have certificates of occupancy, or COs, according to the Miami Beach City Manager’s Office.
Fire sprinklers missing caps and painted-over escutcheons (the sprinkler’s internal glass bulbs) are the most common reasons why Continuum units are without COs, city officials said. Who should take care of the problem was the source of heated debate at last week’s Miami Beach City Commission meeting. The condo board said it’s the developer’s duty to fix the sprinklers and get the COs. The developer received COs for the building’s common areas, parking garage and spa in January and February of this year, and is refusing to help, condo residents said…….
Dude, thos that bought at Icon Brickell and think you can get $3k a month are fooling yourselves!
Those crooks at RCSR will tell u anything to get you to close or to make you belive that you will get certian amount of rent based on the prices and “market analysis”. Funny I walked into Fortune the other day and the realtor had the balls to tell me that a unit at Ivy for a 2/2 is $450 + for the smalleset one and higher from there. I told her she had lost her mind. She said it’s a “marketanalysis” that has proof and she had the balls to say that’s what the market reflects.
Obviously, it’s all BS that’s coming out of develpres sales office. No bldg is immune even the high end ones. The only thing ICON-nic that will happen when ICON starts closig is that it will be one iconic mess and yes it prob will be really nice prob no debating that but bottom line there arent enough CEO’s in Miami to afford 1000+ units and not 1000+ CFO’s to afford $3000 a month rent cause that’s what your title will prob have to be to pay up the ass liek that.
BTW:; speaking of ICON-nic disasters what is the word with Cynergi. Drove by there yesterday and the place was DEAD!
Looks complted but abandonded.
Could we have 100% defaults.
Un Related,
You mentioned the following reasons
Claims I know of:
1. Illegal securities sales in NY
thi sis the story here – did the people who had contracts reciev their 20% down back??????
2. “multiple condo associations” claims –
can you expain this one please
3. not disclosures in condo docs –
what do you mean here?
I want to make sure that I was provided the right dsclosure docs…..
Thanks
IG,
All of the 150 or so cases are still open so it is hard to answer.
1. “Illegal securities sales in NY” Case is still open but said Related’s Offering Docs were “Unregistered Securities” in the State of NY.
2. “multiple condo associations” claims
Apparently, if the project has more than one tower, the buyer becomes a member of A “regular” association and a “master association”. This claim may or may not pass muster with a court……has not been fully litigated.
3. not disclosures in condo docs – “what do you mean here?”
Each project has its own condo document and you recieive a copy. Problems may be found in these resulting in lawsuits.
4. “I want to make sure that I was provided the right dsclosure docs” I have no idea what the ICON condo doc looks like.
Maybe you should go to Courthouse and view the litigations for TRG-Brickell Point. See what the claims being made are and call a few of the Plaintiff’s lawyers. They won’t charge you for a phone consolation and they may think you have a claim.
since there’s been some political talk in prior posts, i just have to ….
after 8 yrs of bush and 6 yrs of congress under his thumb, you get these kinds of results – results we’ve had across the board everywhere from war decisions, economic policy decision, energy (or lack there of) policies, etc etc….not ONE single thing go in the right direction and there’s STILL clowns out there who are voting for a party and not individuals. this country must truly have become numb and dumb.
something is fundamentally wrong at the core of this country if we mcc/palin are put in office….same core that put bush in a 2nd time. we’ve become a country of morons and then we wonder why everything around us is falling apart to extremes we haven’t seen…
Once again, sweet post. HA HA! Exactly what I have been saying.
Does anyone know good mortage broker that specializes in dealing with investors, who dervive their income from outside of US?
Your help is appreciated!
Lucas,
Can you please flush out the irrelevant, news paper cut and paste crime story, post #151 please?
Thanks
We have to get a handle on this before it becomes a runaway train wreck.
Lucas, have you talked to your web developer to see if readers can flag a post as either positive or negative? Too many people rating a post as negative or irrelevent should be removed by you either manually or automatically. That way it will be reader controlled and will not attract allegations of censorship. If people flag my posts and take it down, so be it. It should be the same for everyone. Just like you can vote only once for each IP address, you can only flag a post once only.
“with all due respect, i don’t perceive the last eight years to be the debacle you forecast. nor do i see our economy in a state of decline compared to the BRICs and other emerging countries”
jcrimes,
The BRICs is still growing at 6-8% GDP. What’s the growth rate of the US even ifyou believe the fabricated numbers the government feeds us?The president doesn’t appoint the treasury secretary or the FED chairman? What the hell are you talking about?
You get on this blog all the time and shout about how bad the economy in miami is and how much further the housing market has to do down then you say the economy is not so bad. Come on, at least you can try to be consistent.
Why do you republicans constantly insist that the economy is not the making of bush’s policy of lassie fare. The repugs/bush failed to enforce higher milage standards and now look at the auto industry and the economy of the midwest. They failed to regulate wallstreet, now look at them chocking on their greed. The same republicans whooping and hollering about the welfare mom trying to feed her kids on foodstamps are the same ones crying for the government/taxpayers to bail them out now that their 7 figures salary are in jepordy Most republicans are nothing but hipocrits. They cry for a free market economy without government regulation but when they left to their own devices and they get into trouble ,as they eventually will, they cry out for government intervention.
Yeah this economy is great, better than the BRICs but don’t forget the stock markets are not the economy.
IG,
I don’t know if you are new to the blog but do read all about the super 6 we have talked a lot in the previous thread (900 Biscayne).
This is what I call the super six:
1. Icon Brickell
2. Epic
3. Infinity
4. Everglades
5. Marquis &
6. Paramount Bay
These buildings are set to open in the next 6 months and all of them are branded (except probably Infinity) as Ultra Luxury.
These buildings are priced over $500/sf. So in that sense, these buildings cost anywhere between $150-$200 per sf higher than the luxury segment such as Q, 18, Plaza etc. which were priced sub $400.
What that means is that, you can close on a $375/sf flat in the second tier buildings and rent them out at $2500/month for a 2/2 and still cover all or most of your Mortgage+taxes+maintenance. But as you yourself have pointed out, you may not be able to rent your pricey Icon Brickell 2/2 for no more than the $2500-3000 range, which will just cover your mortgage and leave a big hole with regards to taxes and HOA.
As I said before, There may be enough renters in this town, able to plonk down $2500 for a 2/2 but there are almost miniscule or negligible number of people who can pay $3000-$4500 for a fancy pad. At the end of the day, it does not matter if the flat has a Sub Zero/Miele refrigirator like the ultra lux buildings or just a GE appliance like the Lux buildings. All of them have the same location advantage, a gym, a pool and other conveniences. In that sense the super six must be for owner occupied only. That requirement is satisfied for only 30% of the units. The rest, which are booked by investors like you are in a bind. Do not believe the spin meisters at the Related office telling you that they can rent these for a large sum.
Just take a look at the MB and 900. Two fabulous and beautiful buildings costing between $475-575/sf to buy but the rents are only a tad bit higher than the Q and 18 which cost an average $375/sf to buy and Plaza which is $400/sf to buy. Basically that tells you that the capacity of renters gets tapped out at a certain point and the owners of high end buildings end up subsidizing the renters more than the others.
People think I am a gung ho cheer leeder for all new construction no matter what. It is not true. I am genuinely concerned about the super six, as to their ability to be successful. They are priced high to begin with and are coming at the height of the liquidity crunch to the market.
I will advise anyone who bought pre con in these 6 to close only if you bought to live or if you bought to use it as a vaction home and you are rich enough to afford the monthly outgoings.
People who want to close and thinking of renting these flats to recoup the expenses would be making a big mistake. Losing $100K in deposit will be absolutely gut wrenching. But It is what it is.
Hope this will help you a bit in your decision to close or not on your Icon Brickell unit.
I was reading about two exciting projects. One is the Miami Baywalk, connecting Pace Park along the water all the way to One Miami via the Museum Park.
Another is the realignment of I 395 by putting it under as an open cut. If that ever happens, the Park West and OMNI/Arts will becomne one with the elevated 395 gone and that would make this area THE No1 desirable spot in Miami. Hope it happens. Marquis would be a hot property when the EL next to it disappears!
Once Again said in Post #145:
“Funny I walked into Fortune the other day and the realtor had the balls to tell me that a unit at Ivy for a 2/2 is $450 + for the smalleset one and higher from there. I told her she had lost her mind. She said it’s a “marketanalysis” that has proof and she had the balls to say that’s what the market reflects. ”
Things must be really bad. When I walked into the Alton Road Fortune office in 2005, the “shes” didn’t have balls, however, the sight of those 38-DDD bolt-ons remain in my memory to this day! ROFLMAO!
Those Condo “seller” babes made the RCRS crew look like….what’s the term? Oh yeah, pit-bulls with lipstick!
un-related
that’s been the biggest downer about the whole market fall – the migration of the hot sales associates at the preconstruction offices. how come the case schiller index doesn’t mention this?
AJ,
I believe that your analysis of the “super six” is a very interesting one and brings up some valid points.
But I do have one glaring issue with it: WHO is going to pay $2500+ a month for a unit at quantum or 1800 club? There is higher quality product that is out there for less money than $2500… and from what I’ve seen 2/2’s in Q or 1800 are renting for 1800-2100….. Either way it seems difficult to imagine that the rent would COMPLETELY offset the owner’s carrying costs..
Case Schiller announced Friday that the national real estate market prices have on average bottomed! I would say if your not just in here doing a mental jerk that if you seriously want to be downtown -brickell-Pace-arts districts that you have no more than six months to pull the trigger. Greenspan said his estimate is late 08 or early 09. This is for the buyers.
BTW- Anyone who has a contract and waiting to get your closing dates would be foolish to not close, if you have the financial wherewithall to hang on. Why not move into the unit yourself and wait for a turnaround in prices in the next 3-5 years? If you walk and lose 20% downpayment and prices come down another 20 % (will never happen) then arent you on paper have broken even at that point by closing and living there yourself. Your payback comes back to you by closing and reselling in 3-5 years as the market is allready off approximately 30-40% on average from 2006 peak prices.
Kramer…do you have a link to the story where the case-schiller folks say that market has bottomed?
Following is the blurb I saw: “The S&P Case-Schiller index also showed that 14 cities showed improvement in home sales in June over the prior month and 9 cities actually reported higher home prices.
Of those cities which suffered the largest drop in year-over-year home prices, Las Vegas lead the pack falling 28.6%. Miami was second, down 28.3%, followed by Phoenix where home prices have dropped 27.9%.”
I seriously doubt that you go from a 28.3% drop in prices in miami YOy and then say that prices have botttomed. We are far from a bottom.
I think that some condos in downtown area will have a value of zero. i.e if you pay HOA and Property Tax, you get the condo for free. This may sound extreme, but it could happen.
On a related note, one of my neighbors just sold her townhouse and they got 45K less than what my other neighbor bough her house for. It is about a 9% drop between March 2007 to Sept 2008. I live in a complex where there are 8 identical townhouses. My neighbor who sold at a 9% discount (to peak price) was desperate…her job situation was very shaky and she sold to the first person who made a serious offer. 🙁
Kramer – I think you should check your sources before you state things as fact. You said, “Greenspan said his estimate is late 08 or early 09. This is for the buyers.”
In fact, last month a CNBC article stated, “Former Federal Reserve Chairman Alan Greenspan said the US is “nowhere near the bottom” of the housing slump and is “right on the brink” of a recession.” Here is the link if you wish to read the whole article. http://www.cnbc.com/id/25953040
As far as Case Schiller calling for a bottom, I think that is likely not the case. Here is a great article using price-to-rent ratios and price-to-income ratios to predict that prices are far from bottom. It’s a lengthy article, but here’s a good summary for the lazy: “Figure 3 shows another view of this relationship – median home prices to median household income for the US and a number of major cities. As we see, US home prices still have to drop another 20% or more to return to the historic ratio of home prices/income of 3.5. For places like Los Angeles (10 x income), Miami (7.25 x income) and even Chicago (5 x income), prices still have a long way to fall to return to the historic norm.” Here is full article for those interested. seekingalpha.com/article/94110-housing-prices-bottom-or-temporary-bear-break
So Kramer, I welcome your opinion on the future of housing prices, but please back up your statements with facts and not distortions of the truth (i.e. Greenspan’s call for a bottom soon.)
I personally think the national housing bust isn’t over yet, but we might be more than halfway there. As far as the South Florida condo market, I think there is a very long way to go. Between the glut of inventory and the exorbitant maintenance costs an owner must pay on top of their principal, interest and taxes, there are few salaries down here that can support such monthly expenditures.
I would love to buy a condo down here, but I’m waiting for the inevitable price crash. Of course, this is my opinion. I could be wrong 🙂
Caveat emptor
Ok Shelly- here it is
On Wednesday or Thursday of this last week- Which is the latest interview with Greenspan on CNBC- Maria Bartoroma had about a 15 minute interview- the one your quoting is outdated. I watched the whole intewrview -nothing misquoted Check CNBC 4:15 p.m. interview- im sure its somewhere on their page or try to google it. Case Schillers quote came out Friday.
Here is a link to the story that backs up what Shelly is saying:
http://www.nysun.com/business/greenspan-housing-slump-is-nowhere-near-the-bottom/83039/
I’d like to see the interview, but I will take your word for it. It’s strange how he seems to have turned 180-degrees on housing prices in one month’s time. Either way, I’m now seeing how incompetent his tenure as head of the Fed was and I wouldn’t put much faith in his assessments no matter which way he viewed.
In fact you can’t rely on any expert’s opinion as gospel. The only logical way I can look at prices is using my own amateur economic analysis. I ask, “Is there an oversupply of inventory? Are the prices asked in line with what is historically affordable for the area?” Simple Econ 101 tells us that we’re nowhere near a market clearing price. It’s all guns n’ butter (for those who took Econ 101).
I’m waiting. So Kramer…agree to disagree, agreed? 🙂
fz,
far from it. The rents in Q for 2/2’s in higher floors go for a little higher than what you quoted… I own one and I have it rented for 2200 dollars. My mortgage interest is around 6.2 % ( an investment property) and I still have to dish out about 1200 dollars per month to cover maintenance and taxes. That is the reality… I really wish that it was different, but its not. Oh, and I bought on day #1 at preconstruction prices at about 320 per square foot.
FZ,
2/2’s with direct bayviews in Q and 18 are renting for $2300-$2500. One realtor was lamenting that one of his client is willing to pay $2400 for a direct bayview large 2/2 (lines 5 and 7) In 18oo and even at that price he could not find him one unit!!
I know why Q and 18 are so popular with renters. I will not say it again as a I will be accused of something. So you can find it out yourself as to why these two buildings are so popular with renters, when very high end buildings with more bells and whistles in greater downtown can be had for similar amount of rent (Or I can e-mail you personally what the reasons are).
what is the liklihood that some of the more “surplus to demand” units around Brickell ultimately end up as public housing / Section 8 Housing? is this far-fetched? (any more far-fetched than anyone in 2006 would have thought <$200/sf in Brickell in two years?)
Bank forecloses on hundreds of units, unloads loan at $0.20 on the dollar, someone picks up thousands of surplus units very cheaply, and gets some tax or some other break by making these “affordable housing.” Brickell becomes an extension of Overtown.
Could this happen?
A neighbourhood in transition. That’s a laugh, how is the City of Miami going to fix up a high crime blighted area without any property taxes coming in.
Stand fast in the ranks chaps, $125.00 per square foot is coming.
The Smart Money
3 comments regarding Greenspan’s ever-waffling comments.
1) His view is a national one.
2) The Miami condo market has much different dynamics than single family homes throughout the nation.
3) Greenie’s turning out to have been a very bright guy who has been very wrong for many years.
The Ace Said:
“A neighbourhood in transition. That’s a laugh, how is the City of Miami going to fix up a high crime blighted area without any property taxes coming in.”
Great question. Especially in light of the fact property tax assessments may currently be at their peak for the foreseeable future:
http://www.miamiherald.com/news/front-page/story/684714.html
Current assessments are already based on “smoke and mirrors” because they don’t reflect the realities of foreclosures and short-sales and their effect on REAL market values.
I always understood that in a free market an asset was worth whatever you received for it at the time of sale?
Alan Greenspan is a senile old coot. He is one of the key players majorly responsible for the housing bubble. How can you give credibility to anyone who called the bubble “a froth” in the peak of the 05-06 frenzy when even a 5th grader would have had a better clue on the subject? In fact his name is synonymous with a four letter word.
Greenspan is not responsible for the housing bubble. He had to put liquidity in the market around Y2K due to all the fears about a meltdown. That liquidity had many side effects including starting the housing bubble. The most damaging decision that was made was the ability to re-sell loans as investment vehicles. Banks no longer cared about who they gave the loan to as they had no intention of holding onto the loan long term.
We as a country are moving towards a FIRE economy and a FIRE economy has periodic bubbles.
Click here for more info on FIRE economy: http://en.wikipedia.org/wiki/FIRE_economy
In the last 8 years we have had 3 bubbles. 1. Stock Market (tech stocks) 2. Housing Bubble and 3. Commodity bubble. I am sure there are more bubbles on the way….maybe in the wind/solar/ethanol market.
Check out this blog. It is a discussion of some super inflated prices that have come down to earth (relatively speaking)
http://www.soflahousing.com/2008/01/todays-fcked-buyer-miami-beach.html
WHO still listens to alan greenspan??
i will try to find the james grant article on how out of control the debt levels of individuals and the country exploded under his ‘supervision’ as fed chairman.
and anyone who thinks that the time of his retirement was coincidental as to when housing/economy dumped … needs to read.
he will villified as time goes on … just as bernie ebbers, ken lay, richard armitage, hank paulson and bernanke (will be…) …
it’s sad that people in our country are such sheep.
Miami real estate will not bottom until you see at least 3 months in declines in inventory through true SALES … not through multi-unti removal of inventory from the markets (as Related has done…) and other tricks. very similar to thinking “if we don’t kill em there, they’ll kill us here!” – moronic. typical of these corps..and our pathetic gvmt.
Jane Q Renter,
You said “They realize that they could’ve bought their condo at a 40% discount if they held out another 2 or 3 years”
Wow, The definitism, the scope and breadth of your prediction is breath-taking. Do you have any stock tips too?
Has anyone stopped and wondered for a second, what ever happened to Jack McCabe and Peter Zalewski? They started the vulture funds 3 or 4 years ago to pick up distressed condos for pennies on the dollar. The last I hear is that they are as frustrated as they have ever been. I don’t think any developer gave them even 20% discount, leave alone 30 or 40 or 50% that they were hoping for.
AJ,
One thing to remember is that all investments eventually revert back to their mean. Look at the recent history of gold, tech stocks, chinese markets, the Dow, and oil (yes, even oil). Bottom line is that the gravy train can’t ‘choo-choo’ forever. Sooner or later, some poor guy (or gal) will be left holding the bag. It definitely won’t be me.
Probably to cynical,
I can’t see Brickell becoming an extension of Overtown. I can’t even imagine any Section 8 living in those really nice buildings. However, I can see Downtown and Brickell becoming a nice place to live, where people of all incomes can live, work, and have a great time. Everyone from fire fighters to lawyers to artists will eventually be able to enjoy living downtown.
Here a link to an Interview with R. Schiller about housing market. He is predicting another 10% decline nationally.
http://finance.yahoo.com/tech-ticker/article/53094/U.S.-House-Price-Decline-Could-Be-Worse-than-Great-Depression?tickers=%5Egspc,fre,fnm&
McCabe and Zalewski have not been able to buy at fire sale prices, yet, because our government has continued to prop up the housing and finance market with taxpayer bailouts. Developers will not be able to sell at such large losses for the same reason that underwater homeowners cant unload their properties-banks owning the loans on the property are resisting most forms of short sales of any magnitude. Two things will happen. Either the developers will somehow stay afloat long enough for a recovery to occur and then unload at cost, or eventually economic pressures will force them under and the fire sale will occur. I am not sure which outcome will happen, that is why everything is a waiting game. Right now it is a game of chicken to see which side flinches first. But as the credit crises continues to grow and take its victims, the first scenario becomes less likely to occur.
I have also noticed many new 2B units in the miami area are being filled with college bound roommates. This does not bode well for the luxury professional brand that was being sold over the past few years for these new developments. Nothing wrong with the college students-but their existence in larger numbers will drive down the value of buildings. This will continue as long as rents stay under $2500 a month…but can they really push rents over $2500 a month and expect to attract working professional tenants?
Over the past month i have seen a number of nice 2B listings near $300k disappear from the listings. Lucas, can you comment on whether we have had a surge of purchases at these prices? Or have the listings just been removed for various reasons, perhaps to reappear in another month or so? This has occurred in several buildings and the focus is on the lowest priced 2B units in the building…curious whether the bottom feeders are biting or not…
Greetings everyone,
I’ve been reading this blog for the past year or so but haven’t posted yet. First, I want to thank everyone for their contributions and Lucas especially for running such an informative site.
I’m looking to buy a condo to live in for probably the next 5 years or so. I’ve got the funds to pay all cash for it, so I’m not necessarily as cautious to try and hold out for the absolute bottom. Even if I buy a place now for 500k, and worst case, it has decreased in value by 100k when I want to sell it in 5 years, real estate values will have declined by that percentage across the board, so I won’t actually be losing that 100k in terms of value owned. I plan on staying in Miami, so I’ll just be buying my next place at the deflated value that I would be selling this place at.
That said, I looked at the Lexi yesterday in North Bay Village and really liked what the building had to offer as opposed to a lot of the buildings in downtown and Brickell. The amenities, views and the size of the units were all far better than most of the other buildings I’ve seen and the prices were way better. My realtor was pretty confident that he could get me a great deal from the developer. Obviously he was just speculating at this point, but he figured he could probably get a fully finished corner unit (the biggest line they offer) on a high floor, for high 4’s or low 5’s where the asking price is 600k.
Does anyone know anything about this particular building that I should be aware of? Here’s the website: http://www.thelexi.com Also if anyone is the same boat as me and looking to buy sooner than later, maybe we can compare notes about what we’ve seen and what kinds of deals seem to be out there.
I look forward to chatting with all of you knowledgable folks more.
Gables,
I don’t think the bottom feeders will come out to mid/late 2009 at the very earliest. This whole boom didn’t happen overnight, it took years and years (2000 – 2007). The downfall won’t be here overnight and then boom. While it’s impossinble to call a bottom, I can tell you we aren’t even near it yet.
DJ…. I don’t know how closings have been going at The Lexi, but I can tell you that with the tight lending enviornment, a developer should jump at the opportunity to get a unit sold quickly, so you should easily be able to get it for somewhere in the $400’s
If I am right, that unit is about 2,100 sf, so that would translate to somewhere in the low $200psf range… For not being on Brickell, that should be a good price in the bottom.
Remember, developers are carrying the HOA fees for these units and some still need to pay the construction loan.
I say quickly because a cash buyer is a great buyer
DJ, when lexi opens you and the 13 other people that bought units and make up the HOA will have some sweet special assessments.
Hugo P, Mark
Obviously special assessments are my main concern. The sales agent that showed me around said they had sold 100 of the 170 units. He didn’t know how many of those had closed, but I’m hoping its a good percentage. The HOA fees are low right now (about $500/month), so I know they’ll go up once the association takes over, but by how much is anyone’s guess. A couple hundred bucks a month is fine, and expected. The sales guy also said they were collecting two months in reserves from everyone that closed. I’ll be doing a lot of research before I make any decision either way.
Gables here’s your answer. For now 3ook is the below market point price discussed here:
There is a common misconception out there that the power to stop the housing slump is in the hands of the people. That at some point buyers will decide the time is right to “jump in,” and they’ll start snatching up all this inventory. When individual listings are discussed, someone might say the house is overpriced, that it should be listed at $500k or so, and someone else will respond “there’s no way anyone will let it get that low.” Or, “that house will never fall under 1 million dollars again.” These types of remarks are easy to understand given the runaway inflation of home prices we’ve seen in the last 7 years. But they reflect a misunderstanding of how the housing market works, and especially what the major problem is with it at the moment.
Now, I’ll start by saying this. Any house that prices itself below the competition in an area is going to sell. Why? Because there is a select number of buyers on the sidelines – buyers with significant down payments and verifiable income who really want to get into a house or a particular area. This is why some listings get multiple bids while the majority get none at all. There are buyers out there, and they’re going to flock to the best-priced houses.
BUT, and this is a big but, there aren’t enough of these buyers out there to prop up house values on a macro level. So home prices will continue to tumble until there are enough buyers to support the market. Supply and demand.
So why aren’t there sufficient buyers? The credit crunch. The only reason (well, you could probably add greed as a second) house prices skyrocketed during the bubble was the loose lending standards of banks. You’ve all heard the stories. Million dollar houses bought with 0 down and no verified income. The “creative financing” became more and more creative as prices grew, and it was a vicious cycle that sent prices into the stratosphere. However, that’s all over. Creative financing, exotic loans, teaser rates – they’re a thing of the past. With few exceptions, you can’t get a mortgage in bubble areas (like our own L.A.) unless you have 20% down, verified income (matched to the price of the house as discussed in the previous post), and good credit. That’s why the buyers have dried up. No one can get loans.
And that brings us back to fundamentals. Prices will continue to plummet until they fall in-line with fundamentals (price/income and price/rent). At that point there will be enough buyers that can secure a loan from the bank to stabilize prices.
Trust me, I have full faith in the financial stupidity of those around me. I believe most people would still take a zero-down, interest-only loan if it would get them into that “dream house.” They would walk head-first into financial suicide, losing hundreds of thousands in equity over the next year if they could. Thankfully, the banks won’t give them those loans anymore.
There’s no silver bullet for housing. Alan Greenspan just said today that he thinks housing prices are “no where near the bottom” (http://www.cnbc.com/id/25953040). I’m surprised that’s not obvious to more people, although I think if vested interests were set aside, we’d hear more people admitting it. Prices must fall to match people’s incomes.
Gables,
You are correct. There is an uneasy equilibrium at this point. When banks call in the loans from the developers, all hell will break loose. But I do not think that is going to happen.
This is why:
Some developers have paid off their construction loans. Conventional wisdom suggests that if a building is sold and closed 2/3rd’s, the construction loan is paid off and all liens satisfied. The next 1/3rd is just gravy for the developer. Ofcourse, the developer just cannot sit on the unsold 1/3rd forever as he has to pay the HOA and taxes on those every month.
For example, I heard that the 1800 developer has paid off all loans and liens. He still has under 150 units. He never discounts either to retail buyers or bulk buyers. Probably he must be in a stronger financial position.
Developers such as these will hold on until 2010 for the market to turn around. Those who cannot afford to will fold.
For those developers who have not closed enough units to pay off the construction loans, the banks may not call in the loan that quickly. It would amount to shooting themselves in the foot. It is wiser for the banks to give sweet terms such as interest waiver for a year or two rather than foreclosing on the developer, taking over a building and not knowing what to do with those 200 or so unsold units. The banks know that they have a better chance of recovering their principal by working with the developer than taking over and resorting to a fire sale.
DLJ,
That is an excellent price you paid for your flat pre-construction. Your unit (Line 02) in Quantum is now selling at an average of $50/sf more than what you paid for.
Even if the prices fall another 10% in one year as experts are predicting, you will still be ahead of the curve.
I do agree that $2200/month is low for a direct bayview 1400 sf flat like yours. From what I heard from the 1800’s resident realtor is that the rents have firmed up in the past 2 months. He told me that in the first 6 months of this year, 2/2 owners have panicked and took what ever rent that was offered their way. The rents have ranged from $1900 to $2300.
Since the past couple of months, the lowest 2/2 (especially if it has a water view) cannot be had for less than $2200 and fetching as much as $2500 or more. So your flat will fetch more in rent in the current situation. But if you are happy with your renter and he is paying in time and keeping your unit in a good shape, you should be fine.
Shwin,
You said you have been hunting a while for a flat to rent and will be deciding by October. You were waiting for a better deal to come along. Has your search yielded anything yet? Are the rents really firming up accross the board in all buildings or is it just the Q and 18 phenomenon?
You must have extensively looked at Park West and Pace Park buildings, as they are the most convenient to Jackson Memorial. So what is your assessment so far for these two areas excluding Opera Tower?
guys you are all nuts if you think that rent prices are going to stay at what they are. have you all forgotten that in the downtown and brickell area there are 4 very big projects just about finishing up, Icon Brickell, Epic, and everglades on the bay….with Marquis not too far behind. thats what? like another 3000 units……..so all these rent prices you guys are arguing about are gonna go down down down.
AJ
the problem with your theory about what banks will and will not do (i.e., shooting themselves in the foot) is that it is not grounded in the reality today’s market. the FDIC is inspecting the books and records of all banks that have any noticeable exposure to real estate and if the loan is in default, then whether the bank likes it or not, the FDIC is going to force the bank to put in special assets and either sell it at a discount or foreclose and realize any gain or loss.
look at ocean bank’s modified cease and desist order as an example.
AJ is out of his mind! The US financial system is collapsing tonight. The real question is, will AJ’s foreclosed condo be sold for 50% of 75% off!!! hahaha
50 OR 75
Shwin,
You may look at Fortune House Condo at Brickel as an option for your apartment rental. I have seen lots of people going to Jackson and UM and staying there, particularly if your needs are less than one year. The building is also a full service hotel.
AIG is BK soon. Hurricane Ike is the nail in their coffin. Get ready for some insane insurance rates in Florida.
I return for this Special Report (turn on CNBC or go to its .com).
(1) Lehman Brothers will declare bankruptcy before the opening bell tomorrow.
(2) Merrill Lynch was just forced into a sale to Bank of America for $29/share.
People, this is gravely serious business here. The housing market will only go down because of these events. Given the other events….banks going under including IndyMac, Bear Sterns forced sale, Freddie/Fannie, and now these two major events. Again, people we are in for a lot of pain.
U.S. Foreclosures Hit Record in August as Housing Prices Fell
By Dan Levy
Sept. 12 (Bloomberg) — U.S. foreclosure filings rose to a record in August as falling home prices made it harder to sell or refinance homes to pay off the mortgage, RealtyTrac Inc. said….
Is this bullish for condos AJ???
credit spread are widening like a mofo. OH my god….this is bad for everyone…
Lehman is out. Mer is out. AIG is soon out. WaMu is soon out. The availability of credit is going down the drain.
Morgan stanley, and goldman are next. National City, Wachovia are next. No more loans for the AJs of the world
USD is getting raped overnight, gold popped.
In this financial environment as these positions unwind: “illiquid assets tend to trade rather badly”
Great quote…
Euro is up 1 and 1/2 cents right now
The fed is accepting EQUITIES now. This is astounding!!!
The other issue that people don’t seem to realize is that the bad home loans are FAR worse than many realize? Why? The easy credit and “Refi Madness” covered up a lot of bad existing loans that should have gone under years ago. So, these bad loans have bunched up and are coming out over a period of months instead of evenly over the last 7 years. Previously, the sin of a bad loan was covered up by simply refinancing the loan (bigger loan since home “appreciated”) and like magic, poof, it was “good” again.
Just like my previous post on the “demand surge”, we are seeing a “default surge” that will in the end drive home prices below the long term trend line. There is no longer any credible argument to the contrary.
DOw is down 344 points! Mother fucker!
Mark,
Let me tell you why I never address you and I do not care about your opinion either.
You are the only housing bear on this blog who uses every trick in the book to make people subscribe to your view. You are the only one who uses the fear of crime and murder to scare the people. How can anyone believe a guy who unabashedly says “I have a young and beautiful wife”. Pathetic.
How can anyone believe you when you diss all of Miami, calling it the worst place to live, most unsafe and other bullshit, but waiting for an opportune time to buy a flat here. Disgusting. Have some self respect.
I will only engage in conversations with respectable people here. So no matter how much you egg me on, I will not bite the bait. I bet you dont have enough money to buy my flat even at 50% or 75% off. I suggest you go and look for some property in Port St. Lucie.
Renter tom, there will be no more refis for AJ. I can assure you of that. Quarter point rate cut is coming.
There was some housing “expert” on CNBC who thought that a government intervention to liquidate housing would solve the housing problem and provide us with a support floor. Really? The guy is lucky I wasn’t the one doing the interview. Think about it for a moment. Investors would have to buy homes at prices BELOW the natural market floor to make a profit and offset its costs and risk…which would cause the floor to be LOWER. Then what, well those homes go right back on the market…..supply is the same and a lower then market price floor. Good job Mr. Expert. The only solution is getting the end user into homes…NOT investors.
By the way, Bill Seidman is great. ALWAYS love his comments. His take, a lot have people have learned some valuable lessons and this too shall pass. You the man Bill…
Sure thing AJ. I take so much pleasure in knowing you are losing so much money, right this second you’re losing it.
Renter tom, I saw that guy. They had the former vice president of the treasury address him. He said that the chance of his plan working was “highly unlikely”
I should clarify, the “expert” thought investors were the savior of the housing market and would be the ones the government would sell homes to.
The former treasury guy thought the magnitude i.e. cost) was too great to be feasible. But even if the govt was willing and able to do so, it would be for not.
Lucas,
Nice new look for the home page. Like the colors and the links.
Mark – A rate cut may occur, it is becoming more probable for several reasons. Even so, if the spread widens, will mortgage rates decline too? I dunno…too early to tell. And of course, you are assuming AJ isn’t underwater or if a bank is willing to loan in this local market. We know that banks are running away from financing/refi’s investor condos. I know a bank would not be impressed with an investor holding a declining asset and pulling in less than cost each month. That isn’t a loan I would want to make.
Wilbur Ross, chairman and ceo of WL Ross and billionaire investor, predicts 1,000 regional banks will fail this year. Yes, I did rewind the DVR 5 times and listened to it over and over. Ummm. Hmmm. That is bearish. I guess it depends on how you define “fail”. I think there will be a lot of “mergers” and shotgun weddings among depository institutions, but 1,000 failures this year. Ahhhh. Wow. Gotta wrap my head around that one. Doesn’t look probable at this point. Will contemplate. Wouldn’t be good.
I guess there will be winners and losers out of this mess. Not everyone will get a trophy, not everyone gets to go to McDonald’s afterwards, not everyone gets a “it doesn’t matter if you win or lose just do your best” ribbon. Ouch.
Jcrimes,
I am expressing an opinion. I dont know if the banks would take that step. If they are going to actually help the small fish (home owner) keep his home, why not the developer?
Raffi,
Have you read all the previous posts about the super six? The buildings you mentioned have been talked about. You are very right in the fact that 3000 new flats are coming on line. But with a difference. The 2/2’s in these cost 600K against the 2/2’s in II tier luxury buildings costing 450K.
Those who close in these ultra luxury buildings to live in them have no concerns. Those who want to close and then to rent will encounter serious issues as the numbers will just not add up. A 2/2 in these have to rent for $4000/month to make a serious dent in the carrying costs. Such a market for $4000/month does not exist in Miami right now.
At the same time, they cannot compete with tier II buildings and offer rents in the range of $2500-$3000/month. It is a no win situation especially if you are an investor and not an end user in the super six. But I may be wrong here. Apogee had excellent closings but it is in a league of its own. Only time will tell how the closing rate in these buildings are going to be. I am watching with great fascination. I will be more interested in seeing how the super six will do than to know who will win the coming election.
If they have a good closing rate, Miami condo market will recover in step with the rest of the country, if not, we will be an year or more behind the rest of the nation.
“In the last 8 years we have had 3 bubbles. 1. Stock Market (tech stocks) 2. Housing Bubble and 3. Commodity bubble. I am sure there are more bubbles on the way….maybe in the wind/solar/ethanol market.”
Yes, I agree – the green sector may well be an upcoming bubble. Make no mistake, another future bubble will be health care – just review the demographics of baby-boomers and extrapolate what that will mean for the future of medicine in this country.
Renter Tom – “If I were a busy doctor, I would probably spend my time looking for a really good buyer’s agent who is experienced in short sales and foreclosure purchases. They should have the knowledge and experience to help you decide.”
do you have anyone in mind?
Mane – thanks for the advice, I’ll look into it.
AJ – you’re right, in my extensive research into the area I find that 2/2 units with bay views have held their rental price point thus far. Q and 1800 have the reputation of being fun places to live in the Jackson circles. I’ve had several offers in great buidlings come very close but then fail – mostly due to relatively small differences in rental rate. Wish I could find a way to come up with an extra $200 cash per month and make it a non-issue but I can’t really bartend with my schedule and refuse to give in to the Miami norm and live beyond my means. Let’s see what this week’s maelstrom will bring. It seems that we are all bearing witness to the beginning of the end of our rising standard of living in America.
Dr. Halsted – “Have you thought about doing a fellowship in asthetics? That would work well in Miami.”
i’m actually an internist working on a sub-specialty in sleep medicine so the only trauma i see is when i moonlight in the ER. thanks to all for the advice.
Hey AJ, the condo market has already recovered. I just paid 600K for a 1/1 thats 200 square feet. It was a great deal!
What I mean by good closing rate in these buildings is at least 2/3rd units (66%) closed in 4 months time.
Shwin,
Thanks for the update on your search for a pad. Yes, an extra $200 might get you into a nice place but if you cant afford it, you should not do it. That is very prudent. You might also would like to consider 1/1’s in Q and 18 with out bayviews. I have not really done any research on the 1/1’s there. The last I heard was that they firmed up from an average asking price of $1400 before June to $1600 now. I cannot confirm that though.
Q, 18, 50 biscayne and Plaza have become pricey rentals. I do not know how is One Miami is doing.
Feedback from real rental seekers like you would be more valueble than the asking prices in the MLS. So do keep us all informed and good luck with your search.
shwin – I will be looking for one and will let you know. Also, I think the standard of living in America will rise for those that are fiscally responsible, but not for those who were financing their lifestyle with debt, that is declining rapidly. All hope is not lost. We are getting back to loans being made to those that can repay them versus a throw a loan at everyone, charge a bunch of fees, and aren’t certain what the default rate will be in the future, but gotta love those fees that increase our earnings…until the bell tolls. Ding.
I just looked at Lucas’s MLS listings for the rentals at 1800 and my head is spinning already. Lucas, is that a mistake?
1. Only 1/1’s on the listing. One listed for $1600 and the other for $2000!
2. No direct bayview 2/2’s are on the listing! Only a few partial bayview or city view units available. The cheapest is asking for $2400 and the highest for $3150!!!
Even I am shocked at this. I have no idea how the rents have firmed up so much, so fast. Any theories?
Theories? Yes, those are ASKING prices.
shwin, perhaps you should rent from AJ? He never raises the rent on you, he loves to watch football with his tenants, and enjoys giving them sensual massages. Consider it. Shucks, he’s the best!
I’m getting firmed up just thinking of AJ.
Shwin, did you know that Pace Park area is so safe that you can just fall asleep right on the street? I see a lots of people do it all the time. For some reason theses people are usually a bit dirty and smell like booze. Either way, some typical upstanding Miami citizens.
The lowest priced rentals go first. So the remaining listings are the ones that are higher. Would be interested to know the actual rental prices (not listing) and how fast they are being absorbed.
Maybe there are a lot of Renter Tom’s out there…..rent for half price, wait, wait some more, maybe buy if the time is right and comes in line with renting.
Prices will overshoot on the downside. The default surge has spilled over to auto loans, etc. Cash is king.
A Dozen Companies Which Should Lay-Off 10,000 People This Year
The evidence that sales at many companies are struggling and that employment will suffer are almost everywhere. Recently, a division of GMAC said it would let 5,000 people go. According to MSNBC, “Job cuts announced by U.S. employers last month jumped 12 percent over a year ago to cap the busiest summer of downsizing in six years.” Job cuts through October could top what they were for all of 2007.
The economy is beginning to look like it did during the deep recessions in the early 1990s and 1973. Eric Rosengren, the president of the Boston Federal Reserve Bank, sees the situation getting much darker in the second half. Speaking of deteriorating financial conditions he said, “It may push the unemployment rate up to 6%, with more than 2 million people losing their jobs since the financial turmoil began last summer.”.
If the economy tips closer to what it looked like in ’73, unemployment could be closer to 8% or 9%.
http://www.247wallst.com/2008/09/a-dozen-compani.html
UNEMPLOYMENT JUST HIT 6.1%
Dude those rates on the mls are total BS asking prices.
I found a 2/2 listing @ 50 Biscayne for 2700 and then they told me the’d take $2000.
It’s all BS. I declined 2000 and said $1700 for a 2/2.
Either way I decided to stay on the sidelines but the MLS rental prices r BS.
Lucas,
Your new web design no longer works with Firefox, all the right part is missing. You might want to fix this since this represents about 20% of the market.
AJ
my point is that your opinion is not grounded in the reality of today’s market. more importantly, what you suggest is just improper. you can’t report a loan performing on your financial statements when in actuality, it’s in default. the regulatory requirements are unequivocally clear on this. terms such as bank fraud and investor fraud come to mind. thus, if the loan is in default, you need to make a reserve for such loan, sell it and presumably take a loss, and if necessary, raise additional capital. the simple fact is…you can’t just let it ride to better times. banks aren’t equity investors in their borrowers. they are lenders. this is a huge distinction that i don’t think you understand.
as for what you perceive to be a developer v. homeowner dichotomy, in actuality, there isn’t that much of a dichotomy. although the housing reform bill allegedly gave banks incentive to rework loans, i don’t think you’ll see many workouts. anything that’s double upped (i.e., a first and second mortgage with two different banks), won’t be a workout. anything that’s securitized, won’t be a workout. anything that’s fannie/freddie…who knows.
I am going to have to agree that the prices listed on MLS are ASKING prices: Look at how many days some of these units have been listed! I recently signed a lease after making several offers and looking at many different buildings. I couldn’t imagine anyone paying $2500 a month for a 2/2 in the 1800 club. MAYBE if we’re talking about one of the 1800 sq ft units but otherwise forget about it! Units in 10 museum, 50 biscayne, marina blue, 900 biscayne (granted they would be 1 bedroom + den) can be had for less! Nevermind other buildings along the miami river or in brickell…. It is a renter’s market: Renters rejoice because you have time and MANY options!
It would be interesting to see what current rentals are truly renting for. Not their asking price, but what the lease was actually signed for. Are there any websites the provide such info? This would be an invaluable tool when negotiating a rental price. Furthermore, is there a general rule about making an offer on a rental? Does one generally offer say 20% off the asking price and work their way up from there? Any input is greatly appreciated.
This article of the NYT might be fo general interest:
September 15, 2008
Financial Russian Roulette
By PAUL KRUGMAN
Will the U.S. financial system collapse today, or maybe over the next few days? I don’t think so — but I’m nowhere near certain. You see, Lehman Brothers, a major investment bank, is apparently about to go under. And nobody knows what will happen next.
To understand the problem, you need to know that the old world of banking, in which institutions housed in big marble buildings accepted deposits and lent the money out to long-term clients, has largely vanished, replaced by what is widely called the “shadow banking system.” Depository banks, the guys in the marble buildings, now play only a minor role in channeling funds from savers to borrowers; most of the business of finance is carried out through complex deals arranged by “nondepository” institutions, institutions like the late lamented Bear Stearns — and Lehman.
The new system was supposed to do a better job of spreading and reducing risk. But in the aftermath of the housing bust and the resulting mortgage crisis, it seems apparent that risk wasn’t so much reduced as hidden: all too many investors had no idea how exposed they were.
And as the unknown unknowns have turned into known unknowns, the system has been experiencing postmodern bank runs. These don’t look like the old-fashioned version: with few exceptions, we’re not talking about mobs of distraught depositors pounding on closed bank doors. Instead, we’re talking about frantic phone calls and mouse clicks, as financial players pull credit lines and try to unwind counterparty risk. But the economic effects — a freezing up of credit, a downward spiral in asset values — are the same as those of the great bank runs of the 1930s.
And here’s the thing: The defenses set up to prevent a return of those bank runs, mainly deposit insurance and access to credit lines with the Federal Reserve, only protect the guys in the marble buildings, who aren’t at the heart of the current crisis. That creates the real possibility that 2008 could be 1931 revisited.
Now, policy makers are aware of the risks — before he was given responsibility for saving the world, Ben Bernanke was one of our leading experts on the economics of the Great Depression. So over the past year the Fed and the Treasury have orchestrated a series of ad hoc rescue plans. Special credit lines with unpronounceable acronyms were made available to nondepository institutions. The Fed and the Treasury brokered a deal that protected Bear’s counterparties — those on the other side of its deals — though not its stockholders. And just last week the Treasury seized control of Fannie Mae and Freddie Mac, the giant government-sponsored mortgage lenders.
But the consequences of those rescues are making officials nervous. For one thing, they’re taking big risks with taxpayer money. For example, today much of the Fed’s portfolio is tied up in loans backed by dubious collateral. Also, officials are worried that their rescue efforts will encourage even more risky behavior in the future. After all, it’s starting to look as if the rule is heads you win, tails the taxpayers lose.
Which brings us to Lehman, which has suffered large real-estate-related losses, and faces a crisis of confidence. Like many financial institutions, Lehman has a huge balance sheet — it owes vast sums, and is owed vast sums in return. Trying to liquidate that balance sheet quickly could lead to panic across the financial system. That’s why government officials and private bankers have spent the weekend huddled at the New York Fed, trying to put together a deal that would save Lehman, or at least let it fail more slowly.
But Henry Paulson, the Treasury secretary, was adamant that he wouldn’t sweeten the deal by putting more public funds on the line. Many people thought he was bluffing. I was all ready to start today’s column, “When life hands you Lehman, make Lehman aid.” But there was no aid, and apparently no deal. Mr. Paulson seems to be betting that the financial system — bolstered, it must be said, by those special credit lines — can handle the shock of a Lehman failure. We’ll find out soon whether he was brave or foolish.
The real answer to the current problem would, of course, have been to take preventive action before we reached this point. Even leaving aside the obvious need to regulate the shadow banking system — if institutions need to be rescued like banks, they should be regulated like banks — why were we so unprepared for this latest shock? When Bear went under, many people talked about the need for a mechanism for “orderly liquidation” of failing investment banks. Well, that was six months ago. Where’s the mechanism?
And so here we are, with Mr. Paulson apparently feeling that playing Russian roulette with the U.S. financial system was his best option. Yikes.
DId you guys see Jim Cramer on Squawk on the Street this morning? he was about to poo his pants.
Sold my 1000 AIG $20 puts at the open. Needless to say, I can now buy two condos cash money AJ
oops, I meant 100. hahah I wish 1000
Mark,
Please stop your postpubertal behaviour ! You are not funny !
doing well on my citi and wachovia shorts right now…
postpubertal? I would hope everyone here is postpubertal…
Okay I’m out….I learned my lesson the hard way in march.
Angel,
If you see a rental asking $3,000. Don’t hesitate to offer $2,200 and work your way from there. The easiest thing to do is not to fixate on 1 particular unit in 1 building. In this market, you can find 10+ comparable units in any price range. Make your offers and see what happens. Some will blow you off, some will counter and some might take it.
Jl,
You speak of rentals as they were commodities.
I like to live in a particular apartment because I like the location, view, design etc.
Visionary,
As long as you don’t fixate on a particular buidling, it’s easy to find another unit that is 90% similar (ie. Murano, Murano Grande, Icon, Bentley Bay) so if you’re looking for the best deal, just keep an open mind and don’t lock into a particular unit.
If you broaden your horizons, you might even be able to find an amazing deal that will make you rethink where you want to live.
with all due respect to mr. krugman…lehman is nothing compared to a failure of AIG. if AIG goes…the CDS market could implode. if that happens, asset values across the board will plummet.
rentals in miami are fungible
AIG needs 40 billion. I don’t put it past the fed to spend our money saving them. Thats why I sold out this morning. I was just praying to god that Paulson didn’t jawbone the market this morning, and he didn’t… so I made it. When lehman raised that money in March/April 1 I think it was, I got so screwed. Now look at them…jeeze….I wish I stuck to my guns on that one. When they rallied back to nearly $50/share….it looked really tempting, but my fear of the fed/treasury kept me out….
Mark your comments crack me up, I am betting on Wamu and Wachovia to go down…. I think Citi long term is good buy though
So I am loking at 900 Biscayne. Most 1 bedr0oms are asking from 2100-2300. I think I will throw out 1800 and go from there.
THNX JL
2 months from now, we need a newly minted lawyer or physician to go out to Brickell and try to get a loan on Icon Brickell et al. I would love to see what lending standards will be in play. Forget the supply for a moment, the real question is the lending availability. If no money down loans were still readily available, we wouldn’t have a housing meltdown in Miami.
Angel,
If you are fixated on a couple specific units, it doesn’t hurt to try and find out how long they’ve been listed for rent. Every month unoccupied is about an 8% off the original asking so if a unit has not been able to be leased out for a couple months, a “normal” landlord should be ready to comrpomise.
Angel,
I would start lower, about 1,600.
Thanks JL. That is the kind of data I am looking for. Much appreciated!
The CEO of BofA, Ken Lewis, just gave an interview where he expects housing price declines to continue through the first half of 2009. That is at least nine more months.
With available credit substantially smaller and tighter lending standards, home prices will in fact continue on the way down, substantially so in the big bubble markets.
Also, the “pent up demand” argument is nonsense. The “pent up demand” by current renters like myself will be offset by the units that are currently being rented coming on the market for sale. Moreover, there is a heck of a lot of “pent up supply and defaults” that will blow away any demand. When there was no lending standards and your dog could get a mortgage, that pretty much absorbed any and all possible demand that was “pent up” or demand that was just wondering aimlessly falling into a mortgage fraud windfall. The “default surge” is still surging…
Price will overshoot on the downside. There are no fundamental indicators that show otherwise. Just as Robert Shiller very recently stated, in nominal dollar terms the bottom will be here for a long time when the bottom is reached, but in real dollar terms it will continue to lose.
Angel – I got about a 25% discount on a newly listed unit……and the owner is very happy.
Rentor Tom;
How did those negotiations go? What there a bunch of back and forth? Just curious…
Ofcourse I know that these are asking prices. Dont try to tell me what I already know. If you guys are following the market, the asking prices themselves have firmed up.
a) Asking prices of the 2/2’s in 1800 have firmed up from $2000-$2500 pre June 2008 to the present $2400-$3000.
b) Final lease signings of the same has increased from the average $2150 to the present $2400.
OK now you guys give me the theories on why this is happening.
JL,
I agree with you. If you are not fixated on just one building, you can snag a deal. That is why I asked if this firming of rents is a Q and 18 phenomenon or an accross the board thing.
Angel,
There is no way to know what is the final lease signing amount (unlike the final sale price, which gets recorded in public records). That is the reason why, it is very important for renters like Shwin to post their findings here.
Also you definitely must look at MB and 900. For some, these two buildings in Park West might offer better deals than Q and 18. Some people who have a pet will not settle for anything less than Q and 18 due to the massive park in the front where they can run and play their dog. So each individual has their own reason to choose a certain building. But I am still surprised that only 2 one BR’s are on the 1800 listing asking $1600-$2000 and no direct bayview 2/2 on the listing.
So when the supply side is so low, owners will get close to the asking price. I am still waiting for other active renters in the market to tell us all if this is an isolated case or accross the board phenomenon.
AJ,
Good point. We need more input from active rentors. Data points such as building name, # of bedrooms, sq ft., asking pice and final lease price would be a huge help to the many renters out there looking to snag a great deal.
Angel – Not really. They listed 100%, I spoke to the listing agent and offered 70%, he got back to be and said they’d take 80%, I then countered to 75% . Just a couple of phone calls.
AJ – Final rents for units listed on the MLS, should be available to Realtors just like final sales prices are (if the Realtor follows up and enters the info, most do). Hence, no need for some ad hoc not accurate rental posts. The info is out there…
If so could any realtor with accsess to MLS post the final lease amounts for different sized flats in Q, 18, MB, 900, 50, One Miami, Plaza in the past two months? That would put the speculation to rest.
Renter Tom,
So rental prices should be listed on the MLS as comps just as sales prices are?
Thanks!
Renter Tom,
There can’t be pent up demand when the homeowner rate is 68% and historically it has never been higher than 62-64%. The lax lending standards made homeowners out of millions that were never meant to be homeowners. Oftwominds talks about this. The REIC is hoping that first time homeowners will make up the difference. That makes no sense when hiring is about to take a huge hit. People early in their careers are the first to lose their jobs in a recession. The unemployment rate for 26-34 year olds is already at like 10%.
Alejandro, your shorts are great but watch out. There isn’t much downside on on WaMu left. I had 15 $20 puts in FNM that I bought when FNM was at $30/share, and I sold at $5….the extra $5 downside wasn’t worth another possible rally to $15 in my opinion(which I had just suffered through in July). I made $7500 less, but I don’t care. I was happy with the $20K I made on the deal. I would consider covering my shorts if I was you. I’m 75% out of my short positions. The fed is working against you. Of course I am likely 100% wrong and I agree that both will be zero or close to it eventually.
Angel – Yes. Final rent prices are supposed to inputted into the MLS whereby Realtors and other MLS subscribers can look them up, just like sale prices are. You might get the best price dealing with the owners agent (we’re not talking about a ton of money like buying) if you prepared to “lowball” the number and you can ask the agent to get you the recent listing in the building that have been rented. I have looked a numbers in other markets, there are a few people who pay full price, most don’t, just like on car sticker prices, they don’t know they can negotiate. Oh well.
Mark – Not sure what your post meant, my previous post (#259) was that there is NO pent up demand and that anyone who says there is is dreaming….
Great info Rentor Tom. I am going to start doing my homework and throwing some quasi-lowball offers out there to see if any stick.
Actually we have all along ignored the rental aspect of a building and just talked about the sale prices. For many investors, this will be an invaluable info to decide if they should 1) close on a unit or walk 2) to hold on to it or cut your losses and move on etc.
In my building, the live-in owners do not look to very kindly that the building is getting so many reneters. But they do appreciate the fact that, this is helping the owners stay afloat and pays the HOA on time (incidentally my building supposedly has zero delinquencies with respect to HOA monthly dues). They are also hoping that there will be more end users and less renters when the market turns around.
Watch out shorts, Paulson will be jawboning in exactly 1 hour. Press conference is scheduled. Warren buffet in talks with AIG (what a bunch of shit, here comes the rally…)
“…when the market turns around.”
When is that? In real dollar terms, it is never.
Oh shoot, $50 billion stimulus package announced!!! Got gold!?
Hey, Meredith Whitney was just on CNBC. She expects peak to trough housing declines to be north of 45%!!!
Mark – Was that for the Miami market or for the nation on average? 45% for the nation on average is not likely. The lesser availability of credit and tighter lending standards are going to have an effect on the non-bubble markets, but not 20%.
I’ve been patiently waiting for the stock market’s other shoe to drop (lost count on the number of feet). This MAY be it….need a pulse on two more items: bank closures going forward and consumer debt defaults. Those two items will be telling along with the usual GDP growth, unemployment, etc.
Down 504 points!!!! wow, what a day. Don’t let your guards down…tomorrow we could have a rate cut rally….
Finally so real fear in the stock market….yeah!
Here you go renter tom, north of 45%. Also note, this was at 3 pm. I stated that I am short citi and wachovia in the morning. http://www.cnbc.com/id/15840232?video=856915680&play=1
Also note, this is the most popular video on cnbc.com even though it has only been up 1.5 hours. I wonder how many businessmen will hold off on their Miami Condo Investments now that they’ve seen this….
Nobel prize winnerJoe Steiglitz just stated that housing was a huge bubble that ain’t coming back. But this guy ain’t smarter than AJ.
Why don’t both you nincompoops text message each other on your cell phones or chat on your e-mail accounts. This is not your personal web page.
Hey, they’re rebroadcasting whitney in a few minutes on cnbc….turn it on.
#283 … I can’t hear you AJ, it sounds like you’re yelling underwater…..
Perhaps you shouldn’t throw stones at renters and be so condescending toward them. Not everyone has the wisdom, foresight, and big kahunas to invest in Miami real estate like you, esp. during a precipitous drop in prices, so have pity on the renters.
Renter Tom: #277. There are many other shoes to drop. LEH implosion is just one of many to come. The scariest scenario is CITI. If they fail, it will be HUGE. There will be hundreds (maybe thousands) of bank failures in the next few years. The bank failures are just getting started.
The financial market is not going stabilize till the housing market bottoms out. It is critical that housing bottom out so that banks know what their loans are worth. Nobody knows when housing is going to bottom, but is it not going to be next week or next month. So we are in for a long bumpy ride.
Only good news is the drop in price of oil. That gives the FED some wiggle room to drop interest rates.
Bill Fleckenstein is going to be on fast money soon. Watch this guy. He knows his shiznit. Usually bubblevision has a bunch of pollyannas on. I am pretty impressed…
WASHINGTON MUTUAL COUNTERPARTY CREDIT RATING DOWNGRADED!!!
Wells Fargo exposed to lehman – charge offs coming….
LOL. Renter Tom, I did not mention you by name (#283) but looks like you do accept and concur that you are a nincompoop.
Anybody get a notice on Everglades on the Bay or Icon Brickell closings start date?
Oh AJ, maybe it isn’t water you’re under. Hard to know… If only I was one of your tenants we could be BFF!
Basically, securitization didn’t just spread the risk around it allowed for risk to be hidden and accumulate unabated. That was the real problem. There was a lot of unknown unknowns….
I’m not ready to increase my exposure to stocks at this point. But it is good to see some sort of real shake out versus this 1 step up, 1.5 steps down, etc. etc. etc.
Can we all agree this is bad for the ultra luxury home market at this point? Bye bye hedge funds, investment bankers….
I would like to see actual rental prices for some of these buildings….it would be helpful at the very least to speculate how underwater a lot of these “investors” are.
One important rule to investing and wealth accumulation, do not borrow money to purchase declining assets. It usually is not a wise use of leverage.
You know its bad, when Fiffy the poodle down the street no longer gets mortgage applications in the mail…
The good news is, housing will continue to be more affordable. It’s on sale (or at least not as over inflated)! Yeah!
Got cash?
RENTER TOM for PRESIDENT RENTER TOM for PRESIDENT there you go……..renter Tom is RIGHT again.I think Tom is right……we’re going to see $250-$275 a sq. ft. Condo’s before we know it. GO TOM GO GO TOM GO.
private eye….my aren’t you the optimistic one! $250-$275 seems a tad high….LOL
Building: The Plaza on Brickell
Signed lease in March 2008
Pay USD 1300 per month, 1 parking space in same floor as unit, second parking space is additional $125 at building next door
1 Bedroom, 1 bath corner unit, low floor
I was thinking $200 a lonnggggg time ago.I’m talking LUXURY Condo’s at that price.I’m on the sidelines myself….waiting for the right time.LQQK’s like that might be sooner than we all thought.
Hey …renting at Plaza on Brickell……GOOD SHOW!!!!! poor landlord though…I wonder what HOA & Taxes are ….don’t you feel bad?????
Renting at Plaza. Large 1/1 end unit on low floor. $1225/mo.
Anybody else getting the feeling this could turn into a list that landlords don’t want seen?
JL – that’s precisely the point. Price transparency for information landlords try to hide.
If I were going to sign a lease now, I would request a rental comp from the realtor to get a feel for what rents have been going for and make sure the owner gets a copy of it too so that all are under the same expectations of what the market is. The market is what the market is…
As far as selling prices, I have gone from a hopeful optimism of plateau pricing to a bit of decline (10%?), to a 25% chop, to a 40% cut from peak, to now an over correction on the downside. Let’s hope that it stops there otherwise if it goes lower that would be a because we’re in an economic depression.
Also, I would like to see all of those people who have a certain threshold of culpability regarding the non-disclosure of the risks in these mortgage backed securities have all of their wealth seized like we do to drug dealers. Of course, those involved in outright fraud should go to the federal pen. They lived high on the hog and now its time for them so clean up the pig pen.
Following the AIG thing now……..they have the hard assets, give them the bridge loan to stop a collapse.
Oh AJ, your fingers are magical…. Hey guys, I’m over at AJ’s getting a back rub right now. He might become my landlord and he’s showing me his “unit” later. I just love AJ, there are so many perks for being best buds with your landlord.
wow $1225 for a 1/1 on Plaza is pretty low, please elaborate on how low the floor, are we talking 3rd floor looking into power lines?
Teepee and Plaza renter,
Those are excellent rental prices. But it was indeed cheaper to sign a lease pre June 2008. Rents seem to have firmed up in the past couple of months. Anyone else signed such a good lease in the past two months?
Prices always “firm up” a bit around back to school time…all the UM kids need places to live, and Brickell (esp the Plaza) is the trendy place to live right now. Wait another 1-2 mos, and then make a determination if it is a long term trend.
AJ said: “Those are excellent rental prices. But it was indeed cheaper to sign a lease pre June 2008. Rents seem to have firmed up in the past couple of months. Anyone else signed such a good lease in the past two months?”
Those June 2008 prices will look expensive when you can get a 1/1 at the ICON for $995!
http://www.miamiherald.com/news/miami-dade/story/687998.html
Here’s two snippets!
1. “Among the local projects Lehman backed: Miami Beach’s new Canyon Ranch resort; Ian Schrager’s investment in the Riande hotel chain; the Donald Trump condo tower under way in Hollywood; a recent expansion at the Aventura Mall; and the Related Group’s Icon Brickell on Biscayne Bay.”
2. “If condo sales aren’t enough to pay off a Lehman loan, a bankruptcy court could decide to dispose of the troubled note as quickly as possible. That could mean a fire sale — with the unsold condo units valued at pennies on the dollar.
Let’s see: Bear Stearns, Lehman, WCI, …… What about Rel…….. ? Nah, couldn’t happen.
A liquidation ”would mean selling those units well, well below what their value is,” said Jack Winston, a condominium analyst for Goodkin Consulting in Miami. “What that’s really going to hurt is the condo [buyers] who have already closed.”
I’m paying $2000/mo for a 2bed/2bath at Plaza, high floor city view.
2/2.5 in Marina Blue overlooking the Bay $1900/mo mid floor
Any more Marina Blue or 900 Biscayne renters out there with lease data?
Today published in the Miami Herald:
Huge Miami Worldcenter project heads to planning board
BY MATTHEW HAGGMAN
At a time when banks and builders are struggling for survival, two developers are seeking government approval for Miami Worldcenter — a nine-block, 25-acre mixed used project that would be Miami’s biggest urban development in years.
On Wednesday, the developers, Boca Raton-based Art Falcone, a one-time suburban home builder, and Marc Roberts, a former sports agent who lives in Jupiter, are scheduled to go before Miami’s Planning Advisory Board, the first step in the approval process for their project.
City commissioners are expected to vote on the massive development later this fall.
The project, which would be located between the Adrienne Arsht Center for the Performing Arts and the central business district, calls for a mix of high-rise offices, hotels, shops, restaurants, entertainment and conference venues, schools and eventually residences — all built within a framework of plazas and broad sidewalks.
The proposal comes at a time when there is a renewed desire for city living and the process of revitalizing downtown Miami is underway, but also runs smack into the current economic downturn when credit markets have seized up, lenders have gone under and many developers are struggling to stay afloat.
”We certainly agree that the market in its current form is challenging,” said Nitin Motwani, managing director of the project. “But we know real estate goes in cycles and will turn around, especially in a dynamic international gateway city like Miami.”
The developers have already spent $100 million on the project and that will grow as they close on parcels currently under contract in the nine-block area.
Getting financing in the current environment will be challenging, but Motwani said the developers plan to seek investment partners soon. Even if other partners come in, he said, Falcone and Roberts will remain the master developers of the project.
”What this [difficult] market situation has allowed us to do is that we have not been rushed,” Motwani said. “It has allowed us to . . . work more closely with the city and county, to understand what they want and what we want.”
The project, to be built in multiple phases over many years, would include upward of 12 million square feet of new construction — about the size of eight Dadeland Malls. The first phase would include the hotel, shopping, restaurant and entertainment components.
But what will characterize the development, says its architect Howard Elkus, is its pedestrian focus and emphasis on public spaces.
The plan includes a roughly half-acre park, a traffic circle like New York City’s Columbus Circle and a walking strip similar to Miami Beach’s Lincoln Road. The developers envision that decaying Northeast First Avenue will achieve the ”urban role, presence, and spirit” of Paris’ Champs Elysees, according to plans filed with the city.
Today the Park West area is largely parking lots and one of the most run-down parts of downtown.
Falcone and Roberts are betting their development will be the missing piece in a downtown that includes the Brickell financial district and central business district as jobs centers and cultural and entertainment venues such as AmericanAirlines Arena, the performing arts center and the proposed art and science museums on the waterfront.
Three Metromover stops are within the development area, and the city’s proposed streetcar line would bisect it.
”It’s hard to imagine a site that is more central or better served by a diversity of assets,” said Elkus, the project’s Boston-based architect who has designed many large urban mixed-use projects, including West Palm Beach’s City Place and Victory Park in Dallas.
For nearly two years Elkus and Michael Cohen, both of the firm Elkus Manfredi, quietly master-planned the site and met with local politicians and planners, collectively making more than three dozens visits to South Florida since January 2007.
Cohen said it’s ”extremely rare” to find such a large assemblage of land within a major urban center.
Real estate analyst Michael Cannon said developing such a large, multiyear project is a tricky balancing act. Each phase must not only be completed as a viable, stand-alone project but also integrated with future phases and the existing downtown infrastructure. Another important factor, he said, is whether the master plan has the flexibility to adapt to changing market conditions.
Worldcenter’s developers are asking for not only approval of a special zoning district that binds each of the nine blocks to strict development and design standards while allowing for flexibility on how each building is used but also a contract that would cement the deal for 20 years.
The developers say such an arrangement would give assurances about what each building would look like while allowing latitude to adjust to market conditions such as whether shops and hotels would be more viable at a given time than condos. ”To make this type of commitment time-wise and financially, we need to feel comfortable we can execute the plan through it’s entirety,” said Motwani, who moved to Miami this year to oversee operations.
The Worldcenter project attempts to follow Miami 21, the proposed city-wide rezoning that stipulates screening of garages so pedestrians don’t see pipes and other infrastructure, and storefronts that are 70 percent glass, so passersby aren’t confronted with stark walls. Incentives also would be offered for using green building techniques and for constructing affordable housing within the nine blocks.
Roberts and Falcone, who made about $1 billion when he sold his home-building company Transeastern to TOUSA, began acquiring land in Park West about a decade ago.
Unrelated,
Yes, I read that story yesterday. But before the Marks and Renter Toms of the World start salivating with the prospects of picking up an Icon Brickell flat for pennies on the dollar, it should be realized that very little of it will ever be sold to a retail buyer. If the vulture funds dont pick it up before the market even gets a hint of its existance, Related itself has floated a seperate entity to pick up distressed units, some from its own projects, to be held for at least 5 years and sold at a later date.
I am as handicapped to speculate as to what happens as anyone else at this point. The next six months will be very fascinating to watch. But one thing I can tell the anarchists, the World is not going to come to an end.
AJ wrote: “But one thing I can tell the anarchists, the World is not going to come to an end.’
– No, the world will not come to an end, but condos will get much much cheaper. That is a good thing…unless of course you own several and bought at bubble prices.
– Also, I don’t think I would buy one of these things unless they were 90% off…even then I would need to check out the HOA.
“high-rise offices, hotels, shops, restaurants, entertainment and conference venues, schools and eventually residences — all built within a framework of plazas and broad sidewalks.”
No need for any of this. Surrounding areas are already overbuilt.
“The proposal comes at a time when there is a renewed desire for city living and the process of revitalizing downtown Miami is underway”
No data to back up the claim that people are flocking to cities. Downtown condos were mostly purchased by speculators who are now renting them out hoping they can sell when the market corrects. The high amount of rental units in these buildings is proof. Miami is a resort town. Living in a downtown area is not conducive to a resort lifestyle. This is not Chicago or New York.
“Today the Park West area is largely parking lots and one of the most run-down parts of downtown.”
Run down? All the Realtors say it’s up and coming. It’s been up and coming for over twenty years already. With a another twenty year contract.
“approval of a special zoning district that binds each of the nine blocks to strict development and design standards while allowing for flexibility on how each building is used but also a contract that would cement the deal for 20 years.”
Won’t be completed for another twenty years. If the land hasn’t already been sold to another sucker by then. Special zoning districts in Miami mean fraud. Park West already has a special nightclub district with a 24hrs liquor license.
“began acquiring land in Park West about a decade ago.”
Long time to wait to build.
Teepee,
That is the best explanation I got from anyone as to why the rents firmed up in the last couple of months. Yes, we have to wait and see another couple of months if this trend holds up. If it still holds up then it wont be the school kids but a general gravitating of the population to downtown which is a good thing.
Unless you work downtown, why would you want to live downtown? This is a serious question.
For the ongoing list:
I rent a 2/2 at the Mark, Bay View,15th floor, updated by the owner with real wood floors – $2,100/mo. (asking was $2100, the girlfriend did no want me to offer lower because it was the lowest asking in the building and she fell in love wth the wood floors– an incidentally, would do damage to certain parts of my anatomy if we did not get it).
My brother rents at the Club at Brickell Bay, 1/1, standard cream carpet/appliances, 28th floor, nice sized balcony, view of bay on either side of Jade, he is about 5 floors from clearing the height of Solaris next door, so that view is blocked. (~100 sq ft?) $1250/mo. (Asking was $1450)
well, i’ll go off topic with the rentals (at least location wise). i’m at $2,400 month on the beach in a furnished large one bedroom (app. 1100 sq ft) near lincoln road. wood floors throughout and a massive balcony (my guesstimate is at least 500 sq ft). the building is new, relatively no frills and has garage parking.
To ANYBODY renting condo from “investor-owners”,
Let me suggest that before you rent from an investor-owner, especially if they have multiple units in a single building or spread across these new buildings, that you demand at least a jointly-controlled account in which your security deposit will reside while you are in the building.
Several months ago while residing in a building on the beach, I opened my door and found a process server with a foreclosure notice to “Tenant in Possession #1” (never been called that before). Out I went, losing about $10,000 between my deposit, moving costs and a new deposit and first month’s rent. Since then, I see the same non-US citizen has lost at least two more condos to foreclosures. At $500,000 a crack, this would get tedious!
So, let’s get this straight. Three forclosures, several more possible, ONE lender, at least some financial relationship with a half-dozen more units ($3 million to $4 million worth) in 2008 buildings, non-citizen……. Anyone really question why we really might just have a long-term problem and why some of us will NOT show much optimism, much less buy a condo, until they clean out these rats and cockroaches?
Un-Related…..ouch. Sorry to hear about that. I had seen some of these things on TV and so ended up doing a bit of due diligence (kind of unheard of for a rental). All are advise now to that in this foreclosure environment.
I agree, these people need to be routed out and brought to justice. We have a long way to go…
Same thing happened top a friend. Homeowner collected security and rent but made no mortage payments. My friend got served and had to move out. Stinks!
Un-Related,
I did not metnion sis, because she rents a house near her work in the “upper east side.” You guys may have the same landlord. Per public records, this model citizen bought the house in late 2007 for $765k (no one in their right mind would pay more than $250 for this thing) from someone who had bought it THE SAME DAY for $470k. This town is a free-for-all.
And local law enforcement does not have the capacity or the will to do anything about this. We need the feds to come in here and clean this place up. Too many low-life dirtbags stole way too much money in the past few years. One can’t help but wonder if ths wasn’t being orchestrated on some level between the banks and organized crime.
Luckily, she got a heads up from some save-your-home-scheme guy. He went by the property asking to speak to the “owner.” Apparently, this other model citizen watches the lis pendens filings and tries to pull some other scam on those about to be foreclosed on.
Long story short, she stopped paying rent 2 months ago, so she is clear of her deposit/last month. After some initial threats of eviction, her landlord has disappeared. I also just recently found out that she never met the “owner” whose name is on the lease that she signed… and she made her rent checks out to cash. I thought she had a little more street smarts.
Anyway, renter out there beware. Do some homework before you fork over a deposit.
I met someone who has been living in a house for free for 4 years! I kid you not. The details aren’t entirely clear but something about renting from a guy who claimed to own it who took the insurance money from Wilma instead of passing it onto the real owner who no one has seen (who knows could be in a nursing home or something) and the guy fled the state with the money. In the meantime the tenant has been living there for years with no one to pay the rent to and oddly the mortgage servicer has been paying the property taxes. Very odd. Easy money and lending standards covered up a lot of problems that are now being exposed….. Crazy.
It’s funny how the Miami condo market is like AIG and Lehman. The condo market is very leveraged out and is hoping it won’t be forced to mark to market (ie. no reserve auctions) because there is no sustainable market for all these condo units now. Can the condo developers hold on when major financial institutions that backed these condos couldn’t? You would think a shakeout is coming whether it’s a LEHM bankruptcy forcing a developer to come up with collateral or Wamu and other banks being forced to “mark-to-market” their foreclosures by liquidating.
It’s a trickle down effect where the major financials are getting de-levered and the end developer or consumer is going to have to de-lever likewise. On the consumer side, most notably with higher downpayments and less access to credit (loans, credit cards, etc.)
you should insist in this market that the deposit and last month’s rent be held in escrow and only be disbursed upon the necessary events happening (e.g., you hit the last month in the lease). if a realtor is handling the transaction, this should not be a problem. if this is private party, there’s more than enough lawyers and title companies that can hold the funds for a small fee. worth it once you consider what the downside is (see unrelated’s post).
so who gets left holding the bag in all this mess? we are all truly f***ed.
jcrimes,
Within 6 months, I would venture to be that you can rent ANYWHERE on a month-to-month basis with only first and a deposit necessary. I would not put up a “last month” with an “investor-owner”….even if it was a deal-breaker. You KNOW you can find a similar unit9s0 in the same building and somebody WILL take your offer.
jcrimes,
That is a steep price for 1/1 even if it gas a large 500 sf balcony. I guess you have no water view either. Why are you paying so much for just being near Lincoln road? As per you, It has no frills either.
Renter Tom,
You said “Unless you work downtown, why would you want to live downtown? This is a serious question”
If you ever decide to get out of Sunny Isles other than just going to Walmart and decide to spend some time in Greater Downtown, you will get the answer.
Why don’t you join http://www.miamiurbanlife.com ? There are 900 members and growing everyday, most of who live downtown and party downtown but not necessarily work downtown. They can tell you why it is a great idea to live downtown. I can tell you why but you have mitts on your ears to anything I say.
Actually the last few days of my stay in Miami, I gave up my rental car and just had fun in downtown. If I ever had to go to the beach, I went to the OMNI bus station and took a bus, with an excellent frequency of a bus every 5 minutes to the beach. Other than that I had not missed living in SOBE and I had as much fun being downtown as I would at any place else.
To MoFo Tom: did your landlord cover the move-in costs at the Mark? I was looking at a 1/1 there, and liked the building, but the association wanted $500 in BS fees (including a $200 “move in fee” due to all the boxes the renters throw out during the moving process).
Re: the Club at Brickell Bay. My boyfriend just moved out a few months ago. They have instituted a $250 RETROACTIVE (i.e. anyone moving out, even if the fee wasn’t disclosed/in your lease when you moved in) move-out fee (on top of the association’s application/move-in fees).
AJ
location can’t be beat for me and i’m willing to pay a premium for it. i walk everywhere i need to go and am 15 min drive to work. i should emphasize the place is extremely nice (very high end furnishings).
water views don’t matter to me (neither do gyms/valet/business centers). i grew up in chicago on the northside and had a neighboring building as my backyard/window view as a kid. the most important thing to me is to have everything i want to do in my spare time within walking distance. i get that in my building.
tee pee
how the hell do they collect on the move out fee? i’d laugh in their face as i walked out the door.
unrelated
don’t disagree with you. just saying that if you have to put it up, put it all up in escrow to protect yourself.
Three months after announcing plans to trim 250 jobs, the Miami Herald Media Co. said Tuesday it is cutting another 119 positions, or about 10 percent of the remaining workforce.
We now return to our originally scheduled topic…
Miami Herald
Posted on Tue, Sep. 16, 2008
Huge Miami Worldcenter project heads to planning board
BY MATTHEW HAGGMAN
At a time when banks and builders are struggling for survival, two developers are seeking government approval for Miami Worldcenter — a nine-block, 25-acre mixed used project that would be Miami’s biggest urban development in years.
On Wednesday, the developers, Boca Raton-based Art Falcone, a one-time suburban home builder, and Marc Roberts, a former sports agent who lives in Jupiter, are scheduled to go before Miami’s Planning Advisory Board, the first step in the approval process for their project.
City commissioners are expected to vote on the massive development later this fall.
The project, which would be located between the Adrienne Arsht Center for the Performing Arts and the central business district, calls for a mix of high-rise offices, hotels, shops, restaurants, entertainment and conference venues, schools and eventually residences — all built within a framework of plazas and broad sidewalks.
The proposal comes at a time when there is a renewed desire for city living and the process of revitalizing downtown Miami is underway, but also runs smack into the current economic downturn when credit markets have seized up, lenders have gone under and many developers are struggling to stay afloat.
”We certainly agree that the market in its current form is challenging,” said Nitin Motwani, managing director of the project. “But we know real estate goes in cycles and will turn around, especially in a dynamic international gateway city like Miami.”
The developers have already spent $100 million on the project and that will grow as they close on parcels currently under contract in the nine-block area.
Getting financing in the current environment will be challenging, but Motwani said the developers plan to seek investment partners soon. Even if other partners come in, he said, Falcone and Roberts will remain the master developers of the project.
”What this [difficult] market situation has allowed us to do is that we have not been rushed,” Motwani said. “It has allowed us to . . . work more closely with the city and county, to understand what they want and what we want.”
The project, to be built in multiple phases over many years, would include upward of 12 million square feet of new construction — about the size of eight Dadeland Malls. The first phase would include the hotel, shopping, restaurant and entertainment components.
But what will characterize the development, says its architect Howard Elkus, is its pedestrian focus and emphasis on public spaces.
The plan includes a roughly half-acre park, a traffic circle like New York City’s Columbus Circle and a walking strip similar to Miami Beach’s Lincoln Road. The developers envision that decaying Northeast First Avenue will achieve the ”urban role, presence, and spirit” of Paris’ Champs Elysees, according to plans filed with the city.
Today the Park West area is largely parking lots and one of the most run-down parts of downtown.
Falcone and Roberts are betting their development will be the missing piece in a downtown that includes the Brickell financial district and central business district as jobs centers and cultural and entertainment venues such as AmericanAirlines Arena, the performing arts center and the proposed art and science museums on the waterfront.
Three Metromover stops are within the development area, and the city’s proposed streetcar line would bisect it.
”It’s hard to imagine a site that is more central or better served by a diversity of assets,” said Elkus, the project’s Boston-based architect who has designed many large urban mixed-use projects, including West Palm Beach’s City Place and Victory Park in Dallas.
For nearly two years Elkus and Michael Cohen, both of the firm Elkus Manfredi, quietly master-planned the site and met with local politicians and planners, collectively making more than three dozens visits to South Florida since January 2007.
Cohen said it’s ”extremely rare” to find such a large assemblage of land within a major urban center.
Real estate analyst Michael Cannon said developing such a large, multiyear project is a tricky balancing act. Each phase must not only be completed as a viable, stand-alone project but also integrated with future phases and the existing downtown infrastructure. Another important factor, he said, is whether the master plan has the flexibility to adapt to changing market conditions.
Worldcenter’s developers are asking for not only approval of a special zoning district that binds each of the nine blocks to strict development and design standards while allowing for flexibility on how each building is used but also a contract that would cement the deal for 20 years.
The developers say such an arrangement would give assurances about what each building would look like while allowing latitude to adjust to market conditions such as whether shops and hotels would be more viable at a given time than condos. ”To make this type of commitment time-wise and financially, we need to feel comfortable we can execute the plan through it’s entirety,” said Motwani, who moved to Miami this year to oversee operations.
The Worldcenter project attempts to follow Miami 21, the proposed city-wide rezoning that stipulates screening of garages so pedestrians don’t see pipes and other infrastructure, and storefronts that are 70 percent glass, so passersby aren’t confronted with stark walls. Incentives also would be offered for using green building techniques and for constructing affordable housing within the nine blocks.
Roberts and Falcone, who made about $1 billion when he sold his home-building company Transeastern to TOUSA, began acquiring land in Park West about four years ago.
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© 2008 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com
Some buildings are actually charging their own security deposit from the renters. But mostly the owners are paying that for the renters from the security deposit they recieved from the renters.
This Worldcenter isn’t worth wasting any breath on right now. Next. Bring up the topic in 5 or 10 years when it gets scaled back to an office building.
Hey read my earlier post at #303…..give AIG the bridge loan. Guess what, that is what is happening. Why don’t these guys avoid all the drama and just listen to me first?!?! LOL 🙂 Silly Fed.
Renter Tom – can we hang out? 🙂 You’re one of the most well-read people around these parts.
all of us should hang out, have a beer, and celebrate the gentrification of miami.
Here is a story on how LEH bankrupcy will affect Miami area:
http://www.local10.com/news/17490021/detail.html
A lot of people talk about waiting for the other ‘shoe to drop’. What about the next credit crisis? Credit cards. How many Americans are 20k-50k in debt (or even more in some cases) just on their plastic alone?
They’ve been using it to finance the lifestyle they couldn’t afford since all of their cash had been going into covering mortgages and other non “chargeable” expenses. Then when things got to tight the refi’ed or took out HELOC’s on their mortgages that were based on overvalued unrealistic prices in the first place.
Now the equity has stopped going up and the HELOC’s are frozen. They’re hanging on for as long as they can but that won’t be for too much longer. Wait until phase III of the economic melt-down credit crisis comes into play.
First real estate, then the financial markets and next John Q. Overspender. This thing is going to get MUCH worse before it gets better.
Oh yeah, in case you couldn’t read between the lines that means nobody to pay the over-inflated prices (even a ‘pre-construction’ levels) for so-called luxury buildings with ridiculous association dues, taxes and insurance prices.
Like Renter Tom quipped the other night ‘Got Cash’????
Shwin, I second that. We all should have a party like the Miami Urban Life has parties at Badrutts and such. We can all get to know each other.
Teepee, if you want to hang out with renter Tom, be prepared to pull out some money from your purse and buy him a drink or two. He definitely ain’t pulling out any either for himself or for you, lest that would reduce his holdings to $999, 900.
The give credit first ask questions later economy that has prevailed for the past 8 or so years is fundamentally flawed and now its time to pay the piper.
native asked: ” Credit cards. How many Americans are 20k-50k in debt (or even more in some cases) just on their plastic alone?”
I know one person who won’t get stuck here. Dumped the plastic ten years ago!
teepee,
My landlord did not tell me about those fees until I got the lease and paperwork for the building. I was a little shocked, and told her so. She told me not to worry, they never charge those…
I don’t want to get anyone into any kind of hot water. Don’t know if it is standard operating procedure, or what. Maybe some condo board police freak is going to read this post and raise hell, but I never had to pay any of those.
This is interesting, Forbes/RealtyTrac is putting Miami Beach #2 in a list of “Surprising Foreclosure HotSpots” in luxury areas where median sales are $700K+. I haven’t particularly noticed anything foreclosure-wise in the last 6 months that makes me think things have changed alot so my personal view doesn’t really align with the article… but data is data.
http://www.forbes.com/realestate/2008/09/16/foreclosures-luxury-zip-forbeslife-cx_ls_0916realestate.html
Current Number of Foreclosures: 170
Sure, the state of Florida has been hit hard by the subprime crisis, but wealthy Miami Beach would presumably be immune. However, that’s not the case: Despite a median home sale price of $745,900, this area ranks second on our list of surprising foreclosure hot spots with 170 current loan defaults. Again, it’s got to do with overbuilding and overextension. Developers built too many condos, and many buyers of those condos couldn’t really afford them.
I had to pay the security deposit at the Plaza. It was a requirement in the application/approval process.
Oh silly AJ. I may not be wasteful, but I am not cheap. I gladly buy a round or pay for dinner. I just don’t think a one person $100 steak dinner really is wise spending. Usually such food is small and the steak really isn’t any better than Outback anyway….is the atmosphere really worth it? I guess I’m just not into food like that. I have dined at some very fine restaurants both here and abroad so I do have an appreciation but the pretentious scene or “exclusive” reservations thing just isn’t me nor does it impress me. Perhaps it is my midwest upbringing? Along those same lines, I would never want someone to pay for me whatsoever. Again midwest where you earn your own spending money and pay for things yourself. Likewise, I don’t invest in declining assets with high maintenance costs and where incomes don’t cover the basic costs.
All is not lost from this housing bubble. It did spur some incredible investments in real estate the likes of which we haven’t seen before. Those dollars, although in the end were a poor investment, were invested in the U.S. (except of course those that scammed mortgages, HELOCs etc. and fled the country). Just like the tech stock bubble that spawned a huge surge of investment into this country’s technologies (except of course or the sock puppet in pets.com LOL) which wouldn’t have happened at that pace or if at all to that extent if it wasn’t for the tech stock mania. The homes and magnificent condo buildings are in the U.S. and can’t be shipped abroad etc. so there is a permanent improvement to a lot of areas in the country. Not the most efficient use of capital to be sure, but not a total loss.
With that said, we are going to continue to see a consumer spending pull back the likes of which we haven’t experienced. Can banks take the hit of credit card loses that are to come? The business model of throwing credit at everyone and saying with certainty that only X% will default is not such a certainty in this current economic environment. Many banks made their profits from fees and took their eye off the ball on making sure the loans were actually paid back…that has bit them in mortgages, soon the other loans will come back to bit them too.
Remember, extending credit was a means to take future consumption and move it to today. Why wait to save when you can have it now? It becomes unsustainable at some point where you have to give 6 months credit with no interest, then 12, then 18, then 2 years……you have to keep pulling that future consumption to today. Just like financial leverage. Well, now that is going to be diminished and possibly seriously diminished. Shipments from China are going to fall.
AIG is going to get an $85 Billion loan. Wise move even if it is distasteful. I have to hand it to the fed that when they do help out, they aren’t letting anyone skate away with a golden parachute…the “bailouts” aren’t pain free by any means and who knows perhaps the fed will make money off this since no one else out there seemed to have the ability to step in at this level of investment (it is a chunk of change). If AIG fell, there could be substantial cascading fiscal problems that were simply avoidable.
The relevance to condo investments in Miami is that the financing has been significantly reduced, a lot of people just don’t have the savings to devote to a real down payment, the general euphoria in investing in real estate (2nd, 3rd homes, or primary homes where you buy as much home as the bank will let you) is pretty much gone… I guess it was easy to invest in condos when people were playing a no lose game with the house’s money, but that has changed now.
Again, on a positive note, looks like college kids can now afford to rent in those ultra lux buildings in downtown Miami. Waaa Hooo!
Goodnight my comrades….er, my fellow Americans……
My accountant gave me a the copy of News Day which had an article regarding the 250/500 exclusion rule.
Bob Scharin of Thomas Reuters says, it is time to get packing. If you move in (to the second home and declare it as your primary residence) before the end of 2008, the new law will not affect you at all.
I believe someone said on this blog ” People who did not complete the 2 year requirement by Dec 31 2008 and sell before the end of the year will be screwed”. Looks like it is not the case. There is a two year transition period of 09 and 10 to sell the vacation home after moving in before the end of this year. So there is still time if someone wants to convert their vacation prop to primary residence. They have to do this before 31st Dec 2008. Even if you physically do not move in, at least declare it as such.
Does anyone else know about this? This is huge.
These are the exact words of Bob Scharin in Bank Rate
“The sale profit allocation formula only applies if you convert a second home to a primary residence on or after Jan. 1, 2009. “If you convert before the effective date,” Scharin says, “there’s no effect.”
You even could push it to the new law’s actual date.
“If you can move into the vacation home on Jan. 1, 2009,” says Olivieri, “you can sell the house and claim the full gain exclusion as long as you meet the requirement that you live in the home for two out of the last five years before the sale.”
Be careful, however, if your second property was rental real estate. You will still be required to recapture depreciation you claimed on the property, says Scharin”
AJ wrote: “Even if you physically do not move in, at least declare it as such.”
Wow, I believe that is called tax fraud…potentially a felony. Good advice there. Why is it that liberals always want to raise taxes (you can always donate money to the fed govt if you want to, why force everyone to?) and spend other people’s money yet don’t hesitate to cheat?
Tom, You said good night a while ago. Go back to bed.
In fact If I recollect well, you are the one who wrongly said that ‘those who are in the process of converting their 2nd home to Principal residence , but do not have enough time to complete the 2 year requirement by the end of this year are in trouble’. Trying to mislead the public again?
In any case, the advise is from a tax professional who says, “If you cant move the U-Haul Truck by Jan 1st 2009, but have the intention to do so relatively quick enough, you can declare your new residence and do the needful soon enough”. Just because you declare a place as your primary residence, it does not mean that you are glued to it. You are allowed periods of absence. So don’t talk through your wrong hole if you don’t know and accuse others for giving fraudulant advice. If I get a chance to audit you , I’ll prove in 15 minutes what a sham you are.
Gerardo ,This building sucks ! The gym is a joke and the building in general along with the units look very inferior
Hi, anybody aware of Neo Vertica? any problem there! The prices seem to be quite good compared to the nearby buildings.
The AJ claws come out…..so catty (and NPD, you know what that means I’m sure).
The IRS has since published guidelines to assist the taxpayer. One of those guidelines did state that as the law was to be applied you had until 1/1/2009 to BEGIN your two year residency requirement. They threw the taxpayer a bit of a bone here and made it easier.
As far as establishing residency, the IRS does not usually buy an argument taken for purely tax reasons without more…..to establish residency you should (1) physically reside there on that date (that is why it is called residency after all), (2) change your driver’s license to reflect that state and address, (3) change your voter’s registration.
I do not agree with that tax professional that you can still move in quickly afterward….basically he is taking an aggressive position that you won’t be audited and if so you won’t be penalized if the IRS reverses you.
My CPA and his firm have a top notch reputation and I would not take such a position. Audit away. My position is simply that I don’t ever want to worry about an audit so don’t take aggressive positions. We have a duty to pay our fair share of taxes according to the law, but no more. If you want to advocate taking a position that is a “lie” and hide behind a “professional opinion” go right ahead AJ, but you can probably find a “tax professional” somewhere that will give you whatever opinion you want….sorta like property appraisers….. good luck with that.
“Home building tumbled again in August, with the number of new building permits for single-family homes dropping to a 26-year low, the Commerce Department estimated Wednesday.”
This would seem to indicate that prices of existing homes are falling under the cost of construction (with profit margin) in some areas along with a glut of unsold homes, new and used.
“Irrational exuberance is wishful thinking on the part of investors that blinds us to the truth of our situation.”
Great quote, not only does it describe some of the thinking behind the housing bubble but also the thinking behind a particular presidential candidate with ZERO real experience or established credentials.
Wake up, smell the coffee, reassess the situation at hand and plan accordingly…
Yesterday:
Peter Zalewski, whose firm Condo Vultures tracks distressed real estate projects, predicted Lehman’s South Florida holdings would easily find buyers.
Of the $965 million in outstanding loans listing Lehman as the lead lender for large Miami-Dade projects, Zalewski said most were issued to ”solid, steady” borrowers and attractive projects. Zalewski noted about 75 percent of Lehman’s Miami-Dade loans came after 2006, as the real estate market crested and the lending climate tightened. That means Lehman probably exacted higher interest rates from developers, increasing the profit potential for the loans
Today:
Peter Zelewski of Condo Vultures said the government decision not to bail out Lehman would have a significant impact on South Florida.
By Lehman Brothers’ failure, they’re letting these companies fail and as they fail, that means there is going to be a fire sale,” he said. “This is what everybody has been raising capital for. This is what everybody have been planning for, analyzing for. Now is the time to strike.”
—————————————–
LOL, Peter Zelewski, an average Joe who lucked out with a cool website name. What’s this guy’s background? Realtor?
This guy is beyond stupid. I saw him being interviewed and right there I knew what was up. He just chants the same mantra as any other realtor except he calls himself a vulture. Now is the time to buy, now is the time to buy, now is the time to buy!
I know a guy working for Peter Zalewski. He told me that Peter is yet to strike a single big deal. Instead the company is becoming more of an adviser to developers!!
WOW AJ, interesting! Did you give him a backrub for that info?
Probably no big deals yet since vultures want X% off and developers/banks are hoping to only give Y% off. PZ did look a tad giddy on the news last night, perhaps he thinks he is about to score a big deal now. Perhaps. Regardless, he does have some good information gathered and has garnered a ton of publicity. He may need a business adviser to guide him into making some money out the situation to take advantage of the matters at hand since I am not sure what role he would play between a larger developer/bank and vulture buyer…unless they “list” with him or enter an agreement that he would be a buyer’s agent?
Mark,
Lately your comments directed at AJ have been infantile and far from funny. I also strongly disagree with him on South Florida’s real estate market, but there’s no reason for the personal attacks. If you’re not going to write meaningful, on topic posts, please keep your commentary to yourself.
Wow, it’s amazing to think that the Real Estate fraud in Miami, Las Vegas, California et al. is basically bringing down Wall Street from Wamu to Goldman Sachs. The smartest guys in the room (Goldman Sachs) got their butts handed to them by the best and most experienced Real Estate criminals in the country. Their financial models forgot to factor in fraud. I think Harvard B-School needs to add a course on “How to model crime and kickbacks in business” or maybe let people intern in Miami for a semester then they could see how things work in the real world.
Straw buyers straight out of college, complicit loan originators and appraisers and developers misrepresenting investor% to the banks… there’s quite a lot that can’t be fit into an Excel spreadsheet.
But then again, it doesn’t’ take an MBA to figure out the repercussions of giving No-Doc loans to anybody who wants one.
JL,
The people in management knew what was going on. They only cared about performance based pay in the form of options which they sold for millions of dollars. Even this year Lehman had paid an average of 120K to every member of its work force. After bonuses the average was $340K for every member of its 28,000 member work force. This probably wasn’t evenly disbursed and much of this was in top and middle management. Fuld lost millions, but what people forget is that he liquidated hundreds of millions over the last 7 years when he was not even in charge. Same goes for Prince, ONeil, Mozillo, Syron, Thain, etc. Prince, O’Neil and Mozillo were probably the worst. They didn’t even give up their hundred million dollar golden parachute severance packages.
AJ
you’re right. zalewski hasn’t done much of anything. as for his perceived analysis for LEH, i’m not sure what exactly his qualifications are…wasn’t he a reporter for the hard hitting DBR?
Hey Lucas,
How much longer until we get the latest CLOSING RATES???
It has been 2 1/2 months….
Maybe I am asking the wrong question? Have there been ANY closings?
Waiting to how the “wonder-buildings” (500 Brickell and AXIS) are doing!
PLEASE, PLEASE….
Everyone is blaming mortgages for the failure of the economy. I don’t think that the true. When you added up all billions of bad investment and compare of what was invested in real state, the numbers don’t tie.
gustavo
the investments that are going bust now are all tied to mortgages and other RE based loans.
I spoke to the condo manager yesterday…..closings in the building have dried up. I am guessing leasing is up though. Based on that, I would speculate (speculation only) that many other buildings are having far fewer closings recently too. It seems unlikely that just one building that came online earlier than most and whose HOA is quite active and on top of maintenance would be the only building to see closings dry up.
JL, Gustavo, Jcrimes,
Don’t know what to believe or who to believe. Is it possible that the fraud and frenzy of Miami, So-Cal and Las Vegas is actually responsible for the demise of major fin-institutions and collapse of the World wide economy? You mean to say that Lehman Bros. lending of 900 million dollars to South Florida Real Estate market led to their collapse?!! Something is not adding up. My little old Miami can bring the World markets to its knees? Is the fin-system so flimsy that exposure to sub prime mortgages led to the decimation of the banking system? You mean to say that other than housing, there is nothing else drives the world markets? What happened to Manufacturing? Farming? Servises? RE is just a blip in the entire financial gambit. There is more to this meltdown than just blaming it on the subprime mortgages. These investment banks majorly fcuked up by some 20 something MBA grads taking billion dollar decisions and playing Vegas on Wall street. Now they are simple scapegoating the subprime morts to cover their arses. All these guys should be criminally investigated.
AJ,
Leveraged exposure or fear of leveraged exposure to housing is what killed and is killing financial institutions. What fraud and complete lack of lending oversight in FL/CA/Vegas did was it propped up wildly high property prices which resulted in years and years of unsound loans being made to fraudsters and innocent homeowners alike who boght into these bubble prices thinking they were based on real demand/value in the market. When the fraudsters leave, it deflates in a hurry.
I think you can easily make the argument if there was no fraud in the marketplace, the housing bubble might have peaked in 2004 as opposed to 2005-2006. The major financial institutions could have withstood that bubble.
If you didn’t have fraud juicing housing comparables/values in South Florida and California across the board in 2005 and 2006, you would have had an orderly market. Instead, you get 2-3 years worth of subrprime and prime mortgages which are now worth alot less than face value and Financial institutions who leveraged themselves to that stuff are blowing up. It’s not realy about subprime now, the contagion is moving up the ladder to Alt-A because all loans in the period (prime and subprime) were originated on inflated valuations and thus are less likely to be repaid.
AJ
i’m not sure why you’re focusing on subprime. i’m certainly not. it’s alt-a, it’s prime, it’s home equity lines, it’s senior commercial RE lending (in all forms), it’s mezzanine RE lending (in all forms), it’s the repackaging of all of these loans two/three times over, it’s the cds insuring the investments. in short, it’s a lot of things.
Simple, if you lose $100K-$500K on each 10% of your mortgage portfolio, you’re dead as a going concern.
I think it’s damn near impossible to get a loan to buy a condo in Brickell/Downtown Miami. I assume there will be very few sales/closings as these banks have their *sshole clinched so tight…couldn’t fit a marble up it! Only transactions are cash buyers. Miami has been BLACKLISTED!
There has been movement on closings, although I expect things probably have really dropped off in the past few weeks
biz.yahoo.com/prnews/080916/cltu002b.html?.v=2
RCRS Announces Positive Trend in Closings of Downtown Miami Buildings
Tuesday September 16, 10:00 am ET
Seventy-three percent of 50 Biscayne’s 528 units have closed for a total of 388 units
Loft 2 has closed on 448 of its 496 units (90.3% of units closed)
The Plaza on Brickell has completed the closing process for 663 units of the 1000 units located in both towers. 66%
500 Brickell’s closings which began in June (which to date consist of 146 closings)
JL,
The question is, how many people are being foreclosed upon after not making a single payment on their mortgage. Especially after they realize they can’t get 3K/month from rent for carrying costs. They’ve been had. Also, don’t forget those that can afford to pay, but won’t once comps come in at 10-20% off what they paid. Ya dig?
Look for a 10% to 15% overall increase in rents in the next 6 months.
Short term rentals will also be the norm moving forward, why stay in a hotel when you can rent a two bedroom for $1,000 a week vs $500 a night (two rooms) in a decent hotel.
The short term rental will pit the owner-occupied/responsible owners against the investors who are desperate for cash. The short term rentals REALLY detract from living in the building, increase maintenance costs, admin costs, etc. bringing down property values. It is a recipe for problems and headaches for the long term. The investors will piggy back on the owner-occupied unit owners and bring them down, down, down. Not good. Avoid if possible.
Short term rentals are a problem for buildings in SOBE. I dont think Greater downtown is conducive for short term rentals. Who will stay there? The cruise ship crowd?
Does anyone have information regarding ARM resets that may be tied to LIBOR? If that is common, that is not good with the larger spread…
I have never seen Ben Stein so agitated as he was tonight on Larry King live. He is actually almost agreeing with the Dems! He says his friend got wiped out on the stock market. So thats what it takes for a 180 degree turn around?
JGM, ha!!! Short term rentals eh? What is the vacancy rates on “short term rentals”? Sure you can get a few bucks one week a month or every two months, but wouldn’t a smart business man rather have a steady income from a long term renter?
Also, how many people increase their travel during a recession? Germany, Italy, Spain, Brazil, Russia, are all falling into recessions. Do you expect MORE travel? What about with airline tickets doubling overnight?
What about the overcapacity in Miami hotels already? What about the condo hotel inventory coming online? JGM, your thoughts are ridiculous!
Guys please stop with this back and forth childish bullshit. Grow up! For the sake of this blog…
Ben Stein is now the ultimate contrarian indicator…….might be time to nibble long…..his words from Dec 2007:
“But housing is only about 5 percent of the economy at most. If it falls by half or a third, that’s a big drop. In an economy like ours, though, where there was a severe labor shortage before the housing correction, the labor shortfall can be readily absorbed by other sectors, and it is.”
& his “buy Merrill” call several months ago on FOX would be laughable except that it no doubt hurt a lot of regular folks.
Looks like the Miami Mega Plan is all set to roll. Norman Braman lost his case. Read the full story.
Florida high court ruling could pave way for Miami megaplan
Posted on Thu, Sep. 18, 2008reprint print email
Facebook Digg del.icio.us AIM
BY MICHAEL VASQUEZ
[email protected]
Although not used to directly fund the Marlins stadium, CRA money would flow to other pieces of the megaplan — freeing up separate dollars to pay for the stadium.
Potential bumps lie ahead for Florida Marlins stadium deal
Judge: Florida Marlins stadium serves public good
In a ruling carrying implications for Miami’s megaplan — a public-works package that includes a new Florida Marlins stadium and other projects — the Florida Supreme Court Thursday ruled that voter referendums are not required when spending large chunks of community-redevelopment money.
The ruling had been holding up the final court decision in auto dealer Norman Braman’s lawsuit attempting to derail the stadium. But the Supreme Court’s ruling could well pave the way for the end of Braman’s case.
The development money, usually administered by community redevelopment agencies, or CRAs, is the glue that holds Miami’s megaplan together. Although not used to directly fund the Marlins stadium, CRA money would flow to other pieces of the megaplan — freeing up separate dollars to pay for the stadium.
The voter-referendum issue has been one of the biggest headaches for megaplan backers, though they have done their best to work around it.
The issue was raised by megaplan opponent Braman in court, and despite Braman’s string of recent court defeats, it still had the potential to complicate the issue of stadium funding going foward.
No longer.
Thursday’s ruling is a 180-degree about-face from a 2007 decision by the same court. Last year, Florida Supreme Court justices found that in order to bond out CRA money — the typical method of funding big-ticket projects — voter approval had to be obtained.
That decision sent shock waves to local governments throughout the state. With CRA coffers swelled by the recent real estate boom, local governments had been assembling a virtual laundry list of construction projects to use the money on.
For decades, taking that spending to voters was never a requirement. In its new ruling, the court acknowledged that its decision last year held the potential to upend the state’s financial structure, which had come to depend on spending CRA money under a certain set of rules.
Adding the voter requirement, the court found, “would cause serious disruption to the governmental authorities that have relied upon that precedent for planning public works that are in various stages of development and approval.”
They need to get rid of CRA’s. Spend more money to stop pumping sewage in our oceans and clean up the beaches.
http://www.youtube.com/watch?v=Vp8NLNgkbVI
Hope you guys bailed on your short positions when they banned shorting financial stocks in the UK. I went double long financial as a hedge. We don’t even have a free market. I react to the govt, not the fundamentals.
JL… as far as the news on closing rates, a few comments:
1) The source is RCRS (Related Cervera Realty Services), which we know wants to sell some positive news
2) I don’t know how 60% closings can be considered a success considering that developers usually need to get above 80% -90% to get out of the construction loan. If you take 35% of all the new inventory and assume it’s still for sale by the developers, how many units do you think you get? I bet that’s about 5 years inventory at today’s absorption rates.
3) You need to remember that units for sale by people who closed as an investment also need to be added to these numbers. In some of these buildings, that number is very high, which only adds supply and makes things worse.
Two cents
Jim Cramer is an interesting entertainer…I like watching his show on occasion even if he isn’t always correct and has more of a reckless trading philosophy. He lost credibility in my eyes today since he seems more intent on saving the wall street folk instead of letting these investment banks fail like they should. Investment banks which “made” an obscene amount of money from what now appears to be some shady stuff are to blame for much of this. There are plenty of strong banks out there willing to step in and buy up the bad banks, let it happen. There should NOT be one investment bank standing after all of this, period.
Hope you guys Indiana Jonesed your ways out of your short positions. I sold hundreds of options….short tlt, long uyg. Long term this is bad methinks. Im mostly in cash now.
This RTC idea prevents a collapse but it wont prevent a recession. My god, I was going to go short suntrust…..I would have been annihilated.
Jim Cramer is no sage, he simply gets to say things on TV that are already obvious to most who follow these things.
Basically, the RTC type of thing would take the load off. Quite frankly the load should be allowed to crush these guys and let the smart prudent banks prosper and take over. Maybe it is time to open up Gitmo to house financial criminals. The banks made bad loans, tough.
tom
one…you will have many IBs still standing and rightfully so. the IBs that engage in true advisory work (think Lazard or Greenhill) will be left standing and are actually faring quite well in this market.
two…i’m not sure how you can justify generally that no IB should be left standing in this debacle. what’s happening now with morgan and GS is not a function of a poorly run bank but rather, institutions that are being whipsawed by market conditions that are simply irrational. to the extent some want to blame them for the troubles in housing et al. …remember, these guys were making a killing selling financial products to other smart money players who should have done a better job of vetting.
“remember, these guys were making a killing selling financial products to other smart money players who should have done a better job of vetting.’
– I’d don’t know if the buyers were fully aware of the real risk or if anyone did. Look at what the credit ratings were on these things… The risk was hidden under layers and convoluted. The whole thing is messed up.
All the major IB players in the last 1.5 years of the housing bubble knew the stuff was toxic. It’s amazing though that some chose to keep the stuff on their books. Very odd. Probably thought they could unload it in another year and just ran out of time/buyers.
It’s tough to feel sorry for an IB going bust for holding stuff they knew was junk while profiting mightily from selling the same junk to less knowing entities (mainly foreign at the end) in years previous.
Lucas,
What about a new post ?
JL/Tom
i don’t buy the fact that the IBs knew a lot of what they were shoveling was junk. you need to understand that the models used by the smart money and RAs to value and assess these things were so variable laden in the first instance. the problem was…the historical use of housing data in the models simply didn’t conform to the current housing market (i.e., the madness we saw in the boom). thus, many assumptions built into the models, in particular, re: default, were simply flawed from the get go. the flaws in the model came home to roost in grand fashion.
e.g., one model i’m aware of for a subprime securitization multiplied the historical rate of default for the past several decades on mortgages 4x and used that figure in connection with a risk and pricing analyis. that securitization ended up having an actual default rate of over 30%.
In the end, lending standards are tight and will remain so. That means lower condo prices across the board and probably several failed projects too.
Especially in the last year of the CDO game, bankers packaging and trading desks selling the stuff knew quite well how toxic the stuff was. The running joke was only foreign entities were stupid enough to buy them at that point and which foreign fund/bank was going to be the first to blow up on it. I think the miscalculation was they thought only the end stuff going out of the country was toxic. Little did they know fraud was bubbling many many years earlier in the RE market.
Yes, it’s time for a closings update. Has anybody checked out the listings at Marina Blue? They spiked very significantly within the last week… is the developer possibly listing some units just now? It seems like too many to come on the market all at once from individual re-sellers.
zilbert.com/marina_blue/marina_blue.asp
Also, something fishy is going on at 900 Biscayne. Some resale listings should have popped up by now, but it looks like it’s been stuck at 14-17 for the past few months. Is the developer somehow managing the resales in the building?
Yeah, Viva la bloggers of Miami Condo Investments. Unrelated, JL, Visionary and myself included, demand our absolute and inalienable right to know the latest closing rates from Lucas! Time for a new post. Cant wait to see what happened since the last 3 months, especially with 900.
Hugo P said in post #394:
“JL… as far as the news on closing rates, a few comments:
1) The source is RCRS (Related Cervera Realty Services), which we know wants to sell some positive news
2) I don’t know how 60% closings can be considered a success considering that developers usually need to get above 80% -90% to get out of the construction loan. If you take 35% of all the new inventory and assume it’s still for sale by the developers, how many units do you think you get? I bet that’s about 5 years inventory at today’s absorption rates.”
You have no idea! I read Cervera’s puff-piece today and it brought back memories of early-2005. So I paid an unannounced visit to “____________” this afternoon.
More on this AS SOON AS LUCAS POSTS THE LATEST CLOSING RATES!!!
JL
my own anecdotal knowledge about the CDOs is that the folks that structured these things at the banks (i had two friends at CFSB london that specialized in it…granted, they were doing synthetics which differs from your traditional CDO) really believed in them. the smartest men in the room rarely acknowledge that what they’re doing is garbage.
who the hell decided to do an eastern islands motif at icon brickell. it looks like a piece of a ride from disney world.
hahaha I just went over an email I got in July last year right when this mess was started, its a powerpoint explaining subprime securitization into CDO’s and MBS
http://www.scribd.com/doc/2190705/CDO-Powerpoint-SubPrime-Primer
ADB
that’s old news.
jcrimes it was hilarious when i saw it last year and it was hilarious when i saw it today….
If you guys want to get nostalgic: http://www.youtube.com/watch?v=6G3Qefbt0n4&feature=related
If you watch all 8, it will blow your mind. Also, Schiff is a lot richer than her lets on….
The last 90 seconds of 3 of 8 is the best….Watch it. Of course Schiff is a renter too….
…sniff sniff……
like a pack of cougars at a hotel bar, this post is well-past it’s “use-by” date. How about an update?
Govt protecting money markets now–Howard was on the phone when I was at the brokers yesterday and was told his money was in the RESERVE Fund that collapsed–poor Howard sold stocks and thought money was safe in brokers money market. Broker told him stockbroker insurance was only if his brokerage company went bust not money market. Sad days.
cougars are never past their use by date as long as there is enough alcohol around…my two cents.
OK – with govt backing money market mutual funds….I am now officially concerned. This could unravel beyond control. Maybe there really are some financial terrorists out there trying to manipulate the system now.
BANG! BANG! BANG!
There is a new Sheriff in town and he is not only Brilliant but he is packing. The first Bang is Hank Paulson
shooting dead the cowardly- unpatriotic- bloodsucking leech short sellers-with no blindfolds allowed. The second BANG was the sound of the economy and the markets-literally overnight- going from a deflate mode to one of REFLATE. He arrested the downward spiral for all assets even though the inflationary aspect will be a problem down the road. The third BANG – and just to keep this on topic – was the end game of the national average downward spiral in residential real estate that began over two years ago. Yes, Miami is different because of the inventory problem, but the arrest of downward prices is in place even in Miami. I will explain in detail in another later post when I have time why that is the case. But for those who have closed on their Downtown Miami-Brickell-Park West-Pace apartments and those who have a closing that is close hold tight because the new Sheriff has not only changed the rules mid-game but has indeed changed the whole game. As I have said on at least two previous posts on this forum-The Game is OVER!. The winners are those who bought pre-construction in 03-04-and yes even 05 and locked in their ideal view -floor selection-favorite building-water view etc. The losers are those who cancelled. Because of the large inventory , as I have stated previously you probably still have less than six months to locate your ideal apartment and lock in a price but with the new realities and the fact that Miami Mega Plan has survived the Braman court challenge- the psychology – which is at least 50 % of any market – has changed everything overnight.
In the end, the govt can’t really do much about the housing prices unless they bought up tons of homes and bulldozed them under. All the govt actions are designed to do is instill confidence…so what. Why would any intelligent buyer buy into this mess? So the govt buys up a lot of the bad debt from the banks…the homes still need to be sold to end users.
Kramer,
You still owe me an answer.
My Email is [email protected]
What do you think this new government bail-out plan will do to housing prices across the nation and Miami specifically?
I personally think the governemnt should stay out of it and let the markets correct themsleves as painfull as that may sound.
Thoughts?
AJ,
Did you notice, in Quantum one owner started to raise the asking price !
The # 1903 was on the MLS list for a long time for $219,000.
Now It has been relisted for $233,400.
Kramer,
I don’t know where you buy your Kool-Aid but you should scale back your consumption. I will let the others pick your “buy a condo NOW” mentality apart. I will contain my remarks to a YET-TO-BE-DECIDED question concerning the Miami Mega Plan which you have contorted into a delusionsry “reality”.
You said: “but with the new realities and the fact that Miami Mega Plan has survived the Braman court challenge- the psychology – which is at least 50 % of any market – has changed everything overnight “.
Two really simple questions:
1. Have you ever heard of an Appelate Court?
2. What happens if the “Mega-Plan” does someday have to be put on the ballot?
Well?
Interesting article about some new shops/restaurants opening up at 1060 Brickell…………
………….Among those opening within the 24,000 square-feet of on-site retail are CHAMPS Brickell pre-school, Roberto Giordano Salon-Spa, Mr. Sushi Restaurant, La Provence Bakery, Café Sci Sci, Yogurbella and an Arthur Murray Dance Studio
http://www.cggazette.com/index.cfm?dsp=news.view&nid=611
Kramer
really, you are the most incompetent poster on this blog. you know absolutely nothing about the macro or micro market conditions (you call short sellers unpatriotic…that would be funny in a bill o’reilly sort of way but for the fact you’re actually being serious). in any event, pointing out the numerous fallacies in your logic is a waste of time…but, i’ll make sure to remind you of your idiocy at regular intervals.
Angel
the real effect is that it moves the loans onto the fed’s balance sheet and allows those banks – or at least those that are left standing – to start lending again. in generic terms, banks couldn’t move these assets off their balance sheet because (1) either no one was buying or the fire sale price being offered was too much to stomach and (2) if sold at a fire sale price, the bank would have to raise capital (which couldn’t be done). now that they have a potential wholesale purchaser in the fed (who has iterated it will buy this stuff at a steep discount), there at least is a potential large market player to start unraveling this. as for home prices, i don’t think the fed’s action will have a dramatic effect. until prices revert to fundamentals, banks simply won’t lend what’s necessary to close a deal. outside of all cash buyers or at least 20/25% down payments on conforming mortgage buyers, i don’t see a host of movement on the inventory levels.
JCRIMES,
Thanks for the reply. I agree with your position in that this move by the Fed will do little if anything to put a dent in the current inventory of homes for sale . In essence, who cares if the banks can lend again if there are no buyers with the required 20-25% down payment to buy all these properties. I agree that price declines will continue until housing prices are more in line with basic fundamentals.
The fundamental problem with the real estate market is affordability. People just weren’t able to afford prices at the boom-era levels.
Regardless of what the government does, prices will continue to go down until they reach fundamental levels.
Japan tried massive intervention during their 10-year long recession. What happened to real estate prices? They went down for 14 straight years.
This recent news may help out some banks, but it certainly isn’t good news for the overall economy. I don’t see how stomaching an additional $1 trillion+ in bailout debt is going to help our economy. The fact that the government is resorting to such drastic moves should make you realize how F’d the economy is. We haven’t seen moves this desperate since the Great Depression. We didn’t work our way out of that mess quickly, and we won’t work our way out of this one quickly, either.
Taxes will go up, potentially significantly. Combine that with poor economic performance going forward with possible severe recession and we will all be poorer. Thanks Wall Street crooks.
What makes the owner of Quantum unit #1903 think he can sell at ~233K when he didn’t sell at 219K? I still think the MLS is way off current market pricing.
I think Kramer has a point. I dont know if the housing will turn around overnite because of instituting RTC and banning short sales and the resulting 2 consecutive days of rally on the Wall. But Kramer is right in saying it has a huge psychological impact. Just yesterday, I was telling myself, I am going to cancel this weeks haircut ($25 saving) and a Sushi Dinner ( $75 saving) and a nightout at a club ($90 saving). Today I reinstated those plans. I feel much better today about the future of the economy than yesterday.
As far as housing turn around, we need a better job report, better liquidity in the market. I am 100% positive that there is demand out there with thousands of buyers waiting on the sidelines. Once the psychological confidance is boosted, if it is combined with avilability of credit, the housing market will turn around. When that happens, you can declare bottom. I dont know when it will exactly happen, but it is not too far away.
Banks mad really really bad loans. Banks would have collapsed, but the Federal Govt action should prevent a systemic collapse. Banks, buyers of these securities, etc. will NEVER EVER EVER EVER repeat this again. Banks will still be weak and will only loan to good credit risks with a sizable downpayment. Prices will continue to go down, down, down. No need to get of the sidelines now and buy a declinging asset…
So how long before I can buy a Marina Blue condo from the Treasury?
Warning, save your sushi money, taxes will be going UP UP UP.
Paulson will buy your toxic mortgages for 2 cents on the dollar and 79.9% of your first born. As Geithner told AIG, this is the only offer – take it or leave it.
jcrimes
unrelated
jcrimes-back to his name calling without one whiff to refute why prices have not stopped declining. This from an (ahem) attorney who has not yet realized that he is thick in the middle of the latest mania in Miami-which is the huge number of lawyers who couldnt find work in NYC and set up shop here hoping to profit (speculate) from the original boom by advising people on how to get out of their contracts. There is one of you guys on every corner. So jcrimes -why oh why after over two year declines of approx. 40% from peak prices in august 06 have prices not bottomed? There are many buyers-although not in this blog- who like myself have the 20% down payment-good income and impeccable credit scores to qualify. Btw-except for a few insiders- you needed 20 % down to buy pre-construction so theres your 20% right there.
Unrelated
Here again like jcrimes you have to resort to name calling without any debate about why you think prices have not bottomed here. Im not saying prices are going to shoot up from here. All im saying is that they have bottomed. And this unrelated is from you- a person who has admitted on this blog that you bought pre-construction at 500 Brickell and walked away from your contract complaining that you paid a 45,000 dollar premium for a water view until Viceroy-Icon went up and blocked your view. Didnt you realize that you werent anywhere near the water at 500 brickell and you risked that someone would build in front of you? Besides, having toured 500 brickell- that building is a second rate piece of crap tp begin with. So to answer your two guys question on the Miami Mega Plan- yes im aware that ther is an appeal process which may or may not prove worthy. However, what you both dont understand is that $100 million dollars was awarded to Miami Art Museum- $100 million dollars was awarded to Miami Science Museum for their new museums in Museum Park and $100 million dollars was awarded for the Port of Miami tunnel. This was all done in in a Miami-Dade County election in November of 2004 by the voters of Miami-Dade County. This is regardless and seperate from the Mega Plan. In addition both Museums are close to raising private funds for the balance of the funds needed to complete both museums. The State of Florida is picking up about 75% of the additional funding for the port tunnel with Miami-Dade County kicking in about $400 million. This is aside from the Mega Plan being finally approved. The missing link needed from the Mega Plan is City of Miami,s contribution of about $80 million dollars. The only part of the plan never voted on in a referendum is the new Marlins Baseball Park -which is misplaced anyway in Little Havana. It should have gone downtown near the old Miami Arena right next to the Metr-Rail stop. Cheers!
I have absolutely no problem if the treasury rips a new arse hole to these investment banks and buys their bad debt for 20.1 cents on the dollar. If in 5 years, they can make money on this by reselling the aquired assets for 50 cents and making a profit, I am all for that.
kramer
there is no reason to debate with you. you’re a moron. morons can’t be debated with. just pitied
btw…you really struggle with comprehension. i work with developers…not buyers. and i’m on the deal side. trying to get that through your head is simply amazing.
Investments….usually not a good one when it is a declining asset with negative “dividends”. Schiff is just incredulous why anyone would enter into such an investment. The videos are very good and he certainly hit the nail on the head despite the denial out there at the time.
I would like to see what actual rental number are for some of these buildings and units….
There you go again Kramer, showing a little optimism, you need to be personally insulted and beaten down. Haven’t you learned by now you are wasting your breath? I skim everything now, mostly sounds like the manic rantings of cokeheads to me, especially this week with the whiplash from the stock market.
The quicksnap response time as well leads me to believe that a few just live (or are paid) to smackdown anyone on this blog who dares to hope or show a little optimism. God forbid this blog should show a fair or balanced side. You and AJ seem to be the only ones with any balls to contradict the popular opinions expressed on this blog and take the abuse. I, myself, have little stomach for it. I tip my hat to you for it although you are the minority opinion here.
I should say certain flippant comments sound like the rantings of a manic cokehead, I don’t need to go into the specifics of who, just read the comments, but some comments have been relevant and interesting.
La La,
Welcome back! On my last trip to Miami, I tried to make it to your recommendation ‘Soyka’ in the Morningside area but I didnt have time and I also gave up my car in the last 2 days. Hopefully I can go there on my next trip. Badrutts is also on my list to try out. Have you joined http://www.miamiurbanlife.com yet? It is a social networking side for all the Miami downtown residents.
Quantum has 10 members and 1800 club has only 6 memebers in the Miami Urban Life. The biggest numbers are for 50 biscayne(53), One Miami(29), 900(22) and MB(19). I want to drive more members from Q and 18.
Looks like we are going to hit post #500 for this thread unless Lucas comes up with something new by Sunday. (Condo Closing Rates anyone?)
kramer,
Put a sock in it. The Kool-Aid isn’t only intoxicating, it gave you one whopper of a hangover. Repeat after me: RAH, RAH, RAH!
Need I say more? No AJ, have not tried Badruttis ( not within my tight budget:) nor do I partake in the Miami Urban Life website either although I recommended it once in a post for owners at Q or 1800 who were trying to form some kind of association. Frankly I’m pretty worn out by the ups and downs of the last week, what we are living through now with our economic situation is on a scale that is unprecedented and like the insults vollied around on this blog, I have no stomach for it. I’m just thanking God for my blessings and trying to ride out the storm without contributing to the hype that only makes it worse.
Ameribank just got shuttered by the FDIC, sure feels like a Friday now!
Ameribank must be the sorbet to cleanse the palate between courses. Let’s see….. we’ve had the appetizer (August 2007 meltdown), soup (Bear Sterns), salad (well, it was a mixed salad of AIG, Lehman, and a few other nuts and fruits) already (last weekend was too busy on that soup, this week was the salad)…..the Ameribank sorbet this weekend. Now it’s time to really get to the MEAT which is next week. Get in my belly! For some reason I think we’re going to have a serious case of indigestion before this meal is over…. BURP!
Do you cretins actually think the banks are going to lend to housing speculators? The only people dumb enough to do that are fannie mae and freddie mac (the taxpayers). Besides, we are just starting a recession. California unemployment just hit 7.8%. Also, didn’t you hear? Treasuries are soon to become toilet paper. Interest rates are going to the moon. You can’t reflate a bubble no matter what you do. Now if the government kicks it into high gear and we get hyperinflation, well then AJ might get his 40 million dollar condo. Unfortunately it will cost about 50 thousand dollars to fill up his refrigerator.
Anyhow, why speculate in RE when you can buy Sept $15 calls on Citi at 1 pm on thursday for 12 cents (12 dollars) when they announce the short covering ban in England and then sell them on Friday morning at 9:40 am for 6.5 ($650). Now do that with 1000 contracts. Ya dig?
La La, I hear you loud and clear. I guess we all have to scale down the pomp and circumstance a bit.
Anyway you shouldnt let negativity on this blog bring you down. Optimism is a major ingredient for happiness. We dont need to convince anyone else. I know you are happy with your life and condo, Kramer is having fun in his new flat, I am extremely satisfied with my purchase, Visionary is making positive cash flow with his flat and some unhappy souls insist that we are miserable!!
In fact I know for a fact that for every one Renter Tom, who is waiting for an elusive bottom, there are 9 others who are very interested to pick up a unit at incredible deals that are out there which come once in a life time. There are foreclosures out there for half price. People who traditionally do not like to be renters are doing so against their wishes for the past two years. If the banks are not insisting on 800 credit and 25%-30% down, you would see a flood of purchases now. This credit crunch is inhibiting the market and nothing else.
In my building in SOBE, for long, I was eyeing a 2/2 direct bayview flat. They were selling 475K pre boom and 550K during the peak. One of the most amazing views. Now it is bank owned and listed for 297K. Probably will sell for less than that. There are so many people I know who would be interested to pick it up right away if not for the tough conditions imposed for credit. So if the new plan put forth by the congress this week works to release cash into the system, that will be a major turn around for the housing.
Another view is that, pumping so much cash or issuing bonds($1 Trillion) will churn up inflation and solid assets such as commodities and real estate will not be available for such cheap prices anymore. Infact I am seeing so many talk shows on TV and radio scaring average joe to pull money out of the bank and buy either foreign currency or assets you can touch and feel as a hedge againt inflation! Can you imagine when the dollar goes the Argentinian Peso way, people will look back at the days of $300/sf so wistfully. Can you imagine when Renter Tom’s $1000,000 in the bank will be worth $400,000 in a few years?
Kramer! I just saw your post about short sellers! You must be a professional comic! hahahahah!
AJ, do you understand real prices? Nominal prices are meaningless. House prices will come down in real terms. If you want houses to cost 40million then the average american will have to earn 15-20 million a year.
One more thing, if the dollar goes Argentinian peso, we’re all f*cked. Without a stable currency the economy would collapse. If anything, people with the means would move OUT of this country. The flight of intellectuals from Argentina is well known. There would be capital flight OUT of the country. So this would make house prices go down further in REAL terms. All nontransferable assets would go down in REAL TERMS.
Let me explain:
When you bought your CRAPPY condo for 600k in 2004 you could buy 10 convertible M3s for that money. Now lets say hyperinflation occurs. Your condo (still CRAPPY) is worth 600 billion dollars but now you can only buy 2 convertible M3s for that money. What gives?
Housing is not a transferable asset. A company can’t buy it and sell it in India. They can’t move it. Its value is based on the economic and political conditions of the nation in which it resides. That means that condos in Mexico are cheaper on average than condos in the USA (MUCH CHEAPER). But a big mac or a convertible BMW M3 costs the exact same amount. You understand?????
Now if you’re a broke debtor like yourself, then yes, you just wiped out your debts and got a free condo. And yes, those dumb enough to hold US dollars or worse treasuries are screwed. But guess what, you wont have a job because unemployment will be 45%. If you do have a job your REAL WAGES will be less than they are now. That’s why the price of your condo will be worth much less in real terms. You’ll be like someone in china, working just for food and shelter. You’d be forced to ride a bike or walk everywhere. Furniture for your condo would be ugly and cheap and perhaps homemade. Most Americans would be destitute. See why that would be bad? Look at Argentina. Property values in real terms TANKED TANKED TANKED!!!! I can’t stress this enough. Get it into your head.
If this happens the last thing you or I want is property in the USA. I would trade you 10 Miami condos for a green card in Switzerland, Dubai, or Australia.
What it will do is create a class system in America as anyone can ever imagine to see. Think Mexico. Think Brazil, Think India. Tha haves and the have nots. The haves holding real assets and the have nots working for wages.
What would take this moron to get banished to Sudan?
AJ – What is the MLS of that 2/2 in SoBe? Just curious as to what $297K buys down there….I am guessing it is pretty old building not on the beach??? I’m seeing sub $300/s.f. in on the beach brand new building in Sunny Isles Beach and we haven’t even seen some of the mega buildings even come on line yet. Sub-pre-con pricing is probably going to be here for most. By the way, the ONLY reason the bottom is elusive is because we are still falling falling falling….. it isn’t like I missed it nor will I or anyone else will miss it. Once inventories hit 8 months supply we can start getting a bit more serious in the search since we’ll still have plenty of time. A $250/s.f. price in the new direct ocean view on the beach is not out of the probabilities in fact it is highly likely. Another big indicator when prices are nearing the bottom….banks would lend with the same requirements as a single family home in Peoria, IL. As of now, banks are not willing to lend anywhere near those requirements. For the right price, I’d buy……no need to get bank financing, cash buyer.
My 2¢, if the FDIC wanted to make life easier for many people, just raise the insurance limit to $1M per depositor….pretty simple. I know banks won’t like it since they have to pay a fee based on the amount of insured deposits, but heck, they are already paying the fees in the way people are titling accounts to get FDIC insurance anyway so the higher limits would result in a ton of admin paperwork savings….and hassles for all. If the govt is backing money market funds and didn’t get any premiums, why not bank accounts???? Seems to ne the IndyMac people got screwed since their excess deposits definitely “broke the buck” to the tune of 1/2 (I know they are MM accounts, but you get my point). This is really screwy.
…and LESS hassles for all.
AJ, you still think you can sit back and relax and live off your Miami condos? Are you out of your mind? The haves in India own the means of production. That means steel mills, printing presses, etc. Do you really think 2, 6 , 0r even 10 condos will make you into the super rich? Does that make any sense? In India there is no middle class. Also, who would pay to police your precious pace park when the miami dade govt is BK? Who would pay for fire fighters? How much would fire insurance cost? Can you imagine the crime rate in Miami if the govt was paying police 1/10th of what they are being paid now? Could you imagine the corruption? It’s already bad. no imagine they popo can’t get paid a living wage like in Mexico.
I have always been curious from a philosophical point of view as it relates to this forum just how people form their opinions on religion, politics, finance etc. To better understand how the regulars in this forum and the newcomers form their opinion I have wondered lately how all of you all voted in past presidential elections lets say from 1992 and on. Please no long diatribes on other peoples selections and name calling. We can debate those issues later. Just the facts for now. I will go first. And please be HONEST.
1992 – Bill Clinton
1996 – Bill Clinton
2000 – Did not vote – moved out of state – not registered there
2004 – Ralph Nader
2008 – Obama
Kramer – I know, let’s inject religion into this blog too, politics just ain’t enough…. LOL
Seriously, the bottom line regarding investments in condos is if you have a negative return and the asset is declining in the foreseeable future, that isn’t a good investment or rental property. You can always buy one later when it makes financial sense.
Voted Republican the last two elections, though still registered as a Democrat (found that out when I voted in the Primaries) on the fence now…wish our choices weren’t a giant douchebag and a turd sandwich, but isn’t that how it always is?…That Sarah Palin is one sexy momma though, too bad she’s pro-NRA, pro-life and pro-drilling…otherwise she could have my “Hillary” vote like the Republicans hoped…I’m seriously considering not voting this time…oh and I’m Agnostic with Buddhist leanings:)
Renter Tom,
What do you think, what will be the long term impact of the bush bail out plan for the US economy ?
The way I see it. The bailout is like a massive bankruptcy where debts are forgiven/reorganized so that the business (banks) can continue. As of now, like I had previously posted, if banks had to mark to market their assets (and I am not saying they should have to do that right now since real estate is hard to value like that for numerous reasons) their assets would be less than their liabilities. Basically, as I understand it SO FAR, the US govt would simply take these bad mortgages off the banks’ books so they can move forward. Hopefully the fed govt can do so at a huge discount…..but I doubt that it the top priority right now…and then possibly later do OK without costing the tax payer $700B. Will the fed govt make money off this? Doubt it since no one else is jumping at the chance to buy this toxic junk. But who knows, the banks are pointing their gun to the feds head saying if you don’t do this we’re going into a depression (caused by the banks (by banks I mean all those involved). Hopefully the fed is smart enough to reverse it and tackle one bank at a time and let them know that if you don’t sell us the debt at X we’ll let you go under and we’ll buy the other banks debt at X instead. It is a mess.
The fed could make all bank deposits (heck out of left field all money market funds are guaranteed to not break the buck, just not the interest) or at least $1M per depositor that would prevent a LOT of worry and panic among the public and would instill more CONFIDENCE. I know for a fact that banks have been swamped with people over the $100K limit transferring money, titling accounts, answering phone calls about it, etc. what a complete waste of resources. Just increase the limits at least temporarily esp. given what they did with the MM accounts.
The US needs a good well functioning banking and financial system. The new regs need to be simple, clear, comprehensive and include banks, investment banks, credit unions, etc. No more of this “creative” financing cr*p where finance wonks skim a bunch of money off nonsense finance tricks…..what value do they really add anyway? Basically they scammed off the complexity which no one really understood and ultimately buyers didn’t do the due diligence necessary and simply relied on the rating companies.
This whole thing is greatly distastful it is sickening. Take all the money away from these crooks and put them in jail….felony convictions with no right to vote or lobby.
Regardless, the fed govt can’t do anything about the value of a house just like they couldn’t do anything about the value of a tech stock. Things will go down down down, but this may stop a complete collapse that would only permit cash only buyers which would have resulted in an over correction matched only by the bubble on the upside.
You don’t make money by holding a piece of real estate that costs money each month, that doesn’t provide you with shelter, and where the supply grossly exceeds the demand.
The fed plan may not prevent a systemic financial collapse…..need to time to see what the details are…
Ok Folks, I’v been on the sidelines of the miami-dade housing market for about 4 years and a vocal housing bear for a long-long time but I’m getting ready to jump back in. Why, I believe the Federal government is about to do something unheard of in US history. They are probably going to give people instant equity. Either by facilitating the forgiveness of mortgage balances to give homeowners more equity. Or by giving every homeowner a check for 50K or something along those lines. Also, given the fact that the US treasury will be purchasing assets of financial institutions tied to mortgages and homes, I think this will increase the probability of foreclosed homes being unloaded at the highest bid.
Unfortunately, the fed govt doesn’t have a magic bag of real money that it can hand out like that. Every extra dollar they print causes every other dollar to go down in value. Now, if they were handing out gold….well then we’d be talking…. LOL Besides didn’t you just post this same thing on another threat already? The only thing I can agree with is the fed govt MAY start liquidating real etate…but won’t that just bring down prices and cause more defaults, etc………????? Hmmm head we loss, tails they win. Sounds peachy.
RT,
Its not true that every dollar they print causes inflation. Inflation is a measure of the price level. The price
level is the intersection of aggregate demand with aggregate supply. Government spending can increase aggregate demand and thus cause inflation. But how much inflation? And at what level does the deficit begin to cause inflation? We should at least ask these questions before condemning solutions. Our deficit is around 3% of GDP. Japan’s has been around 6-7% of GDP with no inflation ( in fact deflation) . During WWII the deficit hit 25% of GDP. It all depends on if that hoard of cash that the government spends into the private sector is spent or saved. If its saved then you can have a deficit out the wazoo and it doesn’t cause inflation. If there slack in the economy, as there is now, then deficits can be absorbed without inflation. This is not a mainstream view, but it is in fact the reality of a soft-money regime which is what most of the world operates under. goto moslereconomics . com and learn all about it. There you will learn that deficits are an important condition for having low unemployment and strong GDP. Surpluses are bad for the economy because they are achieved via higher taxes or decreased fiscal spending. See 2001 Clintanomics/Rubinomics recession for proof ( preceded by surplus.)
Also, the government prints money when it spends on something or when it pays interest on treasury bills/notes. This makes them a price setter. So they can choose to spend less on something if they want to which can lead to deflation. Also inflation is not all that bad.
If the fed liquidates real estate, prices will drop. People will buy. Inventories will go down. Prices will begin to recover.
Ummmmm. Yep, the US dollar sure has been strong… You also fail to realize the effects of accumulating debt. All deficit spending is not bad, but accumulated debt can quickly become problematic….we may find out what that means.
Renter Tom… what building in Sunny Isles is selling at under $300/sf? Is it on the water? New building?
The dollar has been strong over the last couple of months and the deficit has been going up. If you are refering to the long term down trend of the dollar. Its been the US governments policy ( not publicly ) to weaken the dollar in order to promote exports. Fewer foreign entities are saving less dollars for various reasons. Political reasons. Also interest rate differentials have hurt the US $. Paulson was calling foreign central governments
currency manipulators not too long ago.
How is accumulated debt problematic to the US ? As above, the US ‘prints’ money when it pays interest on its debts. Its problematic to the asset holder is it not?
I saw a unit in La Perla 16th floor list for $299/s.f….. and that is the asking price. I just looked, not listed now so may have sold but was for lease too. Many in that building have broken the $400/s.f. mark and are around $350/s.f. High rental building so hard to know what sales prices will turn out to be in that building.
bubblerefuge – Under you line of thinking why even tax Americans at all in the first place? Just let the govt. spend money it doesn’t have. A 3% GDP deficit over 33 years is 100% of GDP plus interest. Debts have to be repaid at some point which was lost on the home debtors during this last housing bubble. Accumulated deficits weaken our country.
Hugo P – There are also some listings in the Sayan building….a lot of investors in that building. The new St. Tropez building right across Collins Ave will be interesting to see what prices come in at in this market. That and the Trump Towers pricing….then Jade Beach, Jade Ocean, list goes on….
Hugo,
Renter Tom said: “I saw a unit in La Perla 16th floor list for $299/s.f….. and that is the asking price. ”
You might check and see if the still have some developer-owned units that they would sell. The building was developer was Cornerstone Premier and they are in a world of hurt. They recently Listed 80 (of 213) or so units of their flop, Hollywood Station, with CBRE for a bulk sale. Next door to Hollywood Station, they had to give their Hollywood Lofts & Townhouses (93 units) project back to the bank as they were getting ZERO closings.
They may be very easy to deal with!
La Perla was one of the first big new buildings to have closings and was lower priced than the ultra lux buildings. Not sure what if any the developer still owns. I would expect sub $350/s.f. pricing and possibly a good number at $250/s.f. pricing before the year is up. Resales aren’t happening but there is a lot of rentals. I understand the developer never completed some things in the La Perla either….I guess welcome to the world of special assessments…
I like the Sayan east units….if they get to $300/s.f. then we’d be talking….so far I think some of the prime units have sold at $400/s.f., not bad…..
I would expect the Trump Towers units to get competitive soon…. there are SOOOOOOO many of them and soooo few lights ever on with very bored valets out front. At least one of the Turnberry Ocean Colony buildings might have 10%-15% of lights on (the other maybe 5%), sure beats what is happening at Trump Towers. Of course the Solis looks halted. Jade Ocean and Jade Beach are going to just add to the ultra lux units that are empty…
RT, taxation doesn’t fund government at the federal level. It does at the state level. Taxation
is necessary to add value to currency. It gives people a reason to ‘want’ dollars. The government
spends first, then taxes later. Its all spelled out @ moslereconomics.com read the “Soft Currency Economics”
article.
Christian – Obama
The current economic crisis/drama and the proposed solutions or at least dire attempts at solutions are complicated and the outcome both short and long term far from certain.
Although the recent dialogue clearly shows that this blog has some very knowledgeable (at least educated) contributors, the real matter is that this is miamicondoinvestmentsetc and our local situation so incredibly more perilous (as to housing values) than the vast majority of the rest of the country. We had astounding amounts of fraud and incredible amounts of speculation from non-traditional investors due to the fact that anyone of legal age could speculate without regard to monetary considerations. The prices were absurd, simple supply and demand was out the window because demand was bogus. There is no peak to return to. The population (plus the normal amount of foreigners and second homers) can not and would not support prices anywhere near where they are now much less than in the recent past.
Bubblerefuge, you don’t even know what inflation is. Inflation is an increase in money and credit. The rising prices are a symptom of the problem. Your thinking is so warped I cannot believe it.
Amen, RCR
Renter Tom said: “sure beats what is happening at Trump Towers”
Another brewing debacle for the bigshots at RCRS!
Money is not really that hard of a concept. It replaces bartering and is a storage of value creation or wealth. Inherently, money does not have a value per se, obviously when it is printed cheaply on paper or stored on a ledger sheet or in a computer memory the “money” itself is worthless. That value can only be eroded from the inherent value it represents by printing more money, deficit spending by the govt., etc. If a $1 buys an apple today and tomorrow it takes $2 to buy that same apple the money represents less value. I’ve had numerous graduate courses in economics, finance, etc. and the suggestion that taxation adds to a currency’s value and that gives people a reason to “want” dollars is nonsense…the value does come from supply and demand and when supply has no real limit, the value is diminished for every dollar in existence. Our dollar is/was a great currency because of the strength and stability of the US govt COMPARED to other currencies. Well, in a peaceful world with other strong and stable govts we’re finding that the U.S. dollar ain’t what it used to be. As a huge debtor nation our country’s strength and options are diminished….being without debt is freedom. We don’t need more CREATIVE financing when it comes to home mortgage debt or federal government debt. Peace out.
RT,
Again, the point is how much more can the US government spend than it takes in as a % of GDP without causing excessive inflation? As I mentioned above there are plenty of examples of deficit spending above 6% of GDP without excessive inflation. So, you’re hypothesis is contradicted by counterexample.
“and the suggestion that taxation adds to a currency’s value and that gives people a reason to “want” dollars is nonsense”
Why? You seem to be agreeing with me. As you said, fiat currency has no intrinsic value. The only thing that provides it value is the state, as you alluded to. A dollar bill is nothing more than a tradable tax liability.
Think about it. Think a bit out of the box. I know this sounds crazy but it is true. Just google
“Soft Currency Economics. ” Dr Randall Wray at University of Missouri at K.C. is teaching these concepts
and he wrote the book “Soft Currency Economics which I read.
BTW, IMO, the economics profession is in a shambles. Their analysis is based on the hard currency model ( gold standard/ commodity money) in which you can’t print too much money because you are limited by the physical availability of the commodity. If enough people repeat mistruths, these mistruths become true.
bubbleRefuge – Perhaps I wasn’t clear, I was stating your position and saying IMO that the theory is nonsense. I guess we will have to simply disagree. One of my major points is that 3% of GDP deficit spending may sound benign, but it accumulates. A debt burden can only get so big before it crushes the debtor. The govt, in slow economic times, could use deficit spending to soften the human toll of economic downturns by investing in infrastructure improvements or renovations such as road, bridges, etc. that need redoing or add capacity. But during good economic times, the govt should run a surplus and pay down the principle. The govt is no different than running a business except that it can cause a lot more trouble by recklessly borrowing and printing money. As it stands right now, NO ONE in govt. has ANY fiscal responsibility and eveyone is spend, spend, spend, and NO ONE is taking charge or leadership, NO ONE. We could be doomed, but on a lighter note, homes are cheaper now.
Also, govt, taxes, etc. do not create wealth. Hence the misunderstanding.
Agreed on the point the government should run a counter-cyclical fiscal policy. The government provides money to the private sector by spending. You keep referencing government
debt as a negative. This is another common mainstream false belief. Government debt exists to control
the federal funds rate. The treasury buys and sells treasury bills/notes to drain and supply reserves to the banking system in order to hit the target federal funds rate. It does not exist to finance government. The government doesn’t need to finance itself.
What?!?! The government doesn’t need to finance itself? What fantasy land are you in? Spends first taxes later? Come on. You can’t spend what you don’t have and from last I looked those fed govt emps don’t work for free or cheap, you know with all those benefits and paid holidays. The govt receives its power from the people, it is not some god that can just create wealth by fiat. To a large extent, govt are unnecessary except for the vices of people. We need a lot less government from a moral populace than from a lawless, immoral one.
People in Miami spent first on condos and relied on magical money to later appear all the while accumulating debt. Now they are crushed. The road to debt destruction is paved with little 3% steps all the way…..before you know it you’re a mile in debt and no way to get back.
Ultimately, the dollar has to be backed by something, whether gold or the full faith and credit of the US Govt (which is based on the real wealth and continued income of its citizens).
That’s just my take…….feel free to disagree, but please don’t obtain a position fed govt fiscal policy…LOK just kidding.
Yes the government doesn’t finance itself. It finances the private sector by spending. The federal government can write a check to anybody of any size at any time it wants without having to go into any debt. That’s a fact. The just simply credit your account. They are the sole provider of money. Nobody in the private sector can create new money. We just circulate it by selling goods and services to each other. Feel free to read about it on the site I mentioned. If the government ceased and desisted all spending tomorrow we would go into death spiral depression.
Wow….bubbleReefer what you been smokin’? Let’s see, I can start my own country and do the same thing can’t I. I could then call myself a trillionaire then. Can say Zimbabwe? Yes, the US govt can write out a check of any amount just like Jane Cokehead on the street can because she still has checks in her checkbook even though she has no money in her account. This is utter fiscal nonsense. The check the govt writes is backed up by the citizens wealth (let’s hope that wealth isn’t in housing!).
Sadly, the US govt spends a ton of money and taxes its citizens a lot (at least it taxes me a lot!). Think how much more economic growth we’d have if money was more efficiently spent by the citizens instead of the govt!?!? Heck maybe if the govt cut taxes in half more people could afford those condos!
The accumulated govt debt is not something that is good at this point, not good at all…that is not something that is open to serious debate. What is open to serious debate is the effects of the accumulated debt, is it a potentially serious problem or not?
Can someone talk something else more interesting? My head is spinning already.
By the way, the new Indian restaurant ‘Bengal’ opened this week near Quantum, opposite Cite. My friends went there to eat tonite (saturday) and the waiting line was out of the door. Any one on this blog checked it out yet? It is heartening to see that new buisinesses are opening up in Pace-OMNI and they are doing good too.
AJ – most people consider the biggest economic crisis since the Great Depression a litte more interesting than the new Indian restaurant in town. And it certainly is more relevant in terms of real estate as an “investment” – part of the name of this website.
I’m firmly in the camp that believes any time the government tries to “fix” something, they screw it up even more. There are a lot of things you could blame this mess on. But the government itself deserves the most blame. The Fed’s continous bubble-blowing, the creation of the GSEs and sponsorship of the idea of the “ownership society”, and the moral hazard they created by giving Wall Street the idea that they can be as wreckless as they want because they will be bailed out if things get really bad, all were largely responsible for us getting to this point.
This ridiculous, $1 trillion+ mother of all bailouts that is on the table and that will likely be rushed through into action, is just more of the insanity that got us into this mess to begin with. You can’t create a solution by doing more of the same thing that created the problem to begin with.
This bailout is nothing like the 90’s “RTC” that people keep comparing it to. That was a way for the government to dispose of the assets from failed banks. Now we’re talking about keeping zombie banks going by overpaying for their worthless mortgages. That is the only way this plan will work. Paying “fair market value” doesn’t help the banks one bit.
The plan clearly calls for the taxpayers to give a crappy bank that deserves to go out of business 60 cents on the dollar for something that may be worth 10 cents or zero cents. If the banks could have gotten more, they would have. They just stubbornly refuse to sell something for less than it’s really worth and recognize the loss (just like a lot of home sellers during the past couple of years). It’s that simple. An incredible waste of money.
And on top of that, Paulson wants to be above the law while doing it (the act says he will be free from any judicial review). At any time in history have we given a single, unelected human being $700+ billion to do with it as he pleases without having to answer to anyone? Absolute insanity.
Any plan requiring that much taxpayer money (and not even guaranteed to work) should not be drafted over the weekend and rushed into law.
I think the biggest problem we have right now is lack of transparency. Nobody knows what is sitting on the books and off-balance sheet entities of these companies. That is what is causing this “crisis of confidence”. The first step, I think, before we decide to do anything else, is require every one of these companies to show exactly what they have. Then we can better determine what we’re dealing with. Most of these companies do NOT have a “liquidity” problem. It’s an insolvency problem. The companies are simply worth less than zero.
This crud needs to be cleaned from the financial system. Instead, the government wants to just polish these turds and keep them floating.
Bubble refuge. Youre a f*cking retard.
About the bailout,
It wont stop the house prices from decline. 3x income or a price to rent ratio of 6-10. That is the value of housing. Govt cant pass a law that makes cars not need gas or makes someone dead come back to life. So for those of you that think govt will save you, best default now…my taxes are paying for your dumb mistake.
Renter tom, the 28 year cycle of declining interest rates is over. When the vig on the government debt hits 10%, watch out baby!
Comment I saw on a MH condo vulture story today….it is telling:
“Let me add some first hands facts, I am deeply involved in this business, so I speak from first hand knowledge, not noted by the article:
1. There are no mortgages for individual buyers, foreign buyers can only get 60% of appraised value, 80% loans are only available on building which have closed 35% of the units. I know we have a project in closing stages and mortgage lenders are fleeing.
2. Limited leverage is available for bulk buying, however it is only 40% not the 70% implied in the article. We are doing deals all cash.
3. Deals are being looked on a rental basis, making the assets worth about 30 cents on the senior loan dollar, mezzanine and developer equity is long gone.
4. The reason things are slow, is no fund will buy project until it is CO’d and most projects are 9 months behind schedule.
5. “Real” bulk vultures who have a done deals, santa and the easter bunny tree things i hear a lot about but have never seen.”
It would seem that prices will indeed revert to the rental value equivalent. If you can’t buy it at a price and rent it out and make X% then no one is gonna buy as an investment….kinda obvious.
BANG – BANG- BANG – CAPITULATION!
After the new sheriff in town (Hank Paulson) finished shooting dead the Wall Street Vulture short sellers on Friday, he immediately re-loaded and headed south to Miami- the epicenter of the real estate bubble-boom-bust, and with both guns drawn forced the Miami Vultures to capitulate.
The first BANG came from The Investors Business Daily dated Friday Sept 17 on page A9 that the Miami Vulture king himself, Peter Zalewski of CondoVultures.com, was quoted saying ” a lot of bargain hunters looking in Miami have been kicking the tires, Zalewski says, predicting buying ahead”. “There are signs of a bottom in place”.
The second BANG came from the lead front page story in todays, Sept. 21, 2008 Miami Herald. Here are a few quotes from the article:
(1) “As vulture fund investors send signals that its OK to buy again”.
(2)- “This is our time to get in”.
(3) – the debacle has climaxed and that its time to deal
(4) – “This is really the sign they have been looking for”.
(5) – Flucuating currency rates add to the urgency for many of the funds with investment dollars from overseas. “Israel is here in a big way”.
(6) – Peter Wells of Codo Capital Solutions says with 600 million dollars to spend says – “I cant find a motivated seller”.
(7) – And the nail in the coffin is Real estate anylyst Michael Cannon- probably the go to guy to get all the skinny on the truth about the Miami market with probably 40 yrs of local experience says – “The vulture fund industry has overstated the crisis facing developers and their lenders” – He says -” I am seeing enough condo buyers closing on their units to let most developers pay off their construction loans as well as some secondary loans” – He says- “NOBODY IS PANICKING” – “ITS NOT THERE”.
The third BANG is the sound of the two plus years Bubble of carpet baggin slimy sleazy vulture lawyers who are “experts” in j micro and crimes macro analysis-LOL – POPPING this ballon and who will be folding their tent soon and slithering back to NYC and the Midwest
Funny how there haven’t been any purchases by vulture funds yet…..only more foreclosures. The first vultures in will probably regret their decision. There is no rush and there will be no vulture feeding frenzy…..let the condo animal die first and marinate a bit before ravaging the carcass.
Perhaps someone could buy a whole building at 50% off and turn it into an apartment complex instead.
The calls of a bottom are premature….yet another misguided story. PZ has been waiting and waiting and waiting. The pieces aren’t in place yet and all we are seeing is more posturing. Well, the king has no clothes.
Tom Says “There are no mortgages for individual buyers, foreign buyers can only get 60% of appraised value, 80% loans are only available on building which have closed 35% of the units. I know we have a project in closing stages and mortgage lenders are fleeing”
That is exactly why only the Opera Tower is a failed building and ripe for picking because it could not clear the 35% closing. Most buildings, at least the good ones that count, are over 50% closing which makes the developers resolve even srtonger to withstand the Vulture funds offers.
Buildings which have closed 66% or higher will laugh at the vulture funds if they offer them any less than 80% of the pre-construction price. Yes, a reatail buyer can never coax a developer to sell him a unit for 20% off the pre-con price but a bulk buyer can do that.
For example, If the precon price of the unsold units in the Quantum North Tower is say $350/sf. If you walk into Terra Groups office and offer them $280/sf for one unit, they will politely show you the door. But if you are a bulk buyer and offer $280/sf to buy 50 to 100 units, you may stand a chance. But if the vulture funds want to offer $210 (40% off) or $175 (50% off) to buy even 100+ units or so, they wont stand a chance.
Buildings that have closed 2/3rd or more are in a very good shape and paid off their construction loans or close to paying off their construction loans. They have no incentive to discount.
As they own the remaining units outright free of mortgage, they can just rent them and very easily cover the Taxes, HOA and even turn some profit until the time is ripe to sell. Why should they care to discount?
I agree with Bubble refuge 100%. His startegy is exactly what I have been saying all along. Look out for foreclosures and distress sales. Make a lowball offer and see if it sticks. While someone may not get even 20% off from the developer on a new condo, you may snag a unit for even 50% off, if you are lucky from a foreclosure or a distressed seller. Only a dumb guy would actually wait for some “bottom” to be declared by the “experts” before jumping in.
AJ – I did not say that quote, that was a quote I thought worthy of posting….don’t know who actually wrote that, but it wasn’t me.
AJ wrote “Only a dumb guy would actually wait for some “bottom” to be declared by the “experts” before jumping in.” I guess there are a lot of “dumb guys” out there since people are waiting, not buying. Did you get 50% off those parking spaces and storage lockers? I would gladly compare portfolios with you and we’ll see who has made the smart investments and who has not. $75 sushi dinner all by yourself none the less, can’t stop laughing about that one, only women do that shopping therapy thing….so catty.
Would it make sense to own one unit in an unstable building at $200/s.f. with 1000 s.f.? Can you rent that on Brickel for $2K/month? A lot of work and risk for little actual return. Seems to me s.f. pricing will need to come down further. When the beach has sub $300/s.f. with direct ocean views, the urban oasis or blight can’t be worth much in comparison.
AJ – You never did post that MLS of the SoBe unit you wrote about.
Some experts are predicting “technical” bottom to hit somewhere around May-June 2009. But a technical bottom is exactly that – technical. It is for textbooks and reasearch analysis. It does diddly nothing to average buyer. It does not mean that If you buy on June 1st 2009, against buying now, you will get a better discount on the property. In fact you may be better off shopping now than later as you are the only game in town. You can have the pick of the litter at a discount you are comfortable with as in many cases, you maybe the only one bidding for the property. Do you really want to compete with everyone and their mother next year when the “experts” declare that housing has reached a bottom?
This is the text of Zilberts e-mail. One of the few times, I will agree with a real estate broker.
Long term investors seem content to stay with securities as part of their investment strategy. Alas, there is certainly a shift by many to investment vehicles that are somewhat buffered from the current financial crisis. The two most-prominent types of investments seem to be cash and, yes, real estate.
Since I am a real estate broker, my focus is on isolating ideal real estate investments for my clients. Real estate has proven to withstand the test of time, and even though real estate prices in Miami have fallen, somewhat, there is a lot of speculation that we have hit the bottom. Here are some factors to consider:
A lot of prime, Miami Beach real estate has fallen to pre-boom prices
The availability oceanfront real estate is finite and limited. The available land to build on is scarce. Developers are likely done with their project plans, meaning that we are not likely to see new projects in the near future.
Speculative investors are sitting on hundreds of Miami Beach condos, looking for ways to recover all or part of their invested capital
Our office gets many calls from investors looking to “bail out” speculators who are sitting on property. Investors are looking for super-cheap deals, like 50-cents-on-the-dollar. Alas, even though I have outlined some of the facts of the market above, Miami Beach’s luxury market is doing “ok”. Yes, there are deals, but prices have held up well.
So, here is what we make of all of this:
We feel that the BEST candidate for a Miami Beach property is an end-user purchasing a second-home, and using cash to purchase. This is an excellent place to park money PLUS provide some personal enjoyment.
These buyers will find themselves in extraordinary properties at prices that are below what people paid at the peak
Buyers from Europe and Canada have seen declines in their currencies recently, and many are snatching up U.S. property ahead of any further declines
We are nearing the start of Florida’s winter season, where population is the highest. This is the best time for a buyer to acquire a property. Sellers have been sitting on a dismal market all summer, and many are anxious to cut deals. We expect sales activity to rise in the winter months, so consider this time a pre-season sale period.
While we cannot predict the future, our guess is that Miami Beach will continue to be one of the world’s most-famous destinations, while the ability to build new waterfront properties is severely restricted. So, supply COULD eventually outweigh the demand.
Investors looking for property to buy, then rent out, will likely find themselves with negative cash flow. Rents, in general, still do not cover the monthly carrying costs of a high end property.
rentertom
What are your credentials to contradict Michael Cannon that he has evidence that enough condo buyers are closing on their units to allow enough for the developer to pay off his bank loan? I will repeat-if you own a contract at a preconstruction price then you have allready laid out the 20% you say lenders require to close. Glad to find out that you have finally admitted that you are a vulture. Doesnt it make you feel better to come clean. Interesting to see if we can get a logical response to my Michael Cannon question without him or the other regulars (We know who you are) resort to name calling.
Is Mark off his Meds again today?
Tom, The sushi dinner and the night out at a club expenses are with a date. Yes some of us actually hang out with real people instead of computers you know!!
Anyway, I did not post the MLS because the place is really gutted and you need 50K or more to make it beatiful again. But still the same line units were selling for $525K in the peak. I cannot tell how much they are now as not a single 2/2 came up on the market for the past 3 years. People in those lines hold on to them for many years (Many for as long as 35 years!!). Combined with the fact that the building is the best kept secret on the SOBE with the best managed team, low HOA’s and a location as gold as it can get.
I am trying to snag that unit for myself. If not I am trying to get my friends to buy it. If I can’t get my friends to buy it, I will put the MLS on this site. I just want to give my friends some competetive advantage.
Tell you what AJ, if prices are higher overall in the Miami market on Jan 1, than today, I’ll send you a $100 sushi gift certificate. If they are lower, you can make a $100 donation to a charity of my choice (don’t worry, its not a support Wal-Mart charity LOL).
Kramer, You beat me to the post #500!
Mark is still snorting. Dont worry, He’ll be back with his foul language and bizzare talk as soon as he is done wiping his nose.
The next 3-6 months will be the process of seperating the wheat from the chaffe reagarding Brickell-Downtown-Park West-Pace projects. Along AJ,s top six category I would first rank all buildings as to location first with Tier One-Tier Two and the Tier three. For Location and Quality-Value I would put Epic as number one in the tier one category of location and quality-value. Number two would be a close between 900 Biscayne and Everglades On The Bay with Marquis third or fourth only because they lose points for being right snug up to the expressway. Icon- Viceroy is probably next in line. Can we all agree the bottom tier is Opera Towers- with Axis -500 Brickell and the upriver towers only a notch or two ahead of Opera towers and That Paramount Bay will only help Pace buildings continue to climb.
Tom, I am game for a bet.
But you fail to realize that Miami 2008 or Gables or Bubble Refuge are here to buy one flat for themselves. They are not buying up entire Miami or REIT’s based on Miami condo prices. Individually they can snag a fantabulous deal now than they can if they wait till Jan or June 09.
So let us amend the bet. Let someone post a purchase price of a unit in from June 2008 to October 2008 on a good deal they made (not an idiotic purchase). Let us see If the price of that flat goes down or up or stays the same with in 5%.
$100 sushi certificate is too much for myself. You can join the dinner too and get off that friggin computer for a change. I will share by winning bet with you.
Some of those buildings look like public housing projects, very little character.
No thanks, no need to invoke torture, that is against the Geneva Convention you know….
Tom you still havnt answered my question in post #500? Michael Cannon says – you guys have overstated the crisis facing developers and their lenders. People are closing and yes they have the credit and the 20% down.
Sorry Kramer, didn’t know who you were directing that to. Well, the 20% down has already been down for sometime now hasn’t it? The people that were able to put the 20% without borrowing against that condo probably have, by and large, decent credit. I do not know what the terms of mortgages are for these (more % down???) but there are still a bunch of dumb banks and buyers. Hence the bubble.
Hence the housing bubble, the bank failures and near financial collapse. I also can’t explain why people walk in front of a moving bus either, but they do.
“Some of those buildings look like public housing projects, very little character”
Sour Grapes?
In fact some one told me long ago (about New York buildings): the only difference between a high end co-op and a project is the location and the people who live in it. It is very true, can you tell the difference berteen a Park Avenue pre war high rise and a bronx- brooklyn project? There aint much difference looks wise. Only the Park Ave flat costs 5 million and the project’s are worth 50 thousand.
Unless you want to live in a building shaped like a cone or pyramid, these buildings are beauties with just one glaring ugly exception. Icon Brickell. That is the single most ugly project I have seen in any city around the World. Related and Architectonica screwed up big time on this one. One day in future, I will not be surprised if this hideous monstrosity will be synonymous with the what can go wrong with urban infrastructure. What a pity, they imploded Sheraton to put up these 3 piles of $ hit.
I like the looks of Epic, Santa Maria, Jade, Infinity, Paramount Bay, Q and 18, Continuum II, Akoya and hold your breath – Opera Tower too (for all the ugliness and crampness of inside, the building looks great from outside).
AJ – Give it up, there aren’t any “Sour Grapes” it isn’t like I couldn’t go out and purchase a unit for less than you paid for. There are tons of units to buy, I don’t buy since I’d rather be on the beach. It is always fun to walk by my laptop which is at standing height and read the latest silly posts esp. those from owners who keep denying their buyers regret.
“We are nearing the start of Florida’s winter season, where population is the highest. This is the best time for a buyer to acquire a property. Sellers have been sitting on a dismal market all summer, and many are anxious to cut deals.”
How much of the winter buying season is traditionally made up of individuals with ties to Wall Street? Anybody have a guess?
JL, I think the winter buying season is mostly made up of the Canadians and the Europeans to a large extent. Just guessing.
AJ,
You are right, it’s a fact.
If I was not busy with my work in New York, I would be getting my FL RE license now. I think sales will start to pick up soon. That should be good news to Lucas, Samir, Alejandro Diaz Bazan and so many others.
Renter Tom,
If only a small percentage of the newly, cash rich Russians (who made their fortunes with commodities) was to start buying Miami condos, the whole Miami inventory would be blown away in a few months !
The Miami prices are peanuts for affluent Europeans !
I know a bunch of Russians, they seem to be smart enough to wait too. And if some rich Martians with Martian gold come, they can buy up the surplus overnight too. Oh the possibilities, none of which are realities.
I agree. with the Russian stock exchange tanking, they are looking to park their money somewhere else. If 1% of it heads this way (and why not. The European and Russian love affair with Miami is legendary and never-ending) the excess inventory will get evaporated very quickly.
Let me tell you something, the Europeans and Russians and the Israelis love Miami but they have nothing in common with Las Vegas or So Cal. So if any one particular market benefits from the foriegn buyer interest, it is Miami and maybe Manhattan (another place the whole World Loves to be).
Why do Russians love Sunny Isles?
Renter Tom,
You should once go to a gaming place in Europe where the rich Russians gamble. They gamble with 100’s of k$ a night.
I think you never spent any time with them in their home territory.
When they are fond of something, they are going to spend big, regardless of economical thinking.
Kramer, what’s going on with Everglades… weren’t they supposed to start closings Sept/Oct?
“Why do Russians love Sunny Isles?”
I guess it has traditionally been a place for Russian to go to and has kept being so. But, that isn’t helping the condo glut in Sunny Isles Beach…although I am learning a bit of Russian now, nice people. One older Russian man told me to never ever trust Russian businessmen, always get your money up front with them! He was dead serious.
I have property in Montenegro that several Russian (so called) investors have looked at. They are waiting for prices to drop. Who said they made their $ on commodities? You are kidding of course… Yes they do spend money on gambling, booze, women, etc…but thats a different story. Big difference between a few thousand and several million. They are not going to bail out Miami for sure.They are not stupid
Oops forgot to mention the property is prime beach front (Adriatic) property.
Eastern Adriatic has been a war zone for a long time. I dont know if it invokes solid confidance at this time. Even Dubrovnik is not doing good. In any case, it is only in Summer, you can enjoy the very few beaches of Adriatic among the rocky and cliffy coast. It is beautiful though.
Miami2008,
Did you know that Montenegro is known to have the highest corruption rate in Europe and is also famous as a smuggler’s paradise. You had better bought property in Croatia or Slovenia.
Hi Vis…I didn’t buy the property it belongs to my family. We lived there. Yes there is quite a bit of corruption. The Russians are helping out 😉 just kidding don’t want to offend anyone.
AJ is correct I will buy a unit in Miami. As an end user, I am not really waiting for a bottom as much as looking for right place at the right price. Would love to buy in South Pointe but it is still way out of my price range. That is why I am looking at Brickell, Downtown, PacePark, etc.
Miami2008 – You don’t have to wait for the “bottom” if you don’t want to, but the right price will get much more right by waiting a bit more…. FYI.
I would also add, start your research/search for property now. Then you will get to see what is all out there and how prices are doing, probably will decline at least 15% more ($150K on a $1M unit). I’ve been watching and every time I look and evaluate, I conclude that keep on watching is the right more. Be prudent.
Lucas,
Where did you get your data of Quantum from ? There is quite a large discrepancy to the figures from Samir.
Lastly, every time I review the housing situation I realize that I have simply been way too bullish (I am a glass half full kind of guy). The situation is worse than hoped. Bye bye hedge funds, bye bye big 5 investment banks…. (Nouriel Roubini called that a long time ago).
RT, Doug Noland from the Prudent Bear site has been talking about the GSE’s, credit market excesses, and expected meltdown since late 90’s.
Most of the units that have sold in Brickell these past couple of months have been sold to cash buyers and if you look at the closings things are moving again as prices are in some instances getting reasonable. There will be a point when more sellers start realizing that 2006 prices were not real and go back to fundamentals, positive cash flows. I dont think that waterfront properties will reflect income ratios discussed here as these are true luxury units meant for high end users. On the other hand I think if this 1 trillion dollar plan gets approved we will see inflation and the dollar weaken which could attract foreign buyers if the euro/USD is at 1.70 and property values are down over 50%. I also feel the faster the market drops the quicker the inventory will get absorbed and it will start recovering. As far as condo developments on the Brickell river or by the american airlines arena which were sold on ammenities and are all very similar “luxury looking” units which are not on the water I believe they will have serious trouble closing…. Some bank owned properties have been heavily discounted and they move within the first week they get listed. Given the good deals that have traded for cash and the fact that people are looking to invest in hard assets now that we have seen stocks literary go to zero (I thought Lehman was going to get broken up and sold in pieces).I just wish someone could have a rational explanation of how the proposed RTC plan is just going to take a trillion dollars worth of losses on mortgages, car loans and credit card debt from the banks balance sheet given how some of these notes have been structured and how they can propose a trillion dollar bailout without having the Banks give full transparency of how toxic their books are. Just my 2 cents
Broward’s version of Miami World Center
http://www.sun-sentinel.com/business/sfl-flzriverbend0923sbsep23,0,7471408.story
The developers already have invested at least $50 million in the venture, which eventually could be worth more than $1 billion, Ladd said… Riverbend project “It’s not going to happen overnight,” Rahael said recently. “It may take 10, 15, 20 years. We will move as fast as the economy dictates. We need to be ready when the tenants are ready.
——
Quote: “It’s not going to happen overnight,”
No truer words were ever spoken LOL
AJ,
In your post #499, didn’t you intend to say that the “DEMAND” might eventually be greater than the
“SUPPLY” for Miami Beach property??
Does anyone know what happend with the Miami World Center foreclosure auction on November 25th?