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Pathetic.
This is exactly the kind of activity that will help the market clear…….Stronger hands buy wholesale and then sell or rent at a fair profit.
This won’t clear the market. This is just more speculation. Don’t you get it, there are no end users for these properties! This property NEVER makes a property at the current rental rate and vacancy rate. So they overpaid for it as a rental. They are already dropping the price so they’re having some trouble selling. They better pray they sell soon before the market catches up to them.
*makes a profit
This owner will not be able to sell this unit to a person that will look for financing because according to the new regulations the present owner will need to have the title of the property for at least 6 months before he/she can sell.
Whoever is willing to buy the unit at the current asking will have to be a cash buyer, which at this price does not make sense!
I don’t know anything about this building but $215k for a condo unit in Brickell Key is fantastic. The owner is better off hanging on to it for a while and selling into the next bubble 7-10 years from now.
At $215k the unit won’t bring much of a return at $1850 a month but it should cash flow positive barring any major assessments.
Candela has a valid point. In any case, as this unit is featured in Lucas page, it will get sold soon as Google will give it the best ranking and max exposure.
I hope he isn’t planning on an international buyer.
http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4623525/Failure-to-save-East-Europe-will-lead-to-worldwide-meltdown.html
http://www.guardian.co.uk/world/2009/feb/16/ireland-debt-recession
Lucas,
Off Topic.. Can you please update the Aventura Condo Sales and Rental list with more recent information..Thanks
risky strategy in this market.
No AJ, Candela doesn’t have a clue what he/she is talking about.
You don’t put money away for “7-10 years from now” and then make a profit.
That’s 7-10 years of dead money.
—
For my purposes this is what I need, more comps.
Now all of you, go out and buy.
Muir, have some sand in your vagina?
only fools tread where angels fear to go. 2009 will be singularly bloody for upper end properties.
Homes w/ land are now @$100/sq ft in dade-broward and we are not even near the end of the recession-depression (unlike just a recession). I see suburbia condos in ppines/kendal etc going for $60/ sq ft.
The pain for lots of “jumping jack investors” still lies ahead. Like i said, it will be a pleasing end to this crisis if downtown condos stabilise at $100/sq.ft. To me even that looks too optimistic now.
Japan’s economy PLUNGED at 12% annualized. A major economy is signalling depression and broads w/ fake boobs & soon to be defunct DJs seem to be at it again.
GN,
What’s wrong with the Aventura condo sales and rental list? Are you talking about historical data or current listings?
Lucas,
The current listings and historical data seem to be off. Example, when I do a search for rentals in Aventura Marina using the property search option, I come up with 26 current listings.. However, the condo and sales list shows only 6 or 7. There is also a unit that I know rented on 1/26 that’s not showing up on the list..Thanks
Same scenario for the units for sale..There are 59 units currently listed for sale in Aventura Marina, but the sales and rental list only shows 23
Thanks GN. I’ll have my website developer look into it.
GN,
It should be fixed. The listings displayed were only for Aventura Marina I. I just added the listings for Aventura Marina II. They have different addresses.
Lucas,
The numbers havent changed..
Lucas,
I see the updated information now..Thanks
GN,
The historical data is refreshed about every 2 weeks. The listings, however, are updated every 24 hours.
Excuse me? /
“This won’t clear the market.”
We may have to agree to disagree on this point..I think the more comps the better and the lower the pricing the more activity we will see and have greater clarity on real pricing……….Not saying there won’t come a day that someone buys a 1BDRM for less at Carbonell, but $200PSF is certainly getting there on BRICKELL KEY unless you think these properties are going to ZERO and folks get to live for free on the private island…..In which case what exactly happens to Kendall, Homestead, etc?
There are indeed end users for these products (Feel free to Email me with any of the larger units at Carbonell or Asia that you can sell at $200PSF) at a certain price and not everyone needs financing.
Candella = AJ
—
Touch a nerve there AJ?
—
Muir /Feb 16, 2009 at 11:52 am
“No AJ, Candela doesn’t have a clue what he/she is talking about.
You don’t put money away for “7-10 years from now” and then make a profit.
That’s 7-10 years of dead money.
–
For my purposes this is what I need, more comps.
Now all of you, go out and buy.”
Candela /Feb 16, 2009 at 12:08 pm
“Muir, have some sand in your vagina?”
SwissLuxury.Com
“..I think the more comps the better and the lower the pricing the more activity we will see and have greater clarity on real pricing”
—
We, “the Smart Money” have been saying this for a while.
(While Ace is part of the Smart Money, the Smart Money is non-discriminatory and open to all who which to partake of Smart Money)
SWISSLUXURY…what do you think you could do price wise…for a Ladies LARGE Tank Francaise in stainless& gold? also same in stainless only?(she’s still undecided) thank you and look forward to hearing from you.
Las Vegas edged Detroit for the title of America’s most abandoned city. Atlanta came in third, followed by Greensboro, N.C., and Dayton, Ohio. Our rankings, a combination of rental and homeowner vacancy rates for the 75 largest metropolitan statistical areas in the country, are based on fourth-quarter data released Feb. 3 by the Census Bureau
read the full story at
http://realestate.yahoo.com/promo/americas-emptiest-cities.html
Miami is ranked 15th in terms of rental vacancies and 20th in terms of home vacancies giving it an average ranking of 11. That is completely in line with what I have been saying all along. Miami is a major and vibrant metropolis in need of a lot of housing.
There are perhaps 3 or 4 cities in the World which went overboard with construction during the boom. Vegas, Miami and Dubai being among those. Look at the fate of Vegas. Took the No 1 spot in the vacant city listing. Miami is not even in the top ten with all the over excess building frenzy. That says a lot. I can see Miami for what it is and many are unable to see the whole picture. These 11,000 excess flats (out of the 22,000 built between 2003 and 2008) will get absorbed before you even realize what hit you.
AJ, keep smoking that crack pipe.
Is this the absorption you speak of?
News Flash: The Whitney Condominum in West Palm Beach (individual units for sale asking $386/sf right now) bulk sale goes down at $144 a square foot!!! More that 73% off the asking price!!! More than 50% off the replacement (building) cost of $300/sf!!! THIS IS ONLY THE BEGINNING.
http://www.bizjournals.com/southflorida/stories/2009/02/16/daily7.html
Doesn’t matter if it is bulk sale, before you know it, almost all the excess inventory will be gone to the big fish with cash leaving individual buyers in the lurch. These fat cats have the ability to hold on to these gems for at least 5 years. All those of you who are jumping with joy with the news of bulk purchases registering ever low prices will be very disappointed to realize that it will do diddly nothing to an individual buyer on the street.
Personally, I would rather see that gables or jcrimes or miami 2009 will get the benefit of these low prices rather than some Israeli firm landing at MIA with 60 million dollars in a suitcase and walking away with 100 flats. But the unfortunate truth is that only the big corporations or fat cats with lots of cash will be able to negotiate such swetheart deals with developers or banks leaving the individual buyers to duke it out for foreclosures.
And yeah, the developers will never, I repeat NEVER will sell the unsold flats to individual buyers at the same rate he will sell to a bulk buyer. Not even remotely close. He would rather let the bank take over than setting the price at bulk sale level for individual purchasers. I dont know why. If developers sell them for bulk price to individual buyers, the unsold 11,000 flats will be gone tomorrow, nope – overnight. But they will never do it!
well AJ…I’ll agree with you on this…the window to purchase is the next 12-15 months. but if you jump in, you better hold for the next five years!
with that in mind, looked at some places over the weekend. the reality is that there is outright capitulation in single family homes and to a lesser extent, townhomes, all in decent areas. condo deals are still harder to come by, but, with ass’ns taking it on the chin something has to give.
First off, the firm was Swedish. Second off, 58,000 luxury “flats” were built in Miami-Dade with 22,000 in Miami downtown area. Thirdly, when these people purchase the properties they intend to rent them. They can afford to rent them at prices that are substantially below what they are currently offered at in the same building and below what comparable buildings are renting at. This causes the “investor” who paid triple what the the bulk buyer did to go into foreclose. These foreclosures end up on the open market.
Case in point: Marina Blue. Just last week the cheapest two bedroom was $2200. Now it is $1900 and likely to drop further. Your lovely 3707 in 1800 club has been on the market for months at $2100 (the owner keeps delisting and relisting so it only says 19 days but I’m not fooled).
Why would I pay $2100 to live in midtown when I can pay $1900 and live in a much better building (see Miami Condo Rankings page) with more square feet, a better view and live in the safer and cleaner downtown area? And all the bulk rentals haven’t even hit market yet!
Good luck speculator.
AJ is just not one of the many FBs out there.
His total cluelessness to a reality that can easily be seen by anyone who cares to do a simple 20 minute drive is indicative of something deeper. We see manifestations of boundless optimism, multiple personalities; from false bravado to hysterics to grandiose delusions. All these things point out a more disturbing pattern than a simple FB.
Absolutely Muir. Wait until the 10 year and 30 year bond skyrocket under the sheer stress of $1.6 trillion of new issuance in one year and mortgage rates go to 8% and higher for the next 20 years…..
Has anyone got any info on the Downtown Miami Wal-Mart that is planned? I can’t wait until I can buy groceries at 30-50% off….
Interesting article on Carlos Justo
http://abcnews.go.com/Business/Economy/story?id=6867448&page=1
GN,
Fun article.
Second rule: “Don’t get high on your own supply.”
Words to live by.
From the article (good read)
From Janitor to Agent to the Stars
Justo came to Miami from Cuba in 1967 at age 11. He never finished high school. His first jobs included bagging groceries at Publix, flipping burgers at McDonald’s and wiping floors as a janitor. It took him 30 years to become a multimillionaire. Soon, it will all be gone.
But Justo isn’t looking for sympathy.
“I don’t know what happened,” said the agent, sporting his trademark shaved head and white linen shirt and pants as he looked out the window of the downtown Miami penthouse that he will soon lose to the bank. “What I do know happened is I did it, it was all my doing.”
With disarming candor, Justo says he knows what drove him.
“Greed. Ego. Nothing is ever enough,” he said. “When the ego drives you, it’s like, it’s more, more and more. I have no idea what I wanted to do, but some part of me wanted to create more.”
“Here’s what happened with me,” he said. “My business is selling real estate and [when] I decided to become an investor, that was really my downfall.”
He admits he was initially overwhelmed by that downfall, and for a fleeting moment he even considered suicide. Instead, he decided to confront his demons and clean up the mess he made by declaring personal bankruptcy, and then try to rebuild.
Muir,
I think this is one of the best lines from the article:
“Here’s what happened with me,” he said. “My business is selling real estate and [when] I decided to become an investor, that was really my downfall.”
AJ said: ” I can see Miami for what it is and many are unable to see the whole picture.”
– It is called delusional ideation and thinking. Get back on the meds buddy. This is why I love AJ, the entertainment value is just too much fun in the morning. What would be even better if he put his money where his mouths are. Right Sybil?
Pathetic. 1926 all over again.
AJ is priceless!
seriously though, AJ and the other bloggers out there I have a question.
What do you guys think will happen to the miami RE market once it hits bottom. Will it sit at bottom for years(L-shaped recovery), will it bounce back to the top (V-shaped) or will it bottom out and then have a 50% retracement back towards the top but not back to those lofty levels?
I don’t know, I thinking when it finally bottoms out it may sit there for years and then begin that 3%-5% annual increase. I can’t see how we will get back to those lofty levels within the next 12 years.
once it hits bottom, will stagnate for a few years and then go back to historical, pre-boom growth rate.
Once it hits bottom a major hurricane will hit. Sending all the bulk buyers into bankruptcy. Starting a new bottom again.
makes me think – It will be a long U shaped recovery in nominal dollar terms but an L shape in real dollar terms. The credit bubble has popped and no real recovery for a decade and no amount of fiscal stimulus spending can fill the void and would just need to be re-spent again each and every year. We really just need to work through the slack (the easy part) and adjust through the supply structural investment changes (the longer harder part). A major hurricane and all bets are off since it would drive insurance rates for homes/condos and etc. to levels that the state govt can’t step in and put a ceiling on them. State Farm is smart, run don’t walk away.
Interesting article about Justo. This article and the one about Hollo and my own experience teach investors not to be greedy and very cautious. Only those did not make mistakes who did not try.
Yes those who invested in 2005 in Miami made mistakes. Did Hollo make a mistake building Opera? Yes he did but his life experience tought him to do 1 project at a time. So he can survive. At the end he can emerge as a winner.
I can do probably 4-5 small deals/month but I hold my hand and do 1 deal at a time. Hollo tought me.
At the same time I share AJ’s enthusiastic vision of Miami and its future but I also do my math and try emotions to be there but not prevail over some rational approach.
The bottom line: there are tons of investment opportunities there but do not try to grasp all of them at once.
It looks like we will definitely overshoot to the downside (i.e. below the long term affordability and inflation adjusted price trendlines). At that point we may get a V shape recovery back to the trend line sometime after the real economy recovers. And then an L shape in real prices which was generally the case with home prices from 1947-1997. The memes of “home prices never go down” and “real estate is the best asset class” will be out of fashion for at least 10-20 years.
Petronius post #45 – I concur.
Bubble:
See NASDAQ late 1990’s and compare to today’s levels. No reason why the Miami condo market has to be any different. The parallels are just too juicy. Consider:
-Valuations went out the window. Companies traded for 100’s of times expected profits. Condos traded based solely on ability to flip to the next guy at a higher price, rental income be damned.
-Supply in tech companies was at first very limited (small floats). Supply exploded right before the crash as everyone who could cash out did.
-Cheerleaders hyping the assets to the moon. Stocks had Blodget, RE had the NAR.
Differences:
-stocks are liquid and transaction costs are low. You can basically get out whenever. Not so for your condo.
-stocks don’t have a high carry cost.
-most stock portfolios are not leveraged 20+ times.
I love Miami. It’s a great city. Do I think condos are a good investment at today’s FORECLOSURE levels? No way. Fasten your seatbelts kiddies. This train has another few drops to go.
|__________________________________________________|
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I see a U shaped recovery
I agree with you guys. I asked the question because I am of the impression that some bulls on this blog believe that as soon as prices stabalize they will shoot up back to peak prices. The analogy to Nasdaq Market is a fair one, peaked at 5K in 2000 droped to 12oo in 2002 now The nasdaq market is approaching those lows again. Nasdaq first reached 1500 in 1997, 12 years later we are back below 1500. I don’t think we will see Nasdaq 5k for a while just like we wont see those peak housing prices if ever again.
We are still in the recovery stage. Recovering to value and sanity. The slow pace of this condo recovery will just prolong it. It will be very interesting to see if any of the bulk buyers make a dime over the next five years. There best strategy would be to put the units back on the market now and make some small gains while killing all of the poor souls holding on a for a miracle ‘rebound”in prices.
The Smart Money thought this Flipper was a sucka when he paid $209.00 a square foot and this proves it…….
ABG Sundal Collier a card carrying member of the Smart Money closed on a bulk purchase last week paying $24 million in cash for 141 units of the Whitney condominium in West Palm Beach.
The Smart Money paid $144.00 per square foot, or $170,213 a unit. That’s a significant discount from the $247 per square foot, or $311,348 a unit, that developer Miami-based Evernia Properties owed the lender prior to foreclosure.
$125.00 is just around the corner, hang a tight five.
The Smart Money, in action once again.
I see the Miami Real estate market to be more of a sickle shaped recovery.
2002-2008 prices are never coming back. however, once prices hit 1999 levels, demand should pick back up, and there will be a normal real estate market with people actually being able to sell houses.
The problem is that people are praying for a recovery back to 2005 prices and the fact is that simply is not going to happen ever again. Maybe in 2030, when inflation raises the median income to quadruple what it is now we will see 2005 house prices but the reality is Miami will see a demand recovery, but NOT A PRICE RECOVERY.
Prices will drop to 1999 and just sort of level off slowly increasing with inflation from there in my opinion. (never coming close to the glory days of bubble prices)
jcrimes said “looked at some places over the weekend. the reality is that there is outright capitulation in single family homes and to a lesser extent, townhomes, all in decent areas. condo deals are still harder to come by”. Unbelievably true! I looked at many single family homes in Miami shores in early ’08. Tiny Pieces of shit holes are asking for 400K. Then you have to sink in another 100K to make them livable. I was quite disgusted and settled for a condo. Glad to know that SFH are crashing in price.
The reason why condos are still holding is because of what I said before: 1) Developers will not discount to individual buyers. 2) Bulk buyers will not sell 3) Individual investors, who have the capacity to hold will hold for the next 4-5 years. That leaves just one option, Individual investors, who got foreclosed will be available for retail purchase. Unless there is an avalanche of these foreclosures, which may happen if there is prolonged recession, the condo prices will stubbornly hold on to nearly current levels (albeit 30% down from 06 peaks).
This is not my wish. I am just stating what i think might happen.
RT: “This is why I love AJ, the entertainment value is just too much fun in the morning.”
RT, If only you put me in your Will for all the happiness I give you every Morning 🙂
AJ, your description may hold for a few buildings in Miami which were able to attract enough wealthy individuals in preconstruction to weather the storm, but it will not be the common theme in miami condos in general for brickell and miami. developers will be forced into bankruptcy within the next year, or most likely will continue firesale bulk sales to avoid bankruptcy. the bulk sales will not cover all units, so eventually the developer will firesale the remaining units individually. this will result in the foreclosure of many investor bought units through the preconstruction period. in general, prices will fall further than your 30% down from peak. they will fall even below what is considered an affordable price.
unaffordable real estate prices will be gone for the next 7 to 8 years-nothing will move unless it is priced affordable to rent and incomes in an area. and miami condos will very much struggle with this issue. at the end of the day, it is the HOA situations which will continue to hound miami condos. unless those costs can be placed under control, and proper maintenance of the building still occurs, miami condos will continue to be a money pit. as for future appreciation, buildings with large bulk sales will become defacto rental buildings. How well do you think prices will hold up over the next decade when selling a condo conversion?
AJ, you fail to address what I asked. When bulk buyers rent these buildings out, they can do so for MUCH less than speculators like you who paid full price. They will also have better control of HOA waste. So when the bulk purchaser, who’s got his sh*t together rents out those Marina Blue units at $1200 for a one bedroom and $1700 for a 2 bedroom, with the building being well maintained, how are the flippers at 1800 club going to compete with that? 1800 club has no reserve. First special assessment they get hit with and BAM, foreclosure city.
BMW, lets visit the subject when that happens.
gables, you may have a point. Bulk buyers may not be enough to rescue a building such as Icon which is just 0.5% closed. It will be facinating to see if there will ever be a fire sale of flats by the developer for an individual buyer on the street. Such a scenario may or maynot happen. That is why I am cautioning the buyers to look out for a good foreclosure and grab it and not wait for some pie in the sky (bulk priced sale to the man on the street to happen). Because if it never happens, then what?
It will be a “cruel summer” for Miami condos in 2009:
http://www.youtube.com/watch?v=KgcTHf3tbtc
Another way to look at some of these buildings. Over the next year there will exist a number of bulk owners in many buildings, regardless of whether any “bulk sales” occur. these bulk owners will be the banks. and they will, and are now on occasion, offering fire sale prices. i will guess banks will own as many or more units as would a bulk buyer. bulk buyers and investors will face an owner/seller with which they cannot compete. this will be fascinating as it unfolds. if you have a long term time horizon, you may escape significant damage. but over the next few years there is significant risk in owning a volume of air in a building rather than actual land. prices will not stabalize or rise until the foreclosure process is finished-my guess this will go on for several more years.
It will be a long time until we get “back” to pre-crash price levels:
http://www.youtube.com/watch?v=ru_fcdcmY6g&feature=related
Interesting macroecon take on things. Watch the video in top left corner of webpage. Add to the quote below the Trillions of credit the fed govt will suck up really really changes things go forward and bad for the American lifestyle, er I mean debtor lifestyle…..
“An $8 trillion negative wealth effect from declining home values.
A $10 trillion negative wealth effect from weakened capital markets.
A $14 trillion consumer debt load amid “exploding unemployment”, leading to “exploding bankruptcies.””
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