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wow…tibor’s schlock lawyers drafted that for you? hmmm…i could write something better than that drivel.
It’s a sad day when someone has to apologize for exercising their freedom of speech, at least in America. You are the bigger man for doing it Lucas. I respect you. You’ve got class guy. I guess that’s why you are as successful as you are! I wish you continued success in 2009! Peace out.
I’m glad at least this unnecessary distraction is over for Lucas. I second La La’s opinion.
Man, if I were Mr. Hollo I would concentrate on providing a value for the dollar versus pursuing some blog nonsense about whether some word was being used as a legal definition or not. Oh well, live and learn. If the guy or his company ever does go the big BK, well then we can all say that he should have paid more attention to his knitting instead.
Agree with everyone here, great stuff Lucas.
Now, what was your prediction on closings? How far off were you given that it’s now only 37% closed based on your last post?
I disagree with everyone here.
Lucas did the right thing .
Tibor Hollo has build a lot of wonderful properties in Miami, and his next project will trump
them all.
As for the Opera Tower,The building is a very easy building to maintain,and security is tight.
There is nothing frivolous to take care of.
simeon g.
Cheers, Lucas.
Hmm let’s see. 37% closing rate in December. Great success. Maybe you’ll have to drop these stats on future posts, Lucas.
Thanks for doing what you had to do.
Right wrong or indifferernt..it’s a sad day in 1st Ammedmendmant rights when a prepared statement has to be made in order to dismiss/settle the waste of time these frivolous suits.
In any event let’s move on…so neither Tibor or Lucas be distracted any longer by this.
Now Tibor can concentrate on finish closing his building and Lucas focus on his work as a realtor and this blog.
RENTER TOM……what do you have to say about this?
Hang in there Lucas…. you chose the wrong word in a blog post so a guy with money strung you up for it. Many great people have been rolled by big shots with money, so join the club.
I’m glad you wrote the apology and now you can put that behind you….
Congrats on doing a great job!!!!
I say Mr. Hollo way overreacted. I don’t know if Mr. Hollo first asked for a retraction or just filed suit. If it was the later, then shame since disputes should always be handled face to face, not in the courts. Perhaps there was a PR motive if a lawsuit was filed first? I do not take kindly to bullies and what goes around comes around…esp. with lawsuits which I am sure Mr. Hollo and/or his company will be involved in many new ones for 2009. Moreover, “predictions” are just that … predictions and really need no foundation to make whatsoever. I predict the Dow will be 100,000 on June 30, 2009….have DJI sue me if I’m wrong…. moreover, had our hose predicted 100% immediate closing rates for Opera, would Mr. Hollo have still sued??? Or perhaps those that decided close when they shouldn’t sued instead??? It was probably the bankruptcy thing that got the matter out of whack. Oh well. I’d have filed an answer, affirmative defenses, and a counterclaim and moved for discovery and depositions…then you’d get to uncover a lot!
It is so unfortunate, this law suit thing and all.
I don’t know how many of you actually been inside Opera Tower. I did. I wrote many many times about that building. No need to go into that again. Just to sum up, it is a third class building in a first class location.
When I was first looking to buy in downtown area, which I did not know very much, I used the help of google satellite imagery and after many considerations, calculations, research, declination of the Sun at different times of the year, shadow cast of the buildings etc I finally zeroed in on Opera Towers. If you are sufficiently high enough to clear the Double Tree Grand, and have either line 01 or 02, you could have the best views in all of downtown. It will be the only units in all of Pace Park/OMNI to have the views of Downtown and Bayside Marina apart from bayviews. I used to dream of owning a flat in line 01 or 02 above 40th floor in Opera Towers.
In 2006, I offered someone 599,000 to buy his contract at face value for a 2/2 (lines 01/02). The silly coot rejected my offer! Where ever you are, whoever you are, if you are reading this, accept a thousand salutes for saving my life and my arse. Thank You.
But the rest is history as everyone knows what Opera has turned out to be. Even if Lucas was singing hosannas to that property instead of being truthful, it would not have mattered as the cat got out of the bag. When I asked one RE agent to show me the tower, he said, do not waste your time or my time. That is very rare coming from a RE agent. Eventually I used my own wits to see the place.
I wish I could repeat all I said in my earlier posts about my findings but it is water under the bridge. No point raking it again. The best use for that building will be a hotel. It looks nice from outside at least. I hope Tibor can work out a deal with a major hotel chain to convert it to a hotel as some rumours are to be believed. After all, I would like to see Opera Towers to be fully occupied as that will be good for my neighborhood.
I have friends that rent there, and from what they tell me many of the occupied units are renters also… not a good sign. I can understand why Hugo would be upset about false accusations concerning him however his law suit on Lucas was an EXTREME over reaction. I certainly hope such a formal public apology from Lucas puts an end to this B.S. bulling game he was playing. On another note I hope all you blogers using his site strongly consider using Lucus as your realtor when you are ready to buy/sell/ or even rent, from what I have seen he seems like a capable realtor. Best of luck Lucus!
Crap !
Were you condemned by the court to publish a public apology ? You shouldn’t !
Lucas, we all admire you for depicting the right image of Miami realty. We love your blog, but you might loose your readers by submitting to the power of those crooks…
Hollo should be ashamed of himself and I do hope he eventually goes under and files for bankruptcy… (and I am sure this is not only my personal opinion !)
I think now from all the comments I read here, that Hollo will have even more bad publicity for his name and projects and that it will harm him more than it will harm you !
Cheers ! and take care…
Terry
New post please. This one is really boring
Lucas,
What about the update of the condo rankings ?
The Smart Money will make no apologies now or in the future for our prediction of $125.00 per square foot unless, as was the case when a Unit recently sold for $122.00 per square foot and another $99.00 per square foot.
The Smart Money gives no quarter and expects no quarter in our quest for success.
Lucas,
Hopefully this is all behind you now and the worst that came out of the lawsuit was the apology letter.
Cheers and a successful 2009!
Lucas
Not sure if you’ve addressed in any posts & it really isn’t any of my business but I’m wondering how you did sales-wise in 08′ versus the previous 3/4 years?
I agree that freedom of speech is critical and that it’s unfortunate that Lucas had to make this statement but with the power of his position comes responsibility. I for one would not like to be misdirected into believing someone went bankrupt or not. News services have an obligation to check facts and as the author in this alternate medium shouldn’t there also be some check and balance? Comments in a blog should be free form but this blog is tied to a realtors business and as a business leader I’d like claims to be accurate.
BTW I toured several of Tibor’s buildings and quickly walked away.
NJ Dave,
I agree with you on responsibility of facts, whether in a blog or a newspaper. However, when mistakes do occur, and are not deliberate, then a correction and apology at the time is sufficient. I would worry about doing business with an individual who sued a blogger over comments in a blog. What happens if i have issues with the product or business practices of such an individual? Will i get sued for complaining in public?
“Additionally, the prediction I made regarding contract closings at Opera Tower was unfounded, and I’ve been proven wrong.” WOW!! What was the original prediction? That whopping 37.01 closing percentage after a year of trying is hardly impressive……is there a bank that has lent $$$$ on this property?
Muir post 172
Didnt you just move to Miami? Just one more example of the creeps they are letting in. Glad your not in downtown Miami there goes the neighborhood lol.
Did Rybak’s Cafe open at Latitude on the River?
Lucas,
I hope you wrote this voluntarily and not only because you had to as a settlement of a lawsuit. As a blogger with a large following it is important that you provide the public with accurate information (besides your opinion) and that when you provide facts you need to make sure these facts are verified as to its accuracy. Hope you learned your lesson. Thank you!
It is absolutely pathetic that a developer will resort to such tactics in an attempt to clear its name and boost an already-damaged reputation. FECR should have built a quality condo and this would be a non-issue. Let your buildings speak for themselves- the fact that they seek retribution from a realtor and his blog is pathetic.
In fact, I think their demand of a “public apology” will backfire, since the majority of comments will be critical of FECR and remind all readers (old and new) that Opera Tower is a poor investment and a poor place to live.
business is business folks lets just move on.
when you provide facts you need to make sure these facts are verified as to its accuracy. Hope you learned your lesson.
=================================
Have you told that to any major newspapers in Miami? May be someone has to put together the articles published by them for past 5 years.
I think we all understand what we just read. No need to discuss it further. Lucas was complying with a settlement agreement.
Unlike a lot of blogs, Lucas put his real name up there, and I respect him for that.
Also, if Lucas has any sense, he won’t be replying to threads on this post. If you like this blog, and want it to continue, I suggest the best way to help Lucas is not to comment any further on this thread.
Well, Lucas, accuracy while reporting news is paramount. You have a large following, so you have to be careful where you step. You’re walking through minefields, now. The First Amendment only protects freedom of speech when it is truthful.
Your blog is great; the best RE blog I’ve ever read. That bitter taste in your mouth from having to post that garbage is bile. Spit it out and continue, and don’t put yourself in a situation that allows desperate men, such as Hollo (such a fitting name, isn’t it?) to hold you hostage with their paper thugs.
Hollo, you fled Hungary to escape the Soviet takeover, da comrade? What you just forced Lucas to do was a page out of the politburo’s handbook. It’s amazing that you’ve lived and flourished in America for over 60 years and still have no idea what it means to be American.
You’re 81 now, I believe. The bells tolling on your life’s clock must be deafening. That’s the grave calling, old man.
In my opinionTibor Hollo has built nothing in Miami that is architecturally worthy and nothing which will ever withstand the “Test of Time”. Witness the Grand etc. and then take a look at his proposed project on Biscayne Blvd and SE 1st st which i believe is called Biscayne Plaza – the renderings of a 70 story hotel and adjoing office tower is supposed to resemble a sail. How imiginative. Its downright ugly again in my opinion. Mr Hollo comes across as a somewhat – in my opinion bitter and vindictive man. At his age you would think he would consider his legacy which in my opinion will not read well in his obituary. Just an idea, but he might salvage whats left of his in my opinion sorry legacy by permanently donating the 3 acre parcel he just temporarily donated as a “temporary “park near Brickell on the bayfront instead of building another in my opinion god awful piece of ugly architecture that blocks everyone from a meaningful view of our beautiful Biscayne Bay! After all Tibor, you cant take it with you. They might even name it after you since you are so adamant in preserving in my opinion your tarnished name.
While it is always a noble thing to correct errors, I don’t see how anyone could believe that your reporting of Mr. Hollo’s real estate project was done maliciously. In Times v. Sullivan, there were factual errors in the New York Times’ article about Alabama’s Public Safety Commissioner, Sullivan’s conduct and actions toward civil rights demonstrators. The New York Times’ article was basically correct. The police and state troopers in Alabama were using unnecessary force against non-violent demonstrators who were seeking to end segregation in the south. The fact that there were minor factual errors (which Sullivan claimed defamed him), was insufficient to overcome the public’s interest in a free press. I hope that you will continue to report the news about south Florida’s scandalous real estate market in an unencumbered and robust manner, without fear of SLAP (strategic litigation against plaintiffs) -like lawsuits.
I would have liked to have sat on the jury in this case and when Tibor Hollo sought to prove that your misstatements had damaged his reputation and good name in the community, causing him to suffer damage, I would have laughed so loud the courtroom would have rocked. I hope that Mr. Hollo invested heavily with Bernie Madoff.
Keep up the good work.
Sad–but it will probably stop the monthly billing from the lawyers. Bullies are usually have a whole book full of issues.
It is mind boggling to me that so many of you think calling a developer a bankrupt while talking about a current project the developer is working on is not a serious matter. Although in a few years being a bankrupt around here might be a badge of honor, historically it likes calling someone an adulterer, murderer, child molester, etc. I am certain in my own mind Lucas didn’t know his statement was untrue when he made it or he would not have made it. But he goofed. Life goes on. I look forward to reading this blog in 2009 and beyond.
Merry Christmas!
A lot of people have been comparing Miami Beach, Downtown etc to NYC. I have no idea why anyone would compare a filthy, ghetto, 3rd world city like NYC to beautiful South Beach & Brickell? The residents of NYC pay their taxes in gold literally and they have pothole ridden roads, overflowing garbage on streets to show for it. Manhattan is full of people from the ghetto at all times of the day. And now the blind gov is going to add more taxes. That just makes it even more exciting.
Lucas,
I read your blog often and believe you are doing an excellent job of tracking closing and foreclosure data, as well as unit and per square foot prices of the Miami condo market.
You are obviously very passionate and dedicated in understanding the intracacies of our irrational marketplace, and communicating pertinent and important information to your blog readers and customers. I also want to compliment you for not hyping and fluffing the market (like the vast majority of RE sales people) to make a commission check. Honesty and accuracy will always pay you greater dividends (and restful nights) in the long run.
Keep up the excellent work in 2009!
Best regards.
Jack McCabe
I would like to know more about the Solaris. Does it have maintenance problems? foreclosures, maintence fees, etc.
I heard that Tibor’s sons are actively involved in their dad’s business. I wonder how much role they had to play in this whole saga. In any case, judging from the responses, Lucas has no shortage of admirers or supporters.
I am pretty sure Tibor, his off spring and his lawyers are reading every word written on this thread, the apology as well as the reader responses. All I can say to them is your victory is a Pyrrhic victory.
Unfortunately there are no winners in this battle. Neither Lucas nor FECR.
If there are any, it is the blog readers.
As I am assuming FECR is reading this, can you guys make that into a hotel already? And also please fill that 8000 sf restaurant space below with something good so that we can all enjoy it in our Pace Park neighborhood. And lastly as there is nothing you can do to change the floor plans or structure, the least you could do to those poor souls who closed, take those 1950’s style exposed coil stove tops and replace them with modern cooking ranges like all normal buildings have.
I don’t know how long Lucas has to display his apology on top page as per the settlement/verdict(?). But I just want this thing to get kicked down by a new thread and we can all move on. It is distracting us from talking about all things condo.
Well done Lucas, I find your blog one of the best around. It would be great if we can move on now.
I am looking forward to reading more comments from the posters in the new year. I wish everyone a very happy holiday season, Merry Christmas and a Happy New Year!! x
AJ,
You crack me up! Good advice! And yes, I’m looking forward to a new post already too! Wishing everyone a safe and happy holiday, and a 2009 with good health, peace, wisdom and love.
Correct me if I’m wrong, but wasn’t there supposed to be a bayside pool at Opera Tower? They have huge pictures on-site and on their current website showing a nice pool overlooking the bay, but they only built the one pool in the back of the building. Did I miss something?
Jack McCabe,
You are well liked in HBB.
Though you yourself were slow to get onboard with reality.
Some of us called it in 04 and 05.
Still, congrats on your honesty, diligence and integrity.
Prosperous New Year.
–
Still can’t help it, 🙂 we told you so in 04 and 05 🙂
Found 3 rentals in the Ivy for $1600 in the Ivy.
All are 2/2s.
How does this bode for prices?
🙂
Miami-Miami Beach to drop another 23% in 2009:
http://money.cnn.com/galleries/2008/fortune/0812/gallery.worst_markets.fortune/4.html
Mobi – That is why I have pretty much written off 2009 to buy….it would have to be a very good deal to get me to buy at this point….renting continues to make the most sense. And as I have posted, Cali is going to fair worse overall w.r.t. total $$$ lost. Maybe I’ll pick up a little condo on that coast too once things shake out… Anyone that talks about a real estate price “bottom” in 2009 in Miami is nuts….
Roger,
NY is the most expensive city in the US. It also has the highest salaries and rents. That is why property values in Manhattan are higher. Property values are based on income and rent and nothing more. 64% of the housing stock in Miami Beach is condos. That means a great majority of people in Miami Beach live in condos (and not just the 100 rich Russian oligarchs that have property here). The median and average salary is around $28,000 to $30,000. That is why in median and average terms condos should not cost $500,000 (last year this time) and $350,000 (current), and they will eventually end up in the $100,000 to $200,000 range as they were in the 1990s (or the inflation adjusted equivalent). Get it?
Correction Roger – Correction….it is only incomes that determine these things, not “based on income and rent”. Incomes drive rent rates so incomes are the bottom line in all of this…rents are just reflective of what people can actually afford based on incomes without any financing gimmicks. As this structural recession unfolds and the FIRE economy gets smashed, NYC incomes will drop and so will rents and home prices.
Also, in response to Muir — not sure how the fed govt will be addressing/financing the huge fiscal deficits going forward….if they monetize the debt (which is what you have been implying put the increase in money supply doesn’t indicate that yet since they are just filling in for lost credit/liquidity at this point) then yes inflation will be the later result, if they finance the deficits through debt then there will be less inflation but there will be a higher insolvency risk. In these global troubled times, the U.S. is still a place for safety and wealth preservation. Regardless, I will be developing a plan for either scenario (deficit monetization or via debt financing or combo) over the next 3 months so that I can implement Plan A or Plan B (with a Plan C on the side too). I like to stay ahead of the curve since stupid and costly errors are made during panics.
The rent is dropping on AJ’s beloved 05 and 07 line on a high floor in 1800 club. Now at $2100 with no takers! Oh no, poor AJ!
900 guy – But but but …. don’t those have the best views to put others to shame and envy??? I warned AJ, tried to convince him, but he is stubborn (or a salesman since he is trying to sell one NY property now). The schizoid behavior of belittling, then befriending, then name calling, then being haughty, promoting that only the “special” people will be in such and such building is getting old. He will get what he invested in. Perhaps hanging out in clubs…with “rope lines” etc. distorted his perception of the world and reality….a lot like those realtards that got too close to the condo mania and jumped in too. Oh well, live and learn…live and learn.
Dear Dumb and Dumber,
3707 had an issue. Someone paid a full months advance and then moved to Venezuela and it came back on the market. The owner already got a months rent. He is now discounting that off from the rent. In any case $2100 is not that bad compared to the average $2200 05’s and 07’s are going for. Obviously you guys don’t own anything, otherwise why are you crying and worried about other peoples properties?
Dear Dumbest (AJ),
Wow…very weird. You seem to be in EVERYONE’s property then ask why anyone comments on your real estate cheerleading (not nice to encourage people to make bad financial decisions). The next potential renter doesn’t give a hoot if someone paid a months rent and left, that potential renter still may not pay that price. Obviously I do own things…a lot more than you, I just don’t invest in just one area like you have and I also declare all my income for income tax purposes.
Happy Holidays to everybody!
Everyone is right on this blog. AJ is right, renter Tom is right and some others. Unfortunately your stream of thoughts belong to end users and not to investors. Investors operate in any market. Their stategy changes. Investors do not wait for years until the market is right. They operate in the current conditions. Investor’s mentality is very different from end user’s mentality. No emotions just pure business approach. It is easier to say then to do. Today in Miami there are some great deals and you can make money today in Miami as I do.
As far as Opera is concerned Lucas did the right thing. Hollo has overeacted. BTW I like Opera’s architecture. I have never been inside.
As far as some great theoretics here who did not make mistakes when the market was inflated – good for them but they did not make mistakes because they did not do anything even when the market was right and other people did make a lot of money with real estate.
Lara
when you say you make money on deals…please elaborate. what exactly are you investing in? and what are your alternatives that you’re passing on?
At least I do not have to use confirmatory parenthesis. It seem to have hit the right spot LOL.
Anyways, the readers here know that I was minding my own business until some arseholes took my name unprovoked. Perverts will be perverts. I just cant seem to stop these trolls from jerking off thinking about me. Oh well, in the spirit of the season, I will just let it be.
Happy Holidays everyone.
AJ – I believe it is spelled LITHIUM….stick with it, I know you can do it. Yes you can!
Brian #43 said: “Correct me if I’m wrong, but wasn’t there supposed to be a bayside pool at Opera Tower? They have huge pictures on-site and on their current website showing a nice pool overlooking the bay, but they only built the one pool in the back of the building. Did I miss something?”
———-
If it’s a Real Estate Ad, there’s no real obligation to make the advertisement remotley accurate. In the ad, you can stick the condo on top of Mount Olympus and put a crown on it made of diamonds and pearls. Heck, in tha ad, you could state the building will come with complimentary Playboy models M-F and a complimentary Bentley+chauffeur. As long as they are not promised in the condo docs, the developer can have a field day with the truth when running ads… there’s only 1 thing worse than a developer, it’s a developer in Miami.
That’s how we do it down here… get used to it or go back to your Red state.
Jcrimes,
In this market I do wholesaling mainly in Ft.Myers. I built up my buyers list of about 50 people whose goal is more long term and who have cash to buy now, rent(sometimes) and get a bit of positive cashflow. These are properties not for me to live so I put aside my personal tastes. BTW there is nothing wrong with these properties. They are quite nice and some of them are very new.
Profits are nothing comparable to good years but they are quick from $5,000 to $20,000. In this case one does not have to be greedy. Investor should not be greedy in any case. I learned that from my own experience. In Miami there are some great condo conversions in very good locations where prices dropped dramatically due to foreclosures where rents cover all expenses. As of now you have to find them. It is a process and requires some negotiations. You can earn about $10-15,000 right away.
May be it is not the only strategy and not the best one but it works for me.
You can also find some great deals on land lots. IT is all over Florida. You have to investigate different areas and always be aware what’s going on because prices change.
As far as some great theoretics here who did not make mistakes when the market was inflated – good for them but they did not make mistakes because they did not do anything even when the market was right and other people did make a lot of money with real estate.
=================’
Only REALTORS made money off unsuspecting people. How do you sleep at night? Realtors talked the buyers to pay more and more. Introduced them to mortgage brokers who know how to say YES! What about the poor children who are homeless now? All those broken marriages! What about those kids who have to live without one parent?
Lot of talk – earning $10-15K in few days …. What are you selling here?
Poor and Unemployed,
This blog is called Miami Condo Investments. I was speaking about investments. I am not a realtor. I had my share of losses due to poor judgements when prices were inflated.
I do not blame anyone but myself.
What does it have to do with world’s problems?
I am not trying to sell anything here. That’s for sure. All I am trying to do is to focus a bit more on investments rather than to buy condo for living there yourself. That’s it.
Lara,
I am happy to see that you write some positive news. There are people that are making money in this market. I have associates that are helping investors, who are liquid, earn 10-20% in 30-60 days. As you mention… you have to find the deals and there are many deals in Miami. Problem is that most who write in this blog only tell of stories they hear or read, but never actually get in themselves. Yes, there is alot of bad news in the press and in the streets, but if you were to actually get off your couch or get out from your computer chair and look for deals you would find them. In any market, whether good, bad or no market there is money to be made. As a great author once wrote, “you might well remember that nothing can bring you success but yourself.”
JoeL said: ” I have associates that are helping investors, who are liquid, earn 10-20% in 30-60 days.”
– Really? How? In real estate? Both through research and in real life, I haven’t seen that. Please elaborate.
JoeL said: “I have associates that are helping investors, who are liquid, earn 10-20% in 30-60 days.”
JoeL should have said: “I have associates that are helping investors, who are liquid, earn 10-20% in 30-60 days… but most of the time the investors don’t make anything or lose 30-40%, but that’s besides the point as my associates always get their cut and so we don’t dwell on that minutiae.”
So scripted, so arid, so distant, so linear it’s like a big fat joke……It’s like penance I did at private school . hehehehheheh I will not……I will not……lol Imus not talk in class ….lol
Have you guys seen boiler room? Same deal with realtors and mortgage brokers. Pretty sad. So my uncle has a few mil to invest but no financial sense. What do you think about retaining Peter Zaleski?
Dubai guy,
since it is Lucas’s blog. Go to Lucas. He has some great deals or he can research ones. Yesterday just by going on craiglist I found 1 or 2 potential deals that could be great. Lucas can do excellent job for you. First you have to discuss and outline your uncle’s potential goals and then go to action.
yeah, I also found what seemed to be some great deals on Craigslist:
In one, I just need to send all my money to the deposed king of Nigeria, then six weeks later he sends me millions of dollars! In another, I send all my credit card numbers to the Russian Lottery, and if one of the numbers is lucky, I win a prize!
However, my night with, “horny teen cheerleader nymphomaniac” is something I’d rather forget…..
RT,
Plans:
1. gold
2. ?
3. ?
1. gold
2. platinum
3. silver
Wow – the housing news just keeps getting worse and worse. I never expected it to get quite this bad, especially so quickly. It is going to be a really loooong 2009…can we just fast forward to 2012???
Home sales, prices in deep plunge
Realtors: Sales of existing homes fall 8.6% – much worse than expected – as median prices suffer worst decline since Depression.
http://money.cnn.com/2008/12/23/real_estate/home_sales_November/index.htm?postversion=2008122311
Perhaps LL erred in citing a past BK, but perhaps LL is the new Nostradamus and was really predicting the future for Opera….time will tell.
If this is a duplicate post, sorry, for some reason it wasn’t showing up so tried again…
What do you guys think of platinum? Lowest it can go is 400/ounce. I can get a platinum eagle for $930. Watcha think?
Happy Holidays everyone! I’ll be back shortly after the New Year from the blistering cold.
Hey people! Miami condo prices are in a time machine and are now back to 2003 levels! WOO HOO! Only 4 years until we can “party like it’s 1999”!
10 worst real-estate markets for 2009
4. Miami-Miami Beach
2008 median house price: $293,590
2009 projected change: -22.8%
2010 projected change: -6.4%
Miami will be nursing the hangover from its epic building boom for years to come. After falling 22% in 2008, prices are predicted to plunge another 23% next year.
money.cnn.com/galleries/2008/fortune/0812/gallery.worst_markets.fortune/4.html
^
^
^
🙂
🙂
🙂
Ace,
If you are out there, the miserly money is still calling $75 psf.
Guess-estimate—–> 3Q 2009
–
–
MERRY CHRISTMAS
The new home sales figures are bad, but in a good way. The faster we hit bottom and reach realistic prices that get buyers off the sidelines, the faster the huge overhang of unsold inventory will start clearing.
An ugly rapid descent in early 2009 is preferable to a slow & steady decline that could last until mid-2010 or later…
On a non-real estate related note, holiday shopping this year is phenomenal (if you have cash) – I don’t think I’ve ever seen this kind of discounting… ever!
It’s called deflation Ernst.
Wait until June.
Muir,
Your numbers are a bit optimistic for all of downtown Miami. I think we will hover around $75 psf in buildings like Vue, Club, and Loft1, but higher end buildings won’t drop nearly that low.
Also, this will take a while to happen. We won’t be there by 3Q 2009, I think 3Q 2010 will be a little more accurate. Obama will do all he can to prop up the housing market, resulting in a slow death. I intend on seeing a lot of bailout programs geared for homeowners in distress. These will likely be in the form of tax credits, low interest rates, and other incentives to try to keep the housing market afloat.
Personally, I would like to see some of the higher end investory (900, Jade, ICON) drop to $250 psf before I pull the trigger. Or am I just dreaming?
Jane Q
I don’t think you’re dreaming. Obama can do whatever he wants nationally, but at the end of the day, the real estate market is a localized affair. And with Miami, the end users simply aren’t there at today’s depressed prices, nor tomorrow’s.
Jane Q Renter,
No, you are not dreaming.
And yes, I meant $75 psqf for the the Vue, Club, loft1….
Higher end at -$250 is almost a given at this point. Frankly -$200 is quite possible.
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I do disagree on the timing, it will happen fast.
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Now for something really wild see next post.
Want to see a bubble that surpasses Real Estate?
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Money Supply (one page PDF)
research.stlouisfed.org/publications/usfd/page3.pdf
Yes Muir, we know about the money supply. I don’t see it currently being an issue since the credit and liquidity collapse and to date this is merely an attempt to fill the void left behind. The alternative would be a depression….we need some inflation to prevent a complete collapse in asset prices, especially those financed with nominal dollar debt. Regarding the large fiscal deficits projected for 2009 and 2010 are a concern, but again they will be financed through debt instruments, not cash.
1) The massive expansion of the adjusted monetary base goes mainly to Banks/Financial Institutions. It doesn’t get put into circulation directly.
2) M2 is the most reliable measure of liquidity in the hands of hoseholds. It’s what they can spend.
3) M2 grew only +1.29% YoY by 9/30/08, after inflation. So there really isn’t more money available
4) What really matters is the velocity of money: M x V = GDP (nom). Although M is increasing rapidly, V is collapsing (banks are hoarding cash).
The government can’t control V – but with 0% interest and huge increases in the monetary base they are frantically trying to stimulate banks into more lending… but it’s still not working – so they’re looking into alternatives like quantitative easing/buying junk credit card loans/student loans…
The real question is when banks start lending again and the M2 money supply explodes how to slow things down? That’s the ugly hyperinflation scenario on the horizon…
Velocity of Money! Sounds cool.
So should we be afraid of inflation? Hyper inflation?
As intern said, if there is indeed inflation but with out any corresponding increase in wages, we are on the way to become like any other third world country, spending almost all the salary on food and shelter with nothing left for fun or savings. Next few years we are going to see an America like it has never been before. For good or for bad.
I think these problems are so enormous, Obama will be unable to fix any or most of these and will pay the price in 2012 (Bobby Jindal anyone?).
Jade already is below 250/sf. There was a sale at $147/sf and $240/sf according to country records.
AJ, your hopes for people to continue to spend $2300/month on luxury condo rent borders on psychosis. I had a psychiatrist friend analyze your writing and there is definitely manic elements to it. Renter tom, the current recommended mood stabilizer is Abilify (aripiprazole). You are correct though, Lithium would also work AJ.
for AJ
900 guy – I think I had posted the “manic” stuff several times….it goes in cycles (some people apparently are more rapid cyclers than others) and is exacerbated when off meds. Talk therapy, while helpful, by itself is ineffective to treat mania. My guess is mania/BPII with possible NPD. Oh well, it takes all kinds to make up a world. Some just have a little more spice in them….
Ernst – I haven’t reviewed the current stats, but all the cash seems to be filling the massice credit/liquidity void at this point. The fed govt will react accordingly to avoid hyper-inflation but there is a risk of a bump up in inflation for a year or two through mis-timing since the cash needs to begin being withdrawn on the way up not once we are out of this mess. The real and certain risk is the effects of a substantially large fed debt…..I don’t like it, can live with it, but at some point it has to stop stop stop.
By the way, I won’t elaborate on my educational background which allows spotting mental health disorders…..whenever I post something about education or $, people jump in and say I am lying or something….oh well.
Ernst,
RT (just to keep you in the conversation, not a reply)
Are you sure about that Ernst?
Here’s the M2 data
research.stlouisfed.org/publications/usfd/page6.pdf
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You are correct in the V
No arguing that.
In fact, here’s all of it:
research.stlouisfed.org/publications/usfd/20081219/usfd.pdf
(warning 26 page PDF)
The Interest Rates towards the end for 30 day commercial paper and 30 Ts are breathtaking.
Those are better statistics than the one I read.
But still, a 100% increase in the MB in the last 6 months yielded a 4.5% increase in the M2 supply, talk about NO velocity.
Is deflation still here? Immediately, yes.
When will inflation kick in? How bad will it be? Hyperinflation?
Correct answers to those questions make you immensely rich
Ernst,
Agreed.
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Merry Christmas, everyone!
🙂
An alternative perspective is the lack of credit has made the purchasing power of cash more powerful….the opposite of inflation.
Credit fueled demand and inflation….a lot of credit was extended to consumer purchases, autos, and housing…to the point that repayment of principal risk increased dramatically (let’s hope the fed govt doesn’t get into the same situation and is unable to repay principal without devaluing the currency). Credit/liquidity overall has come to a screeching halt causing a structural shift down of the demand curve. Fed govt is attempting to fill the void through cash/liquidity and borrowing to spend. What will occur is a massive shift in demand from the consumer side to, as of now, infrastructure as fed govt spending attempts to create demand. These are uncertain times that will cause even less private capital going to investments… I fear a further spiral and will become defensive accordingly to preserve and grow wealth.
Regarding post #44 by Muir;
Appreciate the compliment, but a correction to your post, regarding not “seeing the bust happen” in 2004-05.
Think you’ll find the following links interesting. They’re from June and September, 2004.
http://money.cnn.com/magazines/fortune/fortune_archive/2004/09/20/381175/index.htm
http://www.inman.com/news/2004/07/5/real-estate-tells-tales-impending-bubble
As Ben Jones of the HBB can tell you, I was one of the very first to call the bust in 2004 and document it with data support for all Florida markets. There’s also many more articles you can find on the internet with my early and accurate predictions.
Back then, I was “doom and gloom” Jack McCabe. Lew Goodkin of Goodkin Consulting and myself were the only analysts in Florida (and two of a handful nationally) to accurately predict the boom/bust cycle and its timetable correctly, and well documented.
It’s funny to see how all the other quoted analysts who didn’t see the debacle coming until earlier this year are now quoted declaring 2008 the worst recession since the Great Depression. They all have plans to fix the train wreck they never saw happening to begin with. Some are analysts that have seen the market through rose colored glasses, and are now speaking at the distressed property seminars as “experts”. The “born again” housing analysts I call them. New life after years of incorrect analysis and predictions.
Oh well. Time to finish my Santa chores for 2008.
Merry, Christmas, Happy Hanukkah, and for you agnostics and atheists, enjoy your days off and family time.
Renter Tom,
I appreciate your commentary on the housing market. But your economics are off.
You mentioned in (84)
“Regarding the large fiscal deficits projected for 2009 and 2010 are a concern, but again they will be financed through debt instruments, not cash.”
Government spending is not financed. Treasury notes,bills, etc only exist to drain or provide excess reserves to the system. The Federal government is an issuer of currency Why would an issuer of currency need to borrow in its own currency? Makes no sense.
Ernst, my comments in []
1) The massive expansion of the adjusted monetary base goes mainly to Banks/Financial Institutions. It doesn’t get put into circulation directly.
[ government spending is the only way to increase the monetary base ,M0 (M-zero), when the the treasury spends new reserves go directly into circulation.
monetary policy, i.e. targeting of interest rates lowers the price of money but it
does not guarantee people will borrow or spend more. Furthermore, I would not
call it that massive in a historical sense. We need a much larger enough increase in fiscal spending to restore aggregate demand.]
2) M2 is the most reliable measure of liquidity in the hands of hoseholds. It’s what they can spend. [ I like macro indicators like the financial burdens ratio = to households ability to service debt which was at a lowpoint last year + the change in the
size of the federal budget deficit. The larger the federal deficit the more net financial assets in the hands of the private sector and vice-versa. ]
3) M2 grew only +1.29% YoY by 9/30/08, after inflation. So there really isn’t more money available [ since loans create deposits not vice-versa, I think weak M2 is only a
reflection of the fact that people don’t want to borrow(because they can’t service debt) + banks have tightened]
4) What really matters is the velocity of money: M x V = GDP (nom). Although M is increasing rapidly, V is collapsing (banks are hoarding cash).
[ what really matters is the size of the deficit which is too small ]
The government can’t control V – but with 0% interest and huge increases in the monetary base they are frantically trying to stimulate banks into more lending… but it’s still not working – so they’re looking into alternatives like quantitative easing/buying junk credit card loans/student loans…
[ The gov can control V with larger deficits which will increase aggregate demand. The economists I follow say the FED needs to lend to banks un-collateralized . But yes banks don’t like to lend in recessions especially to businesses that are going bankrupt]
The real question is when banks start lending again and the M2 money supply explodes how to slow things down? That’s the ugly hyperinflation scenario on the horizon…
[If the hyperinflation is demand-side as I think you are suggesting then its an ez fix.
Just raise taxes. I wish we had that problem to deal with now.]
AJ,
“I think these problems are so enormous, Obama will be unable to fix any or most of these and will pay the price in 2012 (Bobby Jindal anyone?).”
Though I voted for McLame, I like what Obama is saying. Looks like he is not going to raise taxes. He is on the right track. I don’t like his economic staff nominations because
they are deficit terrorists and they don’t represent the change he campaigned on. But I do like what he is saying an apparently going to do: big infrastructure spending, aid to the states, + payroll tax holiday. That’s awesome and will get things rolling again in the economy.
bubbleRefuge said: “Government spending is not financed. Treasury notes,bills, etc only exist to drain or provide excess reserves to the system. The Federal government is an issuer of currency Why would an issuer of currency need to borrow in its own currency? Makes no sense.”
– I disagree. The fed govt borrows money denominated in USD all the time. It is one thing to print money and use that to finance spending, it is quite another to issue a bond. Pretty basic so am surprised you don’t understand that. Your theory of deficits is off.
bubbleRefuge,
Why don’t you look at the 12/08 data for M2 at StLouis FED.
Think you’ll be surprised.
Bubble Refuge,
Saying the right things and having good intentions is one thing. But to actually be able to implement this talk against all odds is what I am skeptical about. This problem is bigger than what an individual or a government can do. If he is successful, great. But I think this mess is not going to unravel in his first term and he will disappoint and will consequently pay for it in 2012. But then who knows. Anything is possible. BTW, I am completely disappointed with every cabinet appointment so far. It is affirmative action at its worst.
The only capable guy in the cabinet (Bill Richardson) is stuck with a lowly commerce portfolio! I know I am swimming against the tide but I find this cabinet silly.
RT, There is nothing to disagree about. It is a fact that government spending is totally unconstrained. The only constraints to government spending are political. They can spend as much as they want with no limitations. They Fed Gov spends first and then buys and sells bonds afterward to drain and excess reserves from the system in order to meet interest rate targets. Any credible source* that understands reserve accounting + open market operations dynamics will tell you this( and there are few).
*Sidebar. 100% of politicians and 99% of the financial press does not understand these concepts. In my humble opinion, it is this fundamental ignorance about money that is the biggest problem we face. If these concepts were better understood, our economy would be much more stable.
Muir, yes M2 is growing. So what is the point? If you want to be outraged about something. I’ll give you something to be outraged about:
The Federal Reserve led by Bernanke is “bailing out ” other foreign banks to the tune of 700b and rising and nobody is saying anything about it. They have arrested the rise of the dollar dead in its tracks by so doing. This is an outrage. Congress argues about tiny 16b dollar bailouts to the automakers etc and the Fed is sending 700b to Europe, UK, Swiss, Brazil, Mexico, S.Korea which debases our currency and lowers our standard of living and not a word is being said about it.
AJ, if he does what he says he’s going to do and what is being reported. We will be talking about the Obama boom some time next year. A payroll tax holiday would immediately give every working American an 8% raise.
Anyone know what percentage paid their property taxes in November 2008 vs.November 2007 for the county.
bubbleRefuge
“3) M2 grew only +1.29% YoY by 9/30/08, after inflation. ”
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Point was your data is not valid.
As far as outrage, I have none, I just play the hand dealt.
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Happy New Years you ‘all!
“Point was your data is not valid.”
being old and all that….
It was a bloody mess outside 88 SE Fourth Street as another homeless man was killed.
http://www.sun-sentinel.com/news/local/breakingnews/sfl-1226miamibeating,0,3783101.story
Well said, AJ, a third rate cabinet for a second rate President. This guy has no clue. The community organizer is going to straighten this mess out? Give me a break. Disillusionment, anger and then hatred will grow as BO turns out to have nothing to offer. Rough justice. Tough job. Doesn’t have a prayer. Short everything.
Anybody in Park West witness this?
Two men are stabbed outside a Miami nightclub with a history of violence……
Should be premium views of this crime scene from the luxury condos nearby. The excitement of living in Miami is the best. Everybody should move here.
Wild Bill,
Are you Mo by any chance?
Mo’s blog is full of inane crime statistics of Miami. But at the same time this is what he wrote in his forum, which he deleted this week of course. He also removed all references to his name too!
Quote 1 ” If I can prevent at least 10 people from buying (which is 10% of the current sales of condos in Miami), then I can make this crash happen fast”
Quote 2, while replying to someone on the blog “just hang in there, we can soon buy a condo for $125/sf”
So why would someone badmouth a city so much, claiming it to be hell on earth and at the same time wanting and waiting to buy a flat for pennies on the dollar?
I don’t know if you are Mo masquerading as Wild Bill.. But the point is you are posting irrelevant crime statistics .Which big city does not have crime by the way? Miami Metropolitan area has sky rocketed to be the 4th largest urban agglomerate in the US after NY, LA, Chicago beating all other contenders such as Philly, Baltimore, Houston etc. For the sheer size of this city, the crime is relatively less. You are just hoping it would scare buyers and thus lessen the competition.
No one even pays any attention to your scare mongering. The only thing people concerned are if their decision to buy – the time, the price and the location are right or not. They are here for a piece of Miami and they will be here no matter what.
Don’t waste your time. You and the other crime statistic posters are actually beginning to look sad.
AJ,
Condominiums are not good investments. They never were. All this talk of price per square foot is boring. Instead of being outraged that another assault has taken place in this 24 hour nightclub area your more worried about real estate values.
“In late spring and summer of 2006, the 6,000-capacity club was the scene of two shootings, one death by stabbing, one stampede, one machete attack and a hit-and-run accident that killed a parking lot attendant.”
This stuff is hilarious. Just like the 1980’s when Crockett and Tubbs were around.
So, it appears to be certain that we will be able to buy condon’s that sold in 05-06 for 5-600K for about 200K sometime in 09-10. My question is, how long does it take property taxes to readjust to the new sale price? The pain will not stop until the sort out the property tax mess. A 200K condo taxed at a value of 600K will bring no buyers.
Crime stats – are they above or below the norm, that depends all on the self serving interest of the individual. Mask the issue to support the status quo or create hysteria to artifically drive down prices, both extremes are priceless!
CB – I too am interested in how the tax situation will unfold since this will be key in any recovery. Will it be a planned reduction or a homeowners revolt?
Regarding taxes, had a conversation with a Realtor on that subject recently. I noted that so-called distressed sales are not used by the county assessor as comparables. She said that when all sales are distressed sales the assessor has to go there.
What a huge problem this is for all parties. Municipalities are going to get hammered on the revenue front when these lower assessments take hold. And buyers who want to buy get stuck with these artificially high taxes. The wake of this housing bubble has left dead carcasses everywhere!
bubble refuge,
Very true indeed. It is time to express outrage over the taxes. Sure the municipalities are going to be hit but then I am willing to adjust to less services. Florida is the most beautiful state in the union. Even the on-off traffic ramp islands on highways are more dazzling and beautified than the sorry looking parks in my neck of the woods in the North. We don’t need so much pomp and luxury. We can scale back on some of this ostentatious display of vulgar wealth obtained by taxing the home owners to death.
wild bill,
If you were a resident of Montreal or Helsinki and badmouthing the crime in my beloved city, I can understand. But you are living in this “cess pool of crime”. Why? You are also wanting to buy a flat here. Why? If crime is your concern, why don’t you move to Naples or Fort Myers with one murder a year, after all they have the same beautiful weather as Miami?
Nah, you want to live in Miami just like the rest of the World. That is where the action is, that is where the excitement is, that is where the conveniences, culture, arts, entertainment, transportation hubs, medical facilities, educational institutions and the jobs are.
You think anyone is actually afraid of someone losing a life in a nightclub brawl? Do you even know how many such incidents are reported in every city in the World, same as Miami? In fact you are 1000 times (maybe 100,000 times) more likely be a road accident victim in a big city than be a victim in a night club brawl or other bizzare scenarios you keep reporting time to time. If we have to listen to you, one should nevre step foot on a street lest you get hit by a car.
It makes your statements total conflict of interest and totally not worthy of credibility as on one hand you want people to be fearful of Miami and discourage them from moving here or buying here but on the other hand, you continue to live there and waiting for an opportune time to buy a flat for pennies on the dollar. What an Irony.
If talking about price per sf is boring to you, you can also take your crime talk to other blogs. Mo will welcome you with open arms as his blog has zero contributors. In fact he pulled his previous forum down as no one seems to be contributing to it except Mark (not Zilbert) spewing venom on Lucas Lechuga.
Another AJ rant…..classic.
Every story about I have reported has been within six blocks of one of the buildings listed on this blog. I still stand by my six block rule.
I will post stories if they fit my six block rule. If Lucas thinks they are inappropriate he can delete the post.
These crimes are taking place outside the clubs on public property. This club did not even shut down after the two people were stabbed.
well wild bill…why should a club shut down because of two stabbings? i mean, two murders, alright, maybe you should call it a night. but a stabbing? i don’t want to pull an alan iverson “practice” rant here, but, we’re talking about stabbings man. stabbings.
I agree with jcriimess. I’ve been stabbed multiple times in midtown. Comes with the territory. Last time I just went into work anyways….
It really really depends on the length of the blade…under 9″ no biggie. A machete, now that is a different matter altogether…
Re taxes coming in line with assessments. Is there any old timers here who owned properties in cities that had RE go bust in the ’80s?
It’s my understanding that after housing bubbles pop, property taxes usually do not come down to reflect the price drops. Assessed valuse may come down but that is usually offset with an increase in millage rates to keep the overall tax revenue from dropping appreciably.
Anyway, that’s my understanding of what happened after the NY RE bust in the ’80s.
It makes sense in that Miami/South FL can barely keep adequate services going with the current tax revenue… drop the tax revenue significantly and they’ll be dumping the trash in the Ocean and accepting 911 calls only between 9-5.
JL – That has been my experience…the millage rate changes.
Yeah Wild Bill (900 guy and other alarmists),
Let someone offer you a flat in 900 or MB (with in your six block rule) for $300/sf or less and you will be trampling all over those dead bodies, elbow jabbing a few competitors on the way to be the first on the line. Isn’t that your raison d’etre on this blog?
Ok the cat is finally out of the bag. If RT has experienced the 80’s downturn and the millage rate changes, he is not a 35 YO retired guy. More like 65 YO. If he is really 35, he should be 7 YO in 1980 and 12 YO in 1985, living with mum in Iowa.
What happened RT? Cat got your tongue? It has been more than 45 minutes and still no response from you after getting caught with your biggest lie. I have always thought you are some old dude. All your descriptions fit an old retired guy, not a 30 something retired guy 1) Living in the retirement section of Miami beach – SIB 2) Not many friends 3) Loner 4) Goes out only while shopping for groceries, that too in Walmart and nowhere else 5) No outings 6) talks as if you know everything and about everyone 6) Has 6 million dollars in the bank made from selling off his businesses and so on.
Well there is nothing wrong in being 60+. I don’t know why you keep it such a secret. No one will think less of you. In fact you will gain more respectability due to your age and acquired wiseness. So stop those pretenses.
JL,
You answered your own question 🙂
I myself do not expect the County assessors office to lower assessments any time soon, but if they have to, plan on millage going up the max allowed.
AJ,
I could rattle you off the unemployment rates from 1929->1940 from pure memory.
That doesn’t mean I lived during the depression, I am just educated, and know those numbers.
Your premise does not justify your conclusion that RT is a liar. You don’t have to own a home in the 80’s to know what happened to real estate in the 80’s.
Just for the record, I obviously did not own real estate in the 1980’s…in Miami or anywhere seeing as I was still in K-8 at the start of the decade. I was referring to my experience in OTHER real estate markets regarding changes in values and the like. Real estate taxes have two factors, assessed value and millage rates. When one goes down the other goes up, and vice versa.
SIB is not that old at all. In fact, it will probably be THE luxury city in South Florida when all is said and done…advantage when you can basically start from scratch by mowing down the motels, impossible economically to do so to 100-300 unit condo buildings. From what I have heard, SoBe is sorta declining. Even the New Year’s bashes are getting significantly dialed back. From some people that have experienced SoBe for 15 years tell me it isn’t like it used to be now that the luxury high rises have come in and those new owners demand the police tone down the partying. One thing that is nice about SIB is everything is sooo convenient… Since I rent, I can pick up and move to another place without hassle…heck I can rent more than one if I want since I rent for half price. There is a great place in SoBe I am thinking about renting so that I can experience that too in 2009. We’ll see.
AJ – The meds (not the club drugs or whatever messed you up) are your friend, stick with them and stop being so catty.
By the way, 2009 is looking to be “dire”. Summers and Axelrod are warning of 10% unemployment now… gee I think I said that many months ago. About 1 in 10 Floridians are already on foodstamps.
The cumulative pullback on spending and investment across the globe is getting scary. There seems to be little appetite for risk taking. Even valuing the risk is tough as seen in stock market volatilities. Previously, during the credit bubble, risk was under priced – as the economy moved ahead almost any idiot making mistakes could survive, now they can’t and there is a real price to risk as we can all see as the economy pulled back and exposed the errors. Only the strong will survive as the amateurs (including the condo floplords) are taken out, not only one by one, but en masse. This is an historic wealth destruction period.
AJ’s behavior is getting more bizarre by the minute. He’s on the cliff looking down.
AJ himself has admitted that he thought the downturn would only last until second half 2008 (the CNBC consensus in early 2008) . He admits to being wrong. However, he refuses to admit that he made a mistake purchasing a condo in early 2008. That does not compute.
I was looking to buy at that time, however I knew this recession was going to be a doozy and deferred my purchase until there is a recovery in sight within 6 months to 1 year. I cannot even begin to see a recovery. What will be the engine of job creation going forward?
AJ cites 900/MB as properties that will never fall below $300/sf, however if we were to optimistically value them on the rents they are asking (and unlikely to get) they need to fall to at least $250/sf. If rents fall (which they will) then the prices should fall even further.
In the final analysis, AJ’s behavior is to be expected. He’s on the hook for hundreds of thousands of dollars.
I’m sure you’ve all seen the article predicting another 24% decline in 09 and 6% decline in 10 for home prices in South Florida. Scary thing is, that’s the average. Some will be much more. With that being said, I will wait until Nov, Dec, of 09 to start looking.
The bottom will be reached when some of the newer condominiums that are already occupied start to fail. Failure to maintain fire safety systems, pay water bills, electric bills, maintain elevators and pools. A year or two after these actions happen we will have reached a bottom.
Condominiums won’t appreciate greater than the bank interest payments, taxes and maintenance fees. Trying to make money on buying a condominium at the bottom is useless. One major assessment in these buildings will take away two years gains.
Hello,
Does anybody in the forum know what the latest is regarding the new legislature requiring individual condo owners to obtain hazard and liability insurance as of Jan. 1?
I hear is likely the law will change again in March, but that is recommended to get coverage.
This is on top of association fees etc and will be an added expense to condominium owners. Not sure is going to go well to add a new fee to some owners that are already struggling to pay their mortgage.
I would appreciate any comments
thank you
jorge
Like to take time out to wish all a Happy and Prosperous 2009.
Lucas, thanks for your dedication to this blog.
Renter Tom, Lara mentions one way to make money in real estate in any market. Also, SIB is attracting alot of would be SoBe buyers. Buildings are newer, low crime rate, and entry price is lower for luxury buildings. Drawback to living in SIB not many restaurant or nightlife options, aside from that SIB keeps getting better.
FYI… look for a big shake up in the condo market very soon. Don’t ask, just keep your eyes open.
JoeL-Will this condo shake up that you refer to lead to increasing or decreasing condo values?
Two of aj’s speculativ properties (Hudson and long island) in one article: http://www.nytimes.com/2008/12/28/realestate/28zone.html
For everyone who got burned from all of the various ‘bubbles’ recently- don’t worry there is one more. Government bonds. What rational person would be happy for a 2% return on their money for 30 years, or even 2 years at .76%. Check out TBT and TLT action from Monday and keep an eye on them. And even when the Fed starts to monetize the debt and buy far off bonds you can always hedge yourself with a little gold and wait for the fever.
Personally, I am expecting a short term top on TLT and then will cover my put but you could make a lot of money buying puts on eurodollars. The market is pricing a 3.3% CD rate in 2017 and 2.5% in 2012. Are you kidding me! The Fed kept rates at 1% for a year and look at the disaster and the futures market is pricing 3% (USD CDs in Euro banks). There is no way interest rates can stay so low.
http://futuresource.quote.com/quotes/quotes.jsp?s=QED
I know this is a condo blog but it is basically about money and investing (in condos), and there is only so much to say about condos in Miami every day. Also, one of the biggest variables of a condos price is interest rates. Go to Brazil and see how cheap property is when there is no mortgage market. Depending on your view of interest and mortgage rates in the future determines when you will buy. If the economy resembles the 70s and early 80s you can imagine what the prices will be when a mortgage is 20%
Miur — There is no retirement. Condos are not what I would reccomend to someone wanting to become a homeowner…but they are still selling top out here in Seattle area.
What will this shakeup be? There is absolutely no way the news will be good news. Probably a foreclosed condo being sold at firesale prices. Wind by Neo?
I don’t think it’s going to matter much, the need of the time is to move on!!!!!!!!!
louix,
thx, appreciated your insights.
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Everyone! The little thumbs up / down WORKS! (gave one thumbs up to louix)
Looks like Sept – Oct. Miami Case-Shiller numbers show a month over month price decline of 3.0% according to WSJ.com…YOY of 29% drop.
– Just wait for Oct-Nov and Nov- Dec when the real estate really got hit……. ouch….
Muir, did you see the Fred Thompson video on Mo’s blog. Pretty good stuff.
Greetings and Happy New Year!
Seems like mortgage rate drops are helping refis, but not buyers. A 25% drop in mortage rates only helps those who keep the mortage over the life of the contract. Does not really help somebody who may sell and move in 5-10 years. But a 25% drop in principal will help persuade me immediately. I benefit whether I buy and hold or sell in the near term. Banks and sellers must come to grips with this concept. Low rates are great but not for an overpriced asset.
Several buildings I follow now have 2B’s available for around $250k. These are new buildings, and a year or two ago i would have jumped at the chance. But i run the numbers, and its still much cheaper to rent than buy. From my perspective, still more trouble to come for condo owners. Its the taxes and HOA that are killing the sales. Taxes are not representing the lower prices and are adding quite a bit to the monthly tally. And this will be a problem for several years to come. My building has hired an attorney to address this issue, but not making much progress.
I have seen units in Vue, Club, Emerald and Solaris which are now attracting my attention. Any residents of these buildings care to comment on HOA, maintenance and other issues which may affect an owner over the next few years? Positives and negatives appreciated.
Real Estate in general and condo’s in particular have NEVER been a good investment.
The myth is because it is the one asset that people have their whole life that keeps pace with inflation.
So you buy a house at 100K in 1970 and sell for 400K in 2010 you did not make 300K. You simply preserved your wealth which you now own outright.
Condo’s have always done worse than houses and this is not going to change. I am trapped in a condo in Michigan and it sucks. I am now going to be a landlord for the forseeable future.
Now, I am in much better shape than all yall because my property tax is 90 a month, my association fee is 86 a month and my mortgage payment is 470 a month. So I am only on the hook for about 650 a month in total carrying costs for a 900 sq foot 1 bedroom with detached garage.
I can’t even imagine what it would be like paying 2000 or 3000 a month for a 900 sw foot unit like some of you are.
It will be decades before any of us recover from this. My advice though is if you have extra money to invest, put it in the Bullish Oil ETF or the Bullish Gold ETF, hell even put it in a foreign stock mutual fund, but for the love of god do not buy more condos!
gables said: “But a 25% drop in principal will help persuade me immediately. I benefit whether I buy and hold or sell in the near term. Banks and sellers must come to grips with this concept. Low rates are great but not for an overpriced asset.”
– Amen. Financing gimmicks no longer cover up the bubble asset prices. Why lower rates except to help those with existing mortgages I suppose….buyers want lower prices as the cause of lower monthly payments, not lower interest rates.
louix,
Interesting post. I played Eurodollar futures ( short) about two years out earlier this year when inflation looked like it was ripping. Made some bucks and got out, but I would have been murdered had I held on.
Right now I’m betting on a bear market rally in the next 5 months with overweight in the commodity complex. Long steel companies,homebuilders,financials,tech,and brazil.
But I think you can buy almost any sector.
christopher opined: “It will be decades before any of us recover from this. My advice though is if you have extra money to invest, put it in the Bullish Oil ETF or the Bullish Gold ETF, hell even put it in a foreign stock mutual fund, but for the love of god do not buy more condos”
when AJ starts saying that we will know bottom is at hand. Perhaps in 2010.
2009 will see upper end meltdown. Stay tuned.
the gov has announced new plans to screw up the markets and further punish the good to benefit the bad. the feds will buy up mortgage backed securities starting early January. they think this is what is needed to fix the market? all they are going to do is either stall the market or give the screw ups a get out of jail free card. overpriced housing with a mortgage will never be able to be sold without a big loss. those $500k mortgaged condos are now worth $200k. i wont pay a penny more. so at what price are they going to sell the condo when the owner needs to sell and leave the city for job opportunities elsewhere?
we are not saving foreclosures to keep people in homes. we are now socializing the losses because the units will never be sold at even remotely close to break even. and if you think banks take a long time to approve a short sale or foreclosure, imagine the time lag if the feds must make the same approval. this will grind the housing market to a halt for at least 6 months, probably a year. housing prices wont drop any further because no sales will take place. things are going to get ugly. the fix is in. free market theory is supported in a rising economy, but those same folks become socialists during a down fall. might at well resign a long term lease and pull my money off the sidelines and into a safer investment.
question for all the condo owners. when a special assessment is made, do you pay based on square feet owned? or is it equal fee per unit?
It depends on what your condo docs say gables, as each building is different.
thanks. just curious what the more common approaches are to assessment protocol.
900 guy,
It is shameful that you are tooting your blog on Lucas’s site. I give a 1000% guarantee that you are Mo. I also have a strong feeling that you sometimes post as ‘Wild Bill’ and a few other handles. Your subject matter, syntax, emotions, sneakiness all point towards the same conclusion.
Anyway I saw that arsehole Fred Thompson’s verbal diarrhea, appearing to come off after a drunken stupor. If you think that is cute, it says a lot about you.
Coming back to your blog, which of course no one ever reads or contributes, let me tell everyone the most incredible offer you have made.
This guy offers to pay anyone $5 to $10 via paypal for writing a comment on his blog!!!!!!!!!!!
This is the most incredible thing I have ever heard so far. Bribing someone to contribute to a blog. If this is not the biggest shame of the blogosphere, what else is?
That begs the question, when a blog owner is bribing people to write (and he also laid down the writing rules – must write something negative about a building!!!), what kind of credibility does he have. Any comment on that blog whether paid or unpaid is suspect. If he is willing to pay someone to write, he is also capable of writing all the posts himself posing as a reader. And I know he will as he is the owner/site administrator and he has total control over the blog. After all he uses multiple aliases from different computers and different IP addresses on Lucas’s blog. On his own blog, he has no such compulsions to make elaborate hiding and masking arrangements.
Mo, just go away. You have been exposed.
Lucas,
Are you aware of any discounts for condos if the buyer is paying all cash? is there a reduction from the list price a buyer can expect with such an offer? i see many condos in foreclosure where the bank is willing to sell the property and finance it themselves. would they take a discount to take the property completely off their books with cash, in a short period of time?
AJ – You’re nuts. How can you make such allegations? I have never seen anywhere on that blog money to post. What you say could be defamatory. Seriously, what is your problem?
My prediction for 2009: The luxury market takes a big hit after “the rich” review their year end financial statements. Foreclosures mount across the board and distressed sales continue to set the comps for sales. In real dollar terms, we’ll party and price like it is 1999.
According to the New York Times, Manhattan office rents are off by as much as 25%.
http://www.nytimes.com/2008/12/31/business/31office.html?_r=1
If Manhattan is off that much, that would seem to indicate that the high end jobs are hurting big time (no surprise given the investment bank collapses, etc.) and so will high end real estate (including residential rents), in Miami and NYC too. 2009 will be worse than 2008 as the effects of 2008 unfold. You can’t fight the macro economics.”
RT,
Don’t be the sweet talking political wing of a radical organization.
Not only is the money offer there, the guy is so desperate, he increased it to $15-$25 as there seems to be no takers for the $5-$10 offer.
If you cant find it , it is not my problem. I just looked into it 30 seconds ago. I will not provide the link as I refuse to be a partner in promoting that garbage dump.
Oh My Dearest AJ – please provide the link since I can not seem to find it. With Love RT
P.S. I’ve posted on it and there is no fee required whatsoever.
ok, look in the forum link on his website. The top post.
I will not sully Lucas’s blog with a link from Mo’s blog.
NO. you dont have to pay to post. He will pay you if you are willing to post on his site. That is cause no one else is posting, he wants to bribe them to contribute to his blog!
Just went to the site and saw the link. He is offering the payment for a review of a condo building, not for posting on the site. I would love to see more reviews from people that live in the buildings since they will give a much better perspective of the pros and cons of each building.
Here is what it says:Announcement:
I will wire $15 via paypal to anyone providing a decent review of any large condo complex (>100 units). Important things to note are the thickness of the walls (noisy?), quality of the people (bunch of drunkards?), quality of the construction, HOA issues, number of rentals/owner occupied units, whether the elevators are slow, valet issues, crime issues, or anything else. If a unit is great then by all means give a glowing review, but you are expected to at least state a few negative things. We don’t want propaganda. If a review is extremely well done, I’ll compensate you $25 for reviews of Emerald, IVY, and Neo Vertika in Brickell. Please hit the contact link on my blog when you’re finished.
Happy New Years!!!!!!!!!!!!
HAPPY NEW YEAR …… to everyone and a healthy and prosperous New Year as well.
Happy New Year from Idaho. If I ever buy a condo I will only work with Lucas. I love the way he trashes condo projects that need to be trashed, forcing down prices so that sincere investors can get the best price. Lucas, keep trashing, and give us investors the bottom price. I enjoy your ability to be factual and influence the market.
Happy New Year All!
it’s 5.14am and the good neighbors in 900 Biscayne have been disturbing the ENTIRE neighborhood with VERY LOUD music for about 6 hours. the nice neighbors have hired a dj and his club speakers to demonstrate their ignorance to everyone within a couple of blocks.
900 Biscayne security can do nothing about this so if you do not enjoy sleeping, you should buy a night club style condo at 900 Biscayne.
Looks like Whole Foods has pulled the plug on being in the Met Miami project. So Good bye Whole Foods, hello Super Wal-Mart!
http://southflorida.bizjournals.com/southflorida/stories/2008/12/29/daily17.html
The developers rent to ghetto trash to fill the rest of the units. On weekends the police won’t respond to noise complaints. They are understaffed and have to station officers outside the 24 nightclubs.
Whole Foods is just the beginning of major retails who don’t want to expand. Most new retail spaces downtown should remain empty.
With thousands of stores expected to close, why open new ones without an established population??? Retail/strip malls FOLLOW the population, they don’t lead it. Old saying in retail development, first you count the roof tops, then you open build the store. Retail almost NEVER goes in before the population is established….almost never.
http://money.cnn.com/2008/12/31/news/economy/retail_closures/index.htm?cnn=yes
’twas 17 degrees last night in New York and with the 40 mile wind chill it feels like 17 below. It was miserable. To my New Year Party only 60 people showed up instead of the usual 175 as the roads were all iced up. I asked myself why am I even doing this and why am I even in this Tundra Land
I made a new year resolution, the next new year, I will not spend in this Ice Box. If I can move to Miami for good, I will do so, even if I have to survive on eating grass, I will. I just consider everyone living out there “the luckiest people in the World”. Just by the privilege of living in Miami all of you have assured yourself a Happy New Year 2009!
Tiara condo residents re-christen lavish top floor
“Then came the assessments. With only $88 million of the roughly $140 million renovation project covered by insurance, each resident had to kick in between $110,000 and $150,000 toward construction expenses.”
“for the first time in four years and four months, condo residents were able to enjoy it.”
Condominiums are awesome investments. How often can you purchase something and not be able to touch it for four years. The residents of a San Souci condo were out seven months for an electrical fire.
What a warm, beautiful, hopeful and uplifting story of Tiara Condos. All is well that ends well. Thanks for bringing such an inspirational story to light, especially on this New Years Day Wild Bill. If the Tiara residents can overcome such a major catastrophe, it gives everyone hope that good times are possible even with the lesser travails plaguing us right now.
AJ, I know what how you feel. Second year in a row we had poor turnout at our new Years Eve party due to weather. NY winters really suck! I can’t wait to have a place in Miami. Hopefully, I will have our 2010 New Years Eve party down there!
Seems some people would love for Miami to fail…I really don’t get it. I mean I am all for lower Condo prices, taxes and HOA fees. However, I sincerely want the area to prosper. Anyway…
Happy New Year to everyone and thanks to Lucas for keeping this open and informative blog running!
Can’t wait until February…Miami2009.
AJ, what’s in the crack you’ve been smoking? That story is terrible!
HAPPY NEW YEAR to everyone!!!Can anybody help me out with AVENTURA area?I really like that spot and would love to buy there as soon as possible.188 th. street seem’s to be the newest and most up and coming in the area.Any thought’s out there on which building’s might be the BEST BET? Eastside and Uptown marina loft’s are the one’s I like the best……….Please help.
Don’t buy there yet, prices will come down (according to latest report from bloomberg) around 18 percent in 2009. Better, wait until Lucas trashes the condo with a terrible report, which makes sellers nervous and property values tumble further. Then with Lucas’s help you can swoop in and get something at artificially low prices.
aventura? really? why?
Miami 2009,
I am all for lower condo prices. I want you, Gables, Jcrimes, JL and others to get a super fantastic deal. It wont be from me but I hope you guys do get it from some where or some one. I also do not care where the flat prices are settling down. If you guys can buy a flat for cheaper than what I paid, so be it. I will be happy for all of you. I most likely will not see my flats getting sold in my lifetime and hence its notional value is irrelevant to me.
What people do not realize is that I am here vehemently fighting Mo who surfaces with 10 different aliases trying to diss my favorite Miami. I am outraged that he disses Miami for any crime that occurs, yet decides to stay put. He constantly reminds people of the pitfalls of a condo and its special assessments etc. But at the same time will not consider a low rise with no amenities or a SFH where there are no monthly HOA’s. He will not settle for anything other than a Luxury Condo. Such a breathtaking display of hypocrisy! He plans to achieve his dream by crooked means while the rest of you are patiently waiting for a good deal to come across, which will be plentiful this year.
About the NYE parties,
I just got updates on the NYE parties in Miami and I wish I was there. My neighbor had a party on his balcony in 1800 Club and they reported an incredible spectacle. A balmy 75 degree weather. They watched the fire works display from their 29th floor balcony which stretched all the way from Key Biscayne to Miami Beach to Hallandale.
Other friends of mine were on the beach and reported equally boisterous scenes and good times.
A third set went to the Bayfront park for the biggest Free and open air NYE celebrations south of Times Sq. with fire works, open air dicotheque, performances and what not.
Some people living in Miami just don’t know how lucky they are. The weather, the views, the prettiest city in the Union and sometimes I think even the homeless in Miami are living a richer life than some dude in a flat on lake shore drive in wind swept Chicago (OK that is a stretch but you get the point).
I have been hesitant to move to Miami all along as there is not enough money to be made there. But the Quality of Life offered by the Magic City cannot be bought for any amount of money up here in NY or anywhere else in the World that matters.
Hope to see you in 2010 in your own place in Miami. Good Luck.
AJ said: ” I most likely will not see my flats getting sold in my lifetime and hence its notional value is irrelevant to me.”
Looks like AJ has FINALLY thrown in the towel that his two Miami properties will EVER be an INVESTMENT (post 180). I guess it really is a new year!!! Maybe he should start a website called Miami Condo Debtors Prison… Odd that AJ claims almost ALL of his investments are in 4 properties (2 Miami and 2 NYC area) using some debt yet he plans on NEVER selling them….that is a pretty long time horizon especially when you’ll need $$$ in your old age. Oh well, my job isn’t to figure such nonsense.
RT,
You will be taking care of me in my old age.
AJ said: “RT,
You will be taking care of me in my old age.”
– I just couldn’t stop laughing at that one. Thanks for making my day AJ! Too funny.
Someone has to use up that 6 million dollars that you have accumulated by not spending and eating only TV dinners from Walmart frozen food aisle. Who better than me to spend it especially after all the insults you heaped on me. Right?
Lucas, thanks for your reports. I appreciate your professional input..
J.Crimes what’s wrong with the Aventura area??It’s safe.. clean.. new..a lot of amazing deal’s ..close to Miami and Lauderdale.If theres something I don’t know…please tell me.
There is nothing wrong with Aventura. It is a great area.
Thank you Lara…
Nothing wrong with Aventura. Just that it’s a retirement ghetto. If you want to see 75 year olds playing canasta in the common areas, you do not mind total inactivity around where you live, Aventura is the place to be.
By the way Biscayne Plaza (1800 Biscayne Blvd) has some foreclosures. 120K for 1 BR and 140 K for 2 BR. I like that building. Great potential and near to everything and a nice restaurant/shopping below the building. I think it is a great buy.
the bailout of whole foods from the Met project is bad news. they are trying to spin the move as a function of project changes, but it appears to me two major issues are controlling the move. One, the economy is tanking and the company is not interested in expanding unless it is assured a successful opening. Two, the company does not believe the downtown area can provide a successful operating environment. In essence, there are not enough permanent residents in downtown area to support a local high end grocery store. in think they are right. cost of parking will be a deterrent for many people to shop in such a location. this can be overcome, but it requires developers/owners absorbing the cost of parking.
it seems to me that new strip malls in the outer suburbs still provide more amenities than what is available to residents in the downtown areas of Miami. would love to see more coffee houses, restaurants (and cheaper places not just five star locales), bookstores, etc which stay open until 10 or 11 at night to provide safety and a better standard of living. until this happens the downtown areas are destined to look great on the net and in sales brochures, but will remain unattractive for long term residents. the downtown area needs to give people a better reason to move there now, not 5 years from now.
“the downtown area needs to give people a better reason to move there now, not 5 years from now.”
Agreed.
SEATTLE INSPECTOR – POST# 140
I was wondering what a new or recently new high floor with a good view is selling for in downtown Seattle in $ per square foot on average?
Aventura or Bust
Problem with Aventura is you need your car for everything and AJ is correct about the age issue. Also the traffic is a nightmare – waiting at lights to get out to the main road can take 4-5 light turns at certain times of day. The only real amenity is the Aventura Mall if Malls are your thing. Its a high rise suburbia.
i can’t say why i dislike aventura w/o being called archie bunker. suffice to say, my nationality has a big community there and they can drive you insane. on a lighter note, if you’re working downtown miami/gables/grove, it’s a bitch of a commute.
I know several younger families with childeren living in Aventura. I spoke to them. They like it. It is safe. I heard schools are not bad. Also Miami is not that big so you can drive to visit cultural attractions.
I
OPERA TOWERS and now: Opera Suites and Marina
Interesting turn of events germane to this most recent blog so open up your Wall St Journal of Sat Jan 3 section W page 7-at least in the miami edition-and you will see the ad for what some portion of OT is becoming.
George,
Do you have a link on internet. I would like to read it. Since I am in NY it is hard for me to look at Miami edition of WSJ.
Thank you
George,
Please publish the entire article. I have been trying to get more news on Opera becoming a hotel and no one seems to have an answer. This might be it. If true, that is fantastic news for OMNI/Pace as another high end hotel will join the area along with Double Tree Grand, Marriott and Hilton. Great news!
interesting ad. at least the area now has a “luxury hotel”. question for those in the area, does opera really have an operating marina? will a luxury hotel and marina work together?
OK. here is the link if anyone wants to stay in Opera tower Hotel!
http://www.operasuitesandmarina.com/
Gables,
They don’t have a marina attached. Maybe they have an arrangement with the marina at the side of Pace Park which is adjoining the Venetia, Marriott and Double Tree Grand.
lara
cultural attractions? miami? really?
regardless, your drive on the weekends to see cultural attractions means nothing. it’s that stretch from monday thru friday at 8am and 6pm that counts. and i can say for fact, coming from aventura, it’s god awful.
Opening up the link to Opera Suites, its very interesteing to see a feature of the property described as ‘Convenient location in Miami’s design district”, which of course those who live in Miami know is not true.
This is very ironic to see, given the fact that a certain indiviudual was sued for misrepresentation of facts, when Opera “Suites” is doing the exact same thing with this statement…..
re: Aventura or BUST,
Aventura/Sunny Isles is fine. There are so many condos up in that area that you will find plenty of buildings brimming with attractive yups. The only problem (or plus depending on your perspective) is that people in Aventura tend to have jobs while people in Miami and Lauderdale tend to have a lot of delusional fantasies.
It’s a lot more fun (at least for a year or 2) to be around delusional people than people with jobs so that should be your major consideration. Do you want to live in an area that people are mostly responsible and normal or do you want to live in a Zoo where it wouldn’t be out of the ordinary to bump into a ridiculously hot prostitute in the elevator asking you for a condom.
A lot of people fool themselves into believing they want to live in the Zoo only to realize it was a mistake. That’s why you see such a large population turnover every 2 years in Miami Beach.
The overriding thing in Aventura is it’s heavily Jewish. If you don’t’ have any problem with that part, I think it’s a reasonable place as any in South FL.
If anyone lives in Opera Tower, it would be great if you could post your experience.
We spent the last two weekends in the area searching for a rental and we liked the Pace Park area the best. It has quite a few places within walking distance, metro mover across the street, and the Venetian two blocks away. The park is great, we were in the area from 11-6 and the park was very active all day.
We looked at both the 1800 Club and Opera Tower. The 1800 Club was a better building with a much nicer and bigger pool and probably the best gym I have seen in any building. However, we liked the unit at Opera. It had a better layout, a bigger MB, and instead of the extra bedroom having a wall and a door, it was just opaque sliding glass doors so you could really open the place up.
Our friend is also looking to rent a place. We were hoping that she would like the 1800 club so we could come over and use the gym and pool. She didn’t like the building at all. We showed her the Opera, and she made an offer to rent an owner unit with stone tile throughout on the 51st.
Hundreds of new condos and the only thing all the posters (theyre all aj that is) can talk about is pace park and how awesome 1800 club is. I’d never heard of pace park until aj started perseverating on the subject. Some of us LIKE aventura and sunny isles. Don’t attack us for having a different opinion. And dont call aventura a ghetto.
it’s funny
i would never call aventura a ghetto. it’s nothing of the sort. it is however, miami’s interpretation of suburbia. i hate suburbia. i hate even more, miami’s interpretation of suburbia. that’s my humble, albeit, sharp, opinion.
JL
fair characterization for aventura (however, you’ve omitted the multiple divorcees living off alimony – i know, several are ex jcrimes girlfriends). however, as for the beach, i think you’re painting in broad strokes. mid beach/surfside/bal harbour crowd is completely different than sobe. far less transient.
I love when AJ says he hopes the Pace Park area remains a “secret” but on the other hand he can’t stop talking about it.
Re: Opera Tower Hotel.
You’d think that management would have the sense to post better than the blurry pictures they have to depict the suites at the hotel, which starts at $250 a night. Maybe a good place to stay if you’re going to a Heat game but I can’t imagine why anyone else would want to be in that area, it’s dangerous after dark and there’s a homeless tent city right down the street. Not to mention how far it is from the beach!
DID anybody know that AJ work’s for TIBOR HOLLO ?? Yup he’s on the payroll if you want I can let you know his REAL NAME
I agree at $250 a night for just the studio and running up to 450 for the 2bd i think it will be hard to fill unless there’s a special vent liek hear playoffs or something For that u stay at the hilton for under 200.
I guess if u have 3 or 4 people staying w/ ur fine.
CANDELA
Why in the world would anyone want to go to a Miami Heat game and rent a hotel room?
I was at Pace Park one night last week around 9:00 to 10:00 p.m. and the park was filled with people and especially a lot of owners im guessing – out walking their dogs. It seems to me that people on this side of the Bay arent interested in how close to the beach they are.
Finally – there is no, none, nada homeless tent city right down the street . The mis-information by some is a Big Fat Lie. Wild Bill in disguise perhaps.
There is a Camillus center for the homeless on NE First av. but it is a long way from Pace Park and has inside residential and cafeteria. Camillus center has sold this property and will shortly vacate this site as they have purchased land and secured funding for a new homeless center a couple of miles west and south of their current site across Interstate 95. The Facts for you out of towners!
spent the holidays traveling around the country. one thing i can say, things are bad everywhere. i have never been in the situation where so many friends and family are either unemployed or severely underemployed. many with a college degree. most of these folks do not live in overvalued RE locations, and they are just getting by. a couple recently purchased RE in FLA, and are now stuck renting a property they could not sell. they are getting quite concerned and cannot cover costs by rent alone. they will not be foreclosed on unless the economy really deteriorates quickly, but their income is getting cut, so their spending has been reduced drastically (they love to entertain).
get ready for the feedback loop to hit us again this spring. just staying patient until i see how we handle this second downward cycle. may have some answers by this summer, but lots of uncertainty exists at this point. have not seen many condos break below $200 sf, indicating many believe we may hold our own this year. but if the $200 floor is broken, look out below. condos will be a major disaster if they cannot somehow control HOA and tax issues.
gables – This is definitely not a time to be a debtor (nor a lender to distressed debtors either!) of almost any kind. I have been shocked at how people continually withdrew the max equity out of their homes for some really stupid stuff and/or how concentrated their investments were in real estate, even if just their own home. Saw a recent Suze Orman show where some lady and her husband had a $18K/month cash out expenses with only $8K in take home pay….they had ran up $120K in credit card debt alone plus maxed out their HELOC’s of their fabulous $1M home. The lady was still in denial that they will soon lose it all. Unreal how much debt people took on. I have always been debt adverse so for me I just can not understand such recklessness and while fell bad for them I certainly don’t want to have to foot the bill for such stupidity. What will mark this recession more than anything else is that even people that did the right things, played by the rules, etc. will get hurt. There is no doubt in my mind that a bottom in real estate prices for the Miami area will NOT occur in 2009.
most of the folks who are facing financial issues i ran into over the holidays simply refuse to acknowledge the reality. the standard behavior has been to put their heads in the sand. and as long as more govt programs are created to “save” these homeowners, all we do is push off the inevitable until either they are foreclosed on or the currency experiment bails them out. my concern is our policies will create a monetary situation which helps the indebted at the expense of the savers. a necessary move to keep the giant ponzi scheme going i am afraid, but talk about rewarding failed risk takers and punishing those who follow the rules. that will be a dark day my friends.
It’s Funny,
Post #204 is not mine. I never use aliases to post. If you want ask lucas and he can confirm that this post is from a NY IP address and #204 is from probably a Miami IP address.
But wait a minute, #204 is critical of 1800 Club. It says that they only like the pool and the gym in 1800 but not the building that much, which I like to disagree but nonetheless, it was not a post singing praises of 1800.
Candela,
Have you ever checked out the Double Tree Grand, Marriott right across the street from Opera? These hotels are brimming and bristling with guests all the time. It is especially popular with the cruise crowd. The only other option for cruise crowd is the intercontinental. Also many tourists coming to SOBE stay in these hotels who do not like the old and shitty cubby hole art deco properties charging $200/night and also cannot afford other pricey properties like Lowes or Tides or Victor on SOBE charging $400-$500/night for a room. There is definitely lot of demand for these hotels in the Pace Park for those who like 4 or 5 star hotel comforts but will only pay upto $250/night for such rooms. Such hotels or rooms do not exist in SOBE. I also eat in these hotel restaurants and they are always busy.
H,
Everyone on this blog knows about Pace Park. I am not making it any more popular than it already is. I quoted what you said a couple of months ago, meaning that I do not want Pace Park to be overrun by the suburban crowd who want to picnic in a waterfront park or play in many of its water front playgrounds. Not all of Miami knows about it yet, but alas not for long. Even now on the Weekends it is becoming a Zoo. The only other water front park, Morningside Park is not as accessible or has as many facilities. I have lamented before, in a city the size of Miami and surrounded by water everywhere, there are just 2 water front parks (Pace being one). It is an utter shame and disgrace for the city of Miami for not being able to buy up waterfront property and setting it aside for the purpose of public parks. New York Set aside Central Park in the middle of the biggest city. Miami could not set aside a sliver of land on the water. Disgrace to all the previous Miami Administrations over the past 100 years.
Guess What,
I was supposed to be working for Jorge Perez as per someone. What is the change of heart?
and finally Scozuzu (#204)
Your friend didnt like 1800 and offered to rent in Opera instead!!!? Other than probably getting a cheap rent what did she like in Opera that is better than 1800? Please explain. I am flummoxed.
What is going to be absolutely crushing to those in denial will be when their credit card accounts and limits get cut back in 2009 (after their HELOC’s and refi’s got cut in 2008). Meredith Whitney has stated that she calculates a $2T (yes trillion) in credit card credit being pulled. For those playing the credit card musical chairs, the music will stop and it will end in the BK court. I don’t recall ever even using 10% of my credit card limits since I pay off automatically each month so if I ever get a notice that my credit limit is being cut, then I will know banks are panicking. Retail spending…all consumer spending really…will suffer as people are shopped out and are actually engage in “negative” consumer spending as they replenish their savings….
My long term fear is that the fed govt will continue to believe that massive fed spending is the only way out….it isn’t. A robust infrastructure investment spending by the fed govt is justified but what silly spending that will be coming out of DC will be at least 1/2 pure economic waste.
AJ,
It wasn’t a cheaper rent, both units are similar, high floor east view. The 1800 club wanted 2k while the opera owner was asking 2100, but she can probably get that for 2k as well. I know she hates carpet, and the 1800 unit had carpet in the bedrooms. But I don’t think she liked the building, don’t know why.
All three of us liked the unit in Opera better. One main reason is the sliding glass doors (opaque) that separate the second bedroom and the living area. It creates much more space and since neither one of us really needs a second bedroom we are just going to leave that open. There is also a small wall that creates separation in the dining room from the living area. The masterbedroom in the unit is larger, but there is less closet space. Its not even really a closet in Opera, just clothes racks on both sides of the hallway between the mb and the bathroom. The showers are also pretty nice with extra jets shooting out at mid body height and one of those detachable sprayers.
If I was going to buy I would probably go for 1800 and just do some of the upgrades like knocking out the extra bedroom wall.
AJ-Aren’t both Bicentennial & Bayfront Parks considered waterfront parks?
The sliding door you are talking about in Opera is actually a sore point with many. We actually call it a pocket door. It is put in the second BR as the space is too limited. I am surprised that some people are actually considering it as an advantage!
If you are in lines 01 and 02 in Opera from 45th floor to 56th floor, you can clear the Grand and have a sweeping 270 degree views including Bayfront park and downtown which is not the case with even the penthouse in 1800. I consider that as a big advantage of Opera.
But i see that some one has the balls to ask for 800K for 5602 on the MLS. Even the cheapest line 01 and 02 are asking for close to $500/sf. That is absolutely outrageous.
Opera should under no circumstances be worth anywhere close to that.
But in the future, if this hotels really takes off, the 37% who closed may be able to put their units in the hotel program and make money. That is their only saving grace.
Opera has pint sized units, maybe ok for NYC or Tokyo. Not good for Miami or long term living. OK as a hotel and short stays.
I wish your friend will rethink. Why pay $2000 for 1058 sf in Opera when she can get 1222 sf with same views, tons of closets, de la casa kitchens, free valet parking, Best gym and pool and so on in 1800.
Mark,
That thought crossed my mind. But Museum park is a dump right now. No facilities or no one uses them except some home less or when there is a big event. Even when it becomes the future Museum Park, there will be no playing facilities. Strolling, Yes.
Why don’t the residents of One Miami, 50 Biscayne, Met 1, Loft1, Loft2, Everglades (just starting to inhabit) or others utilize Bayfront Park the way tenants around Pace Park take advantage of their adjacent green space? I realize there’s no tennis or basketball court at Bayfront, but why don’t I even see people walking their dogs there, or just hanging out? AJ? Anyone?
From what I understand, Dog walking or dog running is prohibited in Bayfront park.
Even in Pace, it started as no dogs in the park Policy. But due to some heavy lobbying by some influential residents, One acre of the park is now “un officially” set aside for the 4 legged friends. Once in a while when there is a tussle going on for the foot ball ground, especially when the female football team comes to play, the second team (or the late comer team) plays in the “dog park” and the dogs/owners begrudgingly move to one corner. But there is always a deliberate peace between the two sides.
But a very legit Q. Why don’t the Park West/Down town residents use Bayfront park as frequently as those around Pace?
I have one theory:
Other than One Miami, all other buildings are very cut off from these parks by the very wide, Very widely used, busy Biscayne Boulevard. It is actually a trek and a plan to go to the Bayfront park from these buildings. It is never a spur of the moment thing.
But when you consider Pace, it is right across a small calm street across from 18, Q, Cite, Opera etc. You can step out of the elevators of these buildings and literally be in the Park! No planning or picnic basket needed. You can actually jump from park – to your flat for a drink or pee – then back to park in under 10 minutes. So I guess people from these buildings use the park more often than the others.
AJ-I tend to agree with your theory. It’s really a shame though. Bayfront has so much potential. It also is larger than Pace. Except for scheduled events, it is so underutilized.
agreed that bayfront is underutilized. i consider that a prime area which gives greater appeal to the few buildings very local to it. crossing biscayne is no big deal-never heard of an urban dweller who would let such a road be a problem. no worse than the major avenues in NYC. my thought is that the buildings surrounding bayside will benefit in the long term. especially one miami-ideal location in my opinion. problem is with economy tanking, cities and states have no money to spruce up the parks. and the city of miami will be hurting for many years to come with tax revenue. the park deserves to receive appropriate funds to make it an attractive and useful people center, but my guess is we are at least 5 years from that being a remote possibility. bummer because investment in those bayshore parks now will make the local RE more valuable, bringing in more residents and businesses, and increasing tax revenue across the board. but i am afraid the area will stagnate for a number of years.
Mark,
This might come as a shocker to many (who accuse me of a torch bearer of Pace Park).
If I have to pick between Bayfront Park or Pace Park, I would pick Bayfront Park. The reason – The open air mall/restaurants, concert area in the Bayfront Park makes it the winner, unfortunately Pace Park does not have such a luxury. Pace has the dog park, basketball courts, tennis courts, Beach Volley ball courts, Foot ball and Cricket grounds but it is still not enough to offset the mall – food court/concert area advantage of Bayfront Park. It is extremely entertaining walking in the Bayfront Park Mall – second only to the excitement of walking on Ocean Drive or Lincoln Road.
And the 2 buildings I like the most in the area are One Miami and 50 Biscayne.
gables,
If Manny Diaz has his way and gets the largest city stimulus fund ($3.4 B) he asked for, many of these projects might take shape including Museum Park. Even after the traditional lining of pols pockets, there should be enough left to see some of these projects through. After Florida elected Obama convincingly, he owes the state.
What in the World is happening with Everglades?? When are the closings scheduled? It is 2009 already!
Alan, what happened with your Sq. Footage dispute? Can you please update us?
If the Everglades closings have already started, then Lucas has to do a story and pictures on it.
AJ,
I wish you were right on funds for Miami. Unfortunately, i dont think museums and parks will get much priority in the funding scheme. I would buy near those parks if i thought the money would come within the next decade-but not holding my breath. miami does not spend money to improve the standard of living for its residents. it spends money to line the pockets of select individuals. improved standard of living is just an accidental byproduct which we can occasionally benefit from.
As for the Manny Diaz funding request, dont expect much. Miami is not really a priority city regarding economic rebound. we rely on tourism, and do not really have a local industry which improves or impacts the rest of the country. putting tax dollars to work in miami is a losing proposition. the money will be spent on other industrial, financial and technical cities which have greater national impact. this is one unfortunate downside of being a miami resident. we need a local economy based on more than tourism.
Everglades closings started around mid November, according to their staff. They are not budging on the square footage dispute. I refuse to close after so many promises were broken. Any really good deposit recovery attorneys want another client? I too would very much like to hear from Lucas.
Alan, I am sorry man. I wish you good luck.
Will Everglades go the Opera Tower way? Depending on the closing rate (I am expecting not more than 40% closings the way things are going) and the small sized flats, is it destined to become another Hotel? After all they demolished the old Everglades Hotel to build this one. How Ironic it would be if it becomes a hotel again!
I find it interesting that Miami is all about ‘promise’ and ‘potential’. I’m a big fan & bought (literally) into all the hype, yet so much seems unrealized, or it takes 5 times the projected time to actualize anything.
Alan,
Miami is not the only city that fails on promise and potential, although it is one of the leading players. Unfortunately, greed plays a larger role in peoples lives down here than in other areas of the country. you could never get away with some of the greed and corruption in the midwest which occurs openly down here. just different business ethics in general. unfortunately in miami it has become acceptable to say anything necessary to seal the deal-even when you know it is a blatant lie. for some reason we do not hold people accountable for words and actions. you just learn to be more wary in business in this environment.
Gables-My experiences up to now attest to the veracity of your evaluation, sadly. Being from N.Y. I’m accustomed to people, for the most part, making good on their promises, which may come as a surprise to some. I am generalizing; obviously there are those that can be found anywhere who have no intention to follow through on their word. This way of being just seems more integrated, and accepted, into the culture down here.
Interesting article about the lobby in the NYC Buildings. How does it compare to the over the top Miami building Lobbies.
http://www.nytimes.com/2009/01/04/realestate/04cov.html?pagewanted=1
gables,
“Miami is not the only city that fails on promise and potential, although it is one of the leading players. Unfortunately, greed plays a larger role in peoples lives down here than in other areas of the country. you could never get away with some of the greed and corruption in the midwest which occurs openly down here. just different business ethics in general.”
I hope you really don’t believe that, after all, just of the top of my head, I’m thinking mega churches, unbelievable greed in real estate speculation, and finally, the truth, most Americans are greedy to a point of sickness, witness this mess.
Muir,
I do not believe most of america is greedy. and the majority of miamians are not greedy. but greed does exist in certain pockets and segments of our society. and certain parts of the country let those small groups flourish more than other parts of the country. all it takes is to let this small group of greed flourish and it affects many other innocent people. mortgage fraud is a prime example. only a small percentage of people commit this crime, but we all pay by higher comps on housing which follow through with greater taxes, higher insurance, greater rents, higher housing costs, etc. this type of behavior is just a bit more tolerated here than elsewhere-but it does exist elsewhere. i just have not seen it on such a large scale in many other parts of the country.
Only one Wild Bill on this site. If people were posting using my name I would let you know about it. Conspiracy theorists like to believe I use an alias.
You mean to tell me Pace Park doesn’t have homeless sleeping in the mangroves?
Speaking about Hotels, where are the deals I have been hearing of in South Beach? I can’t find a decent room for under $400/night in February.
AJ,
Thank you for posting link to the article about Manhattan lobbies. I liked what I read. NY is a different city so what is good for NY is probably different for Miami. Another great example of superb design (my humble opinion) is recently renovated Brooklyn Academy of Music. Particularly cafe on the 2nd floor. Not expensive at all but super taste for the area and the type of building.
Miami 2009,
Is South Beach the only area you want to stay? From my experience when prices are too high I go more to the North like Sunny Isles. The beach is great and if you rent a car it is really not far from the South Beach.
would like some input from the peanut gallery regarding lobbies. they seem nice, and are probably a great selling point for the developers, but how useful is an extravagant lobby? I live in a reasonable building, and the lobby is adequately designed, not too large and keeps a concierge and security desk. but it is nothing compared to the brand new lobbies i have seen in the recent builds. problem is that i never use the lobby. when driving, I park and take elevator so never see the lobby. I may pass through it in the evening. but i never spend time there. does anybody in this blog spend time in their lobby, or the “club rooms” and other amenities located in their building? just wonder how much of this is money wasted for full time residents?
gables – I can appreciate a nice lobby, but some of these have gotten silly and seem wasteful. Maybe people need a nice lobby while waiting 10-15 minutes for the valet to bring their car? The lobby is almost never used in my building except by realtors to meet possible renters I guess. The only upside to a nice lobby is that it is probably a sunk cost and not having to do much but basic cleaning and cooling. The clubrooms usage require reserving them … rarely used. Maybe they are like the Jacuzzi tubs in the units that rarely get used…a necessary spec for a building/unit, but rarely ever used.
I’ve seen a few of those Opera Tower 02 lines. I agree – that 2nd bedroom door slider isn’t much of a door. Maybe nice for a home office or guest room, but doesn’t make a good 2nd bedroom.
One thing about rentals there – they installed cheap blinds so the sun will be unbearable every day at 6am. and, since the windows are curved with the buildings, custom shades or curtains would need to be installed for big $$$$.
I also saw that 5602 unit. Its the top floor, Penthouse I guess. However, there is nothing special about it. Just a slightly taller ceiling. I would expect the PH level to be much nicer, but its not. They should have merged it with the tiny 1 bedrooms to make a bigger unit and/or bigger balcony.
http://www.buybeach.com/recent_sales/data/con1208.htm this is a link to the condo sales data in December 2008
Thanks Lara. I will look up north a bit since I always rent a car while in Miami anyway.
According to that report there are no sales in the 33132 zip. Or did they just leave that zip out?
I have no idea but probably there are no sales
any chance of a new post? Beginning of strange year, never has the world been in the situation its in right now. interesting to see what will happen and how it will affect the real estate market.
Miami 2009 comment #238
If you can live 3 -5 miles away from sobe you MIGHT find a nicer room in the downtown bus district up to Pace Park area at a lower price using PricelineName Your Own Price .
I suspect that with business travel and maybe tourism down PLUS the NEW supply of rooms at Opera building some excess inventory could end up in NYOP.
The only time guess it will NOT work is Pres Day-wknd when Boat Show usually on..
Check further with Biddingfortravel.com for travelers’ comments re their bidding success or not for the dates you want and you will also find info on how to do free rebids in FAQ section.
Jesus, Lucas must be depressed.
Post something son!
miami 2009,
same exact problem for me. RT and others talk about all the condos turning to daily bed and breakfast and cut throat prices for rooms etc, but I am so frustrated that I cannot find a room for under $100/day anywhere for stays under a week.
I tried Craigslist, short term rentals, vacation rentals everything. Rooms are as expensive as they have always been. I will be in Miami for 3 months from March to May. Where the hell are the deals? I would like to stay in any building from One Miami, 50 Biscayne, MB, 900, Opera, 1800 and Quantum. I do not find a single unit being rented for short term in these buildings. So much for the flood of daily or weekly rental theory by the underwater landlords as proposed by RT.
RT, if I don’t find a decent and affordable place to rent by the time I get there, have your guest bedroom ready for me.
Gables,
Go to HBB and look at past blog entries for the past 4 years about the Midwest.
A lot of greed.
I will say that as far as fraud goes, Miami does outdo everyone else.
research.stlouisfed.org/fred2/series/AMBSL
revised numbers
For everyone!! 🙂
From the Herald:
miamiherald.com/331/story/834433-p2.html
“Q: What are the consequences of association-fee problems going unaddressed?
A: I know of several condominiums that are on the brink of people just walking out. They can’t afford to maintain their units anymore. Their slice of the pie has become so big that they can’t afford it. They are just packing up and leaving their largest investment because it doesn’t pay for them to stay. You are going to be hearing about this very soon. This is going to be a real problem.
Q: So unit owners who’ve been in their condos for many years, who have equity in their condos and even may have paid off their mortgages, are still having to move because they can’t afford maintenance fees?
A: Yes, and some condos can’t take in even enough money to pay their water bills. They’re shutting off the water. They’re shutting off the electricity. They can’t come up with the money because there are so many delinquencies. The few who are left can’t come up with enough money to pay all the bills for everybody. It’s sad.
Q: How do these problems affect sales in the buildings? I’ve heard it described as a “death spiral.”
A: Sales are very poor because people don’t have the money to buy, No. 1. And, they don’t want to take over places with debt problems. Sales are very bad. Everything is very bad. Let’s face it.”
aj# 251
I know someone at the Grand who might have a unit available for short term so you are welcome to leave an email contact and I will try and locate him for you..
If you can cut a deal with him should be much less $ than going through Doubletree Hotel rental office which you can likely find online to give you a baseline of what they ask on monthly basis ..
Thanks George.
My email is [email protected]
“Death Spiral” = $200 Sq. Ft. for 60 condos at MARINA BLUE (Down from $400)
Bulk buyer snags 60 units at Marina Blue
South Florida Business Journal – by Brian Bandell and Oscar Pedro Musibay
A Singer Island-based group has paid nearly $13 million for 60 units at the Marina Blue high-rise across from American Airlines Arena in Miami.
The deal was recorded in separate deed transactions between developer Mist Towers – a subsidiary of Miami-based Hyperion Development – and buyer Welcome Bay on Dec. 24.
Joseph Kuharcik, an attorney in Palm Beach County who represented the buyer, declined to comment. Hyperion Development could not be reached immediately for comment.
The developer issued 374 deeds for the 516-unit Marina Blue before making the bulk deal with Welcome Bay, according to court records.
The total price, based on the taxable value paid for each deed, was about $12.9 million. The unit prices ranged from $116,000 to $264,000.
Robert Given, CB Richard Ellis executive VP in the South Florida Multi-Housing Group, estimated that the units sold for about $200 a square foot.
Given, who is not involved in the deal, suggested that senior lenders at projects like Marina Blue would be happy if units sold at $200 a square foot because that price could generate enough cash to pay them off.
“What you are going to find is that premium buildings and premium sites are going to have enough value to satisfy the senior lenders on new construction and additionally pay back some of the mezzanine and investor positions to a degree and those sites in marginal locations are going to be more challenged,” he said.
However, during preconstruction, units at Marina Blue were selling for about $400 a square foot.
The $200-a-square-foot price provides a ceiling for inferior pricing at inferior locations. But equal or better-quality condos may be able to generate a higher per-square-foot price, Given said.
When the 60-unit bulk sale is factored in, the building is about 84 percent sold, which is “very good” in this market, Given said.
Although $200 a square foot is less than what a lot of units in premier buildings sold for, even at preconstruction prices, it gives developers the breathing room to rent units immediately, and sell the units for more down the line, Given added.
“Once they pay off the senior lenders, they can slow down and maximize sales on the remaining units for investors,” he said. “Senior debt creates pressure to liquidate.”
Given also said that it could be an all-cash deal because financing is so hard to come by in the current market.
Many groups are on the prowl for bulk buys in downtown Miami.
The Related Group’s Jorge Perez is responsible for one of the few bulk buys that have been made public. He launched a buying fund that made two deals in the 528-unit 50 Biscayne, which Related Group built in partnership with Atlanta-based Cousins Properties. The bulk deal sold out the project and closed out its loan.
The 50 Biscayne buying fund, Lubert-Adler Partners, paid $6.1 million in May for 26 units –an average of $236,294 a unit – and $30.3 million for 120 units –an average of $252,504 a condo.
Condo Vultures Realty CEO Peter Zalewski, who was featured recently on 60 Minutes and frequently is quoted about his work to facilitate various bulk buys in Miami, was uncharacteristically silent on the Marina Blue deal.
Kevin Tomlinson, an Esslinger Wooten Maxwell broker specializing in condominiums, speculated that Corus Bank, Marina Blue’s lender, might be getting less from the developer. With individual condo buys becoming harder to come by, bulk buys are a lender’s best chance at recovering any of their money.
“The people who own the senior debt – they may be taking a discount,” Tomlinson said, noting that the deal may not be what the banked wanted or what it was owed, but it is better than nothing.
Next: $100 Sq. Ft. at 500 Brickell and the Axis???
Un-related,
Very interesting article. Thank you. My question is it legal for the developer to sell units for such a low price when other investors paid so much more. It obviously influences the value of other units? Unless it is stated in the purchase contract that they cannot sell these units for some longer period of time.
I heard from someone that one developer wanted to make a bulk sale of 50 units in one of the buildings in Miami Beach but was prohibited to do so since he wanted to sell them for much lower price/sq.ft. Please clarify
Lara,
They were leftover units, never-sold or “walkaways”. It’s perfectly legal. No one in their right mind would bet $13 Million on this if it were not legal. They got a clean title to the units.
As for the now-to-be-devalued “neighbors”: TOO BAD, SO SAD!
Latest bayview terrace sale at $202/sf puts aj underwater
the dynamics of these bulk sales will be interesting. many will try to keep the sales from affecting prices in their own building, claiming they are special circumstances sales which should not be used as comps for other units in a building. but as we get more buildings with bulk sales, they will affect unit prices in neighboring buildings. therefore we have bulk sales in 50 biscayne and marina blue which have essentially provided a baseline of $200-$250 sf for new luxury buildings. This will put significant pressure on units in One Miami, Met 1, Brickell on the River, etc to cap their prices at this range. This definitely puts most 2B under the $300k mark. My guess is they wont drop much below $200k, although my estimate is even at $200k most condos are cheaper to rent than buy.
Does anyone know on the bulk sale at Marina Blue what type of units went into the package? Meaning not sought after by consumers, the last to sell, western views?
nj dave, in Marina blue all the units look east. its the only building that was made like that.
gables
“the dynamics of these bulk sales will be interesting. … This definitely puts most 2B under the $300k mark. My guess is they wont drop much below $200k, although my estimate is even at $200k most condos are cheaper to rent than buy.”
–
Then they will go bellow $200k.
Firstly,
Unrelated, welcome back. Where have you been all these months?
Secondly,
Mark (not Zilbert), Fuck off. Who let you back in? I thought your arse was kicked out by Lucas and you went crying like a baby to Mo’s blog about that. After calling Lucas all kinds of names on the other blog, you have no shame to come back here? You are exactly the piece of shit this blog does not need. It was so much better with out you all this time. I will be very happy if Lucas kicks your arse again.
Thirdly,
Bulk sales are actually good! Bulk sales will actually keep the values from precipitously dropping as bulk buyers are in the business to make money. They paid $200/sf and will rent it out and make some serious cash on it. Just tell me, if you have 13 million dollars, what investment options do you have right now? Buying MB at 50 cents on the dollar is a good thing. The owner of the 60 units will pay the maintenance and the building will be more stable. Don’t expect to buy back the unit from the bulk buyer for $201/sf!! They will hold it until they can realize at least $300/sf, which of course will be less than $400 paid by retail investors. Did the retail investors lose? YES. But their units did not automatically fall to $200/sf bulk sale price. Those prices can only be obtained by all cash bulk buyers. Eventually the bulk buyer prices and retail investor prices should even out somewhere in the middle say $300/sf.
I’m not so sure that the bulk sales will have the impact of setting the comps to the bulk sales prices. The reason being is it is like one developer substituting for another “developer”….you have to leave a lot of meat on the bone for the new “developer” to bite. The bulk sales price won’t be good for the previous buyers but it won’t doom them to $200/s.f. just yet. The larger the bulk sale then probably the less of the impact. Say I buy 50 units at $200/s.f., then I either need to finish them out and rent for years or flip them for $300/s.f. retail price to an end user. The REAL problem is for the people who bought with the primary if not sole goal of flipping before finishing, etc. (and paid $350-$400/s.f.) they will have to compete with a second “developer” and the perception of lower comps….Just a thought.
Mark (not Zilbert) – Welcome back….no profanities from me! 🙂
From the bulk buyers perspective, they probably evaluated their “worst case” scenario of just flipping them at the $200/s.f. to exit if need be and making -0- return. However, their worst case could get even worse. So they are taking on some very real risk in this market…esp. with the holding costs issues, the either need to flip within 12 months or finish and generate cash flow through renting….
When making very large investments, I always evaluate the worst case scenarios for an exit strategy. If I can stomach that and can act to control risks, then I will go ahead if there is sufficient rewards. Just like when the financial system was going nutty, I had to spend time on a Plan A, Plan B, and Plan C to execute depending on the circumstances…..fortunately it never got to that and only opening up a ton of accounts for FDIC was necessary.
RT,
You are agreeing with me (#266)!! Did the pigs fly today?
Anyway, don’t make Mark so welcome. He may be on the same side of the fence as you but he is no friend of you or your cause.
i find it amusing that kt with his beauty school education gets quoted on the viability and internal workings of a bank. ahh, south florida journalism. where even boobs are given a chance to opine.
anywat, sorry guys, but bulk buys kill everyone. as rt, pointed out, the flipper gets murdered here. you’re competing with the new developer. not to mention, any sale s/t financing, forget about it. banks are lending on appraisals and any appraiser, based on the scrutiny they’re now getting, is going to be extremely conservative in valuing this stuff for years to come.
as for end users, i’m not sure how any one of them can claim “well, that was a special sale, so, if you’re trying to buy from me today, we’re not going to look at that.” bullshit. a sale is a sale. the new low has been set and it’s going to take that much more time for any end user to recapture that value. any bank providing financing will say as much. moreover, your building is de facto fractured ownership, with at least 10% rentals. not sure if that’s a good thing.
finally, AJ, i can give you ten investment ideas better than this. hell, buy an S&P fund or distressed corporate debt. if barack can’t spend us out of this financial predicament, then we’re all doomed. including bulk sale purchasers at marina blue.
kt with beauty school education. I was rolling on the floor holding my stomach. really, what credibility does a journo have left after quoting kt? Is that the best he could come up with to interview?
Barack, Spend Spend Spend. Spend us out of this mess. Who cares if your children or grand children will be left holding the bag. Lets have fun now. I am living for today.
If bulk sales are at $200 sf, not sure if expecting anything beyond $250 sf in the near term is reasonable. the days of making 50% profit on capital is gone with the easy money. i really do not mind bulk deals as they put in place owners who should pay HOA, etc which help the building. but these are two bayview buildings, extra luxury and new. this does not bode well for many of the other buildings, particularly in brickell, which are not on the water. plaza and avenue come to mind as possible trouble spots.
the price corresponds to rents of around $2000/month for a 2B. really sucks if you are a new condo owner trying to rent out your place in the near term, since this price will not cover your costs. but a couple of other bulk deals may help put a floor on rents and prices, as these investors are deep pockets who will not be forced to a fire sale in the next few years. but this does not help the thousands who overpaid and are sinking underwater-wonder what those units will sell for in desperation? I still think vue and club are giving good guidance on the lower bound we will see.
$200 a sq foot may seem cheap to some of you now. However, Pets.com looked cheap when it was 50% off also.
furthermore, just because a bulk buyer may choose to never sell these units for less than $200 per sq foot, that does not mean that they will be able to maintain the value of the units at that price floor.
The bottom line is that with exotic financing gone, and the reality quickly setting in that condo’s are now just a place to live instead of being viewed as an ATM machine or lottery ticket will result in people no longer being willing or able to pay the fantasy prices that were happening in 2003-2006.
Here is a simple formula to determine what the true value of a condo is.
(Monthly Rent the unit can be rented for) *120 = Value of unit.
If you can only rent your condo out for 1200 a month. $1200*120 = $144,000
Yes, you heard that right. a Rental that commands $1200 a month is only worth $144,000 in a purely cash flow positive analysis.
You have to remember that Miami Real Estate was about 100 dollars a sqaure foot pre bubble and quickly rose to 300 dollars a sqaure foot. We are 1/2 way to the bottom, but there is still more to go. Don’t buy yet.
Gables,
Using my formula a $2,000 a month 1 bedroom should be worth $240,000
The problem with Miami right now is that with property taxes and association fee’s so high you need to buy the unit for even less to become cash flow positive.
gables – I agree with #272…. $250/s.f. for others is reasonable going forward since the $200/s.f. units were all bought up. Of course, the $250/s.f. assumes there are buyers out there at that price! That is a big assumption!
HOA and taxes really make anything over $200 sf noncompetitive for individuals who are somewhat fiscally responsible. In many cases, a unit costs $1/sf per month in HOA and taxes alone. this seems obscene to me, but others may be more aware of appropriate costs. But with many rentals under $2 sf, you seem to pay a big penalty to “rent” your own property.
on the bright side, i have seen a movement across the country regarding these outrageous property tax bills. perhaps something could be done in this arena. this would be a bold move to make housing affordable again. on the flip side, HOA is mostly an insurance cost. judging by my most recent auto insurance bill, which jumped nearly 15%, not sure if HOA costs will be contained in the near term.
christopher,
my estimate is that i need to buy a 2B condo near $200k for it to be economically sensible, assuming no additional significant RE depreciation occurs. future recession and job risks really do not allow for much more to be spent on housing. condos must show they demand a premium beyond this price point, and from what i have seen, very few buildings can do this. as much as i would like to own, renting still makes way too much sense in the Miami RE scene-unless you are buying a single family home.
A bulk buyer who cannot make his maintenance fee payments will render a building bankrupt almost overnight. No buyer in there right mind should touch any building with a bulk buyer. Ask the developer for a list of all owners and check public records. Watch out for all owners who own more than two units in one building. They are the ones who fail to make payments more often than the true homesteaders.
Miami housing isn’t going to find a bottom until banks start doing No money-down loans again or give it another 5 years which should be how long it takes most people here to save up a 20% downpayment for the first time in their lives… actually I change my mind, make that never. If banks don’t start giving out No money-down loans again in Miami, the housing market here will never recover.
The average person in the housing market here does not have the wherewithal to save up for 20% down… Not even close. It doesn’t matter if lending standards get relaxed to Bubble standards, a downpayment requirement effectively puts a lid on the RE market here.
JL,
So the investors are stuck with their purchases I guess.
My one advice to investors, just enjoy the damn place you bought and forget about selling it. If you (the investor) live in Colubus Ohio or some such place, cancel your Cancun or Paris vacations and just keep visiting Miami all the time. In any case what other vacation destination is better than Miami anyway? That will serve my city good. I love to see all the investors become accidental (if not reluctant) residents of Miami.
Read this about Bayfront Park and Bi Centennial Park. Relevant to what we talked about a couple of days ago.
http://www.bizjournals.com/southflorida/stories/2008/11/10/focus3.html#
Wild Bill – I reviewed one building that had a relatively nice short sale……the one line of units that I reviewed in detail had only ONE homestead filing and that unit was for sale too with an estimated lose of over $250K! So many buyers using Inc., LLC, and other business names……beware. If I form an LLC just to own one property and got a bank to loan the LLC money without a personal guarantee….pretty easy to stop making payments then since there is no personal recourse.
Guess what?
Google Tibor Hollo — this blog post ranks first in Google.
Google Florida East Coast Realty — this blog post ranks second.
How much longer before this post ranks well for Opera Tower?
Bullying doesn’t pay.
jcrimes,
Beauty School guys are well-represented in the News and Real Estate industries. B-S grads support each other and ensure that the “news” stays sunny while buzz-killing, realistic stuff is kept to a minimum. That’s why the recent, totally awesome real estate boom lasted so long. B school grads are good for the eCONomy. Yay for kt.
Lara – thanks for the link on recent sales. I’ve been watching Turnberry on the Green in Aventura for a while now. Do you know of any similar links for the Hollywood Beach/Hallandale area?
AJ,
I think most investors are exactly that-stuck with the place. Problem is they cannot afford it. Most of these blokes cannot hold the property on their own-it must be rented out. And if you have renters, obviously you cannot use the property on a part time basis.
If they can afford to not rent, and use it as a second home, i agree best to just stick with it as your new vacation destination. My bet is most folks do not fall into this category.
NEW YEAR NEW POST?
OR IS THIS PART OF THE SETTLEMENT AS WELL?
Gables (post # 156)
I’m also curious about what kind of discounts can be had when paying in cash. I’ve pretty much narrowed my search down to one building that still has developer units left. When I went in about six months or so ago, the asking price on the 2/2 I liked was $600k (which I think has been their asking price since construction finished up well over a year ago). I’ve been thinking about offering $400k in cash when my current lease is up in a few months. I’m just wondering how much the prospect of a quick cash sale will entice a developer to lower his price.
If I was you….I’d offer 300K Ca$h and that’s it!!Money talk’s these dayz.
DJ
Tell us the building name – view (water or city) – floor height and square footage???
DJ – Whether you have your own cash or a guaranteed mortgage financing, the seller doesn’t care what the source….they just want the money. At closing, it is always all cash to the seller anyway.
looking for those who may have some experience with lender owned properties. if one were to offer 20% below the list price, would a bank consider? and what about turnaround time? looking at a unit that is $200 sf now, but i think is a nice buy for $150 sf. would it be worthwhile to pursue at this point in time? better building and location than vue or club, but not a brand new luxury building-say built in 2004 time period.
Kramer, I’ve talked about in on here before….it’s in the Lexi, top floor (20th) or thereabouts, corner unit, ~1800 sq. feet, south view (water). I really like the floor plans, finishes and amenities of this building, and by this point I’ve seen a ton of different buildings and condos. They all have their pros and cons, but I think the Lexi is the closest to what I’m looking for.
RT – I know its all the same at closing, but obviously having cash just guarantees you get to the closing table that much faster and without any hitches. Apparently lots of deals fall apart these days before the buyer even gets to the closing table due to financing hangups, etc. I figure a seller (especially a developer) would far more prefer to have a guaranteed sale that’s not gonna fall apart, and also a buyer that they know isn’t gonna default. Anyway that’s my thinking on it.
DJ,
My thoughts are the same regarding a cash buy. If i can write a check today for a unit, i would imagine that is worth a discount compared to somebody who must go through the financial motions. because every day the price drops-how much less is the unit worth in another month? that should be the minimum discount for cash buyers. sellers should pay for the reduced risk.
This isn’t good….newbie is already making dumb public statements:
“We’re already looking at a trillion-dollar budget deficit or close to a trillion-dollar budget deficit, and that potentially we’ve got trillion-dollar deficits for years to come, even with the economic recovery that we are working on at this point,” Obama said.
the question is, would you rather here that statement, truthful but a downer, or “the fundamentals of our economy are strong” which is a lie or stupidity.
our aversion to negative statements from our leaders is stupid. i need leadership who will tell me when the ship is sinking, not encourage me to board more passengers. if trillion dollar deficits are in the future, i want to know about them.
gables – Neither. The simple fact of the matter is HUGE government spending will NOT solve the economic problem, period. In fact, running such deficits for “years” could doom the USA, and I am not being dramatic. The simple fact is the fed govt can not and should not try to fill the credit gap left by the credit bubble collapse. All they can and should do is prevent an over correction on the downside by spending on infrastructure investments only. Anyone that complained about Bush’s tax cuts should be frightened as Obama will propose cutting FICA taxes at a time when those obligations will balloon…all so people making less money with lessor skills can buy a flatscreen TV. His dumbass statement should spook the markets…..it was absolutely reckless to make such a statement since NOONE knows if such spending levels will occur for “years”. It is insanity, pure insanity!
As I said before, spend now and screw the next generation later. Who cares if our children will be making sneakers to the Chinese and the Indians 20 years from now in sweat shops from Detroit to Dallas.
that is why baby boomers have been trying to accumulate so much wealth over the past decade. they can accumulate enough wealth to pass on to their children and grandchildren that those individuals will avoid most of the hardships to be endured over the next couple of decades. problem is they could not get cashed out quickly enough.
Does anyone know if the units sold in bulk at Marina Bue are finished?
can they rent them out now – floors windows and closets finished?
if not, they have to spend another $4o psf to rent them.
not such a great deal