Ten Highest Closed Sales Within the Past Six Months in Miami-Dade County

Lebron is here. The oil gush will be capped this week. The World is realizing what we locals already know – The bottom has come and gone in Miami. We (Miami) cannot be clubbed along with the rest of America. We have one thing what the rest don’t – Demand from foreigners. All in all, it is a beautiful day, week, month and a bright future for Miami. Miami’s Downtown Comes Alive as Condos Fill With Renters By Prashant Gopal – Jul 13, 2010 Miami Downtown Comes Alive as Young Renters Fill Condos Brandon Klein has done what few Floridians… Read more »

Is there a rhyme or reason why some foreclosures show up on the MLS but the vast majority do not? I would think they would try to put all the hi-end foreclosures on the MLS but that doesn’t seem to be the case. The foreclosure market is getting really active now but it’s a pain to navigate the Dade govt site.

I will see your article (thanks for the post, by-the-by) and raise you: RealtyTrac: Foreclosures remain high South Florida Business Journal – by Oscar Pedro Musibay It’s more of the same for Florida in terms of foreclosures, which keeps the Sunshine State at No. 3 in the country, according to a new RealtyTrac report. Florida registered the nation’s third-highest state foreclosure rate, with 3.15 percent of its housing units, or one in every 32, receiving a foreclosure filing during the first six months of the year. But, in terms of the number of properties receiving foreclosure filings, its 277,073 ranked… Read more »

LMFAO! The true value of a unit is basically (monthly rent) * (100). So that condo the guy is renting for 900 a month is only worth $90,000 dollars. I bet the owner paid $250,ooo. There is no doubt Miami is a desirable place to live, and the people renting these units at market value prove that. The problem is that flippers, realtors, and “investors” are hoping that prices will return to 2005 levels and they never will again. Figure out what a unit could rent out for per month. multiply that figure by 100 and thats what that unit… Read more »

Chris, while I admire your twisting of facts, no one said the condos are renting for $900. They are saying, 2 roommates are paying $900 each. That is a rent of $1800. Now go back and do your math right with out cheating. While I agree that 2005 prices are a long way off (in fact it is Summer 06 which saw the peak, not ’05-another one of your wrong assumption), unless there is a prolonged no growth in the economy, I predict that we will rebound to 06 levels in about 5-7 years provided there is no new construction… Read more »

why bother — You think Miami housing is going to double in price in the next 5-7 years? Really?

If you could find a way to bottle that optimism, you’d be filthy rich!

Chris #4- You hit the nail on the head. I’m renting for $1900 a month. Thus my unit should be valued at $190,000. In reality they are asking over 400k for units similar to mine. The bottom is still a long ways away. Even more so with the record wave of foreclosures Scriv mentioned above. Numbers do not lie.

Joe, Hope is what keeps this World moving. If you lose all hope, It is anarchy and mayhem. Yes , I believe in what I said. But with 2 major conditions. 1. Economy should grow at a normal rate of 3% even if not at a good 4 or 5% . Presently we are at 1 or 1.5%. If it stays this low for a prolonged period, then all bets are off. No one seems to know where we are headed regarding the economy. Up, Down or Sideways. 2. No new construction should come on line from now until the… Read more »

Nice one Joe!

scriv

Does this whore Zalewski ever shut up? From an article in the South Fla Business Journal re Lebron living situation: “Peter Zalewski, of Condo Vultures Realty, said James could buy an entire condominium project with the kind of money he is rumored to have offered for the Potamkin property. The average 1,000 square foot condo is selling for $200 a square foot. Zalewski, who specializes in bulk deals, said it would make more sense given James’ age and the commute to Gables Estates for the superstar to invest in a group of condos on several floors, tearing down the walls… Read more »

Drew…. couldn’t agree with you more…

Somebody PLEASE tell this so called “expert” to shut up

I just read about another bulk-buyer transaction. What fascinates me is the discount the buyer received and the percentage that the buyer owns in the development: 66 % is a big bet. scriv ——————————————————- Friday, July 16, 2010, 12:07pm EDT Dizengoff buys 106 condo units for $8.2M South Florida Business Journal Dizengoff-Trading Group has acquired 106 condominium units at Bermuda Cay in Boynton Beach. The Israeli firm, which has a U.S. office on Glades Road in Boca Raton, paid $8.2 million in cash for the units. The 35-year-old complex, at Woolbright Road and Federal Highway on the Intracoastal Waterway, was… Read more »

Guys, Here is my two cents about condo prices going back to 2006 levels…… I think regardless of how well the economy does and how low the supply of condos, I don’t think prices will rise back to those 2006 prices. At least not for the next 10-15 years. For me as an end user and not an investor, I would be very happy just to see the day when all the new condos in my Brickell area are sold (or re-sold) to more end-users (for prime or 2nd home), so there will be less renters in these buildings. Prices… Read more »

“I would like to see Brickell become more of a real community with more shops and businesses. ” – – ownerinfinity

Amen brother.

scriv

I have to say I don’t see prices going back to previous peak prices soon either. I’d guess recent reports that indicated prices won’t reach previous highs until 2030 are proabably the best guess. If prices hit previous highs in 2030 that would mean an average of about 4% appreciation per year over the next 20 years. For prices to hit previous highs in the next five years you’re talking about 15% appreciation per year. Than is not happening. why bother, there is no way that no new construction wont come on line in the next 5 years. Developers are… Read more »

from what i understand, hard costs for building a high-rise condo are roughly $180/foot. include soft costs like marketing and sales, and we’re talking closer to $250/foot. so for a developer to make it worth his while prices need to be in the $400/foot range. this may make sense for beachfront properties, but for middle of the road buildings like most new construction in brickell and dowtown, this price seems a long way off. so my prediction is that we wont see any new high rise construction until condo values go up substantially, very close to peak prices…. while having… Read more »

supply** goes down

slothdale, new construction will return-perhaps at very low prices as well. construction is a major part of the economy and cannot stay dormant-but deflation can decrease construction cost in the future. interestingly, luxury buildings today who have filled with renters to cover carrying costs of investors. how will they fare against new building 5 years from now? if you are a buyer, do you buy a brand spanking new building-where rules may very well limit rentals from the very beginning based on our past experience? or do you buy into largely investor rental community for your home? could be an… Read more »

Another article about Lebron’s arrival energizing the downtown market:

http://southflorida.bizjournals.com/southflorida/stories/2010/07/19/story7.html?b=1279512000^3651841

Article about the HOA initiating foreclosures:

http://www.cnbc.com//id/38260141

I just put an offer in on a house in the suburbs of Detroit, Michigan. It is a middle class-upper middle class area (Think Kendall, FL) to give you an idea. The house sold for $210,000 in 2004. It is 1635 square feet, 4 bedrooms and 2 baths. In a really nice subdivision with a great school district. They are asking $105,000 in July 2010. That is a 5o% decrease. Now before you say…Detroit is a ghetto…blah blah blah…which is true. The suburbs are kind of their own seperate entity and are very nice. How does this relate to you?… Read more »

“Pending financing, Miami’s overheated condo market will get its latest infusion when the Mediterranean-style building is completed at the end of 2011. As the first residential building built in the Brickell corridor since the condo glut began, its developers hope it will pump new life into the area’s real estate market.” “We want to be one of the only products available in the market upon delivery that’s new,” said Isos Stamelos-Monroe, 30, SkyPalace’s vice president of sales. Also when you look at cost you also have to remember that land values have obviously gone down. So while it may not… Read more »

Just wanted to give you a visual example. Here is a 1851 sq foot house in Miami Florida selling for $270,000. A price of 146 dollars a square foot. http://www.realtor.com/realestateandhomes-detail/12870-Sw-60-Te_Miami_FL_33183_1118324662 Here is a much larger 2172 sq foot house in Oakland Township, Michigan selling for $174,900. A price of $80.oo a square foot. http://www.realtor.com/realestateandhomes-detail/3040-Bridlewood_Oakland-Twp_MI_48306_1118805437 Still don’t believe me??? Look at the Sales history on zillow…in 1990 the Miami house sold for $106,900 or $57 dollars a square foot. This house was worth 80.00 a square foot in 1999 and thats the price it has to fall back too. http://www.zillow.com/homedetails/12870-SW-60th-Ter-Miami-FL-33183/44255978_zpid/ Conclusion….Detroit… Read more »

RE scrivener # 12 the discount from app $400 a foot is so large because as a 35 year old rather conventional project -meaning not a luxury hi rise-it was never worth the $400 a foot they tried for. Recall 3-4 years ago I read an ” insider’s” offering circular for a 2-3 story glorified garden apartment building located in Broken Sound in Boca where the insider price was app $300 a foot : told my lawyer friend who kept a 700 sq ft unit there that was priced at app $ 225 th to run for the hills and… Read more »

george ,

Owner at infinity #13
Are you involved with the attempted revival of the mixed use project that was going to replace the now shuttered Filenes-and the famous original basement store across from the old Jordan Marsh-likely now a Macys ?
The area looked seedy last time I was there : the real growth will be Cambridge with hi tech, medical leading the way.

===> No, I am not involved in that. The project that I will manage in the Boston area is for a large retailer that wants to extend their retail stores further into the European market.

Parts of the CNBC HOA foreclosure story Gixxer 1000 posted in #21 above don’t seem to add up (especially the scenario outlined in the third-to-last paragraph). How can there be a judicial transfer of title in which the existing mortgage(s) aren’t cleared at the same time? It seems ludicrous that an HOA could take title to a property over a delinquent $500 HOA balance, then evict the mortgage-holder and rent the place out for a year or more while the original mortgage remains in place under the evictee’s name. I know Florida courts and laws are often a joke, but… Read more »

After reading “housingfear chris” I had to laugh. His premise is so far off it is ridiculous. Communities rise and fall and that influences prices. Are you going to argue that $2000 sq. foot on Central Park West is overpriced? Detroit is unfortunately a slum exacerbated by the fall of the auto industry. I don’t see the city recovering anytime soon. On the other hand, Miami is progressive, an international business center. There is no argument that Miami has suffered from the real estate bubble causing prices to decline due to oversupply. But the inventory over time will be absorbed… Read more »

Gixxer, Re#15, I think you guys are right. I may have gone overboard in predicting the return to 2006 prices between 2015-2020. It could be more like 2025. Michael, Chris@housing fear claims are so outlandish, I did not even care to respond. Anyone who reads it would have seen it. I have visited Farmington Hills, MI many times. It is a suburb of Detroit. It is a suburb exactly like what Chris is describing. He claims that suburbs are great even though the City of Detroit is rotting. Not so Fast. Suburbs do not sustain unless there is a robust… Read more »

You comparing Manhatten NYC to Miami is the most laughable thing I have ever read. Manhatten real estate is out of land. There is no land left to build on. It is the greatest city in America. You can’t even compare it. And like I said…I am not comparing Detroit to Miami. I am comparing the suburbs of Detroit. If you actually clicked on the picture I showed you. You would see the house in Oakland Township is somthing that would cost close to 1 million dollars on long island Ny so please don’t call it a slum or you… Read more »

Chris@housingfear, how did you come to the conclusion that housing prices should go back to that of 1999? why not 1984 or 1995, Is there anything significant about that year, how about inflation how was that accounted in your calc? Does the cost of materials, labor and a modest profit for the builder have anything to do with factoring the true cost of a house, what about demand for that product? I just don’t get the reasoning of how some people come up with their estimates about the value of housing. Some people say housing will be stagnant for 30… Read more »

Michael, You make a lot of sense with your post number 27. That $200 per square foot in Brickell is what I paid for my place on the 50 and 51 floors with an amazing east city/bay/ocean view. It will be interesting to see what becomes of all these new condos in Brickell 10-20 years from now. I wonder what type of people will be living in them at that time. For me I just needed a home base, someplace BRAND NEW, but small, in a warn area of the country, with a hell of a view of water. For… Read more »

For a healthy RE market over the real long term, you need to get a handle on high-paying job growth coming into the area.

Foreign nationals/US residents might be buying distressed 100-300K property now as vacation homes or renting $1k-$2K as students/YUPs… but that doesn’t translate into a steady future of buying inventory over 300K+. You need decent jobs for that.

The crux of the matter is that the reason people come to Miami -to screw around-, is the same reason that high paying non-hospitality/RE business avoids Miami.

Chris@housingfear,
you are by far the biggest dimwit who ever appeared on this blog.
Even Joe and Drew must be scratching their heads in amazement…
Great entertainment, though, have to give you that.
Please write more.

Wow, guess you killed this post.

In real terms, the average person in Miami is only 2% wealthier than he or she was in 1980 (or was it ’85?), when Time magazine did its infamous front-page article on Miami. This notion of Miami being a “growing” “international business center” is utter rubbish. If that’s true, how about listing all of the major companies that have moved their HQs to Miami and/or have added huge numbers of jobs in Miami?

Detroit has been a dead city since the race riots of the 60’s. Yet the suburbs have continued to thrive. The Suburbs have their own seperate economy and most people never set foot in Detroit unless it is to attend the casino’s or a sporting event.

Maybe in 99% of America you would have a valid point…but here you are dead wrong.
Detroit has nothing to do with the economy of the suburbs. It is a completely segregated, both racially and economically.

Its like saying Havannah Cuba has an effect on the Miami Economy. Not really.

The reason I selected 1999 is because that is the last year before the housing bubble began to expand and house prices deviated from their historical trend line keeping pace with inflation. 2010 house/condo prices should = (1999 prices) + (annual rate of inflation) as it stands now in Miami…2010 prices = (1999 prices) + (150% increase) The bubble expanded 300% and it will continue to collapse untill prices return to their historical norms adjusted for inflation. The people who say that it will take 20-30 years for Miami real estate to reach 2006 prices again are absolutly correct. It… Read more »

“Real estate is not an “investment” it is an expense that keeps pace with inflation.” – – Chris@housingfear YES!!! DING! DING! DING! YOU ARE CORRECT SIR! WELL SAID! And I would add that in addition to being an “expense,” real estate, particularly condos, is a depreciating asset. Although the value of land may appreciate over time; the value of the structure or dwelling on that land … not so much. I am not so sure I agree with your statement concerning real estate “keep[ing] pace with inflation” because that assumes a certain degree of market efficiency that is clearly not… Read more »

Chris…

If Miami prices drop another 40% the return on equity would be way out of line.
At current prices, those who buy with cash are cash flow positive.
Therefore, if prices were to plunge as you prognosticate, rents would have to also drop.
However, rental prices have not only stabilized, but have begun to rise.

Scriv,
Just a quick question.

Would not the title insurance cover in case there are issues with title/deed?

I am not sure how people come up with the prediction of housing prices in Miami will appreciate in 40 years. What we do know is that people have a love affair with homes. This has been going on from the beginning of time, just look at all the great palaces and castles that have been built since the beginning of recorded history. We also know that housing is cyclical and there have been many periods of boom and bust (especially in s. FL) We also know that the housing cycle is about 7-10 years and that Americans have very… Read more »

When you figure “cash flow positive” you also have to include taxes, association fee’s, monthly repair fee’s, in addition to mortgage carrying costs.

I find it hard to believe that even with rising rents (which I agree with you is happening) you would have enough revenue to pay your mortgage, taxes, ins, assocition fee’s etc and still make enough money where it would justify not just putting the money in a mutual fund or even a money market account.

Americans have a love affair with MONEY…not houses.

The reason for the housing boom is because people wanted to sell their house in 2 years for a huge amount of MONEY.

The reason people are letting their homes go into forclosure is because they realize their neighbor is buying the home next door for 1/2 of what they paid a few years ago causing them to capitulate.

If people really loved houses….people would do everything possible to not let their home go into default. Instead, you see people no doing “strategic defaults”.

Why?…..because people love money…not houses.

“Real estate is not an “investment” it is an expense that keeps pace with inflation.”

If you buy with cash, know where to look and make smart decisions, its possible to yield 10% renting out your downtown CONDO. The best performing public residential REITS perform much better than that. I would consider that a pretty good investment.

Chris, keep sitting on the sidelines. Better yet, put your money in the stock market. Seems like you’re intelligent enough to make money there.

computer consultant: Maybe yes. Maybe no. Title insurance insures the title. What we were talking about – – if I am recalling this discussion correctly – – is the form and choice of deed – – and the protections it provides. The point is: do you want the head ache? Do you want to have to take time out of your life to clean up a defect in title or a bad deed? Or, do you want to protect yourself from these kind of problems by placing the duty on the seller to covey good title and a proper deed?… Read more »

Yes Chris people love money, that goes without saying but people also love the idea of having a nice big home with granite counter tops and marble floors and the nice lawn. Why else did they spend so much money on making upgrades that returned less than the money spent. People dream about owning homes in coral gables or coconut grove, most people don’t dream about renting there, it is all part of the American dream.

10% yield? is that annual or for the decade? because I cannot come up with such returns no matter how I look at it. 250k cash can buy you a decent condo in a nice enough area that could yield $1,500/month rent or so. after taking out a conservative annual tax estimate of 5k, and an average maintenance for an upscale building of $600/mo, and a months rent to cover for any assesment/repairs or empty month (and I think these are all likely best case scenarios), you are left with $4,300 return/year on your quarter million investment (~1.72% annual return),… Read more »

jorge,

With your scenario you are only considering the return from income and not the return from appreciation. And you’re also not figuring the annual increases in rent. A place that rents for $1500 today will likely rent for $2200 10 years from now.

Add the $10k in appreciation and your first year return goes from 1.72% to 5.72%. And we haven’t looked at any of the tax benefits yet.

Once you add in these factors most core real estate investments average 10% – 12% annual return over a 10 year period.

“Can you please elaborate how this is still a good investment or how you come up with 10% return on a cash deal?” Jorge

Can’t do it. Sorry.

Not gonna lie to you.

I can say that if you had taken that same $250k and invested it in a diversified portfolio – – say, for example, shares of CAT (for the juicy monthly dividend), GE (a solid investment), FAST (for the growth) and, let’s say, a developing markets fund – — you would be easily earning 20%.

scriv

Scrive,
Pardon my ignorance but i thought that deed and title were basically the same thing.

I do know what you mean about saving yourself the headache.