Penthouse B at The Setai Sells for $15M
June 8, 2010 by Lucas Lechuga
Last Friday, Penthouse B at The Setai sold for $15M, or $2416 per square foot. No word yet on who acquired the breathtaking, South Beach luxury penthouse. The previous owner purchased the unit directly from the developer in 2004 for $9.5M. From my knowledge, the recent sale is the highest priced condo sale to ever take place in Miami-Dade County.
Pictures and an e-brochure of Penthouse B at The Setai
For inquiring minds, Penthouse A at The Setai came onto the market this past April. The unit has the same square footage as Penthouse B. The asking price is $27M, or $4349 per square foot, which currently makes it the second highest priced condo listing in Miami-Dade County.
Goes to show that there is still shit load of money out there. And it is all cash. Someone on this blog (gables?) said that it is all highly leveraged. NO, when you buy all cash, it is not a leveraged buy.
Good for the lucky guy who bought this spectacular property even though at $2416, it rivals the property prices in Hong Kong and a bit hard to swallow for many.
Where is the $125 brigade LMFAO!!?
why bother, people leverage up to $1m condos, not $15m condos. not much leverage today in Miami according to the latest reports-that all occurred 5 years ago with the mortgage fraud. they are the short sales listed ad nauseum.
This is the same unit that was listed in this website at about $20 Million.
Incredible unit, but still too rich in my opinion
Doesn’t mean much until we see who the buyer is. Knowing Miami, it might be yet another paper transaction.
Lucas — It might be moot now, but the PDF file you mentioned above seems corrupted. I’ve downloaded it 3 times, and all I get is a 2.7 MB file with a blank one-page PDF. I’d like to see if it’s still available somewhere.
Anyway, the pricing history is interesting: Original sale was $9.5M in 2004, then it was listed for $34M, then reduced to $22M, then reduced again to $20M in April, and now it apparently sold for another $5M below list price.
Joe,
It might be your computer. I tried downloading it from two different computers and didn’t have a problem viewing the PDF on either.
This is a lot of fun information. However, it strikes me as being useless to 99.99 percent of condo buyers out. As most insiders know much of these large sales are from Latins, Russians, etc that want to wash their money through the high end Miami condo market by not having to pay taxes on income not reported. It does not reflect the real estate market in any shape or form. What has a greater bearing on Miami real estate is the oil slick spilling onto the Florida and Louisiana shore, altering the environment permanently. The oil slick is the size of a small island. It will take over one year for it to come on shore effecting all of the beach land. Of course if your laundering money you don’t really care. Your condo is basically free. Thoughts?
iphoneapi – Who knows about some of the transactions in this area. One new building I looked at showed about 8 remaining developer units sold to some LLC at 2-4 times market price….couldn’t understand it and doubt the transaction was real. Why would a developer do this (increase comp prices???)? Odd to me…I must be missing something…
Renter Tom
How quickly we have forgotten about OBAMA’s home purchase!
Someone buys something for more money so someone else gets a discount. It is just another financial transaction. In old days they use to say – follow the CASH and you will find the skeletons.
I sure hope all that oil doesn’t come to Miami Beach! Oil clumps may show up on occasion for more than a year on the gulf side…ouch.
Hope and Change? I’d settle for stopping just one oil leak… Where is that oil man when we need him!
Anyone know how sales are going next door at the W South Beach? Heard its in trouble with banks not willing to lend large amounts on such small units? It’s not listed in Zillow or Trulia.
Sales like this one at the Setai are not useless info to the rest of us buyers. Many high end & low end transactions are of questionable pedigree as iphoneapi points out. Same story in every city like New York or London where high end buyers flock. The point is Miami is one of the places that attract them as well & those buyers in many ways grease the less sexy wheels of the overpriced showboxes the rest of us plebs pay up for. Who doesn’t want to own or live down the block from the 15MM PH guy? Miami needs these transactions especially because unlike NY or London we don’t have too many hedge funds!
Renter Tom: I had a conversation earlier today about someone who was looking for a condo on the beach. They were all concerend about the oil that will surely hit FL beaches in the coming weeks/months. Once the oil hits, it will take a long time to clean up.
It will be interested to see what the oil will do to the price of beach front properties.
On a more relevant side:
The median price paid for resale condos in April slipped to $91,000, down from $95,000 in March and $103,000 a year ago. April’s level was the lowest since the resale condo median was $87,500 in January 2002. Last month the resale condo median stood 58.4 percent below its $219,000 peak in July 2006.
http://www.nuwireinvestor.com/articles/miami-home-resales-reach-four-year-high-55368.aspx
From the same article:
“The March-to-April decline in the median was in part the result of a shift toward a greater percentage of homes selling below $200,000. In April, 65.1 percent of all sales were under $200,000, compared with 63.8 percent in March.”
Which is what I have been saying. It’s not that the actual value of units is going down its just that more people are buying lower priced condos than there are people buying higher priced ones trending the median price down. Especially when you had an incentive that disproportionately affected lower price units (tax credit).
Also:
“A popular form of financing used by first-time home buyers – government-insured FHA loans – accounted for 47.1 percent of all home purchase loans in April, up from 45.9 percent in March and 41.5 percent a year ago. Two years ago it was 12.6 percent.”
gixxer, you also have an increased number of sub$200k homes because they have dropped in value. the numbers are not static. a drop in house value decreases the number of $200k+ homes and increases the number of sub $200k homes. its not neccesarily a shift in target price point-but also actual price point.
gables,
I completely agree. The decrease in median value is going to be from a combination of both a decrease in value and decrease in the composition of purchase prices.
Which is why I think we both agree that we’ll have to wait until case/shiller numbers come out for April to get a better understanding.
The case/shiller index looks at changes in price of the exact same price of resale homes. So using the information from March you have a decrease in the median price of resale homes of 18.2% from March 2009. But if you look at case/shiller you had a decrease of 1.7% in home values in March 2010 from March 2009.
So of that 18.2% decrease in the median sales price the 1.7% decrease in home value was a portion of it and more people buying lower priced homes was probably the other larger portion of it.
And again keep in mind this is information for the entire area. Not every single neighborhood is going to perform the same. Here is the 2010 Q1 update of the downtown study:
http://www.miamidda.com/pdf/Goodkin-Focus-DDAMarketTrends_033110.pdf
Mortgage Delinquencies at FHA Show Slowdown
By NICK TIMIRAOS
http://online.wsj.com/article/SB10001424052748704726104575290841574349032.html
“In April, nearly 8.5% of loans backed by the agency were 90 days or more past due. While that was still higher than a year earlier, April marked the third consecutive month in which delinquencies, which peaked at 9.4% in January, declined.”
“The FHA figures come amid other signs that mortgage delinquencies may have plateaued. The number of loans that were 90 days or more past due at Fannie Mae and Freddie Mac, the government-owned mortgage-finance giants, fell in March for the first time in three years. Last month, the Mortgage Bankers Association said that nationally, the number of loans that were 90 days or more past due fell to 9.54% at the end of March, from 9.67% at the end of 2009.”
However:
“And the latest gains could prove fleeting if home prices fall any further. Despite signs that home prices are steadying in many markets, there is some concern that elevated levels of foreclosures could hit the market, weighing on home values.
“If prices drop by 10% to 15% this year, you’re going to unleash another new wave of problems,” says Ted Jadlos, president of LPS Applied Analytics, which tracks loan performance.”
Gixxer 1000 said: “Which is what I have been saying. It’s not that the actual value of units is going down its just that more people are buying lower priced condos …”
— Have you lost your mind? Unless So. Fla. developers, in a fit of largesse, have been building thousands of low-price condos without me being aware of it, “more people are buying lower priced condos” BECAUSE THE CONDOS ARE NOW WORTH SUBSTANTIALLY LESS.
Good grief, man, do you have any shame? You try to spin everything as a positive.
Again you seem to miss the point entirely.
There are about 16,000 condos listed that range in price from $30k up to over $15m. But only about 1000 are sold each month. If all of a sudden of those 100o condos people start buying the condos that are priced at $100k in MARCH in APRIL then the median price will move toward $100k in APRIL even though they are buying these condos at the same price that they were listed at in MARCH. Others like gables here seem to understand that.
Just like how Icon is now selling units at a higher price than what was previously being sold raising the median price up in Brickell. Just because the median price is going up DOESN’T mean that the value of condos in Brickell is going. More people are simply buying more expensive PRICED units and not units that have actually gone up in VALUE.
I used case/shiller to illustrate this. Home values only went down 1.7% but the median price went down 18.2%. Its clear the majority of the decrease in median price is coming from people simply buying more lower priced houses than higher priced ones.
Weren’t you and Renter Tom complaining about the lack of activity in the upper segments????
The funny thing is that a few months from now when the activity in the upper segments picks up (and the median value starts going up) you’ll probably use this exact point to argue there prices aren’t really going up.
Gixxer 1000 — Housing inventory doesn’t just pop up out of thin air. If people are buying more lower-priced condos, then OBVIOUSLY that means the market, in general, has shifted downward. The r.e. market isn’t like some kiosk at Bayside Marketplace where one day a guy is selling popcorn for $1 and the next day someone is selling Rolexes for $10,000.
Real estate, in a market with little or no new construction, is a zero-sum game. It’s not like 5,000 lower-priced condos suddenly appeared on the market last week and skewed the numbers — they came from the EXISTING supply, via price reductions. (Otherwise, are you claiming people in Miami JUST NOW got an appetite for lower-priced housing — an appetite that didn’t exist 6 months ago or a year ago or two years ago? If so, that’s absurd.)
It will be interesting to see how long the oil invasion will effect the miami area. I just read an article that states the oil will be leaking until the end of august at best. A friend of mine from NYC is considering selling his condos at the Bellini, The Bath Club, and One Bal Harbour before the beaches are wrecked and prices head way south. What are ur thoughts everyone?
My thought is, you are just a big phony, making up stories of your imaginary friend.
“Good grief, man, do you have any shame? You try to spin everything as a positive.” – – Joe
I share your frustration.
All this mind-numbing, generalized, and speculative talk of “median prices” – – who is doing this math? “[M]edian prices” – – it is almost an indefinite pronoun.
The “median” is the middle of a distribution: half the scores are above the median and half are below the median. While median values are less sensitive to extreme scores (e.g. “black swans” and “fat tails”) than mean values , how are these “median price(s)” being calculated? What is the size of the data set and what is the range of the distribution? Moreover, does the data set and the distribution factor in “bracket creep” (higher priced units moving into lower price ranges) – – this would certainly affect the distribution’s range and the location of the median.
For example, the median of 2, 4, and 7 is 4.
But let’s say that the next month, another number is added – – because the owner of unit X in Development Y decides that their unit is worth less….or they are desperate to sell it. So, they list their unit in a lower price bracket. Ok?
To illustrate this, assume the same numbers from the first example, but here I add an additional value. The median of the numbers 2, 4, 7, 12 is (4+7)/2 = 5.5
The median value in the second example is higher than the first because the data set is larger. The addition of 12, increased the median value by 1.5. None of the other values changed. And this is the key point here folks.
By expanding the data set from an odd number of digits to an even number of digits, the calculation changes. As illustrated by the first example, when there is an odd number of numbers, the median is simply the middle number. BUT, when there is an even number of numbers, the median is the MEAN of the two middle numbers.
The point I am making here is that it is possible to present a series of increasing median values over time – – showing, for example, that “median prices” are increasing – – by merely increasing the size of the data set.
Put another way, the pre-existing values in the data set may never change. But by adding additional numbers to the set, you can influence the outcome of the calculation.
So the question is, are these increasing “median prices” the product of increased purchasing – – or an increasing data set?
Ain’t simple math great?
Numbers do not lie. That is why I like them.
scriv
scriv,
I’m confused at to why you say you are frustrated and then make a detailed argument explaining my position.
“While median values are less sensitive to extreme scores (e.g. “black swans” and “fat tails”) than mean values , how are these “median price(s)” being calculated?”
The median values are based of the MLS closed sales for that month. So were talking about 8,000 to 9,000 sales each month.
“The median value in the second example is higher than the first because the data set is larger. The addition of 12, increased the median value by 1.5. None of the other values changed. And this is the key point here folks.”
“Put another way, the pre-existing values in the data set may never change. But by adding additional numbers to the set, you can influence the outcome of the calculation.”
Again that is my exact point. As the number of sales increase the main fluctuation in the median sales prices has more to do with the fact that more houses are selling than it does with the VALUE of houses going up or down.
“So the question is, are these increasing “median prices” the product of increased purchasing – – or an increasing data set? ”
Yes, that is the question. Although in most areas the median price is going down. Which is why Joe is arguing that the VALUE of houses must be going down because the median price is going down.
This oil leak is starting to become a real concern…the area real estate market and our country doesn’t need this problem.
Gixxer 1000 said: “Yes, that is the question. Although in most areas the median price is going down. Which is why Joe is arguing that the VALUE of houses must be going down because the median price is going down.”
— Please show us an example of a long-term trend of home values RISING concurrent with DECLINES in the median sales price. Thanks in advance.
Gixx:
Thanks for the reasoned response, though, to be honest, I am not explaining your position. Rather, I am trying to ascertain your position.
My focus is on the numbers that you report and your previous argument that the real estate market reached a “bottom” – – what was it, on or about April.
Your argument seemed to be premised on published data reflecting increased median sales prices. The problem with the argument is that it was based on median values. Trends in median values, though helpful, can hardly be said to be conclusive because of the way they are calculated. Moreover, the problem with your median value analysis is that – – though I may have missed it – – you have not explained or analyzed the change, or shift, in the median value.
The point is that your median value argument is, at best, incomplete because, to the best of my recollection, you do not account for or explain the change in the median.
scriv
PS: Nice one Joe.
sctiv,
When did I base my argument on median values??? My argument has been based on a bunch of factors and I’ve stated that over and over. Median values was just one component.
The basis of my argument was that 2nd quarter 2009 was the bottom based on a combination of sales volume, case/shiller, pricer per square foot and median sales price.
Sales volume:
Sales volume went from almost 20,000 total sales per month in 2005 to a low of just under 5000 sometime in the 1st quarter 2009 and started picking up in the 2nd quarter 2009 and has stayed higher ever since.
Case/Shiller:
The case/shiller index reached a low in the 2nd quarter 2009. After moving higher is has started to go back down but has not yet reached the previous low.
Price per square foot:
Price per square foot reached a low in the 2nd quarter 2009 and has been higher every since.
Median Sales Price:
From the information that I’m looking at the year over year numbers for April started to go higher. Meaning the median sales prices in April 2009 was lower than April 2010. Making April 2009 (a month in the second quarter) the first month to reach the bottom for that month.
The report publisher earlier included both Miami-Dade and broward county. If you look at just Miami-Dade county you’ll see that we are increasing year over year.
http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P1&report=FTFTDCO&typedetail=05&ptype=BR&type=1
April 2009 $145
May 2009 $153
April 2010 $155 (up 7% yoy)
May 2010 $160 (up 4% yoy)
“The point is that your median value argument is, at best, incomplete because, to the best of my recollection, you do not account for or explain the change in the median. Trends in median values, though helpful, can hardly be said to be conclusive because of the way they are calculated.”
Again, my argument has never been about just median values but instead about the combination of all the different statistics. You can argue that one of these are not 100% accurate but when ALL of them point to about the same time then the argument becomes a little more compelling.
Joe,
“Please show us an example of a long-term trend of home values RISING concurrent with DECLINES in the median sales price. Thanks in advance.’
Why, that’s not my argument. See my post #17 when discussing resale homes. I didn’t argue that the median sales price was going down and home values were RISING. I argued that the majority of the downward movement in median sales price was due to people buying more lower end homes and a small portion of it was due to the decrease in home values.
But again as I pointed out to scriv this information is for the entire Miami MSA which includes areas like Ft. Lauderdale. When you look at just Miami-Dade median prices are going up, with area’s like downtown leading the way.
So in the areas where the median sales prices is going up I have the exact same argument in reverse. For example median prices are up 13.6% downtown in zip code 33131. I don’t think home values are up 13.6% though. I would assume prices are probably up around 1% with the majority of the upward movement coming from people now starting to purchase higher priced units.
Gixxer 1000,
—->You always make sense to me.
“you said – So in the areas where the median sales prices is going up I have the exact same argument in reverse. For example median prices are up 13.6% downtown in zip code 33131. I don’t think home values are up 13.6% though. I would assume prices are probably up around 1% with the majority of the upward movement coming from people now starting to purchase higher priced units”
——-> And I agree, now that Icon on Brickell is selling around 30 units a month at around $370 to $400 per sqaure feet, it’s briinging up the median selling price in the Brickell area.
Gixxer 1000:
This is what you said in post #17: “And again keep in mind this is information for the entire area.” (Pay special attention to the “entire area” part.)
… and this was your quote/rebuttal in post #25: “… Although in most areas the median price is going down. Which is why Joe is arguing that the VALUE of houses must be going down because the median price is going down.”
— Since you were clearly talking about median prices for the “ENTIRE AREA” — those are your words, not mine — rather than one particular neighborhood or another, I will ask again: Please show us an example of a long-term trend of home values RISING concurrent with DECLINES in the median sales price in that same area/region. Thanks.
[…] Two other factors working against Clark’s ambitious asking price: one giant oil slick threatening Miami’s coastline and Penthouse “B” at the Setai. It sold last month for $15 million. […]