New Construction Condo Deals in the Arts District, Brickell, Downtown Miami, and South Beach

You bought fairly early, Oct 2003. Can you resell with a profit or not? I bought an unit in another building in July 2004 but I think I have lost most of my 20% deposit in the current market. I have a feeling that the current price level is a lot lower than 2004 prices in all of those pre-construction deals today..Any comments, anyone?

Alright kids, all this talk and no body has yet taken me on my offer. All these realtors advert on Craiglist the lowest prices which they don’t even have the listing or can get close to the price they say (Try it, call them, ask for a unit number and exact price). They do that just to get clients; it’s called the bait and switch. Then we have AIMCO apartments (NORTH and CENTER tower) which nickel and dime you to death so 1319 really is 1500 and is unit with a wonderful trash can and breath taking garage view …wow on a low floor, it doesn’t even have light coming in, dark and almost prision-like..Once I showed this and I felt so bad I was about to commit suicide but no such luck… No Balcony! C’mon people compare apples to apples… We are talking in the SOUTH TOWER only… and still people pay for those higher rents there because is a much nicer building and tenant mix.

About the value drop yes it has happened because first it was over-priced to start and 2nd the whole market has dropped in value.. So where are you kids been hiding the 2 years. Obviously you haven’t been reading this blog for long!

Quantum is complete and ready to close or at least that is what I was told by the closing coordinator last week. After reviewing my sale contract (dated Oct 30, 2003) I came across an addendum that I signed about a year later. The addendum states that the property will be “substantially completed” no later than DEC 31, 2007. Referring back to the sale contract it states “substantially complete” means able to be occupied or in other words having a TCO from the city. After driving by the Quantum last week it would be opinion that it is months away from being complete. Clearly they rushed this to meet the deadline, or did they.
If not completed my Dec 31, 2007 I would think 700+ buyers would have the right to cancel. Do you think one person would close if they had an opportunity to walk?
Somehow, some way they are saying the building is complete and ready to close.
My closing coordinator said closings will start Dec 26th and asked if I was ready. When I said I wanted to close in January I felt a sigh of relief on the other end of the phone.
Just to test their readiness I called today and told them I was ready to close next week. I was questioned as to me readiness. When I said I had the cash and wanted to close I was told that my unit may not be ready. I told the coordinator that I was ready and want to close. She then said she would have to speak with someone and would call me right back. Well, right back was some time later and I was already out of the office.
My assistant received the call and took the message that “they were not ready.” My assistant knows what is up and she asked “does that mean the unit is not ready”?
I paid about $190K for a one bedroom and this was for investment. The upside now has been deflated but still I am OK at the price I paid. I want the unit but now my concern is that the building is not “substantially complete” and many will not close and those who do close will sue because the Developer and City rushed the TCO that possibly would not have been given.
Look at Opera Tower and 1800. They both look more complete than Quantum I am not sure if they even have their TCO.
The Terra Group is heavily invested with several projects all about to be completed. The City too has a lot riding on these projects and the tax revenue. If the Quantum was not actually “substantially complete” and 700+ buyers walked this could the domino that seriously damages an already weakened market.
Anyone know what the deal is?

Lucas…

What were the original pre-construction prices on Continuum II? Have you seen any of these on sale around those prices?

I wonder if this will happen in our Condo market.

“In some cases the contract holders are willing to accept a loss on their contract price in order to retain a portion of the deposit that was made 3-4 years ago.”

ok ok.. i get it( just now huh?) the deposit builders ask for when you buy a unit, and then if the first buyers decided to crash the deal if they pass the contract to another buyer then they could possibly get the deposit back. Hope they do..

FLAMINGO? I would be the first to admit the developer prices were a bit over the top. But at today’s resale prices and with the help of an informed special agent, you can often find the true bargains others miss. The truth is that the complex offers so much more than just location, it’s a lifestyle that cannot be duplicated elsewhere and no I’m not going to throw you a list of amenities since I actually have to work.
We are all aware that if tenants are willing to pay higher than normal rental rates to live there then it must be worth more than other buildings, after all that is what the market says, so the fact is that sales prices will have an indirect correlation to rental rates ,of course all other things being equal. Oh BTW you won’t be able to even get a thru the door at $1,500. Get an agent, study the market and then write something useful Big Fraking Guy (BFG) =). And here is a direct challenge for you guys, find me a comparable property you can squeeze more rental income for the sales price and if I can’t match or beat your deal with a Flamingo unit, I will give you $1,000 cash.

Flamingo Rental prices are over any other bulding in its class. So its doesnt matter if its a 1960s or a 2007 buidling people still pay top dollar to rent

By the way I didnt even find your page on the first 10 pages of google search under flamingo south beach….

Mr. Flamingo, have you ever heard of Craigslist? I just did a quick search and saw some units in Flamingo starting at $1100 for a studio and $1450 for a 1 bedroom with water view. And those are asking prices. In this market, you’ll most likely get them for less than that.

Even the official Flamingo rental website advertises:

“You’ll find studio apartments for rent from $1319, one bedroom apartments for rent from $1599…”

In case you didn’t know, the rental market is soft. Asking prices are negotiable and supply is going to increase even more in the coming months, which will only make it worse for landlords.

I’m glad that you love the Flamingo so much, but it doesn’t hold a candle to any of the newer condos that have been built recently. And if your idea of a great rental investment is a condo that loses 30% of its value in 12 months (with much more to go), then you’re right, the Flamingo is a great investment.

Juan GM – I’ve played around with Facebook a bit but I don’t understand the possibilities. How would creating my own Facebook network increase my target audience? How would people find me and my blog?

Hi Lucas,

Like many have said before me, you have the most professional and truly insightful blog out there…right on par with the top sites like Curbed.com, etc. in other major markets! I love it.

My question is: have you been inside any units or even just the public areas at the Quantum? I am getting ready to close in January and after so many comments about shoddy workmanship/ cheap finishes that I’ve seen posted for some other new buildings, I’m worried about how the Quantum in going to compare.

Thanks very much…

good idea! Best of luck to all parties involved.

The Miami Herald had an article today “Indictments due in huge loan fraud scheme”. My impression, as an outsider, is that there will be no stabilization of the So. Florida real estate market until those guilty of this fraud are prosecuted to the fullest. A strong message must be sent that the climate of fraud will no longer be tolerated. When checking sales histories, I have seen dozens of properties refinanced in the past year, thousands of dollars taken out and now in default. The law abiding people will be paying through the nose for years to come, paying the tabs of these scoundrels. Add to this the thousands of units coming online in the next year and I believe that the deals are going to keep getting better (or that the worst is yet to come).

How much would you say is the total % price drop from the top of the market until today? How much more are you expecting prices to fall?
One of the major financial magazines estimated that Miami condos might fall 50-70% from the top. Do you agree with this estimate?

Thank you Ines! I appreciate that. I’m looking forward to what 2008 has in store for me at EWM.

Mr Waverly, I would definitely contact an attorney on this issue; who will pay the association fees for those units where people walked away leaving their deposits? (owners or developer)

Is the developer charging any type of closing fee? Are the units designer ready?

Might be something to consider; closings & finishing will be about $20k more; so you are looking at $210k; rent in that building for a one bedroom will run around 1300 to 1600.

Since you raise up this issue in re to Quantum I am interested too. Are you going to contact an attorney? It is very important. Also those who are interested we can share expenses to review. I am sure that contracts are identical.

I’m glad closings are moving forward. I’m excited to move into my unit. I do believe it will be one of the better developments in the long term. Many people are turned off by projects like Platinum and Midtown Miami because they are so far away from the safer areas. I think the proximity to Downtown and the new changes to the neighborhood – the retail shops filling in, big boxes moving in will help this little pocket of buildings – Paramount Bay, Quantum, Cite, 1800 Club and I guess Opera Tower. – Even though I think Opera Tower is overpriced. I hope they turn the lots directly West of Quantum, 1800 Club and Opera Tower (which are currently occupied by sales centers and parking for construction) into some nice retail like the spaces in front of Cite. Mr Waverly, the interiors of the units are nice in my opinion. I’ve taken a few purchasing clients in recently. It makes a difference when the units are delivered with flooring (even though it is carpeting). It feels complete. The terrace space on the A, K, L, J and I lines is fairly generous. The exterior of the building still looks like it is slightly under construction (but a majority of that is on the North Tower. I believe they just need to remove all of the tape on the windows of the South Tower and touch up paint. Which line did you purchase Mr Waverly? Also I think some of the numbers in most articles are exaggerated. But I think we can all agree that there will be many units for resale shortly.

Mr Waverly,

I agree that from the outside of Quantum on the Bay it still looks to be at least 1-2 months away from being finished. I also agree that TCO was only given because of the December 31, 2007 deadline. How much money exchanged hands to get that done? Let’s just say…ENOUGH!

Mr Waverly,

Are you talking about Quantum? Your estimate of one bedrooms renting for $900 to $1100 at best in my opinion is very much off. Units in the area (1 bedrooms) have rented for $1400+ recently in older buildings – Cite. Recently we rented a 1 bedroom bayview in Cite for $1600 a month. I think there are a lot of people rushing to make estimates like this without following the fundamentals. Yes there will be more inventory in the future to compete with but not all buildings are alike. Changes in the market will be gradual. Not every building opens at the same time and not everyone rushes to rent or sell at the same time. People will move from other locations – Midtown Miami, Brickell, South Beach to buildings like Quantum which offer bayviews for far less. In addition, the units will come complete with tile and carpeting. Owners will not have to lift a finger to finish them prior to leasing out and their brokers/agents will not let them do something foolish like listing a property for 50% below market. Anyone who bought very early will be in a good position to hold at least in Quantum. Also the office said today that they received the TCO. I will preface all this by saying I also bought a unit in Quantum so I will be living there. I bought a resale and am quite comfortable buying even in this market. The market goes through its cycles but there are buyers out there who buy when they want to buy and don’t care about what the mass media thinks is going to happen.

What is the situation with the property taxes? If you close after Jan 1st you apply for homestead exemption in 2009, so your taxes will be based on the the property appraiser says the market value of your unit is on Jan 1st 2008. If the building is not finished as of Jan 1st 2007 (TCO and not CO) then the property tax bill at the end of 2008 should be minimal, am I correct? As values drop it will probably be advatagious to have property valued in Jan 1 2009. I just hope there is some type of reform at the end of 2008, you should consider signing a citizens initiative to radically change the outreageous property tax system we have in Florida, otherwise on a two bedroom unit be prepare to face a bill anywhere from $8000 to 10000, NOT NICE.

Re- Terra ADI etc. potential issues

Believe if you are going to finance portion of condo purchase via a 1st mortage – then mortagee (bank/lending institution) would expect that they (you) have clear title i.e. if borrower default’s they have the property (security for the loan). Unless mortagor is using another asset other than actual unit – e.g. pledge of stock and/or another hard asset etc.

Lastly developer(s) may be in a “legal” pickle if the guys with the “liens’ prevent them closing on units and paying down whatever short term “construction” financing they may have ?

My advice get a lawyer who knows real estate/condo/construction etc. I’m not a lawyer – but sold a condo in fla. for my parents a few years ago – the original development had a “cloud on the title” – what a mess !

I’m with Al. Within the next 2-3 yrs if Miami doesn’t become what it’s supposed to become I am seriously considering cashing everything out quitting my job and moving to Panama. Much cheaper and you still would get a great deal on a condo.

In fact I coul dhave gotten prob 3-4 times the size of my condo and the Penhouse in Panama vs what I got here. ahh the price we pay to live in the Red White and Blue.

We shall see but I definitly have it on my radar as an option.

I closed today. Unit is nicely finished, nice appliances, nice rug. There is no gym, no equipment yet, largest pool is full with water but not usable, looks to me 6 more months of finishing work in the common areas. The parking spots will not be available for another two months, only ballet parking for now. I don’t understand the rush to close, I guess developer need the money, but paying for amenities and not having them, you feel a little cheated. But it is in the contract, you signed it, so what is the use of arguing?

The building is going to be very nice, with big common areas, I was told they have around 300 workers doing the finishing work. Once you close you get the keys and can move in, although as things are at the moment, you have to put up with incoveniences. I have to furnish the unit first so I won’t be moving in for a few weeks. No way they will give you a discount on the maintenance, if you read the contract, the common areas can take up to a year to be operational, remember, you signed that contract and agreed to the terms. Same thing with other developments, sometimes worse, I was told by my attorney. Ah, maintenance in my unit went up from $529 in the contract to $701 now. If you add maintenance plus property taxes alone, you end up paying the equivalent of a one bedroom rent in Brickell Key, that is not counting your mortgage payments. Something has to give and that is property tax reform, OR I am moving to Panama or other place other than Florida like many other baby boomers. No kidding.

B’J,

Which floor plan do you have and in which tower are you in?