Top 5 Distressed Condo Sales Closed in May 2009

Unit 2213 at Cite was bought on 1/2005 for $220,900. A complete disaster for owners who payed over $200,000. A hit and a rip is the only way out.

One Miami unit 3916 was bought for $400,000 on 10/2006. Sold for $150,000 5/2009. Stop paying mortgage, maintenance fees and steal the appliances. Only way out.

Some guys got really lucky with One Miami and Cite. The one Miami unit directly overlooks all of Bayfront Park and beyond. The cite unit, no views but has the best location advantage of being near Pace Park and among all the up coming conveniences on the Biscayne Blvd. The price paid is peanuts.
But the irony is that the smart folks who read this blog are not benefiting from such distressed sales. Some ignoramus must have stumbled on this with the help of an equally ignorant RE agent and bought it. Not fair for the loyal readers and followers of this blog.
Que Lastima!

No win situation. Once people do the math an realize their investment went down over 50% they will stop paying mortgage and maintenance fees. The cash buyers are screwed because the board can lien and foreclose on their cash units. They are stuck paying for all the losers that took off.

Amazing views from that One Miami unit.

Yeah, lets all blame Lucas. Everyone should get a refund for your membership fees to come here.

Some of the listings may have been on the Condo Deals page. It’s hard to say because the listings are automatically removed from that page once the listing is no longer available. I must admit though that I’ve been pretty bad about keeping the Condo Deals page regularly updated over the past 30 days because I was on vacation part of the time and have been extremely busy with work lately. Ask any agent and they’ll tell you that business has picked up immensely since April. I’m actually quite surprised because this time of year it is usually very slow.

Lara, the individual listings on the site are updated every 24 hours. The closed sales and rentals should be updated every 2 weeks but I sometimes need to remind my developer to download the data again.

I do plan to start the Condo Deals page from scratch again and manually enter the listings. It can be a time consuming task to scour the listings but I hope to tackle it early next week.

Relax, you all will like the June deals more than the May ones and the July ones more than the June ones and the August ones more than the July ones…. You haven’t missed anything here.

Zilbert is doing a good job with his listings annotating short/foreclosed with the listing. Assuming his data is up to date and accurate, One Miami has quite a lot of listings that are short sales. In fact for the 3BRs he’s showing that there are 11 short sale listings vs. 8 normal ones. Nice ratio… NOT

gables, keep your powder dry and get ready. miami 2009, where are you? Same goes to you too. I think the time to grab a short sale and foreclosure is now. These are the only deals that are half off the peak prices. Everyone else is holding off hoping that once all the distressed property is off the market, they can still get their asking price.
So if the economy improves, which looks like it will by the end of the year with no further job losses, the foreclosure list may not get any bigger. As long as there are short sales and foreclosures available in a building, no one will touch the regular priced unit.
Another angle to look at this is “all buildings are not the same”. Some buildings have minuscule or single digit percentage distressed props and others have upto 30%. The former will hold better than the later. And you all know which ones belong to the first column and which ones to the second.

The reason realtors do not push or advertise deals like the “so called runners up” and why the they state that the first five over priced deals are better deals than the lower priced deals can be summed up in one word: commission.

AJ,

There will be more distressed properties available because they are in the pipeline already. Look at Skyline on Brickell for example. In the public records, there are 107 lis pendens filings and only 30 transfers of title to banks so far. Now not every filing leads to a finalized foreclosure and a few bank owned properties may have already been sold but there is still a large pool of foreclosures trickling through the legal system.

The driver to foreclosures isn’t only the economy and unemployment but the deeply negative cash flow that some of the speculators who purchased during the bubble are experiencing. If you look through public records at some of the buildings that were either built during the bubble or had high turnover, their delinquency rates are often in the 30-40% range of total units. There are exceptional buildings that don’t fall into this pattern of course but it isn’t clear how the distressed inventory in other buildings will affect the prices even in the more stable condos.

AJ

I never took you for a plagerist, surely you quote The Ace without giving due credit.

odds & sods,
I cant believe I am agreeing with you a second time in a month! That may be true. selling a $100,000 unit will only fetch $3000 in commission. But the realtors must realize that no one is buying that Million dollar penthouse. A $3000 in the pocket is better than the imaginary $30,000 (3% commission on a $million condo) that you are never going to make. At least not anytime soon.

Realtors are still in dreamland. Every time a unit sells, they seem to think things the worst is over.

I’ll never forget the time I sold a condo and listed it with only a 7% commission instead of the standard 8% (in that area), and then had multiple agents tell me “they only showed full-commission” properties.

Ha ha ha! Enjoy unemployment, scumbags!

The bottom will be in when AJ finally admits he is finacially ruined and/or he hangs himself. Buy then and only then. By my estimation that is a few years away.

The bottom is in. Cash buyers are jumping in. Foreign investors just arrived to MIA. I recommend multiple offers on multiple properties. Buy multiple units in one building. This boom is going to be even bigger than the last.

“this boom” hahahahah! Wild Bill #32 = AJ = AZ88 = Lara

BMW M3,

That was the real me in post #32. I found a new doctor and have new meds. Everything is looking good. Going to place a few offers on Monday. My taxi driver confirmed. Foreigners are in town.

As long as we’re able to hold the deals together and deliver value to our clients we have earned our commissions.

I just put under agreement a $3.5 million listing which I sold for $2.5 four years ago. After staging and networking the property was officially listed with ten showings the first week and an offer was accepted after long negotiations, which brought the offer to full asking price and increased the initial offer by $400,000. The buyers got an exceptional property.

For this my clients are paying 5% (I get 6% for less expensive properties), half goes to the selling broker, my half is split three ways with referrals, my office takes its share and then I pay for the photography, advertising and overhead.

My clients paid 5% in order to pocket $825,000 profit.

If there is any justice, the lazy brokers aren’t putting deals together in this climate, make zip and are trying to find work at Pottery Barn.

I think that the banks keep houses off the market because they want to take their losses gradually. The reserves are probably inadequate.

I don’t think Wild Bill is showing not original purchase prices but rather inflated resales and probably a fraud case one at the Jade.
In my opinion listing agents deserve max 1% commission for their little effort–in todays world a seller could do his own listing and would probably include more than 1 picture to promote the sale–the selling agent is the one to be rewarded.

Richard, who ever you are, I cant agree with you more. The listing agent does precious nothing. Most times, he/she puts the house key in a lock box and disappear. While I was looking at some props with Samir, One MOFO listing agent who had 3 flats in 1800 Club actually left all the main doors open and tells the selling agent to just go look for themselves! What kind of a lazy SOB does that and has the balls to collect the commission. Does the owners even know that this arse hole is leaving their flats unlocked day and night and anyone could have tampered with the appliances etc? But that is only one example.

As you said the listing agent should get no more than 1% and the selling agent should get the max benefit. Or as you said, list it yourself in the MLS and let the selling agents take over. Even if you give 3% to the selling agent, that is what normally they get anyway under a 6% regime. That way you get to keep the 3% you would have otherwise given to the listing agent.

gables,
I cant agree more. I was requesting Lucas to post a column in the condo ranking page, the HOA per sq.ft. per month. That is the single most important factor more than the 5 other criteria he has listed to rank a building. That way we can see which buildings are run efficiently and which are not.
The silly argument that low or teaser HOA rates are offered initially is so old and discredited by now. It is almost two years for most buildings and 3 years for some. No developer is subsidizing any HOA anymore to the peril of his own bankruptcy. So the HOAs you see now are more or less absolute barring special assessments for emergencies.

If Lucas is not going to post the HOAs of different buildings (not because he does not want to but because he is super busy), let us all chip in and put it on this blog ourselves.
The 1800 Club it is 42.7 cents/SF/month. So lets hear it from other owners in other buildings. If not can some RE agent post all the HOA’s that he/she knows in one single post?

We went down this road before.
I gave an open challenge to anyone to show me which of the 50 new downtown buildings have reserves built in their HOA. No one came forward. I knew it.

Talking about water bill!! The water bill part is minuscule in the overall scheme of things in the operation of a building ( It will become a major part by 2020 when water becomes as scarce as petrol but as of now it doesn’t count that much). The major Expenses are Electricity (unchanged due to the low or high occupancy), Staff (same), Insurance (Same). These do not change whether the building is 50% or 70% occupied.

So either someone should step up to the plate by talking sense or STFU.

Well can you all see how the arguments slowly changing. Initially some of these guys were arguing that the developer is subsidizing the HOA and hence it is low in some buildings like the 1800. That has long been debunked.

Some said that certain buildings might be cutting corners by under insuring themselves. I checked with my building insurances and they are fully insured to the mandated levels and beyond. My mortgage holding bank has accepted the fully insured figure and deemed that it is quite sufficient. So even that argument gets flushed down the toilet.

Now they are trying to talk about water consumption bill going up when my building will be fully occupied from the current 70% to 95%. OMG, I am shaking in my boots, my HOA will go up by 2 cents /SF /month due to all the extra showers that the newly arrived residents are going to take! Give me a f@#$%g break.

And you want to talk about the reserves, lets talk about the reserves. For argument sake, lets add reserves 7.3 cents /SF/month to my HOA and make it a even 50 cents /SF/Mo. Even then it will still be a cheaper HOA than any other building in the market.

So just to shut the miserable peoples mouths, lets add an automatic 5 to 10 cents to all the HOAs which do not have built in reserves so that we can compare apples to apples. Let us then see which buildings are still a value to buy into.

For example if Marina Blue charges 65 cents and has reserves, then you compare the 1800 club only after adding 10 cents and making it 52.7 cents before comparing with MB. If MB does not have built in reserves, then you compare only 42.7 cents against 65 cents. As simple as that.

AJ,
The monthly fees are not a great big problem to estimate. Just divide the monthly hoa fee by square footage to get an estimate for the building. the info i am most interested in is the status of reserves, special assessments (how often and how much?), percentage of people paying dues on time, etc. this info would be great to better understand whether a building is a ticking time bomb, cheap but with known upcoming expenses, expensive but safe, average but save, etc. you get the picture.

what the buyers need to understand, is if I hold the unit for 5 to 10 years, what will be the true cost of holding. adding another $20k to $50k in special assessments over time could occur, and would be acceptable, if one could at least predict the occurrence. thus a 1B condo for $150k today would be an ok deal in a nice building, but if you truly had to add another $30k in extra HOA fees, not such a great deal. but the unit at $120k would be a deal with the added expenses. these estimates will greatly affect the value price point for each building, at least from my perspective.