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Top 5 Distressed Condo Sales Closed in May 2009

June 19, 2009 by Lucas Lechuga
Below, you will find what I believe to be the five best condo deals of the 46 distressed sales that closed in the month of May in the MLS located in Brickell, Brickell Key, Downtown Miami and the Arts District.  I think the distressed condos that closed in the month of May were better deals than what we have seen in previous months.

  1. Jade Brickell - unit 1002 - 2 bedroom/2 bath (1,529 square feet) - This unit sold for $375,000, or $245 per square foot, on May 15, 2009.  Short Sale

  2. Courts Brickell Key - unit 1909 - 3 bedroom/3 bath (1,488 square feet) - This unit sold for $350,000, or $235 per square foot, on May 20, 2009.  Short Sale

  3. Skyline on Brickell - unit 306 - 2 bedroom/2 bath (1,367 square feet) - This unit sold for $349,000, or $255 per square foot, on May 8, 2009.  Foreclosure

  4. Skyline on Brickell - unit 1512 - 2 bedroom/2 bath (1,367 square feet) - This unit sold for $305,000, or $223 per square foot, on May 18, 2009. Short Sale

  5. One Miami - unit 3916 - 1 bedroom/1 bath (846 square feet) - This unit sold for $150,000 or $177 per square foot, on May 27, 2009.  Foreclosure


Runner-ups:

  • The Mark on Brickell - unit 1001 - 2 bedroom/2 bath (1,200 square feet) - This unit sold for $205,000, or $171 per square foot, on May 22, 2009.  Foreclosure

  • 1800 Biscayne Plaza - unit 203 - 2 bedroom/2 bath (1,057 square feet) - This unit sold for $120,000, or $114 per square foot, on May 01, 2009.  Short Sale

  • Cite on the Bay - unit 2213 - 1 bedroom/1 bath (795 square feet) - This unit sold for $100,000, or $126 per square foot, on May 13, 2009.  Foreclosure

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AJ
15 years ago

wow!! Lucas, how come you post these sales after the fact? It is a cock teaser. You cant have em anymore. I particularly love the units at One Miami and Cite for 150K and 100k. What the heck, I could have picked up one myself. With one bedrooms renting at $1000ish, it is a +cash flow or close.
So the next time post the foreclosure and bank approved short sales before the fact so that people here can take advantage. One of my friend in NY would have bought either of those two in a heart beat and all cash.

Wild Bill
15 years ago

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.

Hugo P
15 years ago

Lucas:

I agree with AJ.

Given what has been written in this blog that distressed properties is the best (and in my opinion the only) way to get a deal, I think it would be good business for you if you add a distressed tab above so everyone can look what’s available.

It’s a bit of a pain going through every building to see what’s available.

Hope that helps

Wild Bill
15 years ago

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.

Wild Bill
15 years ago

Mr. Perez paid bought unit 1002 at Jade on 12/2006 for $1,600,000. He sold it for $375,000 on 5/2009. Stop paying mortgage, maintenance fees and steal the appliances. Only way out.

AJ
15 years ago

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!

AJ
15 years ago

My question is;
Lucas, were these properties featured on your Condo Deals page? If they did and none of us bothered to look at that page, then it is our fault. But if you never featured them and escaped your eye and your research, then you gotta pull up your socks a bit.

Wild Bill
15 years ago

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.

Odd & Sods
15 years ago

I fail to see how the runners up are not better deals than the first five so called winners all of which sold way above market value. I’ll take $114.00 per square foot any day all day.

H
15 years ago

Amazing views from that One Miami unit.

Lara
15 years ago

Lucas,

Would you please explain why I cannot find these units neither on your condo deals nor in the list of units for sale or sold. You have the list of buildings in each area of Miami where the list of units for sale and sold is supposed to be updated from MLS every 5 days. I think you mentioned it once.

Please explain

southbeachsand
15 years ago

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

Lara
15 years ago

Noone is blaming Lucas. We are simply asking. That’s it. If the listings are old that’s fine too as long as we know about it.

15 years ago

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.

Kramer
15 years ago

The last CLOSING RATE post for new condos that Lucas posted was over 4 months ago February 8th. We dont know if any units are closing or not. Lara pointed out about completed sales pages not being current. Not bitching just saying.

JL
15 years ago

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

Wild Bill
15 years ago

On 1/2006 unit 1512 at Skyline was purchased for $587,000. Unit sold on 5/2009 for $305,000.
Unit 306 in the same building was
purchased on 8/2005 for $590,000. Unit sold on for $349,000 on 5/2009.
Dine and dash.

AJ
15 years ago

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.

Joe
15 years ago

AJ — I’m not so sure the foreclosure list won’t get any bigger, with or without additional job losses. I believe there’s like a trillion dollars in mortgages that are scheduled to reset over the next 12-24 months — ???

Odd & Sods
15 years ago

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.

Miami2009
15 years ago

Aj, I am on the sidelines just waiting ;-). Can someone tell me how to find these deals before they get sold? I will be down in August to take another look. Since prices have been coming down I have broadened my search to include Bal Harbour and Miami Beach as well.

Petronius
15 years ago

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.

southbeachsand
15 years ago

Looks like Bernie Koser got done in by the real estate bug.

Odd & Sods
15 years ago

AJ

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

Wild Bill
15 years ago

Advertising these deals is like advertising the collapse of your industry. All your clients that bought at the peak are destroyed. All the people who buy these short sales will be destroyed when the maintenance fees go up. You’re essentially looking at a blog that is documenting the downfall of Miami similar to the crash of 1926.

AJ
15 years ago

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.

CC
15 years ago

I dont know how some can say that foreclosure inventory will be smaller in the near future. Look at the stats below. It takes 6-9 months for it to work through the system.

Can someone please let me know how i can look public records to see how much a unit sold for in the past?

Joe
15 years ago

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!

Mondrian
15 years ago

Realtards as they say. This party is just gettin’ started! it’s going to last for YEARS. YEARS. Mark my words. The price collapse is just starting. Unemployment just hit a record in the 33 years they are keeping records. Recalibrated to the way they kept stats in the 1930s unemployment is near 20 %. This is going to be a bloodbath.

BMW M3
15 years ago

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.

Lara
15 years ago

Generalization whether it is about agents or politics, or group of people, views on life and etc ruined civilizations, led to cruel wars, tragedies in human life. Not all agents are the same.If one is a real estate agent or talent agent or a sports agent. It is a matchmaking process. Find the right one, take your time to actually look for one. In re to real estate it really depends what your goals are. Being an investor I work all the time with agents on both sides of transactions.

None of us like to pay comissions but it is a necessary part like a stop on the red light. If you can be without it so do it.

I found the right agents to be very informative, helpful and proactive. Like in every profession there are good and bad ones.

Wild Bill
15 years ago

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.

BMW M3
15 years ago

Wild Bill #32 has got to be a phoney. Wild Bill has stated that condos are never a good investment. Why the sudden change?

BMW M3
15 years ago

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

AJ
15 years ago

Many RE agents are losers (professionally). They open the door to show you the flat and expect to pocket the commission. I am so glad they are all out of work and I hope that they continue to be out of work. But there are a few agents/brokers like Lucas or Samir, who work hard for their commission (even though I did not work with Lucas, the work he puts on this site proves that he earns his clients keep).
Even then I seriously object to the 6% commission days.
In the days of yore when the agents have to actually pay to advertise in Newspapers and mags, keep open offices with high rents, it made sense to charge that much.
In the days of internet with free Craigslist powerpost ads and own websites and the agents can work out of their homes with minimal overheads 6% is not justified. I think 4% should be a well justified commission. 2% for the listing agent and 2% for the selling agent. At 4% I will list my flat to be sold with a full service agent (not a help u sell or some do it ur self service) . If the commission does not come below 6%, I will sell it myself. I am smart enough and intelligent enough to be able to sell my own flat. I will never believe the agents when they say “you have more chance of selling it with an agent and get your asking price”. That is just a scare tactic they have been using for generations. It may apply to lazy owners and those who do not know much about RE. But to individuals who are well versed in RE dealings and have some time on their hands, they can sell their own flats saving thousands of dollars.

I have been supportive of good RE agents for a while. So I believe I have earned my stripes to be able to criticize the 6% commission.

I have one word of friendly advice to all the RE agents. Don’t hate me for saying this. But yours is the only profession apart from the screw driver operator in a GM factory who does not need a major skill set or a college degree but paid a ton.
Look what happened to the GM workers when they refused to compromise on the $40-$60/hour union jobs with benefits. Don’t be obstinate and suffer the GM workers fate. Change with the times and accept what is right and reasonable. Your jobs will be safe well into the next century. If not, be prepared to be marginalized and obsolete.

Wild Bill
15 years ago

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.

Joe
15 years ago

AJ — If you think 6% is bad, head to New York. The standard fee there has been 7% to 8% for years. See my post #28.

Lara — “Not all agents are the same.If one is a real estate agent or talent agent or a sports agent.”

— Ouch! Touche.

“None of us like to pay comissions but it is a necessary part like a stop on the red light.”

— I don’t object to commissions; I work in a commission business myself. My problems are these: (1) a 6% to 8% fee, in this day and age, is absolutely outrageous; (2) realtors have been running a price-fixing racket for decades (i.e., my post #28 — a lot of agents won’t even show reduced-commission properties); and (3) realtors invented the whole “buyer’s agent” scam in which the “buyer’s agent” supposedly works for the buyer but actually LOSES money by negotiating a lower price, which means the whole “buyer’s agent” gimmick is a fraud at least 9 times out of 10. The whole r.e. agent business needs a good power-washing from top to bottom, and a whole new set of rules and protocols.

Bobby J
15 years ago

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.

makes me think
15 years ago

honestly, I can’t believe some of the prices I am seeing here. I have noticed that the inventory has shrunk quite considerably in the past few weeks but I have also noticed there are lots of empty houses waiting to be put on the market. I can’t figure it out, seems like the banks are deliberately keeping some houses off market in order to reduce inventory thereby trying to put the brakes on price declines. It seems that prices are spiraling downwards the lower prices are causing lower apraisals. It looks like people are still walking away from their homes in large numbers. Many people went out and bought the most expensive home they couldn’t afford in hopes that the appreciation would net them some easy money, now that it is obvious that ain’t hapening they are just walking away. I saw a house this week where the tennant stripped the house of everything, the kitchen and bath cabines, Furnace and condenser, all the doors and door jams (even the closit and pantry doors) the toilets and that big bathroom mirror was taken as well. Lucas is right, realators are busy because people are buying up these foreclosed houses like there is no tomorrow.

Bobby J
15 years ago

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

Joe
15 years ago

Speaking of distressed condos, check out the article in today’s (Sunday’s) Miami Herald (currently on the front page of MiamiHerald.com) titled, “Condos squeeze deadbeat residents.” Things appear to be getting very, very ugly in CondoLand.

I wonder if the writer reads this site, as one of Renter Tom’s favorite phrases — “condo death spiral” — is used about halfway through the piece.

Richard
15 years ago

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.

gables
15 years ago

AJ,
my powder is dry and ready. there are some really good deals appearing in short sales, but not sure how valid such an offer really is. on the other hand, i am more concerned than ever about the status of HOA in buildings. i get the sinking feeling many of these buildings are going to turn into giant money pits over the next decade due to HOA costs. just a feeling, no firm proof. anybody care to share actual conditions and future projections in buildings they live/own in? would love to have more of this info.

AJ
15 years ago

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?

Wild Bill
15 years ago

Remember that empty units are not using water. The water budget is off instantly. Insurance and reserve accounts are nonexistent or bare minimum. A complete fraud to post low figures when your building has no reserves. What is this a bankers convention?
Real estate agents are not obligated to post anything but the last payments for the maintenance fees. Which is really an estimate. Maintenance fees can change at anytime. Some special assessments are added to monthly maintenance fees. I suspect that nobody knows what they were buying in the first place which is why people cannot pay their fees or they post low ball no reserve figures like 1800 Club.

AJ
15 years ago

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.

Odd & Sods
15 years ago

With unemployment exceeding 14% in Miami and heading for 11% plus nationally there is a Tsumi of foreclousers on the way. And although I’ve been an admirer and follower of The Ace for some time his predicion of $125.00 which is now upon us is no where near the bottom.

AJ
15 years ago

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
15 years ago

I think this is long overdue. Everyone please go down to your management office and get this info please and post it here.

How mush is the HOA/SF/month?
Are their reserves built in this HOA? (If you can even find out how much percentage of the HOA is set aside for reserves, it would be great but if you do not have that info, its still OK)

Whether you are a renter or owner in a building, it does not matter. Please get this info and put it here. I will compile it all and make a chart for everyone to compare unless Lucas wants to do it himself.

Please go down to your respective management offices tomorrow or at least this week.

gables
15 years ago

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.

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