New Miami Condos – Closing Rates for February 2009
February 8, 2009 by Lucas Lechuga
Below, you will find the date that each condo development began closings followed by the number of closed units in each condo development:
- Ten Museum Park - June 14, 2007 - (165)
- Latitude on the River - July 27, 2007 - (374)
- Onyx on the Bay - July 31, 2007 - (74)
- Loft Downtown 2 - September 26, 2007 - (444)
- 50 Biscayne - October 1, 2007 - (526)
With the exception of Onyx on the Bay and 50 Biscayne, the first group above has remained unchanged. Onyx on the Bay was able to close one additional condo while 50 Biscayne was able to close two.
- 1800 Club - November 27, 2007 - (321)
- Brickell on the River South - December 17, 2007 - (175)
- Opera Tower - December 28, 2007 - (235)
- Quantum on the Bay - January 3, 2008 - (566)
- Plaza on Brickell - January 7, 2008 - (727)
Quantum on the Bay and Plaza on Brickell once again were able to show a decent improvement in their closing rate. Quantum on the Bay closed an additional 14 condos while Plaza on Brickell was able to close 21. 1800 Club did not have any new closings but I did find another deed that had been recorded twice. This is the reason why the total number of closed condos in this update is one less than the total stated in the December 2008 post for 1800 Club. It needs just 7 more closed condos to hit the all-important 70 percent mark.
- Apogee South Beach - January 16, 2008 - (66)
- 1060 Brickell - January 23, 2008 - (238)
- Midtown 4 - February 15, 2008 - (339)
- Marina Blue - February 27, 2008 - (425)
- Wind - February 28, 2008 - (218)
As a result of the 60-unit bulk sale, Marina Blue showed the most improvement of the above five condo developments since the last update. I did, however, find re-recorded deeds for Marina Blue that I had previously missed. The developer of Marina Blue has now closed around 82% of the total number of units.
- Asia - April 4, 2008 - (66)
- Met 1 - April 30, 2008 - (150)
- 900 Biscayne Bay - May 5, 2008 - (223)
- 500 Brickell - May 14, 2008 - (213)
- Axis - May 19, 2008 - (169)
In my opinion, the five condo developments above are all likely candidates for some sort of bulk deal taking place in the future. Met 1 was able to close 7 additional units, Asia 2, 900 Biscayne Bay 13, 500 Brickell 17 and Axis 8. As a result of the new Fannie Mae guidelines, it is not likely that we'll see significant improvement in any of the condo developments that haven't thus far reached the 70 percent mark.
- Ivy - June 12, 2008 - (219)
- Icon Brickell - November 18, 2009 - (15)
- Vizcayne - November 20, 2009 - (31)
- Infinity at Brickell - November 21, 2009 - (21)
- Epic Miami - December 19, 2009 - (12)
Above, you'll find the four newly added condo developments which began closings within the past 3 months. Timing could not have been worse for these four. They're going to need to find a plethora of cash buyers who are willing to pay dated prices. Ivy at Riverfront, which began closings back in June 2008, was able to close 14 additional condos since the December 2008 update.
The bright side is that the condo construction cranes of Miami are gone. The cranes that remain are for commercial developments. Marquis and Paramount Bay, which should begin closings within the next 3 months, will be the last of the newly constructed condos to hit the market in Miami. It does appear, however, that Met 3 has begun to lay its foundation. Hopefully, the condo market will reach some sort of equilibrium by the time that development has been completed.
Disclaimer: The above closing rate information was derived from public County records. There can be a 2-3 week delay from the time that a closing occurs and the time that the closing is recorded. The information above is not deemed 100 percent accurate as a result of delays in the recording of deeds and deeds being re-recorded.
They made available 10 years supply (2003-2013) in 5 years (2003-2008).
So only 11,000 flats in the greater downtown area out of a total of 22,000 should have been sufficient to satisfy the end users and 2nd home seekers.
The excess 11,000 are now being held by Developers, Investors and Bulk Buyers. If half of these 11,000 flats get picked up by the bulk buyers, then the rest will belong to the investors. That may bring some sort of relief or equilibrium to the market. But the question is are there enough bulk buyers to absorb 5,500 units?
If no bulk buyers are involved, this excess inventory will take upto 2013 to get absorbed by end users and 2nd home seekers. That is why it is paramount that some or at least half of these flats get picked up by bulk buyers. They can resell after 2013 for double their investment as there will be zero new construction until 2013 and inventory should be down to 6 month levels by then.
Individual investors who can hang on to thier flats until 2013 by either enjoying them meanwhile and/or renting them out periodically may come out at least breakeven if not a profit. 2013 is still 4 years away. But I think Miami condo market will be 180 degrees away from what it is now by then.
very impressive for the Plaza on Brickell.
Many units are leased by developer also. I heard that the first tower is sold.
The second one has few more units left. They opened later.
Because of the superb location.
REAL ESTATE RULE: location, location, location
Is AJ on record calling the bottom of the market in 2013? Seems like a big departure from previous posts.
AJ said: “They can resell after 2013 for double their investment”
– I really needed a good laugh this morning! 🙂 Thanks for the certainty AJ….gotta love the ignorant wishing. You really ought to buy more……instead of selling now. Put your money where your mouth is.
RT,
But really, at this point if he hasn’t sold, does it really matter?
Just saying, let’s say for some unimaginable reason you owned outright one of these units today, Monday, Feb 9th 2009.
What would you do?
Seems at this point if you own it outright you may as well hang on to it.
If it’s mortgaged then it’s tricky, feed the alligator?
Muir – Why hold onto the dead dog? If you lived there then it may be a different story since there are additional factors to consider.
You may be right, I’m not sure.
I don’t think that the argument of fully absorbing units has much relevance. Once most of these buildings have sold 90% of the units (whenever that may be) then we will be in good shape. the other 10% doesnt really matter because you always have left over supply. if we reach the 90% mark then that means that the economy has turned back around, confidence is back, and a bottom will have been reached. all we really want is a true bottom so that we can being to have a normal business cycle. trying to figure out when we will absorb all these condos is irrelevant. and as I’ve said before, thanks to our friend inflation I think that when things start to pick up they will pick up fast.
Hey AZ88 (if you are still around):
No commentary, just the numbers! I would not want to further disparage your sacred white cows at Related, so enjoy….
December 2008: 500 Brickell – May 14, 2008 – (196) 30.96%
February 2009: 500 Brickell – May 14, 2008 – (213) 33.69%
70% of 615 units = 450 units. 237 more closings and 500 Brickell will be at 70%!!!
At 8 closings per month, they should get there in 24 yrs. and 8 mos. October 2033!
Just in time to demolish it for a new structure!
To their credit, 500 Brickell is doing better than that thing across the street:
February 2009 Icon Brickell – November 18, 2009 – (15) .084 % ROFLMAO!
Stalingrad I, II, and III should be 100% full in 84 years!!!!
Raffi – I don’t doubt inflation will come in the mid-term to long-term as a consequence of bad federal government policy, but I see it more as weak dollar then through economic expansion and demand caused inflation. There is a difference and that affects whether these condos get absorbed by end users or not. We are a long long long way from end users making up the majority of owners in many of these projects. The worst is yet to come I’m afraid.
RT, I definetly agree that its going to get worse this year (by how much is anyones guess). where i disagree is if end users buy the properties or not. If someone buys to live in it or buys to keep as a vacation home it really doesn’t make a difference. as long as they are buying for the long term and not to flip or short term gain. those days are obviously long gone. How the dollar is still strong is amazing to me, there is no fundamental reason to why it should be. I guess its like the market, you just cant predict it. I am hopeful that next year this thing will turn around and start a strong upward trend, and I don’t mean condos down here but the economy as a whole.
Un-Related: well you compare 500 brickell with other buildings. You do the same mistake developers did, they built and hoped that everybody will make money.
Just few did.
500 brickell sucks. has building in the front plus location is horrible.
no wonder why is doing so bad.
see KIA cars are cheap but i would never drive one.
same is with condos. some people will prefer one building and leave other empty.
some building will just do fine, some will be disaster. thats the way the life is
How much per unit are these going for? I am so confused.
Lucas, you forgot 100% of the units in Jade have sold. Can you post that closing rate? We all know that building stabilized.
Florida land boom ended 1926. I wonder what what the AJ of 1929 was saying. Just hold on until 1933….
Does this legal argument sound familiar?
http://southflorida.bizjournals.com/southflorida/stories/2009/02/09/daily11.html
Rather surprised to see so many closed at 900 Biscayne since they were pretty high priced in pre-construction. Think if I had several hundred units for sale in a building I would have signs and banners but I don’t see any in of these buidings.
some buildings are doing great but some are about to go under
i have been impressed with the closings at Plaza. I do like the building and location. But closing rate is not of highest importance to me. What will be the delinquency and foreclosure rate on the building in another year? That will describe the true value of the site.
gables: i live in plaza. most of people in the building are wealthy. many wealthy people from south america, northern USA and europe bought a vacation homes. they bought in cash.
i am serious not so many average guys here. and it is easy to rent it out, they have a waiting list for rentals.
Do a public records search for buildings like Plaza on Brickell. Some of the liens are are for assessments of a few hundred dollars. Makes you wonder how many liens will be placed when they have to do major repairs. How do these people not have the ability to pay a few hundred dollars? Scary.
Raffi – I would consider vacation home buyers as “end users”. My concern is that non-end users are simply going to put the units back on the market in the near term so selling to non-end users doesn’t really affect absorption.
Luca,
Thank you very much for this very interesting information.
Something that always surprise me as a real estate broker is how easy it is to become an expert on the Internet.
You cannot mix and match the buildings nor the locations. You have some buildings who were poorly built, or built in a not so nice location. They will just become affordable housing and we badly need that. That will be good for the city.
Some other are nicely built in nice locations and I bet that many people will love to live there later.
If you witness the changes happening around Margaret Pace Park with all these new buildings, you will see that the nicely built will fare very well. And the not nice will bring enoug hpeople to justify shops, services, restaurants, etc.
What will suffer will be the older buildings, were people will now negotiate prices and we will get more options for affordable housing.
So 2013 or 2033 like somebody said ? I don’t know. I just know that you should focus on buildings with intrinsic qualities and nice floor plans and you should do just good in the long term. You just have to do your homework.
I didn’t want to name any building here. I respect Luca’s work and don’t want to bring him any type of problems.
Best regards.
FD
I don’t understand why Raffi, RT, Gables say that absorption of the excess inventory by end users does not make a difference. It will take the inventory off the market for a quick stabilization and quicker reaching of the bottom.
H2o, I did not predict bottom in 2013. In the absense of bulk buyers, yes, ofcourse, it will take that long. But if the bulk buyers pick up at least half the excess inventory (to the tune of say 5,500 flats) by the end of this year or mid next year, and the remaining half would remain with individual investors who can afford to hold on to them for 3-4 years, we can precipitate a bottom.
As someone mentioned, it is not the closing rate but the ability of the building to survive by way of regularly collecting HOA without default. Exactly, If my theory holds good ie. out of the 22,000 flats, half are owned by end users, quarter by individual investors with money and the other quarter by bulk buyers, all 3 parties will have the capacity to pay the HOA’s and thus will ensure the strong survival of the building.
So lets hope for the formula 50% End Users + 25% Individual investors + 25% Bulk Buyers.
RE: Lucas’ comment on Wind suit:
Lucas, as jcrimes and a few others ably pointed out, suits like this will go nowhere. Please update us on the case, but even a HLS-YLS double-team will not get much mileage on this one — and as I mentioned earlier, even if Plaintiff’s win the suit, how do they expect to collect? The entity they are suing don’t have the money…
fairkim — they expect their deposits back. Deposits are typically held in escrow.
The “economy sucks” tactic is not going to get these people out of their contracts. Not only is the legal argument misplaced (the economy is not an “Act of God” rendering performance impossible), it will strike the courts as grossly unfair. Not to mention setting a terrible precedent.
I predict that even if these opportunists win at the trial court level (unlikely), the appellate court will reverse. What an awful lawsuit.
Seems the posts just miss the big picture.
You are all talking about the concrete barriers that will stop the German tanks (1939) meanwhile the faint sound you hear is the Luftwaffe overhead.
These condos are not sold in a vacuum.
Just exactly how are you going to sell these things if we end up in a depression?
Unlikely? Well, how about ‘a prolonged deep recession?’
How unlikely is that?
Because I put the last at about close to 100%
Un-Related,
Yes, I did take a look at the numbers. What you fail to mention is that 500 Brickell had the second HIGHEST number of units closed (excluding the Marina Blue bulk sale) of all the new condos listed since the last update.
Rooting for the failure of a building and its developer says a lot about you…. The only one being disparaged is yourself.
No commentary, just the numbers! I would not want to further disparage your sacred white cows at Related, so enjoy….
December 2008: 500 Brickell – May 14, 2008 – (196) 30.96%
February 2009: 500 Brickell – May 14, 2008 – (213) 33.69%
70% of 615 units = 450 units. 237 more closings and 500 Brickell will be at 70%!!!
At 8 closings per month, they should get there in 24 yrs. and 8 mos. October 2033!
Just in time to demolish it for a new structure!
To their credit, 500 Brickell is doing better than that thing across the street:
February 2009 Icon Brickell – November 18, 2009 – (15) .084 % ROFLMAO!
Stalingrad I, II, and III should be 100% full in 84 years!!!!
Un-Related,
Yes, I did take a look at the numbers. What you fail to mention is that 500 Brickell had the second HIGHEST number of units closed (excluding the Marina Blue bulk sale) of all the new condos listed since the last update.
Rooting for the failure of a building and its developer says a lot about you…. The only one being disparaged is yourself.
FD-Miami-Real-Estate,
You have a remarkable talent for writing entire paragraphs that don’t actually say anything. You should get into politics.
“You cannot mix and match the buildings nor the locations.”
Hmmm. Insightful….
“You have some buildings who were poorly built, or built in a not so nice location. They will just become affordable housing and we badly need that. That will be good for the city.”
Well, that’s certainly one take on it…
“I just know that you should focus on buildings with intrinsic qualities and nice floor plans and you should do just good in the long term. You just have to do your homework.”
“Homework”, floor plans and “intrinsic qualities” (whatever the hell that means). Who knew it was that easy?
P.S.- I know the definition of the word intrinsic but think that you use it to obfuscate. I don’t think you actually know what the hell you are talking about.
Joe — I am considering renting at Plaza. Do you have any complaints about the building? How is the elevator in the morning? Any issues with the garage, internet, hot water, or anything like that which wouldn’t be readily apparent on a tour? Thanks!
AJ, i never intended to say that absorption by end users will have not effect-maybe just a miscommunication. end users are required to salvage the condo market-not investors, speculators and renters. a major problem will arise, however, if end users are unable to acquire financing through the fannie (and similar) programs. note investors are not eligible for fannie anyway.
without financing available, the average good credit end user will not be able to buy a unit unless it crashes in value. we need end users, like myself, more than ever. but the forces are aligning against poplulating miami condos with a strong working class who will live and support the area year round. small local shops (coffee, eatery, etc) will not thrive with rich foreigners who visit a couple of months out of the year.
AJ- I said “full absorption” doesn’t matter and that once we reach a 90% level that will indicate we are in a healthy market.
FD- what the hell are you talking about? worst written paragraph I have ever read. looks more like you wanted to promote your website.
AJ – I never said what you said I said. Why do you like to put words in people’s mouths? End users are those people who don’t plan on just putting the unit back on the market in the nearer term.
Miami and Miami Beach areas have a huge amount of owners who are going to try to unload their units as the economy gets better. I don’t know if these people have the money to survive their taxes or special assessments. These were short term flips that turned into rental units which are now long term investments.
The second wave of mortgage resets isn’t going to hit until 2012. Isn’t this correct?
Hi Guys- This is off topic, I’m considering renting at Aventura Marina and was wondering if anyone can give me some insights on the building. Any issues with noise level etc..Thanks
According to Moody’s…..Miami’s housing will not bottom until early 2011!!!!!
GN
I have an ex-girlfriend who now lives there. I don’t particularly like her. I’d be fearful of whatever demonic effect she may have on the building.
I wouldn’t really take into account anything the morons at Moody’s have to say. we all saw how well their AAA rated investments fared.
I heard that there was a bulk sale at Quantum and 900. Can anyone confirm this?
Moody’s or not, anyone who thinks that the market will rebound in 2009 is completely wrong. For those of you who still not believe this is the case (like AJ), please visit: http://www.foreignpolicy.com/story/cms.php?story_id=4590 which has 5 articles from 5 great economists.
We keep sliding and we have not yet seen the real impact of foreclosures and unemployment. Hold on… worse is definitely to come.
Lucas, please give us more details about the closings in Sunny Isles Beach.
What was Jorge Perez thinking when he got into the Icon Brickell deal???
He is was probably thinking that the taxpayers where going to foot the bill while he takes the profits….LOL….long live the bail out!!!
Mark:
the good on Plaza on Brickell: excellent building management, security, and door people. professional and first rate. attentive. not even a pizza man will get by without having to call up. (I consider this a plus.) this does not apply to the valet parkers, whom I recommend you never, ever use. I’ve seen too many of them driving like jackasses. Location is pretty awesome, too.
the bad: walls are thin. pray you have quiet neighbors. the entrance to the garage is criminally-poorly designed. backs up with just a few cars trying to get in or out, and you need to swing widely to position your car to get in. whoever designed this should be skinned alive. also, I haven’t yet figured out the algorithm on which they run, but you will wait and wait and wait for the elevators. four elevator wells, but normally only two are running at any one time. and they are somehow timed to make the fewest number of trips with maximum load statistically possible.
Mark:
Stay off big buildings, they are nothing but trouble. Check out west brickell where you have 3 new small buildings.
Lucas,
FYI – Reference your post about having lunch with Beck and Lee.
http://southflorida.bizjournals.com/southflorida/stories/2009/02/09/daily11.html?ana=e_du_pap
“Monday, February 9, 2009, 6:14pm EST | Modified: Tuesday, February 10, 2009, 12:00am
Wind condo buyers want out, blame financial crisis
South Florida Business Journal – by Paul Brinkmann
Add a new reason to the list of tactics being used to get condo buyers out of contracts: the “global financial crisis.”
Four condo buyers at Wind by Neo in downtown Miami say they are unable to obtain mortgages, and therefore should be released from contracts.
Blanca and Julio Hernandez, Claudia Gomez and Miryam Gregory filed suit Feb. 5 in Miami-Dade County Circuit Court against developer Neo Epoch 1 Ltd. for buyer rescission.
“In the intervening time since the date the contracts were entered into, nothing short of a global financial crisis has taken hold, which even the most renowned of economists were unable to predict,” the complaint states.
Buyer lawsuits became common in South Florida since the downturn in the housing market. In some cases, new legal precedents have been set and new legal strategies explored by plaintiff’s attorneys.
The suit against Neo Epoch 1 includes several of the more usual allegations, such as violations of the Interstate Land Sales Act.
Attorney Jared Beck, who has handled several buyer rescission claims, filed the suit.
In the complaint, he alleges that the global crisis and inability to obtain a mortgage gave rise to a “mutual mistake and impossibility of performance” – which he says Florida law provides as grounds for contract rescission.
Beck and his partner, Elizabeth Lee Beck, said they believe the claim could set a precedent.
A Neo spokeswoman did not immediately respond to a request for comment on the lawsuit.
The suit seeks return of the plaintiffs’ deposits – $85,360 from a 2005 contract for Gomez and Gregory, and $67,800 from a 2008 contract for the Hernandezes.
The 42-story, 498-unit Wind by Neo is the first building built during downtown Miami’s condo boom to get slapped with a foreclosure lawsuit. On Nov. 26, Wachovia Bank filed a notice of foreclosure against Neo Epoch 2, which listed company officer Lissette Calderon. At the time, the foreclosure document exempted the 214 residential units and four commercial units the developer already sold.
Tue, Feb 10 02:30 PM
Chavon Sutton, Forbes.com
Those living in Monte Carlo may enjoy the Côte d’Azur’s beaches, glamorous nightlife and status as a tax haven, but they pay for it.
For the second consecutive year, the resort area tops a list of the world’s most expensive housing markets, boasting average prices of $4,420 per square foot.
“Monte Carlo is a city of the rich, small and concentrated,” says Matthew Montagu-Pollock, publisher of Globalpropertyguide.com, the online real estate research firm that released the report Monday. “The primary reasons for such high prices are related to a shortage of space and tax havens.”
Moscow ($1,937 per square foot) and London ($1,928 per square foot) ranked second and third. Moscow’s one-spot jump to the top three was propelled by strong economic growth, partly a result of recent high oil prices, and a rise in residential real estate prices in the first three quarters of the year. Last year, the country experienced gross domestic product growth of 6%, according to the CIA’s World Factbook.
A surprising turn was New York’s drop to No. 6, from No. 2, as growth in Asian markets pushed Hong Kong and Tokyo to the top five. Residential apartment prices in Hong Kong and Tokyo were as high as $1,373 and $1,103 per square foot, respectively, in last year’s survey. In New York, the average price per square foot was $1,384.1.
Mumbai, India, rounds out the top 10, with prices averaging $851 per square feet.
Such high property values are surprising during this global economic crisis, but they are a sign of historically high real wealth and global growth.
“Even in these trying economic times, there is still tremendous wealth out there,” says Nikki Field, senior vice president of Sotheby’s International in New York. What drove down New York’s rank was, in part, a “hesitancy for conspicuous consumption. The need and ability still exists to buy at the upper tier, but people are scared to publicly spend.”
Lucas,
Any reason that the last recent sales and rentals information at the Plaza is from September? Lack of information or no movements (MLS rentals/sales) since September?
Thanks!
Dream on AJ and do your homework. You can’t get £1000 a sq ft even in prime Chelsea anymore. So 2 years ago.
AJ-
Let me break it down for you.
There are two types of people who purchase housing.
The first type of person is the one who buys housing as shelter to live in, or a second vacation home that they intend to own for many years. The thought of selling the house for a profit does not really enter into the equation. They just hope to have the home keep pace with inflation, provide a place to live. Imagine a woman saying this is my dream home, or an old couple saying this is where I want to retire. These are end users.
The second type of people who purchase housing are people who don’t really love the house or condo. They love MONEY!!!!
This is the category you fall in AJ. Flippers, Speculators, Investors, Bulk buyers, whatever term you want to use, it all means the same thing.
These people will gladly unload the home or condo the second they can make a monetary return on it.
The problem is that this whole generation has learned a hard lesson about home price appreciation, and the phony and unrealistic housing bubble price appreciation is not coming back any time soon.
Yes… There will still be people who purchase true bargains to invest in and flip but the people who do this will be much more realistic. They will buy foreclosures in good neighborhoods, they will buy distressed properties, they will buy cash flow positive properties where at the very least the monthly rent covers the mortgage, taxes, insurance and association dues with hopefully atleast a hundred bucks left over for profit every month from the hassle.
The reason why you are so screwed AJ, and why you will never get your wish is because you paid way too much money for your properties. Investors will never touch any of them because the crazy house price appreciation is gone for a generation, and they will only buy based on cash flow. Which yours is not, its a debt trap.
So your only hope of selling your unit is to the first type of person, which is end users. The problem here is that your average end user in Miami makes a 50k a year income and has no interest in paying 300-400-600 a sq foot for a condo. Not even 10 years from now with inflation will anyone pay that much because wages simply will not rise enough to justify it.
If you were smart you would just liquidate the bad debt, walk away from your property, and in 2 years your credit will be good enough to purchase a real bargain that is cash flow positive. During that 2 years you can bank all the money you are throwing away into an overpriced condo and use that as a 20% down payment on a true real estate investment in the future.