Just How Hot is the Miami Condo Market?
October 3, 2011 by Lucas Lechuga
Two Fridays ago, we received a new sales listing at Icon Brickell. It was for a 1 bedroom/1 bath condo located on the 9th floor with 726 square feet of interior, the smallest 1 bedroom floor plan at Icon Brickell. The owner wanted to aggressively price the unit so we decided to list it for $315,000, or $434 per square foot. This made it the lowest priced 1 bedroom at Icon Brickell by about $10K. The next lowest priced unit was only 6 square feet bigger but located 14 floors higher. We expected the condo to sell quickly but we were blown away by just how quickly we got it under contract.
Our new listing was tenant-occupied and we weren't able to get in to take pictures until the following Tuesday. Later that same night, we had two showings scheduled. Within an hour of the second showing, we received a verbal offer close to asking price. The next morning, we had a written contract waiting in our inbox and, after negotiating a few minor details, we had an executed contract within the next 24 hours.
Anyway you slice it, the Miami condo market is hot. With each passing month, I am more and more surprised by how limited people's options for condos has become. I learned last week that less than 37 developer units remain at Icon Brickell. That's remarkable considering that Icon Brickell has 1,796 total units.
Congrats to the buyer of a condo with a kitchenette located in a dark hallway. Must be great for dinner parties.
How hot is hot? What is the difference between the developer sale and resale?
Is shit in the diaper different than shit in the pot?
Wow, so much hate and jealousy from drew and poor. But I do have to agree with drew on one point, wtf was the buyer thinking paying 315k for a “studio”. As a property owner, I have mixed feelings about these kind of over the top sales. The buyer could have easily gotten a 2 bedroom for the same price 2 years ago but probably held himself back because he was too stupid and listened to the likes of Drew, Joe, Renter Tom, Poor and other stupid people.
I agree with imo as well.Who in his right mind would pay that for a dark studio???We haven’t seen the “BOTTOM’ yet!!!! Where is RENTER TOM? I remember him well on this site.
No hate or Jealousy IMO. Just a comment. Some people are bullish and some are realistic. Not to forget, some are insecure and some have thier head burried in the sand.
Just views and opinions. Just like yours…….
I have been saying all along the Miami Market is Special and almost Unique. There is a reason why it has it’s unique history of booms and bust. I am expecting another RE bubble in the next few years if the Economy doesn’t fall off a cliff.
–imo, “The buyer could have easily gotten a 2 bedroom for the same price 2 years ago but probably held himself back because he was too stupid and listened to the likes of Drew, Joe, Renter Tom, Poor and other stupid people”
Actually I owe a debt of gratitude to their kinds (all the gloom and doom people expressing their opinions). Thank you! Keep up the good work of keeping away the sheepish.
Cash deals, foreign buyers purchasing for “investment” and a poor national housing market despite record lows (rates sub-4% as of today) aren’t bullish indicators, nor are they indicative of a return to boom times.
People aren’t buying these units because they want to live all day in these units they are buying them because of their location and the ammenities in the buiding. You don’t buy a unit like this because you want to throw dinner parties. You buy it because its the cheapest way to get into this area in this building.
Look at most units in downtown areas and you’ll find something very similar if not worse. Seriously, how many downtowns can you live in a building like Icon?
And with projects like Citicenter coming Miami(read Downtown) is only getting more desireable.
Glad you think so highly of Icon, Gixxer. Yes, dinner parties was an extreme example, but based on that unflattering photo, it looks like frying an egg in that kitchen would be tough.
What’s funny is that in 2011 the trendy, impractical Phillipe Stark-designed crap is already out of style and owners will soon be embarassed that they live in a condo with silly fake statues in the driveway and giant useless chess pieces on the pool deck.
I see a special assessment coming to erase all that ghastly Halloween Decor in the ICON. Really who would want to live in a horror movie setting with dead people staring at you from every corner.
Now Paramount hires Lenny Kravitz, another eccentric to redo their building. I wonder how that will turn out.
You guys act like everyone in the world has the same taste. Were talking about a condo with 1700 units out of tens of thousands of units. And were basically talking about the lobby which most residents don’t actually go to. People here make it seem like the HOA mandates you decorate you actual unit with the same theme.
When I hang out at my friend who lives here it pretty good. Not a fan of the yellow carpet but whatever. You can go to Club 50 and stubmle home home drunk and the pool is great. You can order drinks and unlike my pool due to the hotel there the “scenery” is always changing.
You guys don’t liek the decor, fine. But you clearly over exagerate things. If you can’t fry an egg in this unit then you clearly cant fry an egg anywhere in Manhattan.
This pic so represents Miami!
Well, ” I live at Icon Brickell”, but I do not have any money for furniture and sleeps on an air mattress on the floor.
I am going to sell it now, because I need to buy the latest Range Rover, wheny credit card has a huge debt!
Luxury in a vertical slum with 1800 units?
Have you been to that pool lately?
Tacky tourists add to the glam!
Who in their right mind wants to live like this ?
Again, fake and pretentious status!
Bienvenidos a Miami!
This is why Manhattan will always be Manhattan!
Hello,Everyone,
It’s been a while– I just flew in as I am a newly minted snow bird (last winter). Condo living is something to get used to and I am still learning about it. Today,I have 2 questions to ask you, if you care. First, if you remember me from last year, I cried out for sky-high property tax for my condo. This year, however, my property tax is slashed to my delight (TRIM NOTICE) and so is the value of my unit (TRIM NOTICE) but how can it be? The units in my building have sold like hot cakes at the last year’s prices or even higher prices and you guys have been talking how prices in Brickell have stabilized and even went up by 24% or so and the statistics seem to back that. Did the Miami-Dade use a different method to come up with the property value? Don’t get me wrong I love lower taxes no matter what. I hope this is not a mistake.
My second question – who owns garage spaces? In my building in the beginning, up to 5 guests (cars) were allowed for a free vale service. That ended early this year, of course. All guests must pay now. And for one bedroom unit, the second car was allowed for a free vale service up to now and that’s ending,too and will be charged with $125 a month. Can they ever declare “no more free parking for anybody” in future despite garage space(s) are assigned to you in the contract? Do the developers own the garage spaces? If so, what happens to the garage spaces when they leave? Do they try to sell them to the condo associations? Would anyone care to respond? Thank you
2011 Taxes are based on 2010 prices if assessments was done this year.
Your taxes may not be assessed every year so you may not see significant increase until your next assessment period.
Dear Make Me Think, Thank you for this. I have lots to learn.
You did not specify if you live in a Valet only building such as 10 Museum park or in a building where every unit comes with one parking space (either assigned or deeded) and you have to valet the second car. If you are more specific, someone can answer your question.
Your property prices are appraised the lowest at this point of time. But the way it looks, they may start to reassess them higher very soon. So if you can, declare your homestead (your primary residence) in Miami so that not only do you get a further discount but the assessed value cannot go up by more than 3% a year even if the property values jump by 10 or 20 or 30%
Can anyone correct me if I am wrong?
Both are correct, tax assesement is somthing that is usually slow to happen, especially in an environment where prices are falling. So while current prices are going up the current tax decrease you are seeing is from them finally getting around and recognizing that prices declined from the peak. So let’s say it was 100 in 2007 and fell to 50 in 2009 and then went back up to 60 now. In many cases they are still catching up with the decrease from 100 to 50.
With the homestead exemption your property taxes cant go up more than 3% or the percent change in the CPI, (whichever is lower). It also exepmts the first $50k from propety tax. So if you condo was worth $500k then the taxes would be based off of $450k.
As far as you’re parking they are allowed to change anything that you don’t have a deed to. In my building we have a parking spot deeded with the unit so they can’t charge me for that. However everything else is fair game. My building charges $150 to valet any car that doesn’t have a deeded spot in a nearby garage as their simply isn’t space.
I’m also allowed 5 guest but this is guranteed so its on a first come first serve basis. If they have room fine, but they aren’t going to fill up the building with guests and then turn away the people who paid for valet. So the HOA owns any parking spaces not assigned to a specific unit and they can do with them whatever they want. The days of free parking are gone.
Wow, Thanks, Imo and Gixxer for these detailed infos.
How interesting that HOA owns unassigned parking spots. Developers/Banks are out of the picture. My building comes with assigned self-park space(s)with additional valet service for residents, which is in our contracts. My one bedroom has one assigned self-park spot, which is in my contract (when I bought it).Is this what you mean by “a deeded spot,” for which HOA will never charge, Gixxer?
I will definitely look into this homestead advantage. Thank you again, I am humbled.
Your self-park may be assigned OR deeded. Deeded is better. The other parking spaces are NOT “owned” by the HOA per se, they are common areas owned by all the condo unit owners and their use is governed by the HOA.
By the way, anyone who thinks prices have bottomed in real estate overall is an idiot. You MUST look at each location very carefully and make a prudent decision if you don’t want to over pay. There are deals out there that make sense…but they won’t jump oton your plate, do your homework.
Keep in mind that the VAST VAST VAST number of condos are owned by discretionary owners….that is, non-primary homes and prices could tumble depending on global economic conditions and of course, someday, higher interest rates. With that said, given that we are practically in a majority cash purchase environment, there are deals out there that make sense.
I choose, after careful market study, to buy two condos for my personal use….instead of one $1M home, I bought two sub $500K condos in key areas with great longterm potential. One was a short-sale (talk about a looooong process). The other the seller finally decided to get realistic and dramatically lowered the price. My condo on the beach has a commanding view that is truly a postcard view and am doing some reno that is fully embracing the “miami modern” look. Been fun (except contractors down here are sloooooooow)…allocated $100K for it. The other is in a fun, key location that will definitely do well going forward.
If you’re not in a key location (such as on the beach) prices can and probably will go down some more.
I was right about calling this a structural recession and not a cyclical recession back in 2008/2009….I took a lot of heat for that but I was 100% correct and called it years before the pundits and economists who are now fully embracing that this was a credit bubble burst (not just a real estate price burst). I’ll look up and repost some of my old posts and they were more right on target than anyone else anywhere…. 🙂
Oh, and by the way, both of my purchases were all cash. I am considering mortgages them (or at least one….the one I have zero plans on ever selling….the incredible beach one) for a 30 year mortgage under 4%……that is an incredible interest rate to lock in for such a long time. Generally, you shouldn’t borrow against your primary residence…and really only use purchase mortgages…but there are exceptions when interest rates are so incredibly low, that the home was purchased in all cash, and that the home is a single digit percentage of one’s net worth anyway so can be paid off at any time if necessary.
Cash is king…..for now.
I am still searching for some of my earlier posts on the structural recession (versus a cyclical recession…perhaps the blog doesn’t go back that far anymore…???)…
Renter Tom says:
December 24, 2008 at 12:15 pm
Credit fueled demand and inflation….a lot of credit was extended to consumer purchases, autos, and housing…to the point that repayment of principal risk increased dramatically (let’s hope the fed govt doesn’t get into the same situation and is unable to repay principal without devaluing the currency). Credit/liquidity overall has come to a screeching halt causing a structural shift down of the demand curve. Fed govt is attempting to fill the void through cash/liquidity and borrowing to spend. What will occur is a massive shift in demand from the consumer side to, as of now, infrastructure as fed govt spending attempts to create demand. These are uncertain times that will cause even less private capital going to investments… I fear a further spiral and will become defensive accordingly to preserve and grow wealth.
Renter Tom says:
January 13, 2009 at 9:49 am
Miami Herald:
”The situation is unprecedented,” said David Denslow, an economist at the University of Florida. “Our ordinary models don’t explain what’s going on. All those ordinary models aren’t working, and now everybody is groping. No one knows what’s really salient.”
– As I have previously posted, this is NOT a cyclical recession that is merely part of the business/economy cycle. Rather it is a structural recession caused by the credit bubble collapse shifting the demand curve downward. It is a shift down in demand, not a down part of the cycle. Big difference. Structural investment that matched the supply trend line to the demand trend line will need to shift downward too which will be very painful and cause a 5-10% pullback in GDP….and at the same time, the slack between the old supply trend line and new supply trend line will need to be absorbed making this doubly painful for the approx 24 months that it will take to absorb the slack in supply…..we are still piling up autos for example…..at least housing starts had already plummeted (need even fewer starts) and autos were late to begin to adjust. Fortunately the “just in time inventory” systems will keep this from being a 10 year problem. As I had previously posted….you can pretty much write off 2009…..
Renter Tom says:
February 24, 2009 at 11:45 am
Probably too Cynical – Inflation? It seems to be a mid to longer term concern and inflating our way out of a nominal priced debt obligation would seem to be one solution except when you don’t finance such debt obligations with only long term notes. That is, the short to mid term notes will need to be refinanced going forward and if there is high inflation the lenders will demand a high interest rate! Defeats the deflate [sic, meant inflate] your way out debt scheme. Moreover, there is a lot of pain when inflation reaches higher levels esp above 10%. I have been kicking around opening up foreign account in Canada….they look like they are positioned to weather this storm better then the rest right now…it looks to be the most free market capitalist nation now as socialism is going to harm the US….who would have thought the US would look like worst socialism than Canada! As I had previously posted, we are in a structural recession where the supply investment is undergoing long, deep and painful reallocation (get it over with instead of anchoring to an old model like the fed govt meddling keeps doing….let the market adjust but not over over over correct) and we have to burn off the slack in almost everything….housing, strip malls, retail, apparel, employment, autos….. The fed govt can not reinflate the credit bubble and its borrowing would have to replace the consumer borrowing EVERY year….good luck with that!
The way I see it, there are three main components: (1) structural supply investment change caused by a shift in the demand curve (not along it) which is the most painful and long – maybe a decade, (2) slack to be burned off due to the shift in the demand curve which can take place in a 1-3 years, (3) credit stabilization and availability hopefully a 12-24 month concern. This accumulated over decades of incremental credit expansion until it got the most absurd in the housing market due to deceptive securitization so the housing credit market popped first and exposed the other absurdities in the credit markets. Basically everyone made money off the fees related to a credit transaction and didn’t worry about the repayment obligation. …
Incredible! My humble question brought out Renter Tom from hibernation. This shows no question is stupid or humble. This is all fun. Renter Tom, I’ll read my contract again to see if it is deeded or assigned. Keep up with your posts.
Good to hear from Tom. Would be curious to hear your thoughts on the overall economy short and long term. Glad you finally found your flat(s).
Cheers!
Thanks ellogova….appreciated. So far, good choices with little risk of any substantial price declines for these two condos (Zillow has them up 12.5% and 9.2% but that is just their estimate….just don’t want to lose money….of course transaction costs would eat up any gain anyway LOL).
The U.S. went from say $300B to $1,800B annual additional debt. Pure insanity….
Here is my analogy that I have used for the past two years….
Say you own a grocery store (perishable goods). Last year your sales were $1M. But this year sales are trending to $900K….a 10% drop in sales…..not good, serious recession. So, you go to your bank, borrow $120K, use it to buy a bunch of groceries from your own store, toss them in the dumpster then say “what recession, my sales grew 2% this year…all is fine!!!”. Not sustainable….the next year actual sales would have to be a lot more to show growth AND pay interest on the additional debt (plus of course pay back of some principal). Meanwhile you’re whistling dixie with your fingers crossed desperate to create growth to save your arse. Real growth is the only hope out of such debt obligations.
The U.S. is borrowing an ADDITIONAL 10% of the nation’s GDP beyond what as already large annual deficits and getting a meager 2% growth…where is the growth multiplier??????????????? Sadly, this will prove to be a terrible misallocation of capital….worse than the misallocation of capital during the housing bubble. While I love Roubini, his advocating massive government borrowing and spending is wrong for the long term.
Another discussion on the economy is if you used a broader measure of inflation, in real dollar terms, we never reached the previous GDP peak so we were never really out of the recession. If you consider that falling asset prices helped to cancel out the other living cost increases, then you begin to understand why so many are felling like they are in quicksand…the great malaise. A lot of necessary living costs have increased…inflation in everyday costs…yet housing costs “declined”. The result is a squeeze on one’s standard of living. The structural changes in the economy need to be allowed to happen.
Bernanke is right to provide liquidity but wrong on paying banks interest on their deposits while the bank’s borrowing costs are less. Profit for nothing….profit without having to lend. Hence, private sector lending is anemic. Additionally, the federal government’s MASSVE borrowing (and spending!!!) crowds out private sector activity. A little bit (in this case A LOT) of socialism is enough to rot one’s economic soul. We need more capitalism to create jobs, not more socialism!!!
We are tilting at windmills……a risky game we should not be playing. I’m learning the words to the Canadian national anthem, just in case, eh.
Seems like the “Socialist” country of Canada got it right, eh RT. Glad to see you have come to your senses.
Looks like most naysayers of the past have bought apartments finally! I wonder what gables did (as well as miami2009/miami2010). If Renter Tom became Owner Tom, then I guess, I can come back too. I quit the blog for a few months altogether and the past six months, I have started reading it again(old habits die hard). The blog has become quite slow but we can make it fun again. But I do not appreciate Renter Tom using “arse”. Arse is mine. The rest of you can use “ass”.
When I first heard about the Resort World project it didn’t take long before I was wondering what would AJ say now.
I was at City Hall last week and the food was pretty good. With Publix coming that area is shaping up nicely.
Au contraire mon frère Kramer (for those in Québec)…it isn’t that Canada got it right with socialism but rather the U.S. has gotten it sooo wrong with socialism that they have gotten worse than Canada…and of course the Canadian government’s much more fiscally conservative government makes our tax and spend liberal socialists look like psycho nutcases……truly, the change was wrong. We’ll be paying back these errors for generations.
Aj- “Looks like most naysayers of the past have bought apartments finally!”
I am afraid you may be wrong about that. Many people listened to the naysayers and are now priced out of the prime Miami locations. I am afraid many may have missed their opportunity because the listened to the Gloom and Doom crowd and will again be priced out of the prime locations.
Can you believe the gall of this guy(RT)? After preaching the gloom and doom gospel for years, he vanishes without a trace then shows up all smug, having bought not one but two condos. He then goes on to tell us how right he has been, even goes on to tell us that he has been the most right and proceeds to pull 2 quotes out of 1000’s the has posted over the past 3-4 years. Wonder how long it too him to find those exculpatory quotes.
Hey RT, Yeah, you were right all along! You are not fooling anyone I believe most of the readers of this blog see right through you. We all know which of us were right all along and we are glad to have him back as a contributor. It says a lot about his character that he didn’t take credit for his early predictions. I’m afraid it says a lot about your character too.
Anyway welcome back to all, I’m glad you guys are back.
Looks like a lot of exciting things are happening in Miami RE.
May be now we can get Joe to see the light, and he can finally take credit for being right all along. lol
Renter Tom is definitely self-absorbed dolt with delusions of grandeur, but nobody should be sorry for his dimwitted flock. People who listened to his drivel while he was busy condo shopping, deserve their station in life. Renters forever. Good for them.
Now, while duplicitous Tom is not nearly as smart as he thinks, some of his observations are clearly spot on. America’s economy is shot, and without top to bottom restructuring will remain so. No arguing about that.
Regardless, downtown Miami RE has bottomed, and Omni area is poised for doubling by the time World Resort Miami is completed.
Gixxer, Yes I am excited about all the things that are happening in and around 1800 Club. The entire area looks like it is on steroids. The biscayne blvd looks really good after all that redevelopment. New reataurants etc. There is an amazing cafeteria called la bottega opened up in my building in front of pace park. Everyone please check it out. it is family owned and home cooked gourmet Italian food and a tiramisu to die for with great views of the bay while you are dining. In my building just 18 units are listed for sale and most are getting their asking price. Rentals do not stay on the list for more than 1 or 2 weeks. I heard Quantum is in similar position.
Visionary, Lara called me and told me that she relisted her Quantum apt after her previous tenant left for $400 more and rented it with in days of listing. So it is a win win situation for all the home owners.
That brings me back to MMTs comment about RT. Yes, I feel the same way too. For many gloom and doomers he was the patron saint. A cult leader whose diktat is followed religiously. They listened to what he said and they continued to rent while he quietly goes and buys not one but 2 condos for himself. That is so not fair.
Hey AJ welcome back buddy : ). And yes MMT most of the good locations and good views are gone. That is why I finally pulled the trigger in early 2010. And regarding RT predictions, all I can say is that even a broken clock is right twice a day.
In RT’s defense he pretty much always played both sides of the fence. I mean he came to this site at Buyer Tom not Renter Tom. Here is one of his quotes from late 2009:
“Combine that with eventual higher interest rates and home prices will stagnate at best for years to come. In the more immediate term, high levels of foreclosures will persist. We will be bouncing around the bottom for quite some time, at least through 2010. If you find something you like, get it at a good price, and plan on living there for at least 5 years, makes sense to buy.”
These types of statements are so ambiguous that you can say you ment anything. Miami condo’s (especially downtown, South Beach) which is what most people here are concerned with (hence the name of the site) clearly weren’t stagnate for years to come. But then I guess if you say you were talking about national home prices as an average you’d be correct.
Then he follows it up talking about if you plan to stay there for 5 years it makes sense to buy. Well no sh!t. You shouldn’t be buying real estate unless you plan to keep if for 5 years even during good times.
RT has always talked about buying the problem was that (in my Glenn Beck voice) his deep seeded hatred for whi… I mean Barry Obama pretty much forced him to all but declare the economic collapes of the US. But you can see that regardless of all that talk he still bought not one but two units.
Goes to show that no matter what kind of rhetoric they throw out there those with the financial wherewithall are buying.
The good ones are taken??? Oh get real. Miami prices are going down some more AND banks will be releasing more and more and more as foreclosures ramp up.
You idiots bought around the peak….I bought 50%+ off to pre-bubble prices. You idiots kept hyping the market telling people over and over and over to “buy now” even when prices were WAY OVER PRICED. Get real.
I was quite upfront what I wanted to do…which was to eventually buy. Should I still be renting….probably would still be cheaper but as I said I was looking to buy and didn’t want to lose money…that is to be a knife catcher like you all. After reviewing the market, where I wanted to buy, the $1M+ units are gonna be money losers. So, targeted the market with two sub-$500K condos…more prudent and more fun. Can decide to sell one later without hassle of really moving too…. The sub-$500K condo market has a much larger pool of buyers.
There is a ton of shadow inventory….I’ve examined building after building. Tons of lis pendens filings that are just sitting there. From what I am told from my lawyer friends is that they are now ramping up as their clients are now pushing to foreclose. MANY properties will be coming on the market over the next three years. The loser landlord condo floppers will be defaulting or putting their condos on the market in downtown and other overbuilt areas. There is sooo much inventory not in final owners hands that these things will continue to be metered out into the market keeping prices down. One very good condo building has 15% of the building in lis pendent status and another top building 20%….been the case for a while as they secretly pile up without resolution. Well, the end is coming nearer and those will be on the market sometime over the next year+.
Have we stopped the free fall. I’d say yes. Will prices go down some more? Probably. Are we in the eye of the storm with the second wave coming??? I sure hope not. That would be bad for everyone.
My macro-econ statements we right on target……BULLSEYE!!! 2-3 years ago I was practically the ONLY ONE stating what I stated….fast forward nearly 3 years and EVERYONE is saying it now. Just admit it, I was right.
There is not one condo that I passed on that I regret not buying. I only hope things are now relatively stable so I don’t regret my two purchases. Had I bought them 2-3 years ago like AJ….hells ya I would be kicking myself….esp if I lived next to Pace Park a.k.a. Hobo Village where addicts do their bodily functions in the open….yuck!
Don’t listen to the market shills…..they aren’t even right twice a day! LOL Had I listened to them, instead of doing my homework, I would have lost $400K+………and been a lose like them.
What were you right about again?
You need to tell your lawyer friend to speed up the process because investors like myself are complaining about the lack of inventory in the market.
You clown bought condo in Miami Beach, but worry about Downtown Miami? Stop it, please, that’s just too funny. The overbuilding and remaining inventory numbers are far worse on the Beach than in Brickell or Biscayne Corridor.
Gixxer—-I usually don’t bother to read your posts. But glancing….people were buying and flipping condos like crazy….no one was living in them for 5 years…..so duh.
Regardless of wheter they were doing it in the boom are not you shouldn’t purchase an non liquid asset like real estate if you don’t plan to hold if for 5 years. The boom is over an NO ONE here was even remotely suggesting that people should start flipping houses again. So basically you were setting up a straw man agrument.
As far as the rest of you rant believe me I WANT to believe you. I was on the sidelines for all of 2010 while not working in school and watching $60k+ go out the door in tuition. And the whole time I was watching my option downtown slowly decrease.
Before moving here I was looking at 2/2 for example in 1060 for $250k. Now 2/2 are going for $350k+. So I saved $400 a month by renting or about $10k over two years but now If I wan’t to buy I’m going to have to pay $100k more. Meanwhile rent has gone up $250 each year (luckily only $100 since I’m in the same unit). If I started a new lease in another unit exactly the same as mine I’d be paying $200 – $300 more.
I’m bascially trapped in my unit if I want to stay in Brickell. And its pretty much the same for the rest of the condos. Some bottomed late 09 some early 10 but most are on the upswing now. Then next on the horizon is Citicenter which is supposed to start in 2012. Once they start building this project with more retail, movie theaters, etc. you somehow thing prices are going to go lower??
So you hate on AJ for buying 3 year ago and yet prices in his building are HIGHER. So he had the option of better units at lower prices, how is that a bad thing????
Like I said before I want to believe you but it just doesn’t seem to be panning out like that. I’m probably looking at another year to pony up enough for my downpayment and honestly I’m just hoping I’m not going to have to pay much more than $350k but the way things are trending that looks unlikely as well.
My income growth will outpace the increases and because of school I didn’t have the ability to buy before so I don’t feel that bad. But I’m sure there are plenty of people who had the means to pull the trigger who are kicking themselves right now.
And like MMT has pointed out many people are simply going to be priced out these areas.
AJ, glad to see you returned to the blog! Been hoping you were doing well. I have been pursuing opportunities outside of Miami, so my interest in the blog and Miami condos has changed. I most likely would have purchased in the past year, but better job options apeared elsewhere. Still keep an eye on some units as a second home, but that is different from the primary residence search I had been conducting. Not interested in being a long distance landlord.
My biggest concern the past couple of years has been the low interest rates, and what would happen when that reversed. The liquidity trap has fooled me just like Bill Gross 🙂 But had i purchased, i would be locked into staying at a job which was losing my interest, rather than a great vertical career move which i made under tough employment conditions. i guess the value of the miami condo market for an individual has alot to do with career timing-just ask gixxer!
CNBC just had a segment confirming what I said above about not enough inventory on the market right now. Investors are clamoring for more inventory only the real dogs remain unsold right now. Rental Demand is up, Labor and taxes are down significantly. Right now is a sweet spot for investors but Supply is down drastically. Realtors are telling me that there will be more foreclosures coming on the market in months but competition is stiff and Investors from as far away as Australia makes it difficult to get good deals.
Article that touches on foreclosures and the shadow market:
http://www.miamitodaynews.com/news/111013/story2.shtml
“We’re down to about a 30-day supply of foreclosures,” Mr. Levine said, “and they are selling almost faster than they can come on the market. One property that came on the market recently had 100 offers. A lot of people are chasing these properties because the prices are so good.”
“Many are offering cash sight unseen,” she said.
What’s keeping prices from escalating more quickly, brokers agree, is uncertainty about the “shadow market,” the number of foreclosed properties held by lenders that haven’t yet been offered for sale.”
“The foreclosure freeze at the end of last year changed the way banks look at their distressed property. Now they’re proactively working with homeowners to short-sell rather than foreclosing on them. Ms. Rubin called the shadow market the missing link in the equation.”
Even under the most optimistic timeline the earliest that we would have new inventory is 2014. And even then the majority of units will more than likely be rental units. Met 3 and Citicentre will be rental. The only for sale product that I’m aware of is 23 Biscayne going up now. I know Related ISG is supposed to be working on a couple projects as well like MyBrickell (234 units) but they are raising 80% deposits so whatever they do will pretty much be sold before its even built. I know Skyline over Mary Brickell Village has been trying to do condos forever. They could get the financing to do rentals today but they’d have to give the deposits back so they are stuck in limbo.
So for the foreseeable future the only inventory out there are those forclosures that RT say are ramping up (which will most likely be short sales) or whatever inventory those “loser landlord condo flippers” decide to put back on the market to cash out.
Renter Tom, you sound so smug in describing what an amazing deal you got after all your “careful market study” and how much you paid, in cash of course. Then you go on to talk about the $100,000 you have for the renovations. Well, good for you and all your tireless research and endless supply of money. Sounds a lot like bragging.
The one question I do have is, if you got such a great deal, based purely on your “careful market study” and team of magical attorneys, then why have you not mentioned which 2 buildings you purchased in? Could it be that you are afraid that if the market does dip, or your buildings fall under hard times,then your wise investment skills may come into question with all the other “posters” on this site? If you are going to brag about how saavy you are, put your money where your mouth is and tell us what buildings the rest of us missed, which opened the door for you…
…awaiting your response.
Yep — bought two you (sarcastic) hero worshipper you. They are both for my use, not gonna rent them, not flipping them. So far, so good. Both were “distressed” situations. One the seller really needed to sell and got realistic with price and the realtor called me 6 months after I had seen it to let me know the seller just dramatically dropped the price (I was the first call too). Realtor agreed to give me back 1.5% of the commission since the realtor was on both sides of the transaction….so my negotiations for the 1.5% with the promise of a quick and easy sale paid off. The other was a short sell were the banks lost a ton….however the seller never got a personal release of the debt so collections agency calls may be in their future! I don’t mention the buildings out of privacy….plus there is no reason for me to desparately hype my buildings…the market is what it is and if the market goes up, so be it, if it goes down, so be it. As I noted above, prices could go down some more and if substantial declines then I will loose (then you can call me a knife catcher!!! LOL since it will be true!). Literally 50% off peak pricing. There are condos out there in less key locations (depends on what you want to use it for) that are 70% off or even 80% off but those tend to be apartment to condo conversions that are a total mess (cheap renovations and HOA financial disasters).
There is a a huge shadow inventory as a vast number of condos are NOT in end user’s hands and the lis pendent filings have been piling up to unimaginable numbers. Can you say RESALE??? Saw the CNBC stuff today too….even “Jim the Realtor” was on CNBC. One trend has been to buy low cost places as rentals for income….one scheme is for Section 8 rentals…a potential fools game as the govt will have less money to support those rents.
Just like the fools that refinanced their homes each year so they could spend spend spend….the federal govt is doing the same thing under Obama (and no, I never watch Glenn Beck) but to our nation and her future. So sad, so very very sad. All of this spending to somehow maintain non-working people’s lifestyle.
Did you see all the athletes and celebs that lost millions and millions and millions on the South Florida condos/homes??? Not a good market to be in at all right now. Just the other day it was reported Ricky Martin lost $10.2M on the sale of his Golden Beach home (bought in April 2007 (a bit before AJ bought) for $16.5M fast forward to September 2011 sold for $6.3M. And today news that Chris Tucker’s (Rush Hour) home just had foreclosure papers filed against it. We’ve had an unbelievable number of lis pendent filed but no action taken yet (thanks stupid robo-signing “scandal”)….well action is gonna start to ramp up. So, no Gixxer/AJ, all is not well….
There are deals out there in South Florida…but you have to do your homework and be patient…..and prepared that prices could take another substantial dip. I’m comfortable with my purchases….but I put in the time and effort to make it happen. If they go down some (after an uptick per Zilllow…..rather I bought under Zillow prices in the first place…combo of both) I’m prepared to accept any loses….and have no delusion that prices are going to suddenly spike upward. I played my hand and am now at the mercy of the market….so be it.
This is just a brief cameo appearance for me as the past debate that prices can go down…for years and substantially….is well settled…no denying that.
Oh and small world. In my research way back when I came across suspicious transactions involving a Laura e. Diaz…..fast forward to October 2011 and there was an article about she and 19 others just got indicted! I had wondered back then why isn’t this person in prison….well probably gonna happen now. Well, my research indicates the massive lis pendens filings start to advance with those units coming onto the market over the next 24 months. Ask any condo association about lis pendens units (typically not paying HOA fees…although quite a few are they keep that current so they can rent the places out to pocket the rent but not pay the mortgages.
Call me Paul Revere “The lis pendens are coming! The lis pendens are coming!” YOU’VE BEEN WARNED…
RT, It does not matter if all is not well up there in Golden Beach or else where or Ricky lost money. Downtown is roaring and raring to go. Just today I was shopping/driving in Midtown complex and it is shaping up to be the most beautiful, desirable and livable enclave in Miami. Same goes with OMNI/Arts district with or without the Genting project. Brickell will eventually transform from a cluster of Moscow/Beijing style apartment blocks to a live/shop/play with the coming Citicenter project augmenting the existing Mary Brickell Village. This greater downtown area is doing very well bucking the national trend. So the price of houses in Doral/Kendall/Miami Shores or Golden Beach for that matter has very little relevance to the bloggers of MCI.
RT says “…I don’t mention the buildings out of privacy…”
Or because you’re most likely full of sh#t.
HGTV should have followed RT looking at all 300 units with his negative comments–poor realtor must have felt 100 y/o after working with him.
–RT, “I’m prepared to accept any loses….and have no delusion that prices are going to suddenly spike upward. I played my hand and am now at the mercy of the market….so be it.”
full of bs and such a f*ing hypocrite!
You advised others against buying 1 home for themselves but it is ok for you to buy 2 homes with one clearly being for speculation. I don’t blame you because your bets on higher interest rates went against you. your money earning 1-2% in the bank will not maintain your lifestyle for long. Your bet against the dollar hasn’t worked out so well and soon Your principal would be down significantly. Speculating on RE is one way to hedge your bet.
MMT, you are absolutely correct. With your money making only 1-2% and inflation at around 3-4% (if you see the prices in the grocery stores going up, it feels double that), RT is actually losing money by the day.
He did the smart thing by investing in Miami RE. I am not sure if his investment on the beach will yield the same return as Downtown Miami which is exploding. Nevertheless Miami in general will do ok compared to the rest of the country only because it is the darling of the whole World.