Brickell Condo Index – April 2008
April 29, 2008 by Lucas Lechuga
The Brickell Condo Index is back! I was shocked to see that it's been six months since I last provided an update to what used to be a monthly report. Those who've been around long enough to remember those updates would probably agree, however, that very little change in the market was seen on a month-to-month basis. In this report, you'll definitely see that prices in some Brickell condo buildings have changed quite a bit within the past six months. Ideally, from this point forward, I'd like to provide a Brickell Condo Index update every three months.
Most of the following data was collected last week on April 22, 2008. The pending sales information towards the bottom of the post was collected today.
I finally decided to include Latitude on the River in the Brickell Condo Index. In November, the average price per square foot of available condos in the Brickell Condo Index listed in the MLS was $512.14. Six months later, asking prices have dropped 6.52 percent to an average of $478.76 per square foot. The drop would have been 5.64 percent had Latitude on the River not been added to the index. A few of the following condo buildings, however, have had huge reductions in their average asking prices. I'll discuss these in more detail towards the end of the post.
Average price per square foot of units currently listed on the MLS:
- Atlantis on Brickell - 2025 Brickell Ave | 33129 | $296.44
- Brickell on the River North - 31 SE 5 St | 33131 | $398.36
- Bristol Tower - 2127 Brickell Ave | 33129 | $469.91
- Emerald at Brickell - 218 SE 14 St | 33131 | $577.29
- Four Seasons Residences - 1425 Brickell Ave | 33131 | $1,028.80
- Imperial at Brickell - 1627 Brickell Ave | 33129 | $386.68
- Jade at Brickell Bay - 1331 Brickell Bay Dr | 33131 | $669.65
- Latitude on the River - 185 SW 7 St | 331310 | $402.46
- Neo Vertika - 690 SW 1 Ct | 33130 | $361.71
- One Miami - 325 & 335 S Biscayne Blvd | 33131 | $424.42
- Santa Maria - 1643 Brickell Ave | 33129 | $712.49
- Skyline on Brickell - 2101 Brickell Ave | 33129 | $438.51
- Solaris at Brickell - 186 SE 12 Ter | 33131 | $512.21
- The Club at Brickell Bay - 1200 Brickell Bay Dr | 33131 | $444.68
- The Mark on Brickell - 1155 Brickell Bay Dr | 33131 | $430.75
- The Palace - 1541 Brickell Ave | 33129 | $341.35
- Villa Regina - 1581 Brickell Ave | 33129 | $389.43
- Vue at Brickell - 1250 S Miami Ave | 33131 | $332.53
The average price of Brickell condos sold over the past six months has dropped 13.20 percent to $410.38 per square foot from November's average of $472.80. The drop would have been 11.75 percent had Latitude on the River not been included in this month's update.
Average price per square foot of condos sold in the MLS within the past six months:
- Atlantis - 2025 Brickell Ave | 33129 | $249.28
- Brickell on the River - 31 SE 5 St | 33131 | N/A
- Bristol Tower - 2127 Brickell Ave | 33129 | $442.37
- Emerald at Brickell - 218 SE 14 St | 33131 | $409.11
- Four Seasons Residences - 1425 Brickell Ave | 33131 | $913.08
- Imperial at Brickell - 1627 Brickell Ave | 33129 | N/A
- Jade - 1331 Brickell Bay Dr | 33131 | $544.02
- Latitude on the River - 185 SW 7 St | 33130 | $314.35
- Neo Vertika - 690 SW 1 Ct | 33130 | $322.13
- One Miami - 325 & 335 S Biscayne Blvd | 33131 | $324.77
- Santa Maria - 1643 Brickell Ave | 33129 | $595.43
- Skyline on Brickell - 2101 Brickell Ave | 33129 | $397.72
- Solaris at Brickell - 186 SE 12 Ter | 33131 | N/A
- The Club at Brickell Bay - 1200 Brickell Bay Dr | 33131 | $367.44
- The Mark on Brickell - 1155 Brickell Bay Dr | 33131 | $386.25
- The Palace - 1541 Brickell Ave | 33129 | $320.09
- Villa Regina - 1581 Brickell Ave | 33129 | $356.79
- Vue at Brickell - 1250 S Miami Ave | 33131 | $212.82
Below you will find some additional statistics:
As in the past, the first column to the right of each condo development’s name is the difference in the average sales price and list price for this month, expressed as a percentage. An "N/A" is found next to Brickell on the River, Imperial at Brickell and Solaris at Brickell since this percentage could not be computed as each building failed to have a closed sale within the past six months through the MLS, and thus did not have an average price per square foot for condos sold.
The second column is the number of active listings in each development currently in the MLS. The third column shows the percentage that these listings represent over the total number of condo units in each development. The cells highlighted in green reveal those condo developments that have active listings that represent less than 10 percent of the the overall units in the building. In my opinion, this often demonstrates a sound condo building. The ones highlighted in red reveal those condo developments that have active listings that represent over 20 percent of the overall units in the building. There's definitely underlying risk in buying condos in these buildings and I'd only advise buying within one of these condo buildings if the price justified the risk. The condo developments with active listings less than 10 percent are considered very safe, in my opinion, and anything in the 10-15 percent range is considered normal, even in a healthy market.
The fourth column shows the number of pending sales while the fifth column displays the number of closed sales within the past six months. There are a total of 58 total pending sales in the 18 condo buildings now represented in the Brickell Condo Index. In November, there were a total of 49 pending sales at the time. I was quite surprised by the large number of pending sales at The Club at Brickell Bay, Jade and Solaris at Brickell. It looks like buyers are finally starting to step in and place some of the condo foreclosures in these buildings under contract.
The sixth column show you the difference in the average list prices from this month’s and November’s, expressed a percentage. Those highlighted in red reveal those condo developments which had a drop in their average list price while those highlighted in green show those that had an increase. Vue at Brickell saw asking prices drop about 25 percent, The Club at Brickell Bay around 19 percent, Jade around 16 percent and Solaris at Brickell around 11.5 percent. The seventh column reveals the difference in average sales prices from this month’s and November’s, expressed as a percentage. The condo buildings hardest hit with mortgage fraud saw prices drop in half, in a few cases, as the fraud has ceased and the supply of foreclosures has grown. The average price per square foot for condos sold at Vue at Brickell within the past six months has dropped almost 48 percent. A few apparent fraudulent transactions included in the November average have fallen off. The Club at Brickell Bay's average dropped a little over 46 percent, Solar at Brickell's dropped about 33 percent and Jade fell around 25 percent. Even One Miami took a big hit with a drop of around 23.5 percent.
As a lifelong Miami resident living in a house near Brickell I am fascinated by your analysis and that of those who post here. I know of no more informative site and I thank you for the peicemeal education I am receiving. I am inexplicably fascinated and thank you for your hard work.
“The average price of Brickell condos sold over the past six months has dropped 13.20 percent…”
So, prices have been declining at an annualized rate of 26.4% a year. That’s pretty significant.
Thanks, again, Lucas.
Right, BFG. The average SALE price is declining at a 26.4% annual clip. Of course, sale price means “sold,” not sitting on the market waiting to be sold — or, as is more often the case, converted into a rental (“temporarily,” of course). So even that eye-popping number is probably too low.
And to think there are several tall condo towers that haven’t even been completed yet. And many thousands of mortgages that are just now readjusting. And an, um, recession.
I can see some of these buildings — Everglades on the Bay, for instance — sitting mostly empty for a decade. Tell me I’m wrong.
Great post.
I wish somebody provided this kind of analysis for Miami Beach and Sunny Isles as well.
Market should start improving in 2009
BFG,
The drop has been so great for two reasons: fraudulent transactions are no longer present (which had falsely propped up the average) and many of the sales that have closed within the past six months are foreclosures, short-sales, estate sales, etc.
moretroops, buildings in Miami are always empty because many owners inhabit them for several weeks out of the year.
for example, a lot of Jews have left today and yesterday after celebrating Passover. Their condos will sit empty until next year.
Lucas,
THANK YOU VERY MUCH FOR THE REPORT !!!
I just got a letter from the developer at 1060 brickell avenue of the 15 days notice to close.
Dont know what to do…. at $400 ppsf for a studio on floor 30.
HELP HELP HELP!
any help will be GREATLY APPRECIATED!
Thank You!
Yeah, the View and Jade and literally everything on Brickell sits mostly empty because of seasonal owners and “Passover.” Definitely not because of this historic housing bubble and crash. Nice try.
Given that this market is being almost entirely defined by the outliers, I bet a scatterchart of this data would be pretty illuminating.
BRICKELL SOILDER,
HOW MANY SQ FT IS THAT STUDIO… MY OPINION IS IF YOU CANT CLOSE, THEN SIMPLY CUT YOUR LOSSES AND WALK AWAY FROM THE DEPOSIT.
I think studio apartments are a tough to sell to end users. Even 1br are mostly for renters. I dont see an owner saying I want to buy a studio in Brickell, beach maybe not Brickell…
Post bubble, Miami Real Estate is more expensive now than ever before.
I think you’re going to see some psychology/economics come into play very shortly. Miami has always had a lot of casual 2nd home owners. In the long ago past (pre-1999), RE was relatively cheap so it was not expensive for people to have a pad in Miami and use it a month out of the year. Pre-1999, Owning Miami RE was CHEAP.
During the Go-Go Boom from 1999-2006, RE got bubbliciously priced, BUT it actually got “cheaper” to have a pad in Miami because your paper appreciation far outweighed the carrying costs. During the 1999-2006 boom, owning Miami RE actually got CHEAPER.
What’s happening now is a colossal experiment that has never happened in Miami Real Estate EVER. Owning is EXPENSIVE for the first time ever. There is no historical precedent for Miami RE ownership being expensive.
The shift that’s going to occur in Miami is going to go way beyond pricing. When the dust settles, the pricing will come down much more (obvious point) but Miami will also become much less transient because the costs of ownership will still be much higher than at any previous point in Miami’s history. It’s simple, when ownership is cheap, as it was, from 1970-2006, you can afford to let your waterfront condo sit there. When ownership is expensive, as it is now for the first time ever, it’s going to chase away many of the casual second home purchasers, and force these units to be occupied by primary residents.
what strikes me is the huge diff. between the asking price and closing price. if more people would just list their condos at a “realistic” price for todays standards then i think there would be more buyers. I know lots of people getting out of college with a nice job making 80k yr. that would buy up 1/1 at the 150k range. I say just price them low and they will move, better then listing them 20% higher than what your gonna get and have to wait.
Right on JR56.
My advice to anyone seriously upside-down on their mortgage is to walk and take the credit-rating hit.
Yes, it will be no fun. Your family and friends might even shun you. That sucks, but consider: (1) you wont spend the next ___ years paying off an enormous debt w/out gaining equity; (2) you can rent for much cheaper and save the money; and (3) IMHO, a “foreclosure” on an otherwise good credit history will not be the black mark it once was. So many otherwise good payers are going to be foreclosed on that banks will be forced to downplay that factor in the future, or risk losing millions of future customers.
I don’t think it’s immoral to walk away, either. It’s a monetary transaction that failed, period. The bank left you behind when it (probably) repackaged the mtg. and sold it as a secured instrument anyway. It’s a true arms length transaction. Morality is no longer part of the equation.
So save yourself.
And once again we are looking at supply and demand. Supply seems endless. Demand is evaporating. Think that artificial demand (based on expectations of flipping profits, ninja loans, neg am loans, etc, etc, and you will see the downside is mindbogglingly low. No price that anyone would sell for today could make sense to anyone other than a happy go lucky – so much money they don’t know what to do with it foreigner. Anyone else would be a fool too buy at virually any asking price in today’s south Florida market. I wish it was otherwise but that is the reality.
I dont think anyone buying now would be a fool as you say…there were many people that were priced out and if prices drop some more they will be able to buy. when i say buy I mean end users. someone who will live in it for at least 5 yrs. I have many friends that are happy with the price drops and are glad they can finally move out haha. real estate will no longer be a sport as it use to be and will now be used for what it was intended, living in.
Lucas,
I assume your numbers are from MLS and do not include price effects from foreclosure, short sales, etc. Assuming that those sales are actually of a magnitude which truly affects house prices (which i believe they are), how much lower or higher would that skew your numbers?
60 sales in 6 months! how does that compare to past years activity?
Raffi,
In what industry are people getting paid 80K right out of college?
bubblerefuge,
A few have accounting degrees and a couple finished law school. I know everyone bashes the economy here but most people are just pessimistic and negative….I know things are bad and Miami doesn’t have the best reputation but there are jobs out there that pay well and industries that are always hiring. I’m sure they could make more money elsewhere but then they’d be freezing your ass off for 5 months of the year.
If you look beyond the MLS, the numbers may be higher.
Looking at the Vue at Brickell, the Index says 2 closed sales within 6 months with an average $212.82/sq.ft price.
However, the property appraiser’s site reflects 4 sales with an average per sq.ft. price of $568, which I find very surprising!!!
But here’s the sales:
11/07 unit 1507 with 814sf sold for $560,000
12/07 unit2414 with 1149sf sold for $390,000
1/08 unit 1208 with 838sf sold for $550,000
1/08 unit 1709 with 783sf sold for $463,000
Lucas, no 2 of those 4 sales at Vue would average $212/sf. Which units were used in the calculation?
perez,
Unit 2703 with 1,069 square feet sold for $235,000 on March 20, 2008 and unit 1503 with 1,069 square feet sold for $220,000. Those other 4 must have been private sales.
Those 2 appear to be bank sales of previously foreclosed properties, perhaps not as indicative of the market as the 4 non-MLS private sales, which had much higher sale prices.
The MLS is probably the most efficient way of gathering this data, but unfortunately it could be substantially underestimating (or maybe overestimating) the market.
Vue’s 2 MLS sales reflect $212/ sf
Vue’s all 6 sales reflect $449/sf.
Did anyone happen to notice the sea of Red Ink on old Lucas’s chart 🙂
I can dodge $200 per sq ft babe when $125 per sq ft is not far away.
Inventory….up …. up ….up
Vacancies ….. up …. up …. up
Foreclousers …. up …. up ….up
New Condos coming on line …. up …. up …. up
Taxes …. up …up … up
Unemployment …. up …. up …. up
Inflation (excluding houses) up …. up … up
Interest rates up … up … up
Insurance …. up … up …. up
HOA Dues up …. up … up
Demand down … down …. down
Prices down …. down … down
Perez,
Your numbers do not jive with reality. You may be accessing them from somewhere which claims to be legitimate, but those are not realistic. 800 sq ft condos in Vue are not selling for half a million dollars. If they are, either we are continuing to see fraudulent activity, or buyers in Miami RE may be the dumbest people on earth.
You are correct, however, as i do believe the MLS database is not accurately telling people what the sale price really is. The foreclosures are forming the basis of the new market, whether the RE folks like it or not. The sooner they include that data the better.
The Ace, you forgot gas prices (up), food prices (up), and so inflation (up) — and available credit (down).
Such a perfect storm.
Hey Lucas,
Curious as to why you did not include Wind condo closings like you said you were.
It be great to know whats goin on in that Condo.
Thx
Dobieman –
Well said. This blog and its postings are really great. Checking in here reminds me of being in an advanced class with a great teacher in a really good school.
Thank you Lucas. Now I can see why others are jealous of your blog.
I couldnt help but notice that 50 Biscayne looks very healthy with lots of lights at night. At least the bayside. I like the location too, right next to the shopping at Flagler and bayside Marina and Downtown. It may become the Related’s only success story. If anyone booked a unit there, especially an East facing unit, they should close on it instead of walking away. I think it will be a good building to live in eventually.
Lucas, thanks for the update!
Should The Sail be included within the figures?
Is there any way of compiling an average maintenance cost per sq. ft. for these buildings, would be interesting to see how the different buildings compare to each other…
Does anyone see prices in Jade dropping to below $400 square foot. I am looking at buying several units for investment. How are the rents in the building? Is there demand and do you think you can achieve pos cash flow at $400/sf??
Does anyone have similiar analysis for Sunny Isles and Miami Beach?
1/08 unit 1208 with 838sf sold for $550,000
Who in his right mind would pay that amount for an unit in VUE?
Fraud again?
Can you post the link to that sale?
Who sold and who bought?
Mirador 31 Line for 185K, 970 square feet or 188 per square foot, bay view no balcony, 18% of condo owners not paying maintenance, Buy or do not Buy? Can I buy something else that is a better bang. Have cash. Please someone help me. Thanks.
I agree ignacio…sounds like fraud
perez, those sale prices look wayyyyyyyyyy off, they do not reflect the market, at all. no one would pay those prices for the vue today, that is the building with the most problems which will have the cheapest units.
Perez,
I agree with Ignacio. At least 3 of the 4 sales that you mentioned appear to be fraud.
What was different about the Vue and Jade that allowed/encouraged mortgage fraud to be much more rampant?
JL asked: “What was different about the Vue and Jade that allowed/encouraged mortgage fraud to be much more rampant?”
I hate to sound pessimistic but it may be because Vue, Jade, and Club all had C.O.s in 2005 so the opportunity for fraud existed where it did not exist in half-finished or “drawing board” stage projects.
That and “If there is a will, there is a way”.
The developers’ sales practices, on the other hand relied on: “If it works, it’s right!”
Hey Lucas,
It’d be interested to take a poll or ongoing rating system of best (managed)buildings and most problems associated with buildings. Some kind of ratings system, like on amazon.com This would be extremely informative to would be buyers and everyone in gerenal(i.e Neolofts lawsuits, Neovertika defects in construction, 1 star out of possible 5, etc.) Information is power.!!!!!!!
This is why I love this blog and will keep coming back. Most excellent work Mr Lettuce!!!
Don’t pay more than $150 per sq foot. Anyone buying now is a sucker. Association fee + mortgage alone makes these deals a total rip. People in Miami must use a lot of crack.
Lucas: Once again you have exceeded your readers’ expectations! Congratulations on such an excellent blog! What are your general thoughts on the state of the market and a view down the road in the next 6-12 months?
https://www.ugcorp.com/miunderwriting.html
Most likely the new underwriting rules for mortgage insurance will kill the condominium market.
Hi Jerry Harper,
Personally I would never live in a apartment without a balcony. Having said that if you are buying it to rent to someone, it may not be such a bad idea to get into SOBE at 188/sf. It can be your pad to crash when you visit Miami for a short vacation too.
The “Bayview” from that unit is questionable. It is at the inner corner of a “L”. So you have to stick your neck out near the window to see the bay. Size is good though. Good Luck.
Jerry, dont buy that! How much cash do you got.. can you do 500K ?
Wild Bill, thanks for the link to declining market zipcodes. The whole friggin country is listed there. It would have been better off for them to list the non declining markets.
I see that none of the New York City zipcodes made it to the list. I am glad as I my NYC investments are safe (at least for now)
Help! How can a unit that was mortgage fraud, $860K in SOBE(West Avenue), now have a short sale price $330K. Complete nonsense! Fraud on the way up and now fraud on the way down. When will it stop!!!!!!!!!!!
Generalmagic:
Any seller can put any “short sale” price they want on their unit . It doesn’t mean the bank will accept it. In most cases, they won’t. That is why many agents have no interest in dealing with short sales. It becomes a waste of time.
When you see a short sale price that is significantly less than what is owed the bank, it is usually a seller simply putting an attractive price out there that they hope will get an offer that they can submit to the bank and get approved as a short sale.
I read an article recently that said only about 1 in 20 “short sales” ever close. The reason that number is so small is because most short sales have no bank approval and won’t likely get it, either.
So, I don’t see how there could be “fraud” in the case of an unusually low short-sale asking price – just wishful thinking on the part of the seller.