LeBron James and Dwyane Wade Make Their Decision
October 1, 2010 by Lucas Lechuga
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Testing testing 123 testing…….is there anybody writing in to this blog?Or is there a technical problem? Please can someone let me know. Thank’s
WOW….I can’t believe this?????
I’m still here. We’ve debated Miami r.e. a thousand times here already, so it’s no surprise the comment volume has dropped off. Can’t really expect the bulls or bears to change their minds week to week. Just like the U.S. economy as a whole, the Miami r.e. scene is in for a long, slow recovery. No two ways about that.
Thank you Joe, I was starting to wonder if I was writing to myself.I thought things were picking up as a whole in the Miami R.E. Condo market….but I’m really beginning to wonder.I would hate to buy NOW and find out that the prices dropped another $25-$50 @ sq. foot in 6 months from now.What do you think Joe.I’m sure that there are some real GOOD DEALS around…but in general it still looks a little bleak out there.
Paul — I’m not in Miami right now, so I’m not in a position to talk about deals, time to buy, etc. I’m sure there are “deals” right now in the sense that the current price is much less than the peak, and maybe even much less than other comparable units on the market right now. The things that worry me about Miami are more of a general nature and not a unit-by-unit nature: (1) there’s a huge backlog of foreclosures still in the pipeline; (2) a lot of condos that were advertised as being “upscale” and “exclusive” have now gone rental, and condos that go rental almost never make it back to being owner-occupied; (3) Miami and Miami-Dade are a total financial mess, which means property taxes will be on the rise; (4) the long-term financial health of a lot of Miami condo HOAs is an open question, as new condos can keep fees low in the beginning due to there being no major projects in the immediate future; and (5) the cost of renting still generally seems much cheaper than the cost of owning.
All in all, if a person expected to be in Miami for the next 5 years or more and doesn’t wake up one day with 2-3 kids and need to sell, there are probably some condos that make sense. But with the cost of buying a condo and then the cost of selling the condo, and the long average Days on Market numbers for most condos in Miami, I’d be very hesitant to buy a condo without planning to stay for at least 4-5 years. That’s just my 2 cents, written from afar.
Paul — I got distracted with emails and ended up not only burying but omitting the lede. My No. 1 concern with the Miami r.e. market is the U.S. economy. I simply can’t see how boom times can return to Miami while the U.S. economy languishes (if not trends back in the wrong direction). I don’t see how a jobless “recovery” can even remotely lead to any sort of short-term r.e. appreciation. A few years ago, appreciation would cover a person’s buying and selling costs within 2-3 months of moving in. But these days, with such narrow margins, the front-end and back-end transaction costs could leave a person in the red even after holding a property for 2-3 years (or more). Remember, if you buy a condo today for $200,000, it’s only worth $186,000 when you move in, since selling it will most likely cost you a 7% commission. Even cash buyers are “upside down” on a lot of units these days, just from transaction costs.
Joe, those are true word’s of Wisdom there.When looking at the whole picture as you explain it….it REALLY REALLY makes a lot of sense.I thought we were almost at the bottom…but I can see we have a long way to go yet.Even though I was looking at the 5 yr. minimum picture.I am going to wait for more foreclosure’s to hit the market first before jumping in.Thanks Joe
http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2010/10/luxury_digs_for_wade_bosh_jame.html
Paul,
The problem with this “whole picture” approach is that real estate is local and differs from city to city and even neighborhood to neighborhood. Joe is looking at the entire market as a whole. That’s alright if you want to argue on a blog about where the overall entire market is going. But it does nothing if you personally want to buy a condo in a specific building. Even Joe admits that there are probably units that you can get that have already decreased in price and are even less that comparable sales.
If you’re looking at a specific condo then you should be basing your decisions based on the metrics of that deal rather than the entire market. Why would you care about the entire market if the price of the condo you specifically want is going to be higher? Now I’m not saying that is the case but those are the things you should be looking at.
Here is a spreadsheet that does a rent vs. buy analysis on a 2/2 I was considering at 1060 Brickell. You can use this spreadsheet to compare the true total difference to renting and buying. Because we all have different assumptions about where the market is going any cell that is blue can be changed without messing up the formatting. So you can adjust Loan price, down payment, rent price, appreciation, etc. to your liking and see the difference. Under my assumptions I got an internal rate of return (IRR) of 10.33% compared to investing in a 7 year low risk municipal bond at the equivalent of 2.6%. So the question becomes do I think the risk of owning right now is worth the difference between the two (which is 7.73%).
I used a 7 year time line because real estate is a long term investment and shouldn’t be purchased if you need to sell within 7 years unless you’re willing to take a reduced return or loss.
https://spreadsheets.google.com/ccc?key=0AqLLU0Adpp5jdGJ5S2dwN0JPV0J1TlNFQ0cteUlrb1E&hl=en&authkey=CPHgxskG#gid=1
Joe,
“A few years ago, appreciation would cover a person’s buying and selling costs within 2-3 months of moving in. But these days, with such narrow margins, the front-end and back-end transaction costs could leave a person in the red even after holding a property for 2-3 years (or more).”
This really shows how shortsighted your view of real estate is. That was the problem with the market. If you can make a profit withing 2-3 months of buying then basically everyone should buy regardless of their personal income or credit score.
Since your buying a unit at market rate and you know you have to pay fees to sell then you SHOULD be underwater for a few years without taking your down payment into consideration.
“But these days, with such narrow margins, the front-end and back-end transaction costs could leave a person in the red even after holding a property for 2-3 years (or more). Remember, if you buy a condo today for $200,000, it’s only worth $186,000 when you move in, since selling it will most likely cost you a 7% commission.”
Again this is exactly how it is supposed to be. That’s why the lender want’s 20% down in case you get foreclosed on in the first 2-3 year they can still auction it and get their money.
You keep saying how you can’t see things going back to boom times but they’re not supposed to. Things need to go back to NORMAL times of yearly appreciation of 4% a year where unless you are adding significant value to the property you need to hold it for around 7 years to make a good return.
I agree with you that in most cases the cost of renting is less than the cost of owning but that is slowly changing as rents are rising. Downtown Miami has one of the strongest rental markets in the U.S. right now. Camden Brickell has a 96% occupancy rate with rents just as high as the luxury condos even though they have crappy carpet, no granite and outdated appliances. When a friend went in to check pricing they told him the earliest a unit would be available would be November and that was a couple weeks ago. Look at the recent rental pages here on Lucas’ site and you will see that now most units are renting within a month. When I was renting I tried to get the owner to reduce the price by $50 and by the next day he closed with someone else. In urban areas rental prices have put a bottom in the market and those rental prices are only going higher.
And were heading into a huge multifamily housing shortage right now. Baby boomers are down sizing and move back to urban environments. Millennials are moving into household formation ages as well and they also prefer urban environments and because of the economy many of them are only going to be able to rent in multifamily units. All this is leading to the cost of housing in the urban areas going higher while cost in the suburban areas going lower.
So are some of your concerns about the overall market valid? Maybe, but they are going to affect west Kendall a lot more than Brickell.
Here some market information specific to Miami.
Here is condo supply at the end of September:
Total Condo supply
16045 units/1181 units per month = 13.59 months
Under $200k
8227 units/839 units per month = 9.81 months (51% of market)
$200k – $299k
2226 units/131 units per month = 16.99 months (14% of market)
$300k – $399k
1491 units/61 units per month = 24.44 months (9% of market)
$400k – $499k
949 units/35 units per month = 27.11 months (6% of market)
$500 – $749k
1235 units/51 units per month = 24.22 months (8% of market)
$75k and up
1917 units/64 units per month = 29.95 months (12% of market)
For reference here is where we were six months ago:
Total Condo supply
16042 units/943 units per month = 17.01 months
Under $200k
7841 units/645 units per month = 12.16 months (49% of market)
$200k – $299k
2296 units/114 units per month = 20.14 months (14% of market)
$300k – $399k
1586 units/60 units per month = 26.43 months (10% of market)
$400k – $499k
977 units/32 units per month = 30.53 months (6%% of market)
$500 – $749k
1234 units/45 units per month = 27.42 months (8% of market)
$75k and up
2108 units/49 units per month = 43.02 months (13% of market)
As you can see most of the market segments are pretty much the same with the sub $200k market slowly getting bigger. The majority of the foreclosures are grouped into this market segment. If you look at the Miami DDA report you’ll see that there are only about 50 properties auctioned a month in the entire downtown area.
Six months ago the sales of $200k and under homes average 645 units a month. Now the sales of $200k and under homes average 839 units a month. That’s an increase of about 30%. If you look at the median price six months ago it was $120k, now it’s $102k. The increase in sales of these units is driving the median price down.
If you look at downtown condos they are pretty much selling at the same rate they were 6 months ago. So from this you can see that these new units being sold at reduced prices aren’t located downtown.
Also we can look at housing values. The case/shiller index tracks sales of the same unit to track the actual value of housing. Here are the index numbers since last May when it bottomed.
May 2009——–144.59
June 2009——-145.38
July 2009——-147.27
August 2009—–148.91
September 2009–149.69
October 2009—-149.09
November 2009—149.08
December 2009—148.66
January 2010—-148.32
February 2010—147.52
March 2010——146.15
April 2010——145.04
May 2010——–146.33
June 2010——-146.92
July 2010——-147.88
So you can keep taking talking points from national people who are look at all of Southeast Florida as a whole and simply comparing that to another major metro area and are probably trying to make some political point. Or you can look at whats going on down here neighborhood by neighborhood.
Gixxer 1000 — I specifically told Paul above that there are probably some deals out there for people who are confident they won’t need to sell for the next 4-5 years. It was kind of odd that you jumped in to disagree with my overall comments but then took a SEVEN-YEAR outlook (instead of my 4- or 5-year outlook). (Which one of us is the bear again?)
As for your second rebuttal comment above, I don’t have a “short-sighted view” of real estate. I simply don’t think it’s a great idea to jump into ownership when the transaction costs alone could keep a person underwater for 2-3 years or more. The idea that people “should be” underwater is silly. Taking that position totally defies the idea that there are so-called “great deals” out there right now. Again, which side of the fence are you on?
Gixxer 1000 said: “So are some of your concerns about the overall market valid? Maybe, but they are going to affect west Kendall a lot more than Brickell.”
— Well, I’m mostly concerned with the owner-occupied market, so I don’t care too much if the landlords in Brickell and elsewhere make money by holding their units for years. Right now, I doubt there’s a single new building in downtown Miami that is majority owner-occupied, and if you recall the glossy brochures from a few years ago, they were *all* supposed to be “exclusive” owner-occupied residences. I’m not looking down on renters, but the stats are the stats: Condos in owner-occupied buildings perform much better than those in buildings that are de facto (rental) apartment buildings.
As for r.e. being “local” and “neighborhood by neighborhood,” you really don’t still believe that, do you? The r.e. bulls and shills clung to that idea until a year into the r.e. bust, but it was proven to be nonsense. Huge boom times generally raise the value of even bad investments/properties, and huge downturns generally decrease the value of even the best investments/properties. I guess it’s possible a particular building could appreciate despite lagging local and national economies, but good luck picking out such buildings/investments in advance. The simple fact is, there just aren’t that many “special” or “exclusive” units in the Miami market. Most of these buildings have dozens, if not hundreds, of units that mostly look and are equipped the same. Again, just my 2 cents. We’ll see.
Paul,
You mentioned in your post the following
“I thought we were almost at the bottom…but I can see we have a long way to go yet”
—-> I think we have a long way to go to hit the bottom is incorrect, in fact I think at least for my infinity at brickell building I bought my unit at or near the bottom (end of 2009)
—-> Since I bought my condo from the developer, he sold many many other units like mine for $30-50 more per sq feet then I paid.
—-> in fact today I had my condo unit apprised, because I am doing a refi from a 5.25% 30 year fixed loan to a 3.75% 15 fixed year loan. I will pay $250 more per month but will pay if off 15 years eariler and save $87K in interest charges
—> AT 3.75% IT’S FREE MONEY!!!
—-> I will get the results of the apprisal in a few days, I am calcing that it should be about $20K-$30K more then I paid for it back at the end of year 2009. However I only need $4000 more then I paid for it, so I can cover the closing costs that I will be rolling into the loan.
—-> You really need to do your own research, like I did. Excluding Gixxer 1000, the bloggers comments on this site really didn’t help me much when I was making my desicion to buy my condo. I was also worry like you that the prices would continue to drop after I bought. So far the reverse happened. They went up, again at least in my building
—-> I guess I was at the right place at the right time.
—–> if you find a great deal like i did buy it now. If you get a really good deal you will not need to worry about prices dropping $25 to $50.
—–> I don’t think the condos with drop that much as a whole ($25-50 per sq foot), only thoses that are short sales or repos may do that.
——> for what I can tell the developers are not giving away their new developer units, so I don’t think the new developer units will drop that much, unless it’s a very large bulk sale.
—-> my condo is on the penthouse floor (50 and 51th floors) with an killer city, bay and ocean view.
—-> I paid the least for any unit sold thus far facing east and I am on one of the highest floors.
—-> good luck and if you are like, enjoy the battle to get the best deal.
—-> The deal is more important to me then the condo and it’s view.
owner at infinity — Man, you’ve turned into a broken record. How many times are you going to tell us “I paid the least for my unit … on the highest floors … with a killer view” blah blah blah?
You’ve been very clear that you intend to keep the unit for years and years, so your situation has little or nothing to do with that of an average buyer, for whom appreciation and resale are important.
That aside, you’re refinancing your mortgage after less than a year of ownership and you’re financing the costs? You might have gotten a good deal on your condo, but it seems like you flubbed the rest of the deal. The mortgage market hasn’t changed that much in 9-10 months.
Owneratinfinity
Wow! Man! You are the smartest and greatest. You must be advising the moronOMAMA on how to keep the prices up! At bottom in 2009??? Are you kidding me? So now they let the deadbeats to stay in their homes which they do not own for free for next few years……. Right? How does having a deadbeat welfare recipient as a next door neighbor, who does not pay taxes and mortgage? Will that be a luxury condo in a affluent neighborhood with a great view?
Are you panicking? If I were you – I would put the apartment on the market just to see what kind of offers I get. Hell! No! I would buy two more and rent them out AND then stop paying the mortgage. $hit! I will be able to actually earn few thousand a month tax free; working from home as the flyers say. With that kind of free cash flow, I will be able to buy the whole damn building. I will give you the appraisals! Do you want it on the used or new toilet paper?
Now seriously, tell us what you are smoking or sniffing! Must be good because you actually think like our president.
At 3.75% it is free money! Please, please, please tell us which bank is giving 3.75% APR fixed rate mortgages? Is that the one who has stopped all the foreclosures so they can get more bail out after November elections? Or it is 70 year man next door, who is working in Walmart to make the ends meet because his entire life savings from 401K has shrunk to subsidize the freeloaders? Or it is that woman, who looks like illegal immigrant and works three jobs to pay her rent to a deadeat owner?
Joe,
I was directing my info to Paul who has not heard my story before not to you. Paul is new to the site, for what I can tell, so I was trying to be positive about how there are deals out there and that I don;t think the prices will continue to drop on non-repo/short sales units.
Some of your comments didn’t much sense so I will say it again
My total costs to refi are $4500 which is worth it to me since I am rolling them in the mortgage and because the reasons I am doing a refi is
(1) The rates are the lowest they gave ever been, it’s free money!
(2) Cause I can (I have the required credit score, etc)
(3) I am going from a 5.25% 30 year fixed to a 3.625% 15 year fixed. (today I got wells fargo to relock me for free, so drop to 3.625 from 3.75)
I plan to keep the condo for a long while, so the $4500 in costing costs in worth it for me to go to 15 year fixed loan. This way I pay the down the mortgage much faster and have more equity in the property faster. So if I decide to sell it before the 15 years are up I will alot of equity in the property then if I stayed with the 30 year fixed loan.
It is will cost me $250 more per month for the new 15 year mortgage but I will save $87K in interest charges, I think that is worth the $4500 in closing charges, so how can you say I “flubbed the rest of the deal” because I am doing this refi?
You mentioned “so your situation has little or nothing to do with that of an average buyer, for whom appreciation and resale are important”
THIS IS HOW: I got my apprisal back today. It was apprised for $35,000 more than I paid for it, so I think that gives everyone an idea that my situation does show how the market is doing for those interested in appreciation and resale.
You said “The mortgage market hasn’t changed that much in 9-10 months”
WELL: when I orig bought the place it apprised for $9,000 more then I paid for it and now 9-10 months later it apprisaed for $35,000 more then I paid for it. So something in the market must of changed to allow me to obtain such a high apprisal in less then a year of buying the place. It can not just be that I got a good deal on buying the place. Could it be something called “appreciation”? Because maybe the Brickel condo market is starting to stablize.
But please feel free to negative and disagree as always. However I would rather hear about your positive and wonderfully recent deals that you have make in buying condos in the Miami downtown market.
So please share them, becuase I must of missed reading your earlier comments that explained them. I like to hear about other folks sucesses so please go ahead enlighten us.
Poor and Unemployed Says:
You said:
“At 3.75% it is free money! Please, please, please tell us which bank is giving 3.75% APR fixed rate mortgages?”
—-> here is the link to the wells fargo web site, see that the 15 year fixed rate is 3.625% interest rate (3.943% APR) with 1 pt orig (however due to my excellent credit score and my very low debt to income ratio I got wells fargo to give me a free relock today so got 3.625% interest rate (3.943% APR) with .5 pt orig).
https://www.wellsfargo.com/mortgage/rates
—-> Now concerning the rest of your crazy comments to me – I don’t know why you are directly them at me. I was trying to provide Paul with a success story about someone who actual bought a condo in the brickell condo market to I live in who is now taking advantage of the lowest ever interest rates since 1950 and that is happy that the apprisal for the refi came in at $35,000 more was orig paid for the condo.
—–> however it sounds ike you have been “Poor and Unemployed” too long because it made you very negative. I hope you get a job soon.
owner at infinity — As I said above, the mortgage market hasn’t changed that much in 10 months, so you should have done the 15-year mortgage last year if that’s what you wanted to do. Yes, you might “save” in the long term, but that doesn’t change the fact that you’re doing a refi of a 10-month-old loan at a cost of $10,000 (after financing the charges over 15 years).
—
I said: “The mortgage market hasn’t changed that much in 9-10 months.”
owner at infinity replied: “when I orig bought the place it apprised for $9,000 more then I paid for it and now 9-10 months later it apprisaed for $35,000 more then I paid for it. So something in the market must of changed to allow me to obtain such a high apprisal in less then a year of buying the place. It can not just be that I got a good deal on buying the place. Could it be something called “appreciation”? Because maybe the Brickel condo market is starting to stablize.”
— First of all, your answer has nothing to do with my comment. Second, at best, it seems like you were in the right place at the right time when you bought your unit — i.e., maybe the developer was looking to pay bills so he sold a unit at a good price. But if you believe your unit appreciated $30,000 or $35,000 in 10 months, you’re nuts. There are thousands and thousands of condos available in Miami right now. Unless there’s some gold hidden in your walls, your unit hasn’t appreciated by $30,000. It seems like you got a good deal (at least on paper), but you’re doing a disservice to new readers here (like Paul) by implying that people are routinely buying units and seeing big gains in under a year in Miami right now.
Beyond that, if great deals are so plentiful right now, why don’t you sell your unit and buy a different one? If everything you said above is true, you should be able to make a quick $35,000 or more in profit (less transaction costs) by flipping your unit. Bank appraisals don’t mean much; actual sales tell the story.
—
owner at infinity — Just so we’re clear here, I’m not trying to give you a hard time. I just think you’re mistaking being in the right place at the right time (your good deal) for an r.e. market that’s booming (which it’s not).
owner at infinity — By the way, what’s going on at Infinity? According to Lucas’ info., Infinity is a 480-unit building, but there have been *no* recent sales, only one unit is available for sale, and less than a dozen are available for rent. How did your bank even do the comps? Unless Lucas’ web site is missing a lot of sales, something seems odd here.
Joe,
you said,
Beyond that, if great deals are so plentiful right now, why don’t you sell your unit and buy a different one? If everything you said above is true, you should be able to make a quick $35,000 or more in profit (less transaction costs) by flipping your unit. Bank appraisals don’t mean much; actual sales tell the story.
—–> The developer sold 9 Condos just like mine recently for 30K to 40K more then I paid for mine, So those were actual sales so that tells the story, Those units were my comps and that is how I got my aprisal to be $35K more then I pay for it.
—-> A few months ago, I meet an investors that was about to buy one of those 9 units that sold like mine and I showed him my unit. He asked if I would sell my unit for 40K more then I paid it to him, which was what he was going to pay to the developer for a non-finished unit on a lower floor. He liked my condo better since it was on one of the highest floors and I already put in the nice 24×24 inch floors and painted it. It would be a better deal for him since it was all finished nicly, but I am not a flipping and I didn’t want to move again. Like I said before I am not a investor, I buy homes to live in them one at a time.
You said:
As I said above, the mortgage market hasn’t changed that much in 10 months, so you should have done the 15-year mortgage last year if that’s what you wanted to do. Yes, you might “save” in the long term, but that doesn’t change the fact that you’re doing a refi of a 10-month-old loan at a cost of $10,000 (after financing the charges over 15 years).
—-> I didn get the 15 year mortgage back then because 15 year fixed rates were too high back then (1 year ago), The rates for went down alot since then, So it’s a no bainer to refi for a 15 loan now. Plus I wasn’t not sure it I would like condo live when I finish bought it, so I wasn’y sure I long I was going to live then, now that I live and the rates are low it’s worth refi to 15 year
—-> I am not Gixxer 1000, I don’t like typing so much, I think I have explained myself very clearly, I don’t want to debate things back and forth like you and Gixxer 1000 do. I type enough at work.
Joe Says:
you said:
owner at infinity — By the way, what’s going on at Infinity? According to Lucas’ info., Infinity is a 480-unit building, but there have been *no* recent sales, only one unit is available for sale, and less than a dozen are available for rent. How did your bank even do the comps? Unless Lucas’ web site is missing a lot of sales, something seems odd here.
—-> I am tried of typing so this is my last comment tonight – OK?
—-> You need to start looking at other re sites then just this one
—–> Lucas site only shows re-sle sales if they would listed in the MLS, since the new units that the developer sales don’t get listed in the MLS, Lucas’s site does not show them. It like that for all the new condo buildings that are on Lucas’s site.
—-> This fact has been mentioned on this site several times before.
—-> If you go condoreports . com it shows you all the sold units for all the condo building regardless if they were re-sales listed on the MLS or new developer sales not listed on MLS. The problem is condoreport . com started this week charging a monthly fee to see what the units were sold for, however it does still show you the date sold, unit number and sq foot just not the sold price until you pay a monthly fee.
—-> Here are the stats for you: The building was 459 units total. 156 unit have been sold (33% of the building).
—-> They sell around 10 -15 units per month, in Sept they sold around 17 units. The average sales price for the third quarter of 2010 is 250 per foot.
—–> here is the link to the condo reports site for my building
http://www.condoreports.com/real-estate-reports/infinity-at-brickell_miami_condo_historical_9026
—-> Is is another link of recent sales for my building
http://www.condoreports.com/real-estate-reports/infinity-at-brickell_miami_condo_recent_9026
—–> Since they are not in MLS, The appriser has a way to check to see what the developer sold their units for, I guess it’s the same way that condoreport . com gets the sold unit information. That is how the appriser was able to get the comps in my building for my apprisal.
—-> I hope that helps – Good nite!
owner at infinity — What percentage of Infinity has been sold (and/or what % is still held by the developer)? I’m not doubting your numbers, but it seems odd that you’ve been there for almost a year, but there are no recent non-developer sales and only one non-developer unit is *available* for sale.
Joe,
You said:
Owner at infinity — What percentage of Infinity has been sold (and/or what % is still held by the developer)? I’m not doubting your numbers, but it seems odd that you’ve been there for almost a year, but there are no recent non-developer sales and only one non-developer unit is *available* for sale.
——> First The building is new and closings started in 2008, however most of them were sold in 2010 and late 2009.
——> the building has 459 units and 156 units have been closed, the developer has 303 units left to sell. Some of these 303 units will be sold to the orig pre-sales buyers once the buyers decide if they want to close on their units at their oirg prices, if not the lose their deposit. The rest of the 303 units the developer is selling, So 33% is sold, 64% is held by the devloper and is for sale by the developer. 1 unit is for sale by the owner as a re-sale (it’s a non-developer unit)
—–> The reason there is no re-sale (non-developer units) sold units and only one re-sale for sale unit, is because the owners of 156 sold units are not selling their units. (yet)
—-> Nearly all these 156 buyers paid cash and they knew when they bought their condo 1-2 years old that they would need to hold on to them for at less five years until the market gets better so they can sell them for more then what they paid for them.
—-> Until the market gets better and prices go up the only re-sale non-developer units that will be listed for sale, will be for those cash owners that need the money from their units now and can’t wait until the market gets better.
—-> However I don’t think there will be many re-sale (non-developer) units listed for sale for years until the market prices get better because these cash buyers generally don’t need the cash and can wait the 5 years or so until the market gets better.
—-> So dont expect many re-sale (non-developer) units listed for sale until the prices go up.
—-> I hope I made this clear for you.
Joe,
See link below re Infinity at Brickell
http://www.miamitodaynews.com/news/101007/story1.shtml
Joe,
Infinity at Brickell recently lost its Fannie Mae approval status. That has probably contributed to the slow sales there. As George’s link points out though, Fortune Internatiional Realty recently took over sales. Maybe they can help rejuvenate sales.
Lucas,
As of today per the fammie mae web site, Infinity at brickell still has Conditional Approval from Fammie Mae until Jan 2011.
Here is the link to it
https://www.efanniemae.com/syndicated/documents/dps/condopud/FL.pdf
Its my understanding that “conditional approval” means that conv loans can be done on the building until Jan 2011 and famnie mae will buy them. However if Infinity doesn’t meet the outstanding conditions by Jan 2011, they will lose their Fammie Mae approval.
However maybe they already lost the Fammie Conditional approval and Famnie Mae wasn’t updated their web site yet. I don’t understand this 100%.
But it does not seem to matter if Infinity is Fammie mae approved or not in order for wells fargo to do my refi. My wells fargo loan processor told me that their underswriters are not looking if the building is Fammie approved for not, but rather they looked at the condo building questionaire. Per the condo questionaire, the wells fargo underwriters approved the infinity building for my refi.
And now that I have rec’d a good apprisal on my condo and it is much more then I needed wells fargo should not have any issues completing my refi.
So my case proves that lenders are lending in the Infinity Building fammie mae approved or not. However nearly all the sold units were cash deals and continie to be cash deals, so I don’t think not being fammie approved, if that is true is going to hurt the infinity sales any.
Just Fyi in 2010 on avergae Infinity is selling 10 units per month, which is not bad when you compare it to other new buildings with AXIS which is not Fammie Mae approved at all.
Axis only sells 6 units on average per month and they have alot more units then infiniy. They have 718 and infinity have 459.
It looks like Infinity is selling more per month since Forture got involved. In Sept around 17 units were sold. So it looks like Forture has already increased the infinity sales,
If you look at sept’s sold sales data, they sold 1 bedrooms for around 260 sq foot and the larger 2 bedeooms for around 220 per foot.
They must feel that the 2 bedrooms are harder to sale, so they lower the price per sq foot.
owneratinfinity,
I heard directly from a sales person at Infinity a week ago.
Lucas Lechuga Says:
owneratinfinity,
I heard directly from a sales person at Infinity a week ago.
—> Ok, then Fammie mae has not updated their web site yet
—-> plus the developer doesn’t need the building to be Famnie mae approved anymore, since forture will be selling the rest of building to south americans who are all cash buyers.
—> the 1060 brickell ave building wasn’t fammie mae approved when Forture sold it out and that was not an issue since all the south american buyer paid cash.
—> I am so just glad that I bought my place when I did cause with interest rates beging so low it doesn’t make sense for me to spend my cash in pay in full when I can get a loan with only 3.625% interest. I rather keep my cash for a raining day.
Here’s a story that came out yesterday regarding Everglades on the Bay:
http://www.bizjournals.com/southflorida/stories/2010/10/04/daily62.html
owner at infinity (and others) — Thanks for the info. above. Very interesting.
I’m really surprised Wells Fargo is assuming a $35,000 appreciation has occurred on “owner at infinity’s” unit when only a third of the building has been sold. “owner” must have gotten a great deal and/or he has enough skin in the game that Wells doesn’t consider it a risk.
Anyway, “owner’s” other comments basically confirm what I’ve been saying. If the average Infinity unit had appreciated anywhere near $35,000 in the past year, a lot more than *one* out of 150-plus owners would be trying to flip their units.
Joe
You said:
owner at infinity (and others) — Thanks for the info. above. Very interesting.
—-> You are welcome , Gald I could help
I’m really surprised Wells Fargo is assuming a $35,000 appreciation has occurred on “owner at infinity’s” unit when only a third of the building has been sold. “owner” must have gotten a great deal and/or he has enough skin in the game that Wells doesn’t consider it a risk.
—–> just fyi wells fargo does’t have their own apprisers, they use a third party apprisal company, that assigns an indepentant appriser to do the apprisal.
—–> it doesn’t matter to them if the building is only 1/3 sold as long as the comps that were used for the apprisal were recently sold similar units like mine in my same infinity building or in similar buildings in the same brickell area.
—–> I did get a good deal, I was at the right place on the right time, at that time for a very short number of days they seemed to selling any condo regardless of it’s floor hieght or it’s view (east=water, west=city) for the same $220 something per sq foot. So I bought one on one of the highest floors that was avaiabale with the best view facing east.
—–> I only have 20% skin in the game, cause when I brought the condo I put 20% down cause that was min requirement from the lender to get a conv loan on the condo. 20% DOWN is standard practice for conv loans. To me 20% is not that much skin in the game.
—–> I think many peolpe think it’s impossible to get a loan on a condo these day, however it’s not, you just need a condo building that a lender will loan on, a good apprisal that shows that the condo is worth the purchase price, excellent credit, 740 or more FICA score, low debit/income ratio, a job with income enough to qaulify and 20% down cash. That is it.
Anyway, “owner’s” other comments basically confirm what I’ve been saying. If the average Infinity unit had appreciated anywhere near $35,000 in the past year, a lot more than *one* out of 150-plus owners would be trying to flip their units
—–> no one has had as much apprication as I have. That is because I paid so much less then the rest of the them.
—–> the reason the other owners have not fliped their units yet is cause they did not get as good as a deal as I did so they haven’t achivied $35,000K appriciation like I did (yet)
—–> I paid the less per sq foot for any the units that sold facing east to the bay/ocean, plus my condo is on one of the highest floors
—–> Most of the other owners who bought units simalar to mine facing east paid $35-$50 per more sq foot then me and they units were on lower floors then mine
—–> That is why I had some much apprication compare to the rest of the owners.
—–> I hope this helps – I think I explained this clearly enough
owner at infinity said: “I think many peolpe think it’s impossible to get a loan on a condo these day, however it’s not, you just need a condo building that a lender will loan on, a good apprisal that shows that the condo is worth the purchase price, excellent credit, 740 or more FICA score, low debit/income ratio, a job with income enough to qaulify and 20% down cash. That is it.”
— Well, that’s a long list in the current U.S. economy, and you didn’t even mention the biggest hurdle facing most potential buyers: The need to sell their existing home, which might be underwater and/or could take months/years to sell in such a stagnant r.e. market.
joe said
Well, that’s a long list in the current U.S. economy, and you didn’t even mention the biggest hurdle facing most potential buyers: The need to sell their existing home, which might be underwater and/or could take months/years to sell in such a stagnant r.e. market.
—-> thats was not my problem – i sold my last home (house) almost 3 years old for full asking price, the first day it was on the market – cause i priced it right – i custom built it in 2000 and never took money out of it and had a 15 year fixed rate mortage on it, so i had good equity in the house when i sold it
—-> peolpe who r are in that postion don’t have many choices – it is very sad – most of them will have to walk away which from thier properties which will destory their credit —
as i’ve said over the past couple of years, brickell condos purchased for around $200 sf are a reasonable buy. this is why owner at infinity will do just fine. I can’t see the nice buildings dropping below $150 in even worst case scenarios. After 6 or 7 years, a condo at $200sf will not be a financial burden. But you can see how difficult it is to move these condos even around that price point. not easy to get loans and typical owner occupiers cannot access the cash only buy-either because they do not have cash or its tied up in an existing home. I am talking typical 2B condos here. Total purchase under $250k is manageable for a reasonable segment of the population, above that the scaling cost of taxes and the HOA make the monthly costs a bit too much for most locals. I have followed many units, and they move off the market at about $200k at the lower point.
But now that we are getting into the mess of foreclosure legality, things could get interesting. The moratorium will reduce the supply of condos and possibly provide a little price boost. But this foreclosure mess may get very bad and keep many of these units off the market for years! how that will affect HOA will be interesting. not only did the bankers loan to anybody breathing, but they could not even accurately and legally keep track of the paperwork. this is going to create to separate classes of properties in miami-and two different RE markets for units in the same buildings. very complicated.
gables,
You said
But now that we are getting into the mess of foreclosure legality, things could get interesting. The moratorium will reduce the supply of condos and possibly provide a little price boost. But this foreclosure mess may get very bad and keep many of these units off the market for years! how that will affect HOA will be interesting. not only did the bankers loan to anybody breathing, but they could not even accurately and legally keep track of the paperwork. this is going to create to separate classes of properties in miami-and two different RE markets for units in the same buildings. very complicated.
—-> You make a very good point, however that will not be the case for the infinity building and other brand new buildings that are mostly empty now and are starting to sell their units now.
—-> This was the main reason that I picked a condo building (Infinity) that was very new and very empty/unsold, because it would have a stronger condo HOA in the long run for the following 2 reasons.
—–> 1. since most of the infinity condo units are selling now in this lower more relaistic priced market($200 to 250 per sf) there will be few owners that overpayed in the infinity build then those buildings that sold their units in 2004-2007
—–> 2. due to the harder financing guildlines end user buyers like myself (non-investors) are required to put down at least 20% to buy a condo today and investors need to pay 100% cash. Before many buyers financed 100% with no skin in the came.
—–> Since the building is nearly all cash buyers and will continue to be nearly all cash buyers until it sells out or at least 20% down buyers, all the owners will have ALOT of skin in the game.
—–> With all that skin it’s very unlikly these cash/20% down buyers will stop paying their hoa maintence fees or their property taxes. They would not want a lien put against their property.
—–> Infinity is now 33% sold which is 156 units, NONE of those 156 units have been forcelosed on, none are short/sales, and no one is late in paying their hoa maintenance fees.
—–> all those other buildings that sold in 2004-2007 will take years for all their condo repos and short sales to work themself though, in the meanwhile the building’s condo HOAs will suffer by not getting enough hoa fees from these repo and short sales condos. These buildings will not have enough money to due the proper maintenance that is required in the short term and the building will take a long time to caught up.
—–> That’s why I stayed away from buying a short sale/repo unit. First short sales/repos are a big hassle to buy and normally a building with one short sale/repo is filled with many of them. Causing the building to have larger then normall HOA fees and a less maintained building
—–> I would suggest buying a brand new condo from the developer directly if you can get a good deal and if it is not too much more then buying a short sale/repo.
—–> I would rather pay a little bit more for a brand new unit in a brand new building with no bad loans and nearly all cash buyers then a repo/short sale unit in a 3-5 year old building with tons of condo units that have mortgages more then what the condo is worth.
—–> Besides, I have always had brand new homes. They are less hassle, with new appliances, better/newer technology/equipment, less maintenance costs in the long term and better resale down the road since it’s was a brand new building.
Hello Ownerat infinity,
Couple of things. What is the value of your condo. Is $35K increase in appraisal – is it 1% higher or 50% higher than purchase price? Most inmportant question – Do you work for the developer? As we all know about the people camping on the street for 3 days to buy a condo in Miami and subsequent urban myths about the guy in the front flipping the condo within 10 mins to the guy in the back for clean 150 K profit. We read in Miami Herald about the riot police being called because the developer was selling the codos below market market price……..
Now – the link you gave for the mortgage is for conforming / fha loans. Not refinance. If you do believe that these are the lowest mortgage rates, then you should be taking 30 year fixed rate mortgage if not 50 years. You could be retiring with the basis alone in few years time. Why would you want to pay off your cheap rate mortgage instead of investing that money in treasuries or any absolutely safe investment?
All your posts sound like a penny stock promoter. You spend hours talking about your condo and Infiniti. Time to come clean mate!
Poor and Unemployed Says:
Sorry I just lost a long reply back to you, explaining in detail what I do for a living etc and that I have nothing to do with the developer and that I like the mortgage business and it’s hobby and I got the same 3.625 with .5 pt orig for my refi for 15 year fixed.
I am not hiding nothing, I have been 100% honest on this site, however if you don’t belive me then tough shit. And if you don’t find value in my comnments then just skip over them.
Ha! Ha! Ha! Dog ate my homework! I would live to make mortgage business my hobby. Only if they would give me those 125% mortgages now.
Take care man. Be happy.