6 Bedroom Penthouse at Jade Beach Goes Under Contract – Asking Price $11M
June 15, 2010 by Lucas Lechuga
Recent Luxury Sales within the Past 30 Days
- 88 La Gorce sold for $16M on June 11, 2010
- The Setai Penthouse B sold for $15m on June 4, 2010
- Santa Maria Penthouse 4901 sold for $11M on May 21, 2010
- One Bal Harbour Penthouse 2108 sold for $8.7M on May 25, 2010
- 40 La Gorce sold for $7.4M on June 11, 2010
- Apogee South Beach #904 sold for $6.55M on May 21, 2010
- Ocean Tower One #501 sold for $5.2M on June 3, 2010
This is one nice penthouse! Actually a large unit vs these ‘penthouses’ that are 1 bedroom and located on a top floor.
WOW! Spectacular. Love the bathroom.
unfortunately, 1 tar ball on the beach and this guy will have paid the top…in our lifetimes
Wow, so about a month ago we had Renter Tom and Joe talking about how there were NO sales in the luxury market. But now we have post like this from Lucas showing luxury sales and quotes like this from the WSJ:
“In Miami, 21 such sales of $2 million or more were recorded in the first quarter, up from 15 last year and close to the 23 that sold in that time five years earlier.”
And it’s not just sales over $2 million. Here is chart showing sales and inventory of condos in Miami-Dade priced $750k and above:
http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P6&report=FTFTDCO&typedetail=02&ptype=RE2&type=1
Sales in the last 3 months are up 71% over the same 3 month period last year. And if you look at the price per square foot of ONLY those sales you see that the months where the sales have gone up so did the price per square foot.
http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P6&report=FTFTDCO&typedetail=04&ptype=RE2&type=1
So the increase in sales is coming from selling more expensive properties.
And since Joe loves Miami Beach here is the same information just for Miami Beach:
http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P6&report=FTFTMBE&typedetail=02&ptype=RE2&type=1
Sales up 140%!!!
http://www.ewmrealtors.com/trendx/drawimgdb.asp?Price=P6&report=FTFTMBE&typedetail=04&ptype=RE2&type=1
And again looking at the price per square foot of these sales they are clearly coming from selling more expensive units.
Gixx:
Not to rain on yet another one of your parades of “sunshine an lollipops” – – BUT I am curious.
The charts you provided are nice. I enjoy a good bar chart just as much as the next guy. The problem with them, with all due respect to the nice folks at EWM – – is that these charts, as is always the case, merely summarize data.
Do you have any numbers concerning these sales? Basis figures would be most helpful (cost, transferred, stepped-up, grossed-up, etc.)? While you are digging, if you can rustle up the bid and ask figures for comparison.
Why? Because these figures answer the unanswered question common to the majority of your posts; that being: “what is really going on here?” Are “Whales” suddenly snapping up these properties – – – or, once again, are these sales more a reflection of market correction?
Just curious.
scriv
Once again you try to talk in complete babel with no understanding of what the heck you talking about.
You want the bid price???? This ain’t the stock market genius, there is no bid price. Stepped-up , grossed up, etc. have to do with the market value of a property received from a decedent. Why on earth would you need to know the stepped-up basis for a real estate property??????
I’m assuming that what you want is the individual ASKING and SELLING prices. And no I don’t have that every condo sold. Here is the closest thing I have:
http://www.buybeach.com/recent_sales/data/con0510.htm
With a sample size of 348 condos the average condo sold for 5.8% less than the asking price.
Gixxer 1000 — I love how you always (shamelessly) argue both sides of every issue so that you can never be wrong. In the other thread, you argued that the declining median sales price was due to a larger number of low-priced condos being sold. But now you’re cherry-picking a small number of $10 MILLION sales and pretending they’re representative of a booming market. Seriously, do you have any shame?
Anyway, those charts you just posted show there’s still well over a 3-year inventory of condos priced at $750k and above, and, as I’ve been saying all year, it’s even higher if you look at truly luxury properties priced at $1M or $1.5M-plus. The truly luxury segment’s inventory = 48 months the last time I checked (last month). Hardly a booming market.
Gixxer 1000 — Since you’ve been dodging this for a week — as is your habit when you get caught posting B.S. — I thought I’d bring this over from the “Miami Real Estate Review” thread …
Gixxer 1000:
This is what you said in post #17 [in the other thread]: “And again keep in mind this is information for the entire area.” (Pay special attention to the “entire area” part.)
… and this was your quote/rebuttal in post #25: “… Although in most areas the median price is going down. Which is why Joe is arguing that the VALUE of houses must be going down because the median price is going down.”
– Since you were clearly talking about median prices for the “ENTIRE AREA” — those are your words, not mine — rather than one particular neighborhood or another, I will ask again: Please show us an example of a long-term trend of home values RISING concurrent with DECLINES in the median sales price in that same area/region. Thanks.
Joe,
For the millionth time I’m not claiming the market is booming. The market collapsed and I now believe the market has stabilized.
I’m not answering you’re question because I have already answered them. If you don’t understand my response I’m not going to keep repeating myself.
I argue both sides because those are the facts and the truth is probably somewhere in the middle. Again for millionth time I’ve argued that the market will probably only be up 1-2%.
The ENTIRE AREA is SOUTH FLORIDA. The Miami MSA INCLUDES all three counties. When most national places quote data it is for the entire MSA. Take case shiller for example, it is for the entire MSA. National people don’t care about the difference between Miami or Ft. Lauderdale.
I agree that the numbers for the ENTIRE AREA are still going down. Heck I also agree that most places in Dade county are still going down and I pointed that out.
Where have I claimed that the median price is going down and the value is going up??????
The median price in Dade county is going up. The majority of that increase is simply from people buying more expensive units. So while there are zip codes showing 13% increases I would guess that the VALUE in those zip codes is probably only up 1%. Which is the same thing I argued about median prices going down.
LOL. Gixxer 1000 just admitted that he does, in fact, argue both sides of these issues. Unbelievable.
A few days ago iphoneapp guy asked something to the effect of “what happened to this blog?” as in “why has the quality deteriorated?” I don’t blame it on Lucas, but blame it on the mind-numbing, uninteresting, recurring debate among a few about median and mean values, case-schiller, year-over-year and the like. As a result, the humor has been completely sucked out of the blog too.
Nobody else is posting anything else because no one else gives a sh*t about this particular issue…and the recitation of a bunch of stats is really not that enlightening or appealing to everyone (Sorry to break that to you, Gixxer. I know you feel otherwise.)
The facts are the pull on the upside for the first quarter is off 3 percent in volume less gross. If you consider there are 395,000 unemployed if you discount the mean by a minimum of 7 percent, refactor in seasonal adjustments, discount for labor surplus factors in the future of 11 percent, you can clearly see there is as much downside as upside. The motivational equation relates to a quantum theory of absorbtion rates of -11 percent. Please note these statistics have not been updated or fully realized as of last week. If California reports a gross mean derivation of above 5 percent we can then realize a possible break even point in the second quarter, based on proper reporting.
Drew — I mostly agree with you. I just comment on what’s here. Since this site doesn’t have a message board, the same arguments get rehashed in every new post rather than in a single thread. But regardless, I think most people are just burned out re: r.e. The boom is over and the bust mostly continues, at least in the sense that people can no longer buy today, with $0 out of pocket, and then flip next month for a 30% profit.
Moreover, as much as I enjoy the r.e. porn that Lucas has been posting lately, all these articles about $10 and $20 million penthouses are useless for 99.99999% of the buyers out there.
“In Miami, 21 such sales of $2 million or more were recorded in the first quarter, up from 15 last year and close to the 23 that sold in that time five years earlier.”
—————————–
In miami there are over 1000 properties with asking price of over $2 million. Most of them are asking over $2 million so no one makes any offers and the owners continue to occupy the property for years without paying mortgage, taxes and HOA. BEAT THAT!
ANYONE want to talk about these deadbeats living lavish life style and driving their Hummers?
I GUESS NOT!
The Miami Real Estate Review FaceBook Fan Page has a discussion tab. There you can create topics for discussion just as you would on a message board. My guess though is that many won’t use it since they would lose their anonymity.
Gixx:
Easy now.
For the past 7 or so years folks have been treating real estate like stocks; effectively day-trading them in high-speed flipping transactions. Is it so unreasonable for me to throw financial jargon at you now? Really?
I am not trying to harass you. But when I see a person such as yourself expending the amount of time and energy trying to make a point – – and I note that no matter how much spinning you do, arguing that real estate prices have reached a bottom is not an easy argument to make – – I don’t think it is unreasonable to hold such a person over the flames of scrutiny and demand facts/evidence, supported by adequate rationale, justifying their conclusions. Reliance on median values, third-party prepared statistical summaries, and charts and graphs – – not good enough. This is not checkers my friend. It’s chess!
As for the link you posted: THANK YOU. Raw data! Numbers to crunch!
The number of REO’s and short sales is particularly interesting and should be useful in compiling a working analysis. It seems to me that the number of REO’s, property that a mortgage lender takes back into its “care” as a result of a foreclosure on a home that has not yielded a buyer during a foreclosure sale, is statistically significant and indicates that the market is still in a “correction” phase, not a “bottom,” because outstanding mortgage lender sale transactions will impact, adversely or otherwise, the value and timing the market’s “bottom.”
After all, REO’s force lenders into a “must sell” position because when a bank owns real estate, it stays on its books as a “bad loan.” A bank can only have a certain percentage of bad loans – – after all, shareholders pay attention to debt to equity ratios – – so the Banks are motivated to get rid of the property as soon as they can.
The presence of a large number of short sales could enhance the impact of REO’s in such an analysis, but maybe to a lesser extent. But that’s a discussion for later.
The link you shared – – thanks again – – contains a lot of these. While the “discounts” – – however that term is defined – – varied, a pattern does exist.
scriv
Spot on Lucas, These paper tigers will become exposed in face book page. So they would not go there but rant here instead.
I have noticed more REO units cropping up in the buildings I follow. In the past, they tended to disappear quickly. Recently, however, they are staying much longer-some have been there over 2 months. But the sales lists are dominated by short sales-which i have not bothered with as of yet.
gables:
That is a great observation! And it is one clearly supported – – brace yourself Gixx because here comes a compliment- – by the data Gixx linked to in his earlier post. The tabulated data shows quite a few REO’s.
Part of this could be that short sales are are more attractive to the lender because, in cases where the proceeds from the sale do not cover the outstanding debt obligation, the lender may be able to pursue collection of the outstanding deficiency from the new buyer. Where as in a REO, the bank/mortgage lender may remove some or all of the outstanding debt obligations in its effort to sell the property.
Good call!
scriv
I would also observe the REO list prices appear to be higher than they were a while ago, when they disappeared off the list quickly. Dont think its a coincidence. banks are asking for more, but buyers less inclined to see the price as a deal compared to a year ago-thus the longer time on market.
Lucas, are you seeing more REO units? Are banks aggressive in moving these units?
why bother — I don’t even belong to Facebook. If you think I’m going to join Facebook just to argue r.e., you’re even more nuts than I thought.
In case anyone missed this great article in the NYT:
http://www.nytimes.com/2010/06/17/business/economy/17slump.html?src=me&ref=business
scriv
“For at least the last two quarters, lenders have been making a sincere effort with borrowers – especially primary users – to modify mortgages or short-sale properties in hopes of avoiding foreclosure,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. “Lenders have finally realized that the price that can be obtained for a bank-owned property is virtually the same as for a short sale where the borrower is able to sell at a price that fails to repay the mortgage. The difference is, a short sale is becoming relatively immediate while the foreclosure process in South Florida takes an average of 18 months and costs about $100,000 per property.
Foreclosure filling statistics for Dade county:
http://www.miami-dadeclerk.com/property_mortgage_foreclosures.asp
May numbers were down to 2,619. Monthly numbers only go back to the beginning of last year but I’d guess 2007 was the last time they were that low.
Also here are actual foreclosures so far this year:
http://therealdeal.com/miami/articles/foreclosure-stats-for-the-week-condo-vultures–20
Dade county is at about half of what it was last year. There is a clear shift from foreclosures. And the HAFA program that provides financial incentives for short sales began in April if I remember correctly.
I could care less about ” Asking Price $11M”…what matters is the actual sales price itself and if to a real buyer…not some shell LLC.
I too have noticed more distressed inventory on the market in the areas I have looked at. It seems that the bank controlled (REO’s and SS’s) shadow inventory is just starting to leak out more…
This oil thing is getting ridiculous…
Grixx, I think you are wasting your time with the likes of joe, RT and gables. As I have stated on this blog for almost 2 years now, these guys will never buy a condo. Trying to argue with them about the bottom of prices is pointless. I think it has been very clear to even the casual observer and anyone with even a little common sense that if they were serious about buying and were ready to buy then last year was the time to do so. They have given 101 reasons why it is not a good time to buy a condo. Every day we hear about people who have legitimate concerns about economy, housing, finances, etc. but still muster the courage to put their hard earned money to work buying condos anywhere from 20K – 20M. There have also been more than a few stories about people who bought during the past year and have already realized a handsome return on investment. The gloom and doom crowd have been proven wrong already, it is pointless to argue with them. Why should we listen to these clowns on this board? Why are there opinions any more valuable than a drunkard on the corner? They are like the middle aged heckler at the game wishing they could participate. Since when does having an ill informed opinion make them an expert? What I can’t understand is why do you feel the need to rationalize with Joe? Maybe it is your youth, you probably still think if you show people concrete, undeniable proof backed up with real numbers they will understand and finally see things your way, right? Well the world doesn’t work that way, the world is full of folks like Joe. Right now investors like myself are buying real estate without even taking into consideration future appreciation. The returns on these properties are so high any appreciation is just icing on the cake. I trying my hardest not to over invest in RE and keep a diversified investment portfolio but it is hard to stay disciplined when you are seeing these returns. Maybe I should be thanking the gloom and doom crowd because these values won’t be undiscovered for too long, eventually even the Joe’s of this world will get hip to the game.
Makes Me Think — From the sound of your last post, you don’t actually think about much.
How has the “doom and gloom crowd” been “proven wrong”? Until appreciation starts to kick in again, renting is still the smarter play for an owner-occupant, while most investors are saying that they’re mostly breaking even on renting out their units. Common sense says that if rental returns are so high, there wouldn’t be thousands of condos still for sale. They would have been bought and then rented out a year or two ago.
As always, you are right joe!
Makes me think,
You are right, those who would have bought have already done so. The rest will come up with a million excuses. The best is to leave them alone to enjoy life in their bubble.
Makes me think, perhaps you should think before you write. i have already said there are units worthy of a buy. At this point there is a limit to downside risk, unless another major event comes along and shudders the economy. My basic argument is against people who say we are rebounding-we are not. We are basically floating along sideways. And i am a picky buyer. I will buy the right unit at the right price. Since it still costs me more to own than rent a 2 bedroom, i see no need to rush ahead. home ownership is great, but with the HOA and taxes in sofla, it is a burden to consider. you use the generalization that a large number of people are out trying to buy, using their “hard earned” money for a down payment to get their piece of the pie. just because everybody is doing it does not make it right. everybody was buying in 2005-2007 as well, and those were all correct decisions. what happens to today’s buyer when interest rates hit 7% in three years? underwater again i am afraid.
last year had some amazing value in condos, but the shaky economics around the world kept most people on the sidelines. few working class stiffs were able to take on debt or expend capital in such an environment-maybe some investors with dollars to play with. and today, end users will buy if the value is right. and its beginning to touch that point-not greatly-but valuations are no longer absurd like a few years ago.
Any information on this? What percentage of these large cash transactions from abroad are from Mexico?
Not that I owe anyone here an explanation, but this allegation that I’ll “never buy a condo” is idiotic given that, as I’ve said countless times before, I’ve owned and lived in condos for the last 15 years.
I haven’t bought a condo in Miami yet because (A) I won’t be back living in Miami until the late fall or winter, and (B) I’m not at all convinced that the high-end market has bottomed. If you look at the asking vs. selling prices in the luxury segment, there’s often a 30% or higher reduction from asking to selling (and this is just on the MLS; hundreds more units are still held by developers). That tells me the high-end market is a lot less booming or flourishing than people here are claiming.
Lucas
Any news on the new pricing for Icon Brickell you talked about 2 wks ago?
Mark,
I was told yesterday that the new pricing should be released in 10 days.
If it is not your time to buy yet then just go ahead and say that instead of coming up with all kinds of excuses. To compare the price of owning a home today to renting a condo is foolish. You are expected to pay a premium for ownership initially, the same way it cost more to buy a Honda than it is to lease one for 2 years. I don’t hear too many people making a case for leasing a car every 2 years because it is much cheaper than buying the car. Why would you make the same argument when it comes to housing? At least when you finish paying for that home you never have to go out and buy another home unless you want to, unlike a car where you will eventually have to replace it. Houses are generally appreciating assets whereas cars are generally depreciating. If you would never make that argument with a car why is it a valid argumen with a home? When you rent you build no equity and you will always pay rent indefinitely. When you buy a home you pay off a mortgage and eventually the home becomes yours free and clear and you get to pass it on to your kids and they in turn can pass it down to your grand kids. How do you account for owning a home free and clear for 20-30 years into retirement in your rent vs own calculations? Have you ever heard about a thing called inflation? well let me tell you, it is a bitch. Do you think your $1200/ month rent will stay at that rate for the rest of your life? If you listen to the gloom crowd by the time you are ready to retire that $1200 will buy you a loaf of bread and a gallon of milk Will you be able to find someone willing to rent you a condo for a loaf of bread and a gallon of milk? You don’t buy a house because you think it will appreciate, you buy a house to live in and to a certain extent hedge against future inflation. It is the same reason many business buy their own buildings and other assets if they can afford to do so. Renting always cost more in the long run, that can’t be denied.
Joe, please don’t bother to respond.
Makes Me Think — As much as I should simply heed BillP’s advice not to respond to you anymore, your last comment is a new low for you. Are you seriously saying that the fact I’m not living *IN* Miami right now is a bad excuse for not buying a condo in Miami right now? Really?
Buying now and then letting the unit sit, unoccupied, for 6 months *might* make sense if there was evidence of appreciation in the luxury market, but there’s no such evidence. As I said above, the splits between asking and selling in the $1M-plus market are averaging 20-30% per sale. (Even Gixxer 1000, after crunching all of his numbers, said this week that he doubts high-end units are appreciating at more than 1% right now.) The old “Buy Now! Units Selling Fast!” nonsense from a few years ago is inapplicable.
Joe, Yaaaaaaaaaaaaaaaaaawn.
Makes me think, why bother?
Makes me think, you are living in an old world. mobility is the key to the future, and housing is in need of adapting. people change careers every 3-5 years, and will continue to do so. this demands people not be locked down to a property which takes 7-10 years before they are no longer underwater. i can take my car with me on my next move. my housing needs to be (a) somewhat liquid and (b) not an anchor tied to my neck. it needs to be purchased as value for the next few years. the idea of living in the same property for 30 years is foolhearty in today’s reality. currently i save $700+ a month renting vs buying, resulting in $8k a year buildup of reserve. if housing continues to fall or even hold steady (it has fallen significantly, as you are aware, over the past few years) why change? mobility allows for job changes, resulting in significant pay increases vs inflation if you play your cards right. i am not against homewnership. but your argument is not compelling at all, and is nothing more than a rehash of RE jargon from the past decade. that advice was pretty poor for all the homeowners today who are heading into default on overpriced properties purchased years ago they could not afford. but as you said, housing is an appreciating asset. tell that to the foreclosed property owner in the us over the past 5 years, or the japanese property owner over the past 2 decades.
while low end housing in sofla is bottoming out, the tsunami of crash will trigger at the high and medium-high end..2011-2012 will see a major drop in this segment..stay tuned..
LUXE SALES BUZZING
.Some are calling it a `miniboom’ in high-end condos
Photos
BY ANA MARIA LIMA
anaalaya@yahoo.com
Cristina Miranda never wanted to live in a condominium but after she walked into one at the Gables Club with sweeping views of the sparkling Biscayne Bay, Fisher Island and the Miami skyline, she changed her mind.
With no regrets, Miranda sold her Coral Gables house of 30 years that she had shared with her now late husband, and bought the nearby condominium for $2.5 million in March.
“I always said I was going to die in my house,” Miranda said, taking in her new view from the 5,200-square-foot condo. “But when I saw this, I fell in love with it.”
Miranda’s purchase is part of what some real estate experts are calling a “miniboom” in high-end condo sales in Miami-Dade County this year.
Countywide, 135 condos priced at $1 million or more sold during March, April and May this year, almost doubling the number of units in that price range that sold during the same period in 2009, according to Esslinger-Wooten-Maxwell, one of the largest real estate brokerages in Miami-Dade and Broward. In Broward, 17 $1 million-plus units sold during that time period this year compared to 12 last year.
The superluxury condo market is taking off too: in the past month there were four sales breaking the $7.5 million mark. Units sold for $8.7 million at One Bal Harbour; $9 million at the Fountainebleau; $11 million at the Santa Maria Brickell; and $15 million at the Setai.
Those four sales alone have the real estate industry abuzz, considering that there was only an average of 2.5 sales of condos in that stratospheric price bracket for the past eight years, according to EWM.
“We are selling more units right now because people are sensing we are at the bottom of the market,” said Ron Shuffield, president of EWM. “And there aren’t that many to choose from, especially in the penthouse range.”
The unit that sold at Santa Maria Brickell for $11 million in foreclosure was priced at $14 million three years ago, Shuffield said. “I think people are realizing you cannot reproduce any of these buildings for what we’re selling them for.”
This month, a penthouse at the Marquis Residences sold for $4.2 million, said Lori Ordover, managing director for sales and leasings at Africa Israel USA, the developer of the building.
The four-story, 7,800-square-foot penthouse topping the 67-story building at 1100 Biscayne Blvd. claims the highest terrace and hot tub in Florida, and is one of seven units that sold for more than $1 million since March.
Ordover said the sales team had not yet priced the unfinished condo, which was sold in raw condition without the finishings (floors, window treatments, etc), and was not yet on the market when a buyer showed up with a “good price.”
Ordover said most luxury condo buyers are paying in cash and they are buying units to live in, rather than as a pure investment.
“It’s like the tide is starting to turn,” Ordover said. “I see the energy. I see more people coming to look in the sales office, double the number from last summer.”
For sure a major draw of the luxury condo communities, which began coming on the market in the mid-1990s, is the array of amenities that they offer. Some developments offer glamorous living experiences, with zen gardens, luxury spas, oceanside pools, private butler services, and exclusive club memberships.
At the Marquis Residences, owners can have a chef from its boutique hotel cook them a gourmet meal in their condo. The Setai in Miami Beach, 2001 Collins Ave., offers private plane and yacht charters. At Apogee, 800 South Pointe Dr. in Miami Beach, each unit has a privately-enclosed two-car garage on the parking levels.
Real estate experts say the luxury condo market should only get stronger because condominium living is an increasingly popular lifestyle choice for the wealthy.
In fact, according to Shuffield at EWM, this past quarter is now the third quarter of the last eight quarters where there have been condo sales exceeding single-family home sales for properties priced greater than $1 million.
Though the numbers for that price range are still close — an average of 39 single family homes per month sold during the first quarter of 2010 vs. an average of 45 condos during the same time period — Shuffield thinks the trend is here to stay.
“When I was growing up we didn’t have these choices,” said Shuffield, who is 59. “There were only apartments. Today every one of these buildings is like a little country club. “If you don’t need a yard and space, it’s a great lifestyle.”
At the Gables Club where residents in the two towers on Edgewater Drive, have access to a heated swimming pool, sauna and club, Cristina Miranda has already decorated her new condo with the eclectic paintings and furniture she collected while traveling the world with her husband of 36 years, Guillermo, who ran an athletic footwear company, Gator Industries.
“I like the area, and the amenities are all here,” Miranda said. “They wash your car for you downstairs, they will send up a chef to cook a meal. You name it, they do it.”
Oil may be the Nail in Florida’s Housing Coffin
http://classic.cnbc.com/id/37736499
This is more about West Coast of FL, Panhandle and Keys. (not sure if we are going to be affected on the east coast of FL)
I’ll be the first to admit there’s been an uptick in higher-end condo sales, but I don’t get this talk of a “boom.” The last time I looked at the MLS, there was still a 4-year inventory of condos priced at $1M or more (or maybe it was $1.5M or more; can’t recall the exact cut-off). There seems to be a big disconnect between the cheerleading in the media and the actual sales numbers.
joe and gables. reading is fundamental!
I said “If it is not your time to buy yet then just go ahead and say that instead of coming up with all kinds of excuses.” I don’t care if you buy a home or not just stop with the silly stuff. Gables, it is a given that if you don’t plan on living in a home for more than 7 years it makes no sense to by. Come on man you are not a moron, that is stating the obvious. Again, you buy a home to live in and you buy for the long term not for quick appreciation. If you want appreciation then I would suggest you buy an investment property and even then you need to know what you are doing and have deep pockets to handle the unexpected.
per geroge’s post -“Miranda sold her Coral Gables house of 30 years that she had shared with her now late husband, and bought the nearby condominium for $2.5 million in March.”
Geeez. I wonder if Miranda regrets not renting for the past 30 years? I’m sure she could have rented for much less that buying even 30 years ago.
Makes me think, my view is there will be no appreciation in condos over the next 5 years-right or wrong that is my thesis. if i (and others) can continue to rent well under the cost of ownership (i assume this will not change in the next 5 years-could be wrong), where is the value and urgency in buying, which puts me 6% underwater from the getgo due to transaction costs. if i save even $500 a month renting, that is $30k in my pocket over 5 years. by owning, the first 5 years builds no recovery in principal since i am paying off only interest on the mortgage. For a $250k condo (not luxury) i need to recover $15k in sales just to break even from transaction costs, plus the $30k savings from renting instead. In five years, the condo needs to appreciate to $295 for me to break even-a nearly $50k cost to own over rent. Even if i hold the unit for 7 years as you require, still not going to happen. its a losing proposition compared to renting right now.
If I can buy that unit for $200k, it is undervalued and the purchase is good. Buying only makes sense right now if you can get the proper value-that is why some of the REO sales are worthwhile. before you go off the deep end, this time frame is for the typical resident and not investor. As an investor you can spread your 6% transaction cost over more years and the numbers are much better. but as i said before, there is a significant change occurring in peoples view of holding time for RE as an owner. geographic mobility has been a huge benefit to our economy in the past-we lose that with overpriced and illiquid RE assets.
Makes Me Think — “Reading is fundamental” indeed. I have stated here, on practically a weekly basis, that I’m not living in Miami right now. For someone who follows my comments so closely, your inability to retain basic info. is alarming.
“I have stated here, on practically a weekly basis, that I’m not living in Miami right now”
Wow, but you are the f***ing expert on everything related to Miami. Every time someone post data or comments on something related to Miami you are the first to dispute the validity of the information. Wow man, you are priceless.
-“As I have stated on this blog for almost 2 years now, these guys will never buy a condo.”
I don’t know why that statement get you all worked up. So far I have been proven right. I make that statement without being controversial, to me it is rather obvious. If you have someone subsidising your rent by $800/month then you won’t buy as long as that subsidy is there. Joe doesn’t even live in the state so as long as he lives somewhere else he won’t buy a million dollar condo in SB. I just don’t get why you have to argue every piece of positive information posted here about RE market. The market is trying to recover so there will be some good news and some bad news.
Please don’t take me too seriously though, I’m just having some fun. I’ve finished my project so I have time to bs you guys while I get updated on Miami Condo Market.
Happy Father’s Day!
A comment about Gixxers’ post #6 above:
The “asking price” listed in that table he linked is the most recent asking price, not the original asking price. For example, a condo may be listed for $400k, then dropped to $370k after 2 months, then dropped again to $340k after 3 more months, and finally sells for $330k. The table from buybeach would list the asking price as $340k, and the discount as $10k or 3%, while a more true discount would be $70k or 17%. This happens quite often, so you have to keep that in mind when using that table to compute average discounts.
Here’s that link again for convenience:
http://www.buybeach.com/recent_sales/data/con0510.htm
Makes Me Think — I don’t pretend to be an expert on all things Miami. But unless 20 Fortune 500 companies have moved to Miami in the time I’ve been gone, I’m quite certain my overall opinion of the city, its government, and its job market remains accurate.
“Geeez. I wonder if Miranda regrets not renting for the past 30 years? I’m sure she could have rented for much less that buying even 30 years ago.” – – Makes Me Think
An interesting comment. She probably could have rented, but the questions remains: just because she “could” does not mean that she “should.” I note, that this is one of the themes I see underlying the housing boom/bubble/whatever. My guess is that she has no regrets.
Assuming that she and her former husband purchased their home 30 years ago, the house was probably purchased with $X.00 down and the rest financed with a mortgage. Throughout the life of mortgage, these individuals benefited in that they not only received the tax deductions and credits produced by the home, but also the mortgage interest and other deductions.
The mortgage was paid off and she and her husband owned it free and clear. Because these people were married, the house was probably deeded something like: “Cristina Miranda and Husband as tenants by the entirety.” The importance of this is that on his death, the house passed to Cristina by virtue of the deed and her status as the surviving tenant by the entirety.
After his death, Cristina is sitting on a piece of real estate with – – presumably – – no debt. Sale of the property, assuming normal appreciation and no loss of value caused by deterioration of the neighborhood or some pin-head developer throwing up a structure around the property, produces long-term capital gain. Thus, converting the equity in the home to cash produces revenue taxed at favorable capital gains rates, rather than less-then-favorable short-term capital gain which is tax as ordinary income at the seller’s maximum rate.
Now, if she had been renting for the past 30 years, she would have lost the financial gain, not to mention the tax-benefits, of owning. Granted the risk of loss associated with renting is lower, it is not an absolute zero if on factors in opportunity cost. And 30 years of rent exceeds the fair market value of many of the condos presently on the market.
Just a thought.
scriv