2 Bedroom Foreclosure at Latitude on the River – $266,000
January 16, 2009 by Lucas Lechuga
Within the past three months, I've seen a handful of short-sale condos at Latitude on the River become available on the MLS. Earlier today, however, I came across the first bank-owned foreclosure condo in the building to appear.
The foreclosure condo is a 2 bedroom/2.5 bath with 1,212 square feet of interior and a 196 square foot balcony. The condo comes "decorator-ready" with concrete floors, as delivered by the developer, and is located on the southwest corner of the 20th floor. The list price is $266,000, or $219 per square foot. The most recent Brickell Condo Index published in November 2008 revealed that the average list price of condos available at Latitude on the River was $366 per square foot. There had not been any closed sales in the building at the time within the prior six months and there haven't been any since. Lack of closed sales clearly means that prices of available condos at Latitude on the River haven't yet fallen to a level that will attract buyers. It'll be interesting to see if the 2 bedroom foreclosure condo at Latitude on the River will spark the interest of buyers.
View the pictures and listing information for the 2 bedroom condo foreclosure at Latitude on the River.
This unit is not cash flow positive, so I would not be a buyer here.
However, this is a lot better than other deals you have posted at what I find to be ridiculous 300 and 400 sq foot prices.
As far as I am concerned, Miami Condo’s have officially fallen 1/2 way to the bottom as of 1-15-2009.
Whatever price you see on a unit right now, TAKE OFF ANOTHER 50%!!!!
That is what the price will be in 2012 when all is said and done!.
This unit will sell for $133,000 after it gets forclosed on a second time down the road.
I think that Christopher may be a bit hopeful with the “TAKE ANOTHER 50% OFF” but it looks like the $150 calls that a lot of people have been making will come to fruition. It’s now obvious that bulk lots of units are trading at $200/sq ft while individual units can trade anywhere between $200-$250/ sq ft. Building site, water views or front, amenities, etc all make a significant difference. It’s not unreasonable to see bulk trading down 25% from here at $150/ sq ft. A lot of contributers to this site have made that call and I’m giving some credit and jumping on that bandwagon. good luck!
Talk about lack of windows for the living room. Looks like you have a building next door too. Banks seem to put the crappy units on the market first. If this one goes for 266k, the next one that the bank sells will be either a better unit or the same unit (line) for less. The bank doesn’t want to have to compete with the 266k buyer when trying to sell other units as the 266k buyer may try to undercut the bank and flip it for profit. The banks will have NONE of that right now. They’ll be doing the selling for years to come IMHO.
This unit and other 2/2 units were selling in the lower 400,000’s in 2007. I saw one 2/2 in the tax records that sold for 499,000.
It has been reported that 70% of buyers in Miami were investors.
If this unit sells for around 250,000 all other units will be so under water I expect half the buildings investors to stop paying.
Majority of people in Miami are in denial or don’t have a clue that their properties have fallen 30 to 40 percent already. Once they do they too will stop making payments and walk from these buildings.
Do any of you go the auctions where they sell bank owned properties. If you do please share the experiences and how competitive it is?
Also how much properties are being sold for vs the starting bid.
Thanks
its nice to see some prices dropping to a number which will begin to attract real interest. but we are not there yet. At $266k, this decorator ready unit is actually selling for $300k. Still too much money for a condo in Miami under current conditions. Banks and sellers must realize if somebody is paying above $250k for a unit, they want to be able to move into the unit on day 1. not wait 6 months for construction costs and time over runs to tire them out. the whole idea of condo living is no maintenance and fuss. i want to buy a condo that i can live in today. concrete floors and who knows what other work still needs to be completed on this unfinished condo unit.
lara,
Yes,
Gone to REDC waste of time.
Courthouse foreclosure were getting better last time I went in Nov.
If any of this interest you, let me know and I’ll post more.
If I assume you meant REOs on the REDC auction block, the answer is too many amateurs that bid up quickly. They were all in the MLS for months anyways.
Not a good deal, look at the rental market in the building. Besides your going to have to hold for 3-5 years, (closer to 5) and pay carrying costs, insurance, etc, and take a loss for those years.
Bluehorseshoe says it’s way better to rent now. Your hearing this from a condo investor/owner that is taking a bath on his rental units both in high end and mid range. IE. Santa Maria on Brickell Condo type quality to Tequesa One type quality.
Blue Horse!!!!???
I’d never thought that of YOU!!!
[hangs head in shame]
Following the Pattern:
You are so wrong. Banks don’t give the sale of their foreclosed properties that much thought. That’s how they got into this mess in the first place. They foreclose on one, they put it up for sale at a price they think that they can get. Simple as that. I am a builder/developer and I use some of the larger banks that have many foreclosed properties. They never really seem to care how they get rid of them and they surely don’t go through the hoops you stated.
To Lucas and other readers,
here is an article about condo financing from PCBDaily.com. I posted it just before the cutoff from your previous article so I’m re-posting. I used to live in Brickell and am planning to move back. How will anyone obtain a mortgage w/ these restrictions? What percent of your current clients are obtaining condo mortgages?
Thanks.
New FNMA Condo Guidelines Chilling to Panama City Beach
Written by Jason Koertge
Last Updated: January 14, 2009
FNMA released new condo eligibility guidelines for mortgages acceptable to be purchased by FNMA in Announcement 08-34. These new guidelines are directed specifically toward condominiums located in Florida. The guidelines specify particular situations that place additional restrictions on condominium mortgages that FNMA will purchase in the secondary market. The new guidelines have an effective date of January 15, 2009.
Some of the highlights are:
Reduced loan to value ratios.
70 percent of the total units in a project must have been sold or under a bona fide contract to a principal residence or second home purchaser. This could affect new buildings such as Trade Winds, Ocean Reef, Origin of Seaheaven, Grand Panama, Shores of Panama, Etc.
No more than 15 percent of the total units in a project can be 30 days or more past due on the payment of their condominium/association fee payments. This includes the unsold units where the developer is responsible for paying the HOA fees.
Increased insurance requirements for the HOA and the unit owners.
Projects are ineligible where a single entity (the same individual, investor group, partnership, or corporation) owns more than 10 percent of the total units in the project. This may affect Emerald Beach where the Wyndham Corporation owns more than 50 percent of the units. If a hedge fund comes in and buys 10-20 percent of a project, say the Trade Winds, it could mean that FNMA would not purchase any mortgages of the remaining units.
Review of the project HOA budget and income statement, especially for projects where the developer is still in control of the HOA. This could be a problem for projects where the developer has not fully funded the required HOA fees of the unsold units.
Projects are ineligible where the HOA or developer (if he is still in control of the HOA) is named as a party to current litigation that relates to the project. This could affect Shores of Panama that is in bankruptcy or projects where the developer is being sued for nonpayment of construction work or services.
Lenders are also increasingly reluctant to lend on what they consider to be condo-tels. FNMA may consider projects with any of the following characteristics as condo-tels:
Front Desk/Registration Service
Central telephone system
Daily cleaning service
Advertising rental rates
Central key system
Few or no full time residents
Short-term rentals
There are exceptions to all of the rules. However, if you have a great contract from a well qualified buyer, don’t be surprised if the loan gets rejected by the lender. Additional loan collateral requirements will mean fewer sales and a longer market recover period.
Brett, very useful post. Thanks.
Confirms what I posted previously:
“There are 60, fully arms-length, publicly-recorded comps in MarinaBlue that say you are seriously underwater. No sane lender will ignore those comps so you will not be able to sell at your full price (or any price above $200 psf) to any buyer who requires substantial mortgage financing. Additionally, MarinaBlue will have so many renters and non-occupant owners that most lenders will not lend to any potential buyer at virtually any price.”
Essentially, $200 per square foot is the new ceiling for non-cash buyers at MarinaBlue. This means that the non-bay-view Latitude on the River foreclosure is not a good deal. Appears that The Ace was right; we are heading for $125 psf.
I love Lucas’s blog. However, what is really needed out there is a for-rent-by-landlord site. Really. The landlords need it.
Lucas – can you update your condo deals page? It seems like the last month has had the floor fall out on a lot of the complexes you’ve listed, and those listed deals really…aren’t!
Great blog…thanks for the work!
Thanks for the site, it is just what I needed right now. I have a few question for the Miami residents on the board.
Some background info first.
I grew up in Miami in the late 60’s thru the early 80’s. My wife and I met in Tampa and she is Cuban. We relocated up to the northeast many moons ago. We now hate winter, the rest is beautiful though.
I know about the housing and condo associated problems down there, I have been following the disaster since 2006 via blogs (IMHO, these are the TRUE journalists of today, seriously). Places like Patrick.net, MISH, CRisk etc.
Due to health issues related to winter we want to purchase a home in Miami Beach. Specifically we are looking at the northern area of Bar Harbor as our target. Not the middle and not South Beach. My wife is an ER nurse and I am currently attending nursing school.
Now that you have the info here are my questions
1. Prices have dropped substantially and they have more to go, but how much further do you see it going, especially in the area I mentioned.
2. I have gone on realtor.com to search and I think $150,000 for a condo in that area @~1000SF 2BR/2BA would be a good deal if condition inside was move in ready. Yes, no or thoughts?
3. I am concerned about insurance! How much for what I want, any guesses?
4. I have heard about issues where the condo fees went UP substantially because of so many owners foreclosing and the cost being defrayed among the remaining owners. How bad is it or is that mostly the mainland Miami condos? Way to find out?
I am in no rush to buy, If I found a good enough deal to my advantage I would be more then willing to purchase. I just want to minimize my chances of being diced up by a falling knife.
Any other info you think is pertinent would be appreciated. And thanks in advance for any info shared
I went to the courthouse auction last week and could not believe the lender bid what was owed on every sale except one while I was there. Can’t imagine why they would want these properties back. Saw where banks can lend 31 times their deposits so if just 3% default that bank is in deep trouble. Also saw that like 900,000 houses are delinquent but banks rather have them on the books for full amount due than current or sold value. Crazy times.
this is arguably the worst new project on the river. the units facing north mainly look into the electrical transformer station. many of the units facing south are butting up right against the office building. your views simply suck compared to the other product you can buy on the river.
don’t expect to see many deals at the auction. unless the foreclosed loan comes in under valuation of the property, expect the lenders to credit bid all the way up to their judgment amount. the lackeys they have showing up to the auctions are instructed to do as much.
Richard – I think the banks have to bid what’s owed to get the defaulted borrower off the title, and it then becomes REO. In an auction where the bank is selling to get rid of property, they won’t be bidding. But I don’t know Fla. law, so maybe someone knowledgeable can fill us in.
Muir – if Lara doesn’t take you up on more info, I’d like to. Thanks. Very interesting info.
EVERGLADES ON THE BAY
Anyone in here who has a purchase contract for Everglades On The Bay Cabi Developers and would be interested in relating their experience with their purchase and the developer with an investigative reporter for a major local newspaper contact me with an address and phone number to – myloislane.com
Correction
contact me at – [email protected]
isellpower,
Are you on medication?
I’ve fought hard for REOs in recent months (and failed) and I am calling BS on your post #10.
Richard /Jan 18, 2009 at 11:19 am Vote:
I went to the courthouse auction last week and could not believe the lender bid what was owed on every sale except one while I was there. Can’t imagine why they would want these properties back. Saw where banks can lend 31 times their deposits so if just 3% default that bank is in deep trouble. Also saw that like 900,000 houses are delinquent but banks rather have them on the books for full amount due than current or sold value. Crazy times.
–
That’s what I told Lara.
🙂
Tom /Jan 18, 2009 at 1:23 pm
Richard – I think the banks have to bid what’s owed to get the defaulted borrower off the title, and it then becomes REO. In an auction where the bank is selling to get rid of property, they won’t be bidding. But I don’t know Fla. law, so maybe someone knowledgeable can fill us in.
Muir – if Lara doesn’t take you up on more info, I’d like to. Thanks. Very interesting info.
–
Tom & other,
1. No, banks bid $100.
They do this for the stamps they have to pay (60 cents per $100)
USUALLY, everybody behaves and lets the bank take it unless they are really going to
bid on it. That way it costs the bank as little as possible to get the property. For their
part, the bank representative USUALLY, says out loud before the bidding begins what
they are willing to let go the property for. The bank can bid the judgement amount.
Keep in mind that a LOT of back room calls may have ALREADY been made to investor
“friends.”
2. Sure, 🙂 believe it or not, REOs are not new and was an excellent source of investment
properties before 1997. THe REDC auctions are not a true auction: there are reserves,
thus the “minimum” listed price means nothing. You pay a 5% PREMIUM to the
auctioneers. Now a true auction without reserves, ahh, we’ll wait for those.
Sure, go to the REDC auction this month, have fun: there’s girls and whistles and
people in tuxes, loudspeakers, a real circus atmosphere. Some properties are not
habitable and are sold “cash.” I saw some of these, they were tear downs but people
bid on them. Fools and their money are eventually parted. I never believed the “soon”
part.
Only a fool would pay $219.00 per square foot.
The Smart Money
Latitude won’t see a sale until it goes under $200/SF
Lots of money ready to pounce at $150/SF for those units.