We had a housing shortage already, and the pandemic has created conditions that have only worsened it.". Love water, heat, and sunsets… However, you are correct that foreclosed homes sat empty for years (in some cases) waiting for buyers. Every month they break ground on hundreds of additional units when the existing ones won’t sell. The property prices can halve and that means the property tax halves, but you’re still paying condo fees and remember, when your neighbors stop paying, you’re on the hook for their payments. The Florida cities have been hard-hit by the coronavirus, which may help to explain the declines. I had just read the Kuppy article, then I came here. Consumers But when it floods…it must be global warming responsible. This is totally inaccurate. Dubai is down around 15-20% this year I believe. There ain’t no such thing as a free lunch. many owners seeking to rent out their units are negative cash flow because the pool of renters will only pay as much has the market will bear. And they're competing with those who had no plans to move until the stay-at-home orders created a burning desire for additional square footage and a big backyard in which to ride out the crisis. A 1909 Family Home Is Fully Restored and Grabs Top Dollar, Just Look at How This Cool Cubic Condo in Cambridge, MA, Stacks Up, Have You Served? I have a feeling many will turn to hotels or Airbnb units, which would be really bad for the hotel sector. And they’re expected to continue dropping for the foreseeable future. Your question is nuts, in a best-case scenario. Contact her at clare.trapasso@realtor.com. And I thought momentum tech stocks were risky…. Miami Beach is sinking, and the sea level is rising. One of the tour guides explained there’s actually a higher percentage of Arabs in Manhattan than in Dubai. Takes a while to reverberate through the rest of the country. Lemme know when I can get a great deal on something nice. What next for theses developers. And ban something!!!!!! South Florida is one of those markets where foreigners are always invoked, either as a panacea for all ills or as a cause of all evils. Think of these places as the real estate version of the Vanden Plas 1500: an Austin Allegro with pretentious finish and a ridiculous price tag. Raise taxes. Darn, where are all those manicured little lap poodles going to live now? I was hacked and for security purposes SunTrust suggested I move everything but a deminimus amount into a money market account. My favorite sight was the reasonably-sized indoor, very cold, ski run at the luxury mall (the other mall has the world’s largest aquarium, and it’s fascinating). But this time is different said the REIC shills. "That's what happened in the last recession. Debtor Nation She previously wrote for a Financial Times publication, the New York Daily News, and the Associated Press. During the 90’s we vacationed often in Miami, 3 or 4 days was always more than enough. Him: They underwrote the stuff the local hard money boys wouldn’t touch at 15%, but those jokers got paid fed funds plus 3 to take the risk. 4% or higher property tax rates have been around in some parts of NY state since at least 2017. http://www.empirecenter.org/wp-content/uploads/2018/04/Benchmarking_PropertyTax_2017.pdf. She also taught journalism courses at several New York City colleges and obtained a real estate license. Even more exciting, they have what they call “Sunny day flooding” increasingly every year where the water just comes strait up into their basement through the porous limestone ground the whole city is built on. And to be really cynical, look at the Boeing 737max fiasco. True and when I was building homes I heard the stories of my colleagues making zillions by borrowing more and doing bigger projects as I built one at a time Then as the markets imploded I heard the stories of how they were all crying, bankrupting and divorcing I just kept driving my old pickup to work every day and tried my best to ignore the noise. Buying a condo which comes with insane condo fees always makes it a bad deal. The buyer factors in taxes and HOA fees in the bid or offer. “… And I’ve seen it before It makes no sense to build more, but they keep doing it!! Sounds a lot like Vancouver over built no buyers and more units coming I feel we should see a major crash in Vancouver real estate it’s down 20 percent already we could use another 40 or 60 percent ratcheting before it settles . The best solution is to have many trusted friends that have beachfront luxury condos. Consistently low mortgage rates, expanded work-from-home and remote schooling fueled already strong demand for Miami real estate. Him: Last time, a lot of the stuff that defaulted was upper middle-class product. we live in birmingham – we live in highland park and birmingham is booming- don’t know if it will last but its great right now- we moved here from greenville sc – we like it. The advantage to an apartment is you can leave for greener pastures, typically within a year, or sooner if you break the lease. Let me assure you, in both, management always takes care of it’s own. When then rent goes up, you move. I appreciate it immensely. They used to be able to recycle their capital by selling the assets, but now they can’t. Pass the tax burden down the line I suppose…. A builder that doesn’t build isn’t a builder any more. Him: Are you f*cking kidding me? Inflation & Devaluation Read More » Buyers paid a median $27,000 more for a home in July than they did last year because the supply of available properties for sale plummeted at the same time that demand for them had skyrocketed. Remember, our basis is $1.5 million. And it doesn't look like they'll be coming down anytime soon. And I’m not sure storing it at home would be wise either. For an outfit the size of Hydro a 6 mil salary scarcely seems unusual. If you later decide that moving to Florida was a mistake and you want to sell and move out of Florida, you may find yourself in a strong buyer’s market when Florida real estate prices are low. He runs a real estate economic consulting firm based in Deerfield Beach that bears his name. As early as 2005, McCabe was sounding alarms of a … I heartily recommend this book, a nice read, nothing literary but very enjoyable and uncannily predictive. After Katrina, things changed rapidly. You can give it away for free. The condos are rented out. The tenant then decides to endure or move out. The whole concept is just mad. Gold & Silver They underwrote all sorts of nonsense that I wouldn’t ever touch. 2) any pending or active legal cases against builders or condo assns And property taxes are based on how much the property is valued, not on the real value of the shoddy workmanship and poor materials sold for their weight in gold. Hoping to find buyers for high end. Middle class has been made extinct and the duffers are building high end. Those shrunken rates can greatly reduce monthly mortgage payments. Florida orange groves are dead and dying because of the citrus greening disease. One thing Wolf’s charts support is the fractured nature of this RE market. This means that we need to now take possession of our defaults. Home prices grew by 17 percent year-over-year at the end of 2013 in the West Palm ­Beach-Boca Raton-Delray Beach metro area. Insurance companies can walk away in the middle of your mortgage? Of course, commodities ran right downhill after the start-up as well. Finally allow me to say that having lived in Florida, and fled as soon as possible, I just don’t understand how somebody could pay that kind of money to live in Miami. Rather, your typical condo has a carrying cost of 4-7% of fair value before financing costs (property tax/condo fees/insurance/maintenance/special assessments/etc). Could it be that prospective buyers of Miami or South Beach property have seen pictures of the streets of Miami and South Beach flooding when high tides occur, heavy rain days, etc.? In some parts of the country, new home construction was delayed or paused in the spring in the beginning of the pandemic. Housing prices aren't expected to drop significantly during the COVID-19 pandemic. The Phase One build-out will include many greatly improved floorplans, all with exquisite finishes, five-star services and unique amenities that distinguish the Acqualina brand. Why, exactly, Miami, now??? This is good information but makes me want to puke as my brickell condo which I thought I overpaid for might tame a further bath if/when I sell . The Fed counts vacation homes as vacant rentals, even though they are not rentals, as they are not used as primary residences. In 1977 John D. Macdonald’s novel “Condominium” was published. On the surface, Miami’s condo market is troubled enough: Here is a sampling from the Q2 report on Miami’s condo markets by Brown Harris Stevens. Lots of very dead wood tossed overboard. If the Corona Virus is held at bay, home prices could stay flat for July, and then begin a slight 1% increase in August and September. Central Banks In other news about banking security on the internet. Since condos are not rent-controlled in SF, the owner can raise the rent at the annual lease renewal date to whatever level. My fund has basically stopped lending on condos and is well below 50% LTV on everything else. But Miami has been making up lost ground. They can cut a few points off rates and it wouldn’t matter. If the tenant moves out, the owner can figure out what the market will bear — which is the same for rent-controlled apartments. I suspect similar situation applies to the Bay Area. Me: Won’t the 50-bps the fed cut help clear the log-jam? The Florida vacancy rate was much higher in 2009 after people had moved out of their rental units into new homes to try to strike it rich in the real estate market. So this dialog (convo) above is from 2017. I don’t want any more of this crap on my balance sheet!! Wolf, we will really appreciate your keeping us updated as to how this trend is spreading. We underwrote this one deal two years ago for a $3.4 million purchase of a new construction condo, we leant $1.5 million against it. It is really a must-read for everybody even remotely interested in what’s going on with Miami real estate. https://www.miamiherald.com/news/business/real-estate-news/article235149742.html. Some of the most high-profile buildings have had less than 50% sell-through and the majority of what’s “sold” is immediately dumped onto the market unfinished and unfurnished, below the developer sale price for fear that the developer will drop his price and leave these guys even further underwater. A few years back I was very keen on this great building in Meridian Avenue. Gross domestic product, aka GDP, the value of goods and services produced, dropped the most in the more than 70 years that it has been recorded. Pretty soon they’ll all be forced into another round of price cuts. https://www.local10.com/weather/heavy-rain-causes-street-flooding-in-miami-miami-beach. Who would have thought that this summer, with the number of COVID-19 cases surging and new rounds of restrictions and shutdowns, would yield one of the most competitive housing markets in recent memory? Of course, who can know if it’s a great investment ahead of time? Hey they could always just build a wall Seawall that is Doesn’t POTUS own property down there He’s an expert on wall building. Not sure the fire sale side has failed at all. I’m charging these guys 10% because they cannot get traditional loans. I am not sure about waterfront property, but things seem a little more rational over here. As with many of BC’s local housing markets, prices have stayed relatively consistent for real estate on Vancouver Island, even despite depressed activity in April. As if I’d ever want to go there in 1 million years. We could play these same games with the defaulted borrowers, but my investors want the defaulted paper off the books—we don’t want to re-possess the property and have to sell it. That has to do with the immense dead zone in the GOM result of oil spills and stuff coming down Miss, excess fertilizer dumped on GMO crops in Midwest. RE market is running on fundamentals. Wolf here: Signs have been piling up that the Miami condo market, where luxury towers are still sprouting like mushrooms, is getting into serious trouble. Quick. That is Close to the rent you would pay for a comparable unit if you were renting from the owner. Here is a sampling from the Q2 report on Miami’s condo markets by Brown Harris Stevens. Trade A surge of domestic and foreign buyers are purchasing primary homes in Miami's diverse neighborhoods. The guy defaulted and we’re up to $2.0 million in principal and default interest and we took possession—figuring we were plenty protected by over a million in equity left on the asset. Finally newspaper editors and economists from Japan, Sweden and Australia can explain to the embattled Amir how merely slashing interest rates and buying securities can solve any problem, included (but not limited to) baldness, traffic congestion and even the common cold. Several of the comments posted also helped understanding. I ‘inherited’ a couple townhouses in Florida from a previous romantic relationship. Are there any other local markets in the US this out of kilter? And Petunia makes a good point…. 7 SoCal Properties Recently Sold by the HGTV Star. I moved to Birmingham Al after the crash in Fl. This is turn could be causing the disappearance of demand from the hotel sector. https://www.dropbox.com/sh/8qnnqwg5zho8njq/AABNBcPne_DQ3zqAzYcK0tiia/Floor%20Plans/Estates%20Residences/Donatello?dl=0, https://www.dropbox.com/sh/8qnnqwg5zho8njq/AACpM8nL3JeCAWtdmQ4awya5a/Floor%20Plans/Estates%20Residences/Toscana%20and%20Toscana%20Modified?dl=0. From memory, Miami real estate is very much Kuppy’s area. When we moved to Florida we hardly ever went there, actively avoided it in the 2000’s. The real story is commercial real estate when that blows you will se REITs in canada locking funds get out while you can …just got back from delhi it’s down 40 percent as is dubaii and these places actually have real economies….the kids about to blow don’t get burned. They can take rates to zero, it won’t matter. But it can be. Next up was Philadelphia, up 18.5%, to $340,000; Cincinnati, up 18.5%, to $339,950; San Francisco, up 15.3%, to $1,054,210; Cleveland, up 13.5%, to $235,050; Boston, up 12.5%, to $675,050; Kansas City, MO, up 12.3%, to $351,025; Washington, DC, up 11.6%, to $529,995; and Providence, RI, up 11.4%, to $434,500. It is pretty much mathematically impossible to have a positive yield from buying and renting out a Miami condo (trust me, I’ve done the math many times). Cheap and easy money always finds a place to die. All real estate is local, and prices will be under the most pressure in areas where the economies depend on leisure and hospitality, according to a new report from UBS. Tommorrow I convert to cash. Everybody screamed to raise taxes or the whole place would blow! He set up a real estate company in Mongolia (YAK.V) when it was the fastest growing economy on the planet (2011-12??? This time, who knows. Additionally, as a result of high demand for larger units and more customized features, 777 Via Acqualina will now be reconfigured to feature a total of 150 luxurious residences with square footage ranging from 2,910 to 5,595 square feet, with larger balconies and extra bedrooms. The main culprit is that demand Is not keeping up with the increase in hotel supply in Miami. Wait until it’s your turn. I was told my checking account was empty (I can no longer use on line banking) and $50,000 had been transferred from my money market account to checking to ‘recharge’ it on behalf of the hackers. Chart: Miami home … Rent control in SF applies only to older apartment buildings with two or more housing units that were completed before June 1979. For the condo in Thailand I pay 10,000 Baht (about $330) a month rent. It is pure speculation, combined with the greater fool theory. Thoughts? What areas are most devoid of NE’ers? That’s why every third unit is suddenly for sale. This adds up fast when a property is worth hundreds of thousands or even millions. People are massively striking out on their own. I’m interested in doing that too, but I don’t want to put it in a bank “safety” deposit box. San Jose CA – can’t keep a McDonald’s, a Ross, a Safeway, etc yadda yadda movie theater closed, Cafe Stritch down to operating 4 nights a week and may cut down to 3 (neat jazz club however long it can survive) the place is just getting dead, dead, dead. I don’t think I will be buying or renting a condo in Miami any time soon. Get quick and easy access to your home value, neighborhood activity and financial possibilites. Maybe not exactly the same, but it rhymes a bit. Data from some of Wolf’s earlier articles have been foreshadowing this in Miami. I want to look into Tampa or Jacksonville. Zillow economist Skylar Olsen says Zillow is forecasting a price drop of 2 to 3 percent through the end of 2020, depending on the city, compared to where prices were in February. I got an add for “bank repossessed property Costa Del Sol”. This was done some years ago to halt a wave of conversions of rent-controlled apartments into condos, which are not rent-controlled. For those of you who are unfamiliar with hard-money lending, these are loans made on the basis of the asset value, not the ability of the borrower to pay. It seems that the condo developers should have spent more time paying attention to geopolitical and financial events and less time watching football the property Bros. Owners can’t automatically charge financing costs plus property taxes plus condo fees etc. More expenses for a depreciating asset. Spoiler: absolutely _nothing_ has changed in more than 40 years. Many rentals in large expensive cities are $1K per mo neg cash flow, and owners tolerate that because they are expecting big cap gains. See our Privacy Policy, Miami Real Estate Is About To Collapse… This is About Condos, and it Would Be Funny if it Weren’t so Serious, Copyright © 2011 - 2020 Wolf Street Corp. All Rights Reserved. I guess I will always be looking at the condos 3 blocks from the beach. Median home prices were $403,826 in Miami and $320,050 in Orlando. Kapish? Last time I was there was a few years ago on my way to Yemen and I picked up a brutal dose of food poisoning. Metro areas include smaller towns, cities, and suburbs. Our specialty is underwriting—not foreclosure. Luxury has a price. Price activity within the Fraser Valley real estate market has taken a different turn, with upward growth in average prices of single-family detached home (+2.7%), townhomes (+1.8%) and apartments (+1.0%) compared to price levels for May 2019. The coronavirus crisis is stalling out the residential real estate market during its ... year price drop, with home prices projected to fall 2.6%. "The U.S. housing market performance is closely mirroring COVID[-19]’s path, which is providing clues into what we can expect for various housing markets in the months to come,” Hale said in a statement. In Ontario, Canada, our new Premier cut in almost half the Toronto city councilors… They also impact adjacent markets in So. Unlike in Broward and Miami-Dade, the median price for single-family homes actually went down in Palm Beach County, dropping by 1.4 percent to $340,000. Plus insane monthly HoA fees. The pace of decline has clearly accelerated recently. There are thousands of acres for sale inland. Listen to Shirley Bassey”s song: “History Repeating” There are two things here in SF, going into the opposite direction: 1. This happened despite the economy shrinking by 9.5% in the second quarter of the year from the previous one, as the U.S. Commerce Department reported Thursday. No amount of money can buy happiness. $4K/Mo in prop taxes plus HOA fees of prolly $2K/Mo BEFORE you contemplate the purchase price? Wolf, thanks for including the dialog. ©1995-2020 National Association of REALTORS® and Move, Inc. All rights reserved.realtor.com® is the official site of the National Association of REALTORS® and is operated by Move, Inc., a subsidiary of News Corp. Clare Trapasso is the deputy news editor of realtor.com. Although it starts by admitting that although 34,000 people moved to the Miami area in a recent year, 58,000 moved (bye-bye) to another state the same year. Please do another article on the repo market. opened in the Sunset Harbor recently. That’s not the key cost of holding these things anyway. See pricing and listing details of Miami real estate for sale. This can lead to a large financial loss. We’re on our 3rd broker now. Dys-location, dyslocation. It will eventually be bailed out financially by the federal government . Lets examine the list of normal buyers of Luxury Miami condo’s; Rich Venezuelans–oops, Rich Russians–oops, Rich Chinese=oops, Rich Tech Unicorn Bro’s- oops, Rich Saudi’s-oops, and Rich Columbian Drug Lords- finally a keep group of buyers still rolling. Wonder how many other markets in the US are in similar condition. Hydro was just about to buy Avista a US outfit but this was subject to Hydro being private. Using this model, and using the OECD index numbers, we should see prices drop … Wolf, your table of various neighborhood stats is very interesting and helpful. These things take a long time to filter to the surface, as they’re now starting to. I agree with many of the other readers better to rent . Add to that the $4500-$5000 a month mortgage and all of a sudden it doesn’t really make sense to buy if prices are not going up any more. Any condo owner can do that at any time, and many owners are doing that, no problem. The original Florida land boom was followed by 1929 crash and depression….. Other 1920s Florida Real Estate Bubble Resources: Wikipedia: Florida Land Boom of the 1920s, Market Crashes: The Florida Real Estate Craze, The Forgotten Real Estate Boom of the 1920s, ‘It’s over’: Miami Beach tries to outrace climate change’s rising seas, https://news.yahoo.com/its-over-miami-beach-tries-to-outrace-climate-change-and-the-rising-seas-160000886.html. Therefore, smart guys always watch Miami. Our policy makers will react to this somehow, they don’t like affordable housing either. Yikes. China would rather build empty cities with very slow sales transaction rates than let real estate correct downward. The problem though is that the stats only track demand and supply from hotels and not all sources like Airbnb. I will never understand why people do this. The only cure for asset bubbles is a mercy killing by collapse. California Daydreamin’ Prices eventually followed, falling 7.6 percent from 2016 to 2020, according to data from Zillow, the real estate data company. Go onto the social media and get the silicone enhanced influencers to launch the high end Miami lots. I follow the foreclosures and tax deeds religiously. What ends up happening to these condos that are new and no one wants or can afford? Where do you store your gold and silver? Nonetheless, home prices have hit record highs as buyers are battling it out across the nation over a limited selection of reasonably priced abodes. However, Idaho, Iowa, Kansas, Montana, Nebraska, North Dakota, Oklahoma, South Dakota, and Wyoming have more cattle than people. It depends on the market, obviously. The ground floor on those condos is not far from sea level. Fl’s 21.5M human population outnumbers the 1.1M cattle (who, contrary to popular belief, are allowed to neither vote or count votes). We’re happy when someone takes our problems away. Having said all that, I sure wouldn’t want to live there, Iran is about 30 miles across the water…. By Harris Kupperman, founder of Praetorian Capital, Adventures in Capitalism. Today we’ll stick to your basic trendline using exponential linear regression. It was gangbusters in 2005. Me: Will it really be as bad as last cycle? The bank branch may be from 2017. If you want to live in an apartment, rent one. Transportation Googling OZK bank did not turn up any offices being Besides, the guys who qualify for real loans are all selling because they cannot hold onto their own properties. The branch I got to looks like it’s 100 years old. They don’t clean the sewers and those mardi gras beads pile up. These sub-markets are small, and sales volume in each market is relatively small, so the data can get volatile. It’s going to be just like 2009. These areas outside of the densely packed cities where buyers can get more square footage and outdoor space for their money and have an easier time maintaining social distance have become more popular as the pandemic has dragged on. Maybe stop in Texas if they get that far. Thanks. How recent was this convo? I suppose I will soon get prompts for iPhones streaming service next. https://www.treehugger.com/climate-change/very-late-book-review-john-d-macdonalds-condominium.html. Click on the beer and iced-tea mug to find out how: Would you like to be notified via email when WOLF STREET publishes a new article? Now those guys are jammed up too or at least they’re not coming down here anymore. Greek, Italian and Spanish authorities can provide their expertise in keeping real estate prices sky high in face of declining sales and shrinking populations. I’ve seen plenty of layoffs at my company over the years and I’ve never seen an employee with above average productivity laid off. The basic law of Miami condo pricing is that if prices stop going up, they collapse due to the carrying cost. I rank Dubai as one of the worst cities in the world unless you enjoy 50 degree Celsius heat and shopping malls. A high end buyer buying a unit in a 200 unit building. STAT OF THE WEEK $1 million Miami-based Cervera Real Estate announced that Sandra Masis was its top producer last year in general real estate sales, with $1 million in commissions. After the new tenant signs the lease, rent control kicks back in and limits annual rent increases to a rate linked to CPI. Like “hope and change” who just purchased a $16 million beach front house. After reading I had to check the calendar, it is exactly as it was in 2007. This works well in an up market. In my experience, trends in Miami real estate also tend to lead national trends by a few quarters. And those mind-boggling high prices, shooting up in the middle of a recession with the worst unemployment since the Great Depression and an economy undergoing a historic contraction, are a direct result of the pandemic. Buyers who were sidelined by the virus in the spring are now jockeying with those who had planned to buy in the summer. In SF, condo conversions are limited to 200 a year. The reduced rates are a consequence of the federal government's actions and the response of investors to the turbulent economy. Me: So, what are you doing to clear these bad assets? More subtle things than subscription too, like how “mysteriously” people’s iPhone slow down after a system update following a release of a new model – its why Apple already got sued by France which has anti-planned-obsolescence laws. 200 units per building…. It was still strong in that area up until late 2008 early 2009, then the bottom fell out there too. Looks like another blood bath is underway in Miami’s condo market. Experts blame shutdowns to prevent the spread of Covid-19. A 10 year lease for an apartment is rare. The unit stays the same, and it stays on the rental market, but now the owner doesn’t have to deal with rent control. Villa Acqualina, 60,000 square feet of remarkable amenities space, will also be completed in Phase I, and will house a world-class Spa and Salt Room, a private Nightclub, Wine Lounge and a celebrity chef restaurant, as well as Circus Maximus, offering residents a world of games and activities including a Wall Street Traders’ Club Room, a private skating rink and bowling alley, all in a private gated community on the ocean. Click Follow Search to get alerts on new listings. You really should, otherwise you may not be making the wisest choices about how to spend your housing money. There are almost no foreclosures to speak of right now, it is a dry market, and people are bidding outrageously high amounts for foreclosures. Even the County foreclosure sales, which have been loaded with fix-and flip reality TV fans bidding 110% of value for the past 5 years, are seeing below market priced deals with no bids. I live on the Gulf side. This takes time, and if in the mean time the dollar gets stronger, and the foreign buyers dwindle, things can get messy. ), but the Mongolian government mismanaged everything and the growth spurt came apart. We can use it as the REO office. 2. Not an unknown process at all; in the SF Bay Area lots of small crampy apartments got turned into condos. Heh. I have a strong feeling more and more Airbnb units are hitting the market through owners using their condos for Airbnbs. Right? In the modern real estate market in growing areas, housing is partially a place to live and partially an investment. In 2018, a total of 191 units were converted from apartments into condos, according to the SF Planning Department’s 2018 report. Tell that to all the idiots paying so much to rent in places like San Francisco Raleigh is a great alternative with a growing tech industry and MUCH more affordable living. It’s more than simple supply and demand—though the glut of new supply is clearly part of it. Remember, the price for a whole building is set on the last trade. Sixty grands per years are not peanuts and come on top of the buying price. If your build cost is $300 a foot and you think you can sell it for $700, you’ll flood the market. What does that do to bonds? Miami’s housing market fared far worse … Predicted to be under water (literally) before the mortgage ends. Not good. I own a 2 bedroom flat in England and rent a condo in Thailand. If you buy a condo for $1.2 M in a relatively nice area with good schools, your property tax is about $1200 a month, $500 HOA fees, plus insurance and maintenance, your carrying costs easily reach $2500-$3000 a month before even the mortgage payments. Suddenly, no one wants our defaulted borrowers. All data is for Q2 2019 compared to Q2 2018: Below is a riveting and funny article by Harris “Kuppy” Kupperman on the difficulties the market is now facing, as seen by an insider from beneath the surface, particularly the financing issues that are now ripping into Miami’s condo business. https://www.dropbox.com/sh/8qnnqwg5zho8njq/AAARFIuQmqcZPIj_UpBqPNIba/Brand%20Video?dl=0&preview=The+Estates+At+Acqualina+Brand+Video.m4v, https://my.matterport.com/show/?m=aN8UAcUPy9t&brand=0, Casa D’ Oro- Single Family home renderings, https://www.dropbox.com/sh/8qnnqwg5zho8njq/AAA7y72VWXX2PElefiFbyv-Ha/Floor%20Plans/Estates%20Single%20Family%20Homes/Casa%20D'%20Oro?dl=0, North Tower (fully furnished by Fendi Casa), https://www.dropbox.com/sh/y5pghsioi1qhkq3/AAD2aOcBPSqN0t15JFqSiU00a?dl=0, https://www.dropbox.com/sh/yivyqsn92vqczwe/AAByqwvmZvhAwo61mS4d8b4za?dl=0, https://www.dropbox.com/sh/8qnnqwg5zho8njq/AAA1D0f41aT8zfF0zzD3LQcaa/Floor%20Plans/Estates%20Residences/Vecchio?dl=0, https://www.dropbox.com/sh/8qnnqwg5zho8njq/AAAXV7TTM8lLpml9S7hy1zLIa/Floor%20Plans/Estates%20Residences/Uffizi?dl=0, DONATELLO FLOORPLAN AND RENDERINGS Well, it’s been for sale for 9 months now. 200 units per building. US regulators are among the most aggressive in the world in terms of ensuring banks identify & charge off bad mortgages (which in 2008 so overwhelmed the system, taxpayers got stuck with part of the bill). Friend: Holy sh*t Kuppy, it’s about to blow!! There aren’t enough rich Venezuelans and Russians to buy all these units. It sounds like you’ve never visited any “rent vs. buy” sites or ever made a spreadsheet to calculate your expected future wealth in a buy vs. rent scenario. I spent roughly half my work like in private industry, and the other half in public (if I include the Army). What happens then? China The total inventory of homes on the market is about a third less—roughly 440,000 properties short—than what existed last summer. These sub-markets are small, and sales volume in each market is relatively small, so the data can get volatile. Yes I’ve seen it before Home Buyers Reveal: 'What I Wish I Had Known Before Buying My First Home', Selling Your Home? They’re paid off so I book a nominal profit, but I’m subsidizing my renters to the tune of $200/mo each for the HOA (and a another couple hundred that goes to the property managers). (They have since ticked up to 3.01% in the week ending July 23.) When they go into foreclosure, the HOAs buy them and rent them out to keep the prices from collapsing. While most of the sub-markets show price declines, and in some cases vertigo-inducing price plunges, there are some sub-markets were prices in Q2 have increased. Bank of the Ozarks is into this development for a $600m loan, with a GDV based on over $1100/ sq ft. According to Zillow’s research group, the median home value there dropped by -2% over the past year and is expected to “fall -3.2% within the next year.” Some Northeastern housing markets that were devastated in the spring by the pandemic have rebounded—and then some—as their number of positive cases has fallen. Then the rest of the country. Just little bits of history repeating..”, “Even the County foreclosure sales, which have been loaded with fix-and flip reality TV fans bidding 110% of value for the past 5 years, are seeing below market priced deals with no bids.”. Energy No flood of foreign buyers this time, particularly from Europe. We don’t need a wall at the Mexican border as much as we need one at the Broward County border on I-75. Now you can’t even buy an stationary bicycle without a ‘membership’ attached. It just needed lower prices and it eventually cleared. I used to read about condo conversions. Most of New Orleans is built BELOW sea level. In January of 2011, condo prices in greater downtown Miami and Miami Beaches hit their lowest median sale price of the decade at $163,225, while the median sale price … "We have this market imbalance tipped pretty solidly in favor of sellers at this point," says Hale. Me: Sweet!! The property tax is $50,000 alone. It sounds like the price of the unit can come down but the taxes and other fees still make the condo unaffordable. Freddie Mac’s experts expect home prices to drop, too, falling 0.1% in the third and fourth quarters of this year, and then again in Q1 next year. Each master suite will boast his and her bathroom suites with imported onyx countertops and walls and marble floors, a steam mist shower, a free-standing tub, an ocean-view shower and elaborate his and her dressing rooms. The cycle continues. Friend: The story usually ends with a “fire sale” of the property by the defaulted borrower or by the lender (after foreclosure). While the current conditions haven’t led to a short-term price drop, the long-term economic trends induced will likely effect prices in the future. Florida has more vacation homes than any other state. We should build a fund to pick at their carcass in 2 years. Cars, Trucks & Crashes Between screen addiction, vaping, and the Surveillance Industrial Complex you have to wonder how long Millenials will be able to keep civilization going. From what I understand, once a builder gets a loan, the project goes to completion. You can buy nice houses in South Miami/ Coral Gables/ Pinecrest for less than $300 with no HoA fees. A March 2020 report by Clever, an online real estate service, indicates that only 5.3% of homes in Miami-Dade are worth less than their mortgage … Friend: It’s different now, the whole system is jammed up. But new businesses with planned wages have been getting scarcer since 2007. Don't Neglect These 6 Maintenance Tasks—or Else, Debunked! Wait 6 or 9 more months. Good thing they just popped down a new branch in Sunset Harbor. No traffic jams. Each estate in the sky will be delivered furniture ready, and equipped with the finest appliances, imported stone countertops, smart-home technology and soaring ceilings. We had to cut staff by 20% over two years. Florida real estate prices dropped an average of 60% during the last recession. Keep up the good work folks. “Him” (His Infernal Majesty?) "After being particularly hard hit in March and April, new coronavirus cases remain stable in the Northeast and we’re seeing buyers return to the market in force.". The condo gets sold at auction. They come with a ‘subscription’ in the form of the HOA monthly fee. In San Francisco, where it had already been rock-bottom, it dipped into the single digits. Pittsburgh was followed by Los Angeles, where prices rose 24.3% year over year, to $994,154. Informative article Wolfe. Miami has a highly cyclical property market where the magnitudes of the booms and busts dwarf anywhere else in the country. Home prices fell in only two of the nation's 50 largest metros: Miami, where they dipped 1.5% compared with last year, and Orlando, FL, where they ticked down 0.9%. Trying to clean up the previous parties massive debts and bad policy commitments. Of the 50 largest metropolitan areas, annual prices rose the most in Pittsburgh. Suddenly, it seems as though a lot of owners are becoming financially distressed—forcing them to hit bids at a time when demand is somewhat lacking. 2017, as far bank branches is concerned, is new. It will also offer two single family homes, as well as two two-story penthouses, all with private leisure pools. Miami FL, San Jose CA, Seattle WA, Las Vegas NV all looking weak. Miami was cool in the 70s and 80s when it was a little run down, too commercial now. I wonder if this will spill over to the Gulf side of FL. Many of those listings have yet to go back up. Who the hell can afford this stuff? HoA is over $1/sqft/month, so tens of thousands a year plus property taxes. Record-low mortgage rates have added fuel to the fire as homeownership is now more affordable for buyers. Apparently Brits like Dubai for winter breaks because sunshine is guaranteed. View listing photos, review sales history, and use our detailed real estate filters to find the perfect place. I know what my competitors underwrote, trust me, they’re in MUCH worse shape. No it’s not. My god man…flooding. Europe’s Dilemmas 1) monthly carrying costs – condo fees, RE taxes, local govt fees Even a few months ago, there were still idiots from out of town, or kids with daddy’s offshore money who’d come down here with a new hard money-fund and make stupid decisions. The rent you pay for your apartment includes the owners financing costs plus the property taxes plus the condo fees and special assessments plus some profit to the owner. I’ve been told Australia is even worse, but I find that hard to believe. “People are starting to listen on climate change”. As a Brit, these numbers are absolutely staggering. We’re building cash. 8 Myths About Renting You Should Stop Believing Immediately, 6 Ways Home Buyers Mess Up Getting a Mortgage, 6 Reasons You Should Never Buy or Sell a Home Without an Agent, Difference Between Agent, Broker & REALTOR, Real Estate Agents Reveal the Toughest Home Buyers They’ve Ever Met, The 5 Maintenance Skills All Homeowners Should Know, Click for complete coronavirus coverage from realtor.com, Forget About Recessionary Real Estate Bargains: Home Prices Are Still Rising, The Housing Market Heats Up as More Americans Return to Work, Why a Pandemic, Recession, and Protests Aren't Keeping the Housing Market From Roaring Back, What To Expect in 2021's Housing Market: This Is How Much Home Prices Will Rise, What the Flip? But renting out a condo is NOT considered a “conversion.”. I’m afraid to buy a new car because my dashboard video screen might soon display the latest offerings from Geico before it allows me to change the radio station. I have long drawn my conclusions about the folks who buy this stuff and they are better not printed, at least not on this fine website. The median number of days between the listing date and closing date for single-family homes was 98 days, a 6.7% decrease from 105 days. But prices are also up in California and Midwestern cities where the residents are currently being infected at higher rates. They’re just apparatchiks hired so some manager can get a raise because more people ‘work’ for him. View 10318 homes for sale in Miami, FL at a median listing price of $390,000. I guess Kuppy is mostly back in Miami these days. https://fred.stlouisfed.org/series/FLRVAC. A much stronger group than any union ever was, for damn sure. Sales of existing homes will fall 1.8% from 2019, according to the forecast. Was told you can’t fire the CEO of Ontario Hydro due to some high penalty clause… Besides, those guys aren’t buying here anymore. I’ve always been told to ignore sunk costs, AB. Now you have whole city blocks that are nothing but high end. There’s thousands and thousands of these things. I felt exactly the same way until I spent time there on a cruise stop. "When the pandemic helped tip the U.S. economy into recession, most homeowners and home buyers braced for falling house prices," says realtor.com Chief Economist Danielle Hale. Canada Last cycle, it was a few hundred units of high-end that went bad. If the market is going down is it’s all the fault of those dastardly [insert the nationality that used to be fashionable among RE shills until a few weeks earlier] dumping their properties on the market at fire sale prices. See our, The Most Splendid Housing Bubbles in America, Sep. Update, ← How Employees & Employers Get Bled by Health Insurance, Nearly out of Cash, WeWork Shifts into Shrink & Survive Mode →, https://therealdeal.com/miami/2019/09/26/in-a-sluggish-condo-market-these-miami-developers-find-a-sweet-spot/, https://www.miamiherald.com/news/business/real-estate-news/article235149742.html, http://www.empirecenter.org/wp-content/uploads/2018/04/Benchmarking_PropertyTax_2017.pdf, https://www.dropbox.com/sh/8qnnqwg5zho8njq/AABNBcPne_DQ3zqAzYcK0tiia/Floor%20Plans/Estates%20Residences/Donatello?dl=0, The State of the American Office: Suddenly Emptying Out Again Under the Second Wave, Vacancy Rate at Iconic Manhattan Tower with 899 Apartments Hits 26%: This Shows How Fast & Massive the Exodus Has Been, The State of American Restaurants, by City: The Catastrophe of the Second Wave, This Spike of New Businesses is a Doozie, on Several Levels, The State of the American Consumer: Free Pandemic-Money Runs Low, Average sales price: -15.8% to $1,814,060, Average Sales Price: -15.2% to $1,592,032, Average Sales Price: -36.2% to $1,107,305.