The New Miami Icon

This month the much talked about high-rise residential development known as the Icon Brickell, located at 495 Brickell Avenue in downtown Miami, will start closing on units and open it’s doors to new residents. A couple of weekends ago, I visited the site to get a feel of this enormous condo project at the mouth of the Miami River.

The first thing that jumps out at me are the several gigantic heads, something reminiscent of the Maoi of Easter Island, staring at me as I enter the premises. Multiple shapes, colors, sizes, textures and even a few with lights in their eye sockets. The site is impressive from which the three Icon towers rise in the Miami skyline. I am drawn to the waterfront area and the historical Tequesta Indian settlement, or better know as the Miami Circle. Here it sits directly in front of the “north” tower, almost invisible and certainly not representative of a 2,000 year old archaelogical site. 

So this is Icon Brickell. Three modern glass towers as high as 57 stories tall, all containing 1,800 units and 148 hotel rooms. Spas, fitness centers, movie theater, club rooms, cabanas, pools and multiple sun decks. It’s now 2pm and the middle tower is lost somewhere in the shade of the north and south towers. I imagine that natural light is going to be a premium and so is getting the buyers in contract to close.

According to the Daily Business Review, buyers of 120 condos no longer want to be part of this architectural Miami Icon. They are suing to recover $13.7 million in down payments on condos with purchase prices totaling $68.4 million. The suit claims that the developer failed to complete the project on schedule in 2007.

I cannot help but wonder the fate of this Icon. How many buyers will close and how many will follow that dreaded path to foreclosure? Hopefully these Easter Island heads will not become the living faces of sacred Icon Brickell owners.

Miami Beach Rock Star Cribs

Recently, these four rock star properties traded in Miami Beach. Two homes, two condos. New and old, ocean and bay. Just as I always say to clients, it is all about the location.

> The Residences at the Bath Club -5959 Collins Ave #1103, Miami Beach - a 3 bedroom, 3,640 square feet oceanfront unit - acquired from the developer in 2005 for $2.28 million -  sold for $2.29 million or $629 per square foot.

> The Setai - 101 20th St #1705, Miami Beach - one bedroom, 821 square feet, oceanfront condo - acquired in 2004 for $550,000, generates $110,000 in net rental income - sold for a $1.2 million OR $1,462 per square foot - impressive!

 

> North Bay Road - 5004 N Bay Rd, Miami Beach - a 4 bedroom single family home built in 1950, half an acres, 100 feet of waterfront - listed in Feb 2007 for $6.5 million, closed 9/29/08 for $3,075,000 or $747 per square foot.

> Venetian Islands - 122 E San Marino Drive, Miami Beach - a five bedroom home built in 2003 - active on the market 8/12/08, asking $1,799,000 - SOLD in less than 60 days on 10/29/08 for $1.7 million or $428 per square foot.

These recent Miami Beach sales just go to show that buyers continue to recognize the tremendous value of Miami Beach real estate, even in times of major economic instability.

Florida’s Property Tax Conundrum

Working with buyers of Miami residential real estate can be a lot of fun and full of adventure. We have so many unique neighborhoods, eclectic architectural styles, and such a diverse culture, including homes from tropical bohemian bungalows in Coconut Grove to high-tech modern waterfront homes on the Venetian Isles. Eventually, however, you have to cross that shaky old “real estate tax” bridge. PROPERTY TAXES ARE WAY TOO HIGH, and are a major factor in the property buying decision process.

YES, prices have come down considerably, and in some cases way below the threshold that any of us in this business imagined. Fantastic, that $2.1 million home in the Grove is now available at $850,000!

YES, unless you are in the $5 million and up range, there is a huge inventory of properties to choose from across the board. Superb, short sales and foreclosures galore!

YES, with only a minimum required down payment of 3%, attractive FHA financing is available. Wooohoo, my bank offered me is an amazing rate of 5.5% on 30YR fixed rate mortgage!!

SAY WHAT? Although my purchase price is $129,900 and I am purchasing a wonderful foreclosure property at 40 cents on the dollar, the property appraiser is not going to adjust my market value down to the purchase price in 2009!

According to the Miami Dade Property Appraiser, the current market value of this home is $322,205, and the 2007 real estate taxes were $8,113. This means that I am required to pay as much in real estate taxes as in principal and interest. Does that sound reasonable and workable to ANYONE?

There is some silver lining in this box. Several proposals are out there to drastically reduce the cost of real estate taxes in Florida. People we need to get with the program and talk to our Florida legislators. Check out one proposal out there called Cut Property Taxes Now, for example. They propose capping property taxes to a maximum of 1.35% of market value.

No matter which direction you think best, let your voice be heard and let’s push for CHANGE!

If you would like a FREE consultation on the value of your property or to discuss your real estate tax situation, please feel free to send us a request at info@miamiangelproperties.com or call Ross at (305) 673-5300.

Continuum North

RENT: $5,150 / month  **RENTED** $4,100 / month

Description | With state of the art amenities and interior luxuries, this can be your home away from home.  Located on the tail end of South Beach, the Continuum North building is definitely in the best location.  Brand new, with a fresh, clean, slate, this gorgeous apartment is ready for your style, design, and character. 

Address | 50 South Pointe  Dr #1104  map it

Property Type | Condominium
Year Built | 2008
Living Area | 1,491
Bedrooms | 2
Bathrooms | 2.5
Waterfront | Y

Download a full description (PDF):

50 S Pointe #1104 (Right click the link and choose “Save link as”)

South Beach Short Sale

PRICE : $120,000 **PENDING SALE**

Description | Reduced by more than half the original price, this is the perfect answer to get away from the cold winters up North.  Located in the heart of South Beach within walking distance to Flamingo Park, Lincoln Road, Espanola Way, and the beach, why wouldn’t you snatch this up?  Call today for more information on this short sale.

Address | 536 14th Street #101  map it

Property Type | Condominium
Year Built | 1925
Living Area | 520
Bedrooms | 1
Bathrooms | 1
Waterfront | N

Download a full description (PDF):

536 14th Street #101 (Right click the link and choose “Save link as”)

 

Realtor Denial Syndrome

Yesterday, I read two different blogs in regard to disclosing of number of days that a property has been on the market. One author is convinced that less transparency in real estate is what is necessary to “protect sellers,” while the second author stated that according to Altos Research, Miami has the highest average days [172] on the market out of all the top metropolitan areas in the country.

To the author of “Posting Days On Market Unfair To Sellers,” I say give up your license and find a new profession. We NEED more transparency in real estate and trying to withhold important information from buyers is the last thing we should be doing.

In regard to Miami having the highest average days on the market, we have certainly had an increase in the average number of days on the market. Which market hasn’t? However, based on recent statistics provided by the Southeast Florida MLS, the data is very different to what Altos Research is publishing. The following closed sales statistics are for Miami-Dade County during the last 30 days, from October 11, 2008, through November 11, 2008:

• Condominiums/Townhomes: 448 closed sales, average number of days on the market = 126
• Single Family Homes: 469 closed sales, average number of days on the market = 108

David Knox, of David Knox Productions in Minneapolis, has termed the new seller disorder “PDS” or Price Denial Syndrome. I think that he brings up a very valid point as it also applies to real estate practitioners, particularly here in Miami. I think that the majority of realtors do not “say it like it is” to their clients. They are too concerned with obtaining the listing and then dealing with the high price later. 

In a declining market, this “Realtor Denial Syndrome” and lack of responsibility will have a direct effect on the results. Buyer interest is always at its peak when the property is just listed, so pricing it too high will turn buyers away. Additionally, if you are so overpriced that you are constantly making price reductions, buyers will sit on the sideline waiting for further price decreases. Furthermore, if you are priced too high, many people will just consider your price unrealistic and not even contact you.

The bottom line is that property that is overpriced is simply not going to sell in a declining market, and this responsibility rests directly on the shoulders of the listing agent. Blaming the seller suffering from Price Denial Syndrome is just an excuse.

Miami Is Flying High

So you think that the local economy is depressed and you do not see any improvement on the horizon? It all depends on what information you are tracking and which segment of the Miami economy you are considering.

Let’s consider the latest data provided by the U.S. Department of Commerce and Office of Travel and Tourism Industries on international visitation to Miami:

• We ranked SECOND in the nation, behind New York City, in total number of visitors.
• Year-to-date through August 2008, with over 2 MILLION international visitors, we are up by 10% over the same period in 2007.
• The top ten tourist generating countries to the U.S. - Canada, Mexico, United Kingdom, Japan, Germany, France, South Korea, Italy, Brazil and India.

The Miami tourism economy is certainly alive and kicking. During the first six months of 2008, with an average stay of 5.85 days, overnight visitors in Miami spent $17.1 billion in direct expenditures. If you are looking for foreign real estate buyers, spend your marketing dollars wisely and make sure to focus your efforts and dollars on our feeder markets.

Miami Short Sales - Know the Law

A few weeks ago I wrote a brief introduction to short sales titled Short Sales 101. As a buyer in today’s Miami real estate market, it is essential that one become an expert to navigate the challenging, and at times, perilous seas of short sales.

This is an example of a typical scenario that I worked on recently, and one in which there was plenty of questionable, unethical and illegal activities. Here is a short version of what transpired:

1. After an exhaustive search for a “steal” in Coral Gables, my client, the buyer, decided that he loved a single family home that was listed as a short sale. He instructed us to make an offer at $1.8 million.
2. The seller’s agent, upon receipt of the offer, disclosed to us that the buyer had engaged a “loss mitigation” expert to handle the deal. When asked about this individual the listing agent did not know  this “expert’s” role or how they were to be compensated.
3. The following day, the contract was accepted and returned with the buyer’s name altered to that of the “loss mitigation expert” along with a limited power of attorney.
4. We contacted the “expert” to discuss our concerns over the power of attorney and questioned how they were to be compensated. He stated that ”the seller tried to handle this himself and he could not get it done with the lender,” and “he is too busy to deal with his own property,” and “there is no problem as I have the authority to legally bind the seller,” and “don’t worry about compensation, i have this worked out with the seller on the side!” Say what?
5. Following many further heated discussions to determine what is really going on the deal was exposed. The “expert” had an agreement with the seller to get paid a $15,000 “loss mitigation fee” at closing [on the HUD] and had his own purchase contract in with the lender to purchase the property at a lower price. He would then close in double escrow, pocket the difference of around $150,000 plus the loss mitigation fee.
6. You can only imagine my next conversation with the “expert,” who was essentially asking my client to pay more than what the lender was willing to accept, and swindle the new lender, existing seller and buyer all at the same time. Does this sound familiar?
7. Upon our clear objection to such a scheme, the “experts” next offer was to be paid just a straight real estate commission instead of the loss mitigation fee. 
8. As such, we immediately informed our client that he should cancel the contract and walk away from the deal. Additionally, that we were not willing to be party to the transaction. The buyer signed the release and escrow monies were returned.

This leads me to my next point. It is important to be aware and knowledgeable of the new Florida law titled Foreclosure Rescue Fraud Prevention Act, which took effect on October 1, 2008. This law protects homeowners who face the threat of foreclosure from individuals who would prey upon them, including the payment of any upfront fees to mitigate any loss.

The flood of Miami short sales has no end in sight. You need to be motivated and willing to do the work. To help navigate the way for you in buying a short sale property in Miami, please contact Ross now at info@miamiangelproperties.com or call 305.673.5300.