Luxury real estate 1.5 to 3.5 Million US - bubble? (Miami, Tampa: second mortgage, loans)

[oki]

Dear All,

Appreciate any outlook on real estate prices in the luxury -villa and penthouse- segment in Florida in general and more specific in Boca Raton.

Understood from various threads that this market does not follow immediately the general tendency in Florida of the subprime "infected market". However, with a delay it should - but to which extend and when? Thanks in advance

[MrTudo]

I owned XX Squire Dr, Wellington. I paid 345K for the house and put 200K in renovations including an 80K kitchen. That was in 2000. Listed it for just about a YEAR and finally sold it for less than 450K losing 100 grand in the process plus the monumental expenses that place had. Listed for a year by the way with only the ONE OFFER. Taxes were 3 grand and change. Homeowners was 3 grand and change with a reduced policy for fire as there's no fire station within a certain distance so the insurance company boinked me because of that OR I could have paid Nationwide almost 8 grand for homeowners.

When the offer came in I was living in Asia. I JUMPED at the offer and sold it, swearing I would never do that again.

4 years later, places like Zillow showed the house including the upgrades to be valued at 1.3, 1.4 Million. Are you kidding me? Again , remember I could not get an offer when the house was listed at 595K, then 550, 525, 499, then finally when I lowered it to 475K a doctor ( who couldn't afford it by the way but that's another story ) and his wife made an offer of 452K and I grabbed it. To think this house would find a buyer at over a mil is really something.

If course from a financial sense I wish I held on to it as I would have most definitely sold it later. But I doubt a real buyer would pay anywhere near that.

If you were to buy that house now, I would estimate the prop taxes to be several times greater than what I paid as well as the homeowners. Can we say taxes would be close to 15-20K a year now? And Homeowners ins maybe close to that? Who the heck is going to pay that to be in Wellington? Nice to show off maybe, but what about being realistic?

And next door, Royal Palm Beach whose name is an oxymoron. Half milliion and up for some of those places? Cmon.

I bought there after selling in West Boca so while I'm not specifically addressing your question, it's close enough I think. Hope thats helpful to you.

[firemed]

Zillow shows my house valued at 1.8 Million. I hope I don't get taxed for that. But if someone wants to pay me that much feel free to do so.

[TampaKaren]

I'm sorry to say that $1.5-$3.5 million isn't classified as luxury any more. You can easily find million dollar property in every major Florida city. The term luxury has moved into the multimillions. Tiger Woods $38 million purchase for a 10-acre estate in Jupiter has placed the city on the radar of desireable places to live.

Penthouses in your target range today in the Tampa Bay area are going to be in Clearwater, St. Petersburg, and Indian Shores. Clearwater has the most under development and has been nicknamed Billion Dollar Beach.

[Jareb]

On A-1-A in Southern Indian River County {Vero}, there are several new developments going up with 2 mil + houses being constructed. They are selling readily. This is a beautiful area with pristine beaches. The slow market seems to be in $450k- $750K. Most homes above and below that price point are doing OK, although they are on the market a bit longer than 2004-05.

[oki]

Thank you for all your input. Will have a look in Febuary and see what is there.

[Wild Style]

Originally Posted by oki

Dear All,

Appreciate any outlook on real estate prices in the luxury -villa and penthouse- segment in Florida in general and more specific in Boca Raton.

Understood from various threads that this market does not follow immediately the general tendency in Florida of the subprime "infected market". However, with a delay it should - but to which extend and when? Thanks in advance

From what I have read, there are Prime loans (a LOT of them) floating around with adjustable rates. Some homes were bought out right in this fashion and others were used as second mortgages, basically people cashing in on their equity. The article I read, said this stuff should start to mature next year and continue for another two years or so after that. If this is true, the sub prime was just a warm up lap. I don't know if any of this information is true or accurate though, as i have not started to really sit back and research it yet.

[rkumar3]

Anything on Palm Beach Islands (think expen$ive) has not dropped at all. So the high end market is holding pretty firm even in the downturn. For most part anything over a couple of millions on the east coast along beach is very resilient to market downturn since more than 70% of these deals are being done CA$H so the buyers/sellers are not being effected by the sub-prime mortgage downturn.

[TriMT7]

Originally Posted by TampaKaren

The term luxury has moved into the multimillions. Tiger Woods $38 million purchase for a 10-acre estate in Jupiter has placed the city on the radar of desireable places to live.

That purchase was made in the town of Jupiter Island, which is just North of Jupiter in Martin County.

It's actually the "wealthiest town in America", but it doesn't show up on a lot of lists that do "most expensive zipcode" because it shares its zip code with bordering town of Hobe Sound.

[AONE]

Like any market there are different motivations to sell even in high end RE. While the 1.5M market is pretty solid. once in a while I have found some large discounts available. I was looking in the Miami area for some one and found 20M homes I could get in the 14M range but then some were priced at 32 and were selling at 31M. One I know was priced at 120M and they turned down 90M. Its all about motivation. I have been fortunate and been able to find the deals people want pretty much through out Florida so I know they are there, just hard to find sometimes. Good luck.
Ken Anderson