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Location: Miami (prev. NY, Atlanta, SF, OC and San Diego)
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Reputation: 6685
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Saw a beautiful unit at a building I like in Brickell last week, though ridiculously overpriced for now based on recent comps….without starting negotiations, the sellers agent claims that "luxury buildings have the ability to defeat the market because of the unique buyers who understand what they are buying" (yeah, sure--save your bullcrap for some moron still living in San Diego....if that's the case, why was a person able to purchase a unit 4 floors higher in the same exact location of the building for $400K less than they are currently asking for this unit ??...so much for that theory). I also ran into a person whom I thought was the owner of that unit, at the gym, who was present during the viewing last week. Turns out she is a renter and she told me her lease runs through November with a clause stating she cannot be kicked out before then. Very surprising the sellers agent did not mention this.
An owner at another unit in the same building has cancelled a viewing for a second time and requested a showing after April 2....tell you what, get back to me when you are serious about selling.
2 conclusions:
1. Seems as though owners are not that motivated or serious to sell and now I understand why units at this building are on the market 6 months, 1 year, or longer. Very strange way of doing business compared to other states I have conducted real estate transactions.
2. If and when I make an offer, I am going to insist on a 45-60 day escrow period to give my lender and escrow attorney more than ample time to review pending litigation, building defects, financial health of the property/reserves, adjacent future building projects and permits etc. given how nonchalant/honest people in Miami are when it comes to disclosures and withholding information.
It will be a pleasure making a lowball offer to an owner in another 6 - 12 months who seems to think “this time it’s different” and that Miami is immune to further corrections at a time when (1) rates are rising (JP Morgan Chase is calling for another 4-6 hikes over the next 18 months), (2) LATAM buyers are in hibernation (3) high season will be over in a month with the slower summer selling season approaching, and (4) there is an inventory glut with more to come on market…..even my extremely wealthy friends in Palm Beach, who have a second house for sale in Jupiter for $37.9M, have stated sales of homes in Palm Beach have stalled and the last time that happened was in 2008 at the peak of the market (and we know how that turned out--if that market is not immune to corrections, no market is).
BTW...is it common for the owner and/or resident to be present during viewings?...almost all have been at the viewings I have gone to. It was quite common for the owner to leave the property in other states I have lived when someone came over to view their property with an agent present...is it because of the high distrust level in Miami and paranoia of something being stolen from the property??...you folks definitely do things differently here.
Last edited by elchevere; 03-21-2017 at 02:33 PM..
Saw a beautiful unit at a building I like in Brickell last week, though ridiculously overpriced for now based on recent comps….without starting negotiations, the sellers agent claims that "luxury buildings have the ability to defeat the market because of the unique buyers who understand what they are buying" (yeah, sure....if that's the case, why was a person able to purchase a unit 4 floors higher in the same exact location of the building for $400K less than they are currently asking for this unit ??...so much for that theory). I also ran into a person whom I thought was the owner of that unit, at the gym, who was present during the viewing last week. Turns out she is a renter and she told me her lease runs through November with a clause stating she cannot be kicked out before then. Very surprising the sellers agent did not mention this.
An owner at another unit in the same building has cancelled a viewing for a second time and requested a showing after April 2....tell you what, get back to me when you are serious about selling.
2 conclusions:
1. Seems as though owners are not that motivated or serious to sell and now I understand why units at this building are on the market 6 months, 1 year, or longer. Very strange way of doing business compared to other states I have conducted real estate transactions.
2. If and when I make an offer, I am going to insist on a 45-60 day escrow period to give my lender and escrow attorney more than ample time to review pending litigation, building defects, financial health of the property/reserves, adjacent future building projects and permits etc. given how nonchalant/honest people in Miami are when it comes to disclosures and withholding information.
It will be a pleasure making a lowball offer to an owner in another 6 - 12 months who seems to think “this time it’s different” and that Miami is immune to further corrections at a time when (1) rates are rising (JP Morgan Chase is calling for another 4-6 hikes over the next 18 months), (2) LATAM buyers are in hibernation (3) high season will be over in a month with the slower summer selling season approaching, and (4) there is an inventory glut with more to come on market…..even my extremely wealthy friends in Palm Beach, who have a second house for sale in Jupiter for $37.9M, have stated sales of homes in Palm Beach have stalled and the last time that happened was in 2008 at the peak of the market (and we know how that turned out--if that market is not immune to corrections, no market is).
BTW...is it common for the owner and/or resident to be present during viewings?...almost all have been at the viewings I have gone to. It was quite common for the owner to leave the property in other states I have lived when someone came over to view their property with an agent present...is it because of the high distrust level in Miami and paranoia of something being stolen from the property??
I'm very fond of Miami, but the fact is when it comes to RE and rents, the owners are exceptionally greedy (many in South Florida, other than the practical realists, are).
There is a glut of luxury condos in Miami, and the atmosphere for foreigners buying in the US is getting quite chilly what with a president encouraging travel bans and xenophobia. Most of the buyers in Miami have been foreigners and that is what fueled the boom. This will probably ebb with the new environment in the US of general hostility towards foreigners--it's putting some off.
You are correct - owners are not usually at the showings. Have no idea why they would be if they have a realtor. Hang in there--prices will drop, and for those who will not sell while they can--they will end up under water and renting their places out. You don't want to buy at the peak anyhow.
"...Stephen Cohen, a realtor and investor specializing in the South Beach luxury condo market, is biding his time. By this time next year, the 15-year real estate veteran expects the average price for a condo in Miami Beach’s hottest neighborhood to drop by more than 40 percent than it is today..."
Location: Miami (prev. NY, Atlanta, SF, OC and San Diego)
7,410 posts, read 6,553,115 times
Reputation: 6685
thanks....yeah, I am not in a rush to catch a falling knife....and while I prefer not to rent, even a 'small' 5% drop in the price of units I am looking at will more than pay for a full year's rent...frankly, I do hope there are 4-6 rate hikes as that will effect price--I pay property tax on value of the property, not interest rates. Biding my time like a snake in the grass....the only clock I am up against is my retirement clock--hoping to buy before I retire (voluntarily or forced with severance package) within next 12-30 months as I plan on financing half the purchase price (will be considerably easier to obtain a mortgage while still employed with a steady income stream).
Last edited by elchevere; 03-21-2017 at 02:18 PM..
Yeah Miami is bizarre and sellers of "luxury" or high-end Real Estate are extremely arrogant here. If you read a lot of recent articles you'll see people are dropping their prices by significant amounts on luxury listings.
As mentioned above, the prices are already beginning to flatten, and will likely drop a little, though it probably won't go nuts like 2008/9. The general feeling of the RE environment right now in Miami is something like the late 90's/early 2000's. It's true that foreign buyers have gotten a little spooked with the current administration, however, they're more spooked by the rising prices IMO.
Home prices in lower income areas are still rising as investors are still finding deals in these areas, and some wholesalers that bought foreclosures during the crises are unloading their inventory, often at discounts.
As for owners being at showings, it depends on the circumstances but generally an owner shouldn't be there unless they are also the listing agent (which can often be the case). I have seen a lot of properties in Miami and Broward, and only once was the owner present, and it was because he was the listing agent.
Sometimes owners stay, sometimes they leave. Sometimes agents insist they leave and others are more non-chalant.
The reason the listing you liked is on the market so long at a higher price is because they have that tenant in place, so why rush? Owners do this all the time. They rent it for top dollar, and then list it at a high price and let it sit hoping they get 'their price'. Unless they had something come up in life (job transfer, termination, divorce, kids moved away, health, etc.) they won't get motivated until the renter moves out and they start paying $1000+ in HOA fees, utilities, and property taxes.
BTW, in Florida, a lease trumps a sale, so unless the tenant signed a separate 'kick-out' clause, the tenant will remain after you buy unless you or the owner buys them out or pays them to move.
"...Stephen Cohen, a realtor and investor specializing in the South Beach luxury condo market, is biding his time. By this time next year, the 15-year real estate veteran expects the average price for a condo in Miami Beach’s hottest neighborhood to drop by more than 40 percent than it is today..."
"A downtown condo under $750,000 will be “unprecedented” by 2025, the author of the report claims."
So its hard to guess what the market will look like in 10-15 years. Politics, Climate Change, Economy, etc. Could all drive it up or down.
its been a great time to buy inexpensive condos in Downtown Miami lately...a few years ago, you couldn't get a small loft @ Loft II downtown for under $200k and just last year there were 4-5 for the $185-$190k range. They rent for about $1500-$1650/month and are in high demand before the college semester begins in August with all the MDC students next door.
Hard to imagine that place going for $700k in 10 years though!
Location: Miami (prev. NY, Atlanta, SF, OC and San Diego)
7,410 posts, read 6,553,115 times
Reputation: 6685
That's kinda what I figured..and anything priced $100K or more above recent comps suggests to me there is a good chance they have a tenant and/or are not serious sellers (unless some oligarch comes along and needs to launder his money by overpaying). I have only been here 3 months now but am quickly figuring out the game...give me a shout when you are in Brickell or SoBe via PM.
Quote:
Originally Posted by Marc Middleton
Sometimes owners stay, sometimes they leave. Sometimes agents insist they leave and others are more non-chalant.
The reason the listing you liked is on the market so long at a higher price is because they have that tenant in place, so why rush? Owners do this all the time. They rent it for top dollar, and then list it at a high price and let it sit hoping they get 'their price'. Unless they had something come up in life (job transfer, termination, divorce, kids moved away, health, etc.) they won't get motivated until the renter moves out and they start paying $1000+ in HOA fees, utilities, and property taxes.
BTW, in Florida, a lease trumps a sale, so unless the tenant signed a separate 'kick-out' clause, the tenant will remain after you buy unless you or the owner buys them out or pays them to move.
Saw a beautiful unit at a building I like in Brickell last week, though ridiculously overpriced for now based on recent comps….without starting negotiations, the sellers agent claims that "luxury buildings have the ability to defeat the market because of the unique buyers who understand what they are buying" (yeah, sure--save your bullcrap for some moron still living in San Diego....if that's the case, why was a person able to purchase a unit 4 floors higher in the same exact location of the building for $400K less than they are currently asking for this unit ??...so much for that theory). I also ran into a person whom I thought was the owner of that unit, at the gym, who was present during the viewing last week. Turns out she is a renter and she told me her lease runs through November with a clause stating she cannot be kicked out before then. Very surprising the sellers agent did not mention this.
An owner at another unit in the same building has cancelled a viewing for a second time and requested a showing after April 2....tell you what, get back to me when you are serious about selling.
2 conclusions:
1. Seems as though owners are not that motivated or serious to sell and now I understand why units at this building are on the market 6 months, 1 year, or longer. Very strange way of doing business compared to other states I have conducted real estate transactions.
2. If and when I make an offer, I am going to insist on a 45-60 day escrow period to give my lender and escrow attorney more than ample time to review pending litigation, building defects, financial health of the property/reserves, adjacent future building projects and permits etc. given how nonchalant/honest people in Miami are when it comes to disclosures and withholding information.
It will be a pleasure making a lowball offer to an owner in another 6 - 12 months who seems to think “this time it’s different” and that Miami is immune to further corrections at a time when (1) rates are rising (JP Morgan Chase is calling for another 4-6 hikes over the next 18 months), (2) LATAM buyers are in hibernation (3) high season will be over in a month with the slower summer selling season approaching, and (4) there is an inventory glut with more to come on market…..even my extremely wealthy friends in Palm Beach, who have a second house for sale in Jupiter for $37.9M, have stated sales of homes in Palm Beach have stalled and the last time that happened was in 2008 at the peak of the market (and we know how that turned out--if that market is not immune to corrections, no market is).
BTW...is it common for the owner and/or resident to be present during viewings?...almost all have been at the viewings I have gone to. It was quite common for the owner to leave the property in other states I have lived when someone came over to view their property with an agent present...is it because of the high distrust level in Miami and paranoia of something being stolen from the property??...you folks definitely do things differently here.
Pretty typical that an owner of a condo that's rented out will have it overpriced. They really don't have a lot of incentive to actually sell, because they're continuing to earn money from the rental. And yeah, ideally the tenant would be out during the showings, but there's not really any way to require them to be out. However, I always use it as a good opportunity to find out relevant information. The tenants tend to be more forthcoming about condition issues than actual owners.
BTW, in Florida, a lease trumps a sale, so unless the tenant signed a separate 'kick-out' clause, the tenant will remain after you buy unless you or the owner buys them out or pays them to move.
FWIW, that's a basic tenet of contract law and would be applicable anywhere in the country.
FWIW, Miami's market peaked way before 2008. I want to say that 2005 was the peak but I could be wrong. By 2008, Miami's market had already fallen.
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