Can it get any worse?
Auction on condos reveal 50% price reduction on condo.
Posted: September 27th, 2007 under Uncategorized.
Comments: 4
Comments
Comment from QT
Time: September 27, 2007, 9:47 am
The story by CBS4 was not completely accurate. First off, the bid price was not the selling price, because you have to add in the 10% buyer’s premium. Secondly, his previously sold prices are also inaccurate. I’ll list some examples below.
The reporter only stayed for 30 minutes into the auction, so he missed 75% of it. He was also probably fed alot of BS from the developer who still has no idea what’s going on with the Miami Condo Market. Four units failed to get bids (b/c minimum starting bid was too high), and seven were rejected the following day. So out of 20 units, he sold only 9, most likely because he was contractually obligated to with the Auction House. Developer refused to let the auction run it’s course and it failed because of that. Go to http://blog.miamicondoinvestments.com/ to see video of the auction and see how the auctioneer changed the rules mid-auction.
Examples:
LINE 1B - Lowest sold B.A. - $422,000
LINE 1B - SOLD @ auction - $324,500
LINE 02 - Lowest sold B.A. - $235,000
LINE 02 - SOLD @ auction - $220,000
LINE 05 - Lowest sold B.A. - $321,345
LINE 05 - SOLD @ auction - $269,500
LINE 06 - Lowest sold B.A. - $242,000
LINE 06 - SOLD @ auction - $192,500
LINE 07 - Lowest sold B.A. - $424,000
LINE 07 - SOLD @ auction - $324,500
LOFT 106 - SOLD B.A. - $260,000
LOFT 107 - SOLD @ auction -$176,000
The deals were good, but not what was portrayed in the media. I believe this was the reason for the lack of bidding. The developer, Alex Redondo, refused to let the auction run its course and start at low starting bids.
There was also talk before the auction that he still owned an additional 19 units at the Platinum Condominium in addition to the 20 up for auction. One REA told me he expected only 9-10 units to sell and that the developer planned to rent the rest along with the other 19. He believed the auction was a marketing ploy to get free advertisement for his building. I didn’t believe him then, but I do now. In Tuesday’s Miami Herald, Alex Redondo stated he plans to rent out the units that did not sell.
Comment from Miguel
Time: September 27, 2007, 10:11 am
Great post QT. Thanks for the info! Very helpful.
Comment from HousingPanicIsHere
Time: September 27, 2007, 6:53 pm
A lot of the people who bought condo’s in Miami did so speculating that they could sell these units to baby-boomers retiring to florida from Michigan.
The problem is this…The baby boomers are selling houses like this:
5 Bed, 3.5 Bath
2,500 sq feet.
$359,900
4 bed, 4.5 Bath
3,249 Sq feet
$375,000
As you can see, Why would someone who is used to living in these luxurious mansions want to buy a 1 bedroom 800 sq foot place for the same price.
The bubble in Miami was so huge and went beyond fundamentals so much that it is almost incomprehensible.
I expect prices to continue to crash until we see 2000 prices again. And if you all remember, 1 Bedroom Condo’s in Miami in 2000 went for about 80,000, 110,000, Maybe even 125,000 for a really nice one.
Don’t close on the unit!
Comment from Jack bellotti
Time: October 15, 2007, 9:18 pm
Here is my favorite 50% off crash in Florida. “youve got to be kidding me dude”. lmao
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