Peter Zalewski's Blog

Downtown Miami Land Trades For $39 Million

Wed, 23 Sep 2009 16:55:09 GMT

A Boca Raton company has paid $39 million for nearly 300,000 square feet of vacant land situated on nine parcels in Downtown Miami, according to a new report from the Condo Vultures® Bulk Deals Database.

The newly created PWV Group 1 Holdings LLC, with Gary N. Gerson as registered agent, paid $130 per square foot on Sept. 21 for 27 lots located a block west of four new highrise condo towers on Downtown Miami's Biscayne Boulevard, according to CondoVultures.com research.

The seller, six corporations controlled by AI Holdings (USA) Corp with Tamir Kazaz as chief financial officer, paid a combined $32.3 million, or $108 per square foot, for the land, which was acquired between August 1999 and March 2006, according to Miami-Dade County records.

The powerful Africa Israel fund controls AI Holdings (USA) Corp, according to a notarized document recorded with the deed.

"The purchase price works out to a gross premium of 21 percent for the seller minus expenses, and there have been many of them," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "For the buyer, the purchase price is 8 percent less than today's assessed value of $41.6 million, or $139 per square foot, for property tax purposes."

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Regulators Shut 2 Florida Banks, Lose $140 Million

Tue, 11 Aug 2009 14:03:24 GMT

Regulators have seized three bank, two headquartered in Florida and one in Oregon, resulting in an estimated loss of $185 million to the Federal Deposit Insurance Corp.

First State Bank, a Sarasota, Fla.-based institution with assets of $463 million and deposits of $387 million, was shuttered on Friday, Aug. 7, producing a loss of $116 million to the FDIC's Deposit Insurance Fund. The FDIC ensures deposits up to $250,000 per account.

On that same day across town regulators were seizing the Community National Bank of Sarasota County, with assets of $97 million and deposits of $93 million. This failure resulted in a loss of $24 million to the FDIC's Deposit Insurance Fund.

The deposits of both Sarasota banks were assumed by Stearns Bank of St. Cloud, Minn. This is not the first time that the FDIC has worked out a deal with Stearns Bank to assume the deposits of a failed institution.

In June, Stearns Bank took over the deposits of the failed Minnesota institution Horizon Bank with assets of $87.6 million and deposits of $69.4 million.

For the year, regulators have seized six Florida-based institutions with combined assets of $14.2 billion and deposits of $9.8 billion. The six Florida bank failures of 2009 have resulted in an estimated loss of $5.4 billion, according to CondoVultures.com research based on FDIC data.

Florida ranks fourth in the country in 2009 for the greatest number of bank failures behind Georgia's 16 closings, Illinois' 13 closings, and California's eight closings, according to the Bal Harbour, Fla.-based consultancy Condo Vultures®.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

FDIC To Open Failed Bank Office Next Month In Florida

Fri, 07 Aug 2009 15:13:33 GMT

Federal regulators are staffing up for next month's scheduled opening of what is poised to be a 500-person bank failure and asset sales office in Florida.

The Federal Deposit Insurance Corp, which insures individual accounts up to $250,000, plans to open a "temporary" east coast office on Jacksonville's south side of town in September.

"Throughout its history, the FDIC has used these offices to keep temporary asset resolution staff closer to the concentration of failed bank assets they oversee," according to an FDIC statement. "As the work diminishes, the temporary satellite offices are closed."

Industry watchers expect a surge of bank failures to occur in Florida in the upcoming months as the sunshine state is one of the hardest hit real estate markets yet only six of the 94 FDIC institutions to fail since January 2008 have been headquartered in Florida.

By comparison, neighboring Georgia leads the nation in bank failures with 21 seizures, or 22 percent of the overall total closings, since 2008, according to Condo Vultures® LLC research based on FDIC data.

The FDIC's satellite office is viewed by many industry watchers as further proof that a series of Florida bank failures is imminent in the upcoming months. The FDIC is not dispelling the speculation.

"You put the office as close to the bulk of your work," FDIC spokesman David Barr told CondoVultures.com.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Free First-Time Home Buyers Seminar On Tuesday

Mon, 27 Jul 2009 14:53:33 GMT

Individuals planning to attend Tuesday's First-Time Home Buyers Dos and Don'ts seminar are encouraged to register as soon as possible for the free event given the strong response.

With the $8,000 first-time home buyers federal tax credit scheduled to expire in November, many purchasers are scrambling to figure out how to qualify for the Obama administration incentive before the offer disappears.

Many of the answers will be provided at Tuesday's Condo Vultures® seminar on what every first-time home buyer needs to know before purchasing a deeply discounted residence in South Florida.

"The combination of the Obama tax credit and decreasing inventory in the $350,000 and under category is making this a competitive time for buyers in South Florida, especially on product located in coastal areas," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Bulk Deal Closes At 94% Discount In South Florida

Sun, 26 Jul 2009 21:42:35 GMT

A South Florida private equity group purchased 51 new, oceanfront condo-hotel units in the luxury One Bal Harbour complex at $63 per square foot, a discount of 94 percent off of the $1,100 per square foot average recorded sales price, according to a new report from Condo Vultures® LLC.

Elcom Condominium LLC with Jorge E. Arevalo and Thomas D. Sullivan in South Miami paid $2.6 million for 41,047 square feet of saleable space in the 124-unit Regent Hotel tower located on the west side of the 26-story, trophy complex in exclusive Bal Harbour.

Bankrupt residential development company WCI Communities, Inc., based in Bonita Springs, Fla., was the seller of the condo-hotel with 106,051 saleable square feet. WCI's chief restructuring officer Jonathan Pertchik signed the deed.

"Nearly 60 percent of the One Bal Harbour condo-hotel project closed at an average price of $1 million per unit before Elcom Condominium stole the remaining 40 percent of this high-end project for $51,000 per unit," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Condo-hotels are not for everyone but at $63 per square foot one has to think there are buyers for this quality of product at that price."

This is the eighth bulk deal - and second in Bal Harbour - of new or significantly improved residential product to close since July 2008, according to the Condo Vultures® Bulk Deals Database. Four deals have closed in Greater Downtown Miami and an additional two transactions have closed in West Palm Beach.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Bank Foreclosing Oceanfront Site Seized By Regulators

Thu, 23 Jul 2009 02:21:53 GMT

Federal regulators have seized the South Dakota bank foreclosing on a nearly $12 million oceanfront condo development site in Greater Miami Beach.

BankFirst of Sioux Falls, S.D., was shut on Friday, July 17, less than a month after the 14-year-old institution filed to foreclose on a 1.1-acre site development site located between Collins Avenue (State Road A1A) and the Atlantic Ocean.

A 43-story tower featuring one unit per floor is proposed for the site located in the northeast Miami-Dade County city of Sunny Isles Beach, according to a CondoVultures.com article.

The Federal Deposit Insurance Corp. estimates losses of $91 million from BankFirst's failure. Prior to shuttering the two-branch bank with assets of $275 million, regulators entered into a purchase agreement for BankFirst's $177 million loan portfolio to be acquired by Beal Bank Nevada in Las Vegas.

BankFirst filed the foreclosure action, also known as a Lis Pendens and/or Notice of Default, in Miami-Dade Circuit Court on June 17 seeking repayment of $11.7 million on a predevelopment loan originated in 2006, according to the Condo Vultures® Foreclosure Database™.

Originally purchased for $9 million, or $181 per square foot, in July 2001, the 49,830-square-foot development site is now assessed for tax purposes at $15.7 million, or $315 per square foot, by Miami-Dade County. BankFirst's loan was made at $235 per square foot.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Florida REOs Fall 16% In Q2 of 2009

Fri, 17 Jul 2009 16:30:00 GMT

Banks repossessed 16 percent fewer South Florida properties in the second quarter of this year than were seized during the same period a year ago despite an increased number of foreclosure filings in the tricounty region, according to a new report from Condo Vultures® LLC.

Lenders repossessed 5,992 properties in Miami-Dade, Broward, and Palm Beach counties between April and June of 2009 compared to seizing 7,098 properties in the second quarter of 2008. In 2007, lenders seized 2,167 South Florida properties in the second quarter, according to the report produced using court records.

"Government intervention - whether it be foreclosure moratoriums or mortgage modification programs - is the primary reason for the decrease in the number of repossessed properties," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "That being said, the number of foreclosure filings are back on the rise in the tricounty South Florida region. It is difficult to predict if the foreclosure actions will ultimately end up as Real Estate Owned by banks known as REOs or simply nonperforming mortgages."

More than 52,000 foreclosures have been initiated in South Florida in the first half of the year, putting the tricounty region on pace for more than 100,000 actions in 2009.

By comparison, lenders filed about 38,000 foreclosures actions in the first six months of 2008 and more than 75,000 actions for the year. In 2007, banks filed nearly 8,000 actions in the first half of the year and more than 32,000 for the year, according to data from the Condo Vultures® Foreclosure Database™.

Another factor contributing to the decreasing number of bank repossessions in South Florida despite the increasing number of foreclosure filings is the lengthy legal process necessary before a lender can repossess a residence.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Dakota Bank Files $12M Foreclosure On Oceanfront Site In Miami Beach Area

Thu, 16 Jul 2009 14:46:46 GMT

A $12 million foreclosure action has been launched against an oceanfront development site in Sunny Isles Beach that is to house a proposed 43-story luxury condominium tower featuring only one unit per floor, according to the Condo Vultures® Foreclosure Database™.

BankFirst of Sioux Falls, S.D., filed the foreclosure action, also known as a Lis Pendens and/or Notice of Default, in Miami-Dade Circuit Court seeking repayment of $11.7 million on a predevelopment loan originated in 2006. BankFirst's loan is secured by a 1.1-acre development site located between Collins Avenue (State Road A1A) and the Atlantic Ocean.

Originally purchased for $9 million, or $181 per square foot, in July 2001, the 49,830-square-foot development site is now assessed for tax purposes at $15.7 million, or $315 per square foot, by Miami-Dade County. BankFirst's loan was made at $235 per square foot.

"This is not the first oceanfront development site to go into foreclosure in Greater Miami Beach," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "A courthouse auction is scheduled for September on a slightly larger development site also located between Collins Avenue and the Atlantic Ocean. The judgment amount on that site, however, is twice as much."

A few miles south on Collins Avenue, a 1.4-acre oceanfront property zoned for a high-rise condo tower in Sunny Isles Beach is scheduled to be auctioned off in the next 60 days to the highest all-cash bidder, according to CondoVultures.com.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

$40 Million For Chinese Drywall Repairs Set Aside By Miami Developer

Tue, 14 Jul 2009 15:20:39 GMT

Early estimates in response to dozens of lawsuits have determined that defective Chinese drywall is present in at least two percent of the 20,000 single-family houses developed in Florida between 2006 and 2007 by Miami-based homebuilder Lennar Corp.

The number of defective residences may grow even higher as Lennar's research has just begun to determine how many other homes the Miami company built in earlier years in Florida that contain Chinese drywall, which causes metal corrosion, foul smells, and physical irritation to some individuals.

Lennar initiated the research for Chinese drywall in response to 43 lawsuits from homeowners that have been filed against the homebuilder in state and federal courts.

"The company is currently unable to reasonably estimate its future exposure relating to defective Chinese drywall," according to Lennar's second quarter filing with the Securities and Exchange Commission. "However, the company is continuing its investigation of homes it delivered during the relevant time period in order to determine whether there are additional homes, not yet inspected, with defective Chinese drywall and resulting damage."

Based on the initial findings, Lennar has set aside nearly $40 million to repair about 400 single-family houses in Florida with the defective drywall but is prepared to increase that amount based on future findings, according to the SEC filing.

Florida is estimated to have about one-third of the 100,000 single-family homes constructed nationwide with defective Chinese drywall, according to CondoVultures.com.

This estimate does not include defective Chinese drywall that may have been used to build out some of the high-rise condo towers that were developed throughout the state during the boom years of 2003 to 2007.

At least one high-end condo tower in Greater Miami is known to have defective Chinese drywall present and several other new skyscrapers are suspected of also having the defect present, said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report^TM for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami^TM and Miami's Great Condo Crash: A Chronicle of the Boom and Bust^TM are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database^TM.

Copyright © 2009, Condo Vultures® LLC

$26 Million Oceanfront Site To Be Auctioned

Wed, 08 Jul 2009 14:44:42 GMT

A 1.4-acre oceanfront property zoned for a high-rise condo tower in Sunny Isles Beach is scheduled to be auctioned off in the next 60 days to the highest all-cash bidder at the Miami-Dade County Courthouse, according to Condo Vultures.com.

A final judgment amount of nearly $26.3 million, or $419 per square foot, was established for the property on July 6 by Miami-Dade Circuit Court Judge Ronald Dresnick.

If the borrower fails to satisfy the loan by the auction date, the 62,800-square-foot property with 300 feet of Atlantic Ocean access would be sold to the highest bidder who surpasses the final judgment amount.

"To purchase a property at the Miami-Dade County courthouse steps, a buyer must be able to pay the entire amount of the winning bid on the day of the auction," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "There aren't a lot of buyers with the wherewithal to close all cash that day but then again you never really know for sure in an international city like Miami."

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Interested in buying multiple units from developers or banks? Be sure to visit the Condo Vultures® Bulk Deals Database. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

4th Bulk Condo Deal Closes In Downtown Miami

Tue, 07 Jul 2009 17:46:46 GMT

A Miami Beach company headed by Jorge Mattos has purchased 21 units in the Marina Blue condominium tower in Downtown Miami for $5.69 million in an all-cash deal involving the project's former mezzanine lender, according to a new report from Condo Vultures® LLC.

A newly formed Florida corporation called 21 Marina Blue LLC with Mattos as the manager purchased 13 two bedroom units, seven one-bedroom units, and a three-bedroom penthouse for a blended price of $196 per square foot on a deal that was recorded on June 23, according to Condo Vultures® research.

Mattos is a business partner of Carlos Mattos who purchased 31 units for $6.1 million in mid-June at the 1060 Brickell condominium tower in Miami's Brickell Avenue financial district, according to a recent Condo Vultures® report.

Carlos Mattos' 1060 Brickell Apartments LLC paid $203 per square foot for four studio units, 22 one-bedroom units, and five two-bedroom units with a combined 29,913 square feet of livable space, according to Condo Vultures®.

"This is the second bulk deal to close in the Greater Downtown Miami area in the last month," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures. "Once again, the buyer is a private equity group with roots and investments in South Florida."

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Related Group Negotiates Return Of Unsold Condo Towers

Sat, 04 Jul 2009 01:42:08 GMT

The Related Group, the nation's largest condo tower developer, is attempting in the next two months to finalize plans to return thousands of unsold new units with debt of "roughly $1.5 billion" to the construction lenders, according to Miami news reports.

The admission comes just as the Related Group has agreed to relinquish ownership to its lenders of the remaining 381 unsold units in the 420-unit, 20-story CityPlace South Tower in Downtown West Palm Beach. Related had still owed about $119 million, or about 88 percent, of the original $134.7 million construction loan, according to South Florida news reports.

"We've had very good discussions over the last seven months with all of our lender syndicates," Related Group's chief operating officer Matt Allen told the Miami Daily Business Review. "Each syndicate is different. They have different goals they might want to achieve, and we expect in 60 days to have complete resolution and that resolution can carry many different fronts."

Related developed or converted dozens of highrises with several thousand units throughout Florida, ranging from the Apogee in Miami Beach's South of Fifth neighborhood to the Trump Hollywood in Southeast Broward County, the Oasis in Fort Myers on the Gulf of Mexico to the ICON Brickell complex in Greater Downtown Miami.

In Downtown Miami alone, the Related Group built during the condo boom about 5,550 units, of which the company is still in possession of more than 2,400 units, or about 44 percent, according to the Official Condo Buyers Guide to Miami™ published by Condo Vultures®.

Specifically in Downtown Miami, Related built seven projects with 12 towers and more than 5.8 million gross livable square feet. An eight project proposed for 495 units and 389,000 gross livable square feet was shelved before construction began, according to Condo Vultures®.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Downtown Miami Condo Closings Slow By Half In 2nd Quarter

Wed, 01 Jul 2009 13:45:51 GMT

The pace of new condo closings in Greater Downtown Miami slowed by half in the second quarter of 2009 to 2.7 sales per day, down from an average of 5.2 per deals day in the first quarter of the year, according to a new report from Condo Vultures® LLC.

Buyers purchased 246 units in the 60-block stretch of Greater Downtown Miami between April and June. In the two previous quarters, buyers closed on 466 new Downtown Miami units between January and March, and 441 units between October and December, respectively, according to the Condo Vultures® report based on the Official Condo Buyers Guide To Miami™.
"A majority of the second quarter closings occurred in three projects: Marina Blue, 1060 Brickell, and the south tower of Brickell on the River," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Price reductions were the common denominator triggering the increased closing activity in all three condo projects. With financing difficult to obtain in Downtown Miami, all-cash buyers are proving that they are ready to purchase if the price is right."

With the increased activity, Marina Blue - where a bulk deal occurred in December 2008 - is now 99.4 percent closed with only a handful of units of the 516-unit project still in the name of the developer.

The south tower of Brickell on the River is now 70.3 percent closed with less than 100 units in the 327-unit tower available.

At the 1060 Brickell condominium, the developer has closed nearly 350 units - 31 units of which closed in a bulk deal in June - out of 576 units for a sellout rate of 59 percent, according to the Condo Vultures® report.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Florida Average Discount Reaches 54%

Tue, 30 Jun 2009 15:10:02 GMT

Nearly 900 residences in the Vultures Database™ have closed in the first five months of 2009 at an average discount of $357,500, or nearly 54 percent, a dramatic change from the average price reductions of 44 percent in 2008 and 29 percent in 2007, according to a new report from Condo Vultures® LLC.

Buyers closed 232 single-family houses, condos, and townhouses in the tri-county South Florida region of Miami-Dade, Broward, and Palm Beach counties in May for a daily average of 7.5 transactions. In April, buyers closed an average of 7.0 properties per day. The running average in the first five months of 2009 is 5.9 closings per day on properties in the Vultures Database™, according to the report.

"Discount investors and first-time home buyers are having a noticeable impact on the coastal residential real estate market in South Florida," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Half of the transactions involving properties in the Vultures Database™ have closed in the last two months. We anticipate the pace will continue at the same level, if not stronger, throughout the summer if conditions remains the same."

In its third year of monitoring South Florida discounts, the Vultures Database™ is comprised of nearly 3,800 condos, townhouses, and single-family houses actively for sale east of Interstate 95 in Miami-Dade, Broward, and Palm Beach counties that have been reduced in price by at least 10 percent and/or $100,000.

Discounts are proving to be the single-most important factor in determining whether a property is sold or not. With conventional financing difficult to obtain, the majority of today's buyers are selectively purchasing with cash or the assistance of government-backed programs, such as the Obama $8,000 tax credit for first-time home buyers.

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Ft Lauderdale Inventory Down 30% In 7 Months

Mon, 29 Jun 2009 19:30:49 GMT

Resale residential inventory in the Greater Fort Lauderdale area is shrinking at a faster rate than is the case for the South Florida region, according to a new report from Condo Vultures® LLC.

Resale inventory in Broward County, where Fort Lauderdale, Hollywood, and Pompano Beach are located, is down 30 percent to nearly 26,000 single-family houses, condos, and townhouses in the last seven months dating back to Thanksgiving week.

By comparison, South Florida inventory is down 25 percent for the tri-county region. Resale inventory has fallen by 26 percent in Miami-Dade County, where Miami Beach, Coral Gables, and Aventura are located, and by 19 percent in Palm Beach County, where Boca Raton, Delray Beach, and West Palm Beach are located, according to the report created using Florida Association of Realtors data.

"Broward County is South Florida's middle ground in terms of location and price point between expensive Miami and more reasonably priced West Palm Beach," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "It is not uncommon for dual-income families to have one person working in the Miami area and the other in Broward and/or Palm Beach. In these situations, Broward is often times the place where the families ultimately decide to buy given the lower price compared to Miami."

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Short Sales Account For 31% Of South Florida Properties For Sale

Sat, 27 Jun 2009 18:01:05 GMT

BY WILLIAM BETANCOURT

There were a total of 83,445 residences listed for sale in South Florida as of June 12th, 2009. Of that, 25,814, or 31 percent are in some stage of the short sale process, according to a new report based on the Condo Vultures® Foreclosure Database™.

“The month of May proved to be busy at the courthouse recording office accounting for 1,899 new Lis Pendens filings in Miami-Dade County, 4,442 filings in Broward County, and 2,661 filings in Palm Beach counties, respectively,” said William Betancourt, a licensed Florida real estate agent and short sale specialist with Condo Vultures® Realty LLC. “The real story is the 2,866 filings in Miami-Dade, 4,223 filings in Broward, and 2,029 filings in Palm Beach in the previous month of April and what June has in store ending the second quarter with more distressed inventory. The spike isn’t likely to continue to rise.

"However, we will still see a continuing stream of filings throughout the remaining two quarters.”

Over the past two months, 18,120 new properties are in pre-foreclosure in the three counties. Broward County accounts for 47.8 percent of the new filings, with Dade at 26.3 percent and Palm Beach County with the remaining 25.9 percent, according to the Condo Vultures® Foreclosure Database™, which tracks the filing of Lis Pendens notices through court records since January 1st, 2007.

To date, the database contains more than 158,000 filings.

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Bank Regulators Hold Key To Lending Rebound In Florida

Fri, 26 Jun 2009 18:34:54 GMT

BY JIM FREER
Special Correspondent
CondoVultures.com

It’s not just bankers who will determine when the residential and commercial real estate markets will begin a rebound in Florida and around the country.

Bank regulators always have major influence on banks’ overall strategies, and they have been taking actions that likely will result in many banks remaining cautious on lending for the remainder of this year.

As part of a stepped-up review process they began approximately two years ago, federal and state banking regulators are telling many banks to keep adding to their reserves to cover potential loan losses, experts tell CondoVultures.com.

Those additions to reserves are taken from a bank’s quarterly earnings, or from capital during quarters when there are no profits.

That review of loan quality is part of what some bankers say is regulators being figuratively “in banks” that are having earnings problems. In some cases, they are instructing banks on lending strategies but not necessarily on making individual loans.

Regulators also are telling some banks to raise capital or reduce assets, to improve their capital-to-asset ratios.

For many banks that means making fewer loans and reducing asset size as other loans are paid off.

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Chinese Drywall Impact 'Huge' On Florida Valuations

Thu, 25 Jun 2009 15:19:58 GMT

BY ERIK BOJNANSKY
Special Correspondent
CondoVultures.com

Eight months ago, hardly anyone knew or cared about Chinese drywall. And eight months later, the full impact of this imported building material that has been blamed for metal corrosion, electrical mishaps and health problems is still unknown, according to CondoVultures.com.

Most agree, however, that Chinese drywall will have a huge negative impact on South Florida's already troubled real estate market and any home built with significant amounts of it may be worthless.

"It's a huge problem," said Randall Jimenez, owner of Under Pressure Home Services, a Fort Lauderdale company that cleans up and manages foreclosed homes for banks. "No one has real answers to this problem and no one wants to say anything yet."

The true number of homes constructed with Chinese drywall remains uncertain but estimates suggest that between 35,000 and 100,000 homes and commercial properties across the United States, Canada and the Bahamas were made from this material.

The adverse affects of Chinese drywall was first discovered in homes located within the Sunshine State in January 2009.

Colson Hicks Eidson attorney Elvin Gonzalez, who has been representing hundreds of clients with drywall problems, suspects there may be 35,000 homes infected in Florida alone with large pockets in Miami-Dade, Broward and Palm Beach counties.

"Broward is very, very hard hit," Gonzalez said.

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South Florida Inventory Falls 1.1% To 81,000 Residences

Wed, 24 Jun 2009 13:16:03 GMT

South Florida residential real estate inventory dropped by 1.1 percent in the last week, dragging the total number of resales available down to 81,159 properties, according to a new report from Condo Vultures® LLC.

Residential resale inventory slipped by 888 properties between June 15 and June 22 for an average decreased of 127 properties per day. On June 1, there were 83,491 residential resales on the market in the tri-county region of Miami-Dade, Broward, and Palm Beach counties, according to the report compiled using data from the Florida Association of Realtors.

"The single-family house inventory is shrinking at a faster pace than the condo and townhouse market," said Peter Zalewski, a principal with Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Condo and townhouses now represent about 61 percent of the total South Florida inventory. Back in November, condos and townhouses represented 57 percent of the overall residential inventory in South Florida."

On a county-by-county basis, Broward has the fewest number of single-family houses available for resale with 10,179 properties, or 32 percent of the total South Florida inventory of 32,125.

Miami-Dade and Palm Beach are in a tie in percentage terms with each accounting for 34 percent of the remaining single-family house inventory. Palm Beach, with a population of about 1.1 million, has 10,888 houses for sale compared to 11,058 houses on the resale market in Miami-Dade, with a population of 2.5 million, according to the Condo Vultures® report.

Read More

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Bulk Condo Deal Closes In Greater Downtown Miami

Tue, 23 Jun 2009 03:50:44 GMT

A Miami entity headed by Carlos Mattos paid $203 per square foot for 31 units at the 1060 Brickell condominium in Miami's financial district, according to Condo Vultures® LLC.

Mattos' newly created 1060 Brickell Apartments LLC paid nearly $6.1 million without financing for four studio units, 22 one-bedroom units, and five two-bedroom units with a combined 29,913 square feet of livable space, according to Condo Vultures® LLC.

"We have reason to believe that 1060 Brickell has about 200 units under contract and/or closing as we speak," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "In the last week, 1060 has closed 58 units including the 31 from this bulk deal. It will be interesting to see what our second quarter closing rate report for new condos in Greater Downtown Miami will show."

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Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

NAR Chief Economist: South Florida Real Estate Market At Bottom

Fri, 19 Jun 2009 00:01:42 GMT

The South Florida residential real estate market is at bottom and likely to experience some appreciation within a year, the National Association of Realtors Chief Economist Dr. Lawrence Yun said.

"I think the prices have already pretty much bottomed in the South Florida market," Yun said. "The rest of the country is more difficult to say but I think here, given the buyers, the prices have already bottomed in Florida."

Yun made the declaration (Watch The Video) on June 11 during a keynote address to a lunch crowd of the International Real Estate Congress and Expo. The event was hosted by the Realtors Association of Greater Miami and the Beaches at the Biltmore Hotel in Coral Gables.

Yun's keynote address preceded a panel discussion on the South Florida real estate market with Peter Zalewski, founder of Condo Vultures® LLC; Rei Mesa of Prudential Florida Realty; Oliver Ruiz of Fortune International Realty; and Ron Shuffield of EWM.

Given the growing number of residential deals occurring in South Florida despite no readily available financing, Yun projects that today's buyers could actually realize some home price appreciation as soon as next year when credit is expected to be available once again.

"Soon you will reach the point of equilibrium where home prices begin to show growth," Yun said. "It is always difficult to precisely predict. I think that many people who are buying today in this month - June of 2009 - if they look back a year from now in June 2010, I think many people will see that they have actually gained in equity."

Yun cautioned that the South Florida market conditions - a diverse community with limited developable land, attractive weather, and an international appeal - give the region an advantage over many other areas in the United States.

"There will be some premium attached to Miami, in relation to say Atlanta, Birmingham, and others," Yun said. "So the price point in Miami will be much stronger when compared to other, say, southern states across the country or even say the rest of America. For that reason, I am very hopeful that currently it is an undervalued market.

"Buyers are recognizing [that]. Sales up about 100 percent from one year before."

Yun's comments come a month after national real estate analyst Jack McCabe of McCabe Research & Consulting in Deerfield Beach, Fla., told CondoVultures.com that he thinks South Florida residential prices are within 15 percent of the bottom.

McCabe, who began warning of a Florida housing bust in 2005, projects the South Florida residential real estate bottom will be reached by the summer of 2010.

"I think the worst is behind us, but I still believe we have another 10 to 15 percent drop because of the unemployment and the foreclosures depressing prices, and the amount of inventory we have yet to absorb," McCabe told CondoVultures.com.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Florida Rental Rates Seminar Tonight

Tue, 16 Jun 2009 14:38:08 GMT

Looking to invest in South Florida residential real estate but not sure where rental rates are heading? Struggling to find a double-digit cap rate to justify an investment?

Many of these questions will be addressed by a five-member panel of South Florida experts convening between 5.30 pm and 8 pm tonight, June 16, to discuss "Rental Rates and the Quest For Double Digit Cap Rates" at the Doubletree Grand Hotel just north of Downtown Miami. The program features a networking session, panel discussion, and question and answer period with the panel.

Condo Vultures® principal Peter Zalewski will moderate the discussion about the current and future trends in South Florida's rental market from an investor's perspective.

Joining Zalewski on the panel are:

- James Donnelly, the president and chief executive of the Castle Group condo association management company;

- Jack McCabe, a national real estate analyst with McCabe Research & Consulting;

- Alan Ojeda, developer of the Miami high-rise rental tower One Broadway;

- and Raul Valdes-Fauli, Miami-Dade County president of CNL Bank.

For more information, please visit the Upcoming Events page at CondoVultures.com or call 800-750-0517.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Florida Real Estate Market Rebounding: Industry Watchers

Mon, 15 Jun 2009 16:29:14 GMT

BY ERIK BOJNANSKY
Special Correspondent
CondoVultures.com

Happy days are here again, acclaim Realtors and analysts interviewed by CondoVultures.com, as recent data suggest a significant increase in South Florida home purchases and a decrease in residential inventory.

Well, maybe relief and cautious optimism are better descriptions of how many Florida real estate agents are currently feeling.

South Florida's inventory of condos, townhouses and single-family homes has fallen by nearly 24 percent in seven months. On Nov. 24 there were 107,527 residences available for resale. As of June 15, there were only 82,047 -- a reduction of 25,480. Meanwhile pending sales in South Florida have increased by more than 68 percent between November 24 and June 15 from a total of 9,302 to 15,645, according to a new report released by CondoVultures.com.

"There is a percentage of the population that believes the bottom of the market has hit," said Jeff Morr, CEO of Majestic Properties. "Sales are way up."

Brian Paul, CEO of the Realtors® Association of the Palm Beaches , credited low home prices and the $8,000 federal tax credit for first-time home buyers for the increased buying trend, especially among those who couldn't afford buying a condo or a house two years ago. The prospect of rising interest rates has only increased the pace of home-buying, Paul said.

"Housing is affordable again," Paul said, "People are recognizing that and are getting into the market before they are priced out."

Situations are popping up where investors can, in some cases, collect more on rent than the property actually costs on a monthly basis. A five-person panel is scheduled for Tuesday, June 16, to discuss "Rental Rates and the Quest For Double-Digit Cap Rates" at the Doubletree Grand Hotel just north of Greater Downtown Miami.

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First-Time Home Buyers Guide To South Florida Unveiled

Sat, 13 Jun 2009 22:54:39 GMT

Are you a first-time home buyer who wants to take advantage of the deep discounts and the Obama $8,000 tax credit but are feeling overwhelmed by the process?

Are you unsure about which, if any, of the newly created local, state, and federal programs you qualify for?

Condo Vultures® had you in mind when it created the newly published First-Time Home Buyers Guide To South Florida™.

This 18-page eBook features a collection of articles about the process, pointing out the dos and don'ts in making your first home purchase.

For more information about the First-Time Home Buyers Guide To South Florida™, please visit the eBooks page of CondoVultures.com.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

NAR Chief Economist, Condo Vultures® Founder To Appear On Housing Panel

Fri, 12 Jun 2009 23:59:56 GMT

Dr. Lawrence Yun, chief economist of the National Association of Realtors, and Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC, will participate on a panel discussion on the state of the South Florida real estate market .

Yun and Zalewski are scheduled to speak at the Realtors Association of Greater Miami and the Beaches' International Business Luncheon between noon and 2 pm June 11 at the Biltmore Hotel in Coral Gables.

Rei Mesa, Prudential Florida Realty; Oliver Ruiz, Fortune International Realty; and Ron Shuffield, Esslinger – Wooten – Max well, Inc., are also scheduled to appear on the panel. Matt Haggman, an award-winning journalist with The Miami Herald will serve as moderator.

The luncheon is a highlight of the 14th International Real Estate Congress and Expo that draws a multinational audience from the Realtors Association of Greater Miami and the Beaches and its partners including SECOVI-SP and FENACI in Brazil, and FNAIM France.

“We are proud to be able to bring high-caliber speakers and programming to address international real estate trends and opportunities in South Florida,” said Teresa King Kinney, RAMB Chief Executive officer, in a statement.

For those who can't attend the luncheon, Zalewski is scheduled to moderate a June 16 panel discussion entitled "Rental Rates and the Quest For Double-Digit Cap Rates" at the Doubletree Grand Hotel just north of Greater Downtown Miami.

Participating in the panel discussion, entitled "Rental Rates and the Quest For Double Digit Cap Rates", will be moderator Zalewski of Condo Vultures® along with:

- James Donnelly, president of the Castle Group condo association management company;

- Jack McCabe, national real estate analyst of McCabe Research & Consulting;

- Alan Ojeda, developer of the new Miami high-rise rental tower One Broadway;

- and Raul Valdes-Fauli, Miami-Dade County president of CNL Bank.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ or our Video Gallery. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ , and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Condo Resale Inventory Drops Below 50,000 In South Florida

Tue, 09 Jun 2009 17:36:45 GMT

The number of resale condos available in South Florida has slipped below the 50,000-unit threshold, representing more than a 18 percent drop in total inventory since November, according to a new report from Condo Vultures® LLC.

As of June 8, there are a combined 49,746 condos and townhouses on the resale market in the tri-county South Florida region. A week prior on June 1, there were 50,071 condos available. A month ago on May 11, there were 51,581 condos for sale. Back in November, there were 60,928 condos for resale, according to the Condo Vultures® report created using Florida Association of Realtors data.

"Before the South Florida condo market can stabilize, the overall inventory must first be reduced," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "It is significant psychologically for the region to see the condo resale inventory slip below 50,000 units. Going forward, we see the resale inventory being depleted at a more rapid pace in the coastal submarkets of South Florida compared to the western suburbs, which are far removed from the ocean. "

Condos represent 60 percent of the total South Florida residential resale inventory of 82,792 residences as of June 8, according to Condo Vultures®. South Florida's total inventory of condos, townhouses, and single-family houses is down 23 percent, or 24,735, since Thanksgiving week in November when there were 107,527 residences for resale.

Read More

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ , Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ and First-Time Home Buyers Guide To South Florida™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

$14 Million In South Beach Foreclosures Filed In May

Sun, 31 May 2009 00:10:25 GMT

Nearly three-dozen residences in Miami Beach's South Beach neighborhood slipped into foreclosure in May for nonpayment on nearly $14.3 million in combined mortgage financing, according to the Condo Vultures® Foreclosure Database™.

The most expensive foreclosure action filed in May was against a waterfront single-family house with an outstanding loan amount of $4.3 million. A few doors down a bank filed to foreclose on a $1.1 million loan, which ranks as the third highest foreclosure action filed in May in South Beach.

A luxury condo with an outstanding loan of $1.6 million in Miami Beach's South of Fifth neighborhood ranked as the second highest foreclosure action filed in May, according to the Foreclosure Database™.

"Single-family houses accounted for two of the 34 foreclosure actions filed in South Beach in May," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures. "For the year, condos have accounted for more than 90 percent of the 176 foreclosure actions filed in South Beach through the end of May."

Nearly half of the May foreclosures in South Beach are located on four streets: West Avenue (7 filings); Collins Avenue (4 filings); Ocean Drive (2 filings), Lincoln Road (2 filings). The remainder of the foreclosure actions are spread throughout the barrier island neighborhood.

Overall, lenders moved to foreclose 81 properties in Miami Beach in May, up from efforts to repossess 112 properties in April. For the year, lenders have filed 463 actions against Miami Beach properties, according to the Condo Vultures® Foreclosure Database™.

Peter Zalewski of Condo Vultures® can be reached at 80... or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Miami Bank President To Participate On Rental Rates Panel

Fri, 29 May 2009 13:12:47 GMT

Raul Valdes-Fauli, the Miami-Dade County president and chief executive officer of CNL Bank, has confirmed his participation on the upcoming Condo Vultures® panel discussion examining rental rate trends and the quest for double-digit cap rates on residential investment properties.

Valdes-Fauli is a veteran commercial lender in South Florida who previously worked at Colonial Bank and the former Union Bank before taking the reign of Miami-Dade County for Orlando-based CNL Bank.

Valdes-Fauli joins national real estate analyst Jack McCabe of McCabe Research & Consulting and Alan Ojeda, developer of the new high-rise rental tower One Broadway in Miami's Brickell Avenue area, on the Condo Vultures® Seminar Series June panel discussion on South Florida's rental market.

Valdes-Fauli, McCabe, and Ojeda join a soon-to-be-announced owner of a large condo association management company for a discussion with Condo Vultures® principal Peter Zalewski about the current and future trends in South Florida's rental market.

The June 16 program is scheduled to feature a networking session, panel discussion, and question and answer period with the panel. For more information, visit the Upcoming Events page at CondoVultures.com.

Peter Zalewski of Condo Vultures® can be reached at 800-75... or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

First-Time Home Buyers Target Foreclosures In South Florida

Wed, 27 May 2009 14:57:34 GMT

BY ERIK BOJNANSKY
Special Correspondent
CondoVultures.com

Armed with an $8,000 federal tax credit and knowledge of current events, first time home buyers are seeking bargains in the form of foreclosed properties.

However, home buyers should be careful when considering buying a foreclosed property.

"Just because it is [banked owned] doesn't mean it is the best deal for them [potential buyers]," said Brian Paul, CEO of the Realtors® Association of the Palm Beaches.

Kerry Smith, project editor for the Florida Association of Realtors, said first-time home buyers are asking Realtors about REO (real estate owned, bank owned) properties.

"Everyone has read all the media out there," he said. "A lot of shoppers want a bargain because that is what they read."

Danielle Clermont, communications director for the Realtor® Association of Greater Fort Lauderdale, said so many first-time home buyers are inquiring about REOs that her organization is now offering Realtors classes about foreclosed and short-sold properties.

"Two years ago we did not have [the classes]," Clermont said. But recently the "demand in the courses have increased and participation in the courses have [also increased]."

There is plenty of foreclosed inventory in South Florida, according to data from the Condo Vultures® Foreclosure Database™. Since January 2007, when the real estate market declined rapidly, foreclosure actions have been initiated on 147,000 properties. Condo Vultures® also predicts that 27,000 properties will likely be foreclosed on by the end of 2009.

Once obtained, banks will be looking to unload homes as quickly as possible.

Read More

South Florida Inventory drops 21%, contracts jump 66% in 6 months

Tue, 26 May 2009 15:48:30 GMT

South Florida's residential resale inventory has dropped 21 percent and pending sales have spiked nearly 66 percent in the last six months in Miami-Dade, Broward, and Palm Beach counties, according to a new report by Condo Vultures® LLC.

There were 84,962 condominium units, townhouses, and single-family houses available for resale on Monday, May 25, compared to 107,527 residences listed for resale the week of Thanksgiving.

South Florida pending sales totaled 15,399 on May 25 compared to 9,302 contracts on Nov. 24, according to the Condo Vultures® report based on Florida Association of Realtors data.

"In the last six months, we have seen inventory decrease by between 1 percent and 2 percent on a week-over-week basis," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "During the same period, pending sales have consistently increased by between 1 percent and 3.5 percent on a weekly basis since November. This trend suggests that summer - which historically is a quiet period - looks to be active."

Miami-Dade County, where Miami Beach, Coral Gables, and Sunny Isles Beach are located, has
the greatest number of available residential resale properties with 32,133, or 38 percent of the tri-county regional total. The inventory in Miami-Dade has dropped 21.6 percent in the last six months from 40,994 properties on Nov. 24, according to the report.

Broward County, where Fort Lauderdale, Hollywood Beach, and Pompano Beach are located, has the second largest share of available residential properties in South Florida with 27,669, or 33 percent of the regional total. In November, Broward County had 36,926 residences for resale.

Palm Beach County, where West Palm Beach, Boca Raton, and Delray Beach are located, has the fewest number of properties available for resale with 25,160, or 30 percent of the regional total. On Nov. 24, Palm Beach County had 29,607 properties available for resale, according to the report On a deal basis, Broward County is the busiest place in the region.

Pending sales in Broward are up 80 percent in the last six months to 5,934 contracts on May 25 compared to 3,295 deals on Nov. 24.

Pending sales in Miami-Dade are up 60 percent to 6,789 deals on May 25 compared to 4,245 contracts six months ago.

Palm Beach County's pending sales are up 52 percent in the last six months to 2,676 contracts on May 25 compared to 1,762 deals in November, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report^TM for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM. Our new books, the Official Condo Buyers Guide to Miami^TM and Miami's Great Condo Crash: A Chronicle of the Boom and Bust^TM are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database^TM.

Copyright © 2009, Condo Vultures® LLC

FDIC Lost $5.2 Billion Last Week

Sat, 23 May 2009 21:23:21 GMT

The Federal Deposit Insurance Corp., which guarantees bank accounts up to $250,000, lost nearly $5.2 billion last week with the failure of a Florida savings institution and two Illinois banks.

Last week's bank failures push the total losses incurred by the FDIC in the first five months of 2009 to more than $10.6 billion. In all of 2008, the FDIC lost between $10.4 billion and $14.9 billion, according to a new report from Condo Vultures® LLC using regulatory data.

"The FDIC is losing an average of $2 billion per month with bank failures," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "We expect this trend to continue given that the FDIC plans to open a 500-person bank seizure in asset sales office in Jacksonville, Fla., in September to deal with troubled banks in the Southeast and especially Florida."

Of the 36 banks shut by regulators in 2009, only three have been in Florida even though the sunshine state is considered by many to be the epicenter of the U.S. housing crash.

The most recent failure was on Thursday, May 21, with regulators shuttered Florida's largest institution, BankUnited. Headquartered in suburban Miami, BankUnited had $12.8 billion in assets, $8.6 billion in deposits, and more than 80 branch locations throughout Florida.

BankUnited's failure is estimated to cost the FDIC about $4.9 billion, making it the largest bank failure since July 2008 when IndyMac was seized.

IndyMac Bank was a California-based institution with $32 billion in assets and $19 billion in deposits. The IndyMac failure cost the FDIC between $4 billion and $8 billion.

The two Illinois banks to be closed last week on May 22 were Strategic Capital Bank and Citizens National Bank.

Strategic Capital Bank had assets of $537 million and deposits of $471 million. The FDIC's estimated loss from Strategic Capital Bank is $173 million.

Citizens National Bank had assets of $437 million and deposits of $400 million. The FDIC's estimated loss from Citizens National Bank is $106 million.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report^TM for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM. Our new books, the Official Condo Buyers Guide to Miami^TM and Miami's Great Condo Crash: A Chronicle of the Boom and Bust^TM are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database^TM.

Copyright © 2009, Condo Vultures® LLC

Regulators Seize Florida’s Largest Bank

Fri, 22 May 2009 14:53:29 GMT

BY JIM FREER
CondoVultures.com

Federal regulators late Thursday afternoon seized Coral Gables-based BankUnited, FSB, the largest bank based in Florida, and sold it to a newly formed savings bank with the name, BankUnited.

BankUnited’s new ownership is a consortium of investors that includes John Kanas, a veteran New York banker who will head its operations beginning Friday, May 22, and New York-based investment firm WL Ross & Co. The investors are putting $900 million in capital into the bank.
Bank United, FSB, had $12.8 billion in assets and $8.6 billion in deposits as of May 2.

The bank had been suffering heavy losses, stemming mostly from its portfolio of “monthly option” adjustable rate mortgages. South Florida condominium units were prominent among its growing volume of non-current loans and foreclosures.

BankUnited had been under regulators’ orders to find a buyer or raise capital, and regulators had been directing those efforts since late last month. A change in control was widely expected by the end of this week.

The Federal Deposit Insurance Corp. said others in the investment consortium are: Carlyle Investment Management L.L.C.; Blackstone Capital Partners V L.P.; Centerbridge Capital Partners, L.P. LeFrak Organization, Inc; The Wellcome Trust; Greenaap Investments Ltd.; and East Rock Endowment Fund.

The WL Ross-led group was one of several groups that reportedly submitted bids for BankUnited.

BankUnited's 86 branch offices, all in Florida, will be open Friday during normal business hours. All deposits acquired by the new owners will be insured by the FDIC.

Customers can continue to use BankUnited, FSB's, checks, ATM cards and debit cards. Checks drawn on the bank will continue to be processed. Loan customers should continue to make their payments as usual.

On Thursday, The U.S. Office of Thrift Supervision (OTS) acquired the banking operations, including all the non-brokered deposits, of BankUnited in a transaction facilitated by the FDIC.

The FDIC, as receiver, then arranged the sale to the group led by Kanas and WL Ross.

Details of the regulators’ takeover are on the FDIC’s Web site.

Read More

Consultant Jack McCabe To Participate On Rental Rates Panel Discussion

Thu, 21 May 2009 15:23:40 GMT

Jack McCabe, a national real estate consultant who early on predicted Florida's boom and bust, has confirmed his participation on the upcoming Condo Vultures® panel discussion examining South Florida rental rate trends and the never-ending quest for double-digit cap rates on residential investment properties.

McCabe, president of McCabe Research & Consulting in Deerfield Beach, Fla., is a real estate consultant, expert witness, and advisor to institutional funds who is regularly quoted locally, nationally, and internationally on housing issues in Florida and beyond.

McCabe joins Alan Ojeda, developer of the new high-rise rental tower One Broadway in Miami's Brickell Avenue area, on the Condo Vultures® Seminar Series June panel discussion on South Florida rental rate trends.

McCabe and Ojeda join a soon-to-be-announced Florida bank president and owner of a large condo association management company for a discussion with Condo Vultures® principal Peter Zalewski about the current and future trends in South Florida's rental market.

The June 16 program is scheduled to feature a networking session, panel discussion, and question and answer period with the panel. For more information, visit the Upcoming Events page at CondoVultures.com.

Peter Zalewski of Condo Vultures® can be reached at 80... or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report^TM for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM. Our new books, the Official Condo Buyers Guide to Miami^TM and Miami's Great Condo Crash: A Chronicle of the Boom and Bust^TM are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database^TM.

Copyright © 2009, Condo Vultures® LLC

Concerns Surface For FDIC's Legacy Loan Program

Wed, 20 May 2009 15:50:41 GMT

BY JIM FREER
Special Correspondent

The Federal Deposit Insurance Corp. has set next month as the target date to launch its program where banks will sell pools of problem loans to partnerships of private investors and the U.S. Department of the Treasury.

The regulators hope that participating banks will be able to put more focus on lending, including money from loan sales, and spend less time and expense managing delinquent loans.

However, information from banking and real estate sources indicates that the long-awaited Legacy Loan Program might not get off to a fast start.

Some bankers are concerned that prices for many delinquent loans sold in the program might be lower than the discounted prices at which they are carrying them on their books.

Interest in the program appears stronger from investors, such as large institutional funds and Florida-based real estate developers, than from banks that have delinquent loans.

Several, most notably Wells Fargo predecessor Wachovia Corp., were active earlier this decade in making loans for building and renovating condominium projects in South Florida and other markets.

The chance for investors to put as little as seven percent down on some loans with partial FDIC guarantees is a main attraction, said Nina Gordon, a partner in the Boca Raton office of law firm Broad & Cassel.

“They think they could have access to some treasures buried in vaults,” Gordon said.

Those “treasures” would be loans for now-troubled condominium conversions or construction of condo complexes and apartment buildings that could become viable projects after the economy recovers.

Numerous banks with offices in South Florida have loans on those properties that are 90 days or more delinquent. Many have been restructuring loans by cutting monthly payments or interest rates. They have had hopes, now fading, that borrowers can catch up on payments and avoid foreclosures.

Read More

Jim Freer is a special correspondent for CondoVultures.com. He is a veteran banking reporter and a consultant to the finance industry in South Florida.

Contracts Surge 3.5% In South Florida

Tue, 19 May 2009 16:06:55 GMT

South Florida residential pending resales spiked 3.5 percent in the last week to 15,191 existing contracts in Miami-Dade, Broward, and Palm Beach counties, according to a new report from Condo Vultures® LLC.

Pending sales in Broward County, where Fort Lauderdale, Hollywood Beach, and Pompano Beach are located, surged 4.3 percent to 5,820 deals on a week-over-week basis ending May 18, according to the report produced using Florida Association of Realtors data.

Pending sales in Palm Beach County, where West Palm Beach, Delray Beach, and Boca Raton are located, increased by 3.7 percent in the same period to 2,691 contracts. Pending sales in Miami-Dade County, where Miami Beach, Coral Gables, and Sunny Isles Beach are located, increased 2.7 percent to 6,680 contracts, according to Condo Vultures®.

"Buyers and sellers are entering into contracts in South Florida at a stepped up pace," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate services company Condo Vultures®. "As properties go under contract, the total available residential resale inventory has consistently decreased. In the last six months, inventory has fallen by more than 20 percent."

South Florida currently has 85,705 condo units, townhouses, and single-family houses available for resale in the tri-county area. The week of Thanksgiving, there were 107,527 residential properties on the market for resale, meaning that available inventory has fallen by 21,822 properties, according to the report.

Broward County has experienced the deepest drop in inventory in the last six months, falling 24.1 percent to 28,039 resale properties. Miami-Dade County has experienced a 21.1 percent drop in inventory to 32,348 properties. Palm Beach County's inventory has dropped by 14.5 percent to 25,318 resale properties.

Condominium units and townhouses represent about 60 percent of the total inventory while single-family houses account for the remaining 40 percent. Back in November, condo units and townhouses represented 57 percent of the inventory, and single-family houses account for 43 percent of the South Florida total, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Expert: Florida Housing To Bottom By Mid-2010

Sat, 16 May 2009 14:33:11 GMT

National real estate consultant Jack McCabe, one of the first analysts to predict South Florida’s housing bubble and bust, projects that the Florida housing market is within a year of hitting bottom.

McCabe, president and chief executive of McCabe Research & Consulting LLC in Deerfield Beach, Fla., estimates residential values are within 15 percent of their lowest levels, and he expects the remaining price drop to occur in the next four quarters.

“I think 2009 is going to be the toughest year of this downturn for the state of Florida,” McCabe said in an exclusive video interview with CondoVultures.com. “I really see next year – about mid-2010 – that, I think, we are finally going to reach the bottom, or what everybody has been calling the bottom.”

The hour-long McCabe video interview where he discusses Florida’s past, present, and future with Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®, is available in its entirety in the White Papers section of CondoVultures.com.McCabe disagrees with some on Wall Street that Florida residential pricing will still fall an additional 35 percent in the upcoming months.

“I don’t think it is going to be that severe,” McCabe said. “I think the worst is behind us, but I still believe we have another 10 to 15 percent drop because of the unemployment and the foreclosures depressing prices, and the amount of inventory we have yet to absorb.”

The bottom may be within McCabe’s sight but he doesn’t expect Florida prices to appreciate in the foreseeable future.

“I don’t think it is going to be a V-shape recovery,” McCabe said. “I think this is going to be more like an L shape [recovery]. We are going to see prices remain along that bottom potentially into 2012 before we see any type of appreciation at all. “When we do, it is going to be more in line with historical trends of about six percent [appreciation] a year. We have a ways to go yet.”

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Tax Assessor: Miami Condo Values Down As Much As 40%

Wed, 13 May 2009 14:57:55 GMT

Condominium owners in Greater Downtown Miami can expect to see their assessed real estate values for property tax purposes drop by as much as 40 percent in the upcoming year based on early indications from Miami-Dade County Property Appraiser Pedro J. Garcia.

Garcia's office is currently assessing the value of every property in the county for 2008 property tax purposes, which are in arrears. Once these values are computed on July 1, government officials will then begin the process of levying taxes against every property owner in order to generate revenue to operate the county, school system, and local municipalities.

"Property taxes generally work out to be about 2 percent of the assessed value determined by Miami-Dade County Property Appraiser," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "For the property appraiser to suggest that condo values have fallen by as much as 40 percent is great news for our buyers who are already accumulating heavily discounted units. A property tax break should only improve the situation for our buyers."

Garcia told the Miami Herald that property values have plummeted throughout the county, especially in the overbuilt condominium market.

''Some will be down 20, 30, 40 percent,'' Garcia told the Miami Herald. ``I hope it won't hurt police and fire departments, but we'll have to really tighten our belts.''

In Greater Downtown Miami, for instance, developers constructed nearly 23,000 units between 2003 and the present. In the four decades prior between 1961 and 2002, developers constructed about 11,500 units, according to the Condo Vultures® Official Condo Buyers Guide To Miami™.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Florida Residential Inventory Drops 1.1% In Week

Tue, 12 May 2009 14:10:38 GMT

The number of South Florida residential properties available for resale fell by 1.1 percent in the last week while the number of pending sales in the tri-county region jumped by 2 percent, according to a new report from Condo Vultures® LLC.

There are now 86,812 single-family houses, townhouses, and condominium units for resale as of May 11, down from 87,793 residential properties on May 4. Pending sales in the tri-county South Florida region of Miami-Dade, Broward, and Palm Beach counties totaled 14,679 on May 11 compared to 14,397 properties on May 4, according to the report based on Florida Association of Realtors data.

"Palm Beach County experienced a 2.6 percent jump in pending sales in the last week, which outpaced the 2.2 percent rise in Broward County and 1.5 percent increase in Miami-Dade County," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®. "The Palm Beach County surge in deals was led by a 3 percent spike in single-family house pending sales and a 1 percent jump in contracts for condo units and townhouses."

Palm Beach County has 25,743 residential properties on the resale market, representing 30 percent of the regional total. Single-family houses represent 46 percent of the overall inventory in Palm Beach County with condos and townhouses accounting for the remaining 54 percent.

By comparison, in Broward County, there are 28,468 residential properties for resale, which represents 33 percent of the tri-county regional supply total. Single-family houses account for 40 percent of the Broward County inventory, while condos and townhouses represent the remaining 60 percent of the resale product currently available.

Miami-Dade County has 32,601 residential properties for resale, representing 38 percent of the overall South Florida inventory. The Miami-Dade County inventory breaks down to 37 percent single-family houses and 63 percent condo units and townhouses, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Florida Bank Failures Foreshadowed By FDIC

Sun, 10 May 2009 18:17:30 GMT

Federal regulators are staffing up, leasing office space, and creating a management structure in preparation to seize an undisclosed number of struggling banks in Florida and the Southeastern United States.

The Federal Deposit Insurance Corp., which guarantees deposits of $250,000 at the nation's banks, plans to open a satellite office to be used by up to 500 people in the northeast Florida city of Jacksonville to spearhead the imminent seizures and eventual asset sales.

"The FDIC, which prides itself on predictability and consistency, is sending a strong message to the banking industry that the day of reckoning is almost at hand," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "Industry watchers have been expecting this moment as Florida - considered by many to be the epicenter of the U.S. housing crash - has had few bank failures to date."

Regulators have shut 57 banks since January 2008 with an estimated loss to the FDIC of $15.5 billion. Only four of the failed banks were headquartered in Florida - none in South Florida - compared to 11 seizures in Georgia and nine in California. A Florida credit unit has also closed by regulators.

The FDIC's bank seizure and asset sales office is scheduled to open in September with a combination of employees and subcontractors to oversee the process.

"Throughout its history, the FDIC has used these offices to keep temporary asset resolution staff closer to the concentration of failed bank assets they oversee," according to an FDIC statement. "As the work diminishes, the temporary satellite offices are closed."

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Pending Contracts Stall In South Florida As Winter Ends

Tue, 05 May 2009 15:46:48 GMT

The number of residential resale contracts executed in South Florida in the last week of the winter tourism season grew by the tiniest of amounts, causing fear that buying activity may be stalling, according to a new report from Condo Vultures® LLC.

Pending contracts on single-family houses in the tricounty region of Miami-Dade, Broward, and Palm Beach counties were up by 0.4 percent on May 4 on a week-over-week basis, but that increase wasn't enough to overcome a 0.2 percent drop in deals on condominium units and townhouses that weighed down the overall average, according to the Condo Vultures® report compiled using Florida Association of Realtors data.

On May 4, South Florida had 14,397 pending sales, up minimally from 14,378 pending sales a week earlier on April 27. Two week prior on April 20, pending sales totaled 14,183 single-family houses, condos, and townhouses in the region, according to the report.

"All throughout the winter tourism season, pending sales were growing by between 1 percent and 4 percent per week," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures. "To suddenly see pending sales stall in the last week of April will raise questions in the minds of many industry watchers focused on trying to determine whether the region is nearing a bottom or simply a plateau."

On a product basis, pending sales of single-family houses increased by 0.4 percent to 7,477 on May 4 compared to 7,446 contracts on April 27. Pending sales in Miami-Dade increased by 0.7 percent and in Broward by 0.4 percent. Palm Beach was unchanged, according to the report.

Pending sales on condos and townhouses shrunk by 0.2 percent to 6,920 contracts on May 4 compared to 6,932 deals on April 27. On a county-by-county basis, pending contracts increased by 0.4 percent in Miami-Dade, but fell by 0.8 percent in Broward and 0.3 percent in Palm Beach, according to Condo Vultures®.

As for inventory, the number of single-family homes for resale in South Florida dropped 2.4 percent in the last week to 35,787 homes. The single-family house product is distributed equally in the tri-county area with 34 percent in Miami-Dade and Palm Beach counties each and 32 percent in Broward county.

In just over five months since Thanksgiving week, total single-family house inventory has slipped by 23 percent, or 10,812 houses.

Condominium and townhouse inventory has fallen to 52,006 units, a drop of 1.9 percent in the last week. Miami-Dade has the most condo and townhouse inventory available for resale with 40 percent of the market. Broward is second with 33 percent, and Palm Beach is third with 27 percent.

Since Thanksgiving week in November, total condo and townhouse inventory has fallen by 14.6 percent, or 8,922 units.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

US Bank Failure Losses Top $5 Billion In 2009

Sun, 03 May 2009 18:55:45 GMT

Federal regulators shut three more institutions on May 1, increasing the total estimated losses related to failed bank in 2009 to more than $5 billion, according to a report by Condo Vultures® LLC.

In 2008, regulators shut 25 institutions that resulted in total losses of between $10.4 billion and $14.9 billion, according to the report based on data from the Federal Deposit Insurance Corp.

"Our research indicates that taxpayers have lost an estimated $5.3 billion this year," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®. "This means that taxpayers are losing about $1.33 billion per month or $11 million per day due to bank failures. Based on this pace, it is not difficult to envision losses in 2009 at least equaling those of 2008, which would put us in a range of $30 billion of bank failures in two years."

In the most recent seizures, regulators closed Silverton Bank in Georgia with assets of $4.1 billion, America West Bank in Utah with assets of $299.4 million, and Citizens Community Bank in New Jersey with assets of $45.1 million.

The trio of bank failures increases the total number of failed institutions to 32 in the first four months of 2009, according to Condo Vultures®.

In the first quarter of 2009, regulators shut 21 institutions with combined assets of $9.6 billion and deposits of $7.9 billion.

The estimated losses incurred with the first quarter closures are at least $2.3 billion, according to the report.

In the first month of the second quarter, regulators have already closed 11 institutions with combined assets of $9.7 billion and deposits of $7.6 billion.

Losses associated with these bank failures are estimated at $3 billion, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Will $8,000 Obama Buyers Credit Help South Florida?

Sat, 02 May 2009 18:22:39 GMT

BY ERIK BOJNANSKY
Special Correspondent
CondoVultures.com

Somewhere within President Barack Obama's $820 billion stimulus plan is an $8,000 tax credit for first-time home buyers.

The way it works is this: Those who make less than $75,000 a year, or married couples making less than $150,000 a year, who haven't purchased a home in the last three years can qualify for an $8,000 credit come tax day if they buy a home valued at less than $200,000. Individuals who make less than $95,000 a year, or married couples earning less than $170,000 a year, may be able to qualify for partial credits. To take effect, the purchase must be made between Jan 1 and Dec. 1 of this year.

The question is, will the above tax credit help South Florida's troubled real estate economy?

The entire article is available at CondoVultures.com

Peter Zalewski is the founder of Condo Vultures®. Peter can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report^TM for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM. Our new books, the Official Condo Buyers Guide to Miami^TM and Miami's Great Condo Crash: A Chronicle of the Boom and Bust^TM are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database^TM.

Copyright © 2009, Condo Vultures® LLC

Time To Buy Or Rent A Miami Condo? Find Out Tonight

Tue, 28 Apr 2009 14:35:46 GMT

Trying to get a better understanding about the current state of Miami's condominium market?

Not sure if this is the time to buy or continue to rent? Many of the answers to these questions and others will be discussed tonight, April 28, at a seminar and networking event hosted by Condo Vultures® LLC, a Bal Harbour, Fla.-based real estate consultancy, from 5.30 pm to 8 pm at the Doubletree Grand Hotel just north of Downtown Miami.

Condo Vultures® principal Peter Zalewski will be the keynote speaker. Zalewski, a real estate consultant, has appeared on several local, national, and international TV programs including ABC's Nightline, CBS' 60 Minutes, CNBC's Squawk on the Street, and Fox Business' America's Scoreboard.

The agenda will include a discussion of proprietary research collected by Condo Vultures® regarding the Miami condo market and the formal launch of the firm's newly published eBooks, The Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™.

A question and answer period will follow the keynote presentation. Discounted print editions of The Official Condo Buyers Guide To Miami™ will be available at the event.

For more information, please contact Condo Vultures® Seminar Director Muriel Sommers at 800-750-0517 or by email at msommers@condovultures.com.

Copyright 2009. Condo Vultures® LLC

S. Florida Housing Inventory Falls Below 90,000

Mon, 27 Apr 2009 18:30:54 GMT

South Florida's residential real estate market has less than 90,000 single-family houses, condominium units, and townhouses for resale, a drop of 16.6 percent since November, according to a new housing inventory report from Condo Vultures® LLC.

The number of available resales in the tricounty South Florida area of Miami-Dade, Broward, and Palm Beach counties dropped by 0.8 percent, or 708 residences, in the last week ending April 27 on a week-over-week basis, according to Condo Vultures®.

In the last seven days, single-family house resale inventory dropped 1.1 percent, or 396 residences, to 36,658 in South Florida. Condominium unit and townhouse resale inventory dropped by 0.6 percent, or 312 units, according to the report.

"Single-family houses are coming off the resale market at a slightly greater pace - in total numbers - than the condominium and townhouse inventory," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "Buyers are realizing that the single-family house market was not overbuilt to the same extent as the condominium market, especially in coastal South Florida."

Zalewski is scheduled to discuss inventory and foreclosure trends in the Greater Miami Condo Market at an upcoming seminar scheduled for Tuesday, April 28, at the Doubletree Grand Hotel just north of Downtown Miami.

Pending sales jumped by 1.4 percent, 195 contracts, as of April 27 on a week-over-week basis in South Florida, according to the report.

Single-family house contracts increased by 1.7 percent to 7,446 existing contracts on April 27 compared to 7,325 on April 20.

Contracts on condo units and townhouses increased by 1.1 percent to 6,932 pending sales on April 27 compared to 6,858 deals on April 20, according to the report.

On a county-by county basis, Miami-Dade is experiencing the greatest pending sales activity with 6,372 contracts, or 44 percent of the regional total. Broward is second with 5,472 pending contracts, or 38 percent of the deals. Palm Beach is third with 2,533 pending sales, or 18 percent of the contract activity.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

7 Luxury South Beach Condos Being Foreclosed

Sat, 25 Apr 2009 19:43:13 GMT

Miami Beach's exclusive South of Fifth neighborhood in South Beach isn't even immune from the foreclosure epidemic hitting South Florida.

Lenders since January have initiated foreclose proceedings worth a combined $7.4 million against five luxury Miami Beach condominium units in the exclusive South of Fifth neighborhood of the barrier island city, according to a new report from Condo Vultures® LLC based on data from its Foreclosure Database™.

Lenders are owed more than $4.1 million on two units in the bayfront Murano Grande condominium, and $3.3 million on three units in the oceanfront Continuum on South Beach project.

"Many people will be surprised to learn that foreclosures are an issue even at two of South Beach's most exclusive addresses," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "After all, the Continuum and the Murano Grande are high-end luxury towers where celebrities, dignitaries, and successful business leaders have a second, third, or fifth residence."

Zalewski is scheduled to discuss inventory and foreclosure trends in the Greater Miami Condo Market at an upcoming seminar scheduled for Tuesday, April 28, at the Doubletree Grand Hotel just north of Downtown Miami.

In the first four months of 2009, lenders have filed to foreclose on nine luxury condominiums in Miami Beach valued at more than $1 million each. In addition to the foreclosures at the Continuum and the Murano Grande, lenders have filed foreclosure actions against borrowers in the gated island community of Aqua and the boutique oceanfront tower Mosaic, according to the Foreclosure Database™.

Overall, there have been 25 foreclosure actions filed against Miami Beach properties valued at more than $1 million.

Aside from the nine condos with a combined outstanding loan amount of $12.1 million, lenders are moving to foreclose on 16 single-family houses and condo projects valued at more than $37 million, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

4.4% Surge In South Florida Pending Sales In Week

Thu, 23 Apr 2009 15:56:37 GMT

Pending sales for South Florida condominium units, townhouses, and single-family houses surged by more than 4 percent in the last week, reaching 14,183 existing contracts, according to a new report from Condo Vultures® LLC.

In a seven-day period ending April 20, nearly 600 residential properties on the market in Miami-Dade, Broward, and Palm Beach counties changed in status from "available" to "pending sale" in the Florida Association of Realtors' Multiple Listing Service. This most recent contract volume works out to an average of 86 deals per day being executed.

As the number of pending deals is on the rise, the number of available residential properties is falling. On a week-over-week basis, the number of residential resale properties on the market in South Florida decreased by 1.6 percent, or 1,438 residences, to 90,382 condos, townhouses, and single-family houses, according to the Condo Vultures® report.

"South Florida inventory is down nearly 16 percent and pending sales are up more than 52 percent since Thanksgiving week," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "As we enter into the last weeks of the winter tourism season, it appears as if inventory will continue to tighten despite the lack of financing available for residential product. Several buyers, rightly or wrongly, are deciding that the time to purchase is upon us."

Zalewski is scheduled to discuss inventory and pending sales trends in the Miami Condo Market at an upcoming seminar scheduled for Tuesday, April 28, at the Doubletree Grand Hotel just north of Downtown Miami.

Broward County, where Fort Lauderdale, Hollywood Beach, and Pompano Beach are located, is leading the surge in pending deals in the tri-county region with 295 properties going under contract in the past week. Broward's increase in pending deals represents a 5.8 percent week-over-week increase, according to the report.

Miami-Dade County, where Miami Beach, Coral Gables, and Aventura are located, experienced a 4.3 percent increase in pending sales on a week-over-week basis reaching 6,274 deals. Buyers entered into 260 pending deals in the week long period ending April 20 for an average of 37 contracts per day.

Palm Beach County, where Boca Raton, West Palm Beach, and Delray Beach are located, continues to experience an increase in pending sales, but at a much slower pace. Pending sales increased by 1.7 percent in Palm Beach County in the last week, reaching 2,521 deals. Palm Beach County represents 18 percent of the total number of South Florida pending sales, according to the report.

Palm Beach County may have the smallest number of pending sales, but it also has the fewest residential properties on the market. There are 26,808 residential properties are on the market, representing 30 percent of the regional total.

Miami-Dade County has the greatest number of properties for resale with 33,676, or 37 percent of the regional total.

In Broward, there are 29,898 residential properties for sale, which represents 33 percent of the total market, according to the report.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

South Florida Rental Inventory Stands At 27,000

Mon, 20 Apr 2009 05:14:47 GMT

More than 27,000 condos, townhouses, single-family houses are actively available for rent in South Florida at a median asking price of $1.25 per square foot per month, according to a new report from Condo Vultures® LLC.

The attractive rental prices have spurred strong leasing activity at an average of 110 residences per day since January in the tri-county South Florida region of Miami-Dade, Broward, and Palm Beach counties.

At this pace, the available inventory stands at approximately 246 days, or eight months, of rental supply, according to the Condo Vultures® report.

"South Florida's rental activity is surprisingly strong," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "Today's tenants, some of which have lost their homes in foreclosure, are actively leasing up condos, townhouses, and single-family houses throughout the region, especially in the more expensive coastal areas."

Rental leasing trends, including a white paper examining the ratio of primary users versus tenants in Greater Downtown Miami's 83 new condominiums, is a trend that Zalewski is scheduled to address at an upcoming real estate seminar scheduled for 5.30 pm April 28 in Greater Downtown Miami.

Much like on the purchase and sale side of the real estate business, rental rates can vary dramatically depending upon the submarket where the property is located.

For example in Miami Beach's popular South Beach neighborhood, the median monthly rental rate is $2,200, or $2.34 per square foot, for a 940-square-foot apartment that was built more than 20 years ago.

Across the causeway in the overbuilt Greater Downtown Miami market, the median asking price for the never-lived-in-product is $1,825, or $1.65 per square foot, for a 1,105 square foot apartment, according to the report.

By comparison, the median asking price for a rental in the middle-class western suburb of Kendall is $1,425, or $1.15 per square foot, for a 1,260 square foot apartment. In the Northeastern Miami-Dade suburb of Aventura, the median asking price is $1,850, or $1.42 per square foot, for a 1,302 square foot condo, according to the report.

Overall, the median rental asking price in South Florida is $1,575, or $1.25 per square foot, per month.

On a county-by-county basis, the median asking price per month is $1,750, or $1.46 per square foot, in Miami-Dade; $1,300, or 95 cents per square foot, in Broward; and $1,600, or $1.21 per square foot, in Palm Beach, according to the report.

"The unanswered question is, will rental rates remain steady given the amount of available inventory?" Zalewski said.

South Florida has 27,027 residential properties for rent, with 10,891 located in Miami-Dade County, 7,876 situated in Broward County, and 8,260 properties in Palm Beach County.

Miami-Dade represents the largest chunk of available inventory with 40.3 percent of the regional total. Palm Beach County is second with 30.6 percent of the inventory, and Broward County is third with 29.1 percent of the inventory.

On a city-by-city basis, Fort Lauderdale has the greatest amount of available rentals with 1,694 properties. Greater Downtown Miami is second with 1,604 properties, and Miami Beach's popular South Beach neighborhood is third with 1,414 properties.

Rounding out the top five are Boca Raton with 1,405 rental properties and West Palm Beach with 1,302 properties.

Condo Vultures® Featured On CNBC's Squawk On The Street

CNBC's popular Steals and Deals segment featured Condo Vultures® on April 15 during the financial news network's Squawk On The Street program. The Steals and Deals segment focused on bank-owned condo units in Greater Miami that are now available at discounts as deep as 81 percent.

Miami Condo Trends Subject of Upcoming Seminar

Condo Vultures® is relaunching its seminar series on Tuesday, April 28, at the Doubletree Grand Hotel in Miami with a presentation by real estate consultant and broker Peter Zalewski. The agenda will include a discussion of proprietary research collected by Condo Vultures® regarding the South Florida condo market and the official launch of the firm's recently published eBooks, the the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™. For more information about attending, please visit the Upcoming Events section of CondoVultures.com.

Peter Zalewski of Condo Vultures® can be reached at 800-750-0517 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report™ for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™. Our new books, the Official Condo Buyers Guide to Miami™ and Miami's Great Condo Crash: A Chronicle of the Boom and Bust™ are now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database™.

Copyright © 2009, Condo Vultures® LLC

Up To 36,000 Florida Homes Contain Chinese Dry Wall: Report

Thu, 02 Apr 2009 14:51:52 GMT

Up to 36,000 single-family houses in Florida and 100,000 homes nationwide are estimated to contain the sulfur-smelling, metal tarnishing, appliance ruining, wire corroding, Chinese dry wall, according to the South Florida Sun-Sentinel.

No estimates have yet been made public on the number of condominiums units - where a typical project will have 300 to 500 residences a single tower - built out in the United States with the sulfur-scented Asian wallboard.

"Expectations are that the same regions that are now struggling with an oversupply of new condos built during the boom years could soon be faced with the added challenge of Chinese dry wall," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures ® LLC. "South Florida, Las Vegas, and San Diego are three areas that we could envision having a problem."

Developers imported dry wall in large quantities from China during the building boom years of 2003 to 2007 in response to rising prices and a shortage of materials.

Some of that drywall now hung in homes and condos across the nation was created with a combination of ingredients that puts off a sulfurous smell, ruins electronics, and corrodes wiring.

Headaches, nose bleeds, and sore throats are the typical health complaints made by individuals living in homes with Chinese dry wall.

Litigators are now organizing homeowners in hopes of negotiating with developers to replace the Chinese dry wall and corroded wiring, and provide reimbursements for the damaged electronics and appliances.

State and federal officials and politicians are also scrambling to better understand the problem.

The Florida Department of Health is studying the issue after receiving more than 100 complaints. U.S. Sen. Bill Nelson, D-Fla., has introduced a bill that calls for a "recall and an immediate ban" on the problematic Chinese dry wall, according to the Sun-Sentinel.

"In the end, the Chinese dry wall will be replaced," Zalewski said. "The question is, who will pay for it?"

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database . Our new book Miami's Great Condo Crash: A Chronicle of the Boom and Bust is now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database.

Copyright © 2009, Condo Vultures® LLC

$23 Million Paid For 6 Waterfront Miami Beach Area Condos

Tue, 31 Mar 2009 15:27:29 GMT

Buyers paid a combined $23 million in March for six waterfront condominium units located on the Barrier Island just east of Downtown Miami, according to a new condo report from Condo Vultures® LLC.

There were four deals worth $13.2 million that occurred in Miami Beach, and two transactions worth $10 million that closed in Sunny Isles Beach, according to the condo report.

"Investors seem to be saying with these purchases that new waterfront housing on Miami's Barrier Island is a great hedge against a volatile real estate market," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®.

In trendy Miami Beach, Buyers closed on three transactions in the Capri South Beach for a combined $9.4 million, and one deal at the Apogee for $3.75 million.

Buyers in Sunny Isles Beach paid $5.25 million for a 5,030-square-foot penthouse at the Sayan, and $4.75 million for a two-story unit in the newly opened Jade Beach, according to the condo report.

Four of the transactions closed with cash but two involved financing.

A balloon mortgage for $4 million was provided on the $5.25 million unit at the Sayan, and an Adjustable Rate Mortgage in the amount of $500,000 was extended on a $2.36 million purchase at the Capri South Beach, according to the condo report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database . Our new book Miami's Great Condo Crash: A Chronicle of the Boom and Bust is now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database.

Copyright © 2009, Condo Vultures® LLC

South Florida Resale Inventory Falls 1% To 94,000 Residences

Mon, 30 Mar 2009 16:51:46 GMT

As the South Florida winter tourism season enters its last month, buying activity in the residential real estate markets of Miami-Dade, Broward, and Palm Beach counties is only intensifying.

South Florida's residential resale inventory of condominium units, townhouses, and single-family houses dropped by nearly 1 percent in the last week to the 94,526 properties on March 30 compared to 95,409 properties on March 23. At the beginning of the winter tourism season on Nov. 24, 2008, South Florida had 107,527 properties on the market, according to a new report from Condo Vultures® LLC.

Pending sales of residential real estate are also on the rise throughout the tri-county region. In the last week, South Florida pending sales increased by more than 3 percent to 12,985 on March 30 compared to 12,576 on March 23. At the beginning of the winter tourism season, pending sales in the region totaled 9,302, according to the report.

"South Florida's residential real estate market is in flux," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures®. "As the bad news about the U.S. economy and stock market continues to get worse, demand for South Florida properties just keeps strengthening."

Broward County, where Fort Lauderdale is located, is realizing the greatest buying activity in percentage terms.

Pending sales in Broward are up 4.7 percent in the last week to 4,849 on March 30 compared to 4,633 on March 23.

By comparison, pending residential transactions are up 2.6 percent in Palm Beach County to 2,445 on March 30 compared to 2,384 on March 23. In Miami-Dade, pending sales are up 2.4 percent to 5,691 on March 30 compared to 5,559 on March 23, according to the report.

The number of available properties in Broward has slipped by 1.2 percent in the last week to 31,549 on March 30 compared to 31,921 on March 23. The current number of available resale properties in Broward is down 14.6 percent from Nov. 24 when the total inventory was 36,926 properties, according to the report.

Miami-Dade's available residential inventory dropped by 0.9 percent in the last week to 35,268 properties on March 30 compared to 35,581 on March 23. On Nov. 24, Miami-Dade had 40,994 properties for sale.

Palm Beach County is experiencing the slowest pace of inventory depletion.

Active listings in Palm Beach County stand at 27,709 properties, down 0.7 percent from 27,907 properties on March 23 and 29,607 properties on Nov. 24, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report for detailed condo reports. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database . Our new book Miami's Great Condo Crash: A Chronicle of the Boom and Bust is now available. Want to see every foreclosure filed in South Florida since 2007? Check out our Foreclosure Database.

Copyright © 2009, Condo Vultures® LLC

ICON Brickell's $679 Million Construction Loans Set To Mature

Wed, 18 Mar 2009 15:14:05 GMT

The Related Group is faced with $678.5 million of construction loans coming due on the massive three-tower ICON Brickell condo and condo-hotel project within the next eight months, according to the South Florida Business Journal.

A $502 million construction loan on two of the three towers in the ICON Brickell complex is scheduled to come due on June 18. Under the terms of the loan with HSBC Realty Credit Corp, the developer of the 1,820-unit complex can seek a six-month extension that would end on Dec. 18, according to the article.

A $176.5 million on a third tower in the complex is scheduled to mature on Nov. 16. It is unclear if there is a six-month extension option on that loan, according to the article.

"ICON Brickell has the potential to be one of Greater Downtown Miami's most important projects," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "The question unanswered is will it be profitable."

In the first three months of closings through Feb. 27, 2009, ICON Brickell has recorded 17 closed sales worth $13.1 million for an average of $770,576 per unit and $578 per square foot, according to the Miami-Dade County Clerk of the Courts.

At the current pace of six closings per month, the project would need about 300 months or more than two decades to close out. Industry watchers are confident the closing pace will increase significantly once mortgage financing is once again available in the Greater Downtown Miami market.

In the meantime, ICON Brickell has begun to lease - Condo Vultures® Realty LLC has several leases pending - developer-owned units to tenants interested in the living in the project designed by Internationally acclaimed French designer Philippe Starck.

Tenants are attracted by the overwhelming amenities that include as a two-acre pool deck with Japanese blueberry trees planted, three swimming pools including one that stretches 300 feet and another on the 50th floor of the west tower also known as ICON Brickell No. 3, five restaurants, seven bars, an outdoor fireplace, the largest hot tub in Florida, and a 28,000-square-foot spa and fitness center that features a massive indoor wading pool.

ICON Brickell is comprised of a north tower (57-stories), a South Tower (57-stories), and a West Tower (50-stories) located at 495 Brickell Ave. on the site of the former Sheraton Hotel.

The project is located between two parks, Brickell Park, named after the area influential pioneering family the Brickells, and the state-owned site on the south bank of the Miami River where the Tequesta Indian's ancient Miami Circle sundial is situated.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Miami Single-Family House Contracts Spike 3% In A Week

Tue, 10 Mar 2009 14:54:03 GMT

Spooked by the violent swings of the U.S. stock market combined with plummeting real estate prices, buyers moved aggressively in the last week to purchase single-family houses in Greater Miami, according to a new report from Condo Vultures® LLC.

The number of single-family houses under contract in Miami-Dade County increased 3 percent in the last seven-day period ending March 9, according to the report from the Bal Harbour, Fla.-based consultancy using data from the Florida Association of Realtors.

In Miami-Dade, there are now 2,682 houses under contract, up from 2,603 on March 2. That's a net increase on a weekly basis in pending sales of 79 properties, or an average of 11 new contracts per day.

Pending contracts in Broward County, where Fort Lauderdale is located, are also on the rise, increasing 1.2 percent in the last seven day period ending March 9. In Broward, there are now 2,222 pending contracts on single-family homes, up from 2,195 contracts on March 2.

Palm Beach County, where West Palm Beach and Boca Raton are located, experienced a 0.3 percent decrease in pending sales to 1,171 contracts on March 9 compared to 1,174 accepted offers on March 2, according to the report.

"Single-family houses are the product of choice for today's buyers," said Peter Zalewski, a principal with Condo Vultures® LLC. "In terms of where buyers are focusing their efforts, Miami-Dade is the clear focal point with Broward second. Palm Beach is a distant third in terms of buyer interest based on pending contracts."

Surging single-family house sales in Miami-Dade and Broward combined with minimal changes in Palm Beach have worked to put all three counties into a statistical tie in terms of available inventory.

Each of the three South Florida counties has slightly more than 33 percent of the 40,514 single-family houses on the market as of March 9, according to Condo Vultures®.

Miami-Dade, considered by most to be the epicenter of Florida real estate downturn, has 13,881 single-family houses for sale, down -1.2 percent from the 14,044 available properties the previous week ending March 2.

Broward has 13,351 houses for sale, down -0.9 percent from 13,468 homes the previous week ending March 2.

Palm Beach County has 13,282 houses for resale, down 0.3 percent from the 13,327 single-family homes the previous week ending March 2.

On the condo and townhouse front, South Florida has 56,068 residential properties for sale, an increase of 0.1 percent, or 66 units, on a week-over-week basis ending March 9.

Condo and townhouse inventory remained steady in Miami-Dade (22,144 units for resale for a 0 percent change) and Broward (19,030 units for resale for a 0 percent change) while increasing 0.5 percent in Palm Beach to 14,894 units in a week from 14,823 condos on March 2, according to the report.

The tri-county South Florida region has 96,582 single-family houses, condominium units, and townhouses for resale, down 0.3 percent from 96,841 properties available on March 2. The week of Thanksgiving - Nov. 24 - there were 107,527 residential properties for sale, according to the report.

Pending sales of condos and townhouses increased by 1.8 percent in the last week to 5,685 deals, from 5,584 binding contracts on March 2.

Palm Beach experienced a 3.4 percent surge in pending sales to 1,077 deals on March 9 from 1,042 on March 2.

Pending contracts increased 2.6 percent in the last seven days in Broward to 2,051 deals on March 9 compared to 1,999 on March 2.

Pending deals were up 0.6 percent in Miami-Dade to 2,557 contracts on March 9 compared to 2,543 on March 2, according to the report.

There are currently 11,760 pending residential resale deals in South Florida, up 1.8 percent from the 11,556 existing contracts on March 2. For comparison, consider on Nov. 24 - Thanksgiving week - South Florida had 9,302 pending contracts.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Proposed Downtown Miami Project Goes Into Foreclosure

Thu, 05 Mar 2009 15:42:41 GMT

The proposed seven-story Biscayne Lofts project located just north of Downtown Miami is being foreclosed.

TotalBank, a Miami-based bank with assets of $2.1 billion, filed the initial foreclosure paperwork, known as Lis Pendens, against the project's owner Biscayne Lofts Ltd. on March 2 in Miami-Dade Circuit Court.

Biscayne Lofts was proposed to be a new 15-unit project with 16,212 square feet built just east of Biscayne Boulevard at 333 NE 33 St. in Miami's artsy Biscayne Boulevard Corridor.

"Biscayne Lofts is one of the nearly 50 projects proposed for Greater Downtown Miami that was never built during the boom years of 2003 to 2010, when the last unit is scheduled to be completed," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures ® LLC. "Overall, developers will have constructed 22,737 new units in a 60-block stretch of Greater Downtown Miami that is comprised of Biscayne Boulevard Corridor, Downtown, and the Brickell Avenue Area. In the 40 years before the boom, developer constructed about 11,500 units."

Biscayne Lofts Ltd. was to be built by Aventura-based Palen Development LLC, with members Jorge Sumbre, Susana B De Sumbre, Horacio D. Najlis, and Nora S Wolaj, according to the Florida Department of State.

Construction costs for the mid-rise condominium was projected to be $2 million, or $124 per square foot, to construct the 74-foot tall structure, according to the City of Miami.

The development group purchased the 7,820-square-foot lot for the project in June 2004 for $625,000, or $80 per square foot. The owners immediately obtained an 18-month predevelopment loan, with a six-month extension option, for $312,500 from the former Beach Bank in June 2004.

In December 2005 when the loan was scheduled to mature, the development group exercised its extension option through June 2006.

In March 2007, Biscayne Lofts refinanced the original mortgage and extended the debt amount to $370,000 with a loan from TotalBank.

At the time of refinance in 2007, Miami-Dade County assessed the property's value at $782,000, or $100 per square foot. In 2008, the county assesses the value of the undeveloped land at $625,600, or $80.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Lender Dumps Loan On Florida Oceanfront Development Site

Tue, 03 Mar 2009 21:41:29 GMT

A Miami private equity group located on Brickell Avenue has purchased the existing land loan on the proposed but never started 47-story Paramount Beach luxury oceanfront condominium in Sunny Isles Beach.

Sunny Isles Property Holdings LLC, with managing member Carlos J. Mattos, acquired the loan on Feb. 17 from iStar FM Loans for an undisclosed price. The original loan was made in November 2006 for $32.2 million and scheduled to come due in February 2009, according to the Miami-Dade Clerk of the Court.

Foreclosure proceedings were initiated against the owner of the Paramount Beach land in December 2008, according to the Miami-Dade Circuit Court.

It is unclear what the new owner of the loan has in mind going forward given the dramatic downturn in the South Florida real estate market and the unlikelihood that any new development, especially residential, will occur in the foreseeable future.

"Given the thousands of units that have been constructed in the Sunny Isles Beach area since 2003, we have serious doubts about whether anyone will be able to develop any additional residential product, especially high-end condo units, in the area for at least the next five years," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "With market conditions being as dismal as they are, computing the price of undeveloped land is an extremely challenging exercise."

Sunny Isles Development Company LLC with Daniel Kodsi and Joseph Kodsi purchased the 62,800 square foot property for $25 million, or $398 per square foot, in May 2003 for the proposed Paramount Beach luxury condominium.

The Paramount Beach was proposed to be a 232-unit luxury tower with six residences per floor excluding the penthouse floor.

All of the units were to be three-bedroom and four-bedroom residences that ranged in size from 1,925 square feet to 3,695 square feet.

Pricing was to start at $980,000 and go as high as $1.8 million, according to original project literature.

The Paramount Beach property is located at 16901 Collins Ave, situated immediately south of the newly opened Jade Beach condominium tower and the north of the Sands Pointe condominium.

The rectangular-shaped property, which is zoned for multi-family, high density residential, is assessed for $19.5 million, or $311 per square foot, by Miami-Dade County Property Appraiser.

Property taxes for 2007 and 2008 in the amount of $792,412.14 have are owed on the land, according to Miami-Dade County.

Immediately upon purchasing the property in May 2003, the owner, Sunny Isles Development Company LLC, immediately obtained a $13.04 million mortgage from the former Union Planters Bank, which is now Regions Bank.

In December 2005, an additional $1.96 million in financing was provided on the property to the former Union Planters Bank.

In November 2006, the owner of the Paramount Beach land refinanced the property into a $32.2 million loan with Fremont, which through acquisition would ultimately become iStar.

In February 2008, iStar modified the due date on the Paramount Beach loan to Feb. 1, 2009.

Some 10 months later in December 2008, iStar filed a Lis Pendens action against the borrower to initiate the foreclosure process.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

South Florida Residential Inventory Drops Below 97,000

Tue, 03 Mar 2009 05:38:03 GMT

South Florida's residential resale inventory has fallen 1.3 percent in the last week to 96,841 single-family houses, townhouses, and condominium units in the tri-county region of Miami-Dade, Broward, and Palm Beach counties, according to a new report from Condo Vultures® LLC.

A month ago on Feb. 2, there were 99,033 residences for sale in the region, and three months ago on Dec. 1 there were 106,420 single-family houses, townhouses, and condominium units for sale in South Florida, according to Condo Vultures®.

In the last seven days, the number of actively available South Florida resale properties declined by 187 residences per day or 1,312 single-family houses, townhouses, and condominium units.

For the last 90 days, the residential inventory has been on a reduction pace 106 properties per day for a total of 9,579.

"The fact that inventory continues to drop by more than 1 percent a week in a market where financing is nonexistent is worth monitoring," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "Inventory is falling nowhere near the rate of the peak of the market in 2005 when housing was challenging to find. At the same time, if the available South Florida resale inventory continues to slip by a net of 106 properties or more a day, the total drop for the year would be nearly around 39,000 residences.

"That is assuming there isn't an surge in buyers if and when financing is restored to the market."

On a county-by-county basis, Broward County led the region in terms of the fastest falling inventory with a decrease of 1.5 percent to 32,500, down from 33,010 on Feb. 23.

Miami-Dade County was second with a 1.4 percent drop in inventory to 36,191 on March 2 compared to 36,706 resale properties on Feb. 23. Palm Beach County's inventory slipped by 1.0 percent to 28,150 on March 2 compared to 28,437 properties on Feb. 23, according to the report.

As inventory drops, the number of pending sales continues to ramp up, increasing by 1.4 percent in the last week. On March 2, South Florida had 11,556 pending sales compared to 11,397 on Feb. 23, and 10,362 a month ago on Feb. 2, according to the report.

Palm Beach County is leading the region, in terms of percentage growth, in the number of pending sales. In the last week, Palm Beach County experienced a 1.7 percent surge to 2,216 pending sales on March 2 compared to 2,178 on Feb. 23.

Miami-Dade and Broward counties both experienced growth of 1.3 percent in pending sales.

Miami-Dade has 5,146 pending resales as of March 2 compared to 5,080 on Feb. 23 and 4,755 on Feb. 2. Broward has 4,194 pending resales compared to 4,139 a week ago on Feb. 23 and 3,698 on Feb. 2, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Las Vegas, Chicago Banks Latest To Fail

Sat, 28 Feb 2009 17:31:37 GMT

Regulators shut two more banks - one in Nevada and another in Illinois - on Friday, increasing the total number of failed institutions to 10 for the month of February and 16 for the year.

Security Savings Bank in Greater Las Vegas with assets of $238 million and Heritage Community Bank outside of Chicago with assets of $233 million were seized by regulators on Feb. 27.

Losses from these latest two failures are estimated to cost about $101 million, according to the Federal Deposit Insurance Corp., which was named receiver of both institutions.

Bank failures in the first two months of 2009 are expected to cost the FDIC more than $1.7 billion.

At this pace of about $867,000 in losses a month, the total write off for the FDIC for the year would be more than $10 billion, according to a new report from Condo Vultures® LLC.

In 2008, the FDIC's estimated losses on 25 bank failures were between $10.4 billion and $14.9 billion.

"The FDIC is on pace to shut down four times the number of banks in 2009 compared to 2008," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "Despite the dramatic surge in the number of bank failures this year, the total loss to the FDIC in dollars is on pace to be relatively the same as in 2008 on a year-over-year basis. That is, unless a regional financial institution the size of IndyMac Bank goes down again."

In July 2008, IndyMac Bank, a California institution with $32 billion in assets and $19 billion in deposits, was seized by regulators in a failure that is estimated to cost the FDIC between $4 billion and $8 billion.

On a state-by-state basis, California and Illinois lead the nation in the number of 2009 bank failures with three shuttered institutions each. Florida and Oregon are next with two bank failures each.

The remainder of the failed banks is comprised of one shuttered financial institution in each of the following states: Georgia, Maryland, Nebraska, Nevada, Utah, and Washington.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Anatomy of a Vulture Bulk Deal

Fri, 27 Feb 2009 16:35:52 GMT

A pair of veteran Miami real estate investors obtained a 145-unit apartment complex near the popular Dadeland Mall in Kendall with development rights for more than 700 new units in an all-cash deal that works out to a more than 60 percent discount.

Les Chalet Investments LLC, with Tomas Cabrerizo and Maurice Cayon, has subsequently obtained a $7.2 million mortgage on the five-acre property at 8215 Southwest 72nd Ave, which is located just north of Kendall Drive, south of the Snapper Creek Extension and west of U.S. 1/South Dixie Highway.

"This is a text book Vulture deal," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "The buyers purchased the mortgage at a deep discount off of the original loan amount and immediately proceeded to foreclose. Upon obtaining clear title to the property through the court system, the buyer then took out a commercial loan with terms that allow for the rents to more than cover the expenses."

The whole deal took less than a year to materialize, according to public records. Here is a blow-by-blow description of how it happened.

In June 2007, Dadeland Nadlan LLC purchased the five-building Les Chalet apartment complex with 127,192 square feet of living area for $35.5 million. This price worked out to $244,828 per unit and $279 per square foot.

Part of the reason for the rich premium for a 1967 project was the fact the property has development rights for two 25-story towers with 726 units, according to press reports. The surrounding areas experienced a condo tower boom during the real estate run up.

The seller was Premier Urban Properties with Alejandro Robles as president, according to the Florida Department of State.

The Miami-Dade County Property Appraiser assessed the project the year of Dadeland Nadlan's purchase in 2007 at $18.4 million, or $126,897 per door or $145 per square foot. In 2008, the project was assessed at $23.2 million, or $160,000 per unit or $182 per square foot.

Dadeland Nadlan LLC bought the property byway of a $25 million mortgage obtained in June 2007 from Fortress Credit Corp. in New York. The mortgage worked out to $172,414 per unit or $197 per square foot.

In February 2008, Dadeland Nadlan LLC's managing member Elie Berduo, who was spearheading the project, died of a heart attack while in Israel.

Berdugo, a real estate developer and contractor who founded the successful Boca Raton-based EB Developers in 1993, owned thousands of residential square feet in Florida and even a Manhattan hotel site.

EB Developers was a successful company that built "luxury homes and garden-style condos, and, in recent years lined up $1.5 billion in projects," according to press reports.

Berdugo's passing proved to be too much for the development company to overcome.

By May 2008, Dadeland Nadlan's lead lender Fortress sold the mortgage to Les Chalet Investments LLC for an undisclosed price.

Les Chalet Investments LLC moved to foreclose the property in September 2008, claiming it was owed about $16 million in unpaid debt service, attorney fees, and administrative costs. The outstanding amount works out to $110,345 per unit or $126 per square foot.

In October 2008, the Miami-Dade Circuit Court issued a final judgment of foreclosure at an amount of $14.9 million, and set an auction date of Dec. 19, 2008.

No one bid on the property at the courthouse so the lien holder / lender - Les Chalet Investments LLC - took control of the complex on Jan. 5, 2009.

On Feb. 13, 2009, Sovereign Bank in New York provided Les Chalet Investments LLC a mortgage on the complex in the amount of $7.2 million, or $49,655 per unit or $57 per square foot.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

South Florida Pending Sales Jump 3.5%

Mon, 23 Feb 2009 17:26:28 GMT

Buyers are scurrying to purchase resale single-family houses, condominium units, and townhouses in the tri-county South Florida region of Miami-Dade, Broward, and Palm Beach counties despite the lack of financing available in the market, according to a new report from Condo Vultures® LLC.

Pending residential resales in South Florida jumped 3.5 percent in the last week to 11,397 contracts as of Feb. 23 compared to 11,012 contracts a week earlier on Feb. 16. At the beginning of month on Feb. 2, there were 10,353 pending contracts. according to the report produced by Condo Vultures® LLC using Florida Association of Realtors data.

Pending sales have been steadily increasing since Thanksgiving week when 9,302 residences were under contract on Nov. 24. On Jan. 26, the pending sales number stood at 10,007 residences, according to the Bal Harbour, Fla.-based consultancy.

"The data that we are collecting indicates that an increasing number of all-cash buyers are feeling more and more comfortable buying today rather than waiting for tomorrow," said Peter Zalewski, a principal with Condo Vultures®. "It will be interesting to see how and if this trend continues."

Condo Vultures® studies pending sales and available inventory, in addition to closed sales, to get an accurate, realtime understanding of buyer and seller confidence in this unpredictable market.

At the same time that buyers are going under contract, the number of available resales on the market is continuously decreasing. South Florida has 98,153 properties for sale as of Feb. 23, down -0.4 percent from a week earlier when there were 98,530 properties for sale on Feb. 16.

On Feb. 2, there were 99,033 properties for sale, and 100,131 residences for sale on Jan. 26. The week of Thanksgiving, there were 107,527 residences for sale in South Florida, according to the data.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Downtown Miami Condo Tower Site Being Foreclosed

Wed, 18 Feb 2009 15:53:22 GMT

The site of the proposed 68-story Paramount Park condominium tower in Downtown Miami is being foreclosed by a Kansas lender that is owed $21.2 million, according to Miami-Dade County Clerk of the Court records.

Hillcrest Bank in Overland Park, Kan., has filed a Lis Pendens action - the first step in the long foreclosure process - against the owner of the 72,450-square-foot lot at 700 Biscayne Boulevard, immediately east of the AmericanAirlines Arena in Downtown Miami.

Royal Palm 700 Biscayne LLC obtained permission in 2006 to build a mixed-use project standing 756 feet tall and featuring 300 condominium units and 286 hotel rooms. The condominium market had changed dramatically by the time the project was ready to move forward, prompting the developer to consider other options including an office tower.

The developer originally purchased the land in December 2005 for $11.7 million, or $162 per square foot. Six months later in June 2006, Hillcrest Bank provided an $18 million loan on the property before lending another $4 million in December 2007 for a total of $22 million, or $304 per square foot.

Miami-Dade County's Property Appraiser currently assesses the property at $13.7 million, or $189 per square foot.

"Bulk buyers are currently looking to pay $100 to $215 per square foot for finished condominiums in the Greater Downtown Miami area," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "If one were to assume that land costs should be no more than 25 percent of the entire development cost, we would estimate the Paramount Park site is currently valued at much less than $100 per square foot."

Greater Downtown Miami, a 60-block stretch that is comprised of Brickell Avenue, Downtown, and the Biscayne Boulevard Corridor, is considered by many to be ground zero for the Florida condo crash. The number of condo units in this area has nearly tripled to more than 34,000 units since 2003 according to the Condo Vultures® Official Condo Buyers Guide To Miami ™.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

South Florida Pending Sales Jump 5.2% In 7 Days

Tue, 17 Feb 2009 15:40:24 GMT

South Florida experienced a 5.2 percent jump in pending sales during the last week as the tri-county region's available inventory for resale continues to decrease, according to a new report from Condo Vultures® LLC.

As of Feb. 16, buyers had 11,012 single-family houses, condominium units, and townhouses under contract in Miami-Dade, Broward, and Palm Beach counties, which is up 541 contracts from the previous week ending Feb. 9 when 10,471 residences were categorized as pending sales, according to a Condo Vultures analysis of Florida Association of Realtors data.

Leading the surge in contracts is South Florida's condominium and townhouse sector that experienced a 5.4 percent increase in pending deals in the last seven days. The tri-county region now has 5,313 condos and townhouses under contract, up 272 residences from 5,041 units the previous week, according to the report.

Single-family houses are also going under contract at a steady pace. Buyers in South Florida currently has 5,699 houses as pending sales, up 5 percent from the previous week when 5,430 homes were under contract, according to the data.

This is the first time in recent memory that the region has had more than 11,000 pending sales at any moment in time. As recently as Thanksgiving week, the region had only 9,300 pending sales. The last week in January is when the region surpassed the 10,000 pending contract threshold, according to Condo Vultures®.

"The logical question is, why are pending sales increasing if financing is virtually impossible to obtain?" said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®. "The answer is three-fold. First, many buyers are finding properties at prices that make sense from an investment perspective. Second, many buyers are withdrawing from the volatile stock market and moving to brick-and-mortar for their dollars.

"Finally, foreign nationals seem to think the U.S. Dollar will be strengthening in the months ahead as their home country currencies weaken. "

South Florida's inventory continues to be depleted. On a week-over-week basis, the number of available condos, townhouses, and single-family houses decreased by -0.2 percent to 98,530 from the prevous week's total of 98,748, according to the data.

Available single-family house inventory decreased by -0.6 percent to 41,697 compared to a 41,961homes a week earlier. Condos and townhouses increased slightly to 56,833 from 56,787 units a week earlier, according to the data.

Miami-Dade currently accounts for 37 percent, or 36,885 residences, of the total South Florida available inventory. Broward is second with 34 percent, or 33,188, and Palm Beach is third with 29 percent, or 28,457 residences for sale, according to Condo Vultures®.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Bulk Buyer Pays $144 PSF For West Palm Beach Condo Tower

Sun, 15 Feb 2009 19:50:17 GMT

A European bulk buyer has purchased 141 units in the troubled Whitney condominium for $24 million, or a 45 percent discount off of the existing $43.9 million loan amount, according to the Palm Beach Daily Business Review.

ABG Sundall Collier, a publicly traded Scandanavian investment firm based in Oslo, Norway, reportedly closed the deal on Feb. 12 although the unit deeds have not yet been recorded with Palm Beach County Clerk of the Court, according to the article.

"Our analysis indicates that the bulk buyer paid $144 per square foot for the remaining residential inventory that had an existing loan amount equal to $264 per square foot, " said Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures® LLC. "From a price discovery perspective, it is important to note that this is the second bulk condo transaction to close in Downtown West Palm Beach in the mid-$100 per square foot range."

The seller was a Florida entity related to New York-based lender iStar Financial, which began foreclosure proceedings against the new eight-story midrise condominium in January 2008. The lender eventually gained possession of the property from the developer in December 2008 with a deed-in-lieu of foreclosure transfer.

Fremont Investment and Loan was the original lender on the Whitney condominium, but subsequently sold the condo construction loan as part of a portfolio sale to iStar. The original loan amount for the 210-unit complex was $52.5 million, or an average of $250,000 per unit.

Located at 410 Evernia Street, the Whitney condominium had strong presales during the condo boom of 2004-05 but was only able to close 69 units, or about one-third of the total inventory, when the tower was completed in June 2007.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

4 More Banks Fail At Cost Of $341 Million

Sat, 14 Feb 2009 23:39:52 GMT

Regulators seized four banks with combined assets of $1.01 billion and deposits of $808 million in Florida, Illinois, Nebraska, and Oregon on Friday, Feb. 13, in moves that will generate estimated losses of $341 million for the Federal Deposit Insurance Corp.

This latest round of bank failures is comprised of Florida's Riverside Bank of the Gulf Coast with assets of $539 million and deposits of $424 million; Illinois' Corn Belt Bank and Trust Co. with assets of $272 million and deposits of $234 million; Oregon's Pinnacle Bank with assets of $73 million and deposits of $64 million; and Nebraska's Sherman County Bank with assets of $130 million and deposits of $85 million, according to the FDIC.

The seizures come a week after regulators shut three banks in California and Georgia with assets of $3.2 billion and deposits of $2.5 billion on Feb. 6 at an estimated cost to the FDIC of $452 million, according to a report from the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.

For the year, regulators have closed 13 institutions with combined assets of $6.7 billion and deposits of $5.6 billion. The failed banks have been located in nine states (California with three failures, Florida and Illinois each with two bank failures) are estimated to cost close to $1.6 billion, according to Condo Vultures ®.

In 2008, regulators shut 25 institutions from 13 states with combined assets of $374 billion and deposits of $234 billion. The estimated losses of the 2008 bank failures is between $10.4 billion and $14.9 billion, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Florida, Nevada Unscathed - So Far - By Bank Failures

Wed, 11 Feb 2009 14:56:33 GMT

Regulators have closed 34 banks in the United States in the last 13 months, yet somehow only five of the financial institutions to fail have been based in the devastated real estate markets of Florida and Nevada, according to a new report from Condo Vultures® LLC based on FDIC data.

Florida has had only three institutions fail - all outside of South Florida - while two Nevada banks were seized by regulators. For context, consider that Georgia, a state with a diversified economy and a somewhat steady housing market, has had six banks closed, which is twice as many as Florida and three times that of Nevada, according to the report.

Georgia's surprisingly high number of bank failures, in fact, ranks the state second in the nation behind only California, which has had eight institutions shuttered since January 2008, including three in 2009, according to the report.

"Many people are going to be surprised by the lack of bank failures in Florida and Nevada given the dramatic price drops that have occurred in both states' real estate markets," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®. "One way to explain the low bank failure rate in Florida and Nevada is to assume that the local institutions in each market did a more competent job of lending and underwriting loans than did the out-of-town financiers who rushed to market.

"The other more likely explanation is that both states are primed for a rash of problems in the future."

Florida is home to 307 institutions insured by the FDIC, while Nevada has 41 banks with deposit insurance. California has 312 FDIC-insured banks, and Georgia 335 institutions. The FDIC insures deposits up to $250,000 per account at 8,310 institutions in the United States, Puerto Rico, Micronesia, Guam, American Samoa and the Virgin Islands.

In 2008, the FDIC shut 25 banks in 13 states at a projected loss to the government program of between $10.4 billion and $14.9 billion. In the first six weeks of 2009, the FDIC has already shut nine banks in seven states at a projected loss of at least $1.2 billion, according to the report.

The institutions that did fail in 2008 had combined assets of $374 billion and deposits of $234 billion. The 2009 failures have combined assets of $5.7 billion and deposits of $4.8 billion, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

NY Developer Cleared To Build West Palm Beach Condo Tower

Tue, 10 Feb 2009 16:11:36 GMT

A New York development group has received final governmental approval to construct a 24-story luxury condominium on a 2.5 acre-site in downtown West Palm Beach that overlooks the Intracoastal Waterway.

Trinity Development Group LLC's project, the 84-unit Modern condominium at 1515 S. Flagler Drive, was approved Monday with a 3-2 vote by the West Palm Beach city commission, according to the Palm Beach Post.

The city commission vote clears the way for Trinity Development to raze the vacant 1515 Tower - a 31-story, 119-unit condominium destroyed by the 2004 hurricane season - that currently stands on the site.

In order to obtain the final approval, the developer agreed to demolish the boarded-up tower within the next six months, according to the article.

Prices at the Modern condominium start at $3 million for units that are proposed to range in size from 3,000 square feet to 9,000 square feet, according to the company's website.

It is unclear when the tower is scheduled to be complete or even when construction could begin.
Originally, the project was supposed to be delivered in Spring 2010 but local opposition to the project and changing market conditions hampered those plans.

Stillwater Capital Partners, a New York hedge-fund with assets of more than $800 million, is a joint-venture partner in the project with Trinity Development, according to the company's website.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

South Florida Resale Inventory Drops To 98,000 Residences

Mon, 09 Feb 2009 22:09:50 GMT

South Florida's residential real estate inventory dropped for the third consecutive week as the number of pending sales increased during the same period, according to a new report from Condo Vultures® LLC.

South Florida has 98,748 single-family houses, condominium units, and townhouses on the market as of Feb. 9, down -0.3 percent from the 99,033 residences on the market Feb. 2 and the 100,131 homes available on Jan. 26, according to the report by the Bal Harbour, Fla.-based consultancy.

Single-family houses are dragging down the overall inventory in Miami-Dade, Broward, and Palm Beach counties while the number of condos is falling at a somewhat slower pace in the tri-county South Florida area.

The number of single-family houses on the market has fallen by nearly 1,000 in the last two weeks, going from 42,819 available resales on Jan. 26 to 41,961 resales on Feb. 9. The current condo total stands at 56,787, down about 500 units from the 57,312 condos on the market on Jan. 26, according to the report.

As South Florida's resale inventory is depleted, the number of pending sales continues to increase, spiking 1 percent in the last week in the region.

There are currently 10,471 properties under contract as of Feb. 9, up from 10,363 on Feb. 2, and 10,007 on Jan. 26, according to the report.

Miami-Dade continues to lead the region in pending sales with 46 percent of the total deals. Broward is second with 35 percent, and Palm Beach is third with 19 percent.

Single-family homes account for 5,430 of the pending sales in the region, while condos represent the remaining 5,041deals, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

South Florida Residential Resale Inventory Drops -1.1%

Tue, 03 Feb 2009 15:27:29 GMT

South Florida's housing resale inventory slipped -1.1 percent in the last week to a total of 99,033 residential properties while pending sales in the tri-county region increased 3.6 percent to 10,363 contracts, according to a new report from Condo Vultures® LLC using data from the Florida Association of Realtors.

This is the first time in recent memory that the number of condos, townhouses, and single-family houses in Miami-Dade, Broward, and Palm Beach counties has slipped below 100,000 homes.

For comparison, on Jan. 26 South Florida had 100,131 properties available for resale, and on Dec. 1, there were 106,420 residential properties on the market, according to the data.

As inventory is decreasing, the number of pending sales is rising. Buyers currently have 10,363 resale properties under contract compared to 10,007 pending deals on Jan. 26, and 9,393 contract on Dec. 1, according to the data.

Miami-Dade has the greatest amount of resale inventory with 37,116 properties, down -1.1 percent from Jan. 26.

Broward has the second highest amount with 33,453 resale properties, which is down -1.5 percent from last week. Palm Beach has 28,464 residential properties for sale, down -0.7 percent from last week, according to the data.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Report: South Florida Properties Sell At -43% Discount In 2008

Fri, 30 Jan 2009 05:00:58 GMT

Nearly 2.7 million square feet of condos, townhouses and single-family homes in coastal South Florida sold in 2008 at an average discount of -43 percent, or -$323,784 per residence, according to a new report from Condo Vultures® LLC.

There were 1,717 properties east of I-95 in Miami-Dade, Broward, and Palm Beach counties in the Vultures Database™ that traded last year for a combined price of $775 million, down from a historical high of $1.33 billion.

The overall price drop equates to a combined discount of more than $550 million off of the historical high asking price for the properties that were sold, according to the report by the Bal Harbour, Fla.-based consultancy.

"Every month in 2008, an average of 143 residential properties in the Vultures Database™ sold at 57 cents on the dollar," said Peter Zalewski, a principal with Condo Vultures®. "Given the difficulty in obtaining financing, our data and anecdotal evidence suggests that at least two-thirds of the units sold were purchased by all-cash buyers who didn't need financing to complete their transactions. We don't know how many of these buyers obtained financing after closing."

All-cash buyers who have the ability to close quickly have enjoyed success in South Florida negotiating down prices on residential product from distressed sellers, Zalewski said.

For comparison, consider that in 2007, there were 1,272 properties in the Vultures Database™ that sold at an average discount of -29 percent, or $258,818 per residence, according to the data.

"The Vultures Database™ is comprised of residential properties east of I-95 in Miami-Dade, Broward, and Palm Beach counties from Cutler Bay to West Palm Beach that have dropped in price by at least -10 percent or -$100,000.

On Dec. 31, the Vultures Database™ was comprised of 4,301 condo units, townhouses, and single-family houses in South Florida that had dropped in price by an average of -39 percent, or -$259,356 per residence, according to the report.

Condos and townhouses, which account for 69.6 percent of the total Vultures Database™ inventory, are down an average of -38.5 percent, or -$210,121 per residence. Single-family houses, which represent the remaining 30.4 percent of the inventory, are down an average of -40.2 percent, or -$372,265 per home, according to the Vultures Database™ Report for January 2009.

Pricing in Miami Gardens is down an average of -60.3 percent, making the Miami-Dade County community the city and/or neighborhood with the biggest price drop in South Florida, according to the data.

The Hypoluxo area in Palm Beach County ranks second with an average price drop of -48.4 percent. The neighborhood in Broward County with the biggest price drop is the Oakland Park area, where discounts have reached -45.9 percent, according to the data.

As buyers increasing pick off deeply discounted properties on the barrier island, the difference in pricing is becoming wider and wider for sellers located on the South Florida mainland, according to the data.

For instance, Greater Downtown Miami has an average price drop on condos of -41.8 percent while across the causeway in Miami Beach the average discount is -34.3 percent.

"This is a classic example of buyers flocking to quality, which for many means sand and surf," Zalewski said. "Many people consider a quality building on the water, especially the ocean, a great hedge at times of uncertainty."

The 2008 closed sales of residences in the Vultures Database™ appear to support the notion that buyers, especially those purchasing second homes, are willing to spend more to be near the water.

In 2008, there were 278 Miami Beach properties in the Vultures Database™ that sold for an average discount of -37 percent while the South Florida tri-county regional average discount was -43 percent, according to the data.

In Miami, where the bulk of the new product was constructed based on widespread speculation, there were 378 sales of residences in the Vultures Database™ at an average discount of -48 percent, according to the data.

In Fort Lauderdale, there were 208 transactions of properties in the Vultures Database™ that closed at an average discount of -41 percent.

Hallandale Beach ranked fourth in the region in 2008 for the greatest number of closed deals from the Vultures Database™ with 138 properties at an average discount of -45 percent.

Rounding out the top 5 markets for Vultures Database™ discounts was Sunny Isles Beach with 109 transactions that closed at an average drop of -39 percent.

It is worth noting that Hollywood, just north of Sunny Isles Beach, had 105 deals close out of the Vultures Database™ at an average discount of -43 percent.

All told, there were 29 cities and/or neighborhoods in South Florida that experienced a transaction where the property was being monitored in the Vultures Database™.

The list of South Florida cities ranges from ultra-wealthy Fisher Island, where a property was purchased at a -53 percent discount, to Boca Raton, where 13 properties were sold at an average discount of -49 percent, according to the data.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Residential Resales Drop -19% in Miami, -4% in South Florida

Wed, 28 Jan 2009 13:37:01 GMT

Residential real estate resales in South Florida dropped by -4 percent in 2008 to 34,915 transactions compared to 36,366 in 2007, according to a new report from Condo Vultures® LLC using data from the Florida Association of Realtors.

The Greater Miami metropolitan area experienced a -19 percent drop in transaction as 8,959 residential properties closed in 2008 compared to 11,061 in 2007, according to the report by the Bal Harbour, Fla.-based consultancy.

The overall regional drop in sales would have much deeper if not for slight increases percentage wise in Greater Fort Lauderdale and the West Palm Beach to Boca Raton metropolitan areas.

Fort Lauderdale experienced a 2 percent increase in resales in 2008 with 12,928 transactions closed compared to 12,660 in 2007.

In the West Palm Beach to Boca Raton metropolitan area, the closed sales increased by 3 percent to 13,028 in 2008 compared to 12,645 in 2007, according to the data.

Statewide, resales were down -6 percent in Florida with 162,012 transactions occurring in 2008 compared to 171,720 in 2007, according to the data.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

S. Florida Resale Inventory Poised To Drop Below 100,000 Residences

Mon, 26 Jan 2009 15:53:35 GMT

For the first time in recent memory, the number of single-family houses, condominiums, and townhouses on the resale market in South Florida could drop below 100,000 residences, according to a new report from Condo Vultures® LLC.

Simultaneously, the number of pending sales has broken the important psychological benchmark of 10,000 residences – 10,007 to be exact - under contract and scheduled to close in the upcoming weeks, according to the report that was created using the Florida Association of Realtors Multiple Listing Service.

“It is too early to call a bottom to the South Florida housing market but it is evident from the data and the intelligence we are getting from the street is that residential product is starting to trade,” said Peter Zalewski, a principal in by the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.

In Miami-Dade, Broward, and Palm Beach counties, there are 100,131 properties for sale as of January 26. Miami-Dade has 37 percent of the available inventory, Broward 34 percent, and Palm Beach the remaining 29 percent.

By comparison two months ago on Nov. 28, 2008, there were 107,527 properties on the resale market in South Florida. Today’s current inventory represents about a -7 percent decrease in available resale product since late November, according to the report.

Condominiums and townhouses represent the majority of the resale product available in South Florida.

There are currently 57,312 condos and townhouses on the market with Miami-Dade accounting for 39 percent of the inventory, Broward 34 percent, and Palm Beach about 26 percent, according to the report.

The number of pending sales for condominiums and townhouses stands at 4,838 in the tri-county South Florida region. In Miami-Dade, there are 2,307 pending contracts, while in Broward the total is 1,727. Palm Beach has 804 deals in the works.

South Florida amount of available single-family house inventory is also beginning to decrease.

There are currently 42,819 houses on the resale market in South Florida with 14,888 in Miami-Dade, 14,322 in Broward, and 13,609 in Palm Beach.

Two months ago, there were 46,599 single-family houses for sale in South Florida with 16,554 in Miami-Dade, 15,831 in Broward, and 14,214 in Palm Beach.

The number of pending sales involving single-family houses currently totals 5,169, up from 4,868 two months ago, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

JP Morgan Chase Offers Loan Modifications To Investors

Thu, 22 Jan 2009 03:50:15 GMT

Fearing widespread mortgage default on $1.1 trillion of investor-owned properties, JP Morgan Chase has launched a new loan modification program aimed at keeping landlords paying their debt service.

JP Morgan Chase’s loan modification program – dubbed The Way Forward – piggybacks off the financial institution’s efforts implemented late last year geared toward homeowners who are primary users.

"Over the past two years, Chase has helped 330,000 families avoid foreclosure," according to a company statement. "And now, by addressing investor-owned loans, we will help even more Americans keep the homes they've worked so hard to buy."

As part of the initiative, investors can utilize JP Morgan Chase’s new regional centers around the country housing a team of 2,500 loan counselors who have a number of mortgage modification programs to offer qualified borrowers.

"Don't underestimate the significance of JP Morgan Chase's decision to offer loan modifications to borrowers of investor-owned properties," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. "Many industry watchers had thought that lenders would work with homeowners on loan modifications but never investors."

"The fact that JP Morgan Chase is willing to do so could signal that the bank’s future projections as per the default rates on mortgages are more dismal than many had thought."

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Fannie Mae Gets Into Short-Term Rental Business

Thu, 15 Jan 2009 14:42:06 GMT

Fannie Mae, the public-private mortgage giant bailed out by the U.S. government in 2008, is going into the short-term rental business.

Fannie Mae has unveiled a new National REO Rental Policy that now permits renters – regardless of credit score or payment history – to lease homes that have been repossessed by the mortgage giant.

“Overwhelmed with thousands of bank-owned properties in places such as South Florida, Las Vegas, and San Diego, Fannie Mae is obviously desperate to stabilize its portfolio of repossessed residences and reduce the monthly expenses,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Lenders, governments, and neighborhoods are quickly realizing how important it is to have someone living in a foreclosed home even if it means providing extremely generous terms for the renter.”

All of the leases on the Real Estate Owned (REO) properties will be on a month-to-month basis with the rental rates priced at a fair market value for the area. No security deposit will be required, according to Fannie Mae.

Fannie Mae’s rental program is open to tenants who were already living in a home prior to the residence being repossessed.

In return, all of tenants will be expected to cooperate with the listing agents who will be showing the properties to potential buyers. When a property is sold, the terms of the tenant’s lease must be honored by the new owner.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Bulk Buyer Pays $277 PSF For Oceanfront Condo Units

Sun, 11 Jan 2009 18:14:14 GMT

A South Florida private equity fund has paid $277 per square foot for 101 units in the Related Group’s Harbour House oceanfront condominium conversion in wealthy enclave of Bal Harbour, Fla.

A Florida entity called HH Condominium Investments LLC, with Thomas F. Daly as president and former Miami Beach City Manager Christina M. Cuervo as the registered agent, paid $27 million for an average of $268,000 per unit in the 16-story, Y-shaped tower, according to the South Florida Business Journal.

A year earlier in 2007, a Florida entity called HH Condo Holdings LLC, with Christina M. Cuervo as the registered agent and a member, purchased seven units in the Harbour House for $4.1 million, or $588,000 per residence, according to records from Miami-Dade County and the state of Florida.

The seller was TRG-Harbour House Ltd with Jorge M. Perez of The Related Group as president, according to the government records.

The Harbour House transaction is the third bulk deal to close since December, with the other two multiple unit sales occurring in Downtown Miami and Downtown West Palm Beach.

“Given that three bulk deals have occurred in the last month, we would venture to say the long anticipated bulk buying phase of the real estate cycle is finally upon us,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “The most interesting aspect of all of these deals thus far is that the private equity groups, not the hedge funds and pension funds, are the buyers of the product at deep discounts. We could envision a scenario sometime in the future where the private equity groups will be selling to the hedge funds. ”

HH Condominium Investments purchased 97,573 square feet, or 22 percent, of the 434,781 square feet of residential saleable space in the 451-unit tower, according to Miami-Dade County records.

To complete the deal, HH Condominium Investment obtained a $7.3 million mortgage on the units from the seller, according to Miami-Dade County records.

TRG-Harbour House originally purchased the 1960s Harbour House apartment complex for $125 million in December 2004 using a $101 million loan from Germany's Landesbank Hessen Thuringen Girozentrale, according to Miami-Dade County records.

In September 2005, TRG-Harbour House obtained an additional $48 million loan to undertake a complete renovation of the tower, which included replacing all of the windows and sliding glass doors. An additional $24 million in financing was also provided to TRG-Harbour House in 2006, according to Miami-Dade County records.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Bulk Buyer Pays $165 Per Square Foot For West Palm Beach Condo

Sat, 10 Jan 2009 17:32:10 GMT

A Pennsylvania businessman has paid $165 per square foot – at least $15 per foot below the construction replacement cost - for 26 units in the new but struggling Edge condominium in West Palm Beach, according to the Palm Beach Post.

The highest closing price in the tower was $475 per square foot in 2007, meaning the buyer, Ed Dunlap, chairman of the Canonsburg, Pa.-based roofing company CentiMark, purchased the units at a 65 percent discount off the market peak.

Dunlap was the high bidder on six units at a Nov. 15 auction at a price that was 20 percent higher than the purchase amount he ultimately paid.

In the seven weeks since the November auction, Dunlap negotiated to buy from the developer, Wood Partners, an additional 20 units at a total price of $5 million for all 26 units, according to the story.

The Edge purchase represents the third bulk purchase of new condos in South Florida to close.

“Buyers are beginning to demonstrate that the going rate for a bulk condo deal in South Florida is between $165 and $250 per square foot,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Buying in this price range begins to make sense from a cash-to-carry perspective.”

Peter Zalewski can be reached at 305-865-5629 or by email at peter@condovultures.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Miami Bulk Buyer Refinances Recent Condo Acquisition

Wed, 07 Jan 2009 15:13:36 GMT

An all-cash, bulk buyer that paid $36 million for nearly 150 units in a new Downtown Miami condominium tower last summer has just secured a $21 million mortgage on the remaining high-rise residences that haven’t been resold, according to the Wall Street Journal.

An opportunity fund established by Miami developer Jorge Perez’s Related Group and Philadelphia private equity group Lubert-Adler Partners LP purchased 146 units in 50 Biscayne condominium tower in July for $246 per square foot, or $36.4 million.

Shortly after closing, the Related/Lubert-Adler opportunity fund resold 10 units in the bayfront high-rise to individuals for $3.6 million, or $367 per square foot.

The retail sales cleared the way for Prudential Insurance Co. of America to provide $20.9 million in financing on the remaining 136 units at a price of $151 per square foot.

“Both the borrower and the lender look to win on this deal,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “The borrower has been able to somehow obtain financing on unsold condos in a market where there is virtually no liquidity at this time. The lender has been able to finance an attractive new tower where the replacement costs far exceed the loan amount.”

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

Lender Seizes West Palm Beach Condo, Seeks Bulk Sale

Tue, 06 Jan 2009 17:08:12 GMT

The lender of the Whitney condominium in West Palm Beach has taken back the remaining unsold units in the recently constructed nine-story residential tower, according to the South Florida Business Journal.

New York-based iStar Financial has taken back 140 unsold units from the Miami developer Evernia Properties, which still owes $43.9 million of a $52.5 million construction loan taken out in 2004. The remaining debt works out to about $314,000 per unit repossessed, according to the story.

Fremont Investment and Loan was the original lender on the Whitney, but subsequently sold the condo construction loan as part of a portfolio sale to iStar.

A foreclosure action was filed by iStar before the developer decided in December 2008 to hand over the remaining units by agreeing to a deed in lieu of foreclosure, according to the story

Located at 410 Evernia Street, the Whitney condominium had strong presales during the condo boom of 2004-05 but was only able to close 70 units, or about one-third of the total inventory, when the tower was completed in 2007, according to the story.

The lender is now actively looking to unload the remaining units to a single buyer in a bulk sale, according to the story.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2009, Condo Vultures® LLC

South Florida Home Sales Jump 17% As Prices Tumble

Thu, 25 Dec 2008 18:36:42 GMT

Sales of South Florida condominium units and single-family houses jumped on a year-over-year basis by nearly 17 percent in the month of November as buyers picked off bank-owned properties, foreclosures, and deeply discounted residences.

Buyers closed on 1,623 condos and houses in Miami-Dade and Broward counties in November 2008 compared to 1,391 transactions in November 2007, according to the Florida Association of Realtors.

In Miami-Dade, there were 674 sales in November of this year compared to 560 transactions in 2007 for an increase of more than 20 percent. In Broward, there were 949 transactions recorded in November 2008 for a 14 percent increase compared to the 831 transactions a year earlier, according to the data.

“We have been predicting for some time that the number of South Florida residential transactions in November would surprise most people,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “The early indications are that the December closed sales numbers will be just as strong as November's if not stronger. We are getting reports that many all-cash buyers are moving into the market.”

Dropping prices and shrinking residential inventory are two factors that prompting the increased buying.

The average sales price for a South Florida residential property in November was $183,950, down -35 percent compared to $284,700 in November 2007.

Prices in Miami-Dade were down -36 percent to $198,650 in November 2008 from $312,000 a year earlier. In Broward, sales prices have tumbled -34 percent to $169,250 from $257,400 in November 2007, according to the data.

As prices are tumbling, the inventory is decreasing. In November 2008, there were 76,799 properties on the market in Miami-Dade and Broward compared to 82,299 properties in November 2007. The year-over-year drop represents a -6.7 percent decrease, according to the data.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida Houses, Not Condos, Offer Deepest Discounts

Mon, 22 Dec 2008 14:45:55 GMT

Single-family houses in coastal South Florida have dropped more in asking price than condominiums and townhouses through the first 11 months of the year, according to the new Vultures Database™ Report for November from Condo Vultures® LLC.

Single-family houses in Miami-Dade, Broward, and Palm Beach counties are down an average of -39 percent, or -$350,874 each, for a total discount of -$523 million through Nov. 30.

Condominiums and townhouses, by comparison, are down an average of -37 percent, or -$202,385 each, for a total discount of -$669 million.

The average discount for all residential product in the Vultures Database™ is -38 percent, or -$248,526 per property, for a total discount of -$1.192 billion through the first 11 months of the year, according to the Bal Harbour, Fla.-based consultancy that produced the report.

“South Florida’s real estate crash isn’t limited only to condominiums and townhouses,” said Peter Zalewski, a principal with Condo Vultures® LLC. “Steep discounts are available on single-family houses, but the choices are much more limited as condominiums account for a majority of the distressed residential properties in the Vultures Database™.”

Single-family houses account for 31 percent, or 1,490 homes, of the total inventory of 4,795 residential properties in the Vultures Database™. Condominiums and townhouses account for the remaining 3,305 properties, or 69 percent, being tracked by Condo Vultures®.

Houses, condominiums, and townhouses are added to the Vultures Database™ when a property is located east of Interstate 95 in the tri-county South Florida area and has fallen in asking price by at least 10 percent or $100,000.

For the year, there have been 1,457 residential properties, including 86 in November, in the Vultures Database™ that have sold at an average discount of -42 percent, or -$321,652 each, according to the report.

Miami-Dade County, where the cities of Aventura, Sunny Isles Beach, and Coral Gables are located, is experiencing the deepest discount in the tri-county area on single-family home prices in the Vultures Database™. Prices in Miami-Dade have dropped a combined -$372 million, or -$358,404 per residence.

Broward County, where the cities of Fort Lauderdale, Hollywood, and Pompano Beach are located, has realized a combined decrease in prices of -$140 million, or -$358,997 per house.

In Palm Beach County, the total discount on single-family houses in the Vultures Database™ is only -$10 million, or -$170,683 per home.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Ritz-Carlton Condo Project Cancelled in South Beach

Thu, 11 Dec 2008 19:25:57 GMT

The developers of the proposed Ritz-Carlton Club condominium resort and timeshare in Miami Beach's South Beach neighborhood have cancelled the three-tower luxury oceanfront project, blaming the decision on a lack of available financing, according to the Miami Herald.

A Miami-based entity called 2901 Beach Ventures LLLP, which includes the Lowenstein family's Lionstone Development that already operates the Ritz-Carlton South Beach and luxury condo developer Edgardo Defortuna, planned to develop the high-end residence and timeshare resort.

"If a South Beach project on the ocean with a Ritz-Carlton flag cannot obtain competitive financing, one has to wonder what if anything is financeable today some two months after the Trouble Assets Relief Program bailout was passed," said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.

Preconstruction prices for the condominiums were starting at $900,000.

The project, which would have been the fifth Ritz-Carlton property to operate in South Florida, planned to incorporate the 12-story Seville oceanfront hotel built in 1955 into the complex. Plans called for the Seville Hotel to be restored with 45 units, and two new towers with a total of 86 units were to be built on the property.

The project called for the Ritz-Carlton Club to stand on 5 acres of land situated on the east and west sides of Collins Avenue at 29th Street, just north of Lincoln Road and south of the newly renovated Fontainebleau resort.

The project's developer paid $25 million for the property in May 2005, and began presales the following year with a schedule to open the first units in late 2009.

Before the construction could begin, the South Florida real estate market came to a halt that was exacerbated by a complete pullback in financing by financial institutions and private lenders.

''There's no debt for development,'' Diego Lowenstein, a partner in the deal, is quoted in the Miami Herald. ``Lenders across the board are not doing anything.''

The Ritz-Carlton Club is not the first high-end condo-hotel project to run into construction financing challenges. The proposed St. Regis Bal Habour Resort & Residences obtained a $30 million loan from the Starwood Vacation Ownership Inc., which has ties to the development company, according to Miami-Dade County records.

In August, the St. Regis Bal Harbour Resort & Residences condominium and hotel began construction of a three-tower complex proposed to have 268 condominium units, 36 condo-hotel units, and 24 fractional units for sale to the public plus 182 hotel rooms and a presidential suite that will be owned by the developer, 9701 Collins Avenue LLC.

The development entity - 9701 Collins Avenue LLC - building the St. Regis Bal Harbour on an 8.9-acre site is a partnership between Starwood Resorts & Hotels Worldwide Inc. - which besides St. Regis also owns the brands Westin, W Hotels, Sheraton, Le Meridien and Four Points - and the nation's largest condominium developer The Related Group .

The loan is secured by the waterfront land that had been long owned by the Sheraton Bal Harbour Joint Venture before the deed was transferred to 9701 Collins Avenue LLC in July 2007. Miami-Dade County's Property Appraiser assessed the value of the land at $125.6 million, or $325 per square foot for the dirt, in 2007.

Prices start at more than $1,000 per square foot. An unknown number of units are under contract.

The development schedule calls for topping off the trio of 27-story glass towers in autumn 2009, and delivery in late 2010.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

$190 Million Downtown Miami Land Deal May Not Close

Tue, 09 Dec 2008 14:24:27 GMT

Concerns are rising about whether a $190 million land deal for 10 acres in Greater Downtown Miami near the Adrienne Arsht Center For The Performing Arts will close before the end of the year contract deadline.

The Terra Group, the Miami condo developer that built the nearby Quantum on the Bay and 900 Biscayne towers, is under pressure to close by Dec. 31 on the undeveloped land east of Biscayne Boulevard and west of the Miami Herald newspaper headquarters. The land deal does not include the Herald's headquarters, which fronts Biscayne Bay.

McClatchy Co., the owner of the Miami Herald, is the seller under a contract originated in 2005 by the newspaper's former owner Knight Ridder.

"If the deal doesn't go through, we have a valuable piece of land we can sell to someone else," Elaine Lintecum, treasurer of California-based McClatchy, is quoted saying in the Miami Herald.

Terra Group secured the land contract at the height of the condo boom with plans for a mixed-use development that included residential, office and retail space. The Greater Downtown Miami market has since plummeted as residential financing dried up and about 21,500 new condo units have come onto the market.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database^TM .

Copyright © 2008, Condo Vultures® LLC

S. Florida Residential Inventory Drops Below 106,000 Properties

Mon, 08 Dec 2008 21:49:55 GMT

For the second week in a row, the number of available residential properties in South Florida has dropped by several hundred units as the number of new pending sales has increased by a smaller amount, according to a new report by Condo Vultures® LLC.

The number of condos, townhouses, and single-family houses actively for sale fell by -0.5 percent on a week-over-week basis to 105,873 properties on Dec. 8, compared to 106,420 properties on Dec. 1. A week prior on Nov. 24, there were 107,527 properties on the market in Miami-Dade, Broward, and Palm Beach counties, according to the report compiled using active listings in the Multiple Listing Service.

As the inventory continues to decrease, the number of pending sales keeps rising. There are now 9,445 condos, townhouses, and single-family houses under contract and preparing to close in South Florida. Compare that to 9,393 residences on Dec. 1 and 9,302 on Nov. 24, according to the report.

“We are experiencing a change in mood in the South Florida real estate market,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC that produces the weekly inventory report every Monday. “This is not to say that we won’t experience additional inventory increases in the future but at this point the amount of product is showing signs of a steadily decreasing.”

Miami-Dade has the greatest inventory with 40,272 residences, down from 40,475 on Dec. 1 and 40,994 on Nov. 24. Broward has the second highest number of available properties with 36,278, down from 36,364 on Dec. 1 and 36,926 on Nov. 24. In Palm Beach, there are 29,323 residential properties for sale, down -0.9 percent from the 29,581 properties for sale on Dec. 1 and the 29,607 residences on Nov. 24, according to the report.

On a product basis, the number of condos and townhouses slipped -0.4 percent to 60,160 units on Dec. 8 compared to 60,405 units on Dec. 1 and 60,928 units on Nov. 24. The number of single-family houses available slipped -0.7 percent to 45,713 homes on Dec. 8 compared to 46,015 on Dec. 1 and 46,599 homes on Nov. 24, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Trump Condo Tries Rent-To-Own Program In South Florida

Fri, 05 Dec 2008 15:51:13 GMT

The developer of the newly delivered 384-unit Trump Royale oceanfront condo in Sunny Isles Beach, Fla., has established a leasing program where individuals can rent to own a new luxury unit for a fraction of the carrying costs.

“Rent with an option to buy and apply your rental towards your purchase” is the pitch of a new campaign by Trump Dezer Development to fill up vacant units.

Trump Dezer Development has set aside eight 914-square-foot units with one bedroom and 1.5 bathrooms facing west in the 57-story skyscraper for the rent-to-own program, according to a developer representative.

The rent being sought is $2,500 per month on units with an asking price of $550,000 from the developer. Rental units that had been priced at $2,000 per month have already been leased.

Trump Royale is part of a three-building complex in northern Sunny Isles Beach that features the Trump International Beach Resort hotel and condo-hotel, and the Trump Palace condominium.

This program does not currently apply to Trump Towers I, II, and III, which are located in southern portion of the city of Sunny Isles Beach.

The first buyer to close on a unit (and have the deed recorded) in the Trump Royale condominium paid $2.8 million on Nov. 21, according to government records.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

New Miami Condo Tower Being Foreclosed By Construction Lender

Thu, 04 Dec 2008 15:18:27 GMT

Construction lender Wachovia Bank has filed a foreclosure lawsuit on the remaining 285 units in the new 42-story Wind by Neo condominium tower in Greater Downtown Miami, according to Miami-Dade County records.

The suit names as defendants the condo tower’s developer, Neo Epoch 2 and its members Lissette M. Calderon, Maria T. Calderon, and Frank Guerra, along with nearly two dozen contractors who are or were working on the project, according to the South Florida Business Journal.

Wachovia seeks “damages for breach of a loan agreement; damages for breach of Notes; [and] to foreclose a mortgage, as recorded in Public Records of Miami-Dade County, Florida,” according to the suit.

Wachovia Bank, the troubled lender that was purchased by Wells Fargo Bank in October, filed the Lis Pendens action, or notice of default, at 2:51 pm Nov. 26, 2008, which was the Wednesday before the Thanksgiving holiday, according to the government records.

Neo Epoch 2, an entity specifically created to build the Wind project by the same individuals from the successful Neo Lofts and Neo Vertika condo towers, obtained a $115 million construction loan from Wachovia Bank in October 2005, according to government records.

Construction on the 489-unit project began in January 2006, and the developer filed the final condominium documents with Miami-Dade County in February 2008. The first closing occurred shortly thereafter on March 5, 2008.

Neo Epoch 2 has closed 204 residential units and four commercial units through Nov. 21, 2008, according to Condo Vultures® LLC’s Official Condo Buyers Guide To Miami.

“We are surprised by the foreclosure action given that the Wind has closed about 42 percent of its total units in a nine-month span,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Given the current state of the South Florida condo market, any developer who can close an average of 23 units a month really isn’t doing all that bad.”

Greater Downtown Miami is what many consider the epicenter of Florida's condo crash. Between 1963 and 2002, developers built 11,500 units in a 60-block stretch of Greater Downtown Miami. Since 2003, developers have completed or are constructing nearly 23,000 units, pushing the area's total inventory of high-priced units to nearly 34,500.

To date, 17,300 units have been completed with a 70.3 percent closing rate. An additional 4,000 units are coming online early in 2009, and the remaining 1,500 units bill be delivered by 2010.

The Wind is one of three towers (six towers are approved) standing on a 13.5 acre tract on the north bank of the Miami River and immediately west of South Miami Avenue. The site at one time was considered for a possible location for a new Florida Marlins baseball stadium, which instead is being developed in Miami’s Little Havana area.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Greater Orlando Has 156,000 Vacant Residential Lots

Tue, 02 Dec 2008 15:38:28 GMT

Greater Orlando has nearly 156,000 vacant residential lots sitting idle in central Florida due to the state’s dramatic housing crash.

Many of the 155,835 vacant lots are located in partially completed new subdivisions in the Central Florida counties of Orange, Osceola, Seminole, Volusia and Lake, according to the Orlando Sentinel.

“The backlog of vacant lots is especially evident in more rural counties, such as Lake and Osceola, where developers rushed in during the housing boom and secured approvals to build on huge tracts of inexpensive land,” according to the Orlando Sentinel.

In Lake County, developers have constructed only 7 percent of the 5,398 new homes that were approved to be built. In neighboring Osecola County, there are 30,806 undeveloped lots ready to be built upon but with no takers.

A chunk of those undeveloped Osceola County lots are in the highly promoted subdivision of Reunion, where only 33 percent of the 1,626 lots have been built upon, according to the Orlando Sentinel.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

It's Official: Florida Banks Halt All Foreclosures For 45 Days

Mon, 01 Dec 2008 23:42:02 GMT

All foreclosures initiated by Florida banks have been halted for the next 45 days under an agreement reached between the state’s financial industry and the state’s Gov. Charlie Crist.

The statewide initiative will pertain to new foreclosure actions, not the 444,000 property owners who already are in the process of losing their properties to Florida-based banks, according to the Miami Herald.

''This is to help people in a time of need,'' Crist told the Miami Herald. ``This is not for somebody who went and bought a bunch of condos in South Florida on the spec market.''

Greater Downtown Miami, considered the epicenter of the state’s condo crash, has seen inventory grow from 11,500 units built between 1963 and 2002, to an astonishing 34,500 units since 2003, according to Condo Vultures® LLC, a Bal Harbour, Fla.-based consultancy that specializes in distressed South Florida properties.

Alex Sanchez, president of the Florida Bankers Association, said borrowers who want to participate in the program should contact their lender to initiate the process. To qualify, a borrower must have “no involvement with mortgage fraud and be willing to enter into a re-payment plan,” according to the Miami Herald.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida Residential Inventory Drops, Pending Sales Rise

Mon, 01 Dec 2008 14:58:14 GMT

South Florida’s number of active residential listings decreased by -1 percent on a week-over-week basis to 106,420 condos, townhouses, and single-family houses, while the number of pending sales increased 1 percent to 9,393 properties on Dec. 1, according to a new report from Condo Vultures® Realty LLC.

A week earlier on Nov. 24, there were 107,527 active listings in Miami-Dade, Broward, and Palm Beach counties, and 9,302 pending sales. In the last week, the number of properties for sale shrunk by 1,107, and the number of pending sales expanded by 91.

"The numbers are reflecting the activity that we are seeing on the street," said Peter Zalewski, the broker-owner of Bal Harbour, Fla.-based Condo Vultures® Realty LLC. "We anticipate today's activity to be reflected in closed sales data announced in January and February."

On a product basis, the amount of single-family house inventory decreased by -1.3 percent to a current total of 46,015 compared to 46,599 a week earlier. The condo and townhouse inventory decreased by -0.9 percent to a current total of 60,405 compared to 60,928 a week earlier.

On a county-by-county basis, Broward had the biggest decrease in inventory falling -1.5 percent to 36,364 from last week’s total of 36,926. Miami-Dade experienced a -1.3 percent drop in inventory, falling to present total of 40,475 from 40,994 a week earlier. Palm Beach had minimal movement, slipping -0.1 percent to 29,581 actively available properties from a total of 29,607 a week earlier.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Florida May Temporarily Halt All Foreclosures

Tue, 25 Nov 2008 14:50:13 GMT

Florida homeowners falling behind on their mortgage payments in a downward spiraling economy may get a reprieve from the governor – at least for the short term.

Florida Gov. Charlie Crist is contemplating an executive order that would impose a temporary moratorium on all foreclosures in the state with the second highest number of mortgage defaults in the nation, according to the Miami Herald.

In the first nine months of 2008 ending Sept. 30, lenders filed 56,000 foreclosure actions against borrowers in South Florida and repossessed an additional 19,000 properties, according to Condo Vultures® LLC, a Bal Harbour, Fla.-based real estate consultancy.

Following the similar actions of mortgage giants Fannie Mae and Freddie Mac, Crist is considering the dramatic move for the holiday season, which begins on Thursday with Thanksgiving and ends Jan. 1 with New Years Day, if not longer.

Crist did not elaborate on the length of time any potential foreclosure moratorium would extend in Florida, according to the Miami Herald.

Crist’s idea is not a new one. California, which also has one of the highest mortgage default ratios in the country, recently imposed a 90-day moratorium on foreclosures, giving borrowers an additional quarter to try to resolve their situations.

Before making a final decision, Crist is likely to speak with Florida’s powerful banking industry, which would be adversely affected by a foreclosure moratorium.

``I want to try to work with the banking industry and do it in a way that is not harmful to them because we want them . . . to continue to loan money, but we want to stop the foreclosures, especially during the holidays,'' Crist told the Miami Herald.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida’s Residential Inventory Reaches Nearly 108,000 Properties

Mon, 24 Nov 2008 16:52:48 GMT

South Florida has a combined 107,527 condos, townhouses, and single-family houses for sale and an additional 9,302 residences under contract as of Nov. 24 in Miami-Dade, Broward, and Palm Beach counties, according to a new report from Condo Vultures® Realty LLC.

Miami-Dade, the most populated county in South Florida, has the greatest number of resales on the market with 40,994, or 38 percent of the regional total. Broward’s inventory ranks second with 36,926 residences available, which works out to 34 percent of the total inventory. Palm Beach is third with 29,607 residential properties, representing 28 percent of the total regional inventory, according to the report by the Bal Harbour, Fla.-based brokerage.

The totals are based on active listings and pending sales as of Nov. 24 in the Multiple Listing Service.

Single-family houses represent 43 percent, or 46,599, of the inventory for sale, and condominiums and townhouses account for 57 percent, or 60,928, of the total.

Miami-Dade is home to nearly half of the 9,302 pending residential sales in South Florida. There are 4,245 residences in Miami-Dade under contract, representing 46 percent of the total. Broward ranks second with 3,295 pending sales, which accounts for 35 percent of the regional total. Palm Beach is third with 1,762 properties under contract, accounting for the remaining 19 percent of the total.

Condominiums and townhouses represent 48 percent, or 4,434, of the residences under contract in South Florida, and single-family houses account for the remaining 52 percent, or 4,868, of the total, according to CondoVultures.com.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Miami Developers Sell Out 19 New Condo Towers, 64 More Projects To Go

Fri, 21 Nov 2008 14:18:17 GMT

Developers have successfully sold out 19 new condominium towers with 3,085 units in the Greater Downtown Miami area since 2003, according to a new report from Condo Vultures® LLC.

Units in the sold out buildings closed at an average price of $424,923 and generated a total of $1.3 billion in completed transactions, according to the Bal Harbour, Fla-based consultancy that produced the report.

The early developer success leaves 64 new towers and projects with a combined 19,652 units under construction or in the process of closing, according to Condo Vultures® Official Condo Buyers Guide To Miami™.

Condo Vultures® is scheduled to publish an in-depth report on the closing ratios of the Greater Downtown Miami condo market during the week of Nov. 24, 2008. To receive a copy, please be sure to subscribe to the Condo Vultures® Market Intelligence Report™.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Florida’s Largest Bank Posts $261.6 Million Quarterly Loss

Wed, 19 Nov 2008 22:27:03 GMT

BankUnited, the largest bank headquartered in Florida based on assets of $14.2 billion, lost $261.6 million in the fourth fiscal quarter ending Sept. 30, putting the thrift in “dire financial straits,” according to the South Florida Business Journal.

The fourth quarter loss, due in large part to nonperforming mortgages, dragged BankUnited’s equity capital down by 24 percent to $816.9 million from $1.08 billion at the end of the second quarter on June 30, according to the article.

BankUnited’s decreasing equity capital comes at a time when the Coral Gables-based institution is attempting to raise $400 as required by regulators under a September cease and desist, according to the article.

“If the bank can’t raise more money or shrink its risk-based assets by a Dec. 31 federally imposed deadline, it could face additional action from federal regulators,” according to the article.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Failures Keep Coming As Regulators Shut 2 More Banks

Tue, 18 Nov 2008 14:56:34 GMT

As the U.S. financial crisis deepens, regulators have seized two more financial institutions with combined assets of $6.2 billion and deposits of $4.2 billion, pushing the total number of bank failures this year to 19.

Franklin Bank, a Houston-based institution established in 1987 with assets of $5.6 billion, and Security Pacific Bank, a Los Angeles-based institution created in 1981 with assets of $588 million, were seized by regulators on Nov. 7. The Federal Deposit Insurance Corp, which insures deposits up to $250,000, was named receiver of both failed institutions.

The two most recent failures are estimated to cost the FDIC’s insurance fund between $1.6 billion and $1.8 billion. The 19 bank failures to date are expected to cost the insurance fund between $7.9 billion and $12.3 billion, according to the FDIC.

In anticipation of the two planned seizures, the FDIC negotiated “purchase and assumption” agreements beforehand for the assets of both failed financial institutions to be absorbed immediately by existing banks in hopes that customers would not be hindered.

Prosperity Bank, an El Campos, Texas-based institution created in 1949 with assets of $6.8 billion, assumed all of the deposits, $850 million of assets, and the 46 branches of the failed Franklin Bank.

Concurrently, Pacific Western Bank, a San Diego-based institution established in 1982 with assets of $4.3 billion, assumed all of the deposits, $51.8 million in assets, and the four branches of the failed Security Pacific Bank.

The remaining assets of the two most recent failed banks are to be sold off in the future, according to the FDIC.

The failure of Franklin Bank and Security Pacific Bank means that six financial institutions have been shuttered by regulators in the fourth quarter, which began Oct. 1.

Nine institutions were shuttered in the third quarter at an estimated cost of between $5.7 billion and $10 billion, according to the FDIC.

Regulators shut two institutions in the second quarter at an estimated cost of $216 million and two more institutions in the first quarter at an expense of nearly $6 million, according to the FDIC.

The bank failures have been scattered throughout the United States. California leads the nation with three bank failures. Nevada, Georgia, Missouri, and Florida are all tied for second with two bank failures each. Arkansas, Minnesota, Kansas, West Virginia, Washington state, Michigan, Illinois, and Texas each have had one institution shuttered this year.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

New South Florida Condos Unloaded At 46 Cents On Dollar

Mon, 17 Nov 2008 21:57:10 GMT

A South Florida developer sold 33 new condo units, including 17 units to one buyer, for 46 cents on the retail dollar at a private auction on Nov. 17 in West Palm Beach, according to the Palm Beach Post.

The total sellout price of Saturday’s 90-minute auction was $6.3 million for Downtown West Palm Beach product that had previously set a retail asking price of $13.7 million. The discount reflects a 54 percent decrease off the original asking price.

Properties in The Edge sold for prices ranging from $195 per square foot for a 671-square-foot, one-bedroom unit that traded for $131,000 to $245 per square foot for a 1,175-square-foot, two-bedroom unit on the pool deck that went under contract for $290,000.

Given the deeply discounted prices realized, the developer Wood Partners decided to only sell 33 of the 41 units that were originally scheduled to be auctioned off to the highest bidder.

It is unclear what the developer plans to do with the remaining inventory, whether that inventory was withdrawn from the auction block or never made available at auction.

"We didn't get the number we wanted at all, but no one else is selling, so you've got to start somewhere," Jon Gollinger, the head of Accelerated Marketing Partners which handled The Edge auction, told the Palm Beach Post.

Unlike many other developers saddled with excess inventory, Wood Partners decided to attempt to unload the excess condo inventory at auction rather than sell out in a bulk deal to an opportunistic fund, according to the article.

Apparently that strategy didn’t work as a one buyer, who refused to give her name, purchased 52 percent of the units that were sold, according to the article.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Citi’s South Florida Foreclosures Near $700 Million in 2008

Wed, 12 Nov 2008 15:39:46 GMT

Considering the nearly $700 million in foreclosure exposure that Citigroup has in South Florida alone, it is not hard to understand why the New York financial giant just introduced a new Homeowner Assistance Program to keep borrowers in their homes.

Citigroup and its subsidiaries have filed 2,742 foreclosures actions worth $694 million of troubled loans against South Florida properties in the first three quarters of 2008, according to a report by Condo Vultures® LLC compiled using government records.

Broward County, where Fort Lauderdale is located, represents the greatest concentration of Citigroup foreclosures in South Florida with 1,148 actions totaling $276 million.
Miami-Dade County is second with 812 actions totaling $220 million, and Palm Beach County is third with 782 actions totaling $199 million, according to the report.

Citigroup unveiled its strategy on Nov. 11 to preemptively contact 500,000 borrowers nationwide with mortgages of about $20 billion to discuss a series of options in hopes of keeping them in their homes.

“Under our new Citi Homeownership Assistance program we will preemptively reach out to help homeowners before they become delinquent, which is critical to avoiding the loss of a home and protecting their credit score and future borrowing potential," said Sanjiv Das, CEO of CitiMortgage in a statement.

In the first nine month of this year through Sept. 30, there have been nearly 56,000 foreclosures actions filed in Miami-Dade, Broward, and Palm Beach counties. An additional 19,000 properties (also known as Real Estate Owned) are now in the hands of the bank after a lengthy foreclosure process, according to Condo Vultures® LLC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

3rd Downtown Miami Bulk Land Deal Closes

Tue, 11 Nov 2008 21:40:51 GMT

An investment fund has paid $22 million for an undeveloped site on Brickell Avenue in the heart of Downtown Miami’s Financial District, marking the third land deal to close in the fourth quarter, according to a report compiled by Condo Vultures® LLC.

A newly created entity called 1451 Brickell, Inc., with Jorge Hernandez as president and director paid $840 per square foot on Nov. 4 for an undeveloped 26,182-square-foot site with frontage on Brickell Avenue, Southeast 15th Road, and Southeast 14th Lane, according to state and county government records.

The seller was Fourteen Fifty One Brickell, LLC, with Walter Defortuna, who is the younger brother of condominium developer Edgardo Defortuna, who built the Jade on Brickell Bay high-end condominium in Miami’s Brickell Avenue area and the Jade Beach and Jade Ocean luxury condominium towers in Sunny Isles Beach.

“Three is normally a trend, but I’m not sure that we can apply that rule of thumb to this scenario as the purchase prices of these three land deals are all over the board,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC that produced the report. “What we take away from the surprising number of land transactions in such a short period of time is that many investors, regardless of market conditions and overbuilding, are bullish on the Brickell Avenue area.”

The newly traded site at 1451 Brickell Ave., which is zoned high-density, mixed use, is immediately south of the Millenium Tower/Four Seasons mixed-use project at 1441 Brickell Ave., and east of a new 600,000-square-foot office tower being developed by Alan Ojeda’s Rilea Group at 1450 Brickell Ave.

The 1451 Brickell site consists of two contiguous undeveloped parcels that form a rectangular site on the corner of Brickell Avenue and Southeast 15th Road, which is the traditional boundary between residential condo living to the south and mixed-use office towers to the north.

The southern portion of the property located at 1451 Brickell Ave. has 15,682 square feet. The northern portion of the property located at 1449 Brickell Ave. has 10,500 square feet, according to government records.

The buyer obtained a $13.2 million, or $504 per square foot, mortgage on the property from the seller, Fourteen Fifty One Brickell, LLC, according to government records.

The selling group originally purchased the property in December 2000 for $4.89 million or $187 per square foot. In 2008, Miami-Dade County assessed the value of the land at $6.41 million, or $245 per square foot.

The members of the selling entity are Fortunate Investments, Inc., with Walter Defortuna; Roam Investments, Inc., with Ricardo D’Amato; and Abbey, Inc., with Haracio L. Bossi, according to the Florida Secretary of State.

This is the third land deal to close in the Brickell Avenue area since the beginning of the fourth quarter on Oct. 1.

In October, an investment group purchased the former Brickell Citicentre site for $23.3 million or $95 per square foot, according to the Miami Daily Business Review. In the same month of October, a hotel investment group paid $6.27 million, or $275 per square foot, for a site just west of the recently opened Mary Brickell Village retail center in the popular Brickell Avenue area, according to the Miami Herald.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Florida Bank Shuttered By Regulators

Mon, 10 Nov 2008 17:31:12 GMT

A Tampa area bank has been seized by regulators, marking the 17th U.S. institution to fail this year and the second in the state of Florida since August.

Freedom Bank, a Brandenton, Fla.-based institution with four branches and assets of $284 million, was seized by Florida regulators on the afternoon of Oct. 31. The Federal Deposit Insurance Corp., which insures deposits up to $250,000 per account, has been named receiver.

“The FDIC estimates that the cost to the Deposit Insurance Fund will be between $80 million and $104 million,” according to an FDIC statement.

The failure of Freedom Bank pushes the overall bank failure losses to the FDIC for the year to between $6.2 billion and $10.5 billion. Florida’s portion of the losses represent between $152 million to $176 million, according to the FDIC.

In preparation for the latest seizure, Fifth Third Bank, a Michigan-based institution with an existing Florida presence, entered into a “purchase and assumption agreement” to assume all of Freedom Bank’s deposits, $36 million of assets, and the former Florida bank’s branch locations. The FDIC plans to dispose of the remaining assets in the future.

Fifth Third Bank is a Grand Rapids, Mich.-based institution created in 1853 that has assets of $54.2 billion, loans of $40.8 billion, and deposits of $37.4 billion. Fifth Third has 847 locations nationwide, including 165 in Florida. Before the real estate market turned in 2005, FifthThird Bank had been on in a Florida expansion mode primarily through acquiring existing institutions.

Founded in 2005, Freedom Bank was a state-chartered institution on Florida’ Gulf Coast with three branches in Bradenton and a fourth location in the affluent area of Sarasota. Freedom Bank had deposits of $265 million and loans of $214 million in the first half of 2008 ending June 30, according to the most recent FDIC data.

Freedom Bank lost $14.8 million in the first half of 2008 through June 30 as the institution’s noncurrent-loans-to-loans ratio jumped from 1.66 percent in 2007 to 15.49 percent in 2008.

The bulk of Freedom Bank's noncurrent loans are concentrated in construction and development, representing 31.72 percent; commercial real estate, representing 8.13 percent; and commercial and industrial loans, representing 8.91 percent, according to the FDIC.

Freedom Bank’s failure marks the fourth institution to be shut in the fourth quarter, and the second Florida institution to fail since Brandenton-based First Priority Bank, which was closed on August 1, 2008. Prior to 2008, the last time a Florida bank was closed was 2004.

In the fourth quarter which began Oct. 1, four banks have failed costing the FDIC between $284 million to $316 million. Nine institutions were shuttered in the third quarter at an estimated cost of between $5.7 billion and $10 billion, according to the FDIC.

Regulators shut two institutions in the second quarter at an estimated cost of $216 million and two more institutions in the first quarter at an expense of nearly $6 million, according to the FDIC.

The bank failures have been scattered throughout the United States. California, Nevada, Georgia, Missouri, and Florida lead the nation in failed institutions with two banks each. Arkansas, Minnesota, Kansas, West Virginia, Washington state, Michigan, and Illinois each have had one institution shuttered this year.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida Governments Plan To Buy $80 Million Worth Of Distressed Properties

Fri, 07 Nov 2008 16:13:19 GMT

Opportunistic buyers scouring the South Florida market for deeply discounted residential property deals will shortly have to deal with yet another competitor: local government.

The governments of Miami-Dade and Broward counties have compiled a combined $80 million to spend on bank-owned properties in South Florida. The governments plan to spend the money purchasing, renovating, and then either renting out or selling off the properties.

Miami-Dade government has created a $62.2 million pool to purchase distressed residential properties in the devastated real estate market of Florida’s most populous county, according to the Miami Herald.

Miami-Dade plans to use the money to acquire and renovate foreclosed properties in the central and southeastern parts of the county. Once the properties can be made marketable, the county would then either sell off or rent out the residences.

The county plan calls for using $26.6 million to buy troubled apartment buildings and $10 million of the capital to purchase bank-owned properties. An additional $1 million has been set aside to tear down about 80 delapidated structures.

''We're figuring we can get the biggest bang for our buck if we utilize the money for rentals because we can house the most people that way faster,'' Miami-Dade senior advisor Cynthia Curry told the Miami Herald.
Miami-Dade’s investment pool is being created with grant money provided under the federal government’s $4 billion neighborhood stabilization program that was passed by last summer by Congress.

Broward County, where Fort Lauderdale is located, has received $17.7 million for the program. Florida counties received a combined $541 million, according to the article.

South Florida’s county governments will have plenty of product to choose from once they begin purchasing bank-owned properties.

Lenders repossessed an average of 69 homes a day in South Florida in the first nine months of the year, according to a new report from Condo Vultures® LLC.

At that pace, the number of bank-owned properties in South Florida is skyrocketing, increasing by 134 percent to 7,100 properties in the third quarter and by 190 percent to 18,960 homes for the year, according to the report by the Bal Harbour, Fla.-based consultancy.

A year ago in 2007, lenders took back 3,035 properties in the third quarter and 6,545 properties in the first nine months of the year, according to Condo Vultures®.

On a geographical basis, Miami-Dade County accounts for 46 percent of the bank-owned properties repossessed in the tricounty South Florida region in 2008.

Broward County represents 39 percent of the total REO inventory for 2008, and Palm Beach County the remaining 15 percent, according to the report.

Miami-Dade County had 8,656 bank-owned properties in the first nine months of this year, up 188 percent compared to the 3,009 REO properties during the same period in 2007, according to the report.

Broward County ranked second with 7,370 bank-owned properties through the first nine months of 2008, compared to 2,339 foreclosed properties in 2007. Palm Beach County was third in the tricounty region with 2,934 REO properties in 2008 compared to 1,197 properties in 2007, according to the report.

“Miami-Dade County experienced a spike in foreclosure actions in 2007 that eventually became bank-owned properties in 2008,” said Peter Zalewski, a principal with Condo Vultures® LLC. “Given the current surge in foreclosure actions in Broward and Palm Beach counties right now, we would expect the number of bank-owned properties to spike in these two counties in 2009.”

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

$500 Million Miami Opportunity Fund Targets Florida Land

Thu, 06 Nov 2008 16:04:35 GMT

A new opportunity fund launched by Miami homebuilder Sergio Pino plans to gobble up as much as $500 million in discounted raw and developable land throughout Florida, according to the Miami Herald.

Pino’s creation of an opportunity fund marks no fewer than four influential Miami business leaders who have established buying pools to purchase discounted real estate.

''Some day, after doomsday, housing will be in demand again,'' Pino told the Miami Herald. ``We want to stockpile valuable land.''

It is not difficult to see why Pino is so interested in purchasing land.

Many banks and financiers are having an impossible time unloading land as there is no revenue to be generated and the likelihood of building again is years away. Given the bearish outlook, many lenders and developers are considering and increasingly dumping land at discounts of nearly 90 percent.

Pino’s newly created Century Opportunity Fund has already secured $100 million, and is working diligently to obtain commitments for the remaining 80 percent of the desired amount.

Pino’s Century Homebuilders of South Florida and other entities have developed about 10,000 residences in about 25 South Florida communities, according to the company’s website.

It is unclear if the Century Opportunity Fund will acquire any real estate already owned by one of Pino’s various Florida corporations.

The Century Opportunity Fund is to be run by the same board of directors that currently governs Pino’s Century Partners Group, according to the Miami Herald.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Report: 33 Foreclosures Valued At $1 Million Or More In South Florida

Tue, 28 Oct 2008 14:59:58 GMT

The wealthy may be immune to economic downturns but that hasn’t stopped 33 luxury properties valued at between $1 million and $5 million from going into foreclosure in South Florida, according to a new Vultures Database™ report from Condo Vultures® LLC.

Condo Vultures® is currently tracking 14 luxury condominiums and 19 single-family estates in Miami-Dade, Broward, and Palm Beach counties on or near the water that are being foreclosed upon or already owned by the lenders.

These 33 properties are valued today at a combined $58 million, or $509 per square foot, down -33 percent from a historical high of $87 million, or $763 per square foot, according to the Bal Harbour, Fla.-based consultancy that produced the report.

The bulk of the multi-million dollar distressed properties are concentrated in Miami (11), Miami Beach (8), Hollywood (4), and Coral Gables (3).

Aventura, Boca Raton, Coconut Grove, Fisher Island, Fort Lauderdale, Hallandale Beach, and Sunny Isles Beach each have one distressed property priced at $1 million or more that is in foreclosure or already owned by the bank.

“There are about 109,000 residences for sale in South Florida today, and 8,100, or 7 percent, of these residences are priced at $1 million or more,” said Peter Zalewski, a principal with Condo Vultures® LLC that produced the report. “Statistically, to have 33 luxury properties in trouble from a pool of 8,100 residences is not dramatic. Still, it is bit surprising that 33 luxury properties have been or are on the verge of being repossessed.”

Overall, there are 1,706 properties in foreclosure or owned by the bank, also known as Real Estate Owned, in the Vultures Database™, which tracks properties east of Interstate 95 in Miami-Dade, Broward, and Palm Beach counties that have fallen in price by 10 percent or $100,000.

The foreclosure and REO properties in the Vultures Database™ are down a combined -44 percent to a current value of $498 million from a historical high price of $888 million. On a price per square foot basis, the average foreclosure or REO in the Vultures Database™ is $221 compared to a historical high of $394.

The lowest price for a foreclosure or REO in the Vultures Database™ is $24,900 and the highest price is $4.3 million.

The majority of the residences in foreclosure or owned by the bank are priced at $300,000 or less. There are 535 troubled properties priced between $24,900 to $150,000, and 697 distressed properties priced at $151,000 to $300,000.

On the pricier side, there are 251 problem properties priced between $301,000 to $500,000, and 190 troubled residences priced between $501,000 and $999,000, according to the report.
The remaining foreclosure and REO inventory is priced at more than $1 million and located in several of the region's most exclusive areas, including the community of Fisher Island off the coast of Miami Beach.

“The most remarkable aspect of the foreclosure report in my opinion is that a residence in the ultra-exclusive Fisher Island community is in trouble,” said Tommy Barone, a licensed real estate agent with Condo Vultures® Realty LLC who focuses on Fisher Island. "This is not something that we are accustom to seeing on the island."

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Downtown Miami’s Condo Boom Ends As Last Construction Crane Removed

Mon, 27 Oct 2008 17:02:25 GMT

The last residential construction crane of Greater Downtown Miami’s speculative condo era was disassembled last week and hauled off on flatbed trucks north on Interstate 95.

The removal of the construction crane at the 47-story, 346-unit Paramount Bay condominium tower situated in the Biscayne Boulevard Corridor just north of Downtown Miami ends a building boom period in which some 40 cranes filled the sky at the peak. (The only cranes still standing today in Greater Downtown Miami are building three new office towers under construction.)

Earlier this month, construction cranes were removed from the 51-story, 530-unit Mint condominium tower located on the north bank of the Miami River and the new 67-story, 306-unit Marquis condominium tower on Biscayne Boulevard in Downtown Miami.

Many industry watchers see the removal of the last crane as the symbolic end of vertical residential condo construction boom era in Greater Downtown Miami for at least seven years.

Greater Downtown Miami is considered by most to be the epicenter of the Florida housing crash as 74 condos with nearly 23,000 new units have been built or are under construction in a 60-block stretch between 2003 and 2010. In the 40 years prior to the boom years, developer constructed a total of 11,500 units in the same area, according to the Condo Vultures® Official Condo Buyers Guide To Miami™.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Regulators Shut 16th Bank, 3rd In October

Mon, 27 Oct 2008 01:18:20 GMT

Regulators seized two-year-old Alpha Bank & Trust based in suburban Atlanta, marking the second Georgia institution to be shuttered within 60 days and the 16th lender to fail nationwide this year.

The Georgia Department of Banking and Finance shut Alpha Bank & Trust, a three-branch institution based in Alpharetta, Ga., on Friday, Oct. 24, and immediately named the Federal Deposit Insurance Corp as the receiver to oversee the disposition of the $354 million in assets institution.

“The transaction is the least costly resolution option, and the FDIC estimates that the cost to its Deposit Insurance Fund will be $158.1 million,” according to an FDIC statement.

In preparation of the seizure, Stearns Bank, a St. Cloud, Minn.-based institution with $1.03 billion in assets, agreed with the FDIC to purchase Alpha Bank’s $346 million in insured deposits and nearly $39 million in assets.

Stearns Bank is a 96-year-old national association that operates three locations in Minnesota and one branch in Scottsdale, Ariz. This will be the bank’s first presence in Georgia.

The FDIC plans to dispose of the remaining assets and liabilities in the upcoming months.

Created in May 2006, Alpha Bank & Trust had three locations in the Greater Atlanta area and loans of $306 million on June 30, according to the most recent FDIC data.

In the first half of 2008 ending June 30, Alpha Bank & Trust lost -$6.8 million compared to a profit of $243,000 in 2007.

Before Alpha Bank & Trust’s failure, the institution had a noncurrent loans-to-loans ratio of 18.36 percent due to a spike in nonperforming real estate construction and development financing.

Integrity Bank, also based in Alpharetta, was the other Georgia institution to be seized by regulators this year.

Alpha Bank & Trust’s failure marks the third institution to be shut in the fourth quarter, pushing the total estimated FDIC loss since October 1 to $204 million.

Nine institutions were shuttered in the third quarter at an estimated cost of between $5.7 billion and $10 billion, according to the FDIC.

Regulators shut two institutions in the second quarter at an estimated cost of $216 million and two more institutions in the first quarter at an expense of nearly $6 million, according to the FDIC, which insures deposits up to a newly increased amount of $250,000.

The deposit insurance amount was raised from $100,000 through the end of 2009 with the recent passage of the $700 billion federal bailout package officially known as the Emergency Economic Stabilization Act of 2008. The bailout program is also being referred to as the Troubled Assets Relief Program, or TARP.

Wachovia Bank, a $782 billion in assets institution based in North Carolina, avoided also being shuttered by regulators in the third quarter only when the North Carolina-based organization was able to reach a deal to be acquired.

At first Citigroup, which operates the $1.3 trillion in assets Citibank institution, was the announced suitor, but Wells Fargo Bank ultimately was the highest bidder for the Wachovia franchise.

The bank failures have been scattered throughout the United States. California, Nevada, Georgia, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, West Virginia, Washington state, Michigan and Illinois each have had one institution shuttered this year.

Before Alpha Bank & Trust’s failure, the last time regulators seized an inistitution was on Oct. 10 when two Midwest banks were closed.

Main Street Bank, a $98 million in assets institution based in Northville, Mich., and Meridian Bank, a $39 million in assets institution headquartered in Eldred, Ill., were the 14th and 15th institutions, respectively to be closed by regulators in 2008.

In the first 24 days of the fourth quarter, regulators are on pace to shut an institution once every eight days. In the third quarter, regulators seized a bank once every 10 calendar days.

Prior to the seizure of Main Street and Meridian banks, the last institutions to be shut by regulators was Washington Mutual Bank on Sept. 25.

A week earlier on Sept. 19, regulators shut down Ameribank Inc., a 102-year-old community bank based in West Virginia with links to Florida.

Prior to the Ameribank’s closure, Silver State Bank in the Las Vegas suburb of Henderson was the last institution to be shut, that occurring on Sept. 5. Silver State Bank was the second Nevada institution to fail this year.

In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

Before regulators shuttered Ameribank and Silver State Bank, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.

Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.

Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast.

First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Miami Developer To Pay $25,000 To Contract Holders Who Defaulted On Units

Wed, 22 Oct 2008 19:44:27 GMT

Developer Jorge Perez’s The Related Group plans to pay more than 100 former contract holders who defaulted on their 20 percent deposits at the 50 Biscayne condominium tower in Downtown Miami about $25,000 each to walk away from any future claim, according to CBS 4 in Miami.

The $25,000 payment is far less than the original deposits – some in excess of $100,000 - that were placed by preconstruction buyers who needed just a week to gobble up the 528 units in the 54-story building that opened early this year, according to the article.

The Related Group decided to pay the $25,000 even though a local judge dismissed a lawsuit this week that was brought in February on behalf of preconstruction buyers who did not want to close on their contracts at the 50 Biscayne condominium.

“Tthis is the second major lawsuit in South Florida which side with a developer,” according to CBS 4. “In August, Tibor Hollo won a landmark case where the buyers wanted their deposits back claiming the condos at Opera Tower weren't directly on the water as the advertising brochures had suggested.

“The judge in the case sided with Tibor Hollo, saying that what mattered was in the contract and not in the ads.”

The Greater Downtown Miami is considered by most to be the epicenter of the Florida housing crash as 74 condos with nearly 23,000 new units have been built or are under construction in a 60-block stretch between 2003 and 2010. In the 40 years prior to the boom years, developer constructed a total of 11,500 units in the same area, according to the Condo Vultures® Official Condo Buyers Guide To Miami.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Commercial Bulk Deal Closes At Downtown Miami Condo Tower

Tue, 21 Oct 2008 16:13:10 GMT

A Miami investment group paid $368 per square foot for about 40,000 square feet of raw commercial space in the recently completed Marina Blue condominium in Greater Downtown Miami, according to the South Florida Business Journal.

A newly created entity called 888 Biscayne Enterprises LLC purchased the first three floors of commercial space which includes a mezzanine, 185 parking places, and two outdoor terrace seating areas for $14.7 million, according to the article.

Located at 888 Biscayne Boulevard immediately north of Miami’s Central Business District, the Marina Blue condominium is a 52-story, 516-unit tower situated directly across from the American Airlines Arena and the proposed Museum Park site which is scheduled to begin construction in 2009.

To get the deal closed, Kennedy Funding, a Hackensack, N.J.-based private money lender, was brought in to provide $10.14 million in financing, which works out to a loan-to-value ratio of 69 percent. The terms of the mortgage have not yet been released.

“It’s unfortunate that other lenders will completely rule out a type of development or an entire geographical area without considering specific circumstances and situations,” said Jeffrey Wolfer, President and Co-CEO of Kennedy Funding in a statement. “A closer look at this property, the buyers attracted to the residential units, the commercial spaces in the areas immediately surrounding it, and we were able to close the loan quickly. With the nearby arena, performing arts center and the site for the new Miami Art Museum, the area is really going to be spectacular.”

The Marina Blue commercial space is well suited to serve not only residence of the all-glass tower but nearby workers and passing traffic in the Greater Downtown Miami area.

The ground floor space is divided into two corner areas separated by the main entrance to the condominium tower in the middle. Both spaces are accessible from the tower's lobby.

The large space on the south side of the building has a mezzanine and floor-to-ceiling windows. This space was designed for a national restaurant chain or entertainment venue. The smaller space on the north side of the building was planned for a gourmet food store or coffee shops.

Floors two and three are suited with office space with tall ceilings and unobstructed views of the park, arena, and Biscayne Bay.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Last Construction Crane Left Standing In Downtown Miami

Mon, 20 Oct 2008 20:43:13 GMT

The construction crane used to build the new 51-story, 530-unit Mint condominium tower in Greater Downtown Miami has been disassembled and trucked off on flatbeds heading north on Interstate-95.

The removal of the Mint’s construction crane situated on the north bank of the Miami River means only one residential crane is still left standing in an area where at the peak 18 months ago some 40 cranes filled the sky. (Three office towers are under construction currently.)

The last crane related to residential construction left standing is at the 47-story, 346-unit Paramount Bay condominium site in the Biscayne Boulevard Corridor.Paramount Bay is the project where a piece of the crane fell to the ground, killing two workers in March 2008.

Earlier this month the construction crane building the new 67-story, 306-unit Marquis condominium tower on Biscayne Boulevard was removed.

Many industry watchers see the imminent removal of the last crane as the symbolic end of vertical residential condo construction era in Greater Downtown Miami for at least seven years.

The Greater Downtown Miami is considered by most to be the epicenter of the Florida housing crash as 74 condos with nearly 23,000 new units have been built or are under construction in a 60-block stretch between 2003 and 2010. In the 40 years prior to the boom years, developer constructed a total of 11,500 units in the same area, according to the Condo Vultures® Official Condo Buyers Guide To Miami.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida’s Bank-Owned Properties Spike 190% To Nearly 19,000 REOs

Sun, 19 Oct 2008 21:38:03 GMT

Lenders repossessed an average of 69 homes a day in South Florida in the first nine months of the year, according to a new report from Condo Vultures® LLC.

At that pace, the number of bank-owned properties in South Florida is skyrocketing, increasing by 134 percent to 7,100 properties in the third quarter and by 190 percent to 18,960 homes for the year, according to the report by the Bal Harbour, Fla.-based consultancy.

A year ago in 2007, lenders took back 3,035 properties in the third quarter and 6,545 properties in the first nine months of the year, according to Condo Vultures®.

“Our best guess is that in 2008 lenders have had to absorb about $750 million in expenses - legal fees, repairs, unpaid debt service – related to repossessing the nearly 19,000 bank-owned properties in South Florida,” said Peter Zalewski, a principal with Condo Vultures® LLC which produced the report. “This expense does not even factor in the write offs that many banks are deciding to stomach in hopes of quickly unloading these bank-owned properties to discount buyers.”

The foreclosure process in South Florida generally takes between six and eight months to complete, and typically costs a lender about $40,000 to $80,000 to repossess a property.

The timing and costs of the foreclosure process can vary depending upon the level of resistance of the owner/borrower and the extent of the repairs that must be performed on the home to make it rentable or saleable.

It is unclear what impact the upcoming presidential election or the $700 billion Troubled Assets Relief Program (TARP) will have on the foreclosure process in Florida for banks and owners/borrowers.

Once a property is repossessed by the lender, the troubled asset is immediately shifted by the bank into a special category classification called Real Estate Owned (REO) whereby the financial institution acknowledges that it must now act as the owner and landlord.

As the owner and landlord, a bank is responsible for all facets of the property, ranging from overseeing the rental or sales process to resolving tenant complaints, paying the maintenance fees and special assessments to writing a check for the property taxes.

“Banks are in the business of lending, not owning, managing, and maintaining homes scattered around a vast region or state,” Zalewski said. “This is why so many lenders look to dump bank-owned properties shortly after taking possession at the end of the foreclosure process.”

To understand the discounting, consider that the typical bank-owned property in the Vultures Database™, which monitors coastal properties east of Interstate 95 in Miami-Dade, Broward, and Palm Beach counties, has been reduced in price by -52 percent or about -$242,900.

On a geographical basis, Miami-Dade County accounts for 46 percent of the bank-owned properties repossessed in the tricounty South Florida region in 2008. Broward County represents 39 percent of the total REO inventory for 2008, and Palm Beach County the remaining 15 percent, according to the report.

Miami-Dade County had 8,656 bank-owned properties in the first nine months of this year, up 188 percent compared to the 3,009 REO properties during the same period in 2007, according to the report.

Broward County ranked second with 7,370 bank-owned properties through the first nine months of 2008, compared to 2,339 foreclosed properties in 2007. Palm Beach County was third in the tricounty region with 2,934 REO properties in 2008 compared to 1,197 properties in 2007, according to the report.

“Miami-Dade County experienced a spike in foreclosure actions in 2007 that eventually became bank-owned properties in 2008,” Zalewski said. “Given the current surge in foreclosure actions in Broward and Palm Beach counties right now, we would expect the number of bank-owned properties to spike in these two counties in 2009.”

Lenders have been busy filing foreclosure actions in South Florida in the first three quarters of the year, according to a recent report from Condo Vultures®.

Between January and September, lenders filed 55,737 actions valued at more than $14.2 billion on properties in Miami-Dade, Broward, and Palm Beach counties. Condominiums and townhouses account for 16,553, or 30 percent, of the actions filed, totaling $3.4 billion, according to the recent report.

In what may be a surprise to some, Broward County, not Miami-Dade County, has the highest concentration of total foreclosure actions with 24,733, or 42.2 percent, of the actions filed, totaling $5.99 billion, according to the recent report.

Palm Beach County is second with 17,065, or 29.3 percent, of the actions filed, which totals nearly $4.2 billion. Miami-Dade County, which many industry watchers consider the epicenter of the Florida housing crash, has 13,939 actions – some 28.5 percent - filed, with a value of $4 billion, according to the report.

On the condominium and townhouse front, opportunistic buyers are finding that the most foreclosure actions are in complexes scattered throughout Broward and Palm Beach counties.

Broward County is now home to 41.2 percent of the foreclosure actions for condominium and townhouse product. Broward has had foreclosure actions filed against 7,558 condominiums and townhouses worth $1.4 billion.

Palm Beach County has had 4,042 foreclosure actions filed against condos and townhouses worth $724 million. Miami-Dade County has had 4,953 foreclosure actions filed against condos and townhouses, totaling $1.2 billion, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Florida Mortgage Court Proposed To Deal With Foreclosures

Thu, 16 Oct 2008 16:50:35 GMT

A South Florida city devastated by foreclosures is asking the state of Florida to create a mortgage court to deal with the spiking number of problem loans.

A crucial aspect of the proposal calls for the would-be mortgage court to provide borrowers with a 120-day moratorium on foreclosures thus ensuring that owners can stay in their homes for the short term.

This proposal goes beyond what the $700 billion Troubled Assets Relief Program initated by the U.S. Treasury Department is prepared to do for individuval borrowers who have fallen behind on their residential mortgages.

With more than 900 residences in foreclosure within its boundaries, the City of North Miami, situated between Miami and Aventura, has passed a resolution asking government officials to examine the possibility of creating the special court to oversee foreclosures, according to the Miami Herald.

Currently, foreclosures are handled in the Circuit Court of the county where the property is located.

''The more people we can keep in their homes and out of the court system the better,'' North Miami Mayor Kevin Burns told the Miami Herald.

Burns is hoping that other cities in Miami-Dade will join North Miami's effort, which should not be too difficult given the total number of foreclosures in South Florida.

In the first nine months of 2008, Lenders have been busy filing 55,737 foreclosure actions valued at more than $14.2 billion on properties in Miami-Dade, Broward, and Palm Beach counties, according to a new report from Condo Vultures® LLC.

Condominiums and townhouses account for 16,553, or 30 percent, of the actions filed, totaling $3.4 billion, according to the Bal Harbour, Fla.-based consultancy that generated the report based on circuit court records.

In what may be a surprise to some, Broward County, not Miami-Dade County, has the highest concentration of total foreclosure actions with 24,733, or 42.2 percent, of the actions filed, totaling $5.99 billion, according to the report.

Palm Beach County is second with 17,065, or 29.3 percent, of the actions filed, which totals nearly $4.2 billion. Miami-Dade , which many industry watchers consider the epicenter of the Florida housing crash, has 13,939 actions – some 28.5 percent - filed, with a value of $4 billion, according to the report.

Condo Vultures® LLC is scheduled to release its third quarter 2008 Bank-Owned Properties report on Friday, Oct. 17. For an advanced copy, please be sure to register for the Condo Vultures® Market Intelligence Report.

State of S. Florida Market: 1 Resale For Every 50 People

Wed, 15 Oct 2008 02:54:57 GMT

For every 50 people living in South Florida, there is currently one single-family house, townhouse, or condominium actively for sale in the tricounty region, according to a new report by the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC.

Nearly 110,000 residences are actively for sale in Miami-Dade, Broward, and Palm Beach counties, a region where the U.S. Census Bureau estimates that 5.5 million people live, according to the report.

Condominiums and townhouses account for 56 percent, or 61,779 residences, actively available on the market. Single-family houses represent the remaining 44 percent, or 47,861 residences, of the available inventory, according to the report.

On a residents-to-product type ratio, South Florida has one condominium or townhouse for sale for every 89 people, and one single-family house for every 115 residents.

Miami-Dade County has the largest chunk of available real estate inventory with 42,172 residences, or 38 percent of the total inventory. Broward County is second with 35 percent, or 37,896 residences, of the total residential supply. Palm Beach County is third with 29,572 residences, or 27 percent of the homes actively for sale, according to the report.

On a resident-to-residences basis, Palm Beach County, with 1.3 million people, has the highest amount of inventory with one single-family house, condo, or townhouse for every 44 people. Broward County, with 1.8 million people, is second with one residence for every 47 individuals living there. Miami-Dade County, with 2.4 million people, is third with one condo, townhouse, or single-family home for sale for every 57 people.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Regulators Seize 2 More Banks, Latest Losses Estimated At $50 Million

Sun, 12 Oct 2008 23:23:54 GMT

As the Treasury Department works feverishly to stabilize the U.S. financial system, regulators were busy Friday, Oct. 10, seizing two more banks in emergency actions that are estimated to cost between $45 million and $54 million.

Main Street Bank, a $98 million in assets institution based in Northville, Mich., and Meridian Bank, a $39 million in assets institution headquartered in Eldred, Ill., were the 14th and 15th institutions, respectively, to be shut by banking regulators in 2008.

The failures of Main Street Bank and Meridian Bank mark the first two institutions to be seized in the fourth quarter, after nine institutions were shuttered in the third quarter at an estimated cost of between $5.7 billion and $10 billion, according to the Federal Deposit Insurance Corp.

Regulators shut two institutions in the second quarter at an estimated cost of $216 million and two more institutions in the first quarter at an expense of nearly $6 million, according to the FDIC, which insures deposits up to a newly increased amount of $250,000.

The deposit insurance amount was raised from $100,000 through the end of 2009 with the recent passage of the $700 billion federal bailout package officially known as the Emergency Economic Stabilization Act of 2008.

Wachovia Bank, a $782 billion in assets institution based in North Carolina, avoided also being shuttered by regulators in the third quarter only when the North Carolina-based organization was able to reach a deal to be acquired. At first Citigroup, which operates the $1.3 trillion in assets Citibank institution, was the announced suitor, but Wells Fargo Bank ultimately was the highest bidder for the Wachovia franchise.

The bank failures have been scattered throughout the United States. California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, Georgia, West Virginia, Washington state, and of course Michigan and Illinois each have had one institution shuttered this year.

At the time of the seizure, Main Street Bank was a four-year-old institution operating two locations in the Greater Detroit area, which has been devastated by job loss and plummeting real estate values.

Main Street reported a loss of -$6.5 million through June 30, a dramatic drop from an already disappointed first quarter when the bank lost nearly -$3.2 million on March 31, according to the FDIC.

Main Street’s losses were tied primarily to the bank’s excessive noncurrent loans to loans ratio of 9.32 percent on June 30, and 11.11 percent on March 31. Real estate-related loans accounted for the super majority of the noncurrent loans.

In anticipation of the seizure, regulators worked out a deal whereby all of Main Street Bank’s deposits were assumed by nearby Monroe Bank & Trust, a 103-year-old institution with assets of $1.5 billion and 25 locations with the headquarters in Monroe, Mich.

Monroe Bank has also agreed to purchase at least $17 million of Main Street’s assets. For the next 90 days, Monroe Bank has an option to purchase an additional $1.1 million in “premises and fixed assets” from the FDIC, which is acting as Main Street’s receive. Anything not purchased by Monroe Bank will be disposed of in the future by the FDIC.

“The FDIC estimates that the cost to its Deposit Insurance Fund will be between $33 million and $39 million,” according to an FDIC statement. “Monroe Bank & Trusts' acquisition of all deposits was the ‘least costly’ resolution for the FDIC's Deposit Insurance Fund compared to all alternatives because the expected losses to uninsured depositors were fully covered by the premium paid for the failed bank's franchise.”

Main Street Bank is the first Michigan bank to fail since March 2002 when New Century Bank in Shelby Township was seized by regulators

Five hundred miles away in western Illinois, regulators seized the 98-year-old Meridian Bank and its five branch locations to market the 15th institution to fail this year.

In the lead up to the seizure, Meridian had lost -$843,000 on June 30, and an additional -$706,000 on March 31, according to the latest FDIC data.

Meridian’s noncurrent loans to loans ratio has remained steady at an above average 6.42 percent in the first two quarters of the year. In addition to nonperforming real estate loans, Meridian also had a growing list of troubled commercial and industrial loans, which together combined to spell the end of the nearly century old institution.

In a preemptive maneuver, regulators worked out a deal whereby Meridian’s $36.9 million deposits would all be assumed by National Bank, a 63-year-old institution with $212 million in assets and 10 locations based in Hillsboro, Ill.

National Bank has also agreed to purchase about $7.6 million worth of assets from the failed Meridian Bank.

“The FDIC estimates that the cost to its Deposit Insurance Fund will be between $13 million and $14.5 million. National Banks' acquisition of all deposits was the ‘least costly’ resolution for the FDIC's Deposit Insurance Fund compared to all alternatives,” according to an FDIC statement.

Meridian Bank is the first Illinois bank to be seized by regulators since June 2002 when Universal Federal Savings Bank in Chicago was taken over.

In the first 10 days of the fourth quarter, regulators are on pace to shut an institution once every five days. In the third quarter, regulators seized a bank once every 10 calendar days.

Prior to the seizure of Main Street and Meridian banks, the last institutions to be shut by regulators was Washington Mutual Bank on Sept. 25.

A week earlier on Sept. 19, regulators shut down Ameribank Inc., a 102-year-old community bank based in West Virginia with links to Florida.Prior to the Ameribank’s closure, Silver State Bank in the Las Vegas suburb of Henderson was the last institution to be shut, that occurring on Sept. 5.

Silver State Bank was the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

Before regulators shuttered Ameribank and Silver State Bank, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.

Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast.

First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.]

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida Properties Tumble -$1.05 Billion From Historical Highs

Fri, 10 Oct 2008 23:56:52 GMT

As the global markets tumble, nearly 4,500 coastal residential properties in Miami-Dade, Broward, and Palm Beach counties have fallen by a combined value of -$1.05 billion, or an average of -33 percent, off of their historical highs, according to a new Vultures Database™ report from Condo Vultures® LLC.

The average asking price in the Vultures Database™ was down by -$234,547 per property on Sept. 30 compared to a discount of -$227,330, or -32 percent, per property a month earlier on Aug. 31, according to the report by the Bal Harbour, Fla.-based consultancy.

As the discounts have deepened for coastal South Florida properties, the inventory has steadily decreased due to increased buying activity.

For September, there were 4,456 residences being tracked in the Vultures Database™, compared to 4,647 properties in August, according to the report.

“The stock market uncertainty and the strengthening U.S. dollar are prompting an increasing number of people to look more closely at brick-and-mortar investments," said Peter Zalewski, a principal with Condo Vultures® LLC that released the report . "If someone is adopting that strategy, the fundamentals – population, weather, product quality, and land constraints – of South Florida make the region a viable option for many.”

Condominiums, townhouses, and single-family houses located east of Interstate 95 in Miami-Dade, Broward, and Palm Beach counties are added to the Vultures Database™ once the asking prices are reduced by at least 10 percent or $100,000.

Condominiums represent 69.4 percent of the total inventory, with 3,093 units in the Vultures Database™. Houses and townhouses make up the remaining 30.6 percent of the inventory, or 1,363 properties, according to the report.

For August, condominiums accounted for 68.8 percent, or 3,196 units, of the total inventory in the Vultures Database™. Single-family houses and townhouses represented 31.2 percent, or 1,451 residences, of the total inventory, according to the report.

Palm Beach County is increasingly offering the deepest discounts in condominiums in the Vultures Database™, with Royal Palm Beach ranking No. 1 with an average reduction of -52 percent. Delray Beach is second with an average price drop of -51 percent.

Rounding out the top five rankings are the cities of Boca Raton in Palm Beach County, Oakland Park in Broward County, and North Miami in Miami-Dade County, which are all tied for the No. 3 ranking with an average discount of -40 percent, according to the report.

The cities with the deepest discounts in single-family houses and townhouses are scattered throughout South Florida's three counties.

Palm Beach ranks No. 1 with a -56 percent discount. Boynton Beach ranks second with a discount of -52 percent. Oakland Park is No. 3 with a -44 percent drop. Rounding out the top five rankings are Hallandale Beach in Broward County with a -39 percent drop for the No. 4 spot, and in fifth position are the cities of Bay Harbor Islands in Miami-Dade County and Lantana in Palm Beach County with an average discount of -38 percent each, according to the report.

Construction Crane Comes Down At Miami Condo Tower

Thu, 09 Oct 2008 17:22:49 GMT

The construction crane building the new Marquis condominium on Biscayne Boulevard in the Greater Downtown Miami area is coming down this week, symbolizing the end of the vertical residential development era in the area for several years.

Workers are disassembling the construction crane that was instrumental in putting up the 67-story, 306-unit Marquis condominium tower located immediately south of the MacArthur Causeway with east views of the proposed Museum Park, Biscayne Bay, and barrier island.

The removal of the Marquis condominium construction crane means there will be only
two residential cranes still left standing from a peak of 40 about 18 months ago. (Three office towers are under construction currently.)

The next residential crane likely to be removed in the upcoming weeks will be at the 51-story, 530-unit Mint condominium site on the north bank of the Miami River.

The last crane expected to be disassembled will be at the 47-story, 346-unit Paramount Bay condominium site in the Biscayne Boulevard Corridor.

Paramount Bay is the project where a piece of the crane fell to the ground, killing two workers in March 2008.

The Greater Downtown Miami is considered by most to be the epicenter of the Florida housing crash as 74 condos with nearly 23,000 new units have been built or are under construction in a 60-block stretch between 2003 and 2010. In the 40 years prior to the boom years, developer constructed a total of 11,500 units in the same area, according to the Condo Vultures® Official Condo Buyers Guide To Miami.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

South Florida Foreclosures Top $14B As Lehman Pursues $91M In Problem Loans

Fri, 03 Oct 2008 20:19:45 GMT

Bankrupt investment firm Lehman Brothers is foreclosing on nearly $91 million in problem South Florida loans, an amount that represents nearly 1 percent of the regional total foreclosure value through the first three quarters of 2008, according to a new report from Condo Vultures® LLC.

Most of Lehman Brothers’ bad loan amount is in Miami-Dade County, where $90 million worth of financing is in default. An additional $596,000 in residential financing is in default in Palm Beach County, and $355,000 in residential financing in Broward County, according to the Bal Harbour, Fla.-based consultancy that generated the report based on circuit court records.

The bulk of Lehman's South Florida lending was in the commercial sector, where it has 50 commercial loans with a combined value of $2.4 billion allocated. All of these loans are greater than $10 million, and most appear to be performing, according to a previous Condo Vultures® report.

Washington, in an attempt to avoid another Lehman-like failure, is working to implement a bailout package to avoid any further financial meltdown and curb the spiking number of foreclosures.

In the meantime in South Florida, lenders have been busy foreclosing between January and September filing 55,737 actions valued at more than $14.2 billion on properties in Miami-Dade, Broward, and Palm Beach counties. Condominiums and townhouses account for 16,553, or 30 percent, of the actions filed, totaling $3.4 billion, according to the report.

In what may be a surprise to some, Broward County, not Miami-Dade County, has the highest concentration of total foreclosure actions with 24,733, or 42.2 percent, of the actions filed, totaling $5.99 billion, according to the report.

Palm Beach County is second with 17,065, or 29.3 percent, of the actions filed, which totals nearly $4.2 billion. Miami-Dade , which many industry watchers consider the epicenter of the Florida housing crash, has 13,939 actions – some 28.5 percent - filed, with a value of $4 billion, according to the report.

“Broward and Palm Beach counties are experiencing the foreclosure crisis that Miami-Dade County endured in 2007,” said Peter Zalewski, a principal in Condo Vultures® LLC. “Miami-Dade’s foreclosure actions are now leveling off steadily as many of the distressed properties have already gone through the court process and are now in the hands of the lenders as Real Estate Owned (REO) properties. Going forward, look for Miami’s REO total to fall as opportunistic buyers continue to acquire these bank-owned assets at deep discounts.

“It is a different story for Broward and Palm Beach counties. We expect the number of REO properties to spike in Broward and Palm Beach counties in 2009 once all of the 2008 foreclosures run their course through the court system.”

Condo Vultures® LLC is scheduled to release its third quarter 2008 REO properties report later this month. For an advanced copy, please be sure to register for the Condo Vultures® Market Intelligence Report.

Opportunistic buyers looking for discounted condominiums and townhouses will find that the most foreclosure actions are in complexes scattered throughout Broward and Palm Beach counties.

Broward County is now home to 41.2 percent of the foreclosure actions for condominium and townhouse product. Broward has had foreclosure actions filed against 7,558 condominiums and townhouses worth $1.4 billion. Palm Beach County has had 4,042 foreclosure actions filed against condos and townhouses worth $724 million. Miami-Dade County has had 4,953 foreclosure actions filed against condos and townhouses, totaling $1.2 billion, according to the report.

In a sign of how the foreclosure crisis is spreading north, Miami-Dade County is now home to only four of the top 20 condo buildings and complexes with the highest number of foreclosure actions filed.

A year ago, Miami’s Brickell Avenue financial district had three of the top five buildings, each of these projects were located in a four block stretch in the Greater Downtown Miami area. Today, only one Brickell Avenue condominium project – the Club at Brickell Bay – ranks as one of Miami-Dade County’s top five foreclosure buildings.

Leading Miami-Dade County in foreclosure actions is the Townhomes at Keys Cove in Homestead with 70 actions valued at $11.2 million. The Parc Central Aventura condominium ranks No. 2 with 61 actions valued at $21.4 million. The Blue Lagoon condominium conversion in Miami near the international airport ranks No. 3 with 57 actions totaling $17.9 million.

In Broward, the Edgewater complex in Coral Springs ranks at the top of the list with the highest number of foreclosure actions with 102 valued at $24.5 million. The Tides on Hollywood Beach, an oceanfront condo conversion, ranks second with 96 foreclosure actions totaling $32.8 million. The Palm-Aire Country Club complex in Pompano Beach ranks third with 94 foreclosure actions totaling $12.7 million.

Palm Beach County is home to the single complex with the highest number of foreclosure actions.

The Ponte Verde at Palm Beach Lakes has 120 actions valued at $22.6 million. The St. Andrews
Palm Beach is a distant second in the county with 74 actions filed worth $8.9 million. Cityside Condo and the Spa at Sunset Isles, both in West Palm Beach, rank Nos. 3 and 4, respectively. The 69 foreclosure actions at Cityside Condominium are valued at $19.7 million, while the 67 actions at the Spa at Sunset Isles are valued at $14.9 million, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Downtown Miami Casinos Proposed As Property Tax Revenue Plummets

Wed, 01 Oct 2008 14:39:03 GMT

Hampered by falling property taxes, a South Florida group is proposing a 2010 constitutional amendment to permit full-fledged casino gambling just west of Biscayne Boulevard in Downtown Miami.

Developers of the 25-acre Miami Worldcenter have established the organizational framework to put a casino amendment on the ballot in as little as two years from now, according to the Miami Herald.

The proposed Miami Worldcenter mixed-use project is to be located in the heart of Greater Downtown Miami among nine contiguous blocks situated between the American Airlines Arena west to the former Miami Arena, and the MacArthur Causeway south to Miami-Dade College.

Developers have constructed nearly 23,000 condos in a 60-block stretch of Greater Downtown Miami since 2003, including the nearby Marina Blue, 900 Biscayne, Ten Museum, and the
Marquis condos.

The Greater Downtown Miami area overall area now has more than 34,000 units, according to the Condo Vultures® Official Condo Buyers Guide To Miami™.

Before the first casino can open, organizers must overcome several obstacles, most importantly state voters who have rejected Miami casinos three times before, including the most recent attempt in 1994.

The flip side is voters in the last five years after approved Las Vegas-style slot machines at South Florida’s seven parimutual sites in an attempt to boost the struggling horse racing, dog racing, and Jai-Alai industries.

If a majority of Florida voters do suddenly approve the idea of Miami casinos given how government revenue has plummeted based on the dropping property prices, the ballot item would need to receive at least a 60 percent approval for the amendment to be implemented.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Regulators Shut 9 Banks In 3rd Quarter At Cost Of $6 Billion

Tue, 30 Sep 2008 18:26:10 GMT

Regulators shut down an average of one bank about every 10 calendar days in the third quarter of this year, adding up to nine failed institutions in a 92 day span from July through September.

The nine failed institutions had assets of $347 billion and deposits of $214 billion at the time of closing. The Federal Deposit Insurance Corp, which protects individual deposits up to $100,000 per account, estimates the third quarter bank failures will cost between $6 billion and $10 billion.

Washington Mutual, a $310 billion in assets institution based in Henderson, Nev., was the last bank to fail in the third quarter, being shut by regulators on Sept. 25.

In a preemptive move prior to the seizure, the FDIC negotiated a deal for Washington Mutual Bank’s assets to be sold to JPMorgan Chase Bank, a $1.4 trillion in assets institution based in Ohio, to ensure consumer confidence and avoid mass deposit withdrawals.

Wachovia Bank, a $782 billion in assets institution based in North Carolina, avoided being the 10th institution shuttered in the third quarter only when the North Carolina-based organization was able to reach a deal to be acquired by Citigroup, which operates the $1.3 trillion in assets Citibank institution.

For the year, regulators have shut down 13 institutions. California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, Georgia, West Virginia, and of course Washington state have each had one institution shuttered this year.

Before Washington Mutual Bank’s failure, federal regulators were busy on Sept. 19 shutting down Ameribank Inc., a 102-year-old community bank based in West Virginia with links to Florida.

Prior to the Ameribank’s closure, Silver State Bank in the Las Vegas suburb of Henderson was the last institution to be shut, that occurring on Sept. 5.

Silver State Bank was the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

Before regulators shuttered Ameribank and Silver State Bank, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.

Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.

Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast.

First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Regulators Shut Bank With Florida Link, Failures Reach 12

Sat, 20 Sep 2008 04:32:35 GMT

Federal regulators swooped in to shut down the 12th financial institution of the year and the eighth since July 11, seizing a community bank with links to Florida that has been battered by nonperforming residential loans.

Ameribank Inc., a 102-year-old institution with assets of $113 million based in Welch, W.Va., was seized by the Office of Thrift Supervision on the afternoon of September 19.

The Federal Deposit Insurance Corp., which insures individual accounts up to $100,000, has been named receiver to oversee the liquidation of the failed bank and its eight locations.

“The cost of the transactions to the Deposit Insurance Fund is estimated to be $42 million,” according to an FDIC statement.

In preparation for the seizure, federal regulators worked out “purchase and assumption agreements” to sell off Ameribank’s deposits, locations, and other assets to viable suitors.

Pioneer Community Bank, a 77-year-old institution with $66 million in assets based in Iaeger, W.Va., will assume all of Ameribank’s five West Virginia locations along with the accompanying deposits and some assets.

The Citizens Savings Bank, a 106-year-old institution with assets of $426 million in Martins Ferry, Ohio, will assume all of failed institution’s three Ohio locations, along with the deposits and some assets.

“In addition to assuming all of the deposits of Ameribank, Inc., the acquiring institutions will purchase approximately $23 million in assets from the receivership,” according to the FDIC.

Until August, Ameribank had operated in Florida’s Palm Beach County for five years.

Ameribank at one time was attempting to relocate its headquarters from a low-wage mining community of West Virginia to wealthy Palm Beach County.

In 2003, Ameribank opened a branch location on North Military Trail in Palm Beach Gardens to make loans and collect deposits, which reached $14.6 million in June 2007, according to the latest FDIC data for individual locations.

By July 2008, Ameribank’s Palm Beach location plummeted to less than $1 million in deposits.

The dramatic plummet in deposits occurred in the months after federal banking regulators imposed in October 2007 a cease-and-desist order against Ameribank.

Regulators entered into a 16-page order with Ameribank for “unsafe and unsound banking practices” related to a “failure to comply” with lending limitations, real estate lending standards, loan documentation, and credit underwriting, according to the OTS.

Ameribank’s problems in part were due to risky no-money-down residential loans purchased from Lending One, a Boca Raton mortgage broker, according to the Palm Beach Post.

“The no-money-down one-year home mortgage and renovation loans were designed for speculators who wanted to buy fixer-uppers and flip them for sale at a higher price,” according to the Palm Beach Post. “Borrowers paid Lending One a high interest rate of 15 percent, plus three to five points at closing. In a plan developed by Ameribank's former president, Lou Dunham, Ameribank assumed the risk for an 8 percent cut of the interest, buying hundreds of loans in Florida, Louisiana, Ohio and eight other states.”

Once the housing market began to slow, many of the speculators who owed Ameribank simply stopped paying when they couldn’t flip their investments.

Ameribank lost $10.1 million in 2007 after posting a profit of $2.1 million in 2006. In the first half of 2008, Ameribank lost an additional $6.9 million.

Ameribank is the first institution to be closed in West Virginia since First National Bank of Keystone in September 1999.

Prior to the Ameribank’s closure, Silver State Bank in the Las Vegas suburb of Henderson was the last institution to be shut, that occurring on Sept. 5.

Silver State Bank was the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.

For the year, California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, Georgia, and of course West Virginia, have each had one institution shuttered this year.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

Before regulators shuttered Ameribank and Silver State Bank, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.

Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.

Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast. First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Feds Consider RTC-Like Entity To Liquidate Bad Loans

Fri, 19 Sep 2008 01:18:16 GMT

Reminiscent of the Savings & Loan crisis of the late 1980s, the U.S. government is considering creating a Resolution Trust Corporation-like entity that could firesale off all of the bad debt accumulated by the nation’s banks, according to CNBC.

As U.S. Treasury searches for answers following one of the most volatile weeks for the stock market in decades, Secretary Henry Paulson has reportedly received President Bush’s clearance to approach Congress about the idea of creating a third-party entity to liquidate the billions of dollars of bad debt on the ledgers of many of the nation's financial institutions.

“Such a move, according to its advocates, would allow banks to shovel bad debt off their balance sheets and allow the firms to go back to business as usual,” according to the news report. “It would also eliminate the need for individual company bailouts. In turn, that could allow the housing market to recover because it would restore banks willingness to lend.”

This is the second time in a month that the RTC concept has come up.

Before the Treasury Department took over mortgage giants Fannie Mae and Freddie Mac earlier this month, Fannie Mae had announced plans to unload thousands of repossessed homes by way of opening offices in South Florida and Southern California to “get the property out the door.”

Fannie Mae opened an office in Fort Lauderdale, Fla., in August, and was scheduled to open a sister office in Irvine, Calif., in September.

The satellite offices are designed to streamline Fannie Mae’s efforts to unload bank-owned properties known as Real Estate Owned (REO), reduce defaults, and better manage repossessed properties until the inventory can eventually be liquidated.

“Real estate is at some level local – it makes sense to be local,” said Daniel H. Mudd, former president and chief executive officer of Fannie Mae at the time during an Aug. 8 conference call with analysts to discuss second quarter results.

“We’re adding hundreds of staff as well as contractors to our loss mitigation team, and we have effectively quintupled the amount of senior management that is — dedicated to this effort.”

Fannie Mae has had to rethink its approach as the number of Real Estate Owned properties repossessed in 2008 reached 54,173 on June 30. By comparison, Fannie Mae repossessed 49,121 bank-owned properties for the entire year of 2007, and 36,580 for all of 2006.

Fannie Mae’s repossessed properties are concentrated primarily in six states, including the two where the satellite offices are opening within the next 45 days.

Florida accounts for 5 percent, or 2,681, of the bank-owned properties controlled by Fannie Mae. California accounts for an additional 9 percent, or 4,814, of the Real Estate Owned on the Fannie Mae books.

It is unclear if Fannie Mae plans to open additional offices in other downward spiraling markets where bank-owned properties are spiking such as Michigan with 10,263 bank-owned properties, Ohio with 3,402, Arizona with 1,978, and Nevada with 1,205.

Fannie Mae’s immediate focus is to unload the growing inventory of properties that have been repossessed by the government sponsored, privately-owned entity that is the largest trader of residential mortgages on the secondary market.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don’t forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Lehman Brothers Has Nearly $2 Billion In Miami Area Real Estate Loans

Tue, 16 Sep 2008 16:19:20 GMT

Bankrupt Wall Street investment bank Lehman Brothers Holdings Inc. and its subsidiaries have nearly $2 billion in commercial real estate loans in Miami and South Florida, according to a new report by Condo Vultures® LLC.

Lehman (NYSE: LEH) has 35 outstanding loans in South Florida with 22 loans in Miami-Dade County totaling $964 million, and 13 in Broward County totaling $899 million, according to the report by the Bal Harbour, Fla.-based consultancy.

Lehman and its subsidiaries are the lead lender on a number of high profile South Florida real estate projects, ranging from the new Trump Hollywood oceanfront condominium under construction to the high-end Aventura Mall, the two-story Galleria of Key Biscayne retail center to the Courvoisier Centre office complex on Brickell Key, according to the Condo Vultures® report.

The report only identifies the lead lender and not any participants that may own a share of the syndicated debt originated by Lehman and/or its subsidiaries.

Hamstrung by about $60 billion in troubled real estate loans, Lehman’s debt stood at $613 billion when the 158-year-old Wall Street investment bank with assets of $639 billion when it filed for Chapter 11 bankruptcy reorganization protection on Sept. 15.

The bankruptcy action was Lehman’s last option after failing over the weekend to find a suitor.

Lehman is expected to sell off many of its assets in the weeks and months ahead to satisfy creditors. Citigroup is Lehman’s largest unsecured creditor with $138 billion in bonds. The Bank of New York Mellon Corp. is owed about $17 billion, according to the Associated Press.

The British bank Barclays is reported to be in discussions to buy Lehman's "U.S. broker-dealer business and include Lehman's equity, fixed income, forex and M&A advisory business in the U.S.," according to Reuters.

At the end of trading Monday, Lehman’s stock closed at 21 cents, down 94 percent or $3.44 per share from Friday. Lehman’s 52 week high price was $67.73, according to Yahoo! Finance.

Lehman’s bankruptcy ranks as the largest in U.S. history based on assets held. Disgraced telecom company WorldCom now ranks second with assets of $104 billion, and the failed energy company Enron Corp. is third with $63 billion.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Calling Symbolic Bottom Of Miami Real Estate Market

Wed, 10 Sep 2008 15:40:16 GMT

The U.S. Treasury Department’s surprise takeover of Fannie Mae and Freddie Mac appears to be the last of three symbolic steps necessary to signal the psychological bottom of the South Florida real estate market.

Expectations are that the Fed’s dramatic actions on Sunday, Sept. 7, will inevitably restore liquidity to the residential financing market now that the U.S. government controls the two largest mortgage companies in the country.

Credit, not ready, willing, and able buyers, had been the biggest obstacle for a well-qualified purchaser with a healthy down payment to complete a real estate transaction.

Immediately following the takeover, interest rates on 30-year conventional fixed mortgages have dropped by about 50 basis points from a close of 6.25 percent on Friday, Sept. 5, the last business day before Fannie Mae and Freddie Mac were seized by the Feds.

This is not to say that the Fed’s action will lead back to the days of 100 percent “no doc” financing anytime soon or cause an immediate strengthening in real estate values, especially in oversupplied market such as Greater Downtown Miami, the Las Vegas Strip, or San Diego’s Gaslamp Quarter.

Instead, prices are expected to begin to stabilize in more and more submarkets besides the most popular and/or mature markets such as South Beach as buyers and borrowers once again have access to credit secured by real estate.

Restoring credit to the housing market was the last factor that some industry watchers have been awaiting since a majority of the construction cranes used to build the new condo towers in places such as Greater Downtown Miami have already come down, which signals the end of new development for several years.

The second contributing factor to the idea of a psychological bottom is the sudden willingness of banks to discount their residential real estate portfolios of both existing loans and bank-owned properties.

The discounts have increased since July when banking regulators began to aggressively seize the institutions with troubled loan portfolio that had been stalling the inevitable as they searched for a solution. Regulators have shut seven institutions since July 11, and 11 for the year.

While the symbolic bottom appears close, the statistical bottom of a particular market will only be reached when there are three consecutive months of increased sales by quantity and three straight months of increased median sales price.

The problem that creates for discount buyers is that real estate pricing is not valuated by the minute like a share in the stock market so the bottom of the housing market will only be defined weeks later once the final data from the previous month can be analyzed.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Las Vegas Bank Shuttered By Regulators

Wed, 10 Sep 2008 00:30:18 GMT

A Las Vegas-based bank with $2 billion in assets has been shut down by banking regulators, marking the 11th U.S. institution to fail in 2008 and the seventh since July 11.

Silver State Bank in the Las Vegas suburb of Henderson was seized on Sept. 5 by the Nevada Financial Institutions Division, and immediately placed in the control of the receiver, the Federal Deposit Insurance Corp.

The FDIC estimates the failure of Silver State Bank will cost the insurance fund between $450 million and $550 million.

The deteriorating real estate market of the United States is prompting federal regulators to step in to shore up the wobbling banking industry that has suffered from problem loans made at the peak of the market.

Founded in 1996, Silver State Bank employed 345 people at its 14 branches in Greater Las Vegas area and four locations in the Greater Phoenix area.

Silver State Bank lost $85.7 million in the first half of the year ending June 30, after earning a profit of $12.3 million in the first half of 2007, according to FDIC data.

Silver State Bank, which had a loan portfolio of $1.6 billion on June 30, had an abnormally high ratio of problem loans. The bank’s noncurrent loans to loans ratio spiked in 2008 to 15.38 percent from 0.01 percent in 2007.

The skyrocketing noncurrent loans ratio resulted from a spike in problem real estate loans, especially construction and development financing that increased by nearly 22 percent.

In a deal structured before Silver State Bank’s failure, the FDIC entered into a purchase and assumption agreement whereby Silver State’s $1.7 billion in insured deposits in both Nevada and Arizona would be transferred to one of two institutions.

Nevada State Bank, a 49-year-old institution based in Las Vegas with $3.8 billion in assets, assumed the Nevada deposits. The National Bank of Arizona, a 36-year-old institution based in Tucson with $5.2 billion in assets, was the recipient of the Arizona deposits.

“In addition to assuming the failed bank's insured deposits, Nevada State Bank will purchase a small amount of assets comprised of cash and securities,” according to an FDIC statement. “The FDIC will retain the remaining assets for later disposition.”

Silver State Bank is the second Nevada institution to fail this year. In July, banking regulators shut down the First National Bank of Nevada in Reno, which along with the First Heritage Bank in Newport Beach, Calif., was owned by First National Bank Holding Co. in Scottsdale, Ariz.

At the time of closing, the First National Bank Holding Co. had combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada. The estimated cost of the failure of the First National Bank Holding Co. is $862 million, according to the FDIC.

For the year, California, Nevada, and Missouri lead the nation in failed institutions with two banks each. Florida, Arkansas, Minnesota, Kansas, and Georgia, have each had one institution shuttered this year.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

Before regulators swooped in on Silver State Bank in Nevada, the focus of examiners was on Greater Atlanta-based Integrity Bank, a $1.1 billion in assets institution that was shut on Aug. 29.

Working down the list of failed lenders, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, on Aug. 22.

Three weeks earlier on Aug. 1, regulators shut First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast. First Priority’s closing marked the first Florida institution to be closed by regulators in more than four years.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Report: Regulators Shut 10th Bank This Year, Miami Condo Converter Linked To Seizure

Sat, 30 Aug 2008 18:47:19 GMT

Loans to a Miami area real estate developer appear to have contributed to regulators seizing the 10th U.S. bank of the year, according to the Miami Herald.

Integrity Bank, a $1.1 billion in assets institution based in the suburban Atlanta city of Alpharetta, was shut Friday afternoon, Aug. 29, by the Georgia Department of Banking and Finance. The Federal Deposit Insurance Corp was promptly named the receiver of the failed institution.

The failure is estimated to cost between $250 million and $350 million, according to the FDIC, which insures depositors up to $100,000 per account.

Guy Mitchell, a Coral Gables real estate investor who bought the oceanfront Royal Palm Hotel in the South Beach neighborhood of Miami Beach for $128 million in 2004, was a client of Integrity Bank, according to the Miami Herald article.

Mitchell made headlines in 2004 when he and condo-hotel converter Robert Falor tried with some success to convert the convention center hotel into a condominium-hotel at the peak of the market, but “has since fallen behind on loan payments amid a failed condo conversion,” according to the Miami Herald article.

“The owner of the troubled Royal Palm hotel in South Beach may be a central player in a Georgia bank's failure,” according to the Miami Herald article.

The Miami Herald adds, “In regulatory filings, Integrity acknowledged making 14 loans worth $83 million to companies owned by the same guarantor -- an amount roughly equal to the cash the bank reported having on hand last year.”

Integrity Bank is the sixth institution to be shut since July 11, and the second bank in a week to fail. On August 22, regulators seized Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas.

Regulators, who show no sign of slowing down in their mandate to shore up the financial industry in the midst of the U.S. real estate meltdown, seized Integrity Bank with precision and planning.

When the six former Integrity Bank locations reopen on Tuesday after the Labor Day holiday, customers will learn that their deposits - about $974 million - have been assumed by Regions Bank, a $139.4 billion institution based in Birmingham, Ala.

Regions Bank has 1,936 branches in 16 states, including 153 locations in Georgia.

“All depositors of Integrity Bank, including those with deposits in excess of the FDIC's insurance limits, will automatically become depositors of Regions Bank for the full amount of their deposits, and they will continue to have uninterrupted access to their deposits,” according to an FDIC statement. “Depositors will continue to be insured with Regions Bank so there is no need for customers to change their banking relationship to retain their deposit insurance.”

As part of the deal with regulators, Regions Bank has agreed to purchase more than $34 million worth of assets from the failed Integrity Bank. The remaining assets will be retained by the FDIC until they can be liquidated.

This is the first Georgia bank to fail since NetBank, also based in Alpharetta, was shut by regulators in September 2007.

For the year, California and Missouri lead the nation in failed institutions with two banks each. Florida, Nevada, Arkansas, Minnesota, Kansas, and of course Georgia, have each had one institution shuttered this year.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

Before the seizure of Kansas-based Columbian Bank, regulators were busy in Florida.

First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast, was shutdown on, Aug. 1, marking the first Florida institution to be closed by regulators in more than four years.

To see a Florida bank fail wasn’t a shock to many. Investors are closely watching the banking industry in Florida given the state’s rapidly deteriorating real estate market, which was a key lending focus for most institutions.

Deteriorating real estate markets on the West Coast of the United States prompted federal regulators to seize three banks in three states in the month of July.

Federal regulators shut down on July 25 two banks in three states with combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada.

Regulators seized the First National Bank Holding Co. in Scottsdale, Ariz, the parent company of First Heritage Bank in Newport Beach, Calif., and the First National Bank of Nevada in Reno, Nev. The First National Bank of Arizona merged with the First National Bank of Nevada on June 30, only to be shutdown 25 days later.

The estimated cost of the failure of First National Bank of Nevada and First Heritage Bank is projected to be $862 million, according to the FDIC.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Discount Discrepancy Widens Between Miami’s Mainland, Barrier Island

Mon, 25 Aug 2008 01:02:05 GMT

Discounts in Miami-Dade County’s coastal condominium markets are moving in different directions depending upon which side of Biscayne Bay a particular project is located, according to a new report from Condo Vultures® LLC.

As the average discounts in percentage terms and total dollars deepens on Miami-Dade County’s Mainland where the bulk the new construction occurred, pricing is leveling off for condo units situated on the barrier island where the beaches are located, according to the Vultures Database™ Report for August 2008.

“The growing discrepancy in discounts between Greater Miami’s Mainland and the Barrier Island is not that big of a surprise given today’s buying trends,” said Peter Zalewski, a principal with the consultancy Condo Vultures® LLC that produced the report. “Second-home buyers with foreign currencies – who tend to be the majority of the today’s purchasers – prefer the close proximity to the sand, surf, and nightlife of the Barrier Island. Full-time residents, who are all but invisible or looking to rent in this current market, usually opt for the Mainland, which tends to offer the everyday conveniences at a more affordable price.”

Discounts on the Mainland, which is comprised of Greater Downtown, Coconut Grove, Coral Gables, and South Miami for this report, averaged a drop of -32 percent, or -$174,135, through July 31, according to the data .

The average discount on the more expensive Barrier Island, which is comprised of the cities of Miami Beach, Surfside, Bal Harbour, and Sunny Isles Beach for this report, stood at -27 percent, or -$198,199, according to the data.

By comparison, the average discount on the 3,321 condos in the Vultures Database™ in South Florida through July 31 was -30 percent, or -$175,147, off of the historical high price.

The Vultures Database™ tracks properties – condos, townhouses, and single-family homes - east of Interstate 95 and/or U.S. 1 in the South Florida region of Miami-Dade, Broward, and Palm Beach counties that have decreased in price by at least -10 percent or -$100,000.

The complete Vultures Database™ is comprised of 4,818 properties that have been reduced by -$1.08 billion, or an average of -$223,233 each, and languished on the market for an average of 593 days. Condos represent 69 percent of the total inventory, and single-family houses and townhouses the remaining 31 percent of the properties in the database.

Overall, the top five markets with the biggest average discounts off of the historical high asking prices for condos, townhouses, and single-family homes are located in Palm Beach and Broward counties. Miami-Dade County has only three cities that rank in the Top 10 markets for the deepest discounts, according to the report .

Royal Palm Beach has the deepest South Florida discount at -52 percent, although this drop is based on a single property. Dania Beach ranks second with an average discount of -39 percent on 38 properties and Oakland Park is third with an average discount of -37 percent on 33 properties.

Rounding out the top five markets with the deepest discounts are Lantana with a -37 percent on a single property, and Boca Raton with an average decrease of -36 percent on 42 properties, according to the report.

In the first seven month of this year, 722 properties in the Vultures Database™ have been sold at an average discount of -38 percent, or -$320,462. That works out to a pace of 103 properties per month in a market where financing is a challenge.

This year’s number of closings is up slightly compared to 2007 when there were 1,226 properties in the Vultures Database™ that sold for an average discount of -29 percent, or -$259,586. Last year’s number of total transactions works out to an average of 102 closing per month.

The discrepancy in pricing between Miami’s Mainland and the Barrier Island is also prevalent in the deals that have closed this year. There have been 214 Barrier Island properties in the Vultures Database™ this year that have sold for an average discount of -34 percent, or -$398,488. On the Mainland, there have been 178 sales at an average discount of -37 percent, or -$325,079, according to the report.

All indicators are this trend will continue through the summer and into what is expected to be a busy winter tourism season. Consider that in the last three summer months, the difference between Miami's Mainland and Barrier Island in average discounts and total inventory on a percentage basis has continued to widen.

In July, the Barrier Island accounted for 29.1 percent of the total number of condos in the Vultures Database™, down from 29.5 percent in June, and 30.7 percent in May.

At the same time, Miami’s Mainland has seen its share of the properties in the Vultures Database™ increase to 24.7 percent in July from 23.9 percent in June and 23.2 percent in May, according to the report.

“We expect the current trend of the growing pricing discrepancy between the Barrier Island and the Mainland to continue to widen,” Zalewski said. “As buyers scoop up units on the Barrier Island at smaller discounts, sellers on the Mainland are faced with trying to differentiate their units from the nearly 21,000 new units that have been constructed since 2003.”

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Problem Real Estate Loans Contribute To 9th Bank Failure

Sun, 24 Aug 2008 00:42:07 GMT

Showing no sign of relenting from a strategy to shore up the financial industry, regulators seized their fifth bank since July 11th, and the ninth institution this year as the U.S. housing crisis spreads to the Great Plains.

The Columbian Bank and Trust Co., a $752 million in assets institution based in Topeka, Kansas, was shutdown Friday afternoon and placed into the receivership control of the Federal Deposit Insurance Corp.

“The cost to the FDIC's Deposit Insurance Fund is estimated to be $60 million,” according to an FDIC statement that announced the failure.

Founded in 1978, Columbian Bank operated eight locations throughout Kansas and one branch in Missouri with combined deposits of $596 million on March 31, which is the most recent data available from the FDIC.

Columbian Bank had loans of $633 million, of which $482 million was real estate related. The bank’s noncurrent loans to loans ratio spiked at the end of the first quarter of 2008 to 6.77 percent from 1.16 percent a year earlier.

The primary reason for the dramatic jump was the surge in noncurrent real estate loans that increased from 1.62 percent in March 2007 to 8.95 percent in March 2008, according to the FDIC data.

In advance of Friday’s seizure, banking regulators negotiated a purchase and assumption agreement for Columbian Bank’s deposits to be assumed by Citizens Bank and Trust in the northwestern Missouri city of Chillicothe.

Citizens Bank also plans to purchase nearly $86 million worth of Columbian Bank’s assets, according to the FDIC.

“The assets are comprised mainly of cash, cash equivalents and securities,” according to the FDIC statement. “The FDIC will retain the remaining assets for later disposition.”

Under the arrangement with regulators, the former Columbian Bank branches will be reopened Monday morning under the direction of the new suitor, Citizens Bank and Trust.

Founded in 1889, Citizens Bank has 21 locations in Missouri with assets of $1.03 billion and loans of $647 million at the end of the first quarter of 2008.
Columbian Bank is the first institution in Kansas to fail since April 1993 when Midland Bank of Kansas was shuttered.

For the year, California and Missouri lead the nation in failed institutions with two banks each. Florida, Nevada, Arkansas, Minnesota, and of course Kansas, have each had one institution shuttered this year.

A host of other banks are being closely monitored by industry watchers who anticipate further failures this year, especially in Sun Belt states where the housing crisis has hit hardest.

The last bank to be shut by regulators was in Florida about three weeks ago.

First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast, was shutdown on, Aug. 1, marking the first Florida institution to be closed by regulators in more than four years.

To see a Florida bank fail wasn’t a shock to many. Investors are closely watching the banking industry in Florida given the state’s rapidly deteriorating real estate market, which was a key lending focus for most institutions.

Deteriorating real estate markets on the West Coast of the United States has already prompted federal regulators to seize three banks in three states in the month of July.

Federal regulators shut down on July 25 two banks in three states with combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada.

Regulators seized the First National Bank Holding Co. in Scottsdale, Ariz, the parent company of First Heritage Bank in Newport Beach, Calif., and the First National Bank of Nevada in Reno, Nev. The First National Bank of Arizona merged with the First National Bank of Nevada on June 30, only to be shutdown 25 days later.

The estimated cost of the failure of First National Bank of Nevada and First Heritage Bank is projected to be $862 million, according to the FDIC.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Fannie Mae To Open Satellite Offices To Liquidate Properties

Wed, 20 Aug 2008 02:57:46 GMT

Reminiscent of the Resolution Trust Corporation’s approach of the early 1990s when real estate was liquidated for a fraction of its value, mortgage giant Fannie Mae plans to unload thousands of repossessed homes by way of opening offices in South Florida and Southern California to “get the property out the door.”

Fannie Mae intends to open an office in Fort Lauderdale, Fla., in August, and a sister office in Irvine, Calif., in September.

The satellite offices are designed to streamline Fannie Mae’s efforts to unload bank-owned properties known as Real Estate Owned (REO), reduce defaults, and better manage repossessed properties until the inventory can eventually be liquidated.

“Real estate is at some level local – it makes sense to be local,” Daniel H. Mudd, president and chief executive officer of Fannie Mae was quoted saying in the official transcript from an Aug. 8 conference call with analysts to discuss second quarter results.

“We’re adding hundreds of staff as well as contractors to our loss mitigation team, and we have effectively quintupled the amount of senior management that is -- dedicated to this effort.”

Fannie Mae has had to rethink its approach as the number of Real Estate Owned properties repossessed in 2008 reached 54,173 on June 30. By comparison, Fannie Mae repossessed 49,121 bank-owned properties for the entire year of 2007, and 36,580 for all of 2006.

Fannie Mae’s repossessed properties are concentrated primarily in six states, including the two where the satellite offices are opening within the next 45 days.

Florida accounts for 5 percent, or 2,681, of the bank-owned properties controlled by Fannie Mae. California accounts for an additional 9 percent, or 4,814, of the Real Estate Owned on the Fannie Mae books.

It is unclear if Fannie Mae plans to open additional offices in other downward spiraling markets where bank-owned properties are spiking such as Michigan with 10,263 bank-owned properties, Ohio with 3,402, Arizona with 1,978, and Nevada with 1,205.

Fannie Mae’s immediate focus is to unload the growing inventory of properties that have been repossessed by the government sponsored, privately-owned entity that is the largest trader of residential mortgages on the secondary market.

“As a licensed real estate brokerage that exclusively represents discount buyers, we commend Fannie Mae’s efforts to work towards implementing a solution to the foreclosure crisis,” said Peter Zalewski, the broker-owner of Condo Vultures® Realty LLC in Bal Harbour, Fla. “For our part, we pledge to work endlessly throughout our network to ensure that all of our clients and customers are aware of the Real Estate Owned properties that have been earmarked for liquidation by Fannie Mae. With hard work and some luck, we hope to be able to assist Fannie Mae to move some of its distressed inventory in the upcoming months.”

Besides Florida, Condo Vultures® operates in Southern California and Las Vegas, and is pursuing plans to open in Phoenix.

Fannie Mae’s liquidation efforts are being seen by many industry watchers as a proactive measure to prepare for what some think will be a second wave of foreclosures – and ultimately Real Estate Owned properties – that are expected to flood the market in the upcoming months.

“We continue to move property -- to move REO in this strained market,” Mudd said according to the transcript. “We’re processing much more REO at the same through-put and at the same cycle times using a lot of innovative ways to get the property out the door. I do not think this is a time to be holding on to REO and hoping for a better day. So, we’re doing a good job of moving that inventory back out onto the market.”

A primary reason for the spike in Real Estate Owned properties controlled by Fannie Mae is that many borrowers in expensive markets such as Florida, California, and Nevada are being squeezed by inflation, fuel prices, weakening economies, job losses, and a lack of credit options.

When these issues are combined with the fact that many properties are now worth less than the amount owed, it is not difficult to see why borrowers – many of which obtained exotic financing - are ultimately losing their homes as teaser rates expire.

“Home prices have cratered in certain markets since the peak,” Mudd said according to the transcript. “Cape Coral, Florida, down 50 percent; Las Vegas, down 35 percent, Northern Virginia, down 30 percent; and in California, Modesto and Stockton, down 50 percent; Riverside, down 40 percent. The list goes on.”

Fannie Mae reported that 47 percent of its $1.3 billion in single-family credit losses in the second quarter of 2008 are attributable to four states: California, representing 29 percent of the loss; Florida, accounting for 7 percent; Arizona, representing 6 percent, and Nevada, accounting for 5 percent.

“These states saw the most dramatic run-up in prices, and are now seeing the most rapid declines,” Stephen M. Swad, Fannie Mae’s Chief Financial Officer said according to the transcript.

Home prices slipped between July 2007 to June 2008 by -20.9 percent in California, -21.2 percent in Florida, -23.1 percent in Nevada, and -20.1 percent in Arizona. Nationally, home prices slipped by an average of -7.4 percent, according to Fannie Mae.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Spec Condo Project Begins Construction In Miami-Dade County

Thu, 14 Aug 2008 00:50:14 GMT

As the last three residential construction cranes move closer to being disassembled in the oversupplied Downtown Miami condo market, four additional cranes - against steep odds - have suddenly sprung up on a new speculative oceanfront condominium project proposed in the barrier island city of Bal Harbour in northeast Miami-Dade County.

The newly installed construction cranes have been erected to facilitate the building of the proposed St. Regis Bal Harbour Resort & Residences condominium and hotel on an 8.9-acre site where the Sheraton Bal Harbour Hotel once stood.

The planned three-tower St. Regis complex is proposed to have 268 condominium units, 36 condo-hotel units, and 24 fractional units for sale to the public plus 182 hotel rooms and a presidential suite that will be owned by the developer, 9701 Collins Avenue LLC.

Prices start at more than $1,000 per square foot. An unknown number of units are under contract.

The development schedule calls for topping off the trio of 27-story glass towers in autumn 2009, and delivery in late 2010.

“The development team appears to be so confident that this project - modeled after the ultra-luxury and pricey Apogee condominium in South Beach - will be a success that they are building on speculation that the units can be sold once delivered,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “This goes to show how difficult it is right now to obtain financing for a new South Florida condominium project. When a development team with the background, experience, and war chest of 9701 Collins Avenue LLC opts to self finance a project of this magnitude, you have to conclude that construction financing is all but nonexistent today.”

The development entity – 9701 Collins Avenue LLC – building the St. Regis Bal Harbour is a partnership between Starwood Resorts & Hotels Worldwide Inc. – which besides St. Regis also owns the brands Westin, W Hotels, Sheraton, Le Meridien and Four Points - and the nation’s largest condominium developer The Related Group .

The project received a financial boost from Starwood Vacation Ownership Inc., which provided a $30 million loan to 9701 Collins Avenue LLC, according to public records.

The loan is secured by the waterfront land that had been long owned by the Sheraton Bal Harbour Joint Venture before the deed was transferred to 9701 Collins Avenue LLC in July 2007. Miami-Dade County’s Property Appraiser assessed the value of the land at $125.6 million, or $325 per square foot for the dirt, in 2007.

“Aside from the trophy location and international name brand recognition, the St. Regis Bal Harbour stands to benefit from what a growing number of industry professionals see as a leveling off – and in some cases strengthening - of prices in the condo market on the barrier island of Miami-Dade County,” Zalewski said. “The barrier island, which didn’t have the same extent of condo building as Miami’s mainland, is a popular destination for locals and second-home buyers alike who prefer the combination of sand, water, restaurants, and nightlife.

“Second-home buyers purchasing today tend to opt for the barrier island even though the bigger discounts are more prevalent on the mainland of Miami.”

Mainland Miami’s biggest challenge has been absorbing all of the 22,737 new condo units – 88 percent of which have already been delivered – that are completed or under construction in the Greater Downtown Miami area, which is comprised of the neighborhoods of Brickell Avenue, Downtown, and the Biscayne Boulevard Corridor, according to the Condo Vultures® Official Condo Buyers Guide To Miami™ .

On the barrier island, the amount of new condo construction is estimated to be less than half of the Greater Downtown Miami total.

Average discounts being tracked in the Vultures Database™ highlight the price differences by submarket.

On the barrier island from Miami Beach north to Surfside, Bal Harbour, and Sunny Isles Beach, the average price drop per condo unit in the Vultures Database™ is -25 percent. Average prices stand at $460 per square foot today compared to a historical high asking price of $618 per square foot.

In Bal Harbour, where the St. Regis is going up, the average price drop is -22 percent with an asking price today of $714 per square foot compared to the historical high average of $914 per square foot.

On the mainland in Greater Downtown Miami, the average price drop per condo unit in the Vultures Database™ is -32 percent. Prices are currently $314 per square foot compared to a historical high asking price of $463 per square foot.

The Vultures Database™ is comprised of nearly 5,000 condos, townhouses, and single-family houses east of Interstate 95 in Miami-Dade, Broward, and Palm Beach counties that have been reduced in price by at least -10 percent and/or $100,000.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Pressure Builds On Florida’s Largest Bank

Thu, 07 Aug 2008 18:11:51 GMT

Florida’s largest bank was already under pressure from analysts, investors, and third-party governance groups concerned about the institution’s growing number of problem mortgages even before Thursday’s New York Times article donned the Miami-based lender as the “Tempest for a Bank That Bet on Risky Loans.”

BankUnited, Florida’s largest based bank with assets of $14.3 billion and the originator of the “59 Minute Loan” during the real estate boom years, is now “scrambling to raise $400 million in capital, an amount nearly eight times the bank’s shriveled value on the stock market,” according to the article.

BankUnited has a market capitalization value of $47 million, according to Yahoo! Finance.

The stock price of BankUnited (Nasdaq: BKUNA) dropped by 12 percent to $1.32 per share in midday trading Thursday. The current pricing means BankUnited’s shares have plummeted about 93 percent from the institution’s 52-week high price of $19.69 per share, according to Yahoo! Finance.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Renters Filling New Miami Condos, But Will Rates Hold?

Wed, 06 Aug 2008 23:38:02 GMT

Less than 800 condo units are currently available for rent in the Greater Downtown Miami area despite nearly 21,000 new residences being built in the last five years, according to a new report from Condo Vultures® LLC.

Of the units that are currently available for lease, the rental rates being agreed to on an annual square foot basis per month in the Greater Downtown Miami area are about $1.85 for a city view and $2 for a water view, which is about 30 percent cheaper than in Miami Beach’s South Beach neighborhood, according to the report.

The Greater Downtown Miami area is defined as the Rickenbacker Causeway north to the Julia Tuttle Causeway, Interstate 95 east to Biscayne Bay. The Brickell Avenue area, Downtown Miami, and the Biscayne Boulevard Corridor together comprise this 60-block stretch from south to north.

“Despite all of the speculation surrounding the Downtown Miami condo market, rental activity is surprisingly strong – for the time being – with tenants snapping up units at a pace that has kept many investors out of foreclosure,” said William Betancourt, a rental specialist and licensed real estate agent with with Condo Vultures® Realty LLC. “We have found that there is a lot of demand from young professionals to occupy many of the new projects in Greater Downtown Miami. Most of our renters already work and socialize in the area so it is a natural progression for them.

“It also doesn’t hurt that renters can live in never-before-occupied units at attractive prices. ”

This year 1,102 condo units have been leased in the Greater Downtown Miami area, with leases ranging on a monthly basis from $950, or $1.92 per square foot, for a 496-square-foot studio in a new waterfront facing building in the Biscayne Boulevard Corridor to $9,000, or $3.04 per square foot, for a new waterfront condo with four bedrooms and 2,959 square feet on Brickell Key, according to the Multiple Listing Service.

The median lease price transacted is $1,600, or $1.89 per square foot, for a one-bedroom unit with 846 square feet in a new waterfront condo in downtown Miami.

Renters are leasing up one-bedroom units at a quicker pace than the two-bedroom units, which traditionally are the most popular, according to the report.

There have been 538 one bedroom units that have rented in the Greater Downtown Miami area with the median monthly price being $1,450, or $1.85 per square foot, for a 783-square-foot unit in a new building on the Miami River.

Compare that to 437 two-bedroom units that have rented with the median price being $2,000, or $1.65 per square foot, for 1,212 square feet in a new building on the Miami River.

Studios have been slightly more popular than three-bedroom units. There have been 62 studios rented in 2008, with the median monthly price being $1,150, or $2.55 per square foot, for a 451 square foot unit on the Miami River, while 60 three-bedroom units have rented with the median monthly price being $2,650, or $1.87 per square foot, for a 1,419-square-foot unit also located in a new building on the Miami River.

There were three four-bedroom units that rented this year with the median monthly price being $8,000, or $2.34 per square foot, for a bayfront building with 3,415 square feet. Only one five-bedroom unit, which was built in 1955 and has 4,250 square feet, has rented this year, at a rent of $3,500, or 82 cents per square foot.

“The rental market is stronger than I have seen it for some time,” said Betancourt, who can be reached at William@CondoVultures.com. “The tightening of loan requirements, rising gas prices, and the ability to live in brand new units at investor-subsidized prices all attribute to the robust rental market in Greater Downtown Miami.”

The looming question, though, is whether rental rates will continue to be this robust.

Nearly 90 percent of the new Greater Downtown Miami condo product is already available or scheduled to be delivered this year, and rental rates are still close to $2 per square foot for an unfurnished unit, said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® that authored the report.

The flip side is that bulk buyers trying to acquire hundreds of developer units in the Greater Downtown Miami area are projecting rental rates of $1.25 per square foot through 2010, Zalewski said.

"The key to leasing success for landlords in the Greater Downtown Miami rental market will be to continue to maintain prices below the premium rates charged in South Beach," Zalewski said. "If landlords can maintain the pricing advantage combined with the new product available in Greater Downtown Miami, many landlords think renters can be persuaded in growing numbers to leave Miami Beach for a 10-minute drive west over the causeway."

Prospective tenants who are looking today for units in the Greater Downtown Miami area will find that a majority – 53 percent – of the 791 condos currently available for rent are located in the Brickell Avenue area, which is defined by the Miami River to the north and the Rickenbacker Causeway to the south.

Downtown Miami has the next highest number of available rentals with 26 percent of the inventory. This area is define from the Miami River north to the MacArthur Causeway.

The remaining 21 percent of the units for rent are located in the Biscayne Boulevard Corridor, which is located between the MacArthur Causeway north to the Julia Tuttle Causeway.

Rents today in Greater Downtown Miami range from $975 per month for a 758-square-foot unit in a 34-year-old building in the Biscayne Boulevard corridor to $15,000 per month for a 4,000-square-foot condo in a waterfront trophy building on Brickell Avenue.

The median asking rental price is $2,090 for a two-bedroom unit with 1,141 square feet in a new condominium that opened in 2008. This works out to $1.83 per square foot per month.

About 78 percent, or 621 units, of the total condos available for rent in Greater Downtown Miami are priced between $1,000 and $2,500, according to the report. Here is a rounded breakdown:

- 2 units (0.3 percent) are priced at $975 and $995;
- 98 units (12.4 percent) priced at $1,000 to $1,499;
- 254 units (32.1 percent) priced at $1,500 to $1,999;
- 215 units (27.2 percent) priced at $2,000 and $2,499;
- 123 units (15.5 percent) priced at $2,500 to $2,999;
- 32 units (4 percent) priced at $3,000 to $3,999;
- 22 units (2.8 percent) priced at $4,000 to $4,999;
- 22 units (2.8 percent) priced at $5,000 to $5,999
- 17 units (2.1 percent) priced at $6,000 to $9,999;
- and 6 units (0.8 percent) priced at $10,000 to $15,000.

The units available for rent break down this way: 28 units, or 3.5 percent, are studios; 291 units, or 36.8 percent, have one bedroom; 399 units, or 50.4 percent, have two-bedrooms; 63 units, or 8 percent, have three bedrooms; four units, or 0.5 percent, have four bedrooms; and 2 units, or 0.3 percent, have five bedrooms.

The median price for a studio is $1,400 per month for a 485 square foot unit in a brand new condominium project in Downtown Miami on Biscayne Boulevard. This works out to $2.89 per square foot.

For a one-bedroom, the median price is $1,620 for a 750-square-foot unit in a new tower on the Miami River. This works out to $2.16 per square foot.

The median price for a two-bedroom unit is $2,300 per month for a 1,222-square-foot condo in a new building fronting the bay in the Biscayne Boulevard Corridor. This works out to $1.88 per square foot.

For a three-bedroom, the median price is $3,190 for a 1,650-square-foot unit on a waterfront building on Brickell Key. This price works out to $1.93 per square foot.

The median price for a four-bedroom unit is $8,500 for 3,415 square feet in a bayfront building in the Brickell Avenue area. This monthly rental price works out to $2.49 per square foot.

The two five-bedroom condos current available for rent have asking prices of $7,200 and $14,000 per month.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™.

Copyright © 2008, Condo Vultures® LLC

Bulk Buyer Purchases 120 Downtown Miami Condo Units

Tue, 05 Aug 2008 00:35:01 GMT

A $1 billion U.S. opportunity fund paid about $252,500 per unit for the last 120 units in the newly completed 54-story 50 Biscayne condominium tower in downtown Miami, netting the seller $18 million, according to the South Florida Business Journal.

Lubert-Adler Partners, a $1 billion opportunity fund based in Philadelphia, paid $30.3 million for the remaining 23 percent of the 528-unit tower at 50 Biscayne Blvd. The seller was Cousins Properties, a publicly traded Atlanta real estate company with the New York Stock Exchange ticker of CUZ.

The Related Group with Jorge Perez built the tower as part of a partnership with Cousins Properties. The Related Group and Perez are partners with the buyer, Lubert-Adler Partners, according to a statement from Cousins Properties.

The 50 Biscayne project is one of 85 condominium and/or townhouse projects to be developed in the Greater Downtown Miami area between 2003 and 2010, when the last tower is scheduled to be completed. Greater Downtown Miami is a 60-block stretch from the Rickenbacker Causeway north to the Julia Tuttle Causeway, Interstate 95 east to Biscayne Bay that encompasses the Brickell Avenue area, Downtown Miami, and the Biscayne Boulevard Corridor.

During this latest condo boom, developers constructed or are scheduled to build 22,737 new units pushing the total inventory in Greater Downtown Miami to 34,254 units, according to the Condo Vultures® Official Buyers Guide To Miami.

Greater Downtown Miami is projected to have 39 million square feet of gross sellable space, according to the Guide.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Florida Bank Shut As Regulators Continue Offensive

Sun, 03 Aug 2008 22:05:09 GMT

As Florida’s real estate market continues to plummet, banking regulators stayed on their offensive to clean up the industry by taking the extreme step of seizing a Florida-based institution.

First Priority Bank of Bradenton, a six branch institution with $261 million in assets located on the state’s west coast, was shutdown on the afternoon of Friday, Aug. 1, marking the first Florida institution to be closed by regulators in more than four years.

The last Florida bank to fail was Guaranty National Bank of Tallahassee with assets of $74.1 million on March 12, 2004.

First Priority Bank is the eighth bank to be closed in 2008, and the fourth since July 11. Local newspapers have identified two more Florida-based banks that have landed on regulatory watch lists.

Founded in December 2003 at the onset of the real estate bubble, First Priority Bank grew into an institution with 53 employees and with five locations in Bradenton, one in Sarasota, and one in Venice.

During the five year run, First Priority Bank reached $214 million in deposits and focused it lending strategy on commercial deals secured by Florida real estate, which is now freefalling in value.

As a result of the market downturn, First Priority’s noncurrent loans to loans spiked to 19.14 percent in March 2008 from 2.30 percent in March 2007. The bank’s real estate loans that were noncurrent jumped to 20.46 percent in March 2008 from 2.74 percent in March 2007, according to the Federal Deposit Insurance Corp.

The bank’s ratio of noncurrent construction and development loans skyrocketed to 24.89 percent in March 2008 from 2.15 percent in March 2007, according to the FDIC.

On the eve of the release of the First Priority’s second quarter results Florida Office of Financial Regulation seized the institution, and named the FDIC to be the receiver.

The FDIC in turn entered into an agreement to sell a large chunk of First Priority’s assets, liabilities, and all of Florida bank's branches to the Atlanta-based regional institution SunTrust Bank.

First Priority’s former branches are scheduled to open the morning of Monday, Aug. 4, as SunTrust Bank.

“Deposits will continue to be insured by the FDIC, so there is no need for customers to change their banking relationship to retain their deposit insurance coverage,” according to an FDIC statement. “For the time being, however, customers of both banks should use their existing branches until SunTrust can fully integrate the deposit records of First Priority.”

According to the FDIC, First Priority had about $13 million in uninsured deposits held in about 840 accounts. The FDIC insures accounts up to $100,000.

To see a Florida bank fail shouldn't come as a shock to many. Investors have been closely watching the banking industry in Florida given the state’s rapidly deteriorating real estate market, which was a key lending focus for most institutions.

Deteriorating real estate markets on the West Coast of the United States has already prompted federal regulators to seize three banks in three state in the month of July.

Federal regulators shut down on July 25 two banks in three states with combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada.

Regulators seized the First National Bank Holding Co. in Scottsdale, Ariz, the parent company of First Heritage Bank in Newport Beach, Calif., and the First National Bank of Nevada in Reno, Nev.

The First National Bank of Arizona merged with the First National Bank of Nevada on June 30, only to be shutdown 25 days later.The estimated cost of the failure of First National Bank of Nevada and First Heritage Bank is projected to be $862 million, according to the FDIC.

On July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Has The Real Estate Selloff Begun?

Thu, 31 Jul 2008 16:29:33 GMT

Hedge funds, private equity groups, and pension funds are actively seeking and beginning to purchase problem mortgages in bulk from investment banks and lenders that are desperate to clean up their portfolios, according to the Palm Beach Post.

For example, Lone Star Funds, a Dallas-based opportunity fund, has agreed to purchase a $30.6 billion mortgage portfolio for 22 cents on the dollar from the New York City investment bank Merrill Lynch & Co. The purchase price of $6.7 billion works out to a discount of $23.9 billion off the book value of the portfolio, according to the article.

As Lone Star Funds buys loan portfolios secured by various residential assets, many private equity groups, hedge funds, and institutional investors are searching Florida, California, Nevada, and Arizona for stumbling national and state banks that are willing to sell off loans on specific projects at deep discounts.

Banks are increasingly willing to deal in hopes of shoring up their balance sheets in hopes of avoiding repercussions from federal regulators that have shut down seven banks in 2008. Three banks located in the distressed real estate markets of California, Nevada, and Arizona were shut down by the Federal Deposit Insurance Corp. in the month of July.

No Florida bank has yet been seized although speculation is swirling that such an action could be coming given the plummeting real estate market in the Sunshine State.

Banking analysts have identified two Florida-based institutions that are the watch list of regulators. The two institutions combined by more than $1.2 billion in assets and 19 locations in Florida.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Report: Miami Bank Put On Watch List By Regulators

Wed, 30 Jul 2008 15:20:28 GMT

A Miami-based bank with six locations and $613 million in assets is on the watch list of federal regulators due to the institution’s deteriorating balance sheet, according to the Miami Herald.

Republic Federal Bank in Miami has been slapped with a formal reprimand by the Office of the Comptroller of the Currency. As part of the 24-page order, Republic Federal is to implement “a sweeping compliance program, covering much of the bank's programs and performance and demands the bank draw up a three-year strategic plan,” according to the article.

Under the order, Republic Federal must also “design steps to improve earnings, better its loan-portfolio management, establish periodic reviews of loans of doubtful payment or other problems, establish reserves for loan losses and accurately recognize foreclosed assets, among other issues. The bank agreed to a new capital plan and to only pay dividends when it had complied,” according to the article.

Republic Federal was created in 2007 as a result of the former Hemisphere National Bank in Miami purchasing local competitor Pinebank and adopting the current name.

Republic Federal has $438 million in deposits and employs 123 people at its six locations in Miami-Dade County, which includes the headquarters in the city of Doral, according to the Federal Deposit Insurance Corp., which insures deposits up to $100,000 per account.

Republic Federal reported a loss of $486,000 in the first quarter of 2008 ending March 31 compared to a profit of $467,000 a year earlier in March 2007, according to the FDIC.

The loss occurred as the bank’s problem loans spiked. Noncurrent loans and leases jumped 312 percent to $30.5 million in March 2008 from $7.4 million in March 2007, The bank’s ratio of noncurrent loans to overall loans jumped to 6.64 percent in March 2008 from 1.44 percent a year earlier in March 2007, according to the FDIC.

Financing related to construction and development or multifamily housing was the primary factor for the balance sheet problems.

Noncurrent construction and development loans surged to 35.5 percent in March 2008 compared to zero in 2007. Noncurrent multifamily real estate loans increased to 6.33 percent in March 2008 after reporting no problems a year earlier, according to the FDIC.

Investors are closely watching the banking industry in Florida given the state’s rapidly deteriorating real estate market, which was a key lending focus for most institutions.

Deteriorating real estate markets on the West Coast of the United States has prompted federal regulators to seize three banks in the month of July, and seven institutions so far this year.

Earlier this week on July 28, a veteran investment banker disclosed that Florida-based Peninsula Bank, which has seven South Florida locations and assets of $606 million, is also being closely monitored by banking regulators, according to the Sarasota Herald-Tribune.

Peninsula Bank in Englewood, Fla., on the state’s Gulf of Mexico coast is under regulatory scrutiny due to the instituion's noncurrent loans spiking 723 percent to $38.7 million on March 31, 2008 compared to $4.7 million in March 31, 2007. The bank’s noncurrent loans to total loans jumped to 8.99 percent in March 31, 2008, compared to 1.05 percent in March 31, 2007, according to the FDIC.

Noncurrent construction and development loans were a major factor in the bank’s rapidly deteriorating portfolio. Problem construction and development loans jumped from 1.19 percent on March 31, 2007, to 11.14 percent in March 31, 2008, according to the FDIC.

A Florida bank has not been seized since March 12, 2004, when regulators took over Guaranty National Bank of Tallahassee, which had assets of $74.1 million.

Out West, federal regulators shut down on July 25 two banks in three states with combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada.

Regulators seized the First National Bank Holding Co. in Scottsdale, Ariz, the parent company of First Heritage Bank in Newport Beach, Calif., and the First National Bank of Nevada in Reno, Nev.The First National Bank of Arizona merged with the First National Bank of Nevada on June 30, only to be shutdown 25 days later.

The estimated cost of the failure of First National Bank of Nevada and First Heritage Bank is projected to be $862 million, according to the Federal Deposit Insurance Corp, which guarantees deposits up to $100,000 per account.

Earlier this month on July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Analyst: Regulators Monitoring Florida-Based Bank With Troubled Loan Portfolio

Tue, 29 Jul 2008 21:30:08 GMT

A Florida-based bank with seven South Florida locations and assets of $606 million is being closely monitored by banking regulators, a veteran investment banker told the Sarasota Herald-Tribune.

Peninsula Bank in Englewood, Fla., on the state’s Gulf of Mexico coast is under regulatory scrutiny due to the instituion's noncurrent loans spiking 723 percent to $38.7 million on March 31, 2008 compared to $4.7 million in March 31, 2007.

The bank’s noncurrent loans to total loans jumped to 8.99 percent in March 31, 2008, compared to 1.05 percent in March 31, 2007, according to the Federal Deposit Insurance Corp., which insures deposits up to $100,000 per account.

Noncurrent construction and development loans were a major factor in the bank’s rapidly deteriorating portfolio. Problem construction and development loans jumped from 1.19 percent on March 31, 2007, to 11.14 percent in March 31, 2008, according to the FDIC.

“It gets back to the way they judge their risk," Ben Bishop, chairman of Allen C. Ewing & Co., a Jacksonville-based investment bank, told the Sarasota Herald-Tribune. "The regulators are looking over their shoulders and if they do something that isn't proper, the regulators will call them on it."

Founded in January 1986, Peninsula Bank had 133 employees working from a dozen locations throughout Florida on March 31. Peninsula Bank operates five branches in Palm Beach County, and one branch in both Broward and Miami-Dade counties. Peninsula’s other five branch locations are situated in Sarasota County, where there are two branches, and Charlotte County, where the headquarters and two branches are located, according to the FDIC.

Investors are closely watching the banking industry in Florida given the state’s rapidly deteriorating real estate market, which was a key lending focus for most institutions.

Deteriorating real estate markets on the West Coast of the United States prompted federal regulators to seize three banks in the month of July.

Federal regulators shut down on July 25 two banks in three states with combined assets of $4.6 billion and 28 locations scattered around Arizona, California, and Nevada.

Regulators seized the First National Bank Holding Co. in Scottsdale, Ariz, the parent company of First Heritage Bank in Newport Beach, Calif., and the First National Bank of Nevada in Reno, Nev.

The First National Bank of Arizona merged with the First National Bank of Nevada on June 30, only to be shutdown 25 days later.The estimated cost of the failure of First National Bank of Nevada and First Heritage Bank is projected to be $862 million, according to the Federal Deposit Insurance Corp, which guarantees deposits up to $100,000 per account.

Earlier this month on July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

A Florida bank has not been seized since March 12, 2004, when regulators took over Guaranty National Bank of Tallahassee, which had assets of $74.1 million.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Report: Deepest South Florida Discounts In Palm Beach, Broward Cities

Mon, 28 Jul 2008 13:48:49 GMT

Discounts in the Vultures Database™ fell to an average of -29 percent on condominiums, townhouses, and single-family houses located in coastal South Florida through June 30, representing a -1 percentage point drop from the -28 percent average price reduction the previous month, according to a new report from Condo Vultures® LLC.

As the average price in the Vultures Database™ Report dropped in percentage terms, average discounts in dollar terms actually strengthened to -$219,907 through June 30 compared to an average reduction of -$223,067 on May 31, according to the Vultures Database™ Report for July.

As the average discount drops in percentage terms, several cities in Palm Beach and Broward counties are jumping to the top of the rankings for the deepest price reductions by neighborhood or municipality.

Palm Beach and Broward counties now account for the four markets with the deepest average drop in pricing. It is worth nothing though that the total quantity is limited in comparison to Miami-Dade County.

Royal Palm Beach in Palm Beach County leads the list with one property falling -45 percent. Delray Beach in Palm Beach County ranks second with five properties falling an average of -38 percent. Lantana in Palm Beach County and Oakland Park in Broward County are tied for the third deepest average price drop at -37 percent, according to the report.

The first Miami-Dade County community to make the list at the No. 5 position is Biscayne Park, where the average property drop is -36 percent.

Rounding out the top 10 cities for the deepest discounts are Boca Raton and Palm Beach with a -34 percent average price reduction. Boynton Beach, the Hypoluxo area of Palm Beach County, and North Miami are all tied for the No. 8 position with a -33 percent discount.

“The real estate contagion is expanding at a rapid pace beyond Miami-Dade County to the neighboring South Florida counties of Broward and Palm Beach,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Miami-Dade County still dominates in the number of distressed properties and discounts in the Vultures Database™, but the discounts we are tracking in the central and northern portion of the South Florida region are beginning to surpass that seen even in the Miami area.”

The Vultures Database™ tracks properties east of Interstate 95 and/or U.S. 1 in the South Florida region of Miami-Dade, Broward, and Palm Beach counties that have decreased in price by at least 10 percent or $100,000.

The Vultures Database™ is comprised of 4,729 properties that have been reduced by -$1.04
billion and have languished on the market for an average of 598 days. Condos represent 69 percent of the total inventory, and single-family houses and townhouses the remaining 31 percent of the properties in the database.

There are 3,265 condos in the database that have experienced an average price drop of -29 percent or -$172,360. The number of single-family houses and townhouses total 1,464 properties, where the average drop is -30 percent or -$325,944, according to the report.

Miami-Dade is the source of 3,274, or 69 percent, of the properties in the Vultures Database™. Broward has 1,316, or 28 percent, of the properties, and Palm Beach 139 properties, or 3 percent.

Miami-Dade’s average discount is -$231,767, which should come as no surprise given the amount of speculative buying that occurred there during the real estate boom from 2004 through 2006. Broward’s average discount is -$199,712, and Palm Beach has an average price reduction of -$131,729, according to the data.

Even with the deep average discount of -29 percent, properties aren’t being purchased until sellers are willing to reduce prices by an additional nine percent, according to the report.

There have been 603 properties in the Vultures Database™ that have sold in 2008 at an average discount of -38 percent, or $309,438. In 2007, there were 1,213 total sales for the year that closed at an average discount of -29 percent or -$257,675.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report. Looking for a property at a deep discount? You are encouraged to take a peek at the Vultures Database™ .

Copyright © 2008, Condo Vultures® LLC

Feds Seize Banks In Arizona, California, Nevada; Is Florida Next?

Sun, 27 Jul 2008 21:48:42 GMT

Federal regulators were busy in three states on Friday afternoon shutting down two banks with $4.6 billion in assets and 28 locations in the distressed real estate markets of Arizona, California, and Nevada.

Regulators seized the First National Bank Holding Co. in Scottsdale, Ariz, the parent company of First Heritage Bank in Newport Beach, Calif., and the First National Bank of Nevada in Reno, Nev.

The First National Bank of Arizona merged with the First National Bank of Nevada on June 30, only to be shutdown 25 days later.

The estimated cost of the failure of First National Bank of Nevada and First Heritage Bank is projected to be $862 million, according to the Federal Deposit Insurance Corp, which guarantees deposits up to $100,000 per account.

In preparation of the seizure of the First National Bank of Nevada and the First Heritage Bank in Southern California, the FDIC entered into a purchase and assumption agreement for all of the deposits and certain assets to be sold to Mutual of Omaha Bank in Omaha, Neb., according to regulators.

The former First National Bank of Nevada and First Heritage Bank locations will be open for business on Monday morning as Mutual of Omaha Bank. Temporary signage will cover the original bank names until permanent monikers can be put in place.

Under the agreement with regulators, Mutual of Omaha Banks, which has assets of $738 million and a single location, will guarantee depositors their full amount.

“Mutual of Omaha Bank will also purchase approximately $200 million of assets from the receiverships,” according to an FDIC statement. “Mutual of Omaha Bank will pay the FDIC a premium of 4.41 percent to assume all the deposits. The FDIC will retain the remaining assets for later disposition.”

The seizure of the First National Bank of Nevada and the First Heritage Bank marks the sixth and seventh institutions to be shutdown by federal regulators in 2008.

Two weeks ago on July 11, federal regulators shut down IndyMac Bank, a $32 billion institution based in Pasadena, Calif. The estimate cost of that seizure is between $4 billion and $8 billion, according to the FDIC.

Before IndyMac, regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.The last Nevada institution to be shuttered by regulators was Frontier Savings Association in Las Vegas on December 14, 1990 during the Savings and Loan crisis, according to the FDIC.

A Florida bank has not been seized since March 12, 2004, when regulators took over Guaranty National Bank of Tallahassee, which had assets of $74.1 million.

First National Bank Holding Co. was the largest Arizona-based institution with 1,072 employees, 38 locations, total deposits of $3.4 billion, and assets of $4.6 billion on March 31, according to the FDIC.

Founded in May 1989 in Scottsdale, Ariz., the First National Bank of Arizona merged into the First National Bank of Nevada on June 30. At the time of the merger, the First National Bank of Arizona employed 839 people, operated 28 locations, and had assets of $2.8 billion and deposits of $1.9 billion, according to regulators.

The First National Bank of Nevada, which was founded in July 1987 in Reno, employed 210 employees throughout 10 locations, and had assets of $1.6 billion and deposits of $1.4 billion through March 31, 2008, according to the FDIC.

In February 2005, First Heritage Bank was created in Southern California to focus on business banking and commercial lending.

First Heritage Bank had built up $159 million in total assets and $136 million in total deposits through March 31. The nationally chartered institution had 27 employees working from three offices located in Los Angeles, Orange, and San Bernardino counties at the time of the FDIC’s seizure.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Only 53% of Miami's Preconstruction Condo Buyers Close

Mon, 21 Jul 2008 19:59:00 GMT

Buyers have closed on slightly more than half of the new condominium units built and delivered in Greater Downtown Miami since 2003, according to a new report from Condo Vultures® LLC.

Extensive research comparing Miami-Dade County records with the Condo Vultures® Official Condo Buyers Guide To Miami™ has concluded that warranty deeds have been recorded for 10,665 new units out of a total inventory of 20,045 condos delivered between Jan. 1, 2003 and the June 30, 2008, according to the report.

With credit tight and buyers concerned about not knowing the bottom, closings of new condo units have tapered off in 2008. From January through June 30, only 26 percent of the total units delivered or scheduled to be completed this year have closed.

The 2008 ratio is likely to increase in the months ahead as additional units in semi-finished projects are cleared to close by the Miami Building Department. The entire closing process for a building typically takes about six months to complete and occurs for a block of consecutive floors starting at the bottom, and moving up in a tower.

The current 2008 closing ratio is down drastically from 2007 when 66 percent of the total inventory was closed.

During the three previous years when speculation was widespread, buyers closed at a ratio of 99 percent in 2006, 97 percent in 2005, and 100 percent in 2004, according to the report.

“With 88 percent of the new condo inventory in Greater Downtown Miami now or about to come online in the upcoming weeks, we were surprised to learn that a bit more than half of the buyers of units have stepped forward and actually closed on their preconstruction contracts,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® that produced the report.

“Developers have repeatedly predicted that only about 20 percent to 40 percent of their preconstruction contract holders would walk away from 20 percent deposits. Looking at the closed sales to date, there may be some truth to their 40 percent walkaway projection.”

The 20,045 new units that have been delivered thus far in Greater Downtown Miami are located in 78 condo buildings (including one townhouse project) situated within a 60-block stretch from the Rickenbacker Causeway north to the Julia Tuttle Causeway, and Interstate 95 east to Biscayne Bay. This is the primary area where Miami's condo boom occurred.

The 20,045 new units already online represent 88 percent of the total 22,737 new units proposed and built in Greater Downtown Miami since 2003. The 78 new condo buildings already delivered account for 92 percent of the 85 total projects planned, approved and proceeding, according to the Official Condo Buyers Guide.

Developers are scheduled to deliver six buildings with 2,197 units in 2009, and one building with 495 units in 2010.

For comparison sake, during Miami’s first condo boom stretching from 1978 and 1983 there were 17 towers constructed with 2,112 units and 3 million gross livable square feet. This boom is projected to account for more than 24 million gross livable square feet, according to the Official Condo Buyers Guide.

With the number of residential construction cranes dwindling from 40 at the peak to only three today, developers and lenders are rapidly being forced to figure out ways to sell or maintain units that have been forsaken by preconstruction contract buyers who tended to be speculators.

To address the problem, some developers are offering deep discounts off of retail pricing while others are pitching attractive incentives, such as contributions toward closing costs and the buildout of units that are generally delivered with concrete floors and primer on the walls.

Other developers are quietly negotiating with bulk buyers in hopes of selling enough of the walkaway inventory at a blended price so that the construction loan can be repaid.

Once the construction lenders are satisfied, developers regain control of their projects and can ultimately decide what to do with the excess inventory, whether it be to rent out the product themselves for the next few years or sell it piecemeal to investors.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Giuliani, Like Spitzer, To Launch Opportunity Fund To Buy Distressed Properties

Sun, 20 Jul 2008 18:37:59 GMT

Rudy Giuliani, the former New York City mayor and presidential candidate, plans to launch an opportunity fund with as much of $750 million to buy distressed properties, according to the New York Times.

Giuliani of New York City is partnering up with Berman Enterprises from suburban Washington, D.C, to create the Berman Enterprises Opportunity Fund. The minimum investment will be $25 million for participants, who are expected to come from abroad with an emphasis on oil-exporting nations, according to the report.

The bulk of the purchasing is supposed to occur in New York and Washington. There is no word if the Giuliani-related fund will focus on distressed properties in Florida, where the former presidential candidate spent a significant amount of his time campaigning.

Giuliani isn’t the first former New York politician to affiliate with an opportunity fund.

Former New York Gov. Elliott Spitzer is trying to create an opportunity fund to buy such things as distressed condos in South Florida, single-family houses in Las Vegas, and land in California.

According to the New York Sun, Spitzer, 49, is reportedly courting private equity investors and pension fund managers in hopes of securing enough financial commitments to launch his own fund to purchase short sales, Real Estate Owned by the bank, foreclosures, and any other opportunities that exist on a bulk basis.

Spitzer, a former New York State Attorney General who capitalized on his aggressive prosecution of Wall Street lawbreakers into being elected governor, is the son of a successful Manhattan real estate investor.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Fund Buys Oceanfront Condo Development At Deep Discount

Sun, 20 Jul 2008 00:18:07 GMT

A South Florida opportunity fund received a 31 percent discount in purchasing an undeveloped oceanfront commercial property that had been the site of a proposed ultra-luxury condominium tower in Sunny Isles Beach, which is located in Northeast Miami-Dade County.

The newly created R.K. Land Holdings LLC paid $9.6 million, or $300 per square foot, for the 32,000-square-foot lot that had been the site of the proposed Da Vinci on the Ocean condominium at 17141 Collins Avenue.

Mully SB LLC, a Virginia Beach, Va.-based entity with Nathan D. Benson as a member, was the seller. Waterbrook Developers with L. William Rudnick and Thomas N. Yianilos had proposed building a 69-unit ultra-luxury condominium on the site, according to the Da Vinci website.

It is unclear what the relationship was between Mully SB LLC and Waterbrook Developers.

Under the terms of the deal, the seller could receive as much as $2 million more for the land if the new buyer is successful in developing or selling the property.

“In the event the Grantee [R.K. Land Holdings LLC] obtains profits on its sale of the property (whether the property is improved and sold in units or sold in an unimproved state) in excess of $20,000,000, then the Grantor [Mully SB, LLC] shall be paid an additional $2,000,000 by Grantee [R.K. Land Holdings LLC] in excess of the purchase price under the purchase contract between Grantor and Grantee,” according to the deed.

The buying entity plans to build a 300-unit hotel on the property, according to the South Florida Business Journal.

The hotel would be constructed between the new Ocean 4 condominium to the north and the soon-to-be completed Jade Ocean condominium.

The buying entity is a combination of three limited liability corporations that include as members Raanan Katz of RK Associates which owns several retails centers in Miami-Dade and Broward counties, and Aventura residential developer Yizhak Toledano of Sky Development.

Toledano is involved in the Skyvest Real Estate Opportunity Fund 1 LLC, which is a joint venture between Sky Development and condo converter SunVest USA.

The seller Mully SB LLC paid a combined $13 million to assemble the land in April 2005 by purchasing each of the existing 55 units of the former condo-hotel that once stood on site, according to county records.

Upon buying out each of the condo-hotel unit owners, the seller terminated the condo association and proceeded to raze the previous structure in August 2005 in order to open a sales center of the proposed Da Vinci.

The developer spent nearly three years marketing the project extensively to high-end buyers but was never able to construct the tower.

The seller Mully SB LLC obtained a predevelopment loan for $11.7 million in July 2005 from LaSalle Bank in Chicago. In August 2007, the borrower modified the mortgage and reduced the amount to $8 million, according to county records.

The assessed value of the property for 2008 is not yet available however in 2007 the site was valued at $9.6 million, according to the Miami-Dade Property Appraiser. Industry watchers said that assessed value is often about 15 percent below market value.

Sunny Isles Beach is a 40-block long stretch of barrier island city that is home to six towers with featuring real estate magnate Donald Trump’s name. At least 12 oceanfront towers with more than 300 units each were constructed or completed in Sunny Isles Beach in the last five years. Prices for these units range from $400 to $900 per square foot.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

South Florida Bank-Owned Properties Spike 228% In Second Quarter

Wed, 16 Jul 2008 15:24:28 GMT

As federal regulators attempt to sell off assets from the failed IndyMac Bank, the number of bank-owned properties in South Florida has spiked by 228 percent in the second quarter of 2008, according to a new report from Condo Vultures® LLC.

Nearly 7,100 South Florida properties were repossessed by banks - also known in the banking industry as Real Estate-Owned (REO) properties - between April and June of 2008, compared to 2,167 properties for the same period in 2007, according to the

The second quarter activity pushed the total number of court-ordered repossessions in South Florida for the year to 11,860 properties compared to 3,510 in the first half of 2007, representing a 238 percent increase.

On a county-by-county basis, the greatest concentration of REOs is located in Miami-Dade County where 5,370 properties were repossessed by banks in the first half of 2008. By comparison, 1,665 Miami-Dade properties were repossessed in 2007, which represents a 223 percent increase on a year-over-year basis.

In Broward County where Fort Lauderdale is located, lenders repossessed 4,746 properties in the first half of 2008, up 324 percent from the 1,119 REOs in the first half of 2007.

Palm Beach County is experiencing the smallest increase in REOs with the first half total increasing only 140 percent to 1,744 in 2008 compared to 726 for the same the number of months in 2007, according to the report.

Banks generally attempt to unload newly transferred REOs quickly as the institutions are responsible not only for the upkeep of the property but the monthly expenses, including homeowners association dues, special assessments, and property taxes. These expenses are in addition to the $40,000 to $80,000 that lenders spend during the six to eight month foreclosure process to repossess a property.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

8,400 S. Florida Condos Go Into Foreclosure In '08

Mon, 14 Jul 2008 15:08:54 GMT

Nearly 8,400 South Florida condominium units valued at $1.7 billion in loans entered into foreclosure proceedings in the first half of 2008, with more than half of the properties located in Greater Fort Lauderdale, according to a new report from Condo Vultures® LLC.

Broward County, where Fort Lauderdale is located, had 4,514 units valued at $840 million enter into foreclosure proceedings between January and June, representing 51 percent of the South Florida total, according to the data.

Palm Beach County, where West Palm Beach, Delray Beach, and Boca Raton are located, ranked second in total number of foreclosures with 2,072 units valued at $364 million.

Miami-Dade County, home to Miami Beach, Sunny Isles Beach, Aventura, and Coral Gables, had a reversal of fortunes of sorts, and now has the fewest number of condos in foreclosures in the region with 1,811 units valued at $458 million. In 2007, Miami-Dade County led the tri-county South Florida region in foreclosure actions.

“Miami-Dade County was ahead of the curve in terms of foreclosure actions filed in South Florida's real estate correction,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Now that many of the Miami-Dade foreclosures have been auctioned off or more likely repossessed by the banks, homeowners in the neighboring counties of Broward and Palm Beach are beginning to feel the same pain that was experienced in Miami in 2007.”

Condo Vultures® created this report by compiling data provided by the circuit courts in Miami-Dade, Broward, and Palm Beach counties. This data reflects notices of default or lis pendens filed between January 1 and June 30 of 2008.

As foreclosures spike in Broward and Palm Beach counties, the later stages of the repossession process where lenders are granted title to the troubled properties by the courts is surging in Miami-Dade County.

Court-ordered repossessions - also known in the banking industry as Real Estate-Owned (REO) properties - increased in Miami-Dade County in the first half of the year to nearly to 5,370, up 223 percent from the 1,665 properties in 2007, according to the report.

South Florida experienced 11,860 REOs in the first half of the year, with 4,746 court-ordered title transfers in Broward and 1,744 in Palm Beach. By comparison, South Florida had 3,510 REOs in the first half of 2007, representing a 238 percent increase in 2008 on a year-over-year basis.

Banks generally attempt to unload newly transferred REOs quickly as the institutions are responsible not only for the upkeep of the property but the monthly expenses, including homeowners association dues, special assessments, and property taxes. These expenses are in addition to the $40,000 to $80,000 that lenders spend during the six to eight month foreclosure process to repossess a property.

“Lenders do not want to be landlords, nor do they have the personnel to handle the responsibilities,” Zalewski said. “This reality usually prompts lenders to dump their REO properties within a quarter or so after taking title. In a unpredictable market such as this, bankers realize that today’s foreclosure is tomorrow’s REO so it critical to move fast."

On a project basis, the Palm-Aire Country Club in the Broward County city of Pompano Beach has the highest number of foreclosure actions in South Florida with 71 proceedings valued at $9.6 million. Ponte Verde at Palm Beach Lakes in Palm Beach County ranks second with 58 actions totaling $11.1 million. The Edgewater Condominium in Coral Springs ranks third with 54 actions valued at $12.9 million.

A pair of Miami-Dade condo projects round out the top five rankings. The Parc Central Condominium in Aventura ranks fourth with 50 actions, and the Blue Lagoon Condominium in Miami ranks fifth with 47 actions, according to the report.

From a debt perspective, the biggest potential losses for creditors are in Miami-Dade County, where four of the top five projects are located.

The Club at Brickell Bay in Miami’s Brickell Avenue corridor has the largest amount of troubled debt at $20.6 million tied to 43 units. This is the same project that had the highest concentration of foreclosures for a single South Florida condo in 2007.

Parc Central in Aventura is second with $17.9 million, and the Vue at Brickell is third with 37 unit owners owing $17.8 million. The Beach Club in Hallandale Beach ranks fourth with 32 unit owners owing $17.7 million, and the Blue Lagoon on Northwest 7th Street in Miami ranks fifth with $14.7 million.

The CitySide Condominium in West Palm Beach has the largest amount of troubled debt in a single Palm Beach County complex with $12.3 million, according to the report.

Overall, there were 38,063 foreclosure actions valued at $9.8 billion filed in Miami-Dade, Broward, and Palm Beach counties in the first half of 2008, according to the data. Broward County had 16,778 foreclosure actions totaling $4.1 billion compared to 10,917 actions valued at $2.7 billion in Palm Beach, and 10,368 actions totaling $3.1 billion in Miami-Dade.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Regulators Seize Third Bank in 60 Days, Fifth Institution in 2008

Sat, 12 Jul 2008 19:24:15 GMT

If three really is a trend, it looks like federal banking regulators are ready to clean up the U.S. mortgage mess after shutting down a third institution in two months.

Federal banking regulators seized the $32 billion in assets California-based IndyMac Bank on Friday afternoon and are working through the weekend to launch a suitor institution that is scheduled to open Monday morning, according to the Federal Deposit Insurance Corp.

IndyMac at one time had seven loan production offices in Florida, including one in Miami and another in Hollywood.

The FDIC, which insures deposits up to $100,000 per account, projects IndyMac’s failure will cost between $4 billion and $8 billion, ranking it as one of the largest bank failures in U.S. history.

Regulators intend to sell IndyMac’s assets within the 90 days to a single buyer at a deep discount.

This is the fifth U.S. bank this year shutdown by federal regulators, and the third in 60 days.

Regulators seized Minnesota-based First Integrity Bank with $54.7 million in total assets and $50.3 million in total deposits on May 30; Arkansas-based ANB Financial with $2.1 billion in total assets and $1.8 billion in total deposits on May 9; Missouri-based Hume Bank with total assets of $18.7 million and total deposits of $13.6 million on March 7; and Missouri-based Douglas National Bank with $58.5 million in total assets and $53.8 million in total deposits on January 25, according to the FDIC.

The last California institution to be shuttered by regulators was Southern Pacific Bank in Torrance on Feb. 7, 2003, according to the FDIC.

A Florida bank has not been seized since March 12, 2004, when regulators took over Guaranty National Bank of Tallahassee, which had assets of $74.1 million.

Based in Pasadena, Calif., IndyMac had total assets of $32.01 billion and total deposits of $19.06 billion as of March 31, 2008. In the last 11 days, depositors withdrew $1.3 billion from IndyMac, prompting the institution’s regulator, the Office of Thrift Supervision, to step in to avoid any more of a run on the bank, according to the BBC.

At the time of the seizure, IndyMac Bank, F.S.B. had about $1 billion of potentially uninsured deposits held by approximately 10,000 depositors. It is unclear what if anything these depositors will recoup.

“The FDIC will transfer insured deposits and substantially all the assets of IndyMac Bank, F.S.B., Pasadena, CA, to IndyMac Federal Bank, FSB,” according to the FDIC.

IndyMac was founded in 1985 by Angelo Mozilo, who went on to lead Countrywide Financial Corp. before its sale this month to Bank of America. IndyMac had 33 branches nationwide.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report

Copyright © 2008, Condo Vultures® LLC

Calling The Bottom Of The Florida Real Estate Market

Thu, 10 Jul 2008 05:03:22 GMT

This July not only marks the start of the third quarter of the year but an increasing debate amongst industry watchers about when the bottom of the Miami real estate market will be reached.

In Florida where residential sales peaked in November 2005, the real estate market has struggled ever since with a combination of weak demand and plummeting prices for 33 months and counting.

Optimists yearning for a recovery point to the fact that a typical real estate cycle lasts between seven to 10 years, meaning the chances of a gradual improvement in Florida could be near.

Pessimists respond that this real estate cycle in Florida is not like others given the widespread speculation that occurred unchecked between 2003 and 2006, and ultimately produced the excess inventory that now plagues the market.

Given the conflicting ideas, calling the bottom of the market with any accuracy in the overbuilt markets of Florida is unlikely to occur until months after prices have already leveled off.

Real estate isn’t tracked in a real time manner such as publicly traded stocks so it is only weeks or months after a deal has been negotiated and closed that the analysts can accurately gauge the market based on completed transactions. This lag time leads to the inefficiencies that make investors skittish.

Anxious buyers are concerned that the lengthy lead time in closing deals could work to disguise the most opportune time to buy at the deepest discounts. A fear shared amongst investors is that the bottom will only become known after the low watermark has been reached and the leveling off has already begun.

Adding to the uncertainty for investors is a concern that competitors are likely to learn of the bottom simultaneously, effectively eliminating any buying advantage given the depth of the pent up demand.

Investors searching for any kind of advantage are looking at a variety of factors to better understand how to recognize the bottom. For each buyer, the telltale signs are sure to be different.

“We don’t envision the bottom being reached until all of the new product is delivered, residential lending is restored to the market, and at least one small Florida bank is severely reprimanded related to lending on condo construction or conversions,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Once an institution – and it will be a small one so as not to trigger any panic - is reprimanded, we think the other lenders will understand the message and quickly move to unload their troubled loans out of fear of facing similar repercussions.

"At that point, the distance between buyers and sellers could be bridged.”

New Inventory Delivered

In vertical condo markets such as Miami and Sunny Isles Beach, the easiest way to assess the amount of undelivered inventory still left to be delivered is to count the number of construction cranes still standing at development projects.

In a place like Miami, the cranes are being removed at a steady pace as most of the new glass skyscrapers near completion.

Today, the Greater Downtown Miami area has only four construction cranes still standing from nearly 40 cranes less than 18 months ago. Of the 22,737 new units built in Greater Downtown Miami since 2003, only about 10 percent of the units are yet to be delivered, according to the Condo Vultures® Official Condo Buyers Guide.

Buildings that have functional floor plans, state-of-the-art amenities, and quality materials are closing at a rate greater than many in the industry imagined. (Condo Vultures® LLC is concluding a study to be issued in July that details the average closed sales ratio and price for every new condominium tower in Greater Downtown Miami.)

Towers with dysfunctional layouts, below-average finishes, and minimal amenities are proving to have a more difficult time with closings than the more desirable product. It is the inferior buildings where the greatest deals are expected to be negotiated, both by individual buyers but more likely bulk investors.

Residential Lending Restored

The return of credit to the housing markets in Florida should be a key indicator as to when the market is on its way toward stabilizing, and eventually recovering.

Many of today’s individual buyers who hope to purchase at deep discounts byway of short sales, foreclosures, and Real Estate Owned by banks aren’t currently able to obtain financing from traditional banks.

Today’s discount buyers who have hearty downpayments and above-average credit scores still have few financing options other than hard-money lenders that charge interest rates in excess of 10 percent plus expensive origination fees.

Some industry watchers predict the recovery to begin in earnest when well-qualified buyers are once again able to purchase residential properties using traditional financing with moderate underwriting requirements.

Once financing is again available, cash buyers would lose their current negotiating advantage of being the only viable purchasers in the market.

Small Bank Reprimands

Probably the most telling sign of the bottom will come when federal banking regulators reprimand a small bank or two in Florida that had been involved in financing residential construction or condominium conversions. The Wall Street Journal foreshadowed the coming troubles in a July 2 article.

The banks that are likely to feel the wrath of regulators will be those institutions that facilitated the condo construction and conversion booms in places such as Miami or Tampa.

In many cases, the amounts owed by developers are greater than the projects are actually worth today, yet some lenders are rumored to have not accurately characterized the loan valuations or status properly.

As regulators conduct regularly scheduled examinations of these small banks, expect some institutions to rapidly revise their characterizations of condo construction and conversion loans and shift capital into loan loss reserves as a precaution or a solution.

Until an institution has been reprimanded, local lenders are likely to continue to maintain an optimistic posture and dismiss credible offers from qualified buyers who want to purchase bank-owned assets or loan portfolios at prices that reflect current market conditions.

“Regulatory reprimands in the banking sector will be the clearest signal that the bottom of the real estate market is near,” Zalewski said. “The problem is most buyers are waiting for that action and are ready to strike.”

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report

S. Florida Condo Resales Rise 4th Straight Month, Still Trails '07

Tue, 01 Jul 2008 01:41:40 GMT

Condo resales in the South Florida region and the state as whole increased by volume in May for the fourth consecutive month while median sales prices in the region fell slightly, according to a Condo Vultures® LLC analysis of industry data.

South Florida experienced 1,714 closed resales of condominium units in May, up from 1,576 closings in April in Miami-Dade, Broward, and Palm Beach counties. In March, there were 1,536 resale condo closings, 1,132 in February, and an additional 1,012 closings in January, according to data from the Florida Association of Realtors.

Statewide, condo resales reached 4,018 in the month of May compared to 3,900 closings in April. There were an additional 3,207 closings in March, 2,765 closings in February, and 2,252 closings in January for a total of 16,142 transactions in 2008. By comparison, there were 20,244 condo resales in the first five months of 2007, according to the Realtors association.

“Condo resales in 2008 continue to increase in volume on a monthly basis,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “Some people are going to view these numbers as a clear sign of an improving condo market in South Florida and the state as a whole. Before jumping to any conclusions, we would remind everyone that the total number of condo resales this year, while up on a monthly basis, is still fewer than the total sales in 2007, which in turn is fewer than the total number of closed transactions in 2006.”

As South Florida condo resales pick up, the median sales price for closed transactions continues to fluctuate as many buyers pursue below-market pricing on short sales, foreclosures, and Real Estate Owned (REO) by banks which is dragging down the overall average.

The median sales price for a South Florida condo resale in May was about $193,133 compared to $193,800 a month earlier in April. The median sales price for a condo resale in March was about $183,167, in February $197,433, and in January $198,233, according to the report.

Statewide, the median sales price of a condo resale in May was $181,800, up from $179,200 in April, $176,300 in March, $175,600 in February, and $190,200 in January, according to the Realtors association.

On a county basis, Palm Beach County is experiencing the strongest activity in year-over-year total condo resales both in terms of quantity closed and median pricing. It is worth noting that much of the product closing in Miami right now was purchased directly from developers, and is not included in this report.

Closed resales in Palm Beach have steadily increased from 303 total transactions closing in January to 655 deals concluding in May. On a year-over-year basis, the number of closings in May 2008 was 7 percent greater than the 613 closings in May 2007.

Palm Beach condo pricing also continues to strengthen with the median sales price in May increasing to $159,800 compared to $156,400 in April. Palm Beach County’s year-over-year pricing, however, is down -26 percent compared to 2007 when the median sales price was $217,400.

Fort Lauderdale is the market in South Florida where the greatest number of condo resales have occurred. Between January and May 31, Fort Lauderdale has experienced 2,714 condo transactions out of the 6,970 total South Florida condo resales, which represents 39 percent of the regional deals. Palm Beach County experienced 2,652 condo transactions or 38 percent of the regional total. Greater Miami has had 1,604 condo resales close in 2008, which represents 23 percent of the regional total.

Miami's condo resales are the lowest by volume in the region, yet the area's number of transactions has increased in three of the last four months. In May, there were 420 condo resales in Miami compared to 318 transactions in April, 333 deals in March, 235 closings in February, and 298 sales in January, according to the Realtors association data.

According to the data, the median sales price of a condo in Miami has strengthened in four of the last five months. In May 2008, the median price of a Miami condo was $280,770, up 3 percent from $272,000 in May 2007.

In April, the median sales price of a Miami condo was $275,000, up 3 percent compared to $268,000 in April 2007. The median sales price in Miami was down in March by -11 percent, but up in February by 5 percent and in January by 11 percent, according to the Realtors association.

"The best explanation for Miami’s increasing median sales price is that many of today's buyers are opting to purchase only the best quality product, which tends to have a greater overall purchase price even with a discount,” Zalewski said.

Florida's Two Largest Banks Face Hurdles

BankUnited, Florida’s largest locally headquartered bank, is scrambling to raise capital to shore up its balance sheet as the real estate downturn begins to create havoc for the Coral Gables-based institution with $14.3 billion in assets. BankUnited is pursuing a plan to raise capital by issuing 500 million more shares of stock, up substantially from an original plan to issue 200 million shares.

Down the street at Ocean Bank, Florida’s largest state-chartered commercial bank, the leadership announced Friday that 104 jobs – including three executive positions - were being eliminated as part of a cost-cutting measure to strengthen the balance sheet. Ocean Bank, a Miami-based institution with $5.1billion in assets, lost $63.5 million in 2007.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com . Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Countrywide Tries To Dump 559 South Florida REO Properties

Thu, 26 Jun 2008 16:00:01 GMT

Countrywide Financial Corp, the nation’s largest home lender, is actively trying to unload 1,600 Real Estate Owned (REO) properties in Florida, including 559 in South Florida, at as much as a 40 percent discount, according to a bank source.

Countrywide needs to dump 252 properties in Miami-Dade County, 239 properties in Broward County, and 68 in Palm Beach County. The lender even has 15 REOs in the Florida Keys that need to be liquidated.

The sell off of bank-owned properties was already under way before Countrywide’s shareholders voted Wednesday to be acquired by Bank of America. The deal is expected to close on July 1, according to media reports.

Industry watchers expect Bank of America, which is acquiring Countrywide’s nationwide portfolio at a deep discount, to move aggressively and rapidly to sell off even more than the 1,600 troubled loans and assets in Florida in the upcoming months.

There is no word if Bank of America will act as aggressively with its own South Florida portfolio or simply continue to be unresponsive to short sale proposals.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report .

Copyright © 2008, Condo Vultures® LLC

Downtown Miami's Condo Inventory Triples Since 2003

Tue, 24 Jun 2008 04:03:19 GMT

The number of condominium units in the 60-block stretch of Greater Downtown Miami has nearly tripled to more than 34,000 units since 2003, according to the Condo Vultures® Official Condo Buyers Guide to Miami™. Research by Condo Vultures® has concluded that from 1963 to 2002, developers constructed 11,500 condominium units in the Greater Downtown Miami area from the Rickenbacker Causeway north to the Julia Tuttle Causeway, from I-95 east to Biscayne Bay.

Since 2003, developers are poised to construct 22,737 new units through 2010 when the final tower is scheduled to be completed, according to the Official Condo Buyers Guide™. About 19,000 new units have already been completed with an additional 3,000 units coming online this year. The remaining units will be delivered in 2009 and 2010.

“The good news for buyers is that 22,000 new units are hitting the market, which will create purchasing opportunities,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®, LLC. “The bad news for buyers is the new inventory is only 22,000 new units, not the 40,000 to 80,000 units that were at one time planned.”

After nearly five months of research, Condo Vultures® determined that nearly 50 condominium towers that were at one time proposed will end up not being built. If the typical tower were to average about 400 units, the cancellation of these 50 proposed projects means that as many as 20,000 additional new units will not be built for several years if ever.

The condo construction that did occur since 2003 will generate about 24.7 million gross livable square feet to push the overall total new residential space in Greater Downtown Miami to nearly 39 million square feet, according to the Guide.

With condo construction costs (excluding land) averaging about $250 per square foot, developers will have spent about $6.2 billion putting up the new residential inventory in Greater Downtown Miami.

In terms of total dollars generated by condo sales,in Greater Downtown Miami, developers sold most units for a price between about $350 to $450 per square foot. At an average cost of $400 per square foot, buyers committed to pay some $9.9 billion for the new inventory. Buyers typically were required to put down 20 percent deposits to secure units, which means some $1.98 billion in earnest money was placed as escrow deposits to secure the units.

Real estate licensees who represented the buyers of these condo units typically earned a 3 percent commission, which translates into about $296 million in commission. This total excludes the fees earned by Realtors working in-house for the developers.

On a neighborhood basis, when all of the new units are finally delivered the Brickell Avenue area (the Rickenbacker Causeway to the Miami River) will account for about 55 percent of the total condo inventory in Greater Downtown Miami. The Downtown Miami area (the Miami River north to the MacArthur Causeway) will represent about 23 percent of the total inventory, and the Biscayne Boulevard Corridor (the MacArthur Causeway to the Julia Tuttle Causeway) will account for the remaining 22 percent of the units, according to the Guide.

Condo Vultures® Deep Discounts of the Week

Here is a list of some of the biggest discounts in the Vultures Database™ on coastal properties in Miami-Dade, Broward, and Palm Beach counties:

Miami-Dade County:
Brickell Avenue Area: The price of a condominium unit in a waterfront building in the Brickell Avenue area has been reduced by -30 percent.

Miami: The owner of a single-family house in Miami has slashed the price to $56 per square foot.

Miami Beach: A condominium unit in a waterfront building in Miami Beach has been cut in price to $130 per square foot.

Coconut Grove: The price of a single-family house in Coconut Grove has been reduced by -68 percent.

Sunny Isles Beach: The price of a condominium unit in Sunny Isles Beach has been cut by -58 percent.

Aventura: A one-bedroom condominium unit in a waterfront building in Aventura has been reduced in price to $127 per square foot.

Coral Gables: A one-bedroom condo in Coral Gables has been reduced in price to $169 per square foot.

Broward County:
Fort Lauderdale: The price of a two-bedroom condominium unit in Fort Lauderdale has been slashed in price by -60 percent.

Hollywood/Hallandale Beach: The price of a one-bedroom condominium in Hallandale Beach has been reduced to $129 per square foot.

Pompano Beach: A two-bedroom condominium in Pompano Beach has been cut in price to $140 per square foot.

Palm Beach County:
West Palm Beach: A West Palm Beach house has been reduced in price to $58 per square foot.

Boca Raton/Boynton Beach: A two-bedroom unit in a waterfront condominium in Boca Raton has been reduced in price to $74 per square foot.

To get more information on these properties, please don’t hesitate to contact Condo Vultures® Realty LLC at 305-865-5629 or by email at inquiry@condovultures.com

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Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report

$1 Billion British Fund Eyes Florida's Distressed Properties

Wed, 18 Jun 2008 01:49:11 GMT

Concerned that the U.S. dollar may be at its weakest point, a London-based asset management group is creating a $1 billion fund to accumulate distressed Florida properties, according to the Miami Herald.

Strategic Real Estate Advisors, an equity investor in London’s Heron Tower development, has created the Florida Prime Residential Opportunity Fund to purchase Real Estate Owned (REO) from U.S. lenders. There is no word at this time if the group would consider short sales and foreclosures.

The British opportunity fund intends to raise capital from sovereign wealth funds and rich individuals in Europe and the Middle East, according to new reports.

Strategic Real Estate Advisors is the third group in a week to announce plans to raise capital to pick up troubled Florida condos, townhouses, and single-family house communities at a discount.

NBA center Shaquille O’Neal’s real estate company is launching an enterprise to buy nonperforming residential mortgages in Florida at a discount, according to the Orlando Sentinel.Former New York Gov. Eliot Spitzer is exploring the creation of his own opportunity fund to buy distressed residential property across the country, including distressed markets such as Florida, according to the New York Sun.

The influx of buyers into the Florida market comes as the state largest commercial institution is in the midst of selling off nonperforming real estate loans that triggered $80 million in losses. Florida’s largest credit union is preparing to auction off at a deep discount a waterfront site slated for a condominium development in Palm Beach County.

While the institutional buyers begin to move into the Florida housing market, it’s not difficult to see why individual investors are also focused on the sunshine state.

Nearly 400 South Florida condominiums, townhouses, and single-family houses in the Vultures Database™ have been cut in price to $150,000 or less, with the cheapest residence slashed to $31,000, according to a June study from Condo Vultures® LLC.The under-$150,000 properties in the Vultures Database™ are comprised of 64 single-family houses and 322 condominiums and townhouses scattered throughout 24 South Florida cities and neighborhoods. Overall, there are 4,356 properties including short sales, foreclosures, Real Estate Owned by the bank in the Vultures Database™, according to the report.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Prices slashed below $150,000 on nearly 400 South Florida residences

Mon, 16 Jun 2008 17:43:13 GMT

Nearly 400 South Florida condominiums, townhouses, and single-family houses in the Vultures Database™ have been cut in price to $150,000 or less, with the cheapest residence slashed to $31,000, according to a June study from Condo Vultures® LLC.

The under-$150,000 properties in the Vultures Database™ are comprised of 64 single-family houses and 322 condominiums and townhouses scattered throughout 24 South Florida cities and neighborhoods. Overall, there are 4,356 properties including short sales, foreclosures, Real Estate Owned by the bank in the Vultures Database™, according to the report.

Miami (95 properties), Hallandale Beach (49 properties), and Miami Beach (42 properties) have the greatest concentration of under-$150,000 properties tracked in the Vultures Database™.

Deep discounts also exist on properties in some other popular South Florida cities, such as Aventura (nine properties), Bal Harbour (one property), Fort Lauderdale (22 properties), Sunny Isles Beach (13 properties), and West Palm Beach (15 properties).

“To see properties slashed in price to $150,000 or less in some of the most popular South Florida communities on the barrier island offers a glimpse of just how deep some of the discounting has been,” said Peter Zalewski, a principal with Bal Harbour, Fla.-based consultancy Condo Vultures®, LLC. “The question that remains unanswered is how much more prices will fall on high caliber properties in coastal areas before buyers strike in masses.”

As experts debate where bottom is, discounts in the Vultures Database™ through May 31 have leveled off or strengthened in 22 of the 32 submarkets monitored by Condo Vultures®. The Vultures Database™ tracks condos, townhouses, and single-family houses east of Interstate 95 in Miami-Dade, Broward, and Palm Beach counties that have fallen in price by at least -10 percent or -$100,000.

Of the nearly 4,400 properties in the database, 1,909 residences have been discounted by more than the -28 percent average price drop for the South Florida region. The remaining 2,447 properties have been slashed by -28 percent or less.

The average price drop in dollars in South Florida through May 31 was -$223,067 compared to an average drop of -$225,037 on April 30. On a year-over-year basis, in 2007 the average price drop in South Florida was -$227,619 on May 31 and -$233,495 on April 30, according to the data.

There were 90 properties in the Vultures Database™ that closed in May, pushing the total sales for the year to 507, according to the data. At this pace, there would be 1,217 closings of properties in the Vultures Database™ in 2008, compared to 1,192 in 2007.

As investors scour the market for deal, several unrelated developments this week suggest the time is approaching in some markets.

On the buy side, hedge-fund billionaire Edward S. Lampert has begun to quietly accumulate shares in publicly traded companies in the housing sector, including home builders, home improvement retailers, and mortgage lenders, according to the Wall Street Journal.

NBA center Shaquille O’Neal’s real estate company is launching an enterprise to buy nonperforming residential mortgages in Florida at a discount, according to the Orlando Sentinel.

Former New York Gov. Eliot Spitzer is exploring the creation of his own opportunity fund to buy distressed residential property across the country, including distressed markets such as Florida, according to the New York Sun.

On the sell side, Florida’s largest state-chartered commercial institution is in the midst of selling off nonperforming real estate loans that triggered $80 million in losses. Florida’s largest credit union is preparing to auction off at a deep discount a waterfront site slated for a condominium development in Palm Beach County.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Former Gov. Spitzner Looking For Distressed Miami Condos?

Wed, 11 Jun 2008 14:51:10 GMT

Speculation is abound that former New York Governor Elliott Spitzer is trying to create an opportunity fund to buy such things as distressed condos in South Florida, single-family houses in Las Vegas, and land in California.

According to the New York Sun, Spitzer, 49, is reportedly courting private equity investors and pension fund managers in hopes of securing enough financial commitments to launch his own fund to purchase short sales, Real Estate Owned by the bank, foreclosures, and any other opportunities that exist on a bulk basis.

Spitzer, a former New York State Attorney General who capitalized on his aggressive prosecution of Wall Street lawbreakers into being elected governor, is the son of a successful Manhattan real estate investor.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report™.

Copyright © 2008, Condo Vultures® LLC

Florida’s Next Endangered Species Is Construction Crane

Sun, 08 Jun 2008 19:24:37 GMT

The go-go days of Miami real estate development when more than 40 construction cranes crowded the downtown skyline to assist in constructing dozens of new condominium towers is rapidly coming to an end.

Fewer than 12 tower cranes stand today in the Greater Downtown Miami area with about one-third of the steel structures focused on constructing three new office buildings, not the residential skyscrapers of the last five years.

The remainder of the construction cranes are finishing up a handful of condominium projects such as the Icon Brickell and the Paramount Bay that are scheduled to be completed in the upcoming months. Many other buildings nearing completion have already removed their cranes as work has shifted to interior buildout.

Once the final cranes are gone by the end of the year (with the exception of one tower), developers estimate it could be at least five years before a new residential condominium construction project is justifiable again in the Greater Downtown Miami area.

Retail pricing would probably have to reach $525 per square foot before a developer –and a lender – would consider moving forward on a new condominium project in Greater Miami’s central business district, industry watchers said.

Retail condo pricing today for Miami condo investors in the Greater Downtown area on an individual unit basis ranges from $300 to $500 per square foot. Pricing on resale units is even less given the tremendous number of short sales, foreclosures, and Real-Estate Owned by banks. On a Bulk basis, pricing on new condominium construction product is between $190 to $350 per square foot.

“Florida’s newest endangered species is the construction crane,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®LLC. “The crane is going the way of the South Florida speculator, which became extinct in 2006. Once the construction cranes are taken down, packed up, and hauled off on flatbeds later this year, don’t expect to see a tower crane on a residential project in Downtown Miami again for a long as a generation.”

According to the Condo Vultures® Official Condo Buyers Guide to Miami – 2008™, there are 32 condo buildings in the Greater Downtown Miami area that are already or scheduled to be completed in 2008. An additional eight tower are scheduled to be delivered in 2009 with one more condominium coming online in 2010.

When these projects are finished, there will be a total of 157 condominium buildings – old and new - in a 60-plus block stretch of the Greater Downtown Miami area from the Rickenbacker Causeway north to the Julia Tuttle Causeway, and from I-95east to Biscayne Bay, according to the Official Condo Buyers Guide.

The tower cranes were critical for the developers to be able to construct 2,672 floors of condominium residences since 2003. When the new floors are included, the total inventory in Greater Downtown Miami is nearly 4,000 stories, according to the Official Condo Buyers Guide.

"The disappearance of the construction crane really is the symbolic end of Miami’s condo building boom era," Zalewski said.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report™.

Copyright © 2008, Condo Vultures® LLC

Sales of Distressed Properties In South Florida Jump 23%

Mon, 02 Jun 2008 05:43:00 GMT

Sales of distressed properties in the Vultures Database™ increased by 23 percent in April, triggered by a surge in discount buying in Miami Beach, Fort Lauderdale, Sunny Isles Beach, Hallandale, and Hollywood, according to a new report from Condo Vultures® LLC.

Sales of Distressed Properties In South Florida Jump 23%

Sales of distressed properties in the Vultures Database™ increased by 23 percent in April, triggered by a surge in discount buying in Miami Beach, Fort Lauderdale, Sunny Isles Beach, Hallandale, and Hollywood, according to a new report from Condo Vultures® LLC.

Buyers purchased 116 condos, townhouses, and single-family homes east of I-95 in Miami-Dade, Broward, and Palm Beach counties in April compared to 94 acquisitions in March. For the year, 408 distressed properties in the Vultures Database™ have traded, according to the report.

At this pace 1,224 properties in the Vultures Database™ would be sold in 2008, representing a 3 percent increase on the 1,194 homes that traded in 2007.

In 2008, the average discount for a Vultures Database™ property that sells is -37 percent, or -$297,130, but only after sitting on the market for an average of 498 days. In 2007, the average discount for a closed sale was -29 percent, or -$255,955, with 402 days on the market, according to the data.

“As the overall discount grows, evidence is building that certain submarkets are strengthening in price as all-cash buyers pursue attractive product in well-established areas, primarily on the water,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures®.

The international tourist destination of Miami Beach has had 83 distressed properties in the Vultures Database™ sell this year, with 23 transactions in April alone, at an average discount of -34 percent off of the historical high asking price.

Coastal Fort Lauderdale, a popular destination for North American visitors, ranks second for the number of distressed sales closed by submarket in April with 18 transactions, and 48 deals this year. The average discount is -36 percent, according to the data.

Another area where distressed properties are selling at a steady pace is the stretch of Sunny Isles Beach, Hallandale Beach, and Hollywood in northeast Miami-Dade county and Southeast Broward county.

These three contiguous submarkets recorded 36 transactions in April and 99 sales this year. The average discount is about -36 percent, slightly stronger than the market average of -37 percent.

“Today’s buyers are opting to compromise on the price discount and the quality of the property in hopes of securing the best possible value amidst stepped up competition,” Zalewski said. “The influx of buyers with strong foreign currencies searching for beachfront property is a phenomenon that many people are being forced to consider.”

As the number of closed sales jumped in April, the average discount on condos in the Vultures Database™ remained steady at a -28 percent drop for a second consecutive month, according to the data.

In April, the average condo had been discounted by -$174,821 and been on the market for 586 days. A month earlier in March, pricing on a typical condo had been reduced by -$174,765 after sitting on the market for 570 days, according to the data.

There are 4,284 properties in the Vultures Database™, which tracks South Florida properties east of I-95 from Cutler Bay to West Palm Beach that have been reduced in asking price by at least 10 percent or $100,000 from the historical high price.

Condominiums represent 70.3 percent, or 3,012 properties, of the total inventory, and single-family houses the remaining 29.7 percent, or 1,272 properties.

The average discount on a single-family house in the Vultures Database™ works out to a drop of -$343,947, according to the data.

Discounts in the Vultures Database™ increased in 16 submarkets but remained unchanged in 15 submarkets. No submarkets experienced a strengthening in pricing.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter's blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Expert Claims U.S. Housing Market Already At Bottom

Tue, 13 May 2008 14:24:55 GMT

Chances are most people aren’t even aware that the U.S. real estate market has already reached the bottom, according to a hedge fund manager who wrote a May 6 opinion column that appeared in the Wall Street Journal. “How can this be?” the Wall Street Journal quotes Cyril Moulle-Berteaux, managing partner of Traxis Partners LP in New York, stating in his “The Housing Crisis Is Over” column.

Condo Vultures® - Market Intelligence Report

Can U.S. Real Estate Market Really Be At Bottom As Expert Claims?

“How can this be?” the Wall Street Journal quotes Cyril Moulle-Berteaux, managing partner of Traxis Partners LP in New York, stating in his “The Housing Crisis Is Over” column.

“For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.”

Moulle-Berteaux goes on to elaborate how and why the U.S. real estate market in general is unlikely to get any worse in the future.

Even if this New York fund manager is proven correct, how and why would any reasonable person realistically realize the bottom is upon us?

After all, the latest data nationwide shows that median sales prices still appear to be falling, inventory keeps growing, year-over-year sales data continues to tumble, new housing starts are way down, and corporate write-offs are a weekly occurrence.

In South Florida, foreclosures are spiking, and bank repossessions are up 255 percent in the first quarter of 2008 compared to a year earlier. Banks are taking title on average 52 properties a day, including weekends, as borrowers forsake their properties, according to a recent Condo Vultures® LLC report .

Contributing to the pessimistic outlook on housing is the lack of financing available in the market, especially for condos.

This lack of available financing is not limited only to subprime borrowers but also to primary users who have a 25 percent down-payment and an above-average credit score.

With these bleak circumstances, the pundits declare that no one in good faith would think that this is the time to buy.

Buyers are opting to purchase today because no one else is doing it. Remember that for many qualified buyers, the credit crunch, and not a disdain for real estate, is really what is keeping many individuals on the sidelines against their will.

“Even if the trumpets were sounding and the fireworks were exploding to signify the bottom of the market, many people still couldn’t buy real estate right now because of the lack of financing available on the street,” said Peter Zalewski, a principal in Condo Vultures®LLC, a Bal Harbour, Fla.-based consultancy. “That being said, we are dealing with a steady flow of all-cash buyers, both bulk funds and individual purchasers, who are in the market. These all-cash buyers realize the window of time before credit returns to the market won’t be long given the efforts by the federal government and central bank.”

Several buyers looking to purchase today have decided to acquire properties for a variety of reasons that goes beyond real estate. Some of the most cited external factors spurring a desire to buy today are the weak U.S. dollar, the inevitable change in the presidential administration, record high prices for precious metals, and low interest rates.

In South Florida, two other factors – new product coming online and the quieter summer season - are contributing to a growing sentiment that the time to buy is quickly approaching if not already here.

The bulk of the new condominium product in Greater Miami is scheduled to be finished within six months. As buyers scour the market looking for discounts, many are getting a chance to see each tower in person, rather than just studying the architectural renderings and floor plans.

“People are realizing that the overbuilding in the condo market has created in effect a bad sector that still has good buildings,” Zalewski said. “Today’s buyers are quickly figuring out which buildings are superior, and actively working to purchase units in these condominium towers at attractive prices. The inferior buildings are having a difficult time with closings as buyers are deciding to walk away from their 20 percent deposits rather than be stuck with a difficult resell in the future."

The other South Florida factor influencing today's buyers is the seasonal transition from the bustling winter tourism season into the quieter summer season when real estate transactions typically tail off. Many buyers see the summer stretch between May and September as the right time to get in before the market begins to head back into the winter tourism season that begins in November.

This particular November is of particular interest to bulk buyers and individuals with foreign currencies as a new president will be elected this year. Many of the bulk buyers and foreigners seem to think that the U.S. dollar is poised to strengthen heading into next year for a variety of reasons including a change in presidents.

The buyers reason that purchasing discounted South Florida property with a strong foreign currency offers an opportunity during the next several years to realize a gain not only from real estate but a strengthening U.S. dollar.

“No one knows where the bottom is, or when the right time to purchase really is,” Zalewski said. “All a buyer can try to do is determine a comfortable price point and then let the market come to them. If the market never gets to that buyer’s comfort level, the buyer then has to decide whether or not to revisit his or her strategy.”

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

More Indicators Suggest South Florida Lending Not Getting Easier

Thu, 08 May 2008 16:31:41 GMT

The first quarter results of South Florida banks and a new Federal Reserve national survey of lenders provide more evidence that the slow market for residential lending could continue through the rest of this year.

More Indicators Suggest South Florida Lending Not Getting Easier

By Jim Freer
Senior Contributor
CondoVultures.com

The first quarter results of South Florida banks and a new Federal Reserve national survey of lenders provide more evidence that the slow market for residential lending could continue through the rest of this year.

One key indicator of continued caution is that several South Florida-based publicly traded banks and several out-of-state banks with large branch networks in the region made large addition to their loan loss reserves during the first quarter.

Those provisions, which are subtracted directly from earnings, led to a quarter in which many banks profits were lower than the first quarter of 2007.

A review by CondoVultures.com of first quarter results also shows that numerous banks with South Florida operations reported increases in non-current loans – those 90 days or more delinquent or no longer accruing interest. Banks will have to restructure terms of these loans to help borrowers become current or take charge-offs that must be subtracted from their loss reserves.

As of May 7, some but not all South Florida-based publicly traded banks had released first quarter results.

An upcoming CondoVultures.com report, using information from banking analysts, will review the results and the implications for South Florida’s real estate market.

“Most analysts had predicted this would happen, with earnings and problem loans worse than in the fourth quarter,” said Ken Thomas, a Miami-based banking consultant with KH Thomas Associates.

During the first quarter, more banks began reporting increases in non-performing mortgages to “prime” borrowers and on home equity loans. During 2007, the banking industry’s increase in non-current loans was primarily in subprime residential mortgages and loans to homebuilders and condo converters.

One positive sign for the banking industry, in Florida and nationally, is that most banks continue to have capital well above levels that regulators consider “adequately capitalized” if not “well capitalized,” Thomas said.

This capital grew as most banks reported several years of strong earnings through 2006.

One key measure is the ratio of core capital – basically equity – to total assets. Federal regulators require banks to have a ratio of at least 4 percent to be adequately capitalized and at least 5 percent to be well capitalized.

For the composite 317 Florida-based banks, that ratio was 9.25 percent at the end of 2007, which was basically unchanged from a ratio of 9.24 percent on Dec. 31, 2006.

That composite number could drop sharply for this year’s first quarter, said Thomas, who advises banks in Florida and several other states on branch location and community lending strategies.

Some banks that keep adding reserves for several more quarters might have to shift money from their capital base if provisions are higher than a quarter’s net income.

The extent won’t be known until late May, when the Federal Deposit Insurance Corp. releases first quarter data for the banking industry and all banks.

Most South Florida-based banks are privately held. These banks usually announce little more than net income and quarter-to-quarter changes in assets and loans in quarterly releases they send out for use by daily newspapers.

“If capital ratios get weaker, it will be another reason why the credit crunch will get worse and banks will become more reluctant to lend,” Thomas said.

He said evidence of how that is happening is provided in the Fed’s “Senior Loan Officer Opinion Survey on Bank Lending Practices” for April.

The quarterly survey, released May 5, was based on responses from officials of 56 U.S. banks and 21 foreign banks with U.S. offices.

The Fed did not identify any banks, or provide information on lending trends by state.

In one discouraging sign, the majority of domestic banks reported they had tightened their lending standards on prime, traditional and subprime mortgages since January 2008, when the Fed’s most recent survey occurred.

“About 60 percent of respondents--a somewhat higher fraction than in the January survey--indicated they had tightened their lending standards on prime mortgages,” according to the report.

Prime mortgages, to borrowers with good credit histories, are a major source of funding for prospective buyers of South Florida condo units.

The Fed’s report comes as CondoVultures.com continues to see more banks in South Florida tighten that lending.

The Fed also said that about 70 percent of domestic respondents, somewhat higher than in January, indicated they had tightened standards for approving home equity lines of credit over the past three months.

In addition, the Fed said about 80 percent of domestic bank respondents and about 55 percent of foreign bank respondents reported they had tightened standards on commercial real estate loans between January and April.

The Fed said these numbers are similar to a previous survey that showed a tightening between October 2007 and January 2008 on commercial real estate.

That category includes loans for construction of single-family housing projects, condo buildings and commercial buildings. It also includes loans for condo conversions and for purchases of apartment buildings, office buildings and other commercial real estate.

Jim Freer is senior contributor to Condo Vultures.com who writes a weekly column that appears every Thursday. Freer is a veteran financial journalist in South Florida and a consultant to the financial services industry. He can be reached at JimFreer@aol.com. Be sure to check out the Condo Vultures® blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Experts: Bank Sell-Off Begins In Florida

Tue, 06 May 2008 15:23:05 GMT

At least three banks with a sizable presence in Florida have begun to sell off - at a significant discount - their nonperforming loans on residential undeveloped land throughout the state, two banking experts tell CondoVultures.com.

A Miami-based institution and two out-of-state banks with a significant presence in Florida have each started to discount their land loans by as much as 70 percent in hopes of moving the improved and entitled dirt at a brisk pace, the banking experts said.

The strategy of the banks is to dump problem land loans in the second quarter (which ends on June 30) in an attempt to absorb their inevitable write-offs at the same time that their competitors are also expected to report disappointing financial results, the banking experts said.

In the first quarter of this year, banks had asked for about 70 cents on the dollar for this residential developable land with utility hookups, streetscape improvements, and landscaping. Now, this same land is being quietly marketed in bulk for as little as 30 cents on the dollar, the banking experts said.

Given the amount of time and the expenses necessary for investors to carry this land before being able to resell or justify building upon it, serious buyers are offering between 15 cents and 20 cents on the dollar. At least three banks are said to be actively considering these offers in return for quick and quiet closings, the banking experts said.

"The moment of capitulation appears to be near for lenders that control repossessed land," said Peter Zalewski, a principal in the Condo Vultures® LLC, a Bal Harbour, Fla.-based consultancy. "We expect that more time could be necessary before banks begin to accept comparable deep discounts in pricing on finished bulk residential product such as condos and single-family houses."

Failed condo conversions are likely to be the next product that lenders in possession of bulk Florida product are expected to dump at discounts of about 40 percent.

The discounts are expected to be much deeper for condo conversions built earlier than the 1990s as bulk buyers anticipate not being able to resell these units to individual buyers for at least five years. If that time range proves correct, any projects built in the 1970s and/or 1980s would be nearly four decades old when a bulk buyer could realistically look to exit such an investment.

During the period between buying and before selling, a bulk buyer must be able to absorb any difference between the rents generated at a project and the monthly expenses. Any discrepancy in the rent collected compared to carrying costs incurred depends almost entirely on the purchase price paid by the bulk buyers.

This difference in revenue versus expenses, not capital, is proving to be the biggest obstacle to completing a bulk condo deal in Florida, regardless of whether the product is old or new, experts said.

The caveat to this scenario is the international buyer with the rich foreign currency who fears that the U.S. dollar will strengthen later this year.

New residential condo units, especially the towers in Downtown Miami, Brickell Avenue, and the Biscayne Boulevard corridor, are expected to be the last bulk product to be discounted deeply for buyers as the bank-controlled release prices are too rich, experts said.
Still, that isn't stopping many investors both domestic and foreign from attempting to purchase blocks of condo units in the towers coming online in Greater Miami, experts said.

Developers and lenders almost on a tower-by-tower basis have different expectations as to the number of units and the discounts that will be available. Some towers are closing at a high rate while others are anticipating as many as 40 percent of contract holders to walk away from their deposits.

Since many of the large funds circling Miami want to buy a large quantity of units in a limited number of towers in hopes of realizing operational efficiencies, developers are increasingly considering defaulting out buyers who cannot obtaining financing to close on their units by the original deadline.

By taking back units and a large chunk of the original buyer's 20 percent deposit, developers are hoping to be able to amass enough inventory to fulfill the common fund requirement of a minimum of 100 units in a project and 60 percent of the association's voting power.

For the successful towers where buyers are closing on a majority of their contracts, the dilemma for the developer becomes whether to continue selling off the remaining units on an individual basis for an unknown period of time in hopes of maximizing profits or simply dumping the remaining units in bulk fast for a minimal return.

The advantage of selling fast with a limited return is that a developer would be able to move on to other opportunities, including buying discounted units in bulk from their competitors.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report .

Discounts level off in one-third of market in Vultures Database™

Wed, 30 Apr 2008 13:49:59 GMT

As South Florida’s enters into the summer season, discounts on condominiums in the Vultures Database™ have leveled off or strengthened in 43 percent of the South Florida coastal markets being tracked by Condo Vultures® LLC.

The Vultures Database™ Report for April determined that 12 of the 28 condominium markets in South Florida being monitored experienced no change or even a slight strengthening in discounts through March 31, according to a new report from Condo Vultures®, a Bal Harbour, Fla.-based consultancy.

By comparison, the Vultures Database™ Report for March determined that discounts in eight condominium markets had leveled off or strengthened.

This means conditions in four additional South Florida markets have shifted from a status of falling to one of stabilization. Each of the markets is distinctly different but all share the common characteristics of being a popular destination for full-time residents of South Florida.

“It is too early to determine what this all means specifically,” said Peter Zalewski, a principal with Condo Vultures®. “That being said, it is probably not too farfetched to think that some of the discounts in specific South Florida markets are beginning to level off. Whether this strengthening in discounts is temporary or permanent will only be known with time.”

There are 4,293 properties in the Vultures Database™ with the typical property being reduced by an average of -27 percent off of the historical high asking price. The Vultures Database™ tracks South Florida properties east of I-95 from Palmetto Bay to West Palm Beach that have been reduced in asking price by at least 10 percent or $100,000 from the historical high amount.
Condominiums represent 70.4 percent of the total inventory, and single-family houses the remaining 29.6 percent, or 1,270 properties.

The average discount on a single-family house in the Vultures Database™ works out to a drop of -$337,303, according to the data.

The remaining 3,023 properties in the Vultures Database™ Report for April are condominiums distributed throughout 28 markets, with Fisher Island having the smallest discount of -19 percent and Palm Beach the largest discount at -34 percent.

The average discount for a condo in the Vultures Database™ in April is -27 percent, or -$174,765, off of the historical high asking price.

In the Vultures Database™ Report for March, there was an inventory of 3,015 condos that had an average discount of -26 percent, or -$172,601.

The 10 markets where the discounts have stabilized are Aventura (-28 percent), Bal Harbour (-22 percent), Coconut Grove (-26 percent), Eastern Shores (-25 percent), Fort Lauderdale (-27 percent), Hollywood (-28 percent), Palm Beach Gardens (-28 percent), South Miami (-27 percent), Surfside (-27 percent), and Wilton Manors (-29 percent).

Coral Gables (-25 percent) and Miami Shores (-28 percent) are the markets experiencing a strengthening in pricing, according to the data.

Despite the strengthening in pricing in some markets, the overall number of closings of properties in the Vultures Database™ is down slightly from last year.

In the three months of 2008, there have been 275 properties in the Vultures Database™ that have closed. This averages out to three transactions per calendar day. In 2007, there were 1,190 properties in the Vultures Database™ that sold throughout the year for an average of 3.3 transactions per calendar day.

On a month-by-month basis this year, there were 89 transactions in March, 94 transactions in February and 92 transactions in January. At this pace, there would be 1,095 transactions in 2008. Given the overall inventory in the Vultures Database™ and the current absorption rate, there is about a four-year inventory of product.

“The ongoing trend is that quality product priced at a discount is moving, and the inferior product just doesn’t move regardless of the reduction in pricing,” Zalewski said. “Generally speaking, this product is usually inferior product that tends to be given back to the lender because no one else will take it under these conditions.”

Lenders have taken back nearly 5,000 properties in the tri-county South Florida region in the first three months of 2008, which represents a 255 percent increase compared to 2007. Lenders in the region are on pace to repossess nearly 20,000 properties in Miami-Dade, Broward and Palm Beach counties, according to a recent report.

Guide: 55 percent of Central Business District Condos in Brickell Area

When this latest wave of condo construction finally winds down by the end of 2009, the Brickell Avenue area will account for 55 percent of the projects in Greater Miami's Central Business
District area, according to the Condo Vultures® Official Condo Buyers Guide to Miami – 2008.

Brickell Avenue has 86 of the 159 projects scattered in a 60 block stretch from the Rickenbacker Causeway north to the Julia Tuttle Causeway, from I-95 east to Biscayne Bay. The Biscayne Boulevard corridor has the second highest concentration of condominiums with 51 projects. Downtown Miami has 22 projects.

For more information on purchasing a copy of the Official Condo Buyers Guide, please call 800-750-0517 or send an email to inquiry@condovultures.com.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

Winter Season Ends, But Is It Really Start of Summer Buying Season?

Sun, 27 Apr 2008 23:27:19 GMT

South Florida’s housing crisis was on display this winter tourism season as visitors flocked to town to enjoy the warm weather, experience the diverse culture, and eyeball what many are calling the epicenter of the U.S. housing crash. Weekend after weekend dating back to late November, domestic and foreign buyers alike have come to town to shop for real estate during the day, and socialize in the tropical air at night.

End of Winter Tourism Season, But Is It Really Start of Summer Buying Season?

Weekend after weekend dating back to late November, domestic and foreign buyers alike have come to town to shop for real estate during the day, and socialize in the tropical air at night.

With Easter already celebrated and Passover just getting under way, South Florida is symbolically transitioning from the busy winter tourism season that features perfect weather and large crowds to the more idyllic summer season that entails South American visitors and humid temperatures.

As South Floridians prepares for the steamy temperatures and what historically is a slower pace, the rising interest level of real estate buyers – especially those with rich foreign currencies - has the potential to make this a fast-paced summer.

Sentiment is growing among individual buyers that certain submarkets that did not experience the overbuilding such as in downtown Miami, Sunny Isles Beach, and West Palm Beach, may be finally stabilizing.

After all, some say, it has been 29 months since Florida real estate reached a pricing and sales peak in November 2005, only to start a tumble in December 2005 that hasn’t stopped, according to data from the Florida Realtors Association.

“We are not at the bottom but certain submarkets are doing better than many people would probably expect,” said Peter Zalewski, a principal in the Bal Harbour, Fla.-based consultancy Condo Vultures®. “For example, individual sales of waterfront properties in mature South Florida markets are and have been closing at a steady pace throughout the winter season. We expect that to intensify this summer as fear grows among buyers with foreign currencies that the U.S. dollar may be in its lowest trading band.”

Another purchasing segment that appears to be becoming more active is the bulk buyers.

Several funds are ratcheting up their efforts to purchase large chunks of units in some of these condominium towers that have been recently delivered or are close to completion.

Offers on bulk deals have been coming in at a steady pace for several months now, only to be rejected many times because a buyer’s offer is too low and a seller’s minimum release price is too high.

Optimism is building that the difference between buyers and sellers could soon be overcome due in part to creative structuring and external factors such as regulators.

Consider that one domestic private equity manager who was in South Florida the week of April 14 described his fund’s “anxiousness” to get started so as to have time to build relationships and not lose out to competitors.

Another domestic private equity fund that has been visiting since last summer just leased office space and corporate housing in Miami in anticipation of a busy spring.

Representatives from a third group based in Europe were recently back in South Florida for two weeks sizing up bulk opportunities in Miami-Dade and Broward counties that the fund managers hope to acquire in the near future.

Representatives from a fourth fund, also based in Europe, are scheduled to return to South Florida this upcoming week to reassess three opportunities that were originally viewed at the beginning of April.

Many industry watchers insist that it is still not the time to buy in South Florida because of the amount of inventory available and the amount still yet to come.

Besides, the experts say, Florida’s unemployment rate just hit a 4-year high of 4.9 percent in March as 56,600 jobs were eliminated in the state last month. More job cuts are expected in the future as industries related to real estate and construction are struggling to survive.

On top of that, the experts point out U.S. foreclosure actions, as reported by RealtyTrac , spiked 57 percent to 234,685 filings in March.

Locally, properties repossessed in Miami-Dade, Broward, and Palm Beach counties by lenders jumped by 255 percent in the first quarter of 2008, compared to the same period in 2007. This year alone, lenders have taken title through the court to nearly 5,000 properties for an average of 52 per day including weekends, according to a recent report from Condo Vultures®.

All of these problem loans are having an impact on South Florida’s 61 locally based institutions.

South Florida banks experienced a surge in problem loans in 2007, with 33 local institutions reporting that their nonperforming loans surpassed the industry norm of 1 percent. In 2006, only 15 South Florida banks had more than 1 percent of their loans categorized as nonperforming.

In addition, a new poll by the Associated Press–AOL Money & Finance finds that 60 percent of the 1,002 adults asked said they “definitely won’t buy a home” in the next 24 months. That’s up 7 percent points from the last time the poll was conducted in September 2006, when only 53 percent said they wouldn’t be buying in the next two years.

Making matters worse, the Vultures Database™ Report for April (which is scheduled to be released next week) is expected to show that the average coastal property in South Florida being tracked by Condo Vultures® is down by 27 percent off of the historical high asking price. The combined discount of the more than 4,300 properties in the database is about $974 million.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com . Don't forget to sign up for our weekly Market Intelligence Report.

Lenders Repossess 52 South Florida Properties A Day In First Quarter of 2008

Thu, 17 Apr 2008 16:21:21 GMT

Lenders repossessed an average of 52 REO properties a day in South Florida in the first quarter of 2008 from borrowers who failed to pay their mortgages, representing a 255 percent spike compared to a year earlier, according to a new report from Condo Vultures® LLC. Local courts granted lenders the ownership of 4,762 REO properties in Miami-Dade, Broward, and Palm Beach counties in the first three months of the year compared to 1,343 actions during the same period of 2007, according to the data compiled by Condo Vultures® using local government records.

Condo Vultures® - Market Intelligence Report

Lenders Repossess 52 South Florida Properties A Day In First Quarter of 2008

Local courts granted lenders the ownership of 4,762 REO properties in Miami-Dade, Broward, and Palm Beach counties in the first three months of the year compared to 1,343 actions during the same period of 2007, according to the data compiled by Condo Vultures® using local government records.

On a county-by-county basis, Miami-Dade had the greatest number of repossessed properties - called Real Estate Owned (REO) by lenders - but Broward experienced the greatest jump in repossession actions on a percentage basis. Palm Beach, by comparison, experienced the least activity with only a 149 percent increase in bank repossessions.

Lenders took back 2,395 Miami-Dade properties in the first quarter of the year compared to 619 in 2007, representing a 287 percent increase year-over-year.

In Broward, lenders took ownership of 1,671 properties through the court system compared to 418 properties in 2007 for a 300 percent year-over-year increase.

In Palm Beach, lenders were granted ownership by the court of 696 properties in the first quarter of 2008 compared to 306 repossessions in 2007, according to the data.

Lenders ended up with these REO properties after foreclosing on borrowers and not being able to sell the properties at the minimum price set at the court-ordered auction.

When a lender gets a property back, the institution shifts the repossessed real estate into a REO category. To get to the point of a property being designated as an REO, the lender has typically gone through a six to eight month process where the expenses incurred easily surpassed $40,000, industry watchers said.

It is common to see lenders that have just repossessed properties suddenly change their strategy from trying to get the highest amount possible to simply trying to unload the product fast.

“Bankers tell me that they don’t want to own real estate,” said Peter Zalewski, a principal with the Bal Harbour, Fla.- based consultancy that produced the report. “Unfortunately for the banks, foreclosure properties in South Florida are failing to sell at court auctions due to judgment amounts that are simply too high compared to today’s market value. Therefore, properties are increasingly reverting back to the lenders.”

Many banks usually need about 30 days to prepare to market an REO. A bank must obtain an appraisal, find brokers and often make repairs. Taxes, homeowners association fees and maintenance are among costs from the start. These costs are among reasons banks usually do not wait for the market to recover before selling REOs.

Most local banks usually sell properties one at a time to buyers who are clients of real estate brokers.

The Federal Deposit Insurance Corp. has said that it encourages banks to sell REOs as quickly as feasible, because they are non-earning assets. FDIC rules permit banks to hold REOs for up to 10 years. But carrying costs make that schedule unrealistic even in the sourest of markets -- where South Florida ranks among the top.

Many industry watchers are optimistic the recently approved Economic Stimulus Package passed by Congress and signed into law by President Bush will jumpstart the real estate market.

A key part of the package increases the mortgage limit amount of $417,000 on conventional loans to a ratio based on median sales prices in the area where the property is located.

This is crucial because conventional loans are practically the only mortgages being written today because banks and/or originators can still sell paper off to Fannie Mae or Freddie Mac, and not have to portfolio it. Anything higher than the conforming loan amount is a jumbo mortgage and usually can only be sold off to private investors, who just aren’t buying today.

For several years many South Florida banks issued loans with monthly option Adjustable Rate Mortgages, which allow borrowers to pick different payment amounts each month. The monthly option ARMs are controversial because it enables the borrower to defer interest on the loan which is added to the overall debt amount, creating what is called negative amortization.

Many of the properties going into foreclosure and ultimately being repossessed by the lenders are financed with exotic loans such as ARMs.

At the pace experienced in the first quarter, banks would take possession of 19,048 properties in South Florida in 2008.

By comparison, banks took back 10,087 properties in 2007. If this pace continues, 2008 would represent an 89 percent spike in REOs compared to 2007, which was already the worst year in recent memory for the loss mitigation and/or special assets departments of banks.

South Florida’s REO problem appears worse than the national trend.

Foreclosed condos, townhouses and single-family houses owned by Florida banks soared 620 percent in 2007 to $144 million from $20 million in 2006, according to a recent Condo Vultures® report based on FDIC data through Dec. 31, 2007.

Nationally, the banking industry experienced a 128 percent increase in bank-owned foreclosed condos and houses, totaling $6.6 billion in 2007 compared to $2.9 billion in 2006, according to the data.

The latest statistics on bank-owned REO properties represent near-record highs in both Florida and nationally. And, the numbers provide one of the clearest pictures yet of the exploding foreclosure problem.

This FDIC data represents only those properties that federally regulated lenders have taken title to through the foreclosure process.

The bulk of the nation’s residential REOs are owned by mortgage companies and other non-bank lenders that serviced the mortgages on those homes or by Special Investment Vehicles (SIVs) and other new Wall Street-created entities that purchased mortgages as part of securities.

The diverse ownership is what makes this crisis different from previous housing downturns.

Historically, commercial banks and savings & loans held much larger percentages of their mortgages in portfolios and thus got stuck with higher numbers of foreclosures.

What hasn’t changed since the last housing crisis is the psychology of the lenders that are in possession of REOs. In the last year, a growing number of banks and other companies have set up divisions exclusively to sell REOs.

Most are trying to sell condos and houses as close to market value as possible. Until the quantity grows to the point of desperation, the institutions in possession of REOs hope to avoid sales at deep discounts.

Fortunately for buyers, the days of banks selling REO at par are probably a thing of the past as more REOs are becoming available. The surging volume is expected to prompt more and more financial institutions ready to accept discounts, and thus avoid lengthy costs of maintaining properties.

The FDIC data shows the country’s banks had $51 billion in non-current residential mortgages at the end of 2007, with $1 billion at Florida-based banks. Non-current loans are 90 days or more delinquent or are no longer accruing interest.

Banks list REOs on their books at the market value of a property, based on a new appraisal or review of recent comparable sales.

The FDIC does not report on the number of REOs held by the banking industry or by individual banks.

Florida-based banks, large banks based from out-of-state and Wall Street-related investors are among owners of these troubled Greater Miami properties.

The FDIC does not provide breakdowns on banks’ REOs by states and counties.

Florida’s 317 commercial banks and savings banks held $144 million in residential REOs at the end of 2007. This amount includes an undetermined number of properties in other states.

Real Estate Drags Down Stock Prices of South Florida Banks

Sun, 06 Apr 2008 18:25:26 GMT

South Florida bank stocks took a beating during this year’s first quarter, with prices of several major banks falling more than 20 percent amid investors’ continuing concerns about the real estate markets. An analysis by Condo Vultures® LLC shows that only two of the five South Florida-based banks that trade on major markets saw their share prices rise in the first quarter of 2008. Prices fell for all 11 out-of-state banks with more $1 billion in South Florida deposits operating in the tri-county region of Miami-Dade, Broward and Palm Beach.

Real Estate Market Drags Down Stock Prices of South Florida Banks in First Quarter of 2008

By Jim Freer
Senior Contributor
CondoVultures.com

An analysis by Condo Vultures® LLC shows that only two of the five South Florida-based banks that trade on major markets saw their share prices rise in the first quarter of 2008. Prices fell for all 11 out-of-state banks with more $1 billion in South Florida deposits operating in the tri-county region of Miami-Dade, Broward and Palm Beach, according to the research.

This year’s declines follow 2007’s big drop in share prices for most of these banks, especially during the second half of the year when many financial institutions began reporting major losses on sub-prime mortgages.

Industry watchers said prospects are slim that prices of most of these banks and of the entire banking sector will stage a big recovery this year.

The bearish market for bank stocks is among reasons why analysts expect banks are unlikely anytime soon to loosen their lending standards, including on residential mortgages, and will find it difficult to add branches and expand other operations.

With lower prices and market capitalizations (number of shares multiplied by price) banks will inevitably have less so-called currency to buy other banks, said Christopher Marinac, director of research at Atlanta-based research firm FIG Partners.

This year, stocks of banks with large residential mortgage holdings have generally performed worse than other banks.

Most of the 16 banks analyzed by Condo Vultures® have significant residential mortgage or other real estate exposure in Florida, and thus have been part of the stock decline.

Some larger banks analyzed posted gains April 1, the first day of the second quarter, after some institutional investors began to buy financial stocks following news that Lehman Brothers and Swiss-based UBS would be have new stock offerings.

Unfortunately, that buying might prove to be one of the occasional blips of good financial news among a series of disturbing reports about the U.S. economy and world financial markets.

There also are indications that “smaller might be better” for bank stocks in the current market.

Boca Raton-based Sun American Bancorp (Nasdaq: SAMB) and Fort Lauderdale-based Optimum Bank Holdings Corp. (Nasdaq: OPHC) are the two South Florida bank stocks that rose during the first quarter of 2008. Both have relatively low numbers of shares and are lightly traded.

On the flip side experiencing a drop in share price are Coral Gables-based BankUnited (Nasdaq: BKUNA) and Coral Gables-based Great Florida Bank (Nasdaq: GFLB), which are among the 508 in the Nasdaq Bank Stock Index, and BankAtlantic, which is traded on the New York Stock Exchange.

A look at that index and at the KBW Bank Index, of 24 large banks, shows how bank stocks began slumping sooner than the overall stock market.

The Nasdaq Bank Stock Index fell 4 percent during this year’s first quarter. This followed a full-year decline of 22 percent in 2007.

The KBW Bank Index fell 5 percent during this year’s first quarter, following a 25 percent decline for 2007.

Of the 11 large banks analyzed by Condo Vultures® only Colonial Bank and HSBC are not part of the KBW Index, which is tracked by investment bank Keefe, Bruyette & Woods.

The S&P 500, which includes most of the KBW banks, fell 10 percent during this year’s first quarter. The S&P, widely viewed as the broadest gauge of the U.S. market, had a 4 percent rise in 2007.

Acquisitions by banks from other states have resulted in the small number of publicly traded banks in South Florida – where decades of growth have made local banks – take-over targets.

BankUnited and Fort Lauderdale-based BankAtlantic are often the subjects of such rumors, amid extensive coverage by analysts and interest from institutional buyers of bank stocks.

BankUnited, the largest bank based in Florida, fell 27 percent from $6.90 to $5.01 during this year’s first quarter. After ending 2006 at $27.96, the stock had a 12-month price decline of 75 percent to $6.90 per share.

BankUnited has gained national attention because for several years it was one of the country’s biggest lenders of option adjustable-rate mortgages. These loans permit borrowers to pick different payment totals each month, and in some cases permit build-up of unpaid interest, as well as deferred principal.

Since last year, BankUnited’s rising delinquencies on option ARMs have led to a decline in its stock price.

Analyst Albert Savastano of Fox-Pitt Kelton in New York has an In-Line rating for BankUnited. This means Savastano expects the stock to perform in the same range as other savings banks in its size range during the next 12 months.

Savastano has a 12-month price target of $6.00 for BankUnited, while citing concerns about increasing mortgage delinquencies and foreclosures for the bank.

BankAtlantic’s stock ended 2006 at $13.81, and fell 70 percent to $4.10 over the next 12 months in 2007. During the first three months of 2008, BankAtlantic’s stock price dropped another 5 percent to $3.91.

Amid the homebuilding downturn, BankAtlantic has placed several loans to developers on a nonaccrual status, meaning the bank cannot be certain of full payment of principal and interest. BankAtlantic has said those loans are in parts of Florida, but other than South Florida.

Savastano has an In-Line recommendation and a 12-month price target of $5.00 for BankAtlantic.

South Florida had a third prominent bank stock in West Palm Beach-based Fidelity Federal until Cleveland-based National City (NYSE: NCC) bought it last year.

National City experienced a 40 percent decline in stock price, decreasing from $16.46 to $9.95, to make it the largest drop among banks in the Condo Vultures® analysis.

National City has had one of the banking industry’s higher levels of charge-offs on sub-prime loans, mostly outside Florida.

On April 1, National City said it was considering unspecified “strategic alternatives.”

The following day, The Wall Street Journal which cited “people familiar with the matter” said National City is considering an outright sale to Cleveland-based KeyCorp (NYSE: KEY).

The former Fidelity Federal attracted several bidders because it had a low level of problem loans and was in a population growth market that larger banks coveted.

But FIG Partners’ Marinac projects that a recent U.S. Census Bureau report data on population shifts among U.S. counties could reduce the attractiveness of Florida-based bank stocks in general for money management firms and other institutional investors.

The U.S. Census Bureau estimates that in 2007 the number of people who moved out of Miami-Dade County was 40,128 more than the number who moved into the county.

That “negative in-migration” was 35,661 in Broward and 9,414 in Palm Beach County. The long-term trend of positive in-migration also changed for several other large Florida counties.

The U.S. Census Bureau cites high costs of property insurance and the impact of the real estate crisis as reasons for the shift.

Marinac thinks these numbers are “critical” for bank stock investors. In a March 31 report, Marinac advised clients to consider this trend before buying Florida-based bank stocks in hopes that these banks might be sold if the merger market starts rebounding late this year or in 2009.

Jim Freer is senior contributor to Condo Vultures.com who writes a weekly column that appears every Thursday. Freer is a veteran financial journalist in South Florida and a consultant to the financial services industry. He can be reached at JimFreer@aol.com. Be sure to check out the Condo Vultures® blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Top 10 Miami Foreclosure Projects in Q1 2008

Sat, 05 Apr 2008 22:17:38 GMT

In a sign that the housing crash is expanding beyond Miami’s overbuilt Brickell Avenue area, a coastal condominium complex in Aventura has landed atop the list of the Miami-Dade County projects with the highest concentration of foreclosures in 2008. Creditors have filed the initial paperwork (lis pendens and/or notices of default) against 26 units in the Parc Central condominium conversion in Aventura in the first three months of the year, according to a new report from Condo Vultures® LLC.

Aventura Condo Lands Atop List of 2008 Top 10 Miami Foreclosure Projects

Creditors have filed the initial paperwork (lis pendens and/or notices of default) against 26 units in the Parc Central condominium conversion in Aventura in the first three months of the year, according to a new report from Condo Vultures® LLC.

All of the foreclosure actions at the Parc Central in Aventura were filed since January 1, and do not reflect an additional 70 foreclosure actions launched in the same 702-unit complex in 2007, according to data compiled using Miami-Dade Circuit Court records. Parc Central had the second highest concentration of foreclosures for a Miami-Dade condominium in 2007.

“The housing contagion is beginning to spread beyond the region’s troubled core of downtown Miami’s Brickell Avenue area,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy that produced the report based on circuit court records. “To see a mature market with controlled new construction such as Aventura emerge with a high foreclosure rate is indicative of just how bad the South Florida housing market really is getting. We are entering a phase of real pain being experienced by real users.”

There were 17,821 foreclosure actions filed in Miami-Dade, Broward, and Palm Beach counties in the first three months of 2008 resulting in a total amount owed of $4.6 billion to creditors.

Condominiums account for 3,538 foreclosure actions in Miami-Dade and Broward counties representing $778 million in nonperforming debt at well-known buildings such as The Grand in Miami, The Mirador in Miami Beach, the Beach Club in Hallandale Beach, and the Residences on Hollywood Beach. The breakdown of condominium foreclosures in Palm Beach County was not available at the time of this report.

Broward County leads the tri-county region in the total number of foreclosure actions and the total amount owed. There were 7,394 foreclosure actions valued at $1.8 billion in the first three months of 2008. That represents 39 percent of the overall total of nonperforming loans in foreclosure, according to circuit court records.

Miami-Dade County ranked second with 5,370 actions totaling $1.5 billion, or 34 percent of the region’s total. Palm Beach County was third with 5,057 foreclosure actions totaling $1.2 billion, according to the data.

A foreclosure in South Florida usually takes about six months to work through the court system, and costs a creditor by some estimates upwards of $40,000 when attorney fees, unpaid debt service, and damage is considered.

“We expect Miami-Dade County’s foreclosure problems to surpass that of Broward County later this year when the bulk of the new condo product comes online in downtown Miami and the Brickell Avenue area,” Zalewski said. “According to our research for the soon-to-be-released Condo Vultures® Official Condo Buyers Guide to Miami™, there will 31 buildings with more than 10,000 units that should come online this year alone in the downtown Miami area and an additional eight building in 2009. Watch and see what that does to the foreclosure filings.”

For the time being, Aventura is the home of the Miami-Dade County condo with the highest foreclosure ranking. Still, downtown Miami’s Brickell Avenue area continues to have significant problems with owners not paying their mortgages.

Two of the top five rankings for the highest 2008 foreclosure rates are in the Brickell Avenue area, and the buildings are the same ones that struggled with defaults last year.

The Club at Brickell Bay, which had the highest foreclosure rate in 2007, ranks second in 2008 in Miami-Dade County based on 24 new actions filed since January. In 2007, there were 80 actions filed against owners in the Club, which has 643 units.

The other Brickell Avenue building with repeated foreclosure problems is the Vue at Brickell, which is about two blocks west of the Club. The Vue at Brickell has the fifth highest foreclosure rate in Miami-Dade for the first three months of this year with 21 actions. In 2007, the Vue ranked No. 3 with 65 actions filed in a building with 323 units.

The Jade at Brickell Bay, a top quality tower on the water which earned the No. 5 ranking in 2007 with 56 actions, is not on this year’s list of troubled condos.

“Investors with all-cash are flocking to the Jade looking for deals on top quality units, and lenders increasing are softening their stance in hopes of simply unloading the product which may or may not be already owned by the bank,” Zalewski said. "This is working to improve the situation."

The No. 3 ranking for the highest foreclosure concentration in Miami-Dade County is a condo is a tie at 22 actions between a condo conversion in Sunny Isles Beach and a lakefront project in Miami near the airport.

The Oceanview on Collins Avenue in Sunny Isles Beach had an additional 58 actions filed in 2007 when the Oceanview was ranked No. 4. The Blue Lagoon on Northwest 7th Street in Miami had 47 actions in 2007 to rank it No. 6 for the highest foreclosure concentration in a Miami-Dade complex.

Homestead in South Miami-Dade is home to two of the top 10 condos for foreclosures in the county with the Venetia Gardens with 16 actions valued at $2.3 million for the No. 6 rank, and the Shoma Condo at Keys Cove with 13 actions valued at $1.9 million for the No. 8 ranking.

“You hate to see projects in places like Homestead with a high foreclosure ranking as those are real users who are losing their real homes,” Zalewski said. “For the most part, these were not speculators buying with the intention of flipping the contracts for a quick $50,000 gain. It’s unfortunate but it is happening in working class places like Homestead and increasingly throughout neighborhoods in Palm Beach and Broward counties.”

In Broward County, the Palm-Aire Country Cub in Pompano Beach has the highest number foreclosure actions with 33, which ranks it tops in South Florida. The foreclosure actions in the Palm-Aire are valued at $3.4 million.

The Edgewater on Wiles Road in Coral Springs has the second highest concentration of foreclosures with 23 actions totaling $5.6 million. The Tides on Hollywood Beach is third with 18 actions valued at $6.8 million. Rounding out the top five are the Aventine at Miramar and the Marina Oaks in Fort Lauderdale with 17 foreclosure actions each.

The recently completed oceanfront complex called the Beach Club in Hallandale Beach is tied for the No. 6 ranking in Broward County with the Residences at Hollywood Beach, and the Coral Key in Margate with 16 foreclosure actions each.

Club Caribe in Coconut Creek and Regent Park in Hollywood are tied with 14 foreclosure actions each for the No. 9 ranking in Broward County, according to the data.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

South Florida Banks Eager to Lend But Decision Rests With Investors

Wed, 02 Apr 2008 00:49:00 GMT

Abel Montuori of U.S. Century Bank in Miami doesn’t need CNBC pundits to tell him that institutional investors will play a big role in jump-starting a recovery in high-end mortgage lending. Montuori is among South Florida bankers who are seeing first-hand how Wall Street, as he puts it, “has dried up” even for many loans where buyers meet traditional underwriting standards.

South Florida Banks Eager to Lend But Decision Rests With Investors

By Jim Freer
Senior Contributor
CondoVultures.com

Abel Montuori of U.S. Century Bank in Miami doesn’t need CNBC pundits to tell him that institutional investors will play a big role in jump-starting a recovery in high-end mortgage lending.

Montuori is among South Florida bankers who are seeing first-hand how Wall Street, as he puts it, “has dried up” even for many loans where buyers meet traditional underwriting standards.

And his overview provides insight on how South Florida’s post-recovery mortgage market will look, and on how U.S. Century and some other local banks might become larger players.

“Investors are leery about the quality of paper (mortgage securities) and about the state of housing in the United States,” said Montuori, an executive vp and the senior lending officer at U.S. Century.

“Once the perception changes and the market starts picking up, investors will get more interested in those deals,” he said.

The U.S. Century deals Montuori cited are mostly jumbo loans, all to borrowers with good credit, to buy houses and condo units.

In 2006, U.S. Century set up a residential mortgage division to make those loans and sell them to J.P. Morgan Chase, Citicorp and other large packagers of mortgage securities.

Late that year, institutional buyers began buying fewer residential mortgages of all types as they started dealing with growing numbers of delinquent sub-prime mortgages in their pools.

“A lot of banks here (in South Florida) now have multitudes of loans they could make, if they could sell them,” Montuori said.

U.S. Century, with $1.3 billion in assets and 18 branches, is among many South Florida-based banks that prefer to sell their residential loans. Otherwise, they would need employees to collect and service loan payments.

U.S. Century’s mortgage borrowers include many business people who are its clients for other loans, including commercial.

Most of U.S. Century’s residential loans are larger than the $417,000 “conforming” limit for sale to government-sponsored Fannie Mae and Freddie Mac.

The conforming amount has increased temporarily in Miami-Dade County to about $456,000 and remained at $417,000 in Broward and Palm Beach counties under the Economic Stimulus
Package that was passed by Congress and signed by President Bush in February. This increased conforming limit is set to expire in 2009.

“We can underwrite many of our mortgages in two weeks,” Montuori said.

But the process for getting loans eligible for packaging into securities can take between 45 days and 90 days, he said.

Investment banks are doing more of their own review of loans and often have tighter requirements, on down payments and credit ratios, than just a few years ago.

Meanwhile, fewer hedge funds and other institutions are investing in private mortgage pools.

As investors account for recent losses, some are concerned about the quality and credit ratings of new pools, Montuori said.

Condo Vultures® is hearing similar analysis of that credit crunch from other lenders, analysts and industrywatchers.

Montuori expects it will take a series of positive economic developments and housing reports to lead investors back to the mortgage market.

The Federal Reserve’s recent cuts in interest rates and support for J.P. Morgan Chase’s purchase of battered mortgage buyer Bear Stearns provided some encouragement.

Still, some discouraging news came early in the week of March 24.

The National Association of Realtors reported that sales of existing homes rose 2.9 percent nationally in February, compared with January. But sales were spurred partly by an alarming 8.2 percent drop in median sales price, from February 2007 to February 200.

Meanwhile, the Conference Board reported that consumer confidence fell to a five-year low in March.

These developments don’t give mortgage investors cause for quick optimism about expectations for more lending and lower delinquencies.

But U.S. Century is not changing its long-range view on mortgage lending.

The bank opened in 2002 with a focus on lending to commercial developers and homebuilders, while not making loans to high-rise condo developers.

Four years later, U.S. Century began diversifying with new residential mortgage and business lending divisions.

The bank lends to individuals who are having a home built and to buyers of houses and condos that are not in high rises.

U.S. Century’s portfolio of those loans rose from $27 million at the end of 2006 to $37 million at the end of last year. Those numbers indicate how it is waiting for more investors to return to the
secondary market.

Last year, U.S. Century opened a global division that does correspondent banking for trade finance with Latin American banks.

“We have added good, long-range businesses that will help carry the bank through any period,” Montuori said.

U.S. Century would have taken those steps even if federal bank regulators in 2006 had not started to greater scrutinize banks for their construction lending and other commercial real estate lending, he said.

U.S. Century is among approximately 50 percent of South Florida-based banks that exceed a key ratio of total commercial real estate loans being equal to 300 percent more of capital.

Loans to builders of condo projects and to homebuilders are part of that ratio, but loans to buy houses and condo units are not part of it.

U.S. Century’s programs for making and monitoring commercial real estate loans meet regulators’ standards, Montuori said.

Still, the Federal Deposit Insurance Corp. keeps reminding the industry about its concerns.

On March 17, that agency sent banks a letter that re-emphasized the importance of strong capital and loan loss reserve levels and of sound risk management for banks with heavy concentrations of commercial real estate.

Historically, dollar losses have been higher on those loans than on so-called prime residential mortgages.

The FDIC is giving banks a reason to be ready to make more of those mortgages. In South Florida and other expensive markets, they continue to wait for more buyers for those loans.

Jim Freer is senior contributor to Condo Vultures.com who writes a weekly column that appears every Thursday. Freer is a veteran financial journalist in South Florida and a consultant to the financial services industry. He can be reached at JimFreer@aol.com. Be sure to check out our blog at CondoDump.com . Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

South Florida Condo Prices Drop -1%

Sat, 29 Mar 2008 04:16:44 GMT

The asking price on South Florida condominiums in the Vultures Database™ dropped by an additional -1 percent in February as the number of distressed units available for sale increased slightly, according to a new report from Condo Vultures® LLC. The typical condominium in the Vultures Database™ is down an average of -26 percent, or $172,601, through February 29 compared to an average drop of -25 percent, or $169,160, on January 31, according to the Condo Vultures® report.

South Florida Condo Prices Drop -1%, Yet 8 Markets Hold Steady or Improve

The typical condominium in the Vultures Database™ is down an average of -26 percent, or $172,601, through February 29 compared to an average drop of -25 percent, or $169,160, on January 31, according to the Condo Vultures® report .

North Bay Village experienced the deepest individual market drop as discounts plummeted from -25 percent in January to -30 percent in February. Exclusive Fisher Island experienced the second deepest monthly drop in pricing as discounts jumped from -15 percent in January to -18 percent in February, according to the data.

Six markets experienced a -2 percentage point drop in month-over-month pricing. Palm Beach dropped to a -32 percent discount; Miami Shores to a -30 percent discount; North Miami Beach and Hollywood to a -28 percent discount; Fort Lauderdale to a -27 percent discount; and Coconut Grove to a -26 percent discount.

“While the average discount has deepened, the latest numbers also show that eight of the 28 submarkets tracked in the Vultures Database™ experienced no pricing change and/or even a strengthening in pricing in February,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy Condo Vultures® LLC. “We are nowhere near being able to call the bottom but obviously a leveling off in discounts in nearly one-third of the South Florida submarkets in the Vultures Database™ is something that needs to be monitored.”

The markets that experienced a leveling off in discounts in February are Aventura at -28 percent, Key Biscayne at -24 percent, Pompano Beach at -25 percent, Wilton Manors at -29 percent, and West Palm Beach at -25 percent.

Miami Gardens strengthened from a -27 percent discount in January to a -25 percent discount in February.

During that same period, the average discount in Bay Harbour Islands strengthened from -27 percent in January to -26 percent discount in February, and discounts in Dania Beach decreased from an average of -25 percent on January 31 to -24 percent on February 29.

As the overall discounts have deepened, the number of distressed condos available in South Florida has increased slightly.

The Vultures Database™ is now comprised of 3,015 South Florida condominium units east of I-95 from Palmetto Bay to West Palm Beach that have been reduced in asking price by at least 10 percent or $100,000 from the historical high amount.

In January, there were 2,927 condominium units in the Vultures Database™. The month-over-month change in February represents less than a minimal percentage increase, according to the report.

“Don’t be surprised to see the Vultures Database™ inventory grow this summer when the bulk of the new product in downtown Miami and downtown West Palm Beach comes online,” Zalewski said. “Speculators who opt to close – if they can get financing – are likely to immediately put their units on the market for sale hoping to sell off to one of the numerous all-cash discount buyers looking for value.”

Sales of properties in the Vultures Database™ are off the pace of 2007. In the first two months of 2008, 154 properties in the Vultures Database™ have sold, resulting in an average of 77 transactions per month. By comparison, there were 1,181 properties in the Vultures Database™ that closed in 2007, resulting in an average of 98 transactions per month, according to the data.

Fewer properties are closing this year but the average discounts are deeper. The average price drop necessary for a property in the Vultures Database™ to close is -36 percent, or -$302,737, in 2008. In 2007, the average price drop was -29 percent, or -$257,102.

There have been 22 properties in the Vultures Database™ that have closed at a price that is discounted by at least -50 percent off of the historical high asking price. One unit in Miami Beach closed at a -75 percent discount for a purchase price of $65,000, and another property in Miami sold at a -72 percent discount for a sales price of $50,000, according to the data.

Federal Reserve’s Dramatic Actions Unlikely To Boost Mortgage Lending

Wed, 26 Mar 2008 13:33:47 GMT

Condo buyers who are wondering if this week’s big moves by the Federal Reserve will make banks more willing to lend on residential in the short-term: Don’t expect it. The reality is that any impact from the Federal Reserve’s interest rate cuts and its bailout of mortgage investor Bear Stearns will be indirect, and probably minimal, on residential lending in South Florida and around the country.

Federal Reserve’s Dramatic Actions Unlikely To Boost Mortgage Lending

By Jim Freer
Senior Contributor
CondoVultures.com

Condo buyers who are wondering if this week’s big moves by the Federal Reserve will make banks more willing to lend on residential in the short-term: Don’t expect it.

The reality is that any impact from the Federal Reserve’s interest rate cuts and its bailout of mortgage investor Bear Stearns will be indirect, and probably minimal, on residential lending in South Florida and around the country.

Banking and real estate analysts point out that the Federal Reserve’s discount rate for its overnight lending to banks and its Federal Funds rate target for overnight lending between banks, both cut since March 16, are not the indices lenders use to set residential mortgage rates.

The prime rate, which banks lowered following the Fed Funds cut, is an index for many business loans and home equity loans. But it is not an index for rates on mortgages to purchase or refinance condo units and houses.

Perhaps most importantly, condo market players should recognize that interest rates have not been the big factor in the past year’s tight lending market, said Jack McCabe, president of McCabe Research and Consulting in Deerfield Beach.

“No matter the rate, it gets back to the risk versus the reward,” said McCabe, who monitors the South Florida and national condo markets for institutional investors.

Even if mortgage rates go lower, McCabe expects terms for qualifying for loans will remain tough compared with two years ago.

“There is still a lot of volatility out there,” and many mortgage lenders and investors have not yet determined their losses, McCabe said.

For all types of lending, banks are not in an interest rate crisis but are deep into a credit crunch that makes them hesitant to lend, said Ken Thomas, a Miami-based banking consultant.

“They are shell-shocked,” Thomas said, with growing volumes of delinquent real estate loans and concerns that they could add more problem loans.

Amid last week’s intensive media coverage of the U.S. Central Bank, Thomas reminds prospective condo and house buyers that rates for their loan are driven by the U.S. Treasury market.

Banks and other lenders generally use the 10-year U.S. Treasury Note as their index for setting rates on 30-year fixed-rate mortgages.

Many use the 5-year U.S. Treasury Note as an index to set rates on 15-year fixed-rate mortgages and starting rates on some adjustable rate mortgages.

Short-term rates set by the Federal Reserve and long-term Treasury rates that are determined by bond investors are different markets.

“Long-term and short-term rates often move in opposite directions, and while the Fed has been cutting rates since last year, the rates on different Treasuries have been moving up or staying flat,” Thomas said.

In recent months, Treasury investors in the United States and overseas have been more
concerned than the U.S. Central Bank has been about the potential rise in U.S. inflation.

Another factor is that with the U.S. Dollar’s fall against numerous other currencies, “some foreign investors are not buying as much debt as they did a few years ago,” Thomas said.

Since mid-February, rates on long-term Treasury Notes and most key mortgage rates have dropped between 0.10 percent (10 basis points) and 0.30 percent (30 basis points) – much smaller drops than in the Federal Reserve’s 2008 cuts in its Federal Funds rate.

On March 18, the U.S. Central Bank cut its Federal Funds target by 75 basis points from 3.00 percent to 2.25 percent. The same day, most banks cut their prime rate (3 percentage points added to the Federal Funds rate) from 6.00 percent to 5.25 percent. That is a rate that banks often charge on business loans to some of their most credit-worthy borrowers.

This chart compiled by Condo Vultures® shows how the U.S. Central Bank raised the Federal Funds rate for several years, to keep the economy from over-heating. The Federal Reserve began cutting that rate in September 2007 as part of its attempt to reduce the impact of the housing crisis.

On January 22, the U.S. Central Bank cut its Federal Funds target from 4.25 percent to 3.50 percent. On January 30, the Federal Funds rate target was cut to 3.00 percent.

The Federal Reserve sets that target by using its own financings to reduce or increase the amount of cash available to banks in the overnight market.

One of its main tools is buying and selling short-term Treasury bills, in the market for transactions with commercial banks and investment banks.

If the U.S. Central Bank buys Treasury bills, it leaves banks with more available cash and thus enables them to lower their rates on overnight loans to each other.

With the economy slumping and many businesses and consumers having less money to deposit, many banks in Florida and elsewhere have faced liquidity crunches and more need for access to short-term cash.

“But the liquidity the Fed is adding does not necessarily equate to more lending, especially now when we have so much uncertainty in the credit markets,” the Miami consultant Thomas said.

On March 16, JP Morgan Chase announced an agreement to buy investment bank Bear Stearns, one of the largest investors in the deteriorating subprime mortgage pools where many loans are now in default.

In an unprecedented agreement for bailing out a non-FDIC insured company, the Federal Reserve will provide JP Morgan up to $30 billion to cover any losses.

“They (Fed) put out a fire,” Thomas said. “It could be a major step in averting a growing financial crisis.”

Bear Stearns was an investor in numerous Special Investment Vehicles (SIVs) and other mortgage pools, and its collapse might have produced huge losses for many banks and other institutional investors that have holdings in those pools.

In Main Street terms, the Bear Stearns bailout might be a major step in cleaning up and accounting for this decade’s mortgage mess.

If banks starting with the big players see progress, Thomas said he expects the process of restoring confidence could begin.

That process likely will take a year or more to unfold.

As it does, start looking for banks to gradually and selectively increase their lending on condo units.

Jim Freer is senior contributor to Condo Vultures.com who writes a weekly column that appears every Thursday. Freer is a veteran financial journalist in South Florida and a consultant to the financial services industry. He can be reached at JimFreer@aol.com. Be sure to check out the Condo Vultures® blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report

Copyright © 2008, Condo Vultures® LLC

REOs Spike Six-Fold At Florida Banks

Mon, 17 Mar 2008 15:38:47 GMT

MIAMI -- Foreclosed condos, townhouses and single-family houses owned by Florida banks soared 620 percent in 2007 to $144 million from $20 million in 2006, according to a new report from Condo Vultures® LLC.

Real Estate Owned (REO) Properties Spike Six-Fold At Florida Banks

By Jim Freer
Senior Contributor

Nationally, the banking industry experienced a 128 percent increase in bank-owned foreclosed condos and houses, totaling $6.6 billion in 2007 compared to $2.9 billion in 2006, according to a report based on Federal Deposit Insurance Corp. data through Dec. 31, 2007.

The latest statistics on bank-owned properties – also known as Real Estate Owned (REO) - represent near-record highs in both Florida and nationally. And, the numbers provide one of the clearest pictures yet of the exploding foreclosure problem.

This FDIC data represents only those properties that federally regulated lenders have taken title to through the foreclosure process.

The diverse ownership is what makes this crisis different from previous housing downturns. Historically, commercial banks and savings & loans held much larger percentages of their mortgages in portfolios and thus got stuck with higher numbers of foreclosures.

“This time financial entities all over the world are getting hit, and who owns the REO depends on how the deals were set up,” said Michael Cannon, executive director of Integra Realty Resources’ Miami office.

Fortunately for buyers, the days of banks selling REO at par are probably a thing of the past as more REOs are becoming available. The volume is expected to prompt more and more financial institutions ready to accept discounts, and thus avoid lengthy costs of maintaining properties.

Banks list REOs on their books at the market value of a property, based on a new appraisal or review of recent comparable sales.

The FDIC does not report on the number of REOs held by the banking industry or by individual banks.

Dividing the industry’s $6.6 billion in REOs by an average value of $150,000 translates to about 45,000 properties.

That might not sound huge, without considering the large number of mortgages that banks have sold in the secondary market – thus passing on the foreclosure risk to private investors.

Mortgage originators normally sold off most subprime loans and adjustable-rate mortgages with teaser rates, which are among the loan types with highest delinquency and foreclosure rates, according to the Mortgage Bankers Association.

The Mortgage Bankers Association’s latest survey of loan servicers indicates that about 2 million home loans were in the foreclosure process on Dec. 31, 2007. The survey did not show how many properties had been taken back by lenders.

Locally, a review of court filings show banks and other lenders took back 4,539 properties in the Greater Miami area during all of 2007, according to Condo Vultures® LLC.

The pace is picking up rapidly, with lenders taking back 858 Greater Miami properties during the first 45 days of 2008, according to Condo Vultures®.

Florida-based banks, large banks based from out-of-state and Wall Street-related investors are among owners of these troubled Greater Miami properties.

The FDIC does not provide breakdowns on banks’ REOs by states and counties.

The 317 Florida-based commercial banks and savings banks held $144 million in residential REOs at the end of 2007. This amount includes an undetermined number of properties in other states.

If the REO book value of $144 million is divided by Florida’s median home sale price of $208,600, it is reasonable to presume the state’s banks are in possession of nearly 700 REOs. The number would change depending upon the mortgage amount.

One South Florida bank has $46.9 million in residential REOs, giving the institution the distinction of having the highest concentration of bank-owned properties of the 79 tri-county banks in the region.

This institution had 167 REOs at the end of last year, according to the FDIC data.

As a sign of how the problem is compounding, the South Florida bank with the highest concentration of REOs had 94 properties through the first nine months of 2007. In the last three months of the year, the bank took back an additional 96 properties, and sold 23.

The South Florida bank with the high concentration of REOs insists that its mortgages are not subprime. Still, since last year the institution has been among lenders whose non-current loans and REOs have grown significantly.

Last fall, the South Florida bank set up its asset conservation division to manage and sell REOs and to help borrowers with delinquent loans find ways to adjust payments and make loans current.

“We are not in the real estate ownership business,” a lender with the South Florida bank said.

The lender added that the institution’s goal is to quickly sell REOs “through real estate brokerages and agencies that we feel have the best knowledge of local markets.”

Many banks usually need about 30 days to prepare to market an REO. A bank must obtain an appraisal, find brokers and often make repairs.

Taxes, homeowners association fees and maintenance are among costs from the start. These costs are among reasons banks usually do not wait for the market to recover before selling REOs.

Most local banks usually sell properties one at a time to buyers who are clients of real estate brokers.

“We have gotten calls from buyers interested in buying at bulk at discounts, but none have gone past the initial conversation,” the lender with the South Florida bank said.

The South Florida bank’s REO portfolio is comprised primarily of single-family homes, with few in what the institution calls “luxury high-rise condos.”

The latest number of REOs for the South Florida bank does not seem large for a bank its size, the analyst Cannon said. For that bank and others, the 2008 question will be how many other mortgages are forced into foreclosure he said.

In setting up a division to manage non-current loans and REOs, the South Florida bank is following the lead of many large multi-state banks. Cannon expects most local banks will continue to hire realtors to sell REOs, and will assign lenders and other officials to REO work without setting up special departments.

An FDIC spokesman said the agency encourages banks to sell REOs as quickly as feasible, because they are non-earning assets.

FDIC rules permit banks to hold REOs for up to 10 years. But carrying costs make that schedule unrealistic even in the sourest of markets -- where South Florida ranks among the top.

Jim Freer is senior contributor to Condo Vultures.com who writes a weekly column that appears every Thursday. Freer is a veteran financial journalist in South Florida and a consultant to the financial services industry. He can be reached at JimFreer@aol.com. Be sure to check out our blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report

Problem Loans Spike At Florida Banks

Fri, 07 Mar 2008 20:15:29 GMT

Florida banks ended last year with problem loans reaching a record high of nearly 2.1 percent of the total portfolio amount, due mostly to late payments on condominium and other real estate loans, according to new Federal Deposit Insurance Corp. data compiled by Condo Vultures® LLC. As a result of the spike, net income for the 317 Florida-based banks fell 53 percent from $1.6 billion in 2006 to $755 million in 2007. By comparison, net income for the country’s banking industry fell 27 percent, from a record $145.2 billion in 2006 to $105.5 billion in 2007.

Condo Vultures® - Market Intelligence Report

Problem Loans Spike to Nearly 2.1% of Total Portfolio at Florida Banks

By Jim Freer
Senior Contributor
CondoVultures.com

Florida banks ended last year with problem loans reaching a record high of nearly 2.1 percent of the total portfolio amount, due mostly to late payments on condominium and other real estate loans, according to new Federal Deposit Insurance Corp. data compiled by Condo Vultures® LLC .

As a result of the spike, net income for the 317 Florida-based banks fell 53 percent from $1.6 billion in 2006 to $755 million in 2007. By comparison, net income for the country’s banking industry fell 27 percent, from a record $145.2 billion in 2006 to $105.5 billion in 2007.

“Weakness in the housing sector and the credit squeeze in financial markets made it a very challenging time for many institutions, and we can expect these numbers to continue in 2008,” said FDIC Chairman Sheila Bair in a statement accompanying her organization’s newly released Quarterly Banking Profile on Feb. 26.

“Most institutions are so far successfully coping with the challenges they face,” Bair added.

Whether Florida banks can continue to overcome the market challenges given the state's dismal real estate market remains unclear.

According to the FDIC 2007 data, the non-current rate of construction and development loans for Florida banks rose from 0.65 percent at the end of 2006 to 4.51 percent at the end of last year. This category covers all loans to build commercial and residential real estate.

The non-current ratios on single-family mortgages, including condos, at Florida banks rose from 0.91 percent at the end of 2006 to 1.50 percent last Sept. 30 and 2.20 percent at the end of last year. This category covers loans to buy houses and condos, as well as home equity loans.

Single-family residential Real Estate Owned, industry terminology for properties that the banks have taken title to through foreclosure, on the books of Florida banks rose seven-fold from $20 million at the end of 2006 to $144 million at the end of 2007, according to the data.

Problem Multifamily Loans Spike

Additionally, non-current rates on multifamily residential loans at Florida banks rose from 0.43 percent at the end of 2006 to 4.06 percent at the end of 2007. Loans in this category are for purchases of apartment buildings that will be either operated as rentals or converted into condos.

The FDIC data does not indicate total dollar amounts and non-current amounts for condo conversions. Indications are that conversions are a primary cause of Florida’s non-current multifamily residential loans spiking 10-fold in a year

Historically, bankers and regulators have long regarded loans to buy apartment buildings as some of the “safest” real estate loans.

At the end of 2005, when many condo conversion loans were in early stages, the non-current multifamily rate for Florida banks was just 0.23 percent.

Nationally, the non-current multifamily rate remained a relatively low 0.76 percent at the end of 2007.

Industry watchers are focused on Florida’s spiking non-current ratio for total loans and leases.

The ratio of the Florida-based banks’ non-current loans and leases as a percentage of total loans and leases jumped to 2.09 percent on Dec. 31, 2007, from 0.65 percent at the end of 2006. In the first nine months of 2007, the non-current loans and leases ratio was 1.53 percent, according to the FDIC data for the 317 Florida-based institutions.

By comparison for the nation’s 8,533 banks, the non-current ratio for all loans and leases rose from 0.78 percent at the end of 2006 to 1.39 percent at the end of 2007. The FDIC said the 2007 ratio for U.S. banks was the highest since 2002.

Non-current loans are those 90 days or more delinquent and no longer accruing interest. Real Estate Owned properties are not counted among the non-current loans.

For all real estate loans in the portfolio of Florida banks, the non-current ratio rose from 0.66 percent at the end of 2006 to 1.68 percent on Sept. 30, 2007, and 2.35 percent at the end of last year.

Nationally, the non-current ratio for real estate loans rose from 0.80 at the end of 2006 to 1.71 at the end of last year.

Last year’s spike in non-performing real estate loans in Florida – and throughout the nation - occurred largely because regulators required banks to stop adjusting or extending loan contracts to keep borrowers current and/or the interest reserves built into loans had run out. Many of these loans were made to condo builders and homebuilders in heydays the real estate boom in 2004 and in 2005.

For all real estate loan categories at Florida banks, the latest problem loan ratios are the highest since the FDIC began tracking that data by state in 1994, according to the FDIC report.

It is impossible to decipher which regions of Florida are being the hardest affected since the FDIC does not provide non-current loan breakdowns by county. Still, the FDIC report shows the severity of the condo glut, the homebuilding backlog, and the overall subprime mortgage crisis in Florida and around the country.

Bank Profits Drop

The FDIC report also revealed big profit drops in 2007 for Florida-based institutions and national banks.

Many banks are experiencing declines in operating earnings amid a slowdown in lending and a shrinking pool of deposit dollars, which is forcing them to compete and pay higher rates for that funding.

This is prompting several banks to add to their reserves to cover potential loan losses. This is a significant step since money a bank adds to reserves is subtracted from a quarter’s income.

On Feb. 28, Federal Reserve Chairman Ben Bernanke testified before a Senate Committee and for the first time publicly conceded that “there probably will be some bank failures,” resulting from the housing crisis.

Bernanke added that he does not expect a large number of failures, and that his concern is about the category of smaller regional banks that have heavy exposure to falling property markets.

Banking analysts frequently mention South Florida among areas of the country with that potential problem.

But analysts and regulators note that the banking industry and most banks remain “well capitalized” following a record run of earnings from 2003 through 2006.

For some banks, avoiding failure or possible sales to other banks at relatively low prices could depend on whether they can restructure or sell many of their current problem loans -- thus avoiding foreclosures.

However, a Condo Vultures® review of reports that banks submitted to the FDIC show the dollar volume of real estate loans 30 and 60 days delinquent is still rising at some South Florida banks. Statewide numbers on loans in those categories are not readily available.

One certainty is that the ongoing increase in problem loans, amid related economic problems, will lead many banks to continue the tightening of lending standards and the slower pace of lending they began last year.

Of the 79 banks based in the South Florida counties of Miami-Dade, Broward, and Palm Beach, 38 have $300 million or more in assets.

The 38 South Florida-based banks with assets over $300 million met all FDIC capital-to-asset ratios for being “well capitalized” on Dec. 31, 2007.

Some of these banks have begun to reduce their problem loan ratios since Dec. 31 by selling some loans and by restructuring others to enable borrowers to return to current status.

Jim Freer is senior contributor to CondoVultures.com who writes a weekly column that appears every Thursday. Freer is a veteran financial journalist in South Florida and a consultant to the financial services industry. He can be reached at JimFreer@aol.com. Don't forget to sign up for our weekly Market Intelligence Report newsletter. Be sure to check out the Condo Vultures® blog at CondoDump.com.

Vultures Database™: Condos off -25%, Houses tumble -26% in January

Fri, 22 Feb 2008 05:07:53 GMT

Condominium units in the Vultures Database™ were down an average of -25 percent off of the historical high asking price through January 31, and single-family houses tumbled by a combined -26 percent for the same period, according to a new report from Condo Vultures® LLC. At first glance the price drops appear significant when compared to the December average discounts of -22 percent for condominiums and -23 percent for houses.

Vultures Database™ Report: Condos off -25%, Houses tumble -26% in January

By Peter Zalewski
CondoVultures.com

Condominium units in the Vultures Database™ were down an average of -25 percent off of the historical high asking price through January 31, and single-family houses tumbled by a combined -26 percent for the same period, according to a new report from Condo Vultures® LLC.

At first glance the price drops appear significant when compared to the December average discounts of -22 percent for condominiums and -23 percent for houses.

A closer look, however, reveals the dramatic swing in discounts is the result of a methodological change in the way the data for the Vultures Database™ is compiled.

As of January, the Vultures Database™ is now comprised solely of South Florida properties east of Interstate-95 / U.S. 1 from South Miami north to West Palm Beach that have been reduced in asking price by 10 percent or $100,000. Previously, the database included properties that had been for sale for at least 100 days.

“As more coastal properties languish on the market for longer periods of time, buyers are finding it increasingly difficult to decide where to look and how to proceed given the quantity of would-be deals available in South Florida,” said Peter Zalewski, a principal with Condo Vultures®, a Bal Harbour-based real estate consultancy. “This realization has prompted our organization to sharpen our research focus in hopes of better identifying the deep discounts that are to be had.”

The change in methodology has resulted in a -12 percent drop in the number of properties in the Vultures Database™. As of January 31, there were 4,317 properties in the database compared to 4,915 on December 31, 2007 for a net decrease of 598 units.

The total discount in asking price by South Florida sellers in the Vultures Database™ changed from $1.004 billion in December to $918 million in January.

The Vultures Database™ is currently tracking 2,927 condominium units and 1,390 single-family houses and townhouses. Condos have slipped by an average of -$169,160 and sat on the market for 553 days without selling. Houses have fallen by an average of -$299,716 and been for sale for 522 days.

Oakland Park in northern Broward County and Cutler Bay in south Miami-Dade County are experiencing the biggest price drops of any Florida market, with the average decrease being -32 percent.

The caveat is both markets together have a combined 17 units that are being tracked in the Vultures Database™.

Palm Beach (-31 percent), Pinecrest (-29 percent), and Palm Beach Gardens (-28 percent) round out the top five biggest drops by market. These three markets have a combined 16 units for sale.

Aventura, Bay Harbour Islands, Hallandale Beach, Miami, and North Miami are the first areas in the rankings where the quantity of units for sales combined with the deep discounts creates a critical mass. All five markets are tied for the No. 6 rank of having the largest price drops based on an average decrease of -27 percent off of historical highs, according to the data.

Miami has 1,136 properties that have experienced an average drop of $182,305. Aventura has 170 properties with an average discount of -$164,477. Hallandale Beach has 316 properties that are down an average of -$138,385. North Miami has 84 units that are off an average of -$129,802, and Bay Harbor Islands has 10 properties off -$148,900, according to the data.
Not surprisingly, waterfront cities with sand are experiencing the smallest discounts.

Pricing in Fisher Island is off -15%, or -$757,000, for the nine area properties in the Vultures Database™, ranking it as the smallest discount of the 34 submarkets that are tracked.

Working up the rankings from the bottom based on average discounts are Bal Harbour (-21 percent), Indian Creek Village (-22 percent), Eastern Shores (-23 percent), Miami Beach (-23 percent), and Key Biscayne (-24 percent).

According to the data, a property in the Vultures Database™ won’t sell until the asking price has fallen by 32 percent off of the historical high. In January, there were 70 properties in the Vultures Database™ that sold for an average discount of -$259,220. In 2007, the average price drop was 27 percent, or $258,089.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Greater Miami REOs Spike 139% in 2008

Mon, 18 Feb 2008 15:00:46 GMT

Lenders have taken ownership of 1,400 properties in Greater Miami in the first 45 days of 2008, representing a spike of 139 percent compared to the same period in 2007, according to a soon-to-be issued REO report from Condo Vultures® LLC. Lenders ended up with these Miami-Dade County properties - called Real Estate Owned or REO - after foreclosing and then not having anyone purchase the real estate at the government auction.

Greater Miami REOs Spike 139% in 2008

By Peter Zalewski
CondoVultures.com

Lenders have taken ownership of 1,400 properties in Greater Miami in the first 45 days of 2008, representing a spike of 139 percent compared to the same period in 2007, according to a soon-to-be issued REO report from Condo Vultures® LLC.

Lenders ended up with these Miami-Dade County properties - called Real Estate Owned or REO - after foreclosing and then not having anyone purchase the real estate at the government auction. Many lenders that are now in possession of these properties are scrambling to figure out what to do with this real estate. Banks prefer to lend money rather than be landlords so today’s climate is proving challenging.

In January 2008, lenders took back 1,323 Greater Miami properties, up 253 percent from January 2007 when 375 properties were taken back. In February 2008, lenders took back 77 properties, down 64 percent from January 2007 when 211 properties were taken, according to Condo Vultures, a Bal Harbour-based real estate consultancy.

To receive a copy of the report, please be sure sign up for the Condo Vultures® Market Intelligence Report.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email. Be sure to check out Peter’s blog at CondoDump.com.

Copyright © 2008, Condo Vultures® LLC

Report: Lender Refuses To Finance Units in 72 South Florida Condos

Wed, 13 Feb 2008 14:48:46 GMT

As fear grows about future fallout from the South Florida condo crash, Washington Mutual Bank is now refusing to finance condominium units in a combined 72 towers in Miami-Dade, Broward, and Palm Beach counties according to a Miami Daily Business Review article. Washington Mutual won’t even consider providing a residential mortgage in 40 towers in Miami-Dade, 25 condos in Palm Beach, and 12 projects in Broward, according to the article.

Report: Residential Lender Refuses To Finance Units in 72 South Florida Condos

By Peter Zalewski
CondoVultures.com

As fear grows about future fallout from the South Florida condo crash, Washington Mutual Bank is now refusing to finance condominium units in a combined 72 towers in Miami-Dade, Broward, and Palm Beach counties according to a Miami Daily Business Review article.

Washington Mutual won’t even consider providing a residential mortgage in 40 towers in Miami-Dade, 25 condos in Palm Beach, and 12 projects in Broward, according to the article.

Washington Mutual is not the only institution refusing to finance condos in South Florida. BankUnited, the largest Florida-based savings association, is also refusing to lend in several South Florida condominium towers, according to the article.

“In most cases properties are to be avoided for ‘high investor concentration and declining market value,’ but some are included because of pending litigation, delinquency issues with the homeowner’s association, high foreclosure rates or how many loans a bank already has on units in the building,” according to the article.

Cash buyers should be keen to figure out which condominiums are not able to obtain financing as the likelihood of negotiating a deep discount rises significantly. Sellers in these condos have few alternatives other than to dump to buyers with all cash.

For this reason, Condo Vultures® LLC uses court records to track which condominium projects have the highest foreclosure rates in South Florida.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email. Be sure to check out Peter’s blog at CondoDump.com.

Copyright © 2008, Condo Vultures® LLC

South Florida Overall Discount Strengthens By 9% in Vultures Database™

Tue, 12 Feb 2008 02:24:35 GMT

The total discount in asking prices for South Florida properties in the Vultures Database™ has strengthened by nearly 9 percent to $918 million from a record high of $1.004 billion in December.

South Florida Overall Discount Strengthens By 9% in Vultures Database™

By Peter Zalewski
CondoVultures.com

The total discount in asking prices for South Florida properties in the Vultures Database™ has strengthened by nearly 9 percent to $918 million from a record high of $1.004 billion in December.

The discount is primarily the result of a methodological change in the way the data for the Vultures Database™ is compiled.

As of January, the Vultures Database™ will only be comprised of South Florida properties east of Interstate-95 / U.S. 1 from South Miami north to West Palm Beach that have been reduced in asking price by 10 percent or $100,000. Previously, properties were also added to the database if and when they were on the market for at least 100 days.

The change in methodology relating to days on the market has led to a 12 percent drop in the number of properties in the Vultures Database™. As of January 31, there were 4,317 properties in the database compared to 4,915 on December 31, 2007 for a net decrease of 598 units.

The Vultures Database™ Report for February tracking January's statistics is scheduled to be released on Thursday, Feb. 14.

To receive an advance copy of the report, please be sure to register for our weekly Market Intelligence Report service.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at mailto:atpeter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com.

Copyright © 2008, Condo Vultures® LLC

Condo Vultures® To Release Official Condo Buyers Guide To Miami – 2008

Tue, 05 Feb 2008 14:41:10 GMT

For all those buyers looking to capitalize on Miami’s condo crash, one of the biggest challenges continues to be determining where to best focus their time and resources in looking for deals.

Condo Vultures® To Release Official Condo Buyers Guide To Miami – 2008

By Peter Zalewski
CondoVultures.com

For all those buyers looking to capitalize on Miami’s condo crash, one of the biggest challenges continues to be determining where to best focus their time and resources in looking for deals.

With more than 12,000 new units going up within a two-mile stretch of downtown Miami, identifying the buildings, let alone the opportunities, is proving to be quite the exercise for many prospective buyers. For that matter, it hasn’t been that easy for local Realtors, either.

In effort to assist self-starters to vulture Miami’s opportunities, Condo Vultures® LLC plans to release the “Official Condo Buyers Guide to Miami – 2008” to make the task a bit more manageable. The Buyers Guide will identify many of the pertinent details about every condominium tower located within the epicenter of Miami’s residential crash.

This 60-page reference guide will feature a list (or grid) of nearly 150 towers in a format that permits readers to compare units, floor plans, the age of the construction, amenities, and much more. The Buyers Guide will also feature several locator maps and building-by-building profiles of every tower in the district.

This first Condo Vultures® guide will focus on the submarkets of Brickell Avenue, Downtown Miami, and the Biscayne Boulevard Corridor from the Rickenbacker Causeway north to the Julia Tuttle Causeway, from Interstate 95 east to Biscayne Bay. Miami Beach to Sunny Isles, Fort Lauderdale, and West Palm Beach will be the focus of future guides.

Condo Vultures® Buyers Guide is scheduled for release in early March. For more information about purchasing a copy of the guide or placing an advertisement, please call Condo Vultures® LLC at 800-750-0517. Or, please send an email Peter Zalewski at peter@condovultures.com.

Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report.

Copyright © 2008, Condo Vultures® LLC

$1 Billion Miami Fund To Focus on Condos

Thu, 24 Jan 2008 14:29:10 GMT

Miami Condo Developer Jorge Perez of the Related Group has confirmed the long-discussed rumor on the street that his opportunity fund will have at least $1 billion to scoop up units from distressed towers in Miami and across the country. Perez's official entry into the distressed condo market game should only be perceived that the time for bulk buying is near.

Related Group's Opportunity Fund To Have $1 Billion for Condos

By Peter Zalewski
CondoVultures.com

Miami Condo Developer Jorge Perez of the Related Group has confirmed the long-discussed rumor on the street that his opportunity fund will have at least $1 billion to scoop up units from distressed towers in Miami and across the country.

Perez's official entry into the distressed condo market game should only be perceived that the time for bulk buying is near.

''I strongly believe that Miami real estate is undervalued,'' Perez told the Miami Herald. ``Three years from now, people will look back and be amazed. Nevertheless, right now there are some people stuck in the middle of a loan who don't have any cash and need to get rid of some inventory. We are going to try and take advantage of that situation."

The possibility exists that the time to buy may have already passed for some of the smaller private equity funds that have been circling the Florida market.

Consider Perez's emergence with $1 billion of buying power coupled with an influx of international buyers with foreign currencies, and the question becomes can a U.S. private equity fund with less than $25 million even get a reasonable chance at buying a quality product on the cheap in Florida.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to sign up for Peter’s weekly Market Intelligence Report.

Opportunity Fund Searching For Broker To Implement Buying Strategy

Fri, 11 Jan 2008 18:00:27 GMT

Industry watchers know the South Florida condo market goes the way of the region's biggest and savviest player, the Related Group. Within the last 30 days, the Related Group has confirmed the creation of an opportunity fund (rumored to be about $1 billion) to purchase distressed condo units in bulk and cancelled plans for a new condo tower in downtown Miami.

Opportunity Fund Searching For Broker To Implement Buying Strategy

By Peter Zalewski
CondoVultures.com

Industry watchers know the South Florida condo market goes the way of the region's biggest and savviest player, the Related Group.

Within the last 30 days, the Related Group has confirmed the creation of an opportunity fund (rumored to be about $1 billion) to purchase distressed condo units in bulk and cancelled plans for a new condo tower in downtown Miami.

Now, today the South Florida Business Journal is reporting that multifamily broker Jay Massirman, a principal of Miami-based Massirman Group, has been approached by a headhunter to possibly represent the Related Group's fund.

Massirman is a veteran broker who spearheaded CB Richard Ellis' South Florida multifamily group to $7 billion in sales from 2003 until his departure in late 2006.

Don't be surprised if the bulk sales begin to be negotiated in the first quarter of the year, and are eventually announced sometime around the summer. Industry watchers know the South Florida condo market goes the way of the Related Group.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to sign up for Peter’s weekly Market Intelligence Report .

Developer Cancels Miami Condo Tower

Sat, 05 Jan 2008 17:16:30 GMT

The proposed Loft 4 condo tower with workforce housing in Downtown Miami won't be built anytime soon. The Related Group, the project's developer, has shelved plans to build the 36-story tower with modestly priced units between $140,000 and $450,000 in the heart of Miami's central business district, according to the South Florida Business Journal.

Paper: Related Group Cancels Miami Condo Tower

By Peter Zalewski
CondoVultures.com

The proposed Loft 4 condo tower with workforce housing in Downtown Miami won't be built anytime soon.

The Related Group, the project's developer, has shelved plans to build the 36-story tower with modestly priced units between $140,000 and $450,000 in the heart of Miami's central business district, according to the South Florida Business Journal.

The project was proposed to have 404 one and two bedroom units ranging in size from 630 square feet to 1,066 square feet. Construction was scheduled to be completed in fall 2010.

News of the terminated tower comes as the Related Group, one of the nation's largest condo developers, has confirmed plans to create a opportunity fund to purchase distressed condo units at a discount.

It's not too much of a stretch to see the Loft 4 cancellation as a sign that the real estate downturn is heading into the next phase of the cycle - Vulture buying.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to sign up for Peter’s weekly Market Intelligence Report.

Homebuilders: Housing Market To Bottom In July

Fri, 04 Jan 2008 15:09:48 GMT

The U.S. housing market will hit bottom by July, and grow by 6.5 percent in 2009, according to two top officials with the National Association of Homebuilders. New home sales should reach their bottom price by March, but condos are a still a way off, the association's chief executive and the top economist said.

Homebuilders: Housing Market To Bottom In July

By Peter Zalewski
CondoVultures.com

The U.S. housing market will hit bottom by July, and grow by 6.5 percent in 2009, according to two top officials with the National Association of Homebuilders.

New home sales should reach their bottom price by March, but condos are a still a way off, the association's chief executive and the top economist said.

Predictions of a bottom are likely to come frequently in 2008, and prompt a number of prospective buyers into the market to look for product. This is likely to have a negative effect on buyers as the increased number of lookers could boost the optimism of sellers who can afford to hold their prices steady.

It is important to consider how the bottom will be determined. Watch for three consecutive months of both increased home sales and increased median sales prices. When that happens, that's the bottom.

The problem with that is, the bottom won't be declared until a month later because of data tabulation. In other words, the bottom will be declared effectively four months after the rebound has actually begun.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to sign up for Peter’s weekly Market Intelligence Report.

Nearly 50,000 South Florida condos for sale yet Miami prices rise 3%

Tue, 01 Jan 2008 19:29:28 GMT

The number of condominium units on the market in the Greater Miami-Fort Lauderdale area has jump 21 percent to nearly 50,000, according to the Miami Herald. The region of Miami-Dade and Broward counties had 49,917 units for sale at the end of November, up 8,586 units compared to a supply of 41,331 in November 2006.

Nearly 50,000 South Florida condos for sale yet Miami prices rise 3%

By Peter Zalewski
CondoVultures.com

The number of condominium units on the market in the Greater Miami-Fort Lauderdale area has jump 21 percent to nearly 50,000, according to the Miami Herald.

The region of Miami-Dade and Broward counties had 49,917 units for sale at the end of November, up 8,586 units compared to a supply of 41,331 in November 2006.

Still, condo sales in Greater Fort Lauderdale are off only 23 percent from last year while deals in the Miami area plummeted 53 percent.

Surprisingly, Miami's median sales price for a condo is up 3 percent to $264,700 from last year's level of $257,400. Pricing in Greater Fort Lauderdale is down 17 percent to $166,700 compared to $199,700 a year ago.

Peter Zalewski is a principal with the consulting company Condo Vultures® LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to sign up for Peter’s weekly Market Intelligence Report.