Say you want to sell your unit at Related Group’s new 50 Biscayne Condo in downtown Miami, you find a buyer willing to purchase your unit, you agree on terms, and you probably think, “whew, I’m really lucky I sold.”  Not so fast: today’s Daily Business Review is reporting

Banks and mortgage lenders compile lists of buildings they find too risky for lending, and they refuse to finance purchases there. 

What This Means if Your Miami Condo is “On the List”

It could mean that it will very hard to obtain financing for your condo, whether you are a buyer or a seller, in one of the “non-warrantable” condominiums.

The lists include finished buildings and projects still under development.

Prominent projects on BankUnited’s list include the Related Group’s 50 Biscayne and 500 Brickell; Terra Group’s 600 Biscayne and 900 Biscayne, and Cabi Developers’ Everglades on the Bay.

Is This the Last Nail in the Coffin for Miami Condos?

The impact of today’s news on the Miami condo market:

• Developers with unfinished buildings on the list may have high “walk-away” rates
• Owners of units in “blacklisted” condos may find it next to impossible to sell

Check out Miami’s “blacklisted” condos here:

• Bank United list
• Washington Mutual list
• Popular Mortgage list
• Citimortgage questionnaire

UPDATE:  South Florida Business Journal is reporting that Bank United has blacklisted Opera Tower as well. 

Even buyers with good credit can’t get a mortgage for a condo that has an uncertain value, said Lewis Goodkin, president of Miami-based Goodkin Research. He said because sales have been so slow and 35 percent to 40 percent of buyers could pull out of contracts in some buildings, no one knows the real value of these condos. And, if lenders don’t know the value, he said, they can’t set a loan-to-value ratio with any certainty.

Pictures from the Southeast Florida Regional MLS

Where will Ricky live?  Yesterday, Ricky Martin listed his home on prestigious North Bay Road for $19.5M.

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I’ve always said it and now it’s in print! It all about location, baby. There’s no denying that South Beach is now so big it is a BRAND. According to Forbes:

In some cases, a premium neighborhood was an area’s most lucrative. Take Miami Beach. The city’s ritzy downtown area has appreciated exponentially since 1990, as beach-front mansions and luxury condos have drawn upper-class buyers seeking space to soak up the sun and the sizzling social scene. Parts of the city center have increased in value 1,532% since 1990; the median property there is now worth a whopping $1.64 million.

You’re probably saying to yourself, “oh gawd, here goes another crazy real estate agent telling me the market is doing great.” Nope, not doing that. Here’s my issue with this article: Forbes is reporting that Miami is the “lucrative” neighborhood when, in fact, they mean Miami Beach and more specifically South Beach. For those readers outside of the area, South Beach is not a city, it is a neighborhood, much like SoHo is a neighborhood in New York City.  I’m not trying to distance Miami Beach from Miami, but comparing Miami Beach/South Beach real estate to Miami real estate is like comparing SoHo to the Bronx.

So, while this news is nothing new to me, I’m happy to see that real estate here continues to operate on basic market fundamentals like location, location, location.

Interesting side note (please discuss amongst yourselves): Miami Herald never ran this story. I’m not implying anything here, I just find it very interesting, that’s all.

Check out South Beach real estate here.

Last week I attended the INMAN Connect, a real estate technology conference. While attending various seminars and listening to many people’s opinions about this or that, there was one common question throughout the conference which kept coming up in every conversation:   What’s next for Manhattan real estate?

I saw it everywhere, from Dolly Lenz’ quote in The Real Deal:

“It’s a stale market.”

to last Sunday’s article in The New York Times.  Apparently, many people are beginning to recognize the signs of “a new market” emerging.

I’ve always said that Miami real estate was 10 years ahead of NYC with regard to real estate.  We were the first to boom.  We had the first branded condos. We had the first “starchitects.”  We were the first to have the new “sexy,” “lifestyle” condos.  Miami did “zen” three years before most people even knew what it was.  We were the first to BUST.

I remember looking (there was really nothing to read) at New York Magazine about two years ago and noticing a special section which debuted called “VU.”  It was a section dedicated to real estate in Manhattan and advertised all the glitzy, modern, edgy, branded new towers, and was like premium cocaine for the real estate addict.  I remember thinking to myself, “this reminds me of Ocean Drive magazine three years ago.”

Remembering back to the spring of 2005, I had a conversation with a colleague about the real estate market here in South Beach, I remember telling her that the boom was over and to get ready.  She, of course, laughed and told me how crazy I was and that South Beach was a WORLD-FAMOUS destination and the real estate market would NEVER have to endure so much as hiccup in South Beach.

We continued to discuss the ying-and-yang of it all, but we decided to disagree. 

All The Signs Are There

While reading the January issue of The Real Deal, I decided to pull some quotes and titles at random from the magazine, I love this one the best:

“Starck heads downmarket”

Come on, Philippe Starck is now doing RENTALS in JERSEY????  Priceless.

“A sober look at year ahead”

“Residential brokers hang onto hope”

“Will the city’s hotel market stay strong or stall amid a glut?”

“Playing by a new set of rules”

“The exuberance has dissipated a bit.”  Gil Neary, The Real Deal

Here’s What I See

• Lots of inventory in the pipeline
• Attitude of buyers changing
• Attitude of agents changing
• Loss of liquidity in the mortgage markets
• Recession
• Heavy reliance on the foreign buyer
• Banks are laying off workers

What Will Be Will Be

As an agent selling real estate in Miami Beach for over 15 years, I was in the business before the boom, during the boom, and now in the messy aftermath of the bust.  Truth be told, it’s not all that bad.  Sure, I miss the days of 2004–2005 market, but just like the condo bust of 1983 on Brickell Avenue, Miami recovered then, and will again.

Words of Wisdom

Now, before anyone out there goes “postal” on me, I’m not wishing for this to happen.  What I can tell you is that I have lived this already, and from hindsight, see all the same signs of trouble on the horizon.  I learned that you can’t be “positive” because people will either hate your for “spinning” the situation or think your are completely clueless; it’s a tough position to be in.  Don’t use inane descriptors like “balanced market” or “soft landing.”  Just be real and accept the current market for exactly what it is at that point.  Suze Orman said something once, I don’t remember exactly what it was but she said “perception is reality, and if people perceive the market as bad, than it is bad.” 

As for Miami, the worst is still ahead of us.  From my calculations our “bubble” burst in April, 2005.  So, it seems to me that we are almost three years into our healing process and there is no doubt that a bumpy road ahead still exists.  So, all you guys up there in NYC remember:  the best locations are the last to go down and the first to come up!