The Luxurious Lifestyle Never Materialized In Florida
The Miami Herald reports from Florida. “The undeveloped tract planned to hold luxury condos, high-end retail and posh hotel rooms at Biscayne Landing will go to the highest bidder at a foreclosure auction April 6. But only if the city of North Miami approves the buyer. Meanwhile, the only complete part of the Biscayne Landing project, two condominium towers plagued with low occupancy rates and owners who complain the luxurious lifestyle promised in sales brochures never materialized, is mired in a separate foreclosure. The 173 unsold units are scheduled for another public auction May 11 after BLIA Developers, the Boca Developers subsidiary that developed The Oaks, lost a $35.5 million foreclosure lawsuit in February.”
“‘Everything that happens at Biscayne Landing matters to us. It’s horrifying, the uncertainty about what might happen around your home,’ said Sylvia Londono who spent $400,000 on her two-bedroom condo in The Oaks.”
“Even if the city allowed concessions, Michael Cannon, a real estate analyst, said a potential developer has to consider the environmental factors tied to the site. ‘I hope the bidder understands the market and the condition of the land, which was a former garbage dump.’ Cannon said.”
The Orlando Sentinel. “In what could be the first sign of thawing in downtown Orlando’s iced-over condominium market, an auction of bankrupt tower The Vue at Lake Eola is attracting a pack of big-money bidders. Janne Keskinen, a Finnish real estate investor who owns a home in Lake Worth and is leading Blue Key on behalf of a group of European investors, said The Vue is a good buy. ‘It’s a good tower, it’s new, the location is good in the downtown,’ he told me. ‘We are pretty close to the bottom [of the market], but not yet. It’s going to be a long-term investment, anyway.’”
The Palm Beach Post. “The unfinished Trump International Hotel & Tower on Fort Lauderdale beach is facing foreclosure, after developers defaulted on a $139 million loan on the long-awaited condo-hotel project. The new mortgage holder filed for foreclosure against the developers. The suit also names more than 80 people who put deposits on condos, but never received the units or refunds, and now seek liens on the high-rise that was to include 298 condos.”
“It’s still unclear what the mortgage holder will do with the 24-story property: keep it as a condo-hotel, make it a traditional hotel or something else — options that worry lawyers for the condo buyers.’I've been suspecting they will make it a hotel, because the developers never recorded the condo documents,’ said Fort Lauderdale lawyer Joseph E. Altschul, one of the attorneys for the condo buyers.”
The St Petersburg Times. “Don’t mistake Jon Gollinger for any old auctioneer. He fancies himself more of a marketer and consumer advocate. Hundreds of Tampa Bay residents saw Gollinger in action March 7 when he emceed the sale of more than 50 units at St. Petersburg’s 36-story Signature Place condo tower.”
“Fresh off of the St. Petersburg auction, Gollinger chatted with the Times. Q: So you view yourself more as real estate price setter?”
A: There’s been a price disconnect for a very long time between sellers and buyers. Our company is brought in to create a safe space for buyers and sellers to engage in a process that allows the building to capitulate to the consumer. Our company believes that the consumer rules. That’s American. That’s capitalism. The Signature Place developer would have liked to have seen a little more money out of it. But he can live with the results.”
The Pensacola News Journal. “The amount of bad real estate debt and nonperforming loans held by local banks soared in the past year, sure signs of continuing weakness in the region’s economy. Making matters much worse, she said, federal regulations give bankers very limited leeway in dealing with customers. In years gone by, bankers were able to give customers they believed in the time and latitude to work out businesses problems. Now, they have to slam the door much more quickly.”
“‘The perception is what we’ve got to change,’ said Carol Carlan, market president of Destin-based Gulf South. ‘We’ve got to become doers. We have to quit looking at the glass as half full.’”
“What’s more, appraisals of collateralized properties, ordered by federal regulators, are gutting asset values and inflicting heavy losses on banks’ bottom lines. ‘When you look at the nonperforming asset numbers, they may be down only slightly,’ Bauer’s Dorway said. ‘But if you look more closely at their books, the banks have had enormous charge-offs.’”
“Former Pensacola banker Eric Nickelsen, now a board member of New Orleans-based Whitney Bank, agrees with Dorway. ‘The federal government is coming in and telling banks, for example, to write down a $3 million piece of property to $2 million, a $1 million charge-off,’ he said. ‘They do that even though the loan is a performing loan.’”
The Toronto Star. “Last November Stacey Lynn found herself in Florida pondering whether to buy a condominium in Naples or one in nearby Sarasota. The Toronto woman ended up buying both. ‘The prices were truly amazing, especially when you factor in the exchange rate,’ said Lynn, explaining her splurge.”
“Not since the Japanese started snapping up real estate in Manhattan have a group of foreign buyers been as prevalent in U.S. markets. ‘There is certainly a greater confidence out there with Canadians. It’s not just economic. There is a sense that we are players on the world stage,’ said Philip McKernan, author of South of 49: The Canadian Guide to Buying Residential Real Estate in the United States.”
“Lynn’s first buy was a relatively new one-bedroom condominium in upscale Naples near the beach for $54,900. That’s about what parking would cost at a new luxury condominium in downtown Toronto. (An extra parking spot at the still-to-be-completed Ritz Carlton on Wellington St., for example, costs $55,000 Canadian.) And for just another $5,000, Lynn could have her condo fully furnished.”
“‘Being in Toronto you become jaded at the high prices. There really is a bit of a disconnect to what is happening here and what is happening in the U.S.,’ said Lynn.”
“The bonus was that there were already tenants in both units. The smaller property gets $700 a month in rent, while the two-bedroom gets $1,000. After taxes and condo fees, Lynn says she now nets $1,000 per month gross before any income taxes on the properties. Plus, she hopes the properties will go up in value over the next five years. ‘The worst-case scenario is that I have something to look forward to when I retire,’ says Lynn.”
From Florida Today. “When Jim Poulos took a job transfer to Brevard County in 2008, he decided to buy a townhouse in Melbourne. He wanted to retire there. And he did what thousands of other newcomers to the Sunshine State do every year: He filed for a homestead exemption. The property appraiser turned down his request, saying he was already receiving a similar benefit on his Long Island, N.Y., home.”
“Poulos took the matter before the Value Adjustment Board, which also turned him down. Poulos said the process is tilted in favor of the property appraiser. ‘I kind of feel like I’ve been pushed around in this process.’”
“‘What is causing the appeals is that taxes are going up,’ said Sheila Anderson, an Ocala real estate broker who advises clients throughout Florida on petitions to Value Adjustment Boards. ‘Prices are dropping and they want their taxes to drop as well.’”
“Difficulties in setting property values, given the high number of foreclosures and other distressed sales, has contributed to the surge in petitions granted, as has the fact that property appraisers are being required to have a higher standard of proof of the accuracy of their assessments. The situation isn’t unique to Brevard. Challenges to appraisals are up all around the state, said Duval County Property Appraiser Jim Overton. Overton said that appraiser’s offices around the state have been overwhelmed.”
“‘Frankly, it is killing us,’ he said.”
“As sales slowed over the past few years — and with many of those sales being foreclosures or short sales — the number of ‘qualified’ sales for comparison purposes shrunk. ‘One of the problems we are having is that for a while there the sample size on the sales were so small that we were afraid to make adjustments,’ Overton said.”
“Poulos said he’s come to see tax challenges as a nearly hopeless battle. ‘The county and state will always get its pound of flesh,’ he said. ‘They always do.’”
The News Press. “For five years, the residents of Fort Myers’ Sherwood community have put away $10,000 a year for future road improvements. Believing the community’s roads were private, owners of its 245 homes have paid $7,200 for streetlights and $44,000 a year for a security service to keep watch at night.”
“It turns out they didn’t have to. The roads are public, according to Fort Myers. That means streetlights and road maintenance are the city’s responsibility, not the residents’. The confusion over the roads is one of a multitude of issues Sherwood has had since it was developed. During the housing boom, some homes in the community, which is not gated, went for as much as $400,000. But the housing crisis has forced values down 60 percent.”
“‘A lot of residents are saying, ‘This isn’t what I signed on for,’ said Fidel Balan, vice president of Sherwood’s homeowners association. ‘All we’re asking for is to have our roads back.’”
“Balan is concerned because drivers looking to avoid rush hour’s bumper-to-bumper traffic on SR 82 often cut through the community. And customers at the Dairy Queen next to Sherwood can easily access the neighborhood because the DQ’s parking lot connects to Sherwood’s roads. Part of the problem is police can’t enforce traffic laws on Sherwood’s streets because its street signs don’t meet Florida Department of Transportation standards. And its streets are about half of public streets’ required size.”
“Resident Philip Barker wants to have clarity on the issue. He said his community is often misrepresented, for example, on his property appraisal. ‘It’s listed as a gated community on our deed,’ said Barker, who moved to Sherwood two years ago.”
The Miami New Times. “There was a time — say, last summer — when no clerk wanted to enter a certain room on the 15th floor of a drab Miami-Dade County municipal building downtown. Inside lurked a multiton beast made of dead trees: the collection of pending foreclosure case files for the county. Since the economy began its nosedive, roughly 8,000 foreclosures have been filed per month, which is about the number the county used to have in a year, according to Clerk of the Courts Harvey Ruvin: ‘We have 125,000 open files. If you piled all of them on top of each other, it would make a 24-story building.’”
“‘You could hear the floors creaking under all the weight,’ says an employee of Ruvin’s, a female clerk who asked not to be named. ‘It’s going to blow,’ says an older female clerk, who, like her colleague, requested anonymity. ‘You go in there? Do a Hail Mary first.’”
“Ruvin is counting on a 2-month-old online foreclosure auction system to speed up the process and save his employees from the growing paper bog. Count among his disbelievers Luis Garcia, a public records researcher and entrenched courthouse denizen. He points at missing stone tablets on the exterior of 73 W. Flagler, nets installed to catch decaying pieces of the building, and a chain-link fence blocking pedestrians from falling debris. ‘Doesn’t it look like it’s made out of broken Legos?’ he posits. ‘This whole freakin’ building is coming down!’”
“Hundreds of thousands of foreclosure cases clog state courts. In Pinellas, Pasco and Hillsborough, the mortgage default case load exceeds 50,000. Court-ordered mediation was pitched as a faster and easier way to ease Florida’s mortgage crisis. But it’s turning out to be neither fast nor easy. Faced with the task of setting up a program largely from scratch, Pinellas and Pasco counties won’t start offering foreclosure mediation until June 1 at the earliest. Hillsborough County has yet to set a date.”
“But will mediation work? According to the Collins Center for Public Policy, only half of Florida homeowners sign up for mediation in courts that have experimented with it. Another large group of distressed homeowners — real estate investors without a homestead exemption — aren’t eligible for mediation.”
“The Supreme Court requires that bank representatives have full authority to approve mortgage workouts with homeowners. But in many cases, banks just service loans owned by distant investors and have no final say, said Matt Weidner, a St. Petersburg lawyer who defends homeowners in foreclosure cases. ‘The Supreme Court can order what it wants, but the investors who own these loans haven’t signed off,’ Weidner said of mediation. ‘It’s really a farce.’”
The Naples News. “State Rep. Tom Grady, R-Naples, is filing legislation to allow a foreclosure victim to fast-track the process. ‘Speeding up the process of foreclosing on properties, while providing dignity and access to courts for borrowers, will help solve these problems,’ Grady said.”
“For borrowers who are underwater in their homes, the bill will prevent lenders, who use the fast-track process, from recovering more than simply what the house is worth. ‘In other words, lenders will be barred from seeking a deficiency judgment, and that’s a huge benefit for consumers,’ Grady said.”
“‘For neighborhoods, the quicker the banks take over the property, the faster the financial institutions can begin taking care of the home’s issues, including utility and water bills, as well as the upkeep of the house itself,’ Grady said. ‘It’s even more significant for condo owners who have to pay association fees and special assessments to continue to maintain the common areas.’”
“Grady adds that ‘this bill will cost taxpayers nothing and better yet, it will help bring jobs back to Florida.’ The faster foreclosed homes are moved off the market and home buyers get back in the market, Grady believes ‘we will see a ripple effect, with people spending on their new homes again, meaning people in the construction industry can get back to work again. I have never known a new homeowner who hasn’t hired plumbers, electricians, landscapers and others to help make a house a home.’”
