‘It’s The Way We Should Live Today’: Condo Developers
A trio of condo craze articles. “‘We certainly believe this idea of urban living will catch on in Brickell. People are tired of using their cars for everything,’ Carl Rosso, vice president of the Related Group said. ‘Brickell will be the motor for Miami.’”
“He said it is difficult to know how many units in the Related projects were sold to speculators. He said earlier projects Loft I and Loft II were priced below market value to enable city employees to live there. Some workers who bought units, he said, then quickly sold them at a profit. ‘Were these users or investors? It’s hard to tell.’ He said. ‘What defines one category becomes blurred.’”
“Alan Ojeda said his company’s project, One Broadway, is the product ‘of a contrarian mind’ because instead of being a condominium, it is a ‘36-story, extremely upscale rental project.’”
“Due to the cost of land and construction, he said, an upscale rental project ‘does not work in the short term’ but his company is in the project ‘for the long term.’ ‘In the short term, we have no competition because everyone has gone condo,’ he said. ‘Any competition we have will be from the people who buy these condos and then rent them.’”
“Recent buyers of new condominiums in Seattle are likely familiar with what can be a stressful, cutthroat process. Wanting to spare buyers from that pressure cooker..the builder of a 20-unit loft development in Madison Valley is holding what is believed to be the area’s first Internet condo auction. Potential buyers must register on the development’s Web site, and attend informational meetings, at which they will be able to see renderings of the building and receive a CD with an electronic ‘fly-through’ tour of the development.”
“‘We’re not changing the whole process,’ (developer Mike Mcclure said. ‘We’re augmenting how you define the price.’”
“But (agent) Corey Patt sees potential drawbacks for buyers who could get caught up in a bidding frenzy and pay more than the unit is worth. ‘I know a lot of my clients just feel like they’re bidding blindly in the dark when they make an offer,’ said Patt, who herself hopes to buy one of the lofts. (Broker) Jim Reppond said potential buyers need to ensure with their lenders that a sale is subject to an appraisal. ‘What if you ended up paying $700,000 on a unit that everybody thought was going to go for $400,000 and it doesn’t appraise for $400,000, or you have a 90 percent loan?’”
“Nobody really knows the depth of the high-rise condominium market in Las Vegas, though nearly 1,000 have been built and sold and another 5,800 are under construction, a local economist said. Nine condo projects and three condo-hotels are ‘real,’ meaning you can see the steel going up. John Restrepo said six projects are ‘dead or wounded,’ canceled or put on hold for whatever reason. Three ‘John Does’ are also on the R.I.P. list, he said.”
“Research shows that 80 percent to 90 percent of condo buyers in the Strip corridor are speculators, investors and second-home buyers, Restrepo said. ‘Very few people want to live on the Strip full time,’ he said. ‘Look at Turnberry Place and Park Towers. They’re always dark.’”
“‘We do know there’s a huge amount of interest in Las Vegas and people want to live here,’ Restrepo said. ‘People want to live near the ocean or water some people say the Strip is our ocean. I don’t know about that.’”
FYI … Bay Area sales just out from DQ. BIG double-digit plunge YOY in February …
http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/03/16/BUG8SHP7O88.DTL
I love when the market “tumbles”…
Sorry to repeat an earlier post on another thread, but this seems to belong here as well…
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Picket Fence to Skyline View: Big Builders Come to Town
By MOTOKO RICH
Published: March 16, 2006
FOR decades, home builders have fed the seemingly endless appetite for the suburban four-bedroom house with the backyard and the picket fence. But increasingly, they are recasting the American dream as a two-bedroom condominium with a gym in the basement and a skyline view from the living room.
Some of the biggest names in suburban home building are getting into urban condominium development or greatly expanding their presence there. In the New York metropolitan area, urban condos now represent nearly a third of sales for K. Hovnanian Homes, a national suburban home builder based in Edison, N.J., up from 5 percent five years ago. KB Home, a national developer that has built more than 146,000 homes in suburban subdivisions in the last five years, launched a new urban division last year, which is now building its first project, 200 condo units on top of a hotel in downtown Los Angeles.
http://tinyurl.com/kombb
Wasn’t it just last week that this blog found a condo conversion switching back to rentals? Now we have the first new condo tower switching to rentals, even though the developer states it will lose money in the ’short term.’
“It doesn’t take a weather man to know which way the win blows “……Bob Dylan
Correction; “It does’t take a weather man to know which way the wind blows” …..Bob Dylan
Hurricane force winds help make it easy to know…
YES…in south florida a condo conversion switched back to rental units!
Ben , I believe it was a condo conversion in Maimi? I know Iposted of one place down here in Boynton were some 200 out of 260 or so condo- conversions remain unsold a year after going on the market. They are offering 1 year of free mortage payments or they will “reduce” the purchase pirce he equivalent of 1 year’s mortage payments.
Gee. I wonder how they manage to have increased median sales prices, but decreased number of units sold? LOL.By doing gimmicks like this they can “say” that they “sold” the unit for let’s say $200,000 when in reality with the rebate it might be $15,000 less in the actual amount. Oh,, those silly realtors!
It’s funny how a free market works but how real estate is different?
With all this supply prices will fall.
I don’t care what LIEreah and Appleton-Young say. Maybe they should try and sell a house to the CEO of Shell.
These developers and their flying monkeys make my blood boil.
As a native AND a city employee i can tell you all that only the “connected” employees were informed about buying opportunities and yes they were understood to be speculative because most city employees cannot afford to buy these POS’s!
And as to the bimbo who has lived here a long time, I guess she must have moved here after the great condo crash of the 80s on Brickell . It took 10yrs+ to sell those condos.
Its only a matter of time before this market comes tumbling down just like the windows did in the new construction in the Brickell area after last years storms.
Capitol Condos? Critics Hate the Sound of It
By Cara Mia DiMassa, LAT
For generations, industry titans wishing to place their mark on Los Angeles often did so through their buildings. These were structures destined to become landmarks like the Romanesque 1924 Gas Co. building and the towering Art Deco Title Guarantee
http://tinyurl.com/s3n8q
Dont be too snarky. Downtown condos make a lot more long-term sense than do McMansions in the exurbs. A lot of builders and investors may have had the right idea, but bad timing. The free market allows furious overbuilding as a horde of individual economic actors respond in the same way to the perceived trend. No one wants housing to be centrally planned, however, at least not in a dictatorial way. How much should government be involved in the shaping of residential land-use? Comments?
My thoughts as I read this. Downtown condo’s reduced ex-urban sprawl, help maintain a dynamic energy in an otherwise entropic environment, and are generally a far better use of land and construction materials. That said, a sea-change in attitudes will be required to make the concept trult sale-able. IMO
From an urban planning perspective, vertical living (i.e. condos) is THE way to maximize providing city services, maximizing dwindling tax revenues and reducing pollution.
However, this is juxtaposed with the general public’s desire for a large backyard, with private pool, playground etc.
Think about a pool that 1 family uses 10 times a year vs. a slightly larger pool that 20 families use 10 times a year. (Usually) nobody is crowded out (when’s the last time you used an ENTIRE pool) and water, maintenance and energy are conserved.
IMO the problem begins and ends with the types of urban planning to date. In most cases, it has been slipshod and unappetizing. Look at the subsidized housing in any major city. These are 20 story monstrosities, thrown together on the cheap, without any thought to people WANTING to live there.
Ultimately, higher densities are becoming and will continue to become havens for those who want to avoid that transportation and infrastructure problems posed by the suburbs.
I have never lived in a multi-level condo project before. Do they make them real sound proof ,or ,is everybody hearing what the next guys doing in their unit ?
depends on the construction — if cheap and minimal you have sound — the sound proofing code requirements have constantly been increased here in Canada BUT that doesn’t guarantee ’sound proof’ at minimal compliance. I’m currently living in the tallest rental property in Toronto on the 23rd floor (44 floors) that was built in the 70s — I do NOT ever hear any of my neighbours either up/down or sideways or in the halls…. luxury building but also built far over code for the time and still exceeding current code upgraded requirements.
Thank you. One more question. Is there a wind factor that high up in your unit ?
wind is absolutely a factor.
Hi Sidney,
A little too late at night for me to reply with any profound analysis on this topic. Just wanted to express Iol at Snarky.
“we’ve borrowed from future sales”
oh that one’s good. i like it.
kind of like “just clearing out a little investor overhang”
Some workers who bought units, he said, then quickly sold them at a profit. ‘Were these users or investors? It’s hard to tell.’ He said. ‘What defines one category becomes blurred.’”
No, I think it’s actually pretty clear.
Robert is getting upset at all you bubble believers…
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http://biz.yahoo.com/ap/060316/toll_brothers.html?.v=2
He also gets irked when people call his luxury homes “McMansions.”
“It bothers me and I ignore it,” Toll said. “They’re not McMansions, they’re mansions. The ‘Mc’ is a prefix put there by those who haven’t got one.”
“…there is still room for real estate to grow as long as mortgage rates stay near historical lows”, according the head of Toll Brothers, the nation’s largest luxury homebuilder.
The big if. ‘Historical lows’ are (according to Toll) around 6%. Historical averages are around 8.5%. A lot of if.
“The ‘Mc’ is a prefix put there by those who haven’t got one.”
As opposed to those who own real mansions, who would call his houses sh!tboxes. Or sorry, make that McSh!tboxes. Shabby scales to any size.
I wonder how someone as (seemingly) smart at Mr. Toll thinks Bernake has anything to do with determining long term rates. The actions/policies of China, japan, EU and all the global players, including, but only to small degree, the US, determine longerm loan interest rates. If I have this all wrong, then someone please enlighten me.
They are having a “Blow Out Sale” Everything must Go = name your price, etc.
Soon my freind soon…
In Fl they are offering all kinds of goodies, 10-35K off, premium upgrades and/or no closing costs have been standard since December.
I don’t care what Robert Toll calls his houses. They still are, and always will be McMansions to teh majority of the people. It would be hilarious if he was buried up to his neck in BigMacs to emphasize McMansion. But to his credit, he did acknowledge that term. Our blogging is being heard.
Didn’t they say “McMansion” during the 60 Minutes piece that was shown before Toll Brothers stock took a nose dive? It would be nice if bloggers were being heard, but it is more likely that Robert Toll watches TV on Sundays.
Off topic, but I think it would be interesting if everyone that reads this blog were to get a CMA (Competitive Market Analysis) Report form a local realtor.
You will need to pick a relevant price range for your area, but what you’ll get back is a list of active and sold properties for the area and price range you’ve chosen. In the report will be Days On the Market (DOM), which will tell you how long each house has been sitting since being listed. Also, for each house, there will be an Original Price (what the house was originally listed for), a List Price (what it is currently listed for), and, in the case of sales, the Sale Price. You will also get such useful information as price per square foot for each house, and averages for $/sq. ft., DOM, and prices (orig., listing, and sale). A CMA report might give you a better snapshot of your local market (especially DOM and sale price vs. original price, and average $/sq. ft.). Just a thought.
And maybe we could post our findings on Ben’s blog…
Just ask for a CMA for your (target) neighborhood.
(Downtown condos make a lot more long-term sense than do McMansions in the exurbs. )
I agree. But when I downsize from my modest rowhouse to a condo after the kids leave, I’ll expect it to cost LESS money not more. They’ve been charging too much money, perhaps because they have been making mega-profits, perhaps because they’ve bid up the price of land. The whole urban condo thing would have been more sustainable if the bubble had never happened.
Condos make sense for young professionals, singles & retirees… Only problem is they can’t afford them or would rather have a house.
Condos make no sense for families with kids.
People don’t realize all the costs of owning one. On top of interest you have the same taxes, typically you also have to buy a parking spot, you have to tip all those employees if you want everything done. They just are not practical or family freindly. Great for a 20 something who lives alone or the 65 & up crowd who have the money and/or could use the help.
No the sad truth is many of these condos are second homes or investments. What will happen? We will have buildings (and have many already) that are 10-20% occupied. Thats maybe a couple units per floor where people actually live there. How weird would that be… you move into a condo and your the only one on that floor? Would be like that movie “The Shining” where they are the only people in that huge hotel.
I thought the aging boomers were the ones buying the condos. We’ll soon have plenty of those. My in-laws (mid 70s) sold their 3000+ on 6 acres 2 years ago and bought a nice one just after they both got hip replacements and 2 carpel tunnel surgeries. More of those to hit the market in coming years I’m sure.
Dear God, I had a dream:
There is a TV show and a few Realtors (the young brash ‘anyone who doesn’t buy is throwing away money’ type) are talking with a moderator and a panel of guests (homeowners) about how wonderful housing is and they confidently throw around all the usual phrases. The moderator asks them about the possibility of a downturn and brings up some points about previous busts and they all brush off the concerns as being not relevant to the market today.
Then the guests in the panel are allowed to ask the Realtors question for an excrutiatingly long 45 minutes (this is PBS). These panelists are contributors to some R.E. Blog or something and the Realtors feel sure they can handle this group. What do BLOGGERS know ?!!
Unbeknownst to them these people come armed with facts; historical and personal references to previous bubbles and busts and they nail these twits with questions they just stumble to answer.
It’s like being hit in the head by the club of Barney Rubble’s son Bam Bam. (BAM, BAM, BAMBAMBAM) The Realtors are stunned, with long pregnant pauses and stutters while they look to each other for one of them….. Someone please pick up the slack, find the dialogue. They think, “Who the %$^*%$*^ in the office arranged this *%##^&# show anyway?” The camera does a close up of each of the Realtors. Their eyes have glazed over, the sweat is coming down from their brow, and the make up is melting in the hot studio lights. They are deer in the headlights and they know it. The gray matter is turning into pulp and no one can move.
What happens next?
BRRRRRRRRRIIIIINNNNNNNNNNGGGGG……….. The alarm clock goes off.
I wonder if our local PBS stations ( Seattle) will show that. if one of them does, I’m going to programe my DVR to record the show and tell everyone to watch it.
For some reason, I didn’t see your first line. Well, it’s my dream too. If I ever spot one, I’ll let you know.
Arrrrrrrrrggh! I need some anti-nausea medication. I just finished listening to the local San Jose-Santa Cruz real estate guru.Thank God for this site to know that there are sane people out there, then again maybe I’m dreaming and I’m the patsy.
Things said:(1) Market has improved after two months of stagnation and I’m getting multiple offers on all my listings.Now is a good time for buyers to step up to the plate. (2) The market is great, it’s just back to normal (3)Now is a great time to get a mortgage (4)Property just needs to be priced right and I’m getting multiple offers above asking (5)Says he’s a Director on the CARA (6)I can’t remember all the rest because I was riding my exercise bike to keep from exploding.
How many people believe that there are quote ‘multiple offers’ or it’s a contrived scheme between realtors to keep the game going?
Check out his site at ‘letstalkrealestate.com’ and you’ll get the gist of his shtick. He even said that real estate in San Jose is picking up, as is Santa Clara and Santa Cruz. Maybe this is the pap that fed the home builder stocks rise today.
Is it illegal to lie and say you have multiple offers when you don’t or is that just expected in this game of poker?
Lie is such a strong word. Did you get anything about those other offers on paper?
well what I hear is that S Cali is usually the slowest to make the change so maybe it is the last go for fools as for the northeast its underway and Florida is also starting to get underway, my observations anyway
—-AL
I can’t speak for all of San Jose, but I do track 95126, 95128, parts of Willow Glen, and Cambrian. It’s flat, totally flat. No action. I’ve heard the “multiple offers” line from various realtors lately. Funny, I still see many of the same houses sitting out there since last fall.
Sorry OT,,, I consider myself a little above average consumer with exception that I have sold all my RE back in 05, 3 total, I now rent have lots of money in the bank. Now lets get to the average about me I make over 70K a year, pay my rent and have almost no CC debt, notice that every month since renting all the unfixed expenses have gone up, electric to gas to dry cleaning. I get my annual 4% raise that will take effect in April.
I would like to say that I figure I really seem to make less today than I did last year with all the extra misc. expenses.
This is what I see and I’m not being clouded my how well off I am.
Is this the real feel that most average consumers see but have already maxed out on monthly expenses a year ago? Any thoughts…
—AL
I think the numbers have shown that real income has gone down for the last 4 years…. and although the non core items of food and energy have gone up that doesn’t count.
I’m with you. Prices have gone up and my income has not kept up at the same pace. God knows how the family of 4 making 30K can do it!
I don’t know how you do it, good for you. For me its just myself
Sorry, I was making 2 separate comments. If I was part of a family of 4 making 30K I don’t think I could make it. Some people do - barely - manage and my hat is off to them. I consider myself to be doing pretty well, partly (like many people here) because I don’t get caught up in the hype of buying alot of ‘bling’ if that is what they call it now. What kind of word is ‘bling’ for goodness sake?
Whew,, i’m sure some people do, I don’t know how but i guess if i had to i could learn…
It just occurred to me that SD and Maimi have just solved their homeless problem. The have enough vacant condo’s to house them quite nicely.
And in this new age of PC (political correctness) their ego’s will be upgraded living in such luxury at tax payer expense.