Tuesday, 23 June 2009

What kind of house in Florida can you get for $10, $50 or $100?!

It seems that interest in property competitions - or raffles, or whatever you may call them - is growing, perhaps not unsurprisingly! If the fee for entering the competition is relatively low (say, $50 or below) whilst the prize - a property often worth several millions of dollars - is high, it does seem worthwhile to take a chance.

Moreover, the majority of these raffles restrict the number of entrants (usually to the point where revenue from ticket sales equals the value of the house). The odds of winning the competition are probably higher then winning the lottery for example - and think of the amount of money people spend playing that week-in, week-out.

For example, I previously blogged about a house in Fort Lauderdale that was up for offer in one such competition. All entrants have to pay a fee of $10 to enter, and the homeowners hope that they will sell 300,000 tickets. The house in question is a rather palatial 6 bedroom waterfront home, bought for $2.35 million in 2005. I think I could manage $10 to be in with a chance of becoming the owner of such a sumptious, million-dollar property! (One would assume that the house is isn't quite worth the same now, due to the property slump...but let's gloss over that for once, shall we?) The competition is currently still running.

This isn't the first example of a competition being used to sell a home. In a slightly different vein, last year I also blogged about a lady in Northern Florida who was giving away her $1.25 million house in Ocala to the winner of a competition in which entrants would have to write a short essay about their pet. I can't, however, find out the result of the competition and whether the house was actually won by someone.

So, what other property raffles and competitions are currently or were recently run in Florida - and what is or was the prize? Here's a few examples:

A Coral Springs house for $50 - a 2,164 square foot, two-floor, three bedroom house that was built in 2005. I'm sold by the his 'n' hers walk-in closets in the master bedroom - which of course would be two walk-in closets for me! The competition is still running.

Here's a Miami Beach condo for $100. The one bedroom, 850 square foot modern condo overlooks Biscayne Bay. The raffle actually closed only 9 days ago - the winner received a cash prize of 50% of the net proceeds (which equalled $30,850) as not enough tickets were sold for the condo to be won. Just doing some rough maths, it seems the number of entrants fell far, far short of the anticipated 5,000 entrants. Nevertheless, the winner still received a rather substantial sum, with the same amount raised for the chosen charity.

These competitions don't just occur in Florida. In fact, let's take a look at one that was run a little closer to home. Here's a £1 million house in Devon, UK with 11 acres of grounds, plus lodges and a lake that was won in a competition last autumn in which 46,000 entered. (Each ticket cost £25.)

The main issue with property raffles and competitions is that they never quite seem to attract the number of entries that's hoped for - and the property in question often doesn't actually get "won". Sure, a considerable amount of interest in generated, and a winner selected does normally win some sort of (cash) prize...but the actual idea of raffling off a property rarely really works.

Sunday, 21 June 2009

Condo developments - what's happening to them in the downturn?

The Broward-Palm Beach version of the excellent local free newspaper in southeast Florida, The New Times, this week featured an article showing examples of a number of specific condominium developments in the counties that were built since 2003, and the fate they have suffered in the economic downturn and property collapse in the area.

Condo developments are currently suffering a variety of problems - mainly because so many were built in the last five or so years, and the sluggish economy means that now there just aren't the people to buy them. To give you an idea, Miami-Dade county saw a whopping 23,000 condos built since 2003; Broward and Palm Beach counties together didn't quite reach that figure, although still managed a staggeringly high 18,000.

The developments mentioned in the article are Tao Sawgrass in Sunrise, Broward (near Sawgrass Mills mega-mall) which apparently has not a single resident (some units have been bought, but most likely by investors intending to flip units); CityPlace in West Palm Beach, which has very few residents; and the Villa Medici in Fort Lauderdale, which has suffered from crime in the recent past.

The article also mentions the Radius development in downtown Hollywood. As stated in the article, this development had its moment of fame a few years back when hundreds of people were queuing up outside, so keen were they to buy units. Although suffering from some issues - such as residents having to pay higher monthly maintenance fees (to balance out the lack of fees received from unsold and unoccupied units), and complaints about the quality of finish - the development is reasonably successful, with about 85% of units sold. (Only about 64% are occupied, however.) Part of the Radius's "success" is down to the fact that the developers are now willing to sell units for much discounted prices and are also moving away from their original vision of selling to sophisticated, up-market, young buyers. Of course, the Radius development is also in an area that has been much regenerated - Young Circle now features a delightful little park, and some of the surrounding streets have had new restaurants, bars and shops in the last few years.

In some other cases, however, developers were expecting that once they had started or completed construction of their developments, others would follow suit to revitalise the surrounding areas. This was often not the case, meaning that completed condo developments now find themselves in less than favourable areas.

One property analyst, Jack McCabe, believes that it will be another year before prices bottom out, whilst a full five years before condo developments have more occupied units than vacant ones. As mentioned in previous blog posts, one group of home occupiers - renters - will benefit at the moment as condo owners decide to temporarily (even for a few years) rent out their smart units and wait for the market to recover. Renters now find themselves being able to afford living in apartments or areas that were previously too expensive.

Those that desperately need to sell, however, will most likely need to take a hit on their asking price, or may even slide into foreclosure. Meanwhile, residents of these (not even) half filled condo blocks are also suffering. They face living in deserted developments, in some cases in areas that aren't especially desirable, whilst not all facilities are being kept to proper standards, yet paying over the odds in maintenance fees.

Article: South Florida's Housing Crisis Leaves Behind Ghost Towers (17th June 2009, Broward-Palm Beach New Times)

Thursday, 11 June 2009

New Times Best Of...

The free alternative newspapers New Times Broward-Palm Beach and Miami New Times today published their annual "Best Of..." lists and, once again, they're well worth a look! In keeping with the slightly off-the-wall style of the newspapers, the lists compile everything from the best places to eat, drink, hang out and shop to "Best Drag Queen"; "Best Place For A First Date"; "Best Weathercaster"; and "Best Female Bodybuilder".

I always love these lists each year, and learn so much about the southeast Florida area from them. They've also helped me uncover some hidden gems - only last year did I discover, after reading about the place in the New Times, how delicious the burritos at Zona Fresca are.

And the lists are wildly funny to boot!

Take a look here:

Miami condos are filling up

Today's Miami Herald reports some heartening news about condominiums in the downtown Miami area - namely, that occupancy rates are on the up, which may point to a recovery of the property market a little bit sooner than expected.

Of course, occupancy includes both renting and buying, but rates of both of these are increasing. Moreover, regardless of whether the condos are rented or bought, the fact that more and more are being lived in is good news. The downtown Miami area, though smart, has had (and still does) somewhat of a deserted feel, not helped by the vast numbers of new condo developments that have gone up in recent years.

The paper mentions a report by the Miami Downtown Development Authority who found that 62% of condos built since 2003 are inhabited. Currently, about 280 new lets occur each month; last year, about 50 new sales happened each month, which has increased to 70 per month this year.

38% of condo are still in the hands of developers - i.e. not yet sold - which equates to about 8,300 units. A further 1,333 units will come onto the market as well later this year.

So, what's the reason for this improvement in rentals and sales in this part of Miami? Well, sales are undoubtedly being helped by a reduction in prices, as developers try to shift unsold units and banks try to offload the foreclosed properties they have taken on. However, the vast oversupply that still exists means that many developers are now renting condo units out instead - at least until the property market recovers and the units can be sold - so more condos are available to rent at the moment.

Article: Downtown Miami condos filling up fast, report says (Miami Herald, 11th June 2009)

Thursday, 4 June 2009

Foreclosed properties in some developments are selling well

An article in the the Miami Herald earlier this week noted that for some condominium developments in Dade county, apartment sales are doing very well. The article is based on findings by the website CondoReports.com, which compiles reports about various condo buildings throughout the Miami-Dade area.

CondoReports.com has established that seven of the developments that suffered most from foreclosures in 2008 are now in the top ten for list for best selling projects in the first three months of 2009. (These are only for developments built prior to 2008.)

Some of the top-selling developments included in this finding are in locations and areas that - although not bad at all - may not exactly be considered the most desirable or glamorous. They include Mandarin Lakes in south Dade and the Shoma at Keys Cove development (the top seller in the list) in Homestead. Some properties in buildings in the downtown Brickell area - that had previously seen a high number of foreclosed apartments - are also top sellers.

Of course, the major reason for these developments currently selling so well is the low, low prices that the properties are listed at. Foreclosed properties become owned by banks, who are generally keen to offload them as quickly as possible. The average price of sales at the aforementioned Shoma at Keys Cove development was a very low $38,060, although average sale prices at other projects were considerably higher.

Article: Homes in foreclosure-ridden Miami-Dade projects are top sellers (Miami Herald, 2nd June 2009)