How some condo associations in southeast Florida are surviving - and thriving

I've written in the past about the problems that many condo associations in southeast Florida are facing in the current tough economic climate. With general costs of upkeep (grounds, pool, lifts and so on) increasing, and some condo owners either failing to make their monthly maintenance payments (not to mention those units that may have fallen to foreclosure not being paid for at all), it is no surprise that some are struggling to budget accordingly.

However, the Sun Sentinel recently featured an article that showed that it doesn't always have to be doom and gloom for these associations - in fact, in one particular case, it's just the opposite. The condo association for the Melrose Point at Monarch Lakes development in Miramar (northeast of Miami; east of Hollywood) has managed to cut its cost by $30,000 by either re-negotiating current service contracts, or cutting unnecessary ones completely. They've also done their best to regulate maintenance payments, putting those owners that have fallen behind on payment plans.

The association is now (admittedly, self-nominated) for the Florida Communities of Excellence Awards, for which about 200 associations have been put forward. And they even appear to have a snazzy website (Melrose Point at Monarch Lakes Condominium Association) on which there's a private, residents' only section, as well as a page on which maintenance payments can be made online. How useful is that?

Article: Community associations find ways to thrive (26th January 2010, Sun Sentinel)

Condo boom - of sorts - in downtown Miami

A recent article in the Miami Herald showed how sales of condominiums in downtown Miami - around the Brickell Avenue area - are rocketing...all because prices have finally come down to a level that is now attractive to many buyers.

After a lull following the collapse of the property market which saw many condo units remain unsold, and developers struggling to offload them (with some opting to rent them out instead) some building developments are seeing units fly off the shelf. Desperate to sell these condos, and needing to pay back their construction loans as well as trying to avoid bankruptcy, developers are - almost - taking what they can get. Some lenders are even allowing developers to sell for less than cost purely so they can get what's owed back.

Some of the developments mentioned in the article include 500 Brickell (which has an amazingly annoying website, I might add), Brickell on the River South, The Ivy and 1060 Brickell.

Many of those that are snapping up these units are foreign buyers; at 1060 Brickell it is estimated that about 80% of purchasers are from abroad. A huge 98% of these people had purchased with cash - not so surprising given the difficulty in obtaining suitable loans and mortgages these days. These buyers are investing in these condos as holiday homes for themselves or to rent them out, and aren't baulking at the idea of holding onto them until the market and prices rise again - which might be three years away.

Because interest and demand has increased so dramatically for these units - and because there's such a wealth of supply - there's unlikely to be a rise in prices any time soon. Whilst this is good news for buyers - pay attention, buyers! - those property owners looking or needing to sell in the near future may not be able to. Or, at least, not for price that's reasonable to them.

Whilst the increase in the number of units being sold is good news for the moment, the amount of cash-ready buyers will run out at some point. It will be then that condo units will need to be available at prices that are within reach for those that need mortgages to fund their purchase.

So, if you're after a smart new Miami condo and have funds in place, be sure to check out some of these developments. You may find a complete bargain.

Article: Downtown Miami enjoys mini-boom over cut-price condos (4th September 2009, Miami Herald)

Check your neighbours - and that you have them - before you buy

Another article from The Guardian last week told of the plight of a retired man who bought a Florida condo last November - and who now finds himself the only resident in the building. Victor Vangelakos's situation might not be so bad if the residence in question was a small build, but he in fact lives in a 32 storey building containing 200 units. It must get a little lonely.

Purchasers for other condo units in the building did exist, but either pulled out or failed to get a mortgage. Some others have also been moved to a less fancy building next door which Vangelakos tried to do as well, but was prevented by his mortgage lender.

So he and his family now find themselves all alone in the building. The plus side is that they have sole use of the pool, gym and clubhouse.

Rather creepily, however, they admit to hearing strange noises at night sometimes and once "someone pounded on their door at 11pm".

Article: Marooned family live all alone in 32-storey apartment block (6th August 2009, The Guardian)

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)