MIAMI, FL--Jack Studnicky (top right photo) , an internationally known real estate consultant, lecturer, trainer and real estate workout specialist for 50 years, warns the current dumping of financially distressed residential condominiums in the Greater Miami axis, could damage the development and financing in the luxury condo market for years to come.
In a specially prepared White Paper, he states:
"There are some great deals on condominiums in downtown Miami right now. Some banks holding foreclosed condos in luxury high rise buildings along Biscayne Bay (middle right skyline photo) from the Rickenbacker Causeway (bottom left photo) north are offering door buster prices.
"These 'below cost' of construction prices are great for homebuyers who seek an amenity rich, knockout-view lifestyle. But the fire sale prices banks are setting now will play a critical role in the decline of the downtown real estate market.
"This downward spiral may be so steep, it could take years for the market to come back strong enough represent the actual cost of building the condos.
"To stop the downward trend, banks need to draw a line in the sand on pricing.
History repeats itself
"I’ve seen the Brickell Ave.(top left skyline photo) effect, the pressure to sell below cost, when I entered the business of marketing foreclosed condos. In the 1970s, Chase Trust gave me an opportunity to blow out 175 Maryland beachfront condos.
"I had to hustle because with winter approaching, the selling season was nearing a close. In less than six weeks I sold every unit. The bank was thrilled. I had a pocket full of gold and my phone was ringing off the hook with requests from other financial institutions to help them dump their foreclosed properties.
" Homeowners who purchased their condos when they were priced above the cost of construction saw their home values plummet.
"New development became stagnant because the market was saturated with underpriced homes.
"Economic reality dictated that no developer would start any new building in the area while existing condos were selling below construction costs. Loan officers would not lend under those conditions, so commercial banking became anemic.
"Downtown Miami condominium supply and demand is way out of balance. Supply is high while normal demand is non-existent. This is facilitating panic selling. On top of that, real estate agents are more than happy to support any bank’s lowball pricing. These agents, understandably, want a commission check now, not next holiday season.
"Fire sale pricing is encouraging bulk buyers to swoop in like vultures to snap up blocks of condos. These latest flippers are also going for the quick buck.
"The great deals in downtown condos are attracting Latin American buyers who are purchasing for a home away from home.
"They realize this is an excellent time to obtain a second home in the U.S. capital of Central and South America. But there’s not enough of them to create a seller’s market.
"Banks holding boatloads of foreclosed Miami condos need to take a deep breath and stand firm on realistic pricing, which should be at least cost of replacement. There is no need to comply with an archaic and misdirected appraisal process as these bargain hunters are paying cash."
BACKGROUND:
Jack Studnicky has been a member of the Institute of Residential Marketing since 1988. As a spokesperson for the National Association of Home Builders, (NAHB), Jack has testified before Congress and appeared on national TV.
Studnicky has directed the sales of over $2 billion dollars worth of residential real estate. He is a REO Specialist and has completed over fifty "workouts."
Contacts:
Jack Studnicky, http://www.jackstudnicky.com/
Edward L. Donato, Peter Nasca Associates, office 954 473 0677; cell 954 401 1443; edonato@pnapr.com
Peter Nasca, president, Peter Nasca Associates, pnasca@pnapr.com
No comments:
Post a Comment