The Daily Soak - November 17

"Pura Vida": Costa Rica Emerges As Florida Alternative

In his stand-up routines, Jerry Seinfeld used to talk about his aging parents who moved to Florida because..."Well, it's the law." The Herald-Tribune validates that mentality in the days when "Florida was just a given...the place you moved to at a certain age to enjoy a daily dose of sunshine, a cheap house with palm trees and a pool, low taxes, plentiful local food, and a light-hearted sense of adventure." Now that those days are officially over, Latin American destinations like Costa Rica and Mexico are gaining market share of U.S. retirees and aging Boomers. 72-year-old Carlos Torres left Miami in 2002 and retired in Costa Rica buying a 4-bedroom house for $94,000. Carlos explains his decision, "I love Miami, don't get me wrong, but it is expensive as hell. My limited income with my Social Security and some investments I had saved-I could see that the money could go a hell of a lot further than in the States."


141 West Palm Condos Might Be Bought for 50% Haircut

According to Alexandra Clough at the Palm Beach Post, a buyer may have come forward to purchase the remaining unsold inventory at The Whitney Condo in West Palm Beach. Units in the mid-rise originally sold for around $300/square foot, but only 69 of the original 210 units were sold. An interested buyer may be willing to pay $26 million for the remaining inventory of 141 units. That translates into a purchase per unit of $184,000 per unit or only $150/square foot. In the same column, Clough reports that struggling Palm Beach-based restaurant franchise, R.J. Gator's, is ready for the auction block once again. The current owners bought the franchise out of bankruptcy just 14 months ago. Six franchisees have filed a separate lawsuit claiming the current owners switched the restaurant's theme from a "sea grill" to a "sports bar."


Dwellings + Simple Online Bookmarking = Dwellicious

Pete Cashmore at Mashable gives a review of a new real estate tool and website set to launch next January. According to Cashmore, Boca Raton-based Dwellicious will allow you to "add a bookmarklet to your browser and click it when you see a real estate listing you like, anywhere on the web. Unlike generic bookmarking sites, Dwellicious is optimized to work with Century21, Coldwellbanker, Frontdoor.com, Har.com, Homes.com, Realtor.com, Redfin, Remax, Rentals.com, Trulia, Yahoo Real Estate and Zillow." And Cashmore adds, one of the biggest enhancements over social bookmarking sites like Delicious.com, "Dwellicious knows where to grab the data from on these pages, and bookmarks all the relevant info with ease." The site is currently in beta testing but Dwellicious will launch on January 7th 2009 at the Inman Real Estate Connect Conference in New York City.

The Daily Soak - November 14

Party Time: Come Celebrate Foreclosure Fever in Orlando!

Sooner or later it had to happen. Florida foreclosures have been lurking in the shadows of lenders' back rooms for the past two years with little in the way of transparency. But a new conference set for next February in Orlando will put the spotlight on the foreclosure industry and give the Average Joe a better understanding of what's available and how to buy it. The impetus for the Expo is described on the event website, "Up until now there hasn't been anywhere for the public to go and see real property and to speak with the actual seller to enable them to make an informed decision. The foreclosure industry has been more like a private club where the public could not attain a membership and that has all changed due to the Foreclosure Expo." So, much like Caddy Day at the pool in Caddyshack, the private club throws the doors wide open on February 7th in Orlando. Entry fee is only $10. Please, no Baby Ruths.


Convincing Florida Sellers to Lower Prices Just Like "Pullin' Teeth"

Median home prices in Florida are back down to 2003-04 levels, but according to some realtors, they should and would go further if homeowners would ever get realistic on pricing. A recent survey of Coldwell Banker agents found that 75% say their clients suffer from UILP or Unrealistic Initial Listing Pricing. John Cicero of Valrico bought a stucco home for $380,000 in 2004, put in $80,000 in upgrades and listed it ealier this year for $525,000. No offers. He finally sold the house two weeks ago for $380,000. Cicero said, “You think you have this wonderful home and people will want to buy it...but you’re wrong.” Duke behavioral economics professor Dan Ariely explains the root cause of UILP..."We feel that we’re better than other people. We’re unique. We’re special. It stands to reason that our houses are also special.” Guess what...they're not.


Bank Takes Over High-Profile Sunrise Condo

During the boom, some people bought Florida condos with water views...others wanted urban living...still others wanted to be right on the golf course. But how about owning a unit perched above a 2.3 million square foot shopping mall, the 2nd largest in Florida and the 6th largest in the country. Buyers at Tao Condos paid anywhere from $350,000 to $800,000 for units adjacent to Sawgrass Mills. According to the South Florida Business Journal, "In one of the largest bank seizures of a completed condo in South Florida this year, Corus Bank has taken over the 396-unit Tao in Sunrise from developer Weitzer/Kislak Sawgrass. Corus hired Miami-based Hyperion Development Partners to finish development and close the units. Hyperion successfully closed out its mortgage with Corus on its Marina Blue condo in Miami."

The Daily Soak - November 12

Prediction: The Florida Housing Market Will Get Better or Worse

Members of the South Florida Developers and Builders Alliance met in Palm Beach yesterday to listen to real estate analyst Michael Cannon's assessment for the region, the state and the country in general. Those who attended hoping for some definitive answers probably walked away disappointed. Cannon should consider running for public office or try out for the Marlins, because his base covering capabilities are phenomenal, "We'll probably see this period to further expansion - I'm not going to say 'boom' again - take place probably in the next 36 to 48 months. That's the optimistic side," Cannon said. "The pessimistic side? It could take 10 years. I don't believe it will take 10 years, because this country is too antsy to do that." Antsy? How exactly would "antsiness" be a catalyst for a housing recovery?


Bathtime: Several Florida Zip Codes Over 50% Underwater

A new national survey of zip codes with homeowners in negative equity situations paints a rather wet scenario for several Florida metros. On a statewide basis, Nevada leads the nation with 48% of homeowners upside down followed closely by Michigan, Florida and Arizona. According to the HeraldTribune, "Four states alone, including Florida, accounted for the Top 20 ZIP codes. Besides North Port, four of the Florida ZIP codes on the list were in nearby Lee County, home to one of the worst foreclosure flashpoints, Fort Myers-Cape Coral. In Lee County's 33976 ZIP code, nearly 77% of mortgages were underwater." A senior economist at the company that conducted the survey, First American, sees Florida home prices continuing to decline.

Central Florida Home Sales Up, Median Prices Plummet

That's the news from the Orlando Regional Realtor Association. "Sales of existing homes in Lake, Orange, Osceola and Seminole counties reached 1,545 in October, a 15% increase above the 1,343 sold in October 2007." Sales in both Orange and Lake Counties posted modest, double-digit gains, while Osceola sales were up a dramatic 47%. Median prices in the region were down 24% compared to last year, including Orlando where the median home sales price fell from $235,000 last October to $178,000 this year. Some analysts see the 72% increase in pending sales over last year as cause for optimism. Despite the falling prices, rising interest rates in the region are pushing the home affordability index in a negative direction.

The Daily Soak - November 10

Buyers Lining Up For 70% Discounts at Palm Beach Auction

At least 1,000 people have expressed interest and over 200 are officially pre-registered for an auction of condo units in a new West Palm Beach high-rise. Half of the units in the 307-unit The Edge project located here. The developer, Wood Partners, plans on putting 41 of the 156 unsold units up for auction this Saturday, November 15, and prices are being discounted 40-70% from the original asking prices. While surprised the majority of those registered are older than 50, Jay Jacobson of Wood Partners speculates that volatility on Wall Street may be the impetus for a renewed interest in Florida real estate. "They've watched their stock market holdings go down and they want to put their money in Florida real estate," Jacobson says, "They feel it's bottomed out." For more information on Saturday's auction, please visit the developer's site.


Will $500 Million Renovation of Miami Beach Icon Pay Off?

The Fontainebleau is considered one of the most architecturally and historically significant hotels on Miami Beach. South Florida's largest resort originally opened its doors in 1954 and quickly became a favorite playground of the Rat Pack, Elvis and Jackie Gleason. After falling into a sad state of disrepair, the resort was purchased in 2005 and renovations and construction of two new condo-hotel towers began in 2006. 679 new units have been added to the resort's existing 876 room inventory, and all are set to debut this Friday. According to the Miami Herald, the developers had to sell half of the resort to a group of investors led by the Dubai government for $375 million in order to cover cost overruns at the new Fontainebleau Las Vegas. For a closer look at the renovations, visit the Fontainebleau website.


Leaving Florida: "The Carolinas Are Where There's A Lot of Work"

Alexis Wittrock and her husband, Mike, moved to North Port during the boom for six-figure jobs in the home building business. That was then, this is now. Today Alexis is holding a yard sale to raise some extra cash while Mike delivers pizza, the only job he could find in this Southwest Florida town recently gutted by the HousingBath. The Herald-Tribune sums assesses the damage, "The exodus of people who had planned to raise families here is leaving holes in neighborhoods and changing the fabric of the city with Sarasota County’s lowest median age. The impact is hard to measure, but it is evident in the abandoned homes on many streets, the declining number of students in the city’s schools and the struggle of local businesses to attract patrons." As for the Wittrock's, they are leaving North Port and relocating to the Carolinas.

The Daily Soak - November 9

Deceased Orlando Developer Owed Creditors $255 Million

Orlando developer Steve Walsh and his company, Broad Street Partners, were involved in some strange land deals. Broad Street's investors long questioned the firm's allocation of their capital, and Walsh's June suicide at his Winter Park home only confirmed their suspicions. According to the Orlando Sentinel, "Walsh would shift money without authorization from a partnership account set up for a specific development... and move it to his own business account, where he spent it." Records show Walsh's bills exceed $250 million, but his estate's value is only $6 million...not good news for Wachovia, various municipalities and former investors who have all filed lawsuits against the estate. They shouldn't get their hopes up. Charles Stark, the attorney for Walsh's estate, says the IRS will likely take most of it.

Gilded Age: Buy A South Beach Condo, Get A Free Lamborghini

Some Florida developers offer golf memberships, interior upgrades, or maybe even a free golf cart, but buyers of the last 7 units in one South Beach project will receive a Lamborghini Spyder Gallardo (pictured) valued at $260,000. While the broker spins the promotion as just a natural fit between luxury condo and luxury car, Peter Zalewski of Condo Vultures points out a more credible rationale: it's "a way to shield comparables from discounting, which would drive down prices for prior and current buyers." At $260,000, the 2008 Lamborghini is priced about 30% higher than the median existing home price in the U.S. A quick search of Trulia shows that $260,000 will buy a whole lot of house in Florida cities like Tallahassee, Melbourne and Jacksonville.

Tampa Developers Duped By Ex-Con-Turned-Preacher

After two years of searching for funding, Trump Tower Tampa developer SimDag paid Indiana-based Providence Funding Inc. $150,000 in hopes Providence ("Your Faith-Based Source in Commercial Lending") would secure a $200 million loan for their project. It turns out Providence, according to the St. Pete Times, is led by "an ex-convict named Barney Canada (who) spent three years in federal prison in the early 1990s for stealing millions of dollars procuring phony loans for businesses just like SimDag." SimDag's creditors met in a Tampa courtroom in July seeking loan repayments of almost $40 million. Now SimDag has filed civil theft charges against Father Barney for "withholding information about his criminal past during negotiations earlier this year."

The Daily Soak - November 8

Self-Storage Unit's Hidden Loot Could Send Socialite to Prison

Former Palm Beach multi-millionaire Abraham Gosman, 79, made a fortune in the real estate and health care industries. His net worth once topped $440 million, placing him on the list of Forbes' wealthiest Americans, but things changed dramatically when Gosman filed for Chapter 11 protection in 2001. The Gosman's were forced to sell their mansion at auction to Donald Trump for $41 million. In an attempt to shield some assets, he apparently shifted pricey furniture, artwork and jewelry to his wife's possession, and she lied about those assets in a 2005 deposition. Bad move. Federal deputies just seized millions in jewelry and other assets from a personal storage unit and Linda Gosman's hotel safe, so Linda, 59, could now be going to prison.


20,000 Realtors Gather in Orlando For Mass Suicide Convention

Real estate industry conventions during the boom years were the best. Booze, broads and non-stop bragging about that big pile of new condo deposit checks sitting on your desk. Today's major conferences, like this week's NAR meeting in Orlando, more closely resemble a Tony Robbins motivational seminar for lonely realtors with bruised egos and empty wallets. But alas misery loves company, and what better place than Orlando to celebrate the fact that existing home sales have fallen by 1 million units per year since 2005. The theme of this year's Orlando meeting, Destination Success - Full Speed Ahead, is a sharp contrast to the theme of some past gatherings like 2004's I Am Realtor, Hear Me Roar, or 2005's If At First You Don't Succeed, You're Not A Realtor.


The Canandians Behind The Channelside Purchase in Tampa

HB.com has reported for several months on the high-profile auction of The Place at Channelside in Tampa. And while the buyer's name was not published at the time of purchase last month, we now know that a group of Canadian development firms out of Halifax were the winning bidders. Southwest Properties and Armco Capital teamed up to buy the 243-unit building last month for $21.9 million. Southwest CEO Jim Spatz explained his company's motivation and long-term strategy: "It is a beautiful building. It is very, very well done. It’s in a great location. Our intention is to sell units when the market comes back, in terms of value. I think the opportunities are large. The downturn in the United States, and in particular in the United States housing market, has been quite severe, and I have a lot of faith that that country and that economy will come back." There's a group up in Orlando that could use this pep talk.