The Daily Soak - November 30

South Florida Rental Rates "Dropping Like A Rock"

The glut of thousands of unsold high-rise units in downtown Miami coupled with falling median prices is keeping potential buyers on the sidelines and converting many would-be buyers into renters. And the longer they wait, the better the rental deals get, according to A CBS4 report. "Reduced occupancy has prevented landlords from raising rents, and in many areas of South Florida, rents have fallen or remained stagnant. Homeowners and builders stung by the crunch in the real estate market are seeking ways to unload homes to get some return on their investment - flooding the rental market and lowering prices." Rental prices have fallen 5-10% over last year alone, and they should fall further once thousands of new units hit the market in the first quarter of 2009. (Video)


Luxury Foreclosures On The Rise in Boca, Lake Worth

Alexandra Clough of the Palm Beach Post reports on the growing number of foreclosures in the high-end luxury sector of the South Florida market. One project in Boca Raton, Azura, originally promised "luxurious living and stellar amenities, including concierge services such as limousines, dry cleaning and yes, plant watering." Regions Bank just filed a lawsuit against Azura's developer citing failure to repay some $36 million in construction loans. Only 7 of the 92 luxury homes in Azura were ever sold. Another development up the road in Lake Worth, Villas Santorini, was just placed in receivership with Scott Brenner of Brenner Real Estate Group. Clough concludes, "Brenner said no one could have anticipated the real estate market would claim so many developers, of all size and experience. And with all the new construction that took place over the past few years, no one ever thought to ask this question: 'What if the development never gets done?'"


Florida's Growth Engine Officially On Life Support

An excellent Florida economic analysis today in the St. Pete Times. State economists just met in Tallahassee and are projecting the state will now collect $31 billion (yes, with a "b") less over the next four years than previously forecast. So what's the problem? People aren't moving to Florida like they used to, and that trend is not likely to change in the near future. But don't tell that to Governor Crist who keeps dropping soundbites totally out-of-sync with the state's economic reality: ''Florida will probably come out of it first. I mean, the sun always comes up in Florida first." Contrast that with Florida CFO Alex Sink's recent appraisal, "We are in trouble. We're writing checks like crazy and the money isn't coming in. We can't rely any more on attracting fixed-income retirees from up north and selling them cheap land," Sink said. "Those days are over.

The Daily Soak - November 27

Palm Beach Auctions Require "Meeting In The Middle"

A New York Times writer attended last week's auction of condo units at the Edge condo in West Palm Beach and reports "many of the 37 condos sold during the auction and shortly afterward were bought by individuals who plan to use them as primary residences or vacation properties at prices ranging from $131,000 to $290,000." A nice haircut from the original asking prices in the $400,000-$600,000 range. The auctioneer described the winning formula of compromise: “I think that the developers probably got a little lower prices than they wanted to get and the buyers probably paid a little more than they wanted to pay." Not all recent Palm Beach auctions have been as successful. The prior week's auction of units at the struggling 166-unit Landmark development failed to produce a single sale. According to that auctioneer, "The marketplace basically rejected the minimum bid.”


Destin Condo-Hotel Secures $27 Million

A high-profile waterfront Destin condo-hotel just secured a $27 million line of credit from a New York-based REIT that has apparently financed the project in the past. According to GlobeSt.com, "The 280-unit condo-hotel, located at 10 Harbor Blvd., was completed late last year. The project also includes 48,647 square feet of retail space that was completed this summer. The whole and fractional condo-hotel units are 80% sold and the retail portion is 80% leased by high-end specialty retailers. The space is anchored by New Orleans-based restaurants Commander's Palace and Pat O'Briens. The deal was arranged by Miami-based Cohen Financial. Sales information with floor plans and fractional ownership brochures are available on the developer's website.


The Grinch Local Banker That Stole Christmas My House

The News-Press interviews several community bankers in Lee County who are applauding Charlie Crist's plan to call a moratorium on home foreclosures in Florida. Even though 90% of the foreclosures are investor-owned properties, Riverside Bank chairman Elmer Tabor says, "We don't want to be a Grinch and put a family on the street." Mr. Tabor doesn't clarify his position on putting flippers on the street, but David Hall, president of First Community Bank fills the awkward silence, "We all need to be gentlemen about the whole process. I have no problem with this. If you are an investor, that's a different story." (Yeah, kind of like the difference between the banks that made loans to prime vs. sub-prime borrowers) Finally, Mark Morris, the president of CommerceBank lays it on extra thick, "We certainly have compassion for these folks in their time of need." The question remains...Will Florida lawmakers have similar compassion for bankers who lost millions in bad loans in their time of need?

The Daily Soak - November 26

Florida: One of World's Top "Real Estate Challenges"

That, according to a new weekly "In Depth" survey by Forbes which scans the globe looking for the most depressed markets. The Russian analyst's recent prediction the U.S. will break into regions after this current financial meltdown must be gaining some steam, because Forbes lumps Florida in with the "Southern U.S." The magazine notes, "Orlando prices are down 20% from last year, Miami prices have dropped by 17% and Tampa homes are commanding 20% less than a year ago. What's more, transaction volume in Florida is at a standstill." The other corners of the globe with the biggest challenges include the U.K., Continental Europe, Eastern Europe, all of South America, Australia, China and Japan. (Slideshow)


Florida Developers Finally Going Underground

But it's not out of fear of persecution for overbuilding during the boom years. The subterranean trend is an attempt to bury massive parking garages under new developments like the Downtown Dadeland complex in Miami. While Florida's water table has long served as an obstacle to going underground, height restrictions and exorbitant land prices are forcing some developers to suck it up..."it" being the water that inevitably inundates this type of construction. One developer says, "It's almost like building a swimming pool...you pump the water out and put cars in it." According to the Sun-Sentinel, the 2-level underground garage at Dadeland "spans 7 acres and required construction workers to tolerate bathtub-like conditions for a year." Plans are now underway for 3 and 4-level underground garages in Broward and Palm Beach Counties.


Marco Island: A Rare Bright Spot in Southwest Florida

Sales are up and inventory is down on Marco Island according to one area realtor. In a column on MarcoNews.com, realtor Natalie Kirstein reports "buyer activity is increasing, sales are up for the past two consecutive months, and, overall, for the past six months Marco Island posted a 27 percent gain... as of Oct. 31, inventory was down 13 percent in a year over year comparison." Beachfront condominiums have been the best sellers on the island followed by inland single-family homes and water indirect single-family homes. Prices ranged from single family foreclosures under $150,000 on the low-end to luxury high-rise units in the $1.4 million to $4.35 million.

The Daily Soak - November 24

NAR: "Absurd Cheerleaders & Idiot Naifs"

That's the spin from the New York Times chief financial correspondent, Floyd Norris, following the National Association of Realtors' release of regional home sales data for the month of October. As usual, the data varies greatly by region, but the West posted the most head-turning double-digit gains and losses: Sales up 33%, Prices down 27%. In the release, NAR added one footnote regarding falling prices: “There remains a significant downward distortion in the current price from a large number of distress sales at discounted prices." To which, one rather astute blogger replied, "Funny, I do not seem to recall NAR warning about upward distortions of prices due to the combination of absurdly easy credit, ultra-low rates, and the appraisal fraud some of their membership helped to promote. That the NAR refuses to acknowledge this only further reinforces their image as absurd cheerleaders and idiot naifs. They have a significant degree of culpability in the entire housing debacle."



Now Homebuilders Want To Bask In The Bailout Love

The Wall Street Journal notes the Big 3 automakers left Capitol Hill empty-handed last week, but that hasn't deterred the nation's largest home builders from queuing up for a $250 billion federal bailout bonanza they're calling, "Fix Housing First." While it would fit nicely on a bumper sticker, the Journal notes the program "strikes an all-too-familiar refrain of 'build more homes.' Housing economist Thomas Lawler implores builders to "stop building." He and others argue that effectively setting a floor for home prices will prolong the pain because it will keep supply and demand out of sync." Harvard economist Edward Glaeser goes one step further, "The government does not have the tools to rewrite the laws of supply and demand. By artificially increasing prices, we are encouraging more building."



"And You Think Housing Is Bad Now..."

Should have been the theme of the National Economists Club meeting in Washington yesterday. Some of the country's best-known economists shared the following eye-opening bullet points: 1.) There are now 12 million homes in the United States with a loan-to-value ratio greater than 100 percent. That’s one mortgage in four. The aggregate amount of that is some $2 trillion...2.) As of September 30, 7.5 million mortgages, or 18 percent of all properties with a mortgage, had negative equity...3.) If home prices fall another 10 to 15 percent, as measured by the Case/Shiller Home Price Index, then four out of every 10 mortgages in the U.S. could be underwater, and finally 4.) The next problem is the $60 billion of adjustable-rate Alt-A mortgages, which fall between sub-prime and prime loans. Millions of these loans are scheduled to reset next year to higher interest rates.

The Daily Soak - November 21

New Miami Condo Closings Going Better Than Expected

The pessimistic closing scenarios and rumors flying around earlier this year in South Florida were enough to send most developers to the roofs of their glistening new towers for a contemplative gaze downward from the ledge. It turns out Miami closings are going much better than anticipated in several projects. Over 17,000 new construction units have been delivered so far at an average price of $405,000. According to the Miami Herald, "The sales have been better than many observers expected for a downtown area held out by some as ground zero for speculation and excess. And it underlines Miami's ongoing urban revitalization, fueled by people, builders and investors returning to the city center." Developers of new towers on the verge of closing are equally bullish. Miroslav Mladenovic of the Everglades on the Bay project (pictured) says, "Comparable projects to ours have fared well, we don't see why we can't fare the same.''


More Good News: Encouraging Sales Reports for Tampa & Orlando

Miami isn't the only Florida city with some encouraging news regarding home sales. According to the Tampa Tribune, "Tampa, St. Petersburg and Clearwater had 6,502 existing single-family homes close through the third quarter, up 10 percent from the 5,913 sold in 2007. That was double the state average of 5 percent." And over in Orlando, the Sentinel reports, "Existing-home sales continued to outpace sales in most of the rest of Florida during the third quarter, with Orlando Realtors closing on 4,689 single-family homes, or 14 percent of the statewide total." Yes, median prices have fallen significantly, but at least inventory is moving out of the hands of banks and into the hands of interested buyers. The Orlando-Sentinel concluded, "FAR President Chuck Bonfiglio said the gains were encouraging, particularly in light of the widely reported "lending restrictions and the difficulties of finding affordable credit."


Auctioneer Announces Multiple Florida Dates in December

Auction industry leader Hudson & Marshall plans on auctioning off over 650 bank-owned homes and condominiums in 12 Florida cities between December 2-7. The auctioneer is even upping the commission for buyer's agents from 2% to 3%. The list of cities and dates is as follows: December 2nd - Fort Myers (68 homes); Fort Pierce (9 homes); Pensacola (10 homes)... December 3rd - Tampa (67 homes); Port Charlotte (16 homes); Jacksonville (34 homes); Titusville (20 homes); Tallahassee (3 homes)... December 4th - Orlando (114 homes); Gainesville (6 homes)... December 6th -Miami/Fort Lauderdale (185 homes)... December 7th - Miami/Fort Lauderdale (140 homes). Properties may be viewed during the Open House this Saturday and December 2nd. For more information, visit Hudson & Marshall's website.

The Daily Soak - November 18

Fontainebleau Re-opening: "A Defiant Display of Pluck"

A Time Magazine reporter attended the Fontainebleau's re-opening gala last weekend and marvels at the "lavish revelry" of $399/night hotel rooms, a 40,000-square-foot spa, a 60-piece orchestra, and celebrities like A-Rod and Heidi Klum in attendance. Instead of just relaxing, drinking his champagne and accepting the event for what it was, Tim Padgett says the event only highlights "South Florida's incorrigible reliance on low-wage industries like tourism. It has exacerbated the effects of the recession here — and it has led to a widening, Third World-style gap between rich and poor. The average wage in Miami-Dade County is less than $40,000; but according to a report this year by FAU, a family needs an income closer to $100,000 just to afford an average single-family home here." OK, so he's right, but something tells me Tim wasn't the life of the party. Speaking from experience, that kind of long-winded macro analysis will get you nowhwere with Heidi Klum.



Condo Glut Turning Into An Apartment Glut in Tampa

Rental-to-condo conversions or "rondos" were all the rage during the housing boom, but HB.com coined a phrase back in April to describe the emerging condo-to-rental shift in market strategy being implemented by many Florida developers, "condentals." Even though the phrase hasn't exactly blown up, the market has with an inundation of new rental units originally marketed as whole-ownership condos. In Tampa, hundreds of new units in buildings like the Element Tower, SkyPoint Tower and The Place at Channelside are hitting the market as rentals forcing inventory up and prices down. Despite this glut, developers must be anticipating the fact that more Florida residents will be forced into rental situations due to foreclosures and the inability to secure home loans thanks to the frozen credit market. According to Marcus & Millichap, plans are already underway for 8,300 more apartments next year.



"Kids, Forget the Orlando Hotels...We're Renting A House!"

In the 1983 classic, "Vacation," Clark Griswold and family stopped at a variety of less-than-savory hotels during the 2,000-mile odyssey from Chicago to Wally World. If Clark were planning an Orlando vacation today, I'm sure he would appreciate this CNN "Taking the Kids" article. Eileen Ogintz admits times are tough, but who can resist Orlando, in her words, "that one vacation destination many of us are determined not to give up despite the plummeting Dow." In a long list of money-saving tips for Orlando-bound families, Ogintz says staying in a hotel is ridiculous, especially when there are thousands of Central Florida homes available for short-term rental. According to Ogintz, "Agencies like www.discovervacationhomes.com, a consortium of professionally managed vacation homes and condos headquartered in Orlando, tout three-bedroom homes with pools starting at just $120 a night. Condos are considerably less."

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.

The Daily Soak - November 5

Forbes Panel: "Buy A House Now"

That's the consensus from a recent e-mail exchange forum hosted by Forbes and some high profile real estate analysts. Spencer Rascoff of Zillow.com is bullish with conditions, "I do think this is a great time to be buying residential real estate, with two caveats. First, you need financing, which is much more difficult than in the past. Second, you need to be smart about it. The good old days when anyone could make millions flipping homes in their spare time are over." Developer Donald Trump, Jr. says many sellers need a reality check on pricing. "There are deals out there now. There will definitely be a lot more coming in the near future, but people have to come to terms with the fact that the "equity" that they think they have in their homes is not even close to reality. Buyers know this and are waiting; when that gap narrows deals will be made." (Slideshow: What to Buy and Where)


Lee County Housing Market Still Reeling

Housing permits in the tens of thousands and foreclosures in the hundreds used to be the norm in Lee County, but the HousingBath turned that equation on it's head. According to new figures released yesterday, Lee County foreclosures reached their highest monthly total in October (2,665), up 8% from the 2,467 recorded in July. Understandably, housing permits have plummeted. Only 86 permits were issued in all of Lee County last month. Contrast that to the over 22,000 housing permits issued by Lee County officials between July 2003 and April 2004. Local mortgage broker Jeff Tumbarello remains cautiously optimistic but his words are less than reassuring, "It's going to end at some point," Tumbarello said, "They can't foreclose on every home in Lee County."


Boca Condo Developer Giving Up The Condo Game

Better late than never, but Boca Raton-based Altman Companies probably wish they never got away from their core business of the last four decades: building apartment complexes. Lured by the prospects of striking South Florida condo gold, Altman started building condos in markets like Delray Beach and Stuart. According to the Palm Beach Post, "Altman has been forced to reopen its sales center at a Delray Beach project after half the contracts there fell through. And it has slashed prices at a Stuart property by 50 percent. At The Harborage (in Stuart), prices have plunged from the $300,000 to $700,000 during the boom to a range of less than $200,000 to less than $500,000 now."

The Daily Soak - November 3

Renters Often Forgotten Victims In Foreclosure Mess

The number of foreclosure lawsuits in Miami-Dade has gone from less than 10,000 two years ago to over 40,000 in the first nine months of this year. RealtyTrac estimates only two-thirds of foreclosed properties are owner-occupied; the remaining one-third are renter-occupied. The Miami Herald points to the challenges facing renters in Florida: "In order to avoid homelessness, dispossessed tenants must find and lease a new home in very short order and come up with their first month's rent and a new two-month security deposit without reimbursement from their prior landlord. And they must accomplish this in a very tight rental market and in competition with the thousands of households evicted from owner-occupied housing and from non-foreclosed properties."

Housing Data Mixed: Inventory Falling, Vacant Homes Rising

Sales are improving and prices are plummeting in 28 of the largest metro housing markets polled in the latest Wall Street Journal survey. The markets showing the most improvement in housing inventory reduction are located in Southern California and the suburbs of Washington, D.C. However, housing analyst Ivy Zellman sees a more disturbing statistic lurking in the 6.5 million vacant homes currently not listed for sale nationwide. "If a million of those vacant homes were listed for sale," according to Zellman, "listings would rise about 23 percent from the current level. Some of these empty homes are in the foreclosure process." The survey shows South Florida's inventory glut is at the lower-end of the market, "Homes priced at less than $300,000 account for about 62 percent of the single-family houses and condos listed for sale in Miami-Dade and Broward counties, up from 33 percent in April 2005."

Long-term Renters, Not Flippers, Buying Campus Condos

On-campus condos are still hot properties for students at large public universities nationwide and their parents desperately searching for housing options, according to BusinessWeek. The Director of Housing at the University in Florida says despite the glut of new construction, off-campus alternatives in Gainesville, on-campus demand keeps rising: "More first-year students want campus housing, more students who live in campus housing want to stay after the first year, and students who choose to live off campus after the first year want to come back." The glut of new apartment complexes leaves students in the driver's seat in terms of freebies. BusinessWeek says, "In Gainesville...so many off-campus apartments have been built that landlords are convincing students to sign leases by offering free refrigerators, laptops, and rent discounts."

The Daily Soak - November 2

Regulators Shut Down Florida Bank on Halloween

"Trick or treat?" When federal regulators knocked on the front door of Bradenton-based Freedom Bank on Friday, they weren't there hoping to score some bite-size Snicker's and Reese's Cups. They were there to put up the "Closed" sign and notify Freedom Bank customers of their lender's demise. According to TheStreet.com, "Like so many community banks in Florida and other states that were at the forefront of the housing boom, Freedom's problems sprang from loans to residential real estate developers, who stopped making payments shortly after a sharp drop in demand for housing." The financial news website compiled a list of other "Florida banks that could be in danger."

Regions Foreclosing on Unfinished Miami Beach Condo

Small, community banks aren't the only ones feeling the drain of the HousingBath. Chicago-based Corus Bank is getting hammered by the non-performing portion of $1.4 billion in loans to 18 South Florida condos and condo conversions. Now, word out of Birmingham that Regions bank is poised to foreclose on a $40.2 million construction loan made to BSG Development Group for the Cabana on Collins project at 62nd Street and Collins. The Cabana website informs visitors "Construction is underway with an estimated completion date of late 2008." Regions has not filed foreclosure lawsuits on the other two BSG condos, Terra Beachside Villas and Terra Beachside Villas II. Both projects are located in close proximity to Cabana on Collins.

The Other Side: Tampa Condo Emerges From Bankruptcy

Better news out of Tampa (just look at that genuine hot-model-posing-as-luxury-real-estate buyer's smile), where the developer of one high-profile condominium project sees better days ahead. Richard Saachi filed for Chapter 11 protection for his Towers of Channelside (TOC) project earlier this year when Wachovia forced his hand. Now Shannon Behnken of the Tampa Tribune says "This is big news. It's likely, industry insiders say, that the Towers is the first condo complex in Florida to emerge from bankruptcy. Only time will tell if more follow suit." Thinking back on headier boom times, Behnken blames condo developer novices and bad timing for most of the Tampa projects that drowned in the bath, "The housing boom seemed to bring developers - and wannabes - out of the woodwork. News releases announcing the "tallest" or "most luxurious" condos to ever grace Tampa arrived on my desk regularly."