Go Fish: Welaka Waterfront Condo Auction

Sotheby's to Offer 10 Units at Absolute Auction on February 14

When you think of great Florida resort destinations, the town of Welaka doesn't usually factor into the conversation. The small town in Putnam County was home to 586 people according to the most recent Census data, but one auctioneer intends to boost that number to 596 next month. On February 14, Stirling Sotheby's International Realty will auction off 10 condos at the Sportsman's Lodge Resort Condominium & Marina. According to the press release, two and three-bedroom condominiums will be sold at absolute auction complete with boat slips that accommodate boats up to 35 feet. With opening bids starting at $85,000, the price per square foot for a two-bedroom unit plus a slip would be roughly $72/SF. That's not to say bidding won't rise above the opening bid price, but it's kind of hard to imagine a bidding war breaking out in Welaka. For floorplans, photos and more details, visit the auction site. 

Double Bogey: PGA Sues Florida Developer

Lawsuit Claims Ginn Resorts Had Commitments Through 2011

When the Florida real estate market was booming, sponsoring golf tournaments was a great way for developers like Ginn Resorts to showcase multi-family condos and McMansions clustered around resort-style golf courses. According to the News-Journal, "The booming real estate market powered Ginn's sponsorship of golf tournaments starting in 2007 with the LPGA Tour near Orlando and in the Champions Tour in Flagler County. But those times are over." The lawsuit claims the PGA Tour will suffer "monetary damages, including but not limited to Ginn's agreed-upon contribution to the tournament purse and other expenses of each tournament." A Ginn spokesman, Ryan Julison, explained the Florida housing reality, "The real estate business is the primary funding source for the golf tournament and that's what's caused problems." 

Crashin' Planes, Buyin' Lexuses & Condos

Investment Manager Under Investigation, Assets Frozen

If you're an investment adviser under investigation for allegedly mismanaging your client's hard-earned dollars, what's the best way to demonstrate innocence, remorse and sanity? Well if you're Marcus Schrenker, 38, you fly to Florida on your private plane, make a fake distress call and intentionally crash in the Panhandle. Local authorities were not amused and Schrenker was just transferred from a Pensacola jail to a federal prison in Tallahassee. Meanwhile a judge ordered his assets frozen yesterday after his wife and girlfriend testified against him. The wife (pictured) claims she had no knowledge her husband had misappropriated client money. Michelle Schrenker's lawyer offered a compelling defense, "She did nothing wrong. She married the wrong idiot is what she did."

Why Con Artists Love Florida

Florida Celebrates 100 Years of Investor Scandals

In the relatively short history of our beloved Sunshine State, we have garnered a rich and colorful tradition of cons, scam artists and investor fraud. The arrest this week of Sarasota hedge fund manager Arthur Nadel and the discovery of millions of papers in a Queens warehouse tied to Bernie Madoff's ponzi scheme are only the latest chapter in Florida scam lore. The Guardian UK writes, "To historians, or anyone with a long memory, the Florida link to today's investor scandals is hardly a surprise. The state has always had its own infamous role in many of the great scams of the past 100 years." Keith Wirtz, CIO for Fifth Third Asset Management, explains the lure of Florida, "There's tons of northeast money, a lot made on Wall Street, that ends up in Florida. These scam artists prey on the retirement community and you have a lot of retirees with a lot of money there. There are more victims to be had in Florida." The State of Florida, home to an inordinate number of moronic specialty tags like Trees Are Cool and Support Soccer, should seriously consider a tag celebrating 100 years of investor scandals.  

Home Depot To Close EXPO Chain

High-end Concept Flops; Additional 7,000 Layoffs Expected

You used to be able to gauge the median income of a Florida city by the presence or absence of a Home Depot EXPO. Unlike the regular Home Depot where working folks and contractors go to buy drywall, Ridgid tools and spackle, the Home Depot EXPO is where people in places like Naples and Boynton Beach go to buy such consumer staples as the 66" Aquatic Serenity Studio Air Bath (available in Cashmere or Sandbar) or the 36" Gaggenau Induction Cooktop. Apparently now that no one is buying luxury condos, the demand for EXPO's high-end kitchen and bath accoutrement has vanished. Today Home Depot announced that all 34 EXPO Design Centers will be closed over the next 2 months. The company will also close their Yardbirds nurseries in California, a chain Home Depot acquired four years ago when the housing market was on fire.

Florida Awash In Troubled Mortgages

Dominates Top 10 List; New Rules Won't Make Borrowing Easier

A new Moody's report released yesterday shows 7 Florida cities among the list of Top 10 U.S. metros where the most first mortgages will be written off. Mortgage delinquency rates have also reached double digits in several Florida counties including Palm Beach (16%), Broward (21%) and Miami-Dade (26%). According to the Sun-Sentinel, Moody's economist Chris Lafakis is at a loss for words,"It's unprecedented, in both the level and the swiftness of the decline. This goes right to the huge pressure the Florida housing market is under." The mortgage fallout is being reflected in tougher lending standards being rolled out by Fannie Mae...moves that, according to Monica Hatcher at the Herald, "analysts believe will make it even more difficult to sell units in buildings already starved for residents and struggling financially. The standards, which took effect last week and apply only to Florida, include requiring that no more than 15 percent of a building's unit owners be delinquent on association fees as a condition of funding home loans to new buyers."

Rejoice: Real Estate Camping Out Is Back!

Demand For Active Adult Project Signals End to HousingBath!

Paul Owers of the SunSentinel has an amusing post on the HouseKeys blog tonight. "Well, well. Two people are actually camping out for the right to buy in GL Homes' newest community, Valencia Reserve near Boynton Beach." Owers says that GL used to sell similar homes in the $400-$600k range during the housing boom, but the prices at Valencia Reserve will start tomorrow at $249,000. So what's with the overnight camping out? Maybe it's a cheap publicity stunt. Or maybe these are the same kind of people who camp out for Star Wars tickets and the new iPhone. Or maybe it's two people who just emerged from a four-year siesta in a backyard time capsule they fashioned out of twine and empty two-liter bottles. Whatever the motivation, it's good to see bargain hunters emerging...but camping out? It's going to be a cold, lonely night on the sidewalks of Boynton Beach.

Sarasota RE Fund Manager Disappears

Millions Vanish, SEC Investigation, Suicide Note...

It doesn't rise to the level of Madoff Madness, but Sarasota hedge fund manager Arthur Nadel still took his investors for quite a ride. 76-year-old Nadel told investors that total assets in his six hedge funds exceeded $340 million. The SEC investigation launched earlier this week reports those assets were actually less than $1 million. The Herald-Tribune interviews Florida retirees like Philip Stull of Vero Beach and Hamilton Hagar of Port Orange who each lost over $1 million in Nadel's funds. One of the six hedge funds named as a defendant was Scoop Real Estate L.P. According to the American Bar Association Journal, "When Nadel sought investors in 2004 for one of his investment companies, Scoop Real Estate L. P., he did not disclose (his 1982 New York) disbarment in a private placement memorandum. The memorandum lists Holland & Knight as Scoop Real Estate’s general counsel. A law firm representative told the St. Petersburg Times, 'We are reviewing our records and have no comment at this time.'"

From Millionaire to Maid Overnight

Widow Loses Everything, Including Florida Condo, In Madoff Scam

A Pennsylvania widow who lost over $7.3 million in Bernie Madoff's high-profile Ponzi scheme is liquidating her remaining assets including a Palm Beach condo. "Maureen Ebel, who was born in Philadelphia and has lived in Chester County since she was 6 years old, is making big and small moves to battle back," according to Philly.com. "She listed her Florida condo with a real estate agent and put her Lexus SUV up for sale on eBay, hoping to sell it before the next $690 payment is due Feb. 15. Selling the two-bedroom condo, which was appraised at $400,000 several years ago, is excruciating because her late husband was so happy there. "It was like a chunk of my husband that I still had," Ebel said. But if the condo fails to sell in the miserable Florida real estate market, she cannot imagine what will happen."

South Florida Photog In Sue Happy Mode

Woman Allegedly "Terrorizing" Local Real Estate Brokers

This unusual item appeared on the Google "Florida housing market" news alert blast as well as a few other websites that cover South Florida real estate developments. Apparently a Honduras-born photographer, who probably made a good living snapping pics of luxury homes when the Florida housing market was booming, is now allegedly sending threatening letters to her former clients claiming intellectual property violations. Yacht Vacations & Charters Magazines just published one of her "private" and "secret" form letters. A member of the American Society of Media Photographers, Ordoñez pasted the words "Code of Ethics" on her web site, but ironically did not include the "Responsibility to Colleagues and the Profession" language including such professional guideposts as "1. Maintain a high quality of service and reputation for honesty and fairness." More threatening letters and published images of Ordoñez' work can be found on this article by Salvatore Genovese.

Double Down: South Florida Foreclosures

33,154 In 2007; Could Exceed 150,000 In 2009

We're only 19 days into the New Year, and some analysts are already making their predicitons for record foreclosure filings in 2009. The Miami-Dade, Broward and Palm Beach tri-county area saw total foreclosures jump from 33,154 in 2007 to 75,730 in 2008. The Business Journal article presents two opposing views of how things will unfold in the coming year. Analyst Jack McCabe says, "Based upon what the federal government does or doesn’t do to help troubled homeowners, South Florida foreclosure filings in 2009 can be up anywhere from 50 to 100% over 2008." Fort Lauderdale mortgage broker, Scott Coloney, is a little more upbeat, especially if current homeowners are proactive about loan modifications. “An employee of Motorola in Sunrise came in yesterday and said he could read the writing on the wall,” Coloney said. His company has announced 4,000 employees will be laid off – and he figures he has 60 days before he gets into trouble with his mortgage.”

South Florida Economy Under Water

Wachovia Report: When Will This Horror Show End? 

The Miami Herald offers a sector-by-sector analysis of the South Florida economy for 2009 beginning with housing. In their 2009 Annual Outlook, Wachovia says "New home construction is likely to fall further. Rising unemployment, plunging stock prices and tight credit conditions are hardly a formula for increased home sales. These days, one gets the feeling that potential homebuyers would be less afraid staying at the Bates Motel than they are buying a new home." A headline summary of the other sectors includes Finance ("Banks Await Bailout Money"), Trade ("Cargo Tonnage Is Down, Trade Credit Is Tight"), Tourism ("Weak Economy Means Canceled Vacations"), Health Care ("Hospitals Worry About Getting Paid"), and Agriculture ("Ag Industry Faces Multiple Threats"). UF economist David Denslow says the current environment is unprecedented: "Our ordinary models don't explain what's going on. All those ordinary models aren't working, and now everybody is groping. No one knows what's really salient."

Volusia Loses $4 Billion in Taxable RE Value

Property Appraiser Not Overly Optimistic About 2009

It isn't often that a Florida newspaper has a candid one-on-one with the local property appraiser, but "kudos" to the West Volusia Beacon for this interview with Morgan Gilreath. Coming off a year when his office saw a $4 billion drop in taxable real estate value, Gilreath isn't predicting a quick turnaround. According to the Beacon, "the taxable value of real estate in Volusia County dropped 10 percent last year, as an exuberant real-estate market went bust in a hurry, fraught with mortgage defaults, foreclosures and a severe curtailment of home construction." Gilreath says the unprecedented number of foreclosures will now factor heavily into future Volusia property value determinations. He also advises homeowners to keep a close eye on local government spending. "Volusia County taxpayers need to pay attention. The property taxes people pay are based on spending, and what has not gone down is the spending of local governments."

Florida MarketWatch: Naples

Naples Recently Sold Homes

This week's Florida MarketWatch city is Naples. The first graph shows median prices in Naples currently around $230,000, a 33% drop from this time last year and roughly equivalent to the median price level of late 2005.

Naples Recently Sold Homes

Meanwhile, the average price per square foot for homes sold in Naples, which peaked at $528/square foot in summer of 2007, is now closer to $180/square foot. Incredibly, the average price per square foot for homes sold in Naples dropped 48% in the last 3 months alone, meaning desperate sellers are getting more aggressive heading in to the historically strong winter months in Southwest Florida.

Record Foreclosure Rate In 2008

Up 81% Nationwide; Florida Second Only To Nevada

In a grim survey of the nation's housing status quo, Bloomberg reports new foreclosure filings rose 81% nationwide in 2008 and more than 2.3 million properties were seized or received a foreclosure notice. In Nevada, the state with the highest foreclosure filing rate (7.3%), over 77,000 properties were impacted. Although Florida and California posted lower overall filing rates, the total number of properties under some stage of foreclosure in those states lead the nation at 385,309 and 523,624, respectively. While California has the most cities in the foreclosure metro ranking, Fort Lauderdale, Orlando and Miami all made the Top 10. Bloomberg says the incoming administration may tap the remaining $350 billion in federal TARP funds in an effort to lower mortgage payments for distressed homeowners nationwide.

Multi-family Momentum In Central Florida

More Condos & Town homes Mean More Variety, Better Deals

Just seven years ago, 90% of all residential properties sold in Central Florida were single-family homes, according to the Winter Park Observer. Today, demand has shifted to the relatively more affordable multi-family segment, thanks to the glut of new condos built in and around Orlando from 2003-06. At the market peak in 2006, 62% of the 29,000 homes built in Central Florida were either condos or town homes. Excess inventory has pushed median condo prices well below the $250,000 level. Even though more condos than single-family homes were sold in Central Florida in 2008, the year-over-year percentage drop in sales was greater for condos (-32%) than single-family homes (-9%) or town homes and villas (-10%).

Miami Heat Sues Ticket Holders

Many Have Ties to South Florida Real Estate Investments

Last year things weren't so good for the Miami Heat; the team went 15-67 and superstar Dwayne Wade was injured for much of the season. Now that Wade is healthy and the team has a winning record, the Heat's problems have shifted off-the-court, namely in the form of season ticket holders and advertisers who aren't paying up for their prime seats. According to the Herald, "The Heat...which operates the AmericanAirlines Arena, have filed 16 lawsuits in the past year against companies and people they claim owe about $1.6 million -- if not more. At least a few of the cases have been resolved. Real estate developers, realty firms, a mortgage lender, investment companies and a restaurant group are among those targeted by the Heat." Legal scholars will take interest or great amusement in the following defense: "Some of those being sued by the Heat are making an unusual defense for why they didn't pay in full: The team was lousy last season."

Tarragon Files For Chapter 11

CEO Blames Credit Crunch...Not The Florida-centric Rondo Model

According to the Wall Street Journal, Tarragon Corp. has filed for Chapter 11 bankruptcy protection. While CEO William Friedman blames the credit squeeze, the boom and bust of Tarragon has much to do with the Company's pursuit and purchase of high-priced rental conversion properties in Florida. In 2004, when Tarragon shares were bouncing around $10, the Company owned 23 apartment communities in Florida, but according to the Journal, "(Tarragon's) plans to buy rental apartments at high prices, and convert them to luxury condominiums flopped when buyers failed to materialize and renters fled." By October 2007, Tarragon was in fire sale mode and the stock plummeted to $3 after reaching a housing boom peak of $27/share in July 2005. Tarragon's Florida projects include the Las Olas River House in Fort Lauderdale, Mirabella in Jacksonville and The Quarter at Ybor in Tampa.

HousingBath Spilling Over Into Retail Sector

Vacancies, Store Closures Expected to Ramp Up In 2009

While the commercial real estate sector in South Florida has remained somewhat healthy during the HousingBath, AP predicts 2009 will be the turning point. "Industry watchers expect the national recession, new supply of offices and shopping centers and a crippled housing market to finally hit the city's property rents and vacancies this year." The decision last month by Whole Foods to pull out of the Met 2 development in downtown Miami offers an overpriced, organic taste of what's to come. Real estate analysts say three new projects alone will add over 2 million square feet of office space in downtown Miami. Rents which have topped out in the $40 per square foot range in recent months are expecting to fall to the $20-30 range over the course of the next two years. Another retail sign of the times is visible up the road in Palm Beach where Macy's will close a store that has been open since 1967.

Top 10 Worst Small Towns to Own A Home

Key West, 3 Other Florida Cities Among Top 10

For those looking to escape the hustle and bustle of the big city, small town America has always held the promise of a simpler life, a heightened sense of community, and greater security. But unlike Mayberry where you can pick up a restored turn-of-the-century 4/3 for $59,000, Fortune takes a look at U.S. small towns where the widening disparity between median incomes and housing costs makes life challenging for the working class. Coming in at #4 in the ranking, Key West is the Florida embodiment of this phenomenon with median income of $51,000 and home sales prices peaking in 2005 above $1 million. Fortune sums up the local dilemma in these markets: "In addition to few discretionary funds, homeowners in these areas must also contend with the possibility of foreclosure, mortgages worth more than the values of their homes and a rising national unemployment rate." Other Florida cities in the Top 10 include Aventura, Golden Gate and West Little River. (SlideShow)

No Florida Housing Recovery Until 2011

It's a race to the bottom....and Orlando is in the lead.

Bloomberg reports today on the Florida housing study just released by Attorney's Title Insurance Fund. The report dishes out the good (Central Florida's relatively diversified economy should bottom out first), the bad (Speculative overbuilding will continue to plague areas such as Fort Myers and Cape Coral on Florida’s west coast) and the downright ugly (In Miami, condominium sales will not burn off excess inventory until at least 2015). Sales of homes in Florida have fallen 50% from the 2005 peak of 250,000, while annual housing starts of 50,000 are roughly 20% of the 264,000 new homes started in 2005. Of all Florida markets, the report says Orlando should bottom out first "because it has the least amount of standing inventory and employment and population growth have held up relatively well." Click here to download a PDF of the full 2009 report.

Weak Outlook for Tallahassee & Daytona

Economist Sees Job Losses, Soft Real Estate Markets Through 2012

Florida economist Hank Fishkind participated in a statewide teleconference yesterday and shared his outlook for major Florida housing markets through 2012. The news was bad for two Florida cities in particular, Tallahasee and Daytona, but for totally different reasons. The fact that lawmakers are in Tally this week looking for a way to slash $2.3 billion from the budget should have state employees on edge and polishing up their resumes. Fishkind predicts zero employment growth and limited population growth in 2009. Translation: no increased demand for housing. The outlook for Daytona, Volusia and Flagler County is weak based on a forecast drop-off in the in-migration of retirees from the Midwest and the Northeast. Fishkind sees this pattern having a broader impact statewide: "Florida is unlikely to experience expanded migration until the middle of 2010 at best." That he wouldn't clarify "at worst" leaves open the barn door of Florida in-migration speculation. With Florida's annual population growth dipping below 1% in 2008, look for zero or negative growth in 2009.

A Tale of Two Cities...and Condos

60 Units Snatched Up in Miami; 140 Repossessed in West Palm

It isn't everyday that positive news out of the Miami high-rise market trumps that of another Florida city, but yesterday was one such day. According to the Daily Business Review, a Singer Island-based investment group, Welcome Bay, paid $13 million for 60 units in the 516-unit Marina Blue tower in downtown Miami. While the bulk purchase is welcome relief for the seller, Silicon Valley entrepreneur Jim Clark, the sales prices aren't likely to cheer up owners of adjacent units. For example, Welcome Bay bought Unit 2012 for $168,600 or $127 per SF. The identical unit one floor up , 2112, sold previously for $557,740, or $423 per SF. The DBR says this transaction is a harbinger of what's to come as bulk sales really take off in 2009. Meanwhile, just up the road in West Palm Beach, the first downtown condo has been officially turned over to the lender. With $44 million outstanding on a defaulted mortgage from the developer, iStar Financial just repossessed the 140 remaining unsold units in The Whitney. In other West Palm news, the Palm Beach Post reports that closings are off to a slow start in three other high-profile condos: Two City Plaza, CityPlace South Tower and City Palms.

Condo Mediators See Walkouts in 2009

Why Pie-Slicing Is Forcing Many To Simply Walk Away

I remember a simpler time when Home & Garden sections of the Miami Herald were reserved for full-color spreads of mansions in Gables Estates and Star Island where doting couples would smile and welcome us cattle into their pool cabanas and gift-wrap rooms. Apparently those days are over. Today, Bill & Susan Raphan welcome us into their living room and shower us with stacks of condo documents and pending litigation. The Raphans have the unenviable task of working for the state's Office of the Florida Condo Ombudsman here in South Florida where-not surprisingly-90% of the annual 16,000 complaint calls originate. Bill Raphan says the biggest problems right now are, "The condominium market, the problems in foreclosures, obviously, liens and delinquencies," and he sees the cumulative effect of all three leading to the biggest problem in 2009: "I know of several condos that are on the brink of people just walking out. They can't afford to maintain their units anymore. Their slice of the pie has become so big that they can't afford it. They are just packing up and leaving their largest investment because it doesn't pay for them to stay. You are going to be hearing about this very soon. This is going to be a real problem."

Second-Home Pimpin' Around The World

Thinking Beyond Exotic Locales Like Cape Coral and Parkland

In this week's "The Good Life" section, Newsweek freelance journalist Ginanne Brownell writes about the incredible deals that abound in the global second-home market. She begins stateside in our own backyard and gives high marks to "South Florida—Miami or Naples—where hot weather is guaranteed most of the year." But then, passport in hand, Brownell begins to explore the myriad fire sale second-home possibilities in exotic destinations like Mallorca (pictured), Tuscany, the Scottish Highlands and Cap Ferrat. Maybe this article will serve as a wake-up call to the next wave of second-home buyers who won't merely settle for EPCOT-esque second-homes: Florida gated communities named after foreign destinations. I mean which would you rather have: a genuine, old-stone Tuscan villa in Anghiani or a townhouse in a Tuscany-inspired gated community in a former tomato field next to I-75 in Collier County? Luxury market analyst Marc Cohen believes the second-home buyer profile and preferences are shifting away to more remote corners of the world, "If there is an active buyer, the type will have changed from the typical 65-year-old retiree who has sold his business or retired from a high-salaried job to one who is much younger who has seen this become more of an opportunity."

Foreclosure Filings Up Sharply in Collier, Lee

Trends Reverse After One-Month Dip in November

Homeowners and realtors in and around Naples were optimistic when the number of foreclosure filings actually dipped last November. But any hopes for a downward trend will vanish with the news that foreclosure filings rose to somewhere between 650 and 700 last month. For the year, Collier County's total number of new foreclosure filings should be around 8,000. Just up the road in Lee County, there were almost three times the number of new foreclosure filings in December. Like Collier, Lee's foreclosure filings hit a record high in October (2,603) before dipping in November (1,645) and moving back up sharply in December (2,304). Jeff Tumbarello, a director for the Southwest Florida Real Estate Investment Association, says "Expect a lot of deeds to be conveyed into the new year. The Clerk’s Office has been gearing up for it."

Editorial: Who Is Building Now?

Why Boston Isn't Miami and Why Developers Are Like Sharks


And better yet, Why?, asks Boston Herald columnist Scott Van Voorhis. "Have I missed something, or aren’t we in the middle of one of the worst real estate markets since the Great Depression? " Voorhis notes that several new construction developments priced in the $400-$600k range in and around Boston are not selling. As bad as things are up there, he takes consolation in knowing he doesn't live in Miami where "they put up a new condo tower on practically every block." Through a series of self-indicting posts, local developers use the shark analogy to answer Scott's question. One guy named Marcus writes, "Developers are like sharks. They have to keep moving or die. There is no way they can recoup investments or even minimize losses on undeveloped or partly developed projects. They have to finish before they can get out."

Miami Bank Files Foreclosure On 234 Units

Notices Were Delivered On Christmas Eve

Great Florida Bank filed foreclosure notices on three separate projects on Christmas Eve. Two of the projects, Cutler Gardens and Kendall Lake Towers, were condo conversions originally approved in 2006 while the third project was a commercial condo called Perrine Industrial Park. The three mortgages were originally valued at around $33 million, roughly one-third of Great Florida Bank's $96 million in non-performing loans. The Cutler Gardens project was the biggest drag on the bank's portfolio, as only 10 of the 215 units were ever sold by the developer. Great Florida Bank is filing for foreclosure on the remaining 205 unsold units. While up significantly from a 2008 intra-day low of 59 cents, GFLB shares are down almost 20% from a year ago.