The Daily Business Review reports from Florida. “The owners of Villa Mare, a failed residential condo conversion project in Boca Raton, have seen the property’s debt balloon from about $50 million to more than $70 million since last year. The debt is growing at the rate of $21,000 per day because of interest charges. The development, which NRW purchased in 2006, has two five-story buildings, boat slips and ocean access.”
“It was expected to generate about $90 million in sales with units averaging more than $550,000.”
“In general, it’s not uncommon for the senior lender to opt for the foreclosure, said Jeff Bast, (an) attorney who represents NRW. He added that many condo developers with troubled projects are grappling with the issue of accumulating interest.”
“‘Default interest can accumulate very quickly and dramatically increase the amount of the debt obligation,’ he said.”
“But that only compounds the developer’s problems, he said. ‘If they are under water to begin with, in some situations it may not matter,’ he said.”
The Miami Herald. “Coldwell Banker might seem the least likely sort of business to take a page from the marketing manual of the car dealer’s factory blowout or a Memorial Day mattress sale. But for the prestigious real estate brokerage, desperate times call for desperate measures.”
“Last week, South Florida’s largest real estate firm started hyping its own version of a door-buster sale that starts Sunday. Prices on hundreds of homes, mostly in Miami-Dade and Broward counties, will be slashed by at least 10 percent.”
“Like most sales events, the discounts are good for a limited time only, in this case 10 days — or, presumably, while supplies last!”
“Gus Rubio, senior VP of Coldwell Banker for Southeast Florida, said the firm was simply offering the public a unique chance to ‘buy today at tomorrow’s prices.’ ‘Everybody that is analyzing the market is saying that prices have the possibility of [falling] further,’ Rubio said.”
“If a test sale hosted by the firm in Tampa a few months ago is any indication, buyers should respond positively. Rubio said of 847 participating sellers, 70 got their homes under contract.”
“To participate, sellers with homes listed at $750,000 or below must reduce their asking price by 10 percent; those with more expensive homes can start with 5 percent cuts. No short-sale deals or bank-owned properties are allowed because administrative obstacles make discounting them tricky.”
“‘For a lot of sellers, this was not a program for them because they were upside down,’ Rubio said.”
“With concerns of further price declines keeping many on the sidelines, the sale would seem to answer skepticism that the time to buy has not yet arrived — a difficult thing to do, said Doug DeWitt, a Miami real estate agent.”
“‘When we get to buy-one, get-one-free, then we’re really in trouble,’ he said.”
The Sun Sentinel. “Roughly 400 homes and condominiums in Palm Beach County are participating in the event that starts Sunday, with an average price reduction of 9.1 percent. In Broward County, there are about 300 properties participating at an average price drop of 9.5 percent.”
“‘For the buyer, it’s going to be a huge incentive,’ said Rubio.”
“Its success will depend on whether the asking prices were fair to begin with, said Miami-based housing analyst Lewis Goodkin. ‘If the prices were realistic, then buyers will respond,’ he said.”
“But competing real estate agents are skeptical. ‘It’s meaningless. It’s hype,’ said Bob Melzer of Prudential Florida WCI Realty in Boynton Beach. ‘No serious home buyer falls for that. He offers what he wants to offer.’”
“The median price in Broward fell 18 percent to $298,100 last month, the first time the county’s median has been below $300,000 since October 2004. The median in Palm Beach County in April was $314,000, down 17 percent from $376,300 a year ago.”
“With the city seeing more than 1,800 foreclosures this year alone, Coral Springs officials mulled over a law to accelerate the code enforcement process for vacant and abandoned properties.”
“‘Foreclosures are increasing by 10 percent every month. Lender owned properties have increased 40 percent this year,’ said Erdal Donmez, assistant city manager.”
“Vice Mayor Vince Boccard said the city should consider neighborhood house watch, which is along the same lines as neighborhood crime watch. ‘Abandoned houses can become clubhouses for neighboring kids,’ he said.”
From CBS 4.com. “CBS4 News encountered half a dozen people on a Ft. Lauderdale neighborhood trying to sell or rent their homes. Many are stuck, and everyone is left wondering how low things still have to go during this recession.”
“‘We don’t have the funds to pay the mortgage,’ said Nathan Cohen.”
“Cohen and his family are among dozens of South Floridians who attended a workshop Tuesday night to get help saving their home. It is another sign of a deeply troubled housing market. New numbers show Miami Dade and Broward home prices dropped by a quarter over this time last year.”
“For the Cohens, and so many others, it’s their personal disaster. ‘We don’t pay the credit cards. We pay the minimums if we can. Since my wife doesn’t work we try to survive on my salary,’ said Cohen.”
The News Journal. “Neighbors say an oceanfront timeshare condominium damaged by hurricanes in 2004 continues to be an eyesore but the city’s code board has ended its case against the Ocean Palms Beach Club.”
“‘I live just to the south of this disaster. I’ve been looking at this thing for four solid years,’ said Hill Street resident William Hoffmeister. ‘The city just keeps putting it off. Nothing is being done. (Ocean Palms is) doing the minimal amount of work there that can be done.’”
“‘Everybody’s ticked off because it’s taken so long to fix,’ said Attorney Edward Beazley, representing Ocean Palms. ‘We’ve explained why it’s taken so long to fix. It was a timeshare and everybody walked away.’”
The Herald Tribune. “Sales of new homes showed some life in April, but it was life at one of the lowest levels of activity in nearly two decades.”
“There have been indications of improvement in Southwest Florida real estate…but calling a bottom is problematic with the huge overhang in inventory that built up during the recent housing boom.”
“Some home builders are seeing a spike in sales – albeit at deep discounts – but others complain that they are still competing largely with the overhanging inventory. Just in the Sarasota MLS there are 12,000 homes and condominiums for sale compared with a pre-boom level in the 2,500 range.”
“Overshadowing everything is the question of where prices stand, builders say. ‘A lot of people were waiting to see if prices were going to go any lower,’ said Lee Wetherington of Lakewood Ranch-based Lee Wetherington Homes.”
“For Pat Neal, president of Lakewood Ranch-based Neal Communities, the answer to the bottom question was February. That is not to say the sales that he has made since then – sometimes at very low prices – are generating a profit.”
“The deals out there – Neal is selling homes for as low as $146,900 – will not last long, as demand increases along with the prices of fuel, wood and other items needed to build a house, he said.”
“‘I’m currently giving away some houses to move the land, but eventually prices will go up and I’m going to put some profit in there,’ said Neal, who has built more than 7,300 homes in Sarasota and Manatee counties since 1970.”
The Naples News. “It was a surprise when Robert Toll, CEO of Toll Brothers, recently gave Naples an ‘A’ rating in his financial update. He had previously given Southwest Florida failing grades in new-home sales.”
“Toll regularly grades the markets in which the company invests. Here are some of the grades he gave: Florida Central – F-plus, Florida East – F-minus, Florida North – F.”
“When asked to elaborate on his optimistic grade for Southwest Florida, Toll said, ‘It’s just one market; it’s not a huge market. But it gave us some happy times, especially considering that Naples was one of the worst markets that we had. A year ago, you couldn’t give a house away in Naples… And so we practically did give some homes away, I guess, in order to get rid of our specs.’”
From Law Jobs.com. ” In another sign of the hard times facing the legal industry, particularly in real estate-heavy south Florida, two law firms — Holland & Knight and Shutts & Bowen — have laid off nonlawyer staffers.”
“On a day that could be dubbed ‘Black Friday’ in south Florida legal circles, Holland & Knight, one of Florida’s largest and most venerable firms with 1,150 lawyers, laid off 70 staffers on May 16, including legal secretaries, information technology and accounting staff.”
“No lawyers were laid off.”
“The news comes on the heels of a decision announced internally on May 16 by Fort Lauderdale, Fla.-based Becker & Poliakoff to temporarily and immediately cut all lawyer salaries by 12 percent. The firm, which is heavy in condo and real estate representation, said it was forced to take the action since clients are delaying payment in the lean economic environment.”
“Carl Schuster, managing partner of Fort Lauderdale-based Ruden McClosky, acknowledged his 175-lawyer firm is experiencing ‘a slowdown.’”
“‘Because we do a lot of real estate work, we do have a slowdown,’ he said. ‘Fortunately, we do so much work in other areas, including workouts, bankruptcy and litigation. Like Becker & Poliakoff, we are having trouble getting some of our developer clients to pay. But they’ve been good to us, so we try to be good to them.’”
From US News and World Report. “No matter what you think about the controversial housing legislation moving through Congress, at least we can all agree there just hasn’t been enough TV coverage of the nation’s foreclosure epidemic.”
“So, for all of you begging for a closer look at a process that’s now shattering communities, gutting home values, and threatening to drag the entire country into a recession, meet real estate agent Tom Bruzzesi, the star of The Foreclosure Shoppe-a new realty/reality TV show focusing on Florida’s treacherous real estate market.”
“From the press release: In each episode of ‘The Foreclosure Shoppe,’ camera crews follow Tom on a typical wild and crazy day at the office. Tom (affectionately nicknamed ‘The Maniac’ by his peers) confesses that he is a master at frustrating people.”
“‘I know how to get underneath their skin and throw off their bidding strategies,’ Tom admits. From irritating bidders at the courthouse, to walking through his purchased properties for the first time, to evicting tenants that won’t leave, to picking up his large paychecks, viewers get an inside pass to witness Tom navigating through the messy foreclosure process.’”
