Property-tax lament: `So, where’s my tax break?’

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Property-tax lament: `So, where’s my tax break?’

Gov. Charlie Crist promised Floridians that their tax bills would ”drop like a rock” if they voted for property-tax reform in January.Now, with prospective tax bills in hand, disillusioned South Florida homeowners and investors say the decrease is more like a soggy bag of Styrofoam packing peanuts.

”I was expecting a lot more than this,” said retired shipping manager Alfonso Llanes of Palmetto Bay.

Llanes is one of more than 400,000 South Florida homeowners who are discovering that taxes are going down — but not by much, and not nearly as much as the dramatic dives in real market values over the past two years.

That’s because the assessed value of their primary residences — the amount that counts for tax purposes — still rose this year. It’s one of the key consequences of a property-tax system that rewards longtime homeowners while penalizing those who bought when real-estate prices soared, as they did a few years ago. That law, called Save Our Homes, prevented taxes from skyrocketing in lock step with market values, but now that home prices are falling, it is undermining efforts to ease the tax burden.

Even the reform plan’s staunchest supporters admitted at the time that it wouldn’t solve the property-tax crisis. Some relief, they argued, was better than none.

New rules doubled the exemption on most homesteaded properties to $50,000 and created a way for some homeowners to transfer up to $500,000 in tax-shielded value to a new one.

While property owners like Llanes expected more tax relief than they are likely to get, it’s a start, said Crist spokesman Sterling Ivey.

”We’re seeing some reductions across the state,” Ivey said. “Just because your [tax] notices aren’t going down, we believe that they are going down across the state.”

Voters, Ivey noted, may have the opportunity to reduce their tax bite further if a proposal to replace property taxes to fund schools with a sales-tax hike gets a green light from the state Supreme Court.

Llanes, the retiree from Palmetto Bay, is facing a scenario that will be quite common across Florida during this fall’s budget season.

The market value of the 2,800-square-foot home that Llanes acquired when his wife died four years ago plummeted by $157,000 between last year and this year. Yet, the taxable value increased by $15,000.

Llanes paid $9,464 in property taxes last year. Depending on a number of variables, he’s looking at a proposed tax bill ranging between $8,861 and $9,110 this year.


“My market value is down almost 30 percent. Thirty percent! I have more exemptions than I did last year because I’m a senior now and they passed the tax reform. But I’m paying almost the same in taxes. How can that be?”

The answer goes back to Save Our Homes, a voter-approved amendment that radically altered the way property is taxed in Florida.

Since 1995, the Save Our Homes amendment has capped how much the assessed value on homesteaded properties can rise each year at 3 percent or the increase in the Consumer Price Index, whichever is lower. Assessed value — the key to the taxes that owners actually pay — generally resets closer to the market value when a home sells.

With each passing year, Save Our Homes created growing disparities, often on the same block. One home, owned by the same family for decades, might be assessed at hundreds of thousands of dollars less than an identical house, because it had recently been sold to another family at a higher price.

In a declining real-estate market, Save Our Homes requires property appraisers to continue to apply the increase in taxable values when the Save Our Homes value remains less than the real-market value.

This year, 323,105 homeowners in Broward County fall into this category, where market values have plummeted but their taxable values increased 3 percent.

In Miami-Dade County, more than 112,000 homeowners fit the same profile. Still, nearly 102,000 of them will see their taxes stay flat or dip slightly, because the new $50,000 homestead exemption offsets the rise in assessed values.

Just ask Joseph Fashano, a retiree from Pennsylvania, who has seen the market value of his Eastern Shores condo drop by $70,000 this year, while the taxable value increased by $6,000.

Even with the voter-approved exemptions, Fashano’s prospective tax bill remained virtually the same.

”Tax reform? It’s all double-talk,” said Fashano, who moved to North Miami Beach  in 2001. “They’re talking out both sides of their faces. I think they used that as an excuse to cut services.”

Even with the declining housing market, the gap between Save Our Homes and actual market value is massive.

Marcus Sera, Miami-Dade’s appointed property appraiser, estimates that the $66 billion gap between Save Our Homes and actual values results in a $1.2 billion savings to homeowners.

In Broward, that gap is about $61 billion between Save Our Homes and real-market values, costing government agencies about $1 billion in lost revenue.


Another common complaint revolves around the expectation that all market values would be reduced as home prices continue to decline.

That hasn’t happened — in part because Florida tax bills are calculated on eight-month-old information and comparable sales leading up to Jan. 1, 2008.

This year’s steep market declines won’t be reflected until next year’s tax notices.

The TRIM (Truth in Millage) notices received by homeowners in the past 10 days are projections. Final bills will be mailed by Nov. 1, once governments hold hearings and settle on a final rate.

Another key element of the tax-reform package hasn’t had a major impact on home sales or the tax system yet.

Property appraisers say they haven’t been overwhelmed with applications from homeowners taking advantage of new ”portability” provisions. Portability allows people to sell their current homesteads and transfer up to $500,000 in tax-shielded ”Save Our Homes” value to a new home.

It was designed to help seniors and other longtime residents who wanted to sell but couldn’t afford the higher tax exposure on a new property.

Investors, speculators and owners of rental property that wasn’t sheltered from the vagaries of the marketplace by Save Our Homes are finding even less relief under the new property-tax rules.

Coky Michel, a retired public-school teacher, is struggling to pay the taxes and upkeep on a South Miami rental property that she and her husband inherited when her mother died six years ago.

They paid $8,709 in property taxes on the three-bedroom, three-bath house last year. Depending on an array of factors, their likely tax bill will fall between $8,527 and $8,955 this year.

Appraisers pegged her house’s market value at $408,000, Michel said. “I guarantee you I can’t sell that house for $408,000. My point is: If prices have been going down for more than a year, why isn’t my tax bill showing it?”

The biggest winners — and the ones least likely to be complaining to property appraiser’s offices — are the people who bought homes and condos at the peak of the market in 2005 and 2006 and have been paying much higher taxes than their neighbors down the street who have lived there for decades.

The additional $25,000 homestead exemption, and the narrowing gap between market and assessed values, could reap a tax savings of $1,000 to $2,000 after counties, cities, schools, and water and hospital districts finalize their budgets.


This is always a busy time of year at the local property appraiser’s offices, with the release of TRIM notices. Always dense and complicated for the average citizen to decode, they became even more inscrutable with the latest amendments factored in.

”There’s a lot of confusion out there,” said Broward Appraiser Lori Parrish, who is answering 300 e-mails a day from angry taxpayers. “There usually is this time of year, but it’s gotten worse.”

Zilbert Realty Group – Active Listings September 1 2008

310 RIVO ALTO DR  $1,995,000  $792 3/3/1 2520 Mark Batievsky (305) 216-2206 Click
731 86 ST  $1,299,000  $659 4/3/0 1970 Bill Hernandez (305) 910-7644 Click
1800 Club Condo #601  $800,000  $365 3/3/0 2189 Bryan Sereny (305) 772-6889 Click
200 Ocean Drive Condo #4A  $799,000  $639 2/2/0 1250 Luis Felipe Souza (305) 321-0060 Click
50 Biscayne Blvd #4910  $885,000  $495 3/2/0 1789 Mark Batievsky (305) 216-2206 Click
Casa Grande Condo #507  $3,800,000  $2,639 2/2/0 1440 Bryan Sereny (305) 772-6889 Click
Continuum I #802  $990,000  $824 1/1/0 1201 Jeff Miller (305) 610-4509 Click
Continuum II #2404  $1,400,000  $901 1/1/1 1554 Mark Zilbert (786) 280-0201 Click
Continuum II #2203  $1,850,000  $963 2/2/1 1922 Mark Zilbert (786) 280-0201 Click
Continuum II #1407  $1,600,000  $1,073 2/2/1 1491 Mark Zilbert (786) 280-0201 Click
EL Dorado III #1108  $250,000  $251 2/2/0 996 Jayson Wingfield (305) 878-1709 Click
Flamingo #1466S  $329,000  $453 1/1/0 726 Michael Yablonicky (305) 467-7204 Click
Flamingo #722  $629,000  $578 2/2/0 1088 Michael Yablonicky (305) 467-7204 Click
FONTAINEBLEAU III #511  $849,000  $1,544 0/1/0 550 Michael Yablonicky (305) 467-7204 Click
Four Seasons Residence #41D  $799,000  $717 1/1/1 1114 Bill Hernandez (305) 910-7644 Click
Gateway to the Grove #503  $260,000  $260 2/2/0 1000 Yoandra Pena Click
Icon #3405  $3,720,000  $1,202 4/4/1 3094 Dario Stoka, MBA (305) 987-1195 Click
Imperial House #9C  $274,900  $250 0/1/0 1100 Michael Yablonicky (305) 467-7204 Click
Marina Blue #5108  $689,000  $516 2/2/1 1334 Bryan Sereny (305) 772-6889 Click
Marina Blue #4609  $815,000  $465 2/2/0 1754 Bryan Sereny (305) 772-6889 Click
Mirador 1200 Condo #1010  $299,000  $357 1/1/0 837 Mark Batievsky (305) 216-2206 Click
Mirador North #1219  $300,000  $358 1/1/0 837 Jayson Wingfield (305) 878-1709 Click
Murano At Portofino #1502  $2,495,000  $953 3/3/1 2618 Mark Zilbert (786) 280-0201 Click
Murano Grande #803  $2,150,000  $703 3/3/1 3058 Mark Zilbert (786) 280-0201 Click
Murano Grande #603  $2,150,000  $703 3/3/1 3058 Mark Zilbert (786) 280-0201 Click
Murano Grande #608  $1,250,000  $781 2/2/0 1600 Jayson Wingfield (305) 878-1709 Click
Murano Grande #1211  $1,350,000  $819 2/2/0 1649 Bryan Sereny (305) 772-6889 Click
Neo Vertika #PHII15  $399,000  $318 2/2/0 1255 Bryan Sereny (305) 772-6889 Click
Ocean Place East #8F  $1,495,000  $954 2/2/0 1567 Mark Zilbert (786) 280-0201 Click
One Bal Harbour #2406  $1,995,000  $994 2/2/1 2007 Bill Hernandez (305) 910-7644 Click
Parc Central #911  $299,000  $263 2/2/0 1137 Mark Batievsky (305) 216-2206 Click
Setai #2104  $1,899,000  $1,634 2/2/0 1162 Jeff Miller (305) 610-4509 Click
Shelborne Ocean Beach #925  $103,000  $286 0/1/1 360 Michael Yablonicky (305) 467-7204 Click
Ten Museum Park #1802  $895,000  $459 2/2/1 1949 Mark Batievsky (305) 216-2206 Click
The Bentley Bay #1904  $699,999  $579 2/2/1 1210 Bryan Sereny (305) 772-6889 Click
The Courts at South Beach #137  $699,000  $538 2/2/0 1300 Jacqueline Reeves (305) 776-3235 Click
The Grand Venetian #104  $800,000  $542 2/2/1 1477 Bryan Sereny (305) 772-6889 Click
The Knightsbridge #801  $215,000  $239 1/1/0 900 Ilissa Whitehead (786) 205-5989 Click
The Knightsbridge #802  $150,000  $238 0/1/0 630 Ilissa Whitehead (786) 205-5989 Click
The Montclair Condo #204  $479,000  $471 1/2/0 1018 Lisa Van Wagenen (305) 495-8417 Click
The Setai #2506  $2,295,000  $1,744 2/2/0 1316 Mark Zilbert (786) 280-0201 Click
The Setai #404  $599,000  $1,003 0/1/0 597 Mark Zilbert (786) 280-0201 Click
The Setai #TH-B  $3,495,000  $1,942 2/2/1 1800 Mark Zilbert (786) 280-0201 Click
The Setai Resort #511  $700,000  $1,057 0/1/0 662 Jayson Wingfield (305) 878-1709 Click
The Waverly #1007  $499,000  $370 2/2/0 1350 Jayson Wingfield (305) 878-1709 Click
The Yacht Club Aventura #8307  $329,000  $279 2/2/0 1180 David Veit (954) 294-9014 Click
Turnberry Ocean Colony #2801  $2,300,000  $829 3/3/1 2775 Bill Hernandez (305) 910-7644 Click
Waverly #3007  $574,000  $425 2/2/0 1350 Dario Stoka, MBA (305) 987-1195 Click

People Who Live in Glass Houses

It’s Not All Sunshine; Faded Furniture, Nosy Neighbors and Baking Heat Among Gripes
By SARA LIN – Wall Street Journal

Seeking views, Sara Antani bought a 17th-floor condo last August in a new Manhattan high-rise with floor-to-ceiling windows overlooking the Hudson River.
The sun faded Sara Antani’s sofas and made it tough to read her laptop until she installed shades in her Manhattan high-rise.  She got her vistas. But she got other things she didn’t bargain for. The strong and relentless western light forced her to don sunglasses while reading. It made watching television and using her laptop computer almost impossible. The air conditioning could barely keep the temperature tolerable as sun baked the $1.5 million apartment on summer afternoons. And the sun bleached her pair of brightly colored European sectional sofas, which cost $20,000.

In June, Ms. Antani gave in, spending $12,000 on motorized shades that she keeps lowered during the day. “I love being able to see everything,” says Ms. Antani, a 23-year-old graduate student. But “the sun’s just in your eyes; you can’t focus. Everything is so bright.”
Wall-to-wall windows have become a signature of chic urban living, from Minneapolis to Miami. Home magazines and real-estate ads depict fashionable people in glass-walled towers lounging in front of endless views. But some residents say the reality can be less glamorous. Their windows often are streaked or spotty, even when washed regularly. The sun fades not just furniture but also kitchen cabinets, wood floors, artwork and even books. While urbanites are used to nearby neighbors, a glass-walled apartment without shades can be akin to being on display in a terrarium, especially at night. And temperatures near the glass can be chilly in the winter and roasting in the summer.

In Los Angeles, David Wood learned the hard way not to try to clean the expansive windows in his downtown condo on a sunny afternoon. The investment banker squirted Windex onto the inside of one of them — and it stuck. “The mist baked right into the window and stained it. I couldn’t get it out. It was that hot,” he recalls. The stain is still there.

Investment banker David Wood sprayed Windex on the glass of his Los Angeles condo — and it baked on.
Rick LaBelle bought a downtown Chicago condo in October that came with sweeping views of Lake Michigan — and of the hotel across the street. “They can clearly see in,” he says. “Oftentimes people over at the hotel will wave.” The lack of privacy forced his daughter to retreat to a bathroom to dress. So the auto executive this month paid $15,000 for motorized shades to cover his windows.

Melanie Feinbloom says privacy is just one reason she spent $8,000 for 62 feet of curtains for her downtown Manhattan condo. After her family moved from a brick apartment building to the glass-walled high-rise, her electric bills doubled per square foot because of all the heat-transferring glass. It costs more than $500 a month to heat the 2,200-square-foot apartment at the height of the winter and at least $400 a month to cool it in the summer, says Ms. Feinbloom, an interior designer.

Complaints about glass houses date to some of the earliest examples. After architect Ludwig Mies van der Rohe completed his iconic Plano, Ill., Modernist house in 1951, the owner, Edith Farnsworth, started grumbling. Illuminated at night, the elevated glass box became a magnet for bugs. During the summer, “the sun turned the interior into a cooker,” writes Mies biographer Franz Schulze. Dr. Farnsworth sued the architect, in part over cost overruns but also because she contended that the house was unlivable. She ultimately lost her petition to rescind the added expenses, but her gripes were aired widely and resulted in a small backlash against Modernist architecture.


Glass technology has improved since then. To cut down on sun damage and heat transfer, window makers use films on the surface and gases between the double panes that act as insulators, such as argon. Some windows even have a coating designed to shed dirt and reduce the need for washing. But problems continue. Terry Talentino, chief operating officer of Automated Shading Inc., says he has done work for thousands of apartment owners in Florida and Manhattan who are unprepared for how much solar heat gets transferred by their enormous windows. Many buy their condos based on preconstruction renderings or after viewing a sales unit with ideal conditions, such as less-sunny northern and eastern exposures, he says. “I’m not sure people really anticipate what they’re getting themselves into when they’re buying these,” Mr. Talentino says.

And even when residents decide they need to compromise their views and install curtains or shades, the installation can be problematic. The longer rods and extra fabric needed to cover a wall of glass not only are expensive but also often require installers to use extra-tall ladders or scaffolding. And sometimes these extra-long curtain rods or shades don’t fit into condo freight elevators and have to be carried up the stairs or taken up on top of the elevator cab — at extra cost.

Seasoned glass-house residents have developed strategies to cope with the sun-filled spaces. Connie and Jeff Watson, whose primary home has large windows, recently bought a second home in the new W Dallas Victory Hotel & Residences, which has floor-to-ceiling glass. Ms. Watson says she worked with her designer to carefully place every piece of furniture in the 4,800-square-foot apartment. Bright orange-and-red sofas were set back at least 10 feet from the windows. The rosewood grand piano went next to a small east-facing window. But they left some honey-colored leather dining chairs exposed to direct light because “it’s hard to fade something that color,” Ms. Watson says.


Window treatments are a must for glass walls, says New York interior designer Jamie Gibbs. Without them, he says, “You’d better pick beige interiors, because everything is going to become beige in two years.” Solar shades, which are made of a semisheer fabric, can cut down on heat and damaging ultraviolet rays while allowing residents to retain much of their view. But at night, with the lights on, solar shades aren’t enough for privacy. Mr. Gibbs says it is like a scrim on a theater stage with a light illuminating the actors from behind. “You see defined shadows. There’s not a lot left up to the imagination,” he says.

Then there’s the trouble with birds. Houston artists Dana and Hana Harper live in a 1960 house by architect Harwood Taylor with “wall-to-wall windows,” says Mr. Harper. The couple enjoys looking out over a wooded bayou, but they don’t like that birds periodically crash into the glass and die.

Architect Adam Rolston has a more comical problem with birds — wild turkeys, to be precise. Groups of them sometimes march up to the glass doors that line the sides of the Modernist house he built in upstate New York and peck at their reflections, often early in the morning, he says.

Yet most people who live in glass-walled homes insist they wouldn’t trade their views. Standing in his Manhattan living room overlooking the Hudson, Raj Mahajan says, “It brings a little bit of nonconcrete serenity to my New York existence.” But Mr. Mahajan, a 35-year-old financial-software executive, advises sleepover guests in the summertime to lower their shades before they go to bed. “If they don’t, they get scorched in the morning.”

Write to Sara Lin at sara.lin@wsj.com2

Understanding Short Sales

Selling Property For Less Than What Is Owed To The Bank

In today’s real estate market there is an increasing number of homeowners who are no longer able to pay their mortgages.  In the past, this normally meant that the property would end up in foreclosure.  But, today, lenders are open to an alternative way to deal with these situations.  They often allow a property to be sold for less than  market value, and they absorb the loss.  This is what we call a SHORT SALE.  This simply means that the property is sold for an amount less than what is owed to the bank.  Foreclosures are very costly to a lender, and lenders have numerous financial advantages to allowing short sales. 

Zilbert Realty Group has created a Short Sale department which offers the following services:

  • We help homeowners who are facing foreclosure sell their properties quickly as short sales
  • We help buyers locate short sale opportunities, usually at less than market prices
  • We help other real estate brokers, who are inexperienced in listing short sale properties, list and sell their properties

It’s also important to understand that short sales are make up a very small portion of the real estate market.  In fact, a bargain-hunting buyer may find very few deals, especially in the more-popular areas such as South Beach and Bal Harbour. 

How Does A Short Sale Work?

In order for a property owner’s lender to consider the property for a short sale, the following must be true:

The property owner can demonstrate a financial hardship, AND
The property owner is unable to continue to make their loan payments
Any type of owner can qualify for a short sale on their property:  primary homeowners, vacation home owners, investors, developers, etc.

Many short sale owners are already in a pre-foreclosure stage.  Often, they have missed some of their mortgage payments, failed to pay their condo maintenance or have missed other payments.  These lien holders have started the process of foreclosure.  However, as long as the court has not declared a judgment, a short sale is possible.  Timing is everything, though.  However, a homeowner who is not yet in foreclosure, but who realizes that he or she can no longer make their payments to the lender are also good candidates for a short sale.  The key is to start the short sale as early as possible.

The homeowner engages a broker, such as Zilbert Realty Group, who will place the property on the market at a price that is below the market price.  The broker simultaneously creates a hardship package to be given to the lender.  A hardship package is a set of documents that demonstrates why the homeowner is having a financial problem.  The package also serves as a notice to the lender that the property is going to be listed for sale below market prices. 

When we market your property, we ensure that it is priced at a too-good-to-be-true price, and we let buyers and other brokers know that we have a short sale opportunity to tell them about.  Our target time to sell your property is seven days or less.

When you engage a skilled broker, such as Zilbert Realty Group, the broker will handle all the details of the short sale, including the negotiation with the lender, and the processing of the paperwork.  You don’t incur any fees whatsoever!  The lender pays for everything (subject to the approval of the lender, of course).

Once an offer is received, the broker will present it to the lender, for approval.  If the lender approves the offer, the lender will issue a payoff letter that allows the seller to sell the property for an amount less than what he or she owes the lender.  Additionally, the lender will normally pay all closing costs.  So, at the closing, the seller puts up ZERO dollars, but he or she also walks away with no proceeds from the sale.


SHORT SALE: The seller’s credit is “bruised”, and the seller can normally qualify for a mortgage in just 2-3 years
FORECLOSURE:  The seller’s credit is “damaged”, and the seller will not be able to get another mortgage for 10 years 
SHORT SALE: No attorney fees, as Zilbert Realty Group handles the transaction for the seller
FORECLOSURE:  Substantial attorney fees 
SHORT SALE: The seller has peace of mind, as the lender allows a “way out”
FORECLOSURE: No peace of mind, just never-ending worries 
SHORT SALE: The settlement is negotiated, as are the liens on the property
FORECLOSURE:  The court settles the foreclosure, and liens are extinguished (which opens the seller up for possible civil suits or other judgments)

How Can I Learn More About Short Sales?

We have created additional information for sellers and buyers of short sale properties.  Please click on the button below which best applies to you



DISCLAIMER:  The information on short sales is provided based on various sources.  While we believe the information to be accurate, it is not warranted.  Buyer and sellers of short sale properties should consult with legal and financial professionals for specific opinions and guidance.  Zilbert Realty Group will not be liable for selling or purchase decisions made solely based on the information on this website.

South Florida residential market should feel affects of Opera Tower ruling

By Risa Polansky – Miami Today

   A federal judge’s ruling that threw out dozens of lawsuits claiming a local condo project differed from its advertisement should affect the residential market, experts agree, though they predict varying degrees of impact.

   A US district judge in Miami this month tossed out 29 lawsuits that claimed Tibor Hollo’s Opera Tower project didn’t deliver what the marketing brochure featured: amenities such as designer tile and an Olympic-sized pool.

   Judge Patricia Seitz of the Southern District of Florida ruled that advertising materials do not trump contract terms, which in this case spelled out what buyers were signing for.

   “Folks are simply trying to get out of their contractual obligations because the market’s gone soft,” said attorney Ed Pfister of Phillips, Cantor & Berlowitz, the firm that represented Opera Tower. “This [decision] should have important precedential impact across the country.”

   Around the US, remorseful buyers are fighting to get condo deposits back, he said.

   “They’re trying to flyspeck everything, find any way out of the contract because the market’s changed. They’re trying to get out of their investment decisions.”

   Many are suing under the federal Interstate Land Sales Full Disclosure Act, which was “developed to prevent unscrupulous people from selling swampland to folks all over the country. It was designed to prevent just outrageous fraud,” Mr. Pfister said.

   But now, “they’re trying to use that case law and bend it to the current situation.”

   The judge’s ruling, he said, should prevent future “improper” use of the law.

   Betsy L. McCoy, vice president and associate general counsel for developer The Related Group, said “the case represents significant court adjudication of issues the developers have been struggling with for the past 12 to14 months.”

   She called it “the type of decision frankly I’ve been waiting for” and said it should come in handy in the future.

   “I will be using it in every form that I possibly can to the advantage of The Related Group where applicable.”

   Mr. Pfister said the court decision should inspire confidence among developers.

   “They can go back into the marketplace, they can continue to build and know that purchasers can’t simply go through their documents, flyspeck everything and say, “aha, gotcha!'” he said. “This is not a “gotcha’ statute.”

   To successfully get out of a contract, “it would have to be something extreme and material,” he said, such as a developer delivering fewer or smaller units, no pool when a pool is promised in a contract, and other such changes.

   Jack McCabe, chief executive officer of McCabe Research & Consulting in Deerfield Beach, called many suits today “frivolous.

   “The problem with a lot of the speculators was, they didn’t read the paperwork,” he said.

   Now, “the legal system is determining and describing which cases really are material and adverse and which ones aren’t.”

   Michael Y. Cannon, executive director of Integra Realty Resources—Miami, a real estate adviser, market analyst and valuator, said the same about frivolous cases.

   Developers aren’t the only ones who should rest easier after outcomes such as the Opera Tower decision, he added.   “The confidence part is more important not necessarily to the developer, but to the lending institutions,” he said. “They get cautiousÖ things like this, if it goes the wrong way, widespread, could stymie future development.”

   The recent court decision should do just the opposite, said Ken Thomas, a Miami-based economist and banking expert.

   “I think it will be good news for the housing market.”

   Now, condo flippers will have to either cede their deposits to developers and walk away, or actually go through with buying the condos.

   “That means a lot of this overhang we have it’s going to be less than we expected now, because now many of these condo flippers are going to have to make good on their deposit,” Mr. Thomas said. “You’re talking a lot of money. I think its going to help us get out of this problem sooner.”

   Mr. McCabe disagreed.

   “I think many of them are still going to walk away from their deposits,” he said.

   He said he doesn’t think the court decision will necessarily turn the struggling market around.

   But because developers will be able to hang onto deposits, “it helps them in that they can now resell those units for 20% lower than they had previously contracted them for and not lose any money, so it does give them an added sales tool.”

   Developers will be able to offer discounts, he said, “without affecting their bottom line”

   Ms. McCoy of The Related Group noted, however, that buyers have the option to seek a rehearing or appeal the decision, which could take six months to a year.

   Attorney Kent Harrison Robbins, who filed the Opera Tower lawsuits, did not return calls for comment.

   Still, “the federal court decision is persuasive,” Ms. McCoy said. It “represents a significant advancement in favor of developers. But I wouldn’t say it’s a turning point in the market.”

High Times Roll On For High-End Condo Market

By Albert BozzoSenior Features Editor

If you’re looking for a high-end, luxury condominium, there’s more choice out there but you  won’t find any bargains in Boston — or New York, Los Angeles, San Francisco, or even Miami. That’s right, Miami.
And don’t make too much of the credit crunch or the housing slump. It won’t help you much in the high-end condo hunt.

“Our high end is surging,” says Boston realtor and marketing executive Kevin Ahearn, president of Otis & Ahearn, which controls 14.5 percent of the downtown market. “Pricing and fundamentals are as strong as they’ve ever been.”

As of mid year, transactions are Otis & Ahearn were running 7 percent over 2007, a record year when it netted $450 million in sales.

The company’s closely-watched market data are forecasting a record year in several metrics and the inventory level is now at just 3.6 months.

Sales of $1 million-plus units now represent almost 15 percent of the total, double that of 2004. As of late July, the number of $2-million-plus transactions had already surpassed the 2007 peak. The $3-million-plus segment is the fastest growing; 33 properties have closed, double that of 2004.

“The credit crunch has been digested to a large degree,” says Ahearn, who describes his customers as “not a very heavily-leveraged group.”
The high-end condo market may be powerful but it is not large. Data is also limited and local.

The $1 million-plus home segment — condos, coops and single-family dwellings — accounts for only 2 percent of existing home sales, according to the National Association of Realtors.

Nationwide, the median price of a condo was $224,200 in June vs. $226,300 for all of 2007, but up from the February 2008 bottom of $211,800.

Boston may be exceptionally strong right now, but other top metro areas, such as Honolulu and Chicago, have seen  increases over the past year, according to NAR data. Others –- notably Las Vegas and Miami have suffered sharp declines.
The New York metro area is flat overall, but in the fashionable Manhattan, high-end properties are appreciating, according to realtors there.

“It will be one of our best years,” says Pamela Liebman, CEO of Corcoran Group.

The media price for a luxury condo –- new or existing — is up 19 percent to $4.37 million. On the exclusive Upper East Side, a three-bedroom unit was fetching  $3.65 million as of the second quarter, versus $2.17 million in 2007, according to the Corcoran Report. The very high end — $10 million and above — is at or near a record high.

“Buyers are certainly being more cautious and there’s more inventory to choose from,” says Liebman, who adds there are still “plenty of cash only buyers.”

That’s clearly a quality of the high end-market. Tighter lending rules are not a major factor, nor are contingency deals.

In Philadelphia, the number of transactions is down about 30-percent, but prices in top neighborhoods such as Society Hill are flat or higher, says veteran high-end realtor Allan Domb.

“For a small segment of the market there is opportunity out there,” says Domb.
As an example, Domb mentions the recent sale of a property in the $2-million range in exclusive Rittenhouse Square. The buyer had three other homes, including one in Florida.

“Astute buyers realize this won’t continue forever,” says Domb.

That seems to be the case in southern Florida, an emblem of the distressed real estate market in recent years.

“You’ve already passed the bottom,” says Miami broker Peter Zalewski, who co-founded Condo Vultures in 2006. “Deals are pretty much gone in the proven, mature markets, with access to water.” Most notable are South Beach, Coral Gables Key Biscayne and Coconut Grove.

Zalewski says an analysis of 500 “coastal” properties in the $2 million-$10 million range in the MLS listing system shows 15 percent with price cuts, 10 percent with price increases and the remainder with unchanged prices over the past six months.

“That’s reflective of the confidence sellers have,” says Zalewski, who adds transactions have picked up significantly since July.

The median price in that group is about $3 million for a “trophy building on the sand” in Bal Harbour, right next to Miami Beach.  It has almost 3300 square feet with 3 bedrooms and 3 baths.
From Bal Harbour to Boston, the strength of the high end market is partly because of exclusivity.

“They’re not making anymore beachfront,” says Miami broker Ned Berndt, publisher/founder…

Berndt says he’s seen a dramatic increase in the past 100 days. Inventory levels are down sharply from a year ago, when they were running at four years or more.

On elite Fisher Island –- three miles off the coast of Miami Beach, volume is holding and prices are up. Through June, 16 transactions averaged $3.8 million, versus 32 at $2.7 million in 2006.

In another generally hard hit area of the country, king condo is also alive and well.

In the Los Angeles market, for instance, volume is definitely down, but the “market is still healthy with a slight appreciation in some areas and a slight decrease in others,” according to Steve Heiferman, who co-founded the Luxury Condominium Group in 1978 and works the so-called Wilshire Corridor, or Golden Mile, where the segment starts at about $2 million.

In California’s two other big condo markets, prices in the $1 million-and-over category are clearly outperforming the broader market.

In the San Francisco Bay area, the median price for that segment rose 7.1 percent in the first half of 2008. Overall, prices fell 18.5 percent, according the California Association of Realtors.

“It’s the top area for people who have large cash reserves, strong balance sheets and the largest activity in luxury in condos,” says the group’s deputy chief economist Robert Kleinhenz.

Orange County’s luxury condo market has posted a median price gain of 9.4 percent, compared to a 23.1 percent decline overall.

“The wealthy are somewhat impervious to all this,” says Heiferman of the credit crunch and economic downturn.

The New Miami Heat

Ondine Cohane – Conde Nast Daily Traveler 

I love Miami. My husband, my best friends, Sarah and Hugo, and I take a ritual weekend there each December to celebrate Sarah’s birthday. We always go after Art Basel (before the holiday frenzy, mind you, so the city feels more chill and less overrun by fellow New Yorkers) and try to combine our classic haunts like Joe’s Stone Crab with new arrivals. Last year we checked out the Tides on Ocean Drive, which stood out for its service (and in my experience, service can be less than stellar in South Beach) and the on-site restaurant La Marea with its excellent fish dishes; in fact the property made our annual Hot List.

I keep thinking that the hotel building boom will slow down–it seems like there are more properties than could possibly be needed–but every year I am proven wrong. Which means that the city just keeps getting that much more popular with currency-happy Europeans, sun-starved East Coasters, and South Americans looking for a real estate deal. This year there is yet another generation of properties opening its doors, and it sounds worth the trip.

Perhaps the most anticipated is the Mondrian, designed by Marcel Wanders and conceived as “Sleeping Beauty’s Castle,” which translates (according to the press release) as “chandelier shower heads, adult-size sandboxes, foliage-curtained cabanas, kissing gardens, and outdoor egg-shaped baths.” Not to mention “appearances by the ‘dancing angel,’ suspended Cirque-de-Soleil-style above the pool’s Happy Hour Chandelier.” So Miami. The property is on West Street; I don’t know the bay side of the city as well, so it will be interesting to explore. Other properties on my radar for this season include the Canyon Ranch outpost set to open in October, the Betsy, a new boutique hotel on Ocean, and the newly-renovated Fontainebleau. I’ll keep you posted on my findings…

Beat banks to deals on preforeclosure properties

Monica Katcher – Miami Herald Reports:

What is a preforeclosure? This is property in the foreclosure process but not yet owned by the bank. The borrower is generally 90 days or more late on the mortgage and has about three to six months to resolve the situation before the home is sold at auction.

Under normal conditions, such borrowers often slash their asking prices to avoid ruining their credit, meaning buyers who identify these sellers can often get significant discounts.

In today’s market, when home values are tumbling, however, the majority of homeowners entering foreclosure are upside down and owe more on their mortgages than the market value of their properties. That means buying preforeclosures most likely will involve negotiating a short sale with the lender who agrees to accept a sale amount less than the note due.

These can be complex and time-consuming negotiations that take an average of three to six months to complete, according to Jeanette Escudero, a title attorney who specializes in negotiating short sales. For determined buyers, though, they can be worth the effort, yielding discounts of 40-50 percent.

An advantage of a preforeclosure over a bank-owned property is the chance of getting a home that’s in pretty good shape because the owner has most likely been living there. You are also working with motivated sellers.

But remember not all preforeclosures are for sale. Often, buyers must convince property owners a short sale is in their best interest. Abandoned homes cannot be bought through short sales because lenders must proceed through the court system to obtain title.

Here’s how to proceed:

Research the property. There are several subscription services that provide listings of the first public notice of a foreclosure lawsuit for a monthly fee.

Otherwise, such filings (called lis pendens) can be searched free on the Miami-Dade County Clerk or Broward County recorder’s websites. These filings often do not contain addresses, only legal descriptions. This adds an extra step of research at the property appraisers’ websites.

Some delinquent borrowers will attempt to sell before foreclosure, so many preforeclosures are listed with real estate agents on the MLS as short sale offers.

Find out how long the home has been in foreclosure. Short sale negotiations take time and do not necessarily stop the clock on a public auction.

To craft a good offer, you also should find out the market value of the home, the amount of the original mortgage, and other liens and legal problems encumbering the property.

Approach the homeowner. If a property is not listed for sale, contact the homeowner. Do this with extreme care. Delinquent borrowers are likely getting dozens of phone calls and letters from creditors and business owners selling their services.

Experts recommend leaving a handwritten note to break the ice before calling or knocking on the door. Hire an agent to work with the homeowner if they agree to cooperate with you.

Submit an offer. The lender’s goal is to lose the least amount of money possible. Low-balling might get you nowhere, and some lenders do not make counter offers. Since short sales take a lot of time, you want to consider your offer carefully. Include evidence of your loan preapproval and earnest money.

Despite the home’s market value, consider how much the lender will lose. Factor in the cost of settling other liens as well as closing costs. Lenders will be following their own internal policies. They also may be considering numerous offers simultaneously.

Cash offers with no contingencies carry the most weight, Escudero said. Every concession a lender is asked to make is viewed as a loss, so most sales are offered “as is, where is.”

Make your offer contingent on the lender’s acceptance, and set a time frame for a response.

Close the deal. When a lender accepts your offer, they will pick up the seller’s closing costs, but not home warranties, homeowner association transfers fees, and so on.

(See a list of Short Sales on the Zilbert Realty website:

T-Mobile to Offer First Phone With Google Software

August 15, 2008


T-Mobile will be the first carrier to offer a mobile phone powered by Google’s Android software, according to people briefed on the company’s plans. The phone will be made by HTC, one of the largest makers of mobile phones in the world, and is expected to go on sale in the United States before Christmas, perhaps as early as October.

The high-end phone is expected to match many of the capabilities of Apple’s iPhone and other so-called smartphones that run software from Palm, Research in Motion, Microsoft and Nokia to access the Internet and perform computerlike functions.

The HTC phone, which many gadget sites are calling the “dream,” will have a touch screen, like the iPhone. But the screen also slides out to expose a full five-row keyboard. A video of the phone has been posted recently on YouTube. A person who has seen the HTC device said it matched the one in the video.

The phone’s release date depends on how soon the Federal Communications Commission certifies that the Google software and the HTC phone meet network standards. Executives at all three companies are hoping to announce the phone in September because they would benefit from holiday season sales. The people briefed on the discussions declined to be named because they were not authorized to discuss the project.

Apple’s iPhone has shaken the cellphone industry, partly because of its design, but mostly because AT&T and Apple have allowed owners to download any number of applications to their phones. That freedom to individualize a phone’s functions has helped increase the popularity of the iPhone.

Phones using Google’s software will do the same thing. Google is making the Android operating system software available free to an alliance of companies, including cellphone carriers and manufacturers who have agreed to provide devices which, like personal computers, allow users to decide which applications run on them.

Google thinks that many consumers will want to personalize their mobile phones with unique applications and services, including those made by Google.

Google is eager to get the Android platform on phones quickly because it thinks that the mobile Web is vital to the long-term growth of its digital advertising business.

“We can make more money on mobile than we do on the desktop, eventually,” Eric E. Schmidt, Google’s chief executive, said in an interview on CNBC this week.

But carriers have their own reasons for wanting devices that are more Internet friendly. For one, they can charge more for data plans than typical voice plans. And some carriers, like AT&T, are creating their own mobile applications that they hope will also be revenue generators.

“The launch of Android is an important milestone in the industry,” said Richard Wong, a venture capitalist at Accel Partners, which invests in mobile start-ups. But, he warned, it was only one of several platforms being developed or upgraded today. He said that what he found most exciting was that Google’s Android and Apple’s iPhone “forces others to innovate faster.”

Executives for T-Mobile, the nation’s No. 4 wireless carrier, declined to comment on the new phone except to say it was on track to offer it in the fourth quarter. HTC, which is based in Taiwan, also declined to comment, although executives there have said they expected to deliver their phone by the end of the year.

While other carriers and manufacturers have plans to offer phones based on Google’s software, the T-Mobile-HTC phone is expected to be the only Android phone available in the United States this year, according to a person briefed on the discussion.

Sprint, the third-largest carrier and also a member of the Google-led Open Handset Alliance, has been working closely with Google, too, but does not have a confirmed date for offering an Android phone, said Kevin Packingham, vice president for wireless product management. So far AT&T and Verizon Wireless, the two biggest carriers, have not committed to selling mobile phones sold with Google’s software.

The chip maker Qualcomm, another member of the alliance, said the company was working on Android phones with more than five phone manufacturers.

Google executives have confirmed that phones based on Android will be available this year, but have refused to reveal details. The company said it was testing the software on several devices.

“This process ensures we have an opportunity to receive feedback from users,” Google said in a statement.

Some makers of mobile software programs have complained that creating applications for Android has been difficult, as Google has continued to make changes to the operating system and has at times been too busy to provide support to developers. Some of those software makers have chosen to focus their development efforts, at least for now, on phones that are already on the market like the iPhone or the BlackBerry, made by Research in Motion.

But others say that creating programs for Android has been painless.

“Over a period of weeks we were able to create an application that worked very well on Android,” said Andrew Perlman, senior vice president for content and community and general manager of Vringo, which makes video ring tones for mobile phones. Google has organized a contest for developers creating applications for Android and says it has received more than 1,700 entries.

Miami Beach developer faces default judgment in New York

South Florida Business Journal – by Paul Brinkmann and Oscar Pedro Musibay
Leon Cohen, the Miami Beach developer who proposed a 93-story skyscraper in downtown Miami, faces default judgment in New York State Supreme Court over fraud allegations related to a former hotel redevelopment project.

New York Judge Walter Tolub wrote the decision against Cohen, his father Maurice Cohen and other defendants on Wednesday in connection with alleged fraud at the Flatotel in midtown Manhattan.

According Tolub’s ruling, the “defendants’ long-standing patterns of default, lateness, and abject failure to comply with court orders amounts to willful … conduct which not only warrants but necessitates … award of default judgment.”

Cohen received initial approval from a Miami panel in January for the Empire World Towers project, slated to have 1,557 residential units. At the time, real estate analysts questioned the project because of hurricane codes, height restrictions, the ongoing credit market crunch and the downturn in real estate markets.

The impact of Wednesday’s decision in New York was not immediately apparent. Miami spokeswoman Kelly Penton said no one at the city had heard about the New York case.

Cohen’s New York attorney, John Gleason of Gleason & Koatz, declined to comment on Friday.

The plaintiff in the suit against Cohen is a French lender, CDR Creances, represented by Douglas A. Kellner of Kellner Herlihy Getty.

Court documents show Cohen, his family and their companies borrowed $92 million in 1991 to fund acquisition of the Flatotel. CDR received a security interest as part of consideration for the loan. The suit alleges that Maurice Cohen orchestrated the unauthorized transfer and eventual sale of shares of stock in which CDR held a security interest, without CDR’s knowledge.

According to Kellner, the Cohens “sold the New York Flatotel to a Bahamian company controlled by hotelier Simon Elias in 2000 without disclosing the transaction to CDR and without making any payment on the loan.”

The details behind the case involve foreign bank accounts and “extremely complicated business transactions,” the judge noted.

Kellner told the Business Journal of Friday that he plans to file a motion seeking $264 million in actual damages from Cohen and punitive damages of $2.5 billion.

Kellner said he is very interested in Cohen’s Florida company, Maclee Development, and its funding to pursue the Empire World Towers project.

“Where those funds came from to acquire his property has been of great interest to us,” he said.