In a sign that the housing crash is expanding beyond Miami’s overbuilt Brickell Avenue area, a coastal condominium complex in Aventura has landed atop the list of the Miami-Dade County projects with the highest concentration of foreclosures in 2008.
Creditors have filed the initial paperwork (lis pendens and/or notices of default) against 26 units in the Parc Central condominium conversion in Aventura in the first three months of the year, according to a new report from Condo Vultures® LLC.
All of the foreclosure actions at the Parc Central in Aventura were filed since January 1, and do not reflect an additional 70 foreclosure actions launched in the same 702-unit complex in 2007, according to data compiled using Miami-Dade Circuit Court records. Parc Central had the second highest concentration of foreclosures for a Miami-Dade condominium in 2007.
“The housing contagion is beginning to spread beyond the region’s troubled core of downtown Miami’s Brickell Avenue area,” said Peter Zalewski, a principal with the Bal Harbour, Fla.-based consultancy that produced the report based on circuit court records. “To see a mature market with controlled new construction such as Aventura emerge with a high foreclosure rate is indicative of just how bad the South Florida housing market really is getting. We are entering a phase of real pain being experienced by real users.”
There were 17,821 foreclosure actions filed in Miami-Dade, Broward, and Palm Beach counties in the first three months of 2008 resulting in a total amount owed of $4.6 billion to creditors.
Condominiums account for 3,538 foreclosure actions in Miami-Dade and Broward counties representing $778 million in nonperforming debt at well-known buildings such as The Grand in Miami, The Mirador in Miami Beach, the Beach Club in Hallandale Beach, and the Residences on Hollywood Beach. The breakdown of condominium foreclosures in Palm Beach County was not available at the time of this report.
Broward County leads the tri-county region in the total number of foreclosure actions and the total amount owed. There were 7,394 foreclosure actions valued at $1.8 billion in the first three months of 2008. That represents 39 percent of the overall total of nonperforming loans in foreclosure, according to circuit court records.
Miami-Dade County ranked second with 5,370 actions totaling $1.5 billion, or 34 percent of the region’s total. Palm Beach County was third with 5,057 foreclosure actions totaling $1.2 billion, according to the data.
A foreclosure in South Florida usually takes about six months to work through the court system, and costs a creditor by some estimates upwards of $40,000 when attorney fees, unpaid debt service, and damage is considered.
“We expect Miami-Dade County’s foreclosure problems to surpass that of Broward County later this year when the bulk of the new condo product comes online in downtown Miami and the Brickell Avenue area,” Zalewski said. “According to our research for the soon-to-be-released Condo Vultures® Official Condo Buyers Guide to Miami™, there will 31 buildings with more than 10,000 units that should come online this year alone in the downtown Miami area and an additional eight building in 2009. Watch and see what that does to the foreclosure filings.”
For the time being, Aventura is the home of the Miami-Dade County condo with the highest foreclosure ranking. Still, downtown Miami’s Brickell Avenue area continues to have significant problems with owners not paying their mortgages.
Two of the top five rankings for the highest 2008 foreclosure rates are in the Brickell Avenue area, and the buildings are the same ones that struggled with defaults last year.
The Club at Brickell Bay, which had the highest foreclosure rate in 2007, ranks second in 2008 in Miami-Dade County based on 24 new actions filed since January. In 2007, there were 80 actions filed against owners in the Club, which has 643 units.
The other Brickell Avenue building with repeated foreclosure problems is the Vue at Brickell, which is about two blocks west of the Club. The Vue at Brickell has the fifth highest foreclosure rate in Miami-Dade for the first three months of this year with 21 actions. In 2007, the Vue ranked No. 3 with 65 actions filed in a building with 323 units.
The Jade at Brickell Bay, a top quality tower on the water which earned the No. 5 ranking in 2007 with 56 actions, is not on this year’s list of troubled condos.
“Investors with all-cash are flocking to the Jade looking for deals on top quality units, and lenders increasing are softening their stance in hopes of simply unloading the product which may or may not be already owned by the bank,” Zalewski said. "This is working to improve the situation."
The No. 3 ranking for the highest foreclosure concentration in Miami-Dade County is a condo is a tie at 22 actions between a condo conversion in Sunny Isles Beach and a lakefront project in Miami near the airport.
The Oceanview on Collins Avenue in Sunny Isles Beach had an additional 58 actions filed in 2007 when the Oceanview was ranked No. 4. The Blue Lagoon on Northwest 7th Street in Miami had 47 actions in 2007 to rank it No. 6 for the highest foreclosure concentration in a Miami-Dade complex.
Homestead in South Miami-Dade is home to two of the top 10 condos for foreclosures in the county with the Venetia Gardens with 16 actions valued at $2.3 million for the No. 6 rank, and the Shoma Condo at Keys Cove with 13 actions valued at $1.9 million for the No. 8 ranking.
“You hate to see projects in places like Homestead with a high foreclosure ranking as those are real users who are losing their real homes,” Zalewski said. “For the most part, these were not speculators buying with the intention of flipping the contracts for a quick $50,000 gain. It’s unfortunate but it is happening in working class places like Homestead and increasingly throughout neighborhoods in Palm Beach and Broward counties.”
In Broward County, the Palm-Aire Country Cub in Pompano Beach has the highest number foreclosure actions with 33, which ranks it tops in South Florida. The foreclosure actions in the Palm-Aire are valued at $3.4 million.
The Edgewater on Wiles Road in Coral Springs has the second highest concentration of foreclosures with 23 actions totaling $5.6 million. The Tides on Hollywood Beach is third with 18 actions valued at $6.8 million. Rounding out the top five are the Aventine at Miramar and the Marina Oaks in Fort Lauderdale with 17 foreclosure actions each.
The recently completed oceanfront complex called the Beach Club in Hallandale Beach is tied for the No. 6 ranking in Broward County with the Residences at Hollywood Beach, and the Coral Key in Margate with 16 foreclosure actions each.
Club Caribe in Coconut Creek and Regent Park in Hollywood are tied with 14 foreclosure actions each for the No. 9 ranking in Broward County, according to the data.
Peter Zalewski is a principal with the consulting company Condo Vultures®LLC and a licensed real estate broker with Condo Vultures® Realty LLC. Peter can be reached at 305-865-5629 or by email at peter@condovultures.com. Be sure to check out Peter’s blog at CondoDump.com. Don't forget to sign up for our weekly Market Intelligence Report
Copyright © 2008, Condo Vultures® LLC
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