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More Condos Entering Lists of Miami Bank Owned Homes

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By : John Cutts    99 or more times read
More condos are getting added to lists of Miami bank owned homes, as more developers lose their condo projects to the banks that loaned them millions of dollars they can no longer repay.

A number of condo developers have even cut down sharply their prices to make sales and improve their cash flow, but still many of them could not sustain their payments to their lenders.

Median condo prices have fallen by double digits, not only in Miami, but in nearby cities like Fort Lauderdale and West Palm Beach.

In Miami alone, the median price for condo units plunged to $126,100 in February, a substantial 14-percent decrease from the median 12 months earlier. Statewide, existing condo prices plunged even further, with the median condo price dropping by 15 percent to hit $92,200, far below the $109,100 condo median in February last year.

Among the condo projects that were recently put into foreclosure and could get added to lists of bank owned property sales in the coming weeks are the 346-unit Paramount on the Bay condo complex in Miami and the 19-unitVerona Park condo complex in Coral Gables.

Condo units at the Paramount condo complex could enter lists of Miami bank owned homes sooner than expected as the developer was reported to be planning to surrender the property and no longer considering opposing the foreclosure lawsuit.

The developer, Royal Palm Miami Holding, still owed $216 million in development loans to iStar Tara, an affiliate of New York firm iStar Financial. The original $216-million loan was provided by co-lenders iStar and Corus Bank in 2006, but the full mortgage was acquired by iStar in March 2010 from Starwood Capital and the Federal Deposit Insurance Corporation, which closed Corus Bank in 2009.

A major crane accident in 2008 that killed two construction workers was just one among factors that delayed construction.

According to condo businessman Peter Zalewski, Paramount is well designed, but its units are too large for the current market. Many units measure more than 2,000 square feet and were pre-sold at prices above $1 million.

Verona Park LLC, the developer of the other recently foreclosed condo project, Verona Park, took out two loans from FirstBank Puerto Rico in 2005 and 2008 that amounted to $9.3 million. The foreclosure judgment won by the bank in March was $10.2 million. The condo project is already scheduled for auction and its units could join other Miami bank owned homes in the coming weeks.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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