Opening Comments
Picture/Video of the Day-7’4” 14 Year old Girl Basketball Player
Separation Anxiety
Quick Bites
Markets, High Yield, Gundlach on the US $
Mortgage Rates, China GDP, Banker Comp
Federal Prosecutor on Hunter, DeBlasio on Commuters
Drug ODs, CA Guaranteed Income, Unemployment By State
Hospital Costs, European Rainfall, Humans vs Neanderthals (DNA)
Robo Callers Caught, Aggressive Wedding Dining
Virus/Vaccine
Data-Cases Exploding-Every State Showing Increases-Lots of Charts and a good link
WSJ Opinion on Delta is Reassuring
Biden Administration on Origin of Virus
Mask Mandate in LA vs Sheriff
Covid @ Olympics
Real Estate
Greenwich 1st half of 2021 Update
Miami Condos (2 stories)
South Florida Real Estate Statistics
Opening Comments
Very good feedback on my last piece and it seems to have resonated with many. Getting old is definitely for the birds. However, there were quite low opens (50%). Given a combination of summer travel for me and my readers and the low opens, this will be the last Rosen Report for a bit, unless I see something the readers need to know. These reports take so much time and I cannot seem to get through the firewalls to deliver it more efficiently. Growing readership meaningfully has proven to be challenging recently. Love the support from my loyal readers and their incredible emails, texts and calls, but I am going to try to figure out how I can deliver it to more readers and start again. I am open to ideas. I have tried via email (too big now), Mail Chimp, Constant Contact and Substack. All the professional delivery services seem to get blocked by firewalls. They do a good job of tracking opens and give me data, but a bad job on delivery.
I am heading to Hamptons tonight and will be there most of the week. Around for drinks if some readers want to get together. Jack has a tournament out there.
Lots of readers asking about Fred my 93 year old friend from the last report. I speak with him every day and saw him on Friday when he told me where he was going for lunch, I crashed it to check in on him. He is doing great. I sure hope I am half as able if I ever make 93.
Quite a few questions about the process of “Credit Bidding,” from the real estate story of Chris Whittle’s house. Credit bidding is a mechanism, enshrined in the US bankruptcy legislation, whereby a secured creditor can ‘bid’ the amount of its secured debt, as consideration for the purchase of the assets over which it holds security. In effect, it allows the secured creditor to offset the secured debt as payment for the assets and to take ownership of those assets without necessarily having to pay any cash for the purchase. I am not sure what happened exactly with Whittle’s house, but believe he took substantial loans against it, not just the $6mm owed to Avenues. If Whittle only owed $6mm, surely, he could have sold the property for multiples of that. This is prime R/E. I have read up on Whittle, and he has other ventures which were in trouble and he was borrowing money to support them according to the press. This is a man who sold half of Whittle Communications to Time Inc in 1989 for $185mm.
The inability to hire people remains a major issue. I was speaking with a golf pro at a country club. The restaurant staff is so over worked, the chef is doing the dishes. The golf pro instructed the 35 people in the golf department to work at least 5 hours a week in the restaurants to help out with washing dishes, waiting tables and hosting. No really, lets pay more people to sit at home and play video games, keep rates at zero and continue to have the Fed buy $120bn/month. Makes sense to me. No sarcasm here. I saw this sign on the highway. Sorry it is blurry. Offering $3,000 sign on bonus for drivers for a specialty food store, Baldor’s. All this demand may have me coming out of retirement to deliver pizza again.
Expanded virus section today. Please take a few minutes to check it out.
Jack and I were hosted by my friend, Ed, at Glen Oaks today. We played 7300 yards. A bit long for me. The food at Glen Oaks is an 11 out of 10. I am hitting send and then going to the famous Sunday BBQ. If you don’t hear from me for a while, it might be because I am in a food coma. I have been pacing myself for two days in anticipation of this event. I am going in now. Have a great week.
Picture of the Day
A 7-foot-4 adult is rare. A 7’4” 14-year-old girl is unheard of. Enter Zhang Ziyu, a teenage girl from East China’s Shandong Province, after a video of her notching 42 points, 25 rebounds and six blocks in an under-15s tournament game went viral. In the highlights, Ziyu towers over her helpless opponents, easily securing uncontested rebounds and scoring wide-open layups. The video is pretty funny. This is the link to the story. She has #s like Wilt Chamberlain. I feel for the kids trying to shoot over her. She does not need to jump to block it. This reminds me of when I played basketball with Jack when he was 6 years old.
Separation Anxiety
I wrote that my 14-year old daughter, Julia (not 7’4”), went off to sleep away camp for the 1st time in her life. Julia, like so many other teens, was extremely impacted by the pandemic because of her love of socializing with her friends. No physical school, no birthday parties, no play dates, no sleepovers…She never had interest in camp prior to this summer and decided to go to an all girls camp in Vermont. Although she was excited, she was very nervous about being away from the family. The day before she left, she was crying and did not want to go because she was scared. I said, “Julia, you are going to have so much fun that you are not going to want to leave. I am pretty sure I have never been wrong about anything in my life and this is no different. You are going to have a blast, make new friends and learn new things.” Julia was not convinced and grew more nervous as her departure grew closer.
My wife, Jill, dropped Julia off at camp on June 22nd, as I was at a golf tournament with my son, Jack staying at a fleabag hotel. I was told Julia was crying and nervous. Well, that did not last long, she LOVED camp (Dad is ALWAYS right). I received amazing letters about sailing, tubing, water skiing, tennis, singing, making bracelets, archery, new friends and donuts… The list was endless. She loves sailing and it is what she is talking about quite a bit. Quickly, the shoe was on the other foot in that I missed my daughter. I had never been away from her for so long and she was having a ball without me. I was having a little separation anxiety. Despite the fact that teenagers can be incredibly irritating and annoying on just about every level, I missed having Julia around and spending time with her.
Well, Julia came back Saturday night. Jill picked her up and Jack and I came to NYC to see her and spend a week together out in the Hamptons. When Jill saw Julia at the camp for pick up, my daughter was crying. Jill thought Julia was crying because she was happy to see her mother. NOPE, Julia was crying because she did not want to leave camp. They drove almost 7 hours to get back to NYC.
When I saw Julia, she was beaming. The time away gave her so much confidence that she could be more independent. She realized things which scared her are not so horrible and wants to go back next summer. Looks like I will miss her again. I hope she does not go for 7 weeks, I have learned I can handle 3.5 weeks only. My only complaint is Julia is singing these incredibly annoying camp songs. It was cute the first time, less so the 9th. I am hopeful the songs stop in 24 hours, or Julia may be going back to camp sooner than she thinks, as in this week.
Julia having a miserable time at camp on an inner tube. Clearly, she is upset missing her father. She looks very sad and lonely and in need of Dad, YEAH RIGHT!
Quick Bites
U.S. stocks fell on Friday, pushing the Dow Jones Industrials Average into the red for the week, as inflation fears overshadowed strong retail sales numbers and better-than-expected earnings reports. The Dow lost 299 points, or 0.86%, to close at 34,687. The S&P 500 dipped 0.75% to 4,327 and the Nasdaq shed 0.8% to 14,427. The three averages closed the week lower to each snap 3-week win streaks. The Dow ended the week down 0.52%, while the S&P 500 dipped 0.97% and the Nasdaq Composite fell 1.87% during the same period. Despite the week’s losses, the Dow is still up 13% for the year and sits just 1.15% from an all-time high. The S&P 500 is up 15% on the year and is 1.51% below its record level. The link above goes into detail on consumer sentiment, inflation and energy markets. Clearly, rising cases is a discussion point for the markets as well.
The extra return investors demand to hold lower-rated corporate bonds over ultrasafe Treasurys has fallen within striking distance of all-time lows, a sign of investors’ appetite for riskier assets and the changing composition of bond indexes. As of Thursday, the average extra yield, or spread, of bonds in the Bloomberg Barclays U.S. high-yield corporate bond index was 2.82 percentage points. Earlier this month, the spread fell as low as 2.62 percentage points, the lowest since June 2007 and just a shade higher than the all-time low of 2.33 percentage points set in May of that year. Speculative-grade bond spreads have narrowed around 0.8 percentage point since the end of last year and 0.3 percentage point since late May, suggesting that a record is well within reach without any major change in investor behavior. I wonder why this is happening? The Fed has bought everything in sight, taken rates to zero and the world requires yield. Investors are forced to go down the risk spectrum to find any yield and now that which had any excess yield is almost nothing. The Fed is currently buying $120 billion of assets per month -- $80 billion of Treasury securities and $40 billion of mortgage backed debt – and has pledged to keep up that pace “until substantial further progress” has been made toward its goals of maximum employment and 2% inflation. Insurance companies, pension funds, endowments, retired people living on fixed income are dying for yield and being forced out the risk spectrum to find it. I am sure this does not end well, but won’t end tomorrow.
DoubleLine Capital CEO Jeffrey Gundlach offered a dire long-term assessment on the U.S. dollar Thursday, telling CNBC in an interview he thinks the greenback is “doomed.” “Ultimately, the size of our deficits — both trade deficit, which has exploded post-pandemic, and the budget deficit, which is, obviously, completely off the charts — suggest that in the intermediate term — I don’t really think this year, exactly, but in the intermediate term — the dollar is going to fall pretty substantially,” Gundlach said. “That’s going to be a very important dynamic, because one of the things that’s helped the bond market, without any doubt, has been foreign buying, with the interest rate differentials having favored hedged U.S. bond positions for foreign bond investors,” he added. “It’s a question of what your horizon is,” Gundlach said. “In the short term, the dynamics have been and will continue to be in place for the dollar to be marginally or moderately stronger.” “In the longer term, I think the dollar ... [is] doomed,” he added.
The average interest rate on a 30-year fixed-rate mortgage fell to 2.88%, according to Freddie Mac, the lowest level since mid-February and the third consecutive weekly drop. The 15-year fixed-rate mortgage dropped to 2.22%. "Since their peak at 3.18% in April, mortgage rates have declined by thirty basis points," said Sam Khater, Freddie Mac's chief economist. "While this decline is not large, it provides modest relief to borrowers who are purchasing in a market with strong home appreciation and scant inventory." These favorable rates will help to offset rising home prices, said George Ratiu, Realtor.com's senior economist.
Great news, China is growing quickly assuming you can believe any data which comes out of the most honest country in the world next to North Korea. The country’s gross domestic product increased 7.9% in the second quarter from a year ago, the National Bureau of Statistics said Thursday. That fell short of Reuters’ estimate of 8.1% growth. Retail sales rose 12.1% in June from a year ago, more than the expected 11% level forecast by Reuters. Industrial production grew by 8.3%, greater than the 7.8% Reuters estimate. “China’s economy sustained a steady recovery,” the statistics bureau said in a release. But the bureau added there were still concerns about the global spread of the pandemic and “unbalanced” recovery domestically.
Interesting Bloomberg article about Wall Street compensation on work/life balance and are offering some perks to entice people to stay, especially young bankers. “Is it the best time to be a banker in terms of making money? Sure,” says executive recruiter Dan Miller of True Search. “Is it a horrible time in terms of lifestyle? Absolutely.”
The top federal prosecutor in Delaware decided to pause a criminal investigation of Hunter Biden months before the 2020 election to prevent the public from learning about it, according to a report. US Attorney David Weiss, appointed by former President Donald Trump, decided not to seek search warrants or issue grand jury subpoenas so as not to “alert the public to the existence of the case in the middle of a presidential election,” Politico reports. The prosecutor’s office reportedly was torn over whether to continue its probe or pause it due to the election, and Weiss, who remains in his job leading the case, sided with those who wanted to wait. Could you imagine if this was Trump’s kid prior to the election? Again, all I asking for is consistency. I don’t want the media, big tech or US Attorneys General impacting elections with bias. Let the people decide without insane influence by someone who is paid to be impartial. I am not a Trump guy, but want a level playing field.
New York Mayor Bill de Blasio is pushing for state action on congestion pricing in an effort to get commuters of the most traffic-choked U.S. city back onto trains and buses. The lame-duck mayor has ramped up criticism in recent days of the state Metropolitan Transportation Authority’s failure to appoint members to the Traffic Mobility Review Board, a panel created in 2019 to work out details of congestion pricing. The program, which would raise billions of dollars for mass-transit improvements from tolls on motorists entering Manhattan’s business core below 60th Street, could be up and running within a year if the state filled the board vacancies and started work, de Blasio said. Brilliant idea today. Given the state of the NYC subway and buses with rampant crime and a under appreciated police force, it is a great thought to push more people to pack it in on crowded subways. Also, COVID-19 cases are rising. DeBlasio, you are a horrific mayor who should go away now and never be seen again. You humiliated yourself running for President. Not sure who voted for you, but it suggests to me, there are many people who should read a little more about your remarkable record. Better yet, look outside at the homeless, filth, crime, drugs, violence and determine how good of a mayor you have been for 12 years. As an aside, I was in NYC for 14 minutes on Saturday on 63rd and Madison. A fight broke out in front of Hermes. Luckily cops were on it. I never recall seeing this when I lived here. Bloomberg, please come back!
Drug-overdose deaths in the U.S. surged nearly 30% in 2020, the result of a deadlier supply and the destabilizing effects of the Covid-19 pandemic, according to preliminary federal data and public health officials. The estimated 93,331 deaths from drug overdoses last year, a record high, represent the sharpest annual increase in at least three decades, and compare with an estimated toll of 72,151 deaths in 2019, according to provisional overdose-drug data released Wednesday by the Centers for Disease Control and Prevention. I have written countless times about unintended consequences of the pandemic, lockdowns and the China lies which created this monster. We are not done with this story yet in my opinion.
California lawmakers on Thursday approved the first state-funded guaranteed income plan in the U.S., $35 million for monthly cash payments to qualifying pregnant people and young adults who recently left foster care with no restrictions on how they spend it. The votes - 36-0 in the Senate and 64-0 in the Assembly - showed bipartisan support for an idea that is gaining momentum across the country. Dozens of local programs have sprung up in recent years, including some that have been privately funded, making it easier for elected officials to sell the public on the idea. Over a year ago, I suggested guaranteed income would be on the table. Here we go.
Fantastic WSJ article with interactive charts comparing states which ended Federal Covid Related Job Benefits early vs those which continue to dole out money. All 26 states were Republican other than Louisiana which ended the program. These states have lower unemployment (Shocker). Take a minute to go through the chart in the attachment.
The care was ordinary. A hospital in Modesto, California, treated a 30-year-old man for shoulder and back pain after a car accident. He went home in less than three hours.The bill was extraordinary. Sutter Health Memorial Medical Center charged $44,914 including an $8,928 "trauma alert" fee, billed for summoning the hospital's top surgical specialists and usually associated with the most severely injured patients.The case, buried in the records of a 2017 trial, is a rare example of a courtroom challenge to something billing consultants say is increasingly common at U.S. hospitals.Tens of thousands of times a year, hospitals charge enormously expensive trauma alert fees for injuries so minor the patient is never admitted. US healthcare is a mess. The cost of insurance coverage is INSANE. My wife broke her wrist in Vail three summers ago when she fell off a bicycle. We were 1.1 miles from the hospital. I should have called Uber and it would have been $5. I called 911 and got an ambulance which took about 12 minutes to arrive. How much was a 1.1 mile trip? They gave her a bag of ice. NOTHING else. Over $2,000! I called the CEO of the ambulance company when I received the bill. My crap insurance did not cover it all of it despite, at the time, premiums of $3,300+/month. He had the audacity to tell me he “lost money on this job.” If you lose money by charging over $2,000 for a 1.1 mile trip, you are a horrible operator. The total cost for the surgery, NO over night stay in hospital was $68k. For perspective, the median house hold income in the US happens to be $68.7k in 2019. Houston, we have a problem. Jamie Dimon, Jeff Bezos and Warren Buffett tried to insert themselves in the healthcare process given the high and rising costs of employee healthcare. Three accomplished, brilliant business men started a joint venture. I threw my hat in the ring to get involved until they told me I had to move to Boston. This Bloomberg article suggests the company started to disrupt healthcare costs has closed before accomplishing much. This CNBC article suggests it has been disbanded. If Dimon, Bezos and Buffett cant figure it out, we are screwed.
Baltimore City Schools has reached an alarming low in student performance. Project Baltimore has learned, during the first three quarters of this year, nearly half of high school students in City Schools earned a grade point average below a D. When Jovani Patterson ran for Baltimore City Council President last year, he ran on a platform that included accountability in education. “They take. They take. They take. Yet, despite the amount of money they get. We don’t see much change. Our schools outspend 97% of other major school districts,” Patterson said during a 2020 campaign ad. When Project Baltimore showed Patterson how Baltimore City students have been doing this year, here is how he reacted. “This is terrible,” Patterson told Project Baltimore. “This is just further perpetuating a cycle of poverty, of despair.” Nearly half of students in one Baltimore high school have 0.99 GPA or lower. Who will take responsibility for this debacle? I previously wrote about this story: City student passes 3 classes in four years, ranks near top half of class with 0.13 GPA. Who runs this city? Who are the congressmen/women in charge of Baltimore? Why are they not held accountable? Public education at many major cities is a disaster and will lead to crime and kids being unprepared. Want to fix a lot of problems? Fix this one.
The World Meteorological Organization said Friday that some parts of western Europe had received up to two months worth of rainfall in just two days. Parts of Switzerland, Luxembourg and the Netherlands have been affected, but the most severe flooding is reportedly in Germany and Belgium. The death toll rose above 150 on Saturday, according to media reports, with that figure expected to rise as flood waters recede.
What makes humans unique? Scientists have taken another step toward solving an enduring mystery with a new tool that may allow for more precise comparisons between the DNA of modern humans and that of our extinct ancestors. Just 7% of our genome is uniquely shared with other humans, and not shared by other early ancestors, according to a study published Friday in the journal Science Advances. “That’s a pretty small percentage,” said Nathan Schaefer, a University of California computational biologist and co-author of the new paper. “This kind of finding is why scientists are turning away from thinking that we humans are so vastly different from Neanderthals.” The research draws upon DNA extracted from fossil remains of now-extinct Neanderthals and Denisovans dating back to around 40,000 or 50,000 years ago, as well as from 279 modern people from around the world. Wow, this is scary. We are only 7% different from Neanderthals from a DNA perspective? I am no expert here, but if I had been asked the question, I would have thought much higher.
Three New Jersey brothers will pay $1.6 million to settle charges of instigating more than 45 million illegal robocalls nationwide, including to tens of millions of Americans on the Federal Trade Commission's Do Not Call Registry, the agency announced on Friday. I hope these are the morons who call me 3x a day about a warranty on a car I have not owned in 9 years rot in hell. They have been calling my 15 year old son and 14 year old daughter about the warranty expiring on their cars. The problem is neither actually owns a car or knows how to drive. Personally, I would like the see these three brothers face the guillotine for their invasive crimes. I do not think a $1.6mm fine is enough.
I had to put this one in the Rosen Report. The audacity of some people never ceases to amaze me. The bride and groom at a wedding gave dinner options at based on the value of the gift given. The bigger the gift, the better the dinner the guests received. Wait what? Guests who purchase a gift worth up to $250 are classified in the "Loving Gift" category, which affords them meals like roasted chicken and swordfish. The "Silver Gift," priced between $251 to $500, allegedly included options like sliced steak and poached salmon. The "Golden Gift," set between $501 to $1,000, allegedly upgraded meals to filet mignon and lobster tails. The fourth tier, titled "Platinum Gift," allegedly offered two-pound lobsters and a souvenir champagne goblet for $1,001 to $2,500. The RSVP ticket then said vegetarian and kosher meals were available at the "Platinum Gift" level.
Virus/Vaccine
Data is going the wrong way now for all categories for COVID-19. Cases are +135% in two weeks and now averaging 31k/day up from 11k on June 22nd. The US was averaging 1.8mm tests/day at one point and now down to a little over 500k/day or down 13% over two weeks. Hospitalizations are +32% to almost 22k and deaths are +27% to 272. The good news is we are SUBSTANTIALLY lower than peak and the vaccinated people (approximately 50%-see chart below) are somewhat protected. The bad news is the cases are climbing sharply. One state which surprised me was Florida +190% over 14 days. I was there a week ago, it is EMPTY. I am shocked that they are seeing such a spike with so many residents gone for the summer. Lots of charts today to keep you updated. The NYT link above is informative for those who want more info. The last chart is showing how other countries which have high vaccination rates are also seeing increased cases. It is concerning, but I want more data. Are people with vaccinations who test positive getting sick or just testing positive. One reader of the Rosen Report is vaccinated and just tested positive. He said he felt sick for a couple days like the flu, not bad. Only real side effect was loss of taste and smell. We are seeing new mask mandates in some cities and fear what may take place for school in the fall if the numbers are high.
After declining for weeks, seven-day average daily Covid deaths have increased by 26% to 211 per day. New Covid cases increased by roughly 70% since last week, while hospitalizations increased 36%. U.S. health officials maintain that Pfizer and Moderna vaccines are still highly effective against the delta variant. Israel’s Ministry of Health published preliminary findings that put the efficacy of the Pfizer vaccine at preventing infection from the delta variant at 64%. The study also indicated similar efficacy in preventing severe disease from the virus variant after two doses. Some experts have criticized the study out of Israel, citing issues in Israel’s genomic surveillance. Other studies, from Public Health England and The Lancet, put prevention rates for the delta variant after two doses of a Pfizer vaccine at much higher numbers. Walensky also cited numbers “exceeding 90%” in mRNA vaccine protection against hospitalization and death from the delta variant.
Interesting WSJ Opinion piece following with a couple good charts. You read the same alarming headlines every few months, now with Greek letters. As the virus that causes Covid-19 evolves and mutates, the same concerns pop up about whether the variant evades vaccines, makes people sicker than the old versions, and increases transmissibility. What we know about the Delta variant is reassuring. One of the most important questions is whether vaccines are still working well. The best way to answer that is to look at the number of vaccinated people getting serious Covid-19 symptoms or being hospitalized. A new study from the U.K. found that vaccines are still incredibly effective at preventing serious illness with the Delta variant circulating. The Pfizer vaccine was 96% effective after two doses at preventing hospitalization, meaning the average unvaccinated person in the study was more than 25 times as likely to be hospitalized with Covid as the average vaccinated one. (This almost certainly understates the protectiveness of the vaccine, as the vaccinated cohort was older and had a higher incidence of pre-existing conditions than the unvaccinated one.) The Johnson & Johnson vaccine produces strong neutralizing antibodies and cellular responses against the Delta variant, still present eight months after administration.Studies from Canada and the U.K. show 79% to 87% effectiveness against symptomatic infection with the Delta variant. On July 8 the CDC and FDA asserted their confidence in the vaccines. They jointly announced that no boosters are necessary at this time.
Biden administration officials are divided over the origin of the coronavirus, but an increasing number now believe that it could have leaked from a Wuhan lab, according to a report. The once-derided lab-leak theory is now being seriously considered by senior administration officials even as most experts on coronaviruses maintain that the virus had its origins in nature, jumping from animals to humans, according to a CNN report Friday.
Los Angeles County Sheriff Alex Villanueva said he will not enforce the reinstated indoor mask mandate because it contradicts guidelines from the Centers for Disease Control and Prevention. In a statement Friday, Villanueva said the department is already underfunded and he "will not expend our limited resources" to ensure residents are following the order. He instead asked for voluntary compliance. "Forcing the vaccinated and those who already contracted Covid-19 to wear masks indoors is not backed by science and contradicts the U.S. Centers for Disease Control and Prevention (CDC) guidelines," he said. With the substantial increase in new cases in the US, more states/cities will be re-imposing mask mandates. It will be interesting to see how this plays out. I wonder what happens come the fall, if we continue to have rising cases? Will school be back to Zoom?
Two South African soccer players became the first athletes inside the Olympic Village to test positive for COVID-19, and other cases connected to the Tokyo Games were also confirmed Sunday, highlighting the herculean task organizers face to keep the virus contained while the world’s biggest sports event plays out.The positive tests came as some of the 11,000 athletes and thousands more team officials expected from across the globe began arriving, having traveled through a pandemic to get to Tokyo. They’ll all now live in close quarters in the Olympic Village on Tokyo Bay over the next three weeks.
Real Estate
Greenwich 1st half of 2021 report by Mark Prunner. First the superlatives; June 2021, Q2 ’21, H1 ‘21 and the last 12 months were all time records in Greenwich and in most cases by a significant margin. For the month of June, we had 134 sales which blew away our prior record of 118 sales in September of last year. Prior to that we had had 114 sales in June 2011, which happened because the Connecticut legislature raised the real estate conveyance tax by a quarter of one-percent. (Greenwich sellers are very tax sensitive.) The to get a pure market demand record you have to go back to July 2003 when we sold 108 houses.
Interesting WSJ article on Miami condos. Engineers say it can take just 30 years for condominium buildings to reach a point when owners can no longer delay making critical repairs. In the Miami region, two out of every three condo buildings are more than 30 years old, according to data compiled by real-estate data firm Zillow for The Wall Street Journal. In at least seven other Florida cities, some three-quarters of condo buildings have hit that age. Many of the aging towers line the beachfront, where salt corrosion and other forces are speeding their decline. That is leaving thousands of buildings saddled with multimillion-dollar repair costs—and little notion of how to pay for them.
The tragic collapse of a residential tower spooked South Florida homebuyers and real estate investors alike into reassessing the risk of buying in the Miami-area condo market. The market had been booming before Covid. Then it soared even higher as the work-from-anywhere culture took hold. But then in late June, scores of people were crushed to death in the Champlain Towers South collapse in Surfside. Now, the market is focused on engineering inspection reports from older towers, which are required by the state to get re-certified every 40 years. Insurers are also under scrutiny, as they hold the keys to new purchases in the market. “No one in their right mind is going to buy a condo built before 2000 unless they have a safety certificate for the structure of the building, and it doesn’t exist today,” said Peter Zalewski, a South Florida condominium expert, consultant and analyst.
South Florida residential sales rose dramatically in the second quarter compared to the same period of 2020, in part reflecting the slowdown during the pandemic. After the market came to a halt early on in the pandemic, single-family sales soared last year, eventually reaching new records throughout the tri-county region. Condo sales bounced back later, which explains the much greater year-over-year increases for condo closings in the second quarter, according to Douglas Elliman’s reports, which are authored by Jonathan Miller of Miller Samuel. The link shows data by area: Miami, Miami Beach, Fort Lauderdale, West Palm, Palm Beach. For example, this was the Miami Beach data: In Miami Beach and the barrier islands, which includes Bal Harbour, Bay Harbor Islands, Fisher Island, Golden Beach, Indian Creek, Key Biscayne, North Bay Village, Sunny Isles Beach and Surfside, residential sales climbed to 2,393, a 378 percent annual jump. Condo sales skyrocketed by 406 percent to 2,101. The median sale price for condos increased by nearly 50 percent to $540,000. Supply fell to 4.6 months by the end of the second quarter, not including pre-construction condos. Single-family home sales grew by 240 percent to 292 closings. The median sale price was just over $2 million, up 60 percent year over year. Supply totaled 3.1 months for single-family homes listed on the Multiple Listing Service.