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September 2, 2010 |
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| February 01, 2010 |
By: Jack McCabe |
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very now and then, I read an opinion piece from a local real estate person complaining about the condo depression in Miami that screams of “still in denial,” and which I opine to be an absolute shirking of the author’s personal responsibility in creating the mess to begin with.
Jack Studnicky is a sales executive with International Sales Group, or ISG. His brother Craig Studnicky is one of the brokerage’s two principals.
In an opinion piece in the Jan. 25, 2010, DBR, Mr. Studnicky blames banks and appraisal firms. “Banks holding boatloads of foreclosed Miami condos need to take a deep breath and stand firm on realistic pricing, which should be at least the cost of replacement.
There is no need to comply with an archaic and misdirected appraisal process as these bargain hunters are paying cash.”
ISG, along with several other South Florida sales groups, were responsible for hyping and fluffing the Miami condo market with multimillion-dollar international campaigns to develop a market of speculative flippers that artificially inflated sales and created the atmosphere for developers to overbuild true market demand.
While banks and frivolous lending for construction and mortgages were integral to the condo collapse, just as crucial was the role played by sales groups to hype, fluff and puff the Miami market as the next New York or Paris overnight.
Marketing programs and Web site ads were designed to attract investors to purchase multiple condo units, because as marketing materials trumpeted, they were a “can’t lose” investment.
Perhaps the best example of ISG’s own involvement in catering to speculative flippers can be found in a quote from ISG Principal Philip Spiegelman in an article by the Miami Herald on May 22, 2005, regarding the condo project Marina Blue (exclusively marketed by ISG). “One hundred percent of the buyers were investors and speculators,” Speigelman said. “Anyone who tells you their projects are different are deluding themselves.”
It’s also quite possible that the foreclosure sales are superior in price competition to units ISG is still trying to market at retail (figment of the imagination) price levels, and the company’s income has been affected.
I would recommend to representatives of firms that profited in the millions of dollars by prostituting Miami’s condo market that perhaps it is best to go play golf, go fish, go to Aspen and put a finger across their collective lips anytime they might wish to shine a light on the role they played in causing this debacle, and expose how they profited by it at the expense of the investors or flippers they sold to, and the banks that made the construction and mortgage loans.
To point the finger at anyone else or any other industry is not only ludicrous, but hypocritical and delusional. Time for some to take a good, hard look in the mirror.
Jack McCabe is a Deerfield Beach-based real estate analyst and CEO of McCabe Research & Consulting.
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