Marc Sacheli
Sterling Equity Realty
Cell: 305-898-2818

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Miami Leads the Nation in Home Price Gains for 2014

Hope your New Year's Resolution isn't to buy a new house, because residential property prices have surged higher here in Miami than in any other major market in the country according to the latest data from the S&P/Case-Shiller Home Price Indices.

Between October 2013 and October 2014, average prices here appreciated by 9.5 percent. Only San Francisco, which continues to get infused with tech money, came close with a 9.1 percent appreciation.

Meanwhile, the index's 20-city composite saw an average rise of 4.5 percent year-over-year, or less than half of Miami's levels.

That's, of course, thanks to Miami's current real estate boom, and because Miami home prices had fallen so far in the recession.

Home prices here hit a peak in December 2006 before starting to take a serious dive in 2007 and bottoming out in March 2011.
Keep in mind that this index does not include either condo units or new construction, but rather single family homes that have been sold at least twice.

By Kyle Munzenrieder, Miami New Times




 

La Floride devient le 3eme etat le plus peuple des USA selon le dernier recensement.

En ajoutant 803 nouveau citoyen par jour, la Floride depasse maintenant l'etat de New York. La population de Floride a augmente de 293.000 personnes entre le 1er Juillet 2013 et 2014 et depasse maintenant les 20 million d'habitants.
La Californie et le Texas restant pour l'instant les 2 etats les plus peuples.




 

Average sale price of high-end Miami Beach condo up 37 percent

The average sale price of a high-end Miami Beach condo jumped 37 percent during the most recent quarter compared to the same period last year, according to an industry report. The average was $2,653,423 during that period, up from $1,935,041, according to a report by Miami-based Zilbert Realty broker Arno de Vos, which analyzed transactions between Sept. 1 and Nov. 30. The median price was $1.875 million.

Single-family home prices averaged a more modest 5-percent increase. Those sale prices averaged nearly $ 3 million, up from about $2.85 million, during the same period.  The median was $1,647, 500.

Closed sales of condominiums rose from 67 to 72, but single -family home sales dropped steeply, from 51 to 36.

For the 12 months from Dec. 1, 2013 to Nov. 30 2014, sales of luxury single family homes remained stable (211 each year) while average price per square foot rose 21 percent to $772.

High-end condos saw an 11 percent rise in price per square foot ($1,079 to $1,199) while sales dipped slightly from 375 to 365.

 [deVosReport] — William J. Gorta

 





Miami Is Running Out of Retail Space

Thanks mostly to tourists with fat wallets, the retail sector in Miami has reached an all-time high, and retailers are scrambling to get a piece of the action.

Retail space vacancy rates have hit 3.8 percent, and the average rent in the third quarter of 2014 was $45.18 per square foot. That's up a whopping $4.83 per square foot and $7.43, year over year.

This is according to a new report from CBRE, a commercial real estate services firm as reported by Miami Today.


Though a rebounding local economy has something to do with it, the ever-increasing demand of foreign tourists is really what's driving the retail craze. And those tourists have fancy taste. Vacancies for areas that attract luxury retailers are even lower.

That shouldn't be much of a surprise considering another recent report named Miami as the fourth biggest luxury retail market in America right now, far ahead of even Los Angeles, and only behind New York, Chicago, and Las Vegas. In fact, together, New York, Chicago, Las Vegas, Miami, and San Francisco now are home to 40 percent of the total luxury retail locations in all of America.

Miami was also third in 2013 for luxury sales per square foot. So at least high-end retails are getting more than their money back for those pricey per-square-foot rents.

As we all know, developers are keeping up with demand. The Design District is completing its transition into luxury shopping destination. Aventura and Bal Harbour have plans to expand, and new developments with a heavy focus on retail like Brickell City Centre are under construction.

By Kyle Munzenrieder Wed., Dec. 10 2014 at 11:44 AM




 

25% of international investors buy a home in Florida
 

ORLANDO, Fla. – Sept. 8, 2014 – U.S. real estate appeals to foreign buyers, and a large number of them settled on property in Florida – about 25 percent of all international U.S. home purchases to foreign buyers, according to the 2014 report "Profile of International Home Buyers in Florida."

In the 12 months that ended in June 2014, the dollar value of purchases in Florida hit $7.97 billion – a 24 percent increase over the amount spent ($6.43 billion) the year before. About one in 10 property purchases (10 percent) in the state (26,500) involved a foreign buyer, an increase from 9 percent the year before.

Two major trends drove the increase in foreign buyers: A continuing recovery of the world's economy and the affordability of U.S. properties.

U.S. and Florida residential prices remain affordable to most international homebuyers, and they buy property that, overall, costs more than the mean price paid by domestic buyers. In Florida, 76 percent of all Realtors cited less expensive property as a top reason for purchase.

 

Countries
Canadian buyers accounted for the largest share of international clients (32 percent), followed by:
• Western Europe: 24 percent; primarily from the United Kingdom, France and Germany
• Latin America/Caribbean: 23 percent: primarily from Brazil and Venezuela
• Asia: 10 percent; primarily from China

Florida destinations
Sales to non-resident international clients as percent of international sales:
• Orlando-Kissimmee: 11 percent
• Tampa-St. Petersburg- Clearwater: 11 percent
• Miami-Miami Beach: 10 percent
• Bradenton-Sarasota-Venice: 8 percent
• Fort Lauderdale: 8 percent

Other key findings:
• 52 percent of Florida Realtors reported international clients (national average: 28 percent)
• 19 percent of Florida Realtors with international clients reported 6 or more clients (national average: 12 percent)
• 20 percent with international clients said they accounted for 26 percent or more of their transactions (national average: 15 percent)
• 29 percent reported that their percentage of international clients increased in the last five years (national average: 20 percent)

Market success
Realtors dealing with international clients say the key to success is understanding the culture, concerns and language of potential foreign clients; reaching out through personal contacts and online tools; and assisting potential foreign buyers through the regulatory and financial process, especially for agents on the buy-side of the transaction.

According to the survey, Realtors also said that relaxing current visa restrictions on a length of stay would attract additional international clients.

The complete Profile of International Home Buyers in Florida 2014 Report is available online.

© 2014 Florida Realtors®

 




 

Grant Cardone makes big Miami real estate push
Author wants to invest $1 billion in Florida property by end of decade




Bestselling author and television commentator Grant Cardone is making a big push into the Florida real estate game, spending $250 million on properties in the state over the last two years.
Cardone, who creates sales training programs for Fortune 500 companies, hopes to invest $1 billion in Florida by the end of the decade. His latest purchase is the Wellington Club in Lake Worth for an undisclosed price. The acquisition of the 204-unit apartment complex at 9855 Herons Nest Court has not been recorded by Palm Beach County.
Another apartment complex purchase is about to close in North Miami, according to the Daily Business Review. Cardone makes his real estate investments through a company called Pacific Star 5 Inc.
Cardone relocated from Los Angeles to Miami two years ago.
“We’re just warming up here,” Cardone told the Review. “There’s so many reasons to buy in Florida. It’s not going to stop.”

Eric Kalis  
Daily Business Review
May 12, 2014 09:45AM

 




 

Condo confidence
New urban mentality seen as key to sustaining Miami’s Downtown development boom

This time, it’s different.

That’s the mantra from developers, brokers and other real estate professionals about the development flurry in Miami’s urban core.

Skeptics point to last decade’s devastating bust after an unprecedented wave of residential construction, and predict a similar result a few years down the line. The memory of thousands of condos sitting unsold from Brickell Avenue, the home of Miami’s financial district, to Midtown, a neighborhood inspired by New York’s Soho, still lingers for some.

About 50 new condo towers housing nearly 14,000 units are proposed or under construction in a 60-block stretch from Brickell’s entrance to the Julia Tuttle Causeway connecting Midtown to Miami Beach, according to Condo Vultures. That represents more than 65 percent of the construction pipeline for South Florida’s entire tri-county area.

Anyone hung up on the last cycle might point to that statistic as a harbinger of trouble.



Proponents counter with a list of critical distinctions between the two eras. Most notable is the present deposit structure, which requires condo buyers to fork over as much as 50 percent of the purchase price before closing. That is expected to eliminate most of the flippers who wreaked havoc on the market between 2003 and 2007, as long as developers don’t start lowering deposit thresholds. It also allows condo builders to avoid over-leveraging.

Such deposits are common in South America, where a large chunk of the early buyers in this cycle are from. But brokers and developers say more Europeans, and even a smattering of domestic buyers from the New York area, are getting comfortable with the model.

Instead of large bank loans, builders are using these deposits to finance condo construction. That approach, as Miami attorney Thomas Lehman puts it, “is the equivalent of crowdfunding.”

Another key talking point for the optimists is how quickly the overhang of more than 25,000 unsold condos was gobbled up during the recession. Those units were supposed to take up to 10 years to be absorbed; by the end of 2011 only about 35 percent of the condos remained unsold. Through the end of January, a mere 400 units were left from the last boom, according to Condo Vultures.

Miami still offers an extreme discount to comparable condos in major cities like New York, Los Angeles, Hong Kong and London. The $1,200-per-square-foot average preconstruction price at the Zaha Hadid-designed One Thousand Museum in downtown Miami, for example, is a fraction of the price for a luxury unit in Manhattan. And that’s a historically expensive price for the Greater Downtown Miami market.

‘We had no city’

Perhaps the most important difference between the booms is unrelated to how the developments are being funded or supply and demand trends. Proponents say that unlike the last cycle, urban Miami is ready for the influx of new residents.

“The first time around, we had no city,” Zilbert International Realty president and CEO Mark Zilbert said. “The vast majority of investors in the first cycle were amateur investors who were all about making a quick buck. What is happening now is, Miami is rapidly moving toward the status of a world-class city. There are more people around and more infrastructure for condo boom 2.0.”

The world appears to be taking notice of Miami’s evolution. In London-based Knight Frank’s 2014 “Wealth Report,” Miami ranked eighth on the list of “cities that matter” to wealthy investors worldwide. It was the only U.S. city to make the list besides New York, which ranked second to London.

Brokers like Zilbert can take a prospective client to South Miami Avenue in the Brickell area on a Friday night and show how the block is now an urban version of South Beach’s Lincoln Road, one of the nation’s busiest retail and restaurant streets. South Miami Avenue has a pipeline of at least 14 projects, which will bring about 4,700 units to a one-mile stretch, including the Jorge Perez-led Related Group’s 1100 Millecento Residences, one of the first projects in the current cycle.

Greater Downtown Miami is also earnings its cultural chops, thanks to the Adrienne Arsht Center for the Performing Arts and the recently opened Perez Art Museum Miami near American Airlines Arena, home of the Miami Heat. A new science museum is also on the way.

Additionally, massive retail projects like Brickell CityCentre, which is under construction in the financial district by developer Swire Properties, and Miami Worldcenter, (a project by Forbes Company and Taubman Centers still in planning stages that has already landed Bloomingdale’s and Macy’s as anchor tenants), will bring much-needed shopping space to the city.

“The last cycle was really just condos with no restraint,” said Rilea Group vice president Diego Ojeda. Rilea is currently building the 328-unit Bond at Brickell, the first condo project of the current cycle located directly on Brickell Avenue. “Now it’s about a city coming together.”

Emerging neighborhoods

To the north of Brickell and downtown Miami, urban pockets with unique characteristics, like Wynwood, Midtown and the Design District, are also drawing attention. These neighborhoods will offer residents homes, workplaces and entertainment in the same general area. For a city with a history of congestion and paltry public transit offerings, this is an overdue trend.

These new developments will draw suburban residents to relocate to urban Miami, said ONE Sotheby’s International Realty managing partner Daniel de la Vega. “You now have a vibrant nightlife where you can go out to dinner, have a nice time and walk back home, versus having to get in a car and drive around. People aren’t buying only to be in a building, they are buying into these new developments that are taking place in the center of new cultural venues. Whether it’s Brickell, Edgewater, downtown or the Design District, people are buying a lifestyle.”

Edgewater is attracting the most interest from developers and land investors. The stretch along Biscayne Bay from Northeast 17th to 37th streets has at least seven major condo towers proposed for the area, and most available sites have been gobbled up.

“Edgewater was a place a couple of years ago that no one thought about,” Ojeda said.

The neighborhood was the setting for the unofficial beginning of the current development cycle. In 2011, the family-run Melo Group introduced the now-popular 50 percent deposit structure for its 23 Biscayne project. It sold out in eight months.

“At the time, no banks were willing to lend because of the crash in 2008 and 2009,” said company director Martin Melo. “My father had built 12,000 units in Argentina and we knew in all of South America, the idea of having to put that much cash in advance is normal. We brought that matrix to Miami.”

Melo then pressed forward with additional residential projects in Edgewater. The company completed the 250-unit Skyview Luxury Residences, a rental building one block away from 23 Biscayne. Skyview was fully rented in 120 days. Now Melo is building Bay House, a 38-story, 165-unit condo building at 600 Northeast 27th Street.

Edgewater has since attracted a herd of condo developers, including Eastview Development and mckafka Development Group. Eastview formed a joint venture with investment firm GTIS Partners for the 51-story, 399-unit Biscayne Beach luxury tower. To distinguish itself from neighboring developers building high-rise towers with between 150 and 300 condos, mckafka is constructing the 20-story, 90-unit Crimson.

The Related Group is also in Edgewater, constructing the 42-story Icon Bay and planning the two-tower Paraiso Bay, which is attracting celebrity buyers like basketball star Manu Ginobili, musician David Guetta and former tennis champion Arantxa Sanchez Vicario.

Even though Edgewater is getting crowded, Melo said his family has at least two more projects in the works, a condo and a rental.

Immediately northwest, the Wynwood neighborhood stands out as one of two Miami urban enclaves, along with the Design District, that is not being saturated with high-rise development. Over the last decade, many neglected industrial buildings in Wynwood were purchased and repositioned as art galleries, restaurants and mixed-use facilities. That is making the neighborhood attractive to artists, retailers and creative entrepreneurs, according to Tony Cho, president and CEO of Metro 1 Properties, for whom Wynwood is a primary focus.

“Interesting cities are comprised of unique and distinct neighborhoods,” Cho said. “We are starting to see a lot of independent brands from New York coming here and wanting to do business in these neighborhoods.”

But residential developers are taking notice. Two rental projects and one condo building are in the works in Wynwood. Prominent developer David Edelstein, through a partnership that includes New York real estate heavyweight Robert Futterman, wants to build a mixed-use project with 264 units, possibly rentals, at 2801 Northwest Third Avenue.

Don’t expect Wynwood to mirror South Miami Avenue or Edgewater, however.

“What has limited development in Wynwood is the zoning, unlike Edgewater,” Cho said. “None of the stakeholders want aggressive upzoning. For the Greater Downtown area, it’s fine to concentrate there and allow other neighborhoods to develop organically.”

Looming concerns

While most real estate observers say Miami is in a better position to handle thousands of new condos now, some still see potential problems.

Lehman, the attorney, wondered how long condo buyers can be expected to keep funding the majority of the city’s developments through cash deposits.

“The real question is what happens if a few people drop out?” he asked. “The problem comes when there is no more demand for other units. People get cold feet about the direction the market is going and everything comes to a halt. What happened in 2007 down here is the cost of construction went out of sight, which hurt a lot of projects. Inevitably it happens.”

Developers like Rilea’s Ojeda note the deposit structure is forcing buyers to “scrutinize the hell out of” projects before making the commitment. Thus, they are less likely to walk away from a preconstruction purchase.

“A 50 percent deposit is a big chunk of change,” Ojeda said. Buyers are asking tough questions about developers and sales teams. “They won’t take a leap of faith on someone they don’t know.”

That won’t stop inexperienced developers, or developers with no track record in Miami, from trying to get a piece of the boom, Zilbert said. An influx of unfamiliar players could drag down the market.

“I’m always a little leery of bringing clients to an unproven developer’s project,” he said. “We will see a scattering of new projects look impressive, but never get built in Miami. Unfortunately it’s the buyer who suffers.”

On a broader level, Miami still lacks reliable mass transit. Options are limited for commuters who live in the suburbs and work Downtown. And Downtown residents must drive or navigate a convoluted bus system to travel the short distance to Miami Beach.

The local real estate sector is also trying to get its arms around the continued threat of climate change-induced sea level rise, which could have a devastating impact on property values in the future. “To me, the biggest problem is that the city is not willing to face the issue,” Miami attorney Hal Lewis said.

Of course, providing residents with enough cultural, retail and entertainment options is another big goal. “If Miami is willing to dedicate itself to a proper urban core, then it can move toward being a world class city,” Lewis said.

By Eric Kalis

 




 

High demand for U.S. real estate in 10 countries

 
NEW YORK – April 16, 2014 – Foreign buyers are being lured to U.S. real estate because they consider it to have bargain prices, economic stability and a "safe haven for investors," 24/7 Wall St. reports. Interest in U.S. real estate from international buyers in 10 countries has soared since 2009 by 95 percent or more. In nine of those countries, the interest has at least doubled, according to data from RealtyTrac.

"The U.S. real estate market is coming off of a rough patch and entering recovery mode," says Daren Blomquist, RealtyTrac's vice president. "International buyers see it as a great time to jump in and catch the U.S. market on the upswing."

24/7 Wall St. compiled data from RealtyTrac to find that the following countries are showing the highest increases in interest in purchasing American homes.

1. United Arab Emirates
Growth in prospective homebuyers: 352.2%
Share of international prospective buyers: 1.1% (12th highest)

2. Switzerland
Growth in prospective homebuyers: 269.7%
Share of international prospective buyers: 2.1% (8th highest)

3. Hong Kong and China
Growth in prospective homebuyers: 254.2%
Share of international prospective buyers: 4.1% (4th highest)

4. France
Growth in prospective homebuyers: 190%
Share of international prospective buyers: 2.8% (6th highest)

5. Italy
Growth in prospective homebuyers: 178.4%
Share of international prospective buyers: 1.9% (10th highest)

6. United Kingdom
Growth in prospective homebuyers: 153.8%
Share of international prospective buyers: 12.1% (2nd highest)

7. Australia
Growth in prospective homebuyers: 121.9%
Share of international prospective buyers: 11% (3rd highest)

8. Canada
Growth in prospective homebuyers: 107.7%
Share of international prospective buyers: 45% (the highest)

9. Sweden
Growth in prospective homebuyers: 100.0%
Share of international prospective buyers: 2.0% (9th highest)

10. Germany
Growth in prospective homebuyers: 95.2%
Share of international prospective buyers: 2.6% (7th highest)

Source: "10 Countries Racing to Buy American Homes," 24/7 Wall Street (April 11, 2014)

© Copyright 2014 INFORMATION, INC. Bethesda, MD (301) 215-4688

 




 

Is Miami the next Monaco?

If Miami real estate is a bubble, it's still inflating fast.

The average sales price for Miami real estate was up 19 percent in the first quarter compared with the same period a year ago, according to a report from Douglas Elliman and Miller Samuel. The median sales price hit $244,000, the highest since the pre-crisis peak in 2008.

The number of sales was up 4 percent, and it hit the highest level since Elliman started gathering data in 2006. The number of days homes were on the market fell 9 percent.

The luxury sector—defined in the report as the top 10 percent of the market—was truly on fire. The average sales price for luxury single-family homes surged 34 percent over the same quarter last year, rising to $2.7 million. The number of luxury sales also grew 7 percent.

Average prices for luxury condos surged 16 percent to $1.8 million.



"I can't believe how much prices are increasing," said Jay Phillip Parker, the CEO of Florida brokerage for Douglas Elliman. "Miami is becoming more like Monaco, with a lot of wealth and a sophisticated infrastructure and culture to support that."

Of course, Miami doesn't have the gambling, the sporty monarchy or the offshore tax shelters that Monaco has. But pockets of Miami are becoming enclaves for the global super rich. Fisher Island, Star Island, the Venetian Islands and other posh communities are attracting a much younger, richer and more private buyer.

"These are gated communities that give people that sense of isolation that they're looking for," Parker said. "Their kids can walk safely on the streets. They want that security."

The latest wave of wealthy buyers are pouring in from both overseas and the Northeast, Parker said. Although the rich Russians and Latin Americans get a lot of the attention for Miami mansion sales, the core demand is really being driven by financial executives and hedge funders in the Northeast looking for a lower tax bill and the Miami lifestyle, he said.

"People have been saying for years that the hedge fund guys and financial folks would move here, but now it's really happening," Parker said.

He said many hedge funders and Wall Street executives calculate that they can buy a luxury condo with the money they save in New York taxes "over just a couple of years."

Read MoreThis town has the most expensive homes in US
Of course, Miami has a history of booms and busts. And one of the warning signs in the current market is inventory, which climbed 10 percent in the first quarter.

Miami has become a giant construction site again and some developers worry about over-supply of high-end condos coming on line in the next year. But because so many buyers are paying with cash or have relatively low mortgages, and are paying hefty deposits for new projects, there is less risk of a bubble bursting, according to Parker.

"Where we worry about bubbles and real contraction is in the new construction," he said. "But for these buyers, this is really a second or third home. It's not speculation or an investment strategy."

Robert Frank     | @robtfrank
Thursday, 17 Apr 2014 | 1:20 PM ET

 




 

Miami ranks as 7th top global city in Wealth Report
 
Miami rose to seventh place in a recent survey of the most important global cities to the world’s wealthy.

Miami and New York were the only North American cities to make the top ten list of the Wealth Report, which is issued annually by London-based real estate consultancy Knight Frank. The report includes the Global Cities Survey which ranks cities based on four factors: economic activity, quality of life, knowledge and influence and political power, as well as taking into account the number of ultra-high net worth individuals who call each city home.

Miami ranked fourth in quality of life; ninth in economic activity, eighth in political power, and 10th in knowledge and influence.

Miami, which ranked eighth last year, outranked every other city in the Western Hemisphere with the exception of second-ranked New York. Miami outperformed Paris, Beijing and Dubai. The Global Cities Survey predicts that Miami will remain in the top ten for at least the next decade. New York and London will continue to vie for the top two spots over the next ten years, according to the report.



BY INA PAIVA CORDLE

ICORDLE@MIAMIHERALD.COM




 

Here's How Much You Have To Make To Buy A House In 25 Major Cities

Online mortgage company HSH.com recently estimated the salaries needed to afford a house in 25 metropolitan areas across the United States. Because, the cost of real estate varies across cities and regions — you need to be making about four times as much money in San Diego as in Cincinnati to afford a house.

The map illustrates these differences. The wider the circle over a city, the more you need to make to afford a house there:

 

 

Here is a table of the 25 cities and the salary you need to earn to afford the median-priced house, from HSH.com's estimates:

 

Business insider, Andy Kiersz, Feb. 20, 2014

 




 

Miami Boom Signals First Rating Increase Since 2004: Muni Credit
By Toluse Olorunnipa - Jan 6, 2014

Construction cranes dot Miami’s skyline as 47 condominium projects are under way, the most in almost a decade, symbolizing the city’s housing boom.

Record demand from international investors is boosting prices and property-tax collections, leaving Miami poised for its first credit-rating increase from Standard & Poor’s since 2004. Some city debt is gaining in value after falling to near-junk status following the housing-market crash and as regulators investigated Miami for financial fraud.

As Miami home prices are the highest since 2008, the extra yield investors demand to buy Miami general obligations rather than benchmark munis has decreased, data compiled by Bloomberg show. When Miami returns to the bond market -- it hasn’t sold general obligations since 2009 -- investors will require an even lower penalty, said Michael Schroeder, chief investment officer at Wasmer, Schroeder & Co. in Naples,Florida.

“Miami definitely has a much more positive story to tell than they have had any time in the last five years, when the crisis hit, and probably the five years before that,” said Schroeder, who helps manage about $3 billion in munis.

Schroeder, who hasn’t held the city’s debt for several years, said he would consider buying should its finances improve further.

New Outlook

S&P changed its outlook on Miami to positive from negative on Nov. 26, saying it may raise the city’s BBB general-obligation rating, which is two steps above junk. The company cited improving revenue, mostly from rebounding property values as overseas buyers pile in.

Miami’s budget reserves are set to pass $75 million this year after falling 90 percent to $13 million from 2006 to 2010, said city Chief Financial Officer Daniel Alfonso.

The state’s second-largest city behind Jacksonville, Miami plans to hold off issuing new debt until it resolves a civil securities fraud complaint from the U.S. Securities and Exchange Commission, Alfonso said.

The SEC in July accused Miami of misleading investors before 2009 bond sales by using “shell games” and illegal transfers to hide its deteriorating finances. Miami lost a court bid to dismiss the SEC lawsuit on Dec. 27, when U.S. District Judge Cecilia Altonaga ruled that the case could move forward. The SEC is seeking fines and other sanctions.



 

Debt Wait

“We’ve turned the corner, but I don’t think we’re ready to go crazy with new debt,” Alfonso said. “We may wait another year.”

Miami tax-exempt general obligations maturing in January 2029 traded last month at an average yield of 4.46 percent, or about 3 percentage points more than benchmark munis, Bloomberg data show. The spread was as high as 3.5 percentage points in October.

Miami had $668 million in debt as of Nov. 30, according to city financial statements.

Fitch Ratings, which downgraded Miami after learning of the fund transfers, said in November that the city’s outlook has strengthened. Fitch affirmed its A- grade on Miami general-obligation bonds, noting a resurgent housing market.

Home prices in Miami reached a five-year high in October, although they’re still down almost 40 percent from a 2006 peak, according to the S&P/Case-Shiller property-value index.

Revenue from property taxes makes up 43 percent of Miami’s $524 million general fund. That revenue rose 4.5 percent in 2013, the second straight year of increases after three years of declines.

‘Right Direction’

Le T Quach, an S&P analyst, said she was initially skeptical that the city was experiencing sustained improvement. Quach said she’s now convinced.

“It looks like the writing is on the wall: The real estate values are improving,” Quach said. “The underlying economy is going in the right direction.”

As the housing-market tumble took hold in 2008 and 2009 with developers struggling to sell thousands of newly built condos, prices declined and foreclosures increased. Property-tax revenue fell 25 percent from 2008 to 2011 while pension payments increased, leaving a budget shortfall.

The city declared “financial urgency” in 2010, allowing it to make unilateral cuts to pension and salary payments for police officers and other unionized employees. Miami repeated the declaration in 2011 and 2012, slicing more than $100 million from employee benefits to plug budget holes and build reserves.

Cuts Avoided

Rising real estate values eliminated the need for more cuts last year, Alfonso said.

The rebound is being led by overseas residents who flocked to the city to buy discounted condos after the property crash and have since financed new construction, said Peter Zalewski, owner of Condo Vultures LLC, a Miami-based brokerage and consulting firm.

Zalewski, who tracks the city’s condo projects, said the 47 towers being built marks the biggest such wave for Miami since 84 projects from 2003 to 2005.

Construction cranes in downtown Miami are reminiscent of the boom that created 22,000 residential units from 2003 through 2008, Zalewski said. This time, buyers are putting up cash deposits to fund the building before completion, instead of developers relying on bank loans.

“It’s occurring simply because of the Latin American buyers and the European buyers, who are willing to put down cash,” Zalewski said.

Cash Payments

Foreigners paying cash made up at least 75 percent of the buyers at BrickellHouse, a 374-unit downtown high-rise slated to open this year, said Harvey Hernandez, who is overseeing the project as chairman of Miami-based Newgard Development Group. The project, which broke ground in 2012, was among the first after Miami’s last real estate cycle ended with plunging values, bank repossessions and half-constructed buildings.

Henry Pino, founder of Miami-based developer Strategic Properties, said 95 percent of buyers at his two planned condo projects are international investors paying cash.

“Miami is like the capital of South America,” he said of the city of 420,000, home to the Latin American headquarters of Hewlett-Packard Co. (HPQ) and FedEx Corp. (FDX)

The city’s tax base will grow as major construction projects are completed over the next three years, said Alyce Robertson, director of Miami’s Downtown Development Authority. That includes a $1 billion mixed-use complex by Hong Kong-based Swire Properties Ltd. and twin condo towers by Malaysia-based gaming company Genting Bhd. (GENT)

Investor Confidence

Miami still faces investor skepticism, said Schroeder, the Naples-based money manager. The city flirted with bankruptcy in 1996 and received an SEC cease-and-desist order in 2003 for misappropriating bond funds. Ratings companies have cited the SEC allegations against Miami as credit risks.

The pending SEC lawsuit accuses Miami of misleading investors by transferring money from the city’s Capital Improvement Fund to its general fund to mask growing deficits from 2007 through 2009. The transfers -- which included legally restricted funds -- weren’t fully disclosed to investors as Miami issued about $154 million in debt in 2009, according to the SEC. Miami has denied wrongdoing in the case.

“There’s a long history there that they seem to be making a concerted effort to confront,” Schroeder said.

In trading in the municipal market, benchmark 10-year bonds yield about 2.99 percent, down from a three-month high of 3.05 percent on Dec. 11. That compares with about 2.96 percent on similar-maturity Treasuries.

That makes the ratio of the interest rates, a measure of relative value, about 101 percent, in line with the five-year average. The lower the figure, the more expensive munis are compared with federal securities.

To contact the reporter on this story: Toluse Olorunnipa in Tallahassee, Florida at tolorunnipa@bloomberg.net
To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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Florida is No. 3 in population – almost
TALLAHASSEE, Fla. – Jan. 6, 2014 – Florida will have to wait another year, but it’s narrowing in on New York’s spot as the third most populous state in the nation.

According to estimates released by U.S. Census Bureau on Monday, Florida trails New York by fewer than 100,000 residents, cutting the Empire State’s edge by more than half since last year.

It’s a matter of when, not if, the Sunshine State will slide into the top-three tier behind California and Texas.

“Based on Census Bureau estimates, Florida will probably pass New York within the next year,” says Stan Smith, Program Director of the University of Florida’s Bureau of Economic and Business Research.

Florida is now home to an estimated 19,552,860 residents, up more than 230,000 from last year and 750,000 more than in the 2010 census count. The numbers are estimated as of July 1 and do not reflect growth at the county or municipal level.

Gov. Rick Scott credited the population increase on his economic policies and efforts to attract new businesses to the state, trailing New York by just 98,267 residents.

“Florida is on a roll,” Scott said in a statement. “Cutting taxes and reducing red tape on businesses is a great catalyst for economic opportunity and job creation.”

Many experts consider Florida’s climate and the lack of a state personal income tax the peak attractions for migrants of all ages.

With an estimated 19,651,127 residents, New York hasn’t been able to keep up with Florida’s pace of growth. New York gained about 75,000 residents in the past year – less than a third of Florida’s increase. And while New York City continues to attract newcomers, regions of upstate New York have seen stagnant and declining population numbers.

Florida’s population boost brings with it the potential for a larger tax base but also comes with an increased demand for services, such as roads and schools, and resources including water and land.

One benefit of Florida’s current pace of growth could be additional representation in Congress, Smith says. “The ranking itself doesn’t mean much, other than the likely shift in congressional seats following the 2020 census.”

Due to population changes reflected by the 2010 census, Florida picked up two seats while New York lost two.

Monday’s estimate put the U.S. population at 316.1 million as of July 1, with states in the South and West growing faster than the rest of the country.

West Virginia and Maine were the only states to have projected declines in population from 2012 to 2013, while Maine and Rhode Island are the only states currently home to fewer people than when the 2010 census was taken.

Source: News Service of Florida, Jim Turner







 

Miami cracks Top 10 luxury residential markets
 
Miami’s in with the in-crowd, tastemakers say, debuting on Christie’s International Real Estate’s list of top 10 luxury residential markets.

The real estate arm of the iconic auction house publishes a global research report of trends across the world’s prime real estate markets, tracking spending patterns among wealthy buyers.

And this year for the first time it named Miami as one of the cities where the rich not only play but also stay.

“Miami is on everybody’s radar across the world,” said Ron Shuffield, president and CEO of Esslinger-Wooten-Maxwell Realtors, an affiliate of Christie’s International Real Estate. “We have a lot of people coming here to spend their money and enjoy what we have.”

In naming the choicest markets, Christie’s selection criteria included cities’ gross domestic product; number of billionaire residents; their tally of Fortune 500 company headquarters; performance on S&P/Case-Shiller Home Price indices; position on the AT Kearny Global Cities Index; ranking on Swiss bank UBS’ list of most expensive cities; Globalization and World Cities Research Network rankings; and the presence of a Christie’s affiliate.

Emerging as the most attractive cities for the rich: Dallas, Hong Kong, London, Los Angeles, Miami, New York, Paris, San Francisco and Toronto. Côte d’Azur, also called the French Riviera, even though not a city, also made the list, “added to this elite survey group for being one of Europe’s most highly prized second-home destinations for more than a century.”


“As the only real estate network owned by a fine-art auction house, Christie’s International Real Estate has unparalleled access to the [high-net-worth individuals] around the globe who procure assets such as art, wine, jewelry and, of course, luxury real estate,” said Bonnie Stone Sellers, Christie’s International Real Estate CEO. “Together with the collective knowledge of its 125 affiliated real estate brokerages in 41 countries… Christie’s International Real Estate is uniquely qualified to understand the characteristics and trends associated with the prestige real estate market.”

And observers say Miami has cultivated the cachet to draw these buyers.

Helping its appealing: An emerging cultural offering that now includes the internationally renowned Miami City Ballet, the Miami Symphony Orchestra, major art museums and world-class food, art and cultural festivals.

Add to that plans to draw boaters, coupled with the area’s luxury retail outlets, daily flights to major world centers and a growing financial services sector, and it’s clear Miami allows wealthy homebuyers access to choice recreation and international business centers, Mr. Shuffield said.

“And as trite as it sounds,” he said, “the weather is still a big draw.”

Written by Samantha Joseph on November 13, 2013

 




 

Looking to expand in Miami, Virgin Hotels opens local office

With an eye on expansion in South Florida and beyond, Virgin Hotels has opened an office in Miami.
About 10 employees are working in the Coconut Grove office, which set up shop last month. Sister company Virgin Mobile Latin America was already operating in the same building on South Bayshore Drive; now the companies share space. A Virgin Hotels office in New York has about five employees.

Virgin Hotels CEO Raul Leal said the company, which launched two and a half years ago, plans to open its first property in Chicago next year. New York will follow in 2016.

Leal said the search is still on for the right real estate in Miami.

“It’s definitely one of the top markets for us in terms of the brand,” he said.

Virgin Hotels, which is part of Richard Branson’s Virgin Group empire, would like to have at least two hotels in Miami-Dade, specifically in Miami Beach and the Brickell area. The company would be interested in putting a hotel in Fort Lauderdale as well, Leal said.

He said having an office in Miami makes sense gives the company access not only to South Florida but also to the Caribbean, Latin America and Europe.

“It helps us diversify the company a little more,” Leal said.


By Hannah Sampson
hsampson@MiamiHerald.com
© 2013 Miami Herald Media Company. All Rights Reserved.
http://www.miamiherald.com






 

Fontainebleau's Gotham Steak Launches $1,954 Menu



In honor of the upcoming 60th anniversary of Fontainebleau Miami Beach's 1954 opening, one of its marquee restaurants Gotham Steak now serves a $1,954 menu for two called the "1954 Dining Experience." What does $1k a head get you?

· a bottle of Louis Roderer Cristal champagne
· Petrossian Royal Osetra Caviar
· Alaskan King Crab
· a selection of East and West coast oysters
· chilled steamed lobster
· a night cap at nightclub LIV
Note that does not (does NOT) include tax or service charge. But it does include free valet parking.

Thursday, October 10, 2013, by Amanda Kludt

 




 

Sales and New Listings of Miami Single Family Homes and Condos Continue to Boom
Miami’s robust real estate market was marked by a 71.3% growth in the sales of single homes valued $250,000 to $399,999 in August compared with last year...

Miami, FL – Miami’s robust real estate market was marked by a 71.3% growth in the sales of single-family homes valued $250,000 to $399,999 in August compared with last year, according to a new report from the 30,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) system. The monthly listings and sales reports also detailed strong growth in new listings for single family homes across multiple price ranges and a sharp 72.7% increase in the sales of condos valued between $400,000 and $599,999.

“Miami’s boom in the sale of single-family homes and condos across various price ranges is marking unprecedented growth in our soaring real estate market,” said 2013 Chairman of the Board of the MIAMI Association of REALTORS Natascha Tello. Adding, “Our double-digit growth in the new listings of homes and condos at multiple price points sends a strong message that now is the time for sellers to put their properties on the market.  Miami’s real estate market is definitely booming. The data clearly reflects there has never been a better time to invest in Miami.”


Boom in Sales of Single-Family Homes and Condos
The Miami real estate market continues to experience strong sales across different price ranges. There were 1,210 single-family homes sold in Miami last month compared with 1,051 in August 2012, an increase of 15.1%, according to MIAMI’s monthly market report.  Of those 281 sales, 139 properties were valued between $250,000 and $299,999, which marked an impressive 80.5% increase from the same period the previous year. Additionally, the sale of single-family homes valued between $300,000 and $399,999 saw an increase of 63.2%.

Meanwhile, the sales of condos were driven by a significant 64% growth in closings of properties valued between $400,000 and $999,999. Specifically, there were 171 condos sold between $400,000 and $599,999, a growth of nearly 73% relative to 2012. This trend was also consistent with higher-end condos in which the 96 Miami properties that were sold with a valuation of $600,000 to $999,999 marked a 50.8% growth from the 65 that were sold during the same time last year.

“The double-digit boom in the sales of Miami residential properties in most price points is truly remarkable,” said Fernando I. Martinez, MIAMI residential president. “The fact that this boom is not isolated to one sector is a sign that Miami’s real estate market is positioned for continued long-term, sustainable growth.”


Double-Digit Growth in New Listings of Single-Family Homes and Condos
The double-digit growth in the listings of Miami condos and single-family homes is further evidence that South Florida’s real estate market is booming and that there is still insufficient supply to keep up with the strong demand for new properties.

The 2,009 single-family homes listed in August represented a 3% growth from new listings in July. Nearly 22% of August’s listings originated from single family homes valued between $250,000 to $299,999 and $400,000 to $599,999. The 210 new listings of the former signified a robust 54.4% increase from the same period in 2012; moreover, the 224 new listings for properties with the latter valuation represented a substantial increase of 44.5% compared to last August’s 155 new listings.

The vigorous growth in the new August listings of condos centered around more affordable properties valued between $100,000 and $199,999 which saw an increase of 67%. In August there were 500 new condos listed with an asking price between $100,000 and $149,999, a growth of 57.2% relative to 2012 when 318 condos in the same range were listed. In addition, $150,000 to $199,999 condos also saw double-digit growth. There were 337 new listings within this range, marking an increase of 35.3% versus the 249 new listings in August 2012.

Note:  Statistics in this news release may vary depending on reporting dates. Statistics reported by MIAMI are not impacted by NAR’s rebenchmarking efforts.  MIAMI reports exact statistics directly from its MLS system.

by Lynda Fernandez | Oct 04, 2013

About the MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating 93 years of service to Realtors, the buying and selling public, and the communities in South Florida.  Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 30,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage.  It is the largest local Realtor association in the U.S., and has partnerships with more than 100 international organizations worldwide.  MIAMI’s official website is www.miamire.com.

 




 

Why South Florida is ripe to attract the wealthy  ... and their advisers

As investors and investment managers know, timing is everything. And the time to consider a move to South Florida is now.
The continued economic growth of countries such as Brazil, Colombia, and Chile, has had an unbelievable side effect on South Florida: South Americans love to shop in Miami. Shopping eventually turns into purchasing homes as the attraction of the drastically improved amenities and new opportunities lure them in one by one.
The South Florida real estate market was not predicted to rebound until 2016, but it is turning around much quicker than expected, largely because of foreign buyers hailing from Latin America and Europe.

The median sales price of condominiums spiked 27.5 percent in August from a year earlier while single family homes are up 20.5 percent, the Business Journal reported.
There have even been sightings of the unofficial state bird, the “Miami (Construction) Crane” dotting the beautiful Miami skyline.
The amount of dollars flowing in from overseas is astonishing. More and more affluent South Americans and Europeans are making South Florida their permanent home.
Whether it’s because of distrust in their home country’s political regime, economic uncertainty, tax advantages or simply the weather, South Florida is experiencing significant growth in its millionaire population.

Five South Florida cities have made Forbes’ list of America’s millionaire capitals.

Wealth managers have already started to flock south. Last year alone, several wealth advisement firms opened offices or expanded their teams in Miami and the surrounding areas.
A key factor for high net worth individuals to consider is state income tax -– an issue in all but seven states.
As the long-term capital gains tax increases in 2013 from 15 percent to 20 percent and other potential tax increases at both the federal and state/local levels remain on the table, any prudent personal financial planning must consider taxes. Should carried interest be taxed at ordinary rates in the future, wouldn’t an investment manager consider controlling some of the income tax burden by moving to a state such as Florida with no personal state income tax?
Creation of an individual state income tax is prohibited by the Florida constitution unless residents vote to reverse this policy; therefore, it’s doubtful it will ever happen in our lifetime.

So what does this all mean? South Florida is HOT! (And I’m not just saying that because I am a native Floridian.)
For all of the reasons above, now is the time to consider the move.
And let’s not forget the weather. If you are one my friends who live in the frozen tundra, a move to South Florida will make obsolete half or more of your wardrobe. Median temperature in February is 68.5 degrees while the median temperature in New York is 35.5 degrees.
Ready to move yet?

If you’re still not convinced, remember, South Florida’s proximity to Central and South America facilitates business with the region. Being able to meet foreign executives and entrepreneurs while playing in the land of fun and sun is akin to -– and sometimes literally involves -– discussing business deals on the golf course … even in winter.

Raul A. Garcia, CPA, is a principal in the financial services department of Kaufman, Rossin & Co., one of the top CPA firms in the country. He handles both audit and tax engagements for clients in a variety of industries.

 




 

South Florida economy growing at 3.5 percent, thanks to a real-estate surge

Real estate, once again, can be found at the head of South Florida’s economic pack.
New output numbers released Tuesday show real estate as the No. 1 contributor to economic growth last year, accounting for 31 cents of every new dollar added to the tri-county area’s $274 billion economy. Overall, the economy grew by 3.5 percent, the sharpest increase since 2006 and well ahead of the national metropolitan average of 2.5 percent.

“Overall, I think it’s a pretty good number,” said Robert Cruz, official economist for Miami-Dade County. He noted that of Florida’s largest economies, South Florida had the sharpest growth in 2012.

Real estate’s return as a major economic engine comes amid rising property values and a return of cranes in downtown Miami as developers again see profits in one of the most ravaged housing markets in the country.

“Real estate is really the foundation for this area. It’s crucial for the recovery,’’ said Tony Villamil, a private economist and dean of the business school at St. Thomas University.


In 2012, the real estate sector — which is driven by rents, property values and commercial transactions — contributed about $52 billion to the combined economies of Broward, Miami-Dade and Palm Beach. That was 8.4 percent better than in 2011, and the best showing since 2006.

The real estate numbers were one data point in the annual metropolitan report card issued by the federal Bureau of Economic Analysis. The annual numbers mirror the quarterly Gross Domestic Product reports that track the health of the national economy.

In general, the report showed metropolitan areas faring well in 2012, with most sectors gaining. Financial services, a category that includes real estate, helped drive growth across the country, as did manufacturing and the category that includes retail.

Government dollars were basically flat in 2012. Though down by $19 million, that still represented less than a 1 percent decline. The data does not cover the start of the automatic federal spending cuts called “the sequester,’’ which began in March. But the numbers do reflect cutbacks in spending at the end of Washington’s $800 billion stimulus program and as Miami-Dade governments grapple with ongoing budget squeezes. The decline shows a bottoming out of spending cuts, with 2010 and 2011 seeing government output down by between $100 million and $200 million.

In South Florida, the education sector was the No. 1 drag on output, with a 7 percent decline. The figures are preliminary, so the sharp decline may moderate as BEA revises its numbers.

By Douglas Hanks,  © 2013 Miami Herald Media Company. All Rights Reserved.
 



Cash, condos & criminals: The big loophole for money laundering
 
Alvaro Lopez Tardon needed to launder tens of millions of dollars in proceeds from selling thousands of kilograms of cocaine trafficked from South America to Europe, so he turned to Miami condos, federal authorities say.

Lopez Tardon, the alleged leader of the Los Miami drug gang from Spain, is facing a trial in Miami on charges of laundering $26.4 million in drug money into real and personal property here. Among the items were 14 condo units bought from 2001 through 2006. All but two were purchased directly from developers – including four units in The Mark on Brickell and seven units in One Miami – all affiliates of The Related Group. Most were held in limited liability companies (LLCs), including a penthouse unit at South Beach’s Continuum, where Lopez Tardon resided.

There’s nothing intrinsically wrong with LLCs, which are common in real estate, but a Business Journal investigation has found they create an easy way to launder money. A typical scenario: Ill-gotten cash is put in a foreign bank, an LLC is formed to buy property and the money is supplied in a cashier’s check or wired in for a cash closing.
The Miami Association of Realtors says lawyers and title agents – not developers – are the ones that are supposed to ensure sources of funds are legitimate.
Some experts, however, worry that cash deals in general are creating a new condo bubble.
Attorney: ‘Unprecedented theory’

Lopez Tarden’s attorney, Richard Klugh, said his client is actively contesting the government’s “unprecedented theory” of money laundering prosecution.
“Mr. Lopez’s ownership of real estate was done openly, purchased under his own name or corporations in which his financial interest and his family’s financial interest was fully disclosed,” Klugh said. “He paid for the properties with certified bank funds relying on reputable law firms to close the transactions.”
Court records show Fabiani Krentz purchased five units, then transferred them to companies owned by Lopez Tardon through quitclaim deeds. The information filed with her 2012 guilty plea describes how Krentz purchased and managed properties in Miami on behalf of the Spanish drug gang so earnings from the cocaine trade would look legitimate.

The obvious question should have been: How did a UPS manager such as Krentz afford to spend more than $2 million on condo units? But that didn’t stop the real estate professionals in the deals from taking the money, or a handful of banks from issuing her mortgages.
The story might sound like a flashback to the “Cocaine Cowboys” days of the 1970s and 1980s, as former drug traffickers in the 2006 documentary stated that drug money built many of the high-rises in Miami.

“The regulation of real estate transactions for financial crime and money laundering is worse than Swiss cheese for all the holes it’s got,” said Charles Intriago, president of the Miami-based Association of Certified Financial Crime Specialists, which trains professionals to spot money laundering, and a former assistant U.S. attorney. “Real estate is one of the most ripe areas for the hiding of the proceeds for financial crime and the laundering of those proceeds.”

Experts shocked by pace of construction
Peter Zalewski, a principal with Bal Harbour-based Condo Vultures LLC, said he’s astounded that, only two years after the first post-recession condo broke ground in South Florida, there are 152 towers planned, including 70 taking deposits and 32 under construction.
“That’s one hell of a pace,” Zalewski said. “I joke that they are 500 percent sold out in an hour.”
Zalewski is taken aback by the pricing. A Condo Vultures study of 46 projects found prices averaged $725 a square foot, and 16 were asking more than $1,000 a square foot. (There are still unsold units from the bust available for less.)
“The average prices for these units are mind-boggling,” Zalewski said. “Some developers are arguing that preconstruction prices are what prices in the market will be two years from now. … At this point, statistically, it’s kind of shocking to me.”
Zalewski doesn’t know of any developers that are concerned about the people behind the LLCs, only that they aren’t selling to flippers. Even then, developers often have no way of knowing if the LLC ownership is transferred, he said.

Unlike the last boom, when down payments were 10 to 20 percent, many developers are now asking for upward of 60 percent down – so depositors mostly fund buildings.
Such an arrangement isn’t acceptable to most domestic buyers, said Lewis Goodkin, president of Miami-based Goodkin Consulting, who has done many studies on the condo market and predicted the real estate meltdown years in advance. Now, he said, foreign cash buyers appear to be overpaying and distorting the equilibrium of the marketplace.

“I can say with absolute certainty, based on all of my experience, that if these people are paying these prices, they will have to find other people like themselves to get them out because it won’t be the domestic buyer who does it,” Goodkin said.
It’s especially a problem when it’s illegal money, because those buyers don’t care if they overpay and drive properties out of reach for legitimate buyers, Goodkin said. Even relying on legitimate sources of foreign cash is a dangerous game, he added.
“You have real wealth and also people where you don’t know who the hell they are,” Goodkin said. “That’s one thing that is disturbing because it’s not really real. The market is so dependent on a source you can’t even qualify. You don’t know: How deep is this market?”
Three-fourths of sales are cash

Goodkin is also surprised with the high volume of cash resales in the condo market, which he called unprecedented. In the first half of 2013, 73 percent of condo resales by dollar volume were cash deals, according to the Miami Association of Realtors. Nearly 90 percent of condo buyers were foreign in 2012, and that trend continued this year.
Buying condos for cash while mortgage rates are low is risky, Goodkin said, because when rates rise, it decreases borrowers’ buying power and could negatively impact prices.

“If you look at our past sales and see what a relatively small percentage of these sales were cash, and now all of these buildings are going up, predicated on buyers’ cash,” Goodkin said. “It would seem to me that that is a phenomenon that I’m surprised the FBI isn’t really cognizant of. This is a flood.”

The increase in cash sales in Miami doesn’t prove there is money laundering going on, but it increases the potential for money laundering because of the lesser regulation in the cash market, said Josh Burdett, head of Jensen Beach-based financial consulting firm TMP Risk and a former compliance officer for national banks. Real estate professionals should do more due diligence on customers, especially those who use shell companies, seek to close too quickly or use multiple cashier’s checks, he said.

Miami Association of Realtors Chairman Natascha Tello said most international condo buyers are looking for second homes.
Some purchases are done remotely without viewing a unit, or by simply looking at a developer’s floor plan online, she said. Most foreign buyers use accounts in the U.S., but Tello said it’s up to the title agents and real estate attorneys to check the source of funds.
“A real estate agent would be out of their scope to source those funds,” she said.
Gary Saul, a Greenberg Traurig shareholder who has done legal work for condo developers including Related and Terra Group, said it’s often difficult to tell who the person behind an LLC is, especially when a group is trying to quietly assemble properties.
“There are high-profile individuals who would rather others not know who they are,” he said. “Certain people from Latin American and certain European countries would rather not have their U.S. holdings disclosed.”

Some developers want to know the identities of preconstruction buyers to ensure they haven’t committed too many units to a single person, which could create a problem if that person can’t close, Saul said. Developers routinely check the Office of Foreign Assets Control (OFAC) list to see if clients are flagged as banned individuals or entities, he added.

Since developers are asking for so much cash up front, they often aren’t checking the buyer’s source of income, Saul said.
“Most of them aren’t concerned with source of funds,” he said. “It’s so easy to move money that, as soon as you come up with one precautionary measure, there’s just another way to do it. I don’t know that you would ever have enough protections to find the ultimate sources of dollars.”
Intriago said there’s much less regulation for putting cash into real estate transactions than for opening a deposit or securities account, which makes real estate a go-to target for people with lots of dirty money to move.
“The developers don’t know who’s behind it, and I don’t think they care,” he said. “They want to make sales, regulations be damned.”
Loopholes with LLCs

The ownership privacy protections of LLCs have made it more difficult to verify ownership. Organized criminal groups often use LLCs to buy real estate and conceal their identities because most states don’t require LLCs to list beneficial owners or changes in ownership, said Michael McDonald, an international money laundering consultant with Wellington-based Michael McDonald & Associates and a former IRS criminal investigator.
“They can form a corporation and bury you so no one ever knows who you are,” he said. “You have criminal groups outside the U.S. trying to park money here. One of the best ways to do it is to buy real estate because no one asks who you are.”

While closing agents often run company and managing member names through the OFAC list, it’s easy for terrorists and drug traffickers on the list to control the LLCs secretly, McDonald said. He noted that the list doesn’t cover other types of criminals, such as corrupt politicians and Ponzi schemers.
A plan for improving transparency

In June, the White House published an action plan for improving transparency of company ownership and control as part of a G8 movement to combat tax dodging and money laundering. It requires legislation.
A developer that accepts illicit money without knowing it was dirty usually wouldn’t have to return it. However, anyone who collects money from someone on the OFAC list must forfeit the funds and pay a $50,000 fine for each transaction, regardless of whether they were aware of it or not.
Another developer nightmare would be if a buyer fronting an illegitimate company files bankruptcy and has its assets seized.
Despite the dangers, McDonald believes most developers aren’t motivated to uncover dirty money.
“If illegitimate activity was behind a portion of the sales, it makes an impact. It can cause artificial inflation of the real estate market,” he said. “Realtors don’t want to hear it because they are running to the bank. Developers want to sell their units. It will generate additional real estate tax revenue for the municipalities. ... If you want the drug money problem to go away, are you OK with reduced revenue to your restaurant or auto dealership?”

THE DETAILS:
What real estate professionals should know about money laundering
Financial Crimes Enforcement Network (FinCEN) spokesman Steve Hudak said mortgage brokers and bankers are required to file suspicious activity reports (SARs), but real estate agents and title insurers do not, so it’s not typical to get SARs from all-cash property deals.
However, the National Association of Realtors posted an article on its website that lists voluntary guidelines to prevent money laundering. It noted that transactions not involving banks and mortgages could be more vulnerable to money laundering. Agents can voluntarily file SARs if they have concerns.
Best practices and red flags for spotting money laundering in real estate deals include:
  

 • The money comes from a country known for weak anti-money laundering laws, terrorism or political corruption.
    • An LLC or partnership is used to obscure the identity of the person who controls the property without a legitimate explanation. Know your customer, including the person or corporation behind the buying entity.
    • Names and jurisdictions should be run through the OFAC list.
    • The deal significantly undervalues or overvalues the property, and your party isn’t interested in negotiating a more favorable price.
    • Actual cash is brought to the closing. A Form 8300 must be filed for cash transactions of more than $10,000.
    • The buyer pays all cash, although it doesn’t match their personal characteristics, occupation or income.
    • The funds used in the deal come from an unrelated third party or business that doesn’t take an interest in the property.
    • The buyer immediately resells the property.
    • The buyer doesn’t view the property, or isn’t interested in its features.

For more information, go to www.realtor.org/articles/anti-money-laundering-guidelines-for-real-estate-professionals.

Brian Bandell, Senior Reporter- South Florida Business Journal







Double-digit gains for luxe Miami Beach homes

The average sales price for single-family homes among Miami Beach's luxury units rose 14.1 percent over the year,The Real Deal reports.
According to a report by Miami-based Zilbert Realty broker Arno de Vos, single-family homes and condominiums in Miami Beach saw an increase in sales, with 826 condos and 304 single-family units sold since Aug. 1, 2012.
The average sales price of a single-family unit went from $2.21 million to $2.52 million, while the sales price per square foot rose 11.2 percent, from $480 to $534.
During the same period, the average sales price of a luxury Miami Beach condo rose to $1.49 million from $1.41 million, a 6.5 percent increase, while average sales per square foot rose 5.6 percent, from $765 to $808.
The biggest sale during the year ended last month - a $30 million single-family home.
 

Staff South Florida Business Journal
Aug 16, 2013, 6:48am EDT

 




 

David Beckham might buy South Beach’s Versace mansion
 Aug 8, 2013, 7:25am EDT

Soccer icon David Beckham and wife Victoria are “eyeballing” the Versace mansion in South Beach as he works to launch a local soccer team.
Now Magazine of the United Kingdom is reporting that the Beckhams might make a run at Casa Casuarina, which is set for a Sept. 17 bankruptcy auction.
The house, which once belonged to fashion designer Gianni Versace, is in a tug of war between the current mortgage holder, the Nakash family of Jordache Jeans fame and Peter Loftin, who has a controlling interest in the property.
Bidding for the auction starts at $25 million.
Preparing for sale, the owners of the former Versace mansion recently got a new $40 million insurance policy.
Beckham has been meeting with local officials and leaders to get the temperature of the community about a new soccer team and talk to potential investors. He even attended Miami Heat playoff games during its run at the 2012-13 championship.
Beckham's L.A. Galaxy contract gave him the option of buying a franchise for $25 million, a bargain compared to the $100 million the owners of the New York Yankees and Manchester City paid for the chance to put New York City FC on the field in 2015.

Oscar Pedro Musibay
Reporter- South Florida Business Journal




 

South Fla. home prices climbing back
MIAMI – July 31, 2013 – Seven years after the South Florida real-estate bubble stretched as far as it could, buyers continue to pump more air into the deflated market.

New numbers from the S&P/Case-Shiller real-estate index for South Florida show home values up 14 percent this year. That’s the best 12-month gain since July 2006.

“I don’t hear people say they’re worried anymore,’’ said Charlette Seidel, a co-managing broker at Coldwell Banker’s Coral Gables office. “Buyers are confident.”

But even with prices on a steady climb since early last year, the damage from the bust remains.

Case-Shiller, the most closely watched real estate index in the country, shows South Florida values remain 41 percent below where they were at the peak of the boom in May 2006. Case-Shiller released its May 2013 numbers on Tuesday, offering a detailed look at seven years of what might be the worst real-estate crash in South Florida history.


The grimmest reading came in November 2011, when the Case-Shiller index showed a 51 percent decline from South Florida’s May 2006 peak. The rock-bottom prices brought another boom in sales, largely fueled by foreign investment dollars. But with prices so low, few homeowners are opting to sell. Realtor groups cite a lack of listings as the main reason sales aren’t even higher.

The combination – high demand and low supply – finally brought momentum to the recovery in early 2012, with both sales and prices heading higher.

May marked the 17th straight month of gains in South Florida’s Case-Shiller index. That’s the best streak for South Florida since the market peaked in May 2006. At the time, Case-Shiller showed values going up every single month since August 1999 – 82 months in all.

But even with Case-Shiller showing steady improvement in South Florida and across the country, the gains have some real-estate watchers warning of another bubble. A year ago, Case-Shiller, which tracks sales of single-family homes, showed prices up only 3 percent in South Florida. Now, they’re rising at a pace almost five times faster, with a 14 percent surge.

Jonathan Miller, a New York appraiser who tracks South Florida’s market, said the economy is too weak to be fully confident in a real estate rebound.

Miller, president of Miller Samuel Inc., said he won’t join in the conventional wisdom of “calling this a housing recovery.”

“I call it a period of better housing stats,” he said.

Copyright © 2013 The Miami Herald. Distributed by MCT Information Services.

 




 

10 Markets Where More Buyers Bring Cash

DAILY REAL ESTATE NEWS | FRIDAY, JULY 26, 2013
Home buyers who require financing for their home purchase can struggle to compete against buyers who have offers of all-cash.

Where are all-cash deals are the most prevalent? Cash deals represented 80 percent of home sales in June in Vermont; 58 percent in Nevada; 57 percent in Florida, and 51 percent in New York, according to RealtyTrac. Cash deals represent a very small percentage in Texas, Utah, and New Mexico.

The markets with the most all-cash transactions tend to have a high number of foreclosures and depressed home prices, which attracts investors and private equity firms, according to RealtyTrac.

The following 10 metros had 40 percent or more all-cash deals out of the total home sales in June, according to RealtyTrac:

Miami/Ft. Lauderdale: 64%
Las Vegas: 62%
Tampa, Fla.: 58%
Detroit: 56%
Orlando: 53%
New York: 49%
New Orleans: 43%
Memphis: 43%
Jacksonville, Fla.: 42%
Atlanta: 42%

Source: “Housing markets where cash is king,” CNNMoney (July 25, 2013)
 




 

Brazilians among Top Foreign Consumers Searching Miami Properties in May 2013
by Miami Admin | Jul 03, 2013


Brazil ranked among the top countries searching for Miami properties on Miamire.com in May 2013, according to the 27,000-member MIAMI Association of Realtors® (MIAMI). Trends also show that South Florida remains the top area in the nation for international real estate buyers and consumers, evidenced by statistics from the MIAMI website, which has received more than one million visits between January and May 2013.

Brazilian Interest in Miami Market Grows
Brazil topped the list of countries—second only to the U.S.—that conducted searches on the MIAMI website (www.miamire.com) in May. MIAMI is the ambassador association for the National Association of Realtors to SECOVI-SP in Brazil and has conducted extensive outreach to Brazilian agents and buyers since 1996. SECOVI-SP was MIAMI's first international partner association. Today MIAMI has more than 100 partnerships with real estate associations worldwide, including FENACI, COFECI, and Balneario Camboriu also in Brazil. MIAMI also shares listings with associations in Brazil through its landmark International Data Exchange, which further promotes MIAMI members and the South Florida market.

As a result, Brazilian buyers consistently rank in the top three countries of origin investing in Miami real estate, according to the 2012 Miami International Market Report.

"Miami continues to be a top choice for Brazilian buyers who feel at home in Miami and are attracted by the local lifestyle, culture, and thriving real estate market," MIAMI Chairman of the Board Natascha Tello said. "Our relationships further boost already strong interest in our market, as affluent Brazilians prefer Miami over any other market in Florida and the U.S."

The top five countries searching South Florida properties on Miamire.com (Miami Association of Realtors Property Search) in May 2013 remained the same compared to the previous year, but figures show growing interest among foreign buyers and investors in Brazil, Canada, and Venezuela:


May 2013
    • United States
    • Brazil
    • Canada
    • Colombia
    • Venezuela
    • Spain
    • Argentina
    • France
    • United Kingdom
    • Italy


May 2012
    • United States
    • Brazil
    • Canada
    • Colombia
    • Venezuela
    • France
    • Uruguay
    • Argentina
    • Italy
    • Spain


"A growing number of buyers from worldwide markets are showing interest in all that Miami has to offer, as our website becomes a top portal for international consumers," said 2013 MIAMI Association of REALTORS® Residential President Fernando I. Martinez. "Foreign buyers and investors know that Miami and South Florida offer profitable opportunities and want to preview what's available and take advantage of the local affordability combined with world-class amenities."

Miami Top Market for U.S. & Foreign Consumers
Nationally, Miami is consistently one of the top markets for most of the highest ranking countries searching for property in the U.S. Miami again ranked second only to Los Angeles among the top ten overall most searched U.S. cities by non-U.S. consumers throughout the month of May 2013 on Realtor.com® & Realtor.com® International. Fort Lauderdale ranks tenth. If the Miami-Fort Lauderdale real estate market were combined, the ranking would be even higher.

    • Los Angeles, CA
    • Miami, FL
    • Las Vegas, NV
    • Orlando, FL
    • Washington, DC
    • Houston, TX
    • New York, NY
    • San Diego, CA
    • Atlanta, GA
    • Fort Lauderdale, FL
Foreign consumers searching U.S. properties from Brazil, France, and Spain were most interested in the Miami real estate market in May 2013, according to online engagement statistics from Realtor.com®. Miami was a second top choice for buyers from Italy, Netherlands, Russia, and Switzerland. The top countries (outside the U.S.) where global consumers were most engaged on Realtor.com® & Realtor.com® International were:

    • *Canada: Los Angeles, Detroit, Miami, Fort Lauderdale, Orlando
    • U.K.: Los Angeles, Orlando, Houston, Las Vegas, Washington DC
    • Australia: Los Angeles, New York, Las Vegas, Houston, San Francisco
    • Ireland: Washington DC, Los Angeles, Orlando, Boston, New York,
    • *Germany: Los Angeles, San Antonio, Miami, Las Vegas, Colorado Springs,
    • Japan: Jacksonville, San Diego, Honolulu, Los Angeles, San Antonio
    • *India: Los Angeles, Las Vegas, Chicago, San Jose, Miami
    • *Brazil: Miami, Orlando, Los Angeles, Boca Raton, Fort Lauderdale
    • *France: Miami, Los Angeles, Washington DC, New York, Houston
    • Mexico: San Diego, San Antonio, El Paso, Laredo, Houston
    • *Italy: Los Angeles, Miami, Washington DC, San Diego, Las Vegas
    • *Netherlands: Los Angeles, Miami, Detroit, New York, Houston
    • China: Los Angeles, New York, Irvine, San Francisco, Las Vegas
    • *Spain: Miami, Los Angeles, Washington DC, New York, San Diego
    • Philippines: Las Vegas, Los Angeles, San Francisco, Houston, San Diego
    • South Korea: Los Angeles, Las Vegas, Irvine, San Diego, Colorado Springs
    • *Switzerland: Los Angeles, Miami, Washington DC, Raleigh, Detroit
    • *Russian Federation: Los Angeles, Miami, New York, Orlando, San Francisco
    • Singapore: Houston, Los Angeles, San Francisco, Austin, New York
    • New Zealand: Los Angeles, Las Vegas, San Diego, Detroit, San Francisco
*Country with Miami or Fort Lauderdale as
top searches.

Based on the 2012 Miami International Market Report, Miami attracts a significant number of buyers from countries not reflected in property search rankings above, including Venezuela, Argentina, and Colombia.

 




 

May home prices rise by 12.2% – most in 7 years
WASHINGTON (AP) – July 2, 2013 – U.S. home prices jumped 12.2 percent in May from a year ago, the most in seven years. The increase suggests the housing recovery is strengthening.

Real estate data provider CoreLogic said Tuesday that home prices rose from a year ago in 48 states. They fell only in Delaware and Alabama. And all but three of the 100 largest cities reported price gains.

Prices rose 26 percent in Nevada to lead all states. It was followed by California (20.2 percent), Arizona (16.9 percent), Hawaii (16.1 percent) and Oregon (15.5 percent).

CoreLogic also says prices rose 2.6 percent in May from April, the fifteenth straight month-over-month increase.

Steady hiring and low mortgage rates have encouraged more Americans to buy homes. Greater demand, a limited number of homes for sale and fewer foreclosures have pushed prices higher. Prices are still 20 percent below the peak reached in April 2006, according to CoreLogic.

Sales of previously occupied homes topped the 5 million mark in May for the first time in 3 ½ years. And the proportion of those sales that were “distressed” was at the lowest level in more than four years for the second straight month. Distressed home sales include foreclosures and short sales. A short sale is when a home sells for less than what is owed on the mortgage.



Home sales are expected to increase in the coming months. That’s because the number of people who signed contracts to buy homes rose in June to the highest level since December 2006. There’s generally a one- to two-month lag between a signed contract and a completed sale.

One worry is that higher mortgage rates could slow the housing recovery. Still, rates remain low by historical standards. And increases in rates could boost home sales. That’s’ because many Americans may act to lock in the lower rates before they rise further.

A survey by the University of Michigan released last week found more Americans believe it is a good time to buy a home because both rates and prices are just starting to rise.

Rates have been trending higher for two months. And the average rate on a 30-year fixed mortgage leapt to 4.46 percent last week, according to mortgage buyer Freddie Mac. That’s the highest in two years and a point more than a month ago.

Mortgage rates surged after Federal Reserve chairman Ben Bernanke said last month that the Fed could scale back its bond buying later this year and end it next year if the economy continued to strengthen. The bond purchases have kept long-term rates down.

Economists say that higher mortgage rates are unlikely to stifle the housing recovery. A more critical issue is whether potential buyers can get loans. There are signs that banks have become more willing to extend mortgages.
 

Copyright 2013 The Associated Press, Christopher S. Rugaber, AP Economics Writer.
 




Fla.’s housing market continues momentum in May 2013

Florida Realtors Chief Economist Dr. John Tuccillo details this month’s trends. The info explains how the market is tipping in favor of sellers in many areas.

Existing-home sales rise in May with strong price increases.

ORLANDO, Fla. – June 20, 2013 – Florida’s housing market continued its upswing in May, with higher closed sales, more pending sales, rising median prices, more new listings and a lower inventory of homes for sale, according to the latest housing data released by Florida Realtors®.

“Home sales continue to increase, it’s taking less time for sales to close, and median sales prices are on the rise,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “This is the 17th month in a row that we’ve seen the statewide median sales prices increase year-over-year for both single-family homes and for townhome-condo properties.

“Sellers are seeing this momentum in Florida’s housing sector and it’s prompting many to decide now is the time to list their property for sale. Statewide, new listings for single-family homes increased 10.2 percent in May, while new townhome-condo listings rose 7.1 percent.”

Statewide closed sales of existing single-family homes totaled 22,375 in May, up 18.7 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes last month rose 30.8 percent over the previous May. The statewide median sales price for single-family existing homes last month was $171,000, up 15.9 percent from the previous year.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in April 2013 was $193,300, up 11 percent from the previous year. In California, the statewide median sales price for single-family existing homes in April was $402,760; in Massachusetts, it was $315,000; in Maryland, it was $258,093; and in New York, it was $218,875.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.


Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 11,201 units sold statewide last month, up 11.5 percent compared to May 2012. Meanwhile, pending sales for townhouse-condos last month increased 18.3 percent compared to the year-ago figure. The statewide median for townhouse-condo properties was $128,000, up 13 percent over the previous year. NAR reported that the national median existing condo price in April 2013 was $189,500.

The inventory for single-family homes stood at a 5-months’ supply in May; inventory for townhouse-condos was at a 5.4-months’ supply, according to Florida Realtors.

“The numbers continue to move in the right direction,” said Florida Realtors Chief Economist Dr. John Tuccillo. “We remain concerned about the rise in the percentage of sales accounted for by all cash buyers. These numbers understate the true condition of the market in that a great many sales are conducted directly with the financial institution holding the property, and thus do not appear in the Multiple Listing Service (MLS).

“But those crying doom-and-gloom who read this growth in investor activity as the sign of a new bubble are far off-base and simply don't understand the texture of the current market.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.54 percent in May 2013, down from the 3.80 percent average recorded during the same month a year earlier.

To see the full statewide housing activity report, go to Florida Realtors website Research & Statistics page and click on the Research page; then look under Current Market Reports and get the statewide May reports. Or go toFlorida Realtors Media Center and download the May 2013 data report PDFs under Market Data.

© 2013 Florida Realtors®




 

Miami's hotel market booming in first quarter

Miami's hotel market booming in first quarter, firm says
Hotel experts are expecting investors to place nearly $750 million of capital into the Miami market this year.
The investment of capital is a 12 percent increase form last year, according to Jones Lang LaSalle’s Hotels and Hospitality Group.
The firm said more than $600 million of investments went into Miami’s hotel market in 2012, and so far the first quarter this year has already outpaced 2012 levels with an increase in lodging demand by nearly 5 percent.

“During the last decade Miami has expanded its infrastructure, built strong ties to international trade and positioned itself as an international tourist destination. The market roared back from the downturn reeling in the investment community with it,” said Gregory Rumpel, managing director and leader of Jones Lang LaSalle’s Hotels & Hospitality Group in Miami. “Miami’s positioned itself as the ‘Gateway to the Americas,’ and since 2010 we’ve seen REITs, private equity and institutional investors pump $1.6 billion of capital into the market. In the year ahead, we’ll likely see more hotels trade hands than last year, but the lack of big-box hotel sales opportunities will keep Miami’s transaction volume in check.”

Through the first quarter of 2013, Miami saw a positive growth trend with revenue per available room, or RevPAR, increasing 16.7 percent to $192, driven by 12.2 percent growth in available daily rooms, and a 4 percent growth in occupancy during the first quarter.
“The year is off to a great start with $200 million of hotels traded right out of the gate in the first quarter, which is a traditionally slower quarter,” said Andrew Dickey, VP of Jones Lang LaSalle’s Hotels & Hospitality Group in Miami. “The market is positioned to continue to outperform national averages, further solidifying its position as one of the top investment and hospitality markets.”

The Miami Beach Resort & Spa sold for $117 million in March 2013

Of the Miami market, Miami Beach demonstrated strong performance during the first quarter, according to Jones Lang LaSalle. The transaction volume within that submarket alone made up more than 71 percent of the total Miami area transaction volume in 2012, and is likely to see the same trend in 2013, Dickey said.
“Miami Beach continues to see strong momentum on a transactions front, particularly in mid-beach which stretches from 23rd to 63rd Street, where large institutional investors have been able to acquire big box assets during the last 12 months like the Gansevoort, Miami Beach Resort & Spa, Hilton Cabana and The Crown Miami Beach,” he said. “When looking at the total number of transactions in Miami, a majority occurred in South Beach with independent boutique assets. On the performance front, Miami’s RevPAR growth continues to be spurred by strong domestic and international demand, with international travel anticipated to reach 50 percent of total overnight visitation.”

Miami has been a big draw for visitors in the first quarter with some of the more popular events including the Ultra Music Festival, Sony Ericsson Open and the Miami International Boat Show. Each event brings tens of thousands of people to South Florida every year.
“The Miami brand is stronger than ever reporting records on records in 2012, including 13.9 million overnight visitors,” said Bill Talbert, president and CEO of the Greater Miami Convention & Visitors Bureau. “The destination has evolved into a world-class sophisticated cosmopolitan destination with almost 50 percent of overnight visitors international. Miami International Airport, which now has direct rail service into the heart of Downtown Miami’s flourishing waterfront core, offers hundreds of flights daily from around the world and continues to add new routes and international service.

“A year-round calendar of events that includes Art Basel and Design Miami, the Sony Open, the World Golf Championship-Cadillac Championship at Doral, the Orange Bowl and more continue to attract a growing number of visitors every year.”
Shaun Bevan covers tourism, hospitality, retail and restaurants.

May 7, 2013. Shaun Bevan Reporter- South Florida Business Journal - covers tourism, hospitality, retail and restaurants.

 




 

Will 'Missing Households' Reappear After Investors Leave?

Investors and all-cash home buyers accounted for about 19 percent and 30 percent, respectively, of all sales in March, according to the National Association of REALTORS®. That represents a significant share of the market, and some analysts are concerned that as home prices rise, investor and all-cash demand will start to shrink.

Who will step up in their place?

Robert Dietz, an economist with the National Association of Home Builders, notes in a recent article for U.S. News & World Report that “missing households” in today’s market who have delayed home ownership will eventually play catch up.

Notably, recent college grads who delayed home ownership by moving in with their parents or renting are expected to increase their homebuying activity. Also, surveys show a growth in the number of Americans living together as roommates who are not relatives. Americans have doubled or even tripled up in rental residences to help cut costs. But as more people get married and start families and jobs stabilize, household formation will likely grow, Dietz notes.

The nation’s population has grown, but the number of independent households of renters and owners has not kept pace. The Census Bureau’s American Community Survey shows that the population from 2006 to 2011 grew by more than 4 percent, but there was only about a 3 percent growth in the number of households.

Dietz expects that homebuying demand will come strongly from rental households that were created over the last seven years. In that time, the number of rental households in single-family homes grew by 2.5 million, or 22 percent. Traditional renting households in multifamily units increased by nearly 7 percent, Dietz notes.

Dietz says the “real demand for housing is on the sidelines, particularly among younger Americans. ... For these younger prospective homebuyers, policy debates concerning the future of the housing finance system and home ownership programs like the mortgage interest deduction will have real impacts on their housing and wealth status in the years to come.”

Source: “What Happens to the Housing Market When the Investors Leave?” U.S. News & World Report (May 3, 2013)

 





Get Ready for Big Bidding Wars This Spring

With tighter inventories of homes for sale, buyers are finding increased competition through bidding wars. But the bidding may not be between only one or two other buyers -- more bidding wars are popping up where dozens or even hundreds of other buyers are all competing for the same property.

"The only question is not whether a new listing will get multiple bids but how many it will get," Kris Vogt, who manages Coldwell Banker offices in the Sacramento area, told CNNMoney.

For example, a home in Elk Grove, Calif., reportedly received 62 separate bids, with the final sales price more than $150,000 above its $129,000 asking price. In Cambridge, Mass., real estate brokers stopped accepting bids after the tally reached 250 bids for two condos listed at $800,000 each. The two condos ended up selling together for $2 million.

Seventy-five percent of real estate agents with the brokerage Redfin surveyed in March say their clients have faced multiple bid situations for properties -- up from 56 percent in late 2011.

Bidding wars appear to be most prevalent in California. Ninety percent of homes sold in San Francisco, Sacramento, and throughout Southern California saw multiple bids during the month, CNNMoney reports. What’s more, at least two-thirds of listings in Boston, Washington, D.C., Seattle, and New York had bidding wars for homes too.

Meanwhile, inventories of for-sale homes continues to be low. The National Association of REALTORS® reported a 19.2 percent drop in inventories year-over-year in February.

Source: “The home bidding wars are back!” CNNMoney (April 4, 2013)

 




 

Midtown Miami sees the return of 97% financing

Buyers in the tower at Midtown Miami called 4 Midtown have an opportunity to take advantage of 97 percent financing as part of its sales program.

Write down Midtown Miami and March 20 as the day 97 percent financing returned to a condominium project in South Florida.
This announcement from the owners of Midtown Miami and their broker Fortune International Realty is another significant bellwether in the condo market, which has been fueled by cash in the new cycle.
The goal is to advance sales at the completed 33-story 4 Midtown tower, The Miami Herald reported.
Midtown Miami Owner Gold Krown Financial has been marketing units for sale at 4 Midtown for some time. Fortune was able to get approval for the low down payments, which could be as little as $8,300 for a $276,000 unit, through a program targeting emerging neighborhoods, George Fraguio, a financing expert at Fortune, told theHerald.

The last big real estate marker of an industry recovery was the $160 million financing of the ultra-luxury, 79-unit Mansions at Acqualina tower in February. The Midtown announcement and the financing of Acqualina are yet another sign that South Florida condo recovery is gaining traction in the eyes of lenders.
If that is the case, developers will follow.
So far, the focus from the development side has been on the high-end luxury condo projects because demand for the units, paid for in cash, seemed unquenchable.
Buyers from Latin America and elsewhere were putting down as much as 80 percent of the market value of the unit prior to the completion of the project, a deposit vehicle that acted as construction financing for developers.
This kind of individual financing for the purchase of mid- to entry-level condominiums, if other developers can leverage it, could open up the market to another wave of condo development. The previous wave transformed South Florida, and remade downtown Miami into a vibrant, residential draw for professionals.
However, small deposit-purchases also fed a frenzy, which spurred speculators to sign contracts for multiple units, many of which walked away from closings as projects were completed. Many developers, left with units with depreciating values, eventually defaulted on their construction loans, a trend that was realized throughout South Florida, especially Miami-Dade County, during the last decade and that helped lead to a financial meltdown of the economy.

South Florida Business Journal March 20, 2013
Oscar Pedro Musibay covers real estate.




 

Economist: Big discounts on foreclosures fading
NEW YORK – March 12, 2013 

Homebuyers may not get as great of a deal on a foreclosure as they once did, according to Paul Diggle from Capital Economics in a new report.

Foreclosure starts are falling and the inventory of foreclosures has been decreasing, which has caused the discount on foreclosures to lessen.

The discount on foreclosed homes compared to other homes has fallen to a 12 percent average, according to Diggle. That was about the same percentage prior to the housing crash, he says. Last year the foreclosure discount averaged about 30 percent.

“Ultra-low mortgage interest rates and steady, if not spectacular, job creation could mean that the delinquency rate and foreclosure start rate are falling quickly,” Diggle writes.

Source: “Those Amazing Deals on Foreclosed Homes Are Disappearing,” Business Insider (March 7, 2013)

© Copyright 2013 INFORMATION, INC. Bethesda, MD

 




 

Foreign firms eye U.S. single-family rental market

WASHINGTON – Feb. 22, 2013 – Several foreign firms are jumping into the single-family rental market of late, seeking high returns by snagging up homes at discounts, turning them into rentals, and waiting for an improved housing market.

“The business of buying and renting houses, long dominated by local mom-and-pop investors, has morphed over the past two years into one of the hottest investments on Wall Street,” The Wall Street Journal reports.


For example, US Masters Residential Property Fund, a real-estate investment trust consisting mostly of Australian retirees, has raised $276 million to invest in the U.S. housing recovery.

“Investors from countries whose currencies are strong can outbid U.S. investors because they also are hoping to make money from foreign-exchange rate fluctuations,” The Wall Street Journal reports. For example, Australians consider single-family U.S. houses “really cheap” due to the currency exchange rate.

US Masters is earning a yield of about 7 percent off its rental portfolio when accounting for operating expenses, but investors will possibly earn 30 percent more in profits when the fund sells its homes, according to a spokesman for the fund.

The Toronto-based Tricon Capital Group Inc. also has jumped in, spending $160 million acquiring nearly 2,000 properties in California, Arizona, Florida and North Carolina. It hopes to own up to 4,000 homes by the end of the year.

“If I’m a foreign investor and I’m not entirely confident in my own economy, of all the places that I could put my money, U.S. housing looks like a really attractive place,” says Lisa Marquis Jackson, senior vice president with John Burns Estate Consulting LLC.

Source: “Foreign Buyers Hop on Rental Trend,” The Wall Street Journal (Feb. 20, 2013)
© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

 





Florida marked a record 89.3 million visitors in 2012.
Feb 19, 2013, 7:38am EST

The Sunshine State set a new tourism record in 2012, with nearly 90 million people visiting the state.
Officials from Visit Florida, the state’s tourism marketing firm, reported Florida saw 89.3 million visitors in 2012, a 2.3 percent increase compared to the 87.3 million people who visited Florida in 2011, according to an news release.
The annual report released Monday estimated that 10.2 million visitors from overseas came to Florida in 2012 and the number of domestic visitors to the Sunshine State increased by 1.2 percent.

“Surpassing the 10 million overseas visitor mark for the first time ever is a significant milestone for Florida’s tourism industry,” Visit Florida Board of Directors ChairmanGlenn Hastings said in a statement. “With over 10 percent of all Canadians traveling to Florida last year, we are exceedingly grateful for the loyalty of our friends and family to the North.”
South Florida Business Journal

 




 

Fla.’s housing market gained strength, momentum in 2012
NAR: 4Q home prices see strongest increase in seven years

ORLANDO, Fla., – Feb. 11, 2013 – Florida’s housing market wrapped up 2012 with more closed sales, higher pending sales, higher median prices and a reduced inventory of homes for sale compared to the year before, according to the latest housing data released by Florida Realtors®.

“Throughout 2012, we’ve seen increasingly strong signs that the state’s housing market is in solid recovery,” says 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Orlando. “These positive fundamentals in the housing sector continue to attract potential homeowners and investors; however, they’re facing a limited inventory of available for-sale homes in many areas. Florida’s economy is growing, more jobs are being created and mortgage interest rates probably will stay favorably low for some time – which will help drive the housing market forward in 2013.”

Statewide closed sales of existing single-family homes totaled 204,414 in 2012, up 8.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations.  In the fourth quarter, closed sales of single-family existing homes totaled 52,624, up 21.2 percent from 4Q 2011. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed but not yet completed or closed – for existing single-family homes rose 17.6 percent in 2012 compared to 2011’s figure. The statewide median sales price for single-family existing homes in 2012 was $145,000, up 9 percent from the previous year. Looking at 4Q 2012, the statewide single-family existing-home median price was $150,000, up 11.1 percent from the same quarter a year ago.

According to the National Association of Realtors® (NAR), the preliminary national median sales price for existing single-family homes for all of 2012 was $176,600, up 6.3 percent from 2011 – and the strongest annual price gain since 2005. In California, the statewide median sales price for single-family existing homes for 2012 was a preliminary $319,340; in Massachusetts, it was $298,000; in New York, it was $215,000; and in Illinois, it was $139,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhouse-condos, a total of 101,876 units sold statewide in 2012, up 2 percent from 2011. Pending sales for townhouse-condos for the year increased 6.2 percent compared to 2011. The statewide median for townhouse-condo properties in 2012 was $106,000, up 17.8 percent over the previous year.

For 4Q 2012, closed sales of townhouse-condos totaled 24,743, up 14.3 percent from 4Q 2011; pending sales of townhome-condos rose 21.6 percent over the same quarter a year ago. The statewide median for townhome-condos in 4Q 2012 was $111,900, up 24.3 percent from 4Q 2011.

The inventory for single-family homes stood at a 5.5-months’ supply for 4Q 2012; inventory for townhouse-condos was at a 6-months’ supply for the same period, according to Florida Realtors.

Florida Realtors Chief Economist Dr. John Tuccillo said, “To an extent, we have seen these numbers before in monthly reports, but it’s often good to step back and look at the statistics from a more aggregated level. They clearly show the robustness of Florida’s housing recovery in sales and the beginnings of what we see as a sustained growth in prices. Of particular interest is the growth in cash sales. This is indicative of the growing interest of investors and foreign buyers in Florida real estate, but also points to the difficulties presented by the current financing climate that households wishing to buy face.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.66 percent for 2012, down from the previous year’s average of 4.45 percent, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the 2012 and 4Q 2012 reports. Or go to Florida Realtors Media Center and download the 2012, the 4Q 2012 and general statewide metropolitan statistical area (MSA) data report PDFs under Market Data.

© 2013 Florida Realtors®

 




 

What’s behind falling housing inventories?
NEW YORK – Jan. 29, 2013 – Home prices are increasing across the country as the number of homes for-sale continues to fall. But at a time when buyer demand is picking up, why is inventory still so low?

Inventories fell to 1.82 million at the end of last year, a 21.6 percent drop from one year earlier, the National Association of Realtors® reports.

The Wall Street Journal recently highlighted several reasons behind the dropping inventories, including:

Sellers hesitant to sell: About 22 percent of homeowners with a mortgage remain underwater, owing more than their home is currently worth. These homeowners don’t tend to sell unless a life-changing event occurs because they don’t want to take a loss on the sale. CoreLogic data finds constrained inventories in areas with the highest number of underwater borrowers.

• Not enough equity to trade up: Homeowners often rely on equity from their current home to make a downpayment on the next home. With fewer homeowners seeing equity, they may not have enough money to move into a pricier home – a constraint on the would-be “trade up” buyer.

• Investors continue to snatch up properties: Investors still snap up properties, but they’ve changed their strategy, which also constrains inventories. Now they’re holding onto properties and turning them into rentals instead of rehabbing and flipping them for profit. The result: fewer homes on the market.

• Banks slowing down foreclosures: Banks have new rules to meet with the foreclosure process, and it’s causing them to move at a slower pace. Banks also are showing a preference for short sales and loan modifications, which curbs the number of foreclosed homes on the market.

• Builders doing less building: Housing starts were at record lows from 2009 through 2011, so there’s less inventory added to the market. A rebound in the new-home market has only recently started to occur.

Source: “Six Reasons Housing Inventory Keeps Declining,” The Wall Street Journal (Jan. 22, 2013)
© Copyright 2013 INFORMATION, INC. Bethesda, MD (301) 215-4688

 




 

Foreclosure inventory falls 10% in one year

JACKSONVILLE, Fla. – Jan. 16, 2013 – The November Mortgage Monitor report released by Jacksonville-based Lender Processing Services (LPS) finds that the national foreclosure inventory dropped to 3.51 percent in November – an almost 10 percent decline from September 2012, when National Mortgage Settlement requirements began to influence the pace of first-time foreclosure starts.

However, LPS expects foreclosure starts to rebound as mortgage servicers incorporate new procedural requirements into their operations in the coming months.

According to LPS Applied Analytics Senior Vice President Herb Blecher, borrowers are benefiting from today’s historically low interest rates. “Comparing interest rates on new versus paid-off loans, we see that interest rates on the former are 1.5 percentage points below the latter,” says Blecher. “On average, this translates into new loan payments that are approximately $190 less per month than those of borrowers prior to paying off their loans.

Blecher also thinks more homeowners will avoid foreclosure in the future as HARP – the government program to help at-risk homeowners in foreclosure – expands to other mortgages.



Key results from LPS’ latest Mortgage Monitor report

* Total U.S. loan delinquency rate: 7.12 percent
* Month-over-month change in delinquency rate: 1.2 percent
* Total U.S. foreclosure pre-sale inventory rate: 3.51 percent
* Month-over-month change in foreclosure pre-sale inventory rate: -2.84 percent
* States with highest percentage of non-current loans (foreclosures and delinquencies as a percent of active loans): Florida, New Jersey, Mississippi, Nevada and New York
* States with the lowest percentage of non-current loans: Montana, Wyoming, South Dakota, Alaska and North Dakota

LPS manages performance information on nearly 40 million loans across the spectrum of credit products.

© 2013 Florida Realtors®

 





 

Buyer Urgency Expected to Drive 2013
DAILY REAL ESTATE NEWS | WEDNESDAY, DECEMBER 19, 2012

 

Home shoppers will likely have more urgency in the new year, wanting to buy before home prices rise even more.

Home prices are edging up in most markets, and buyers are taking notice. Buyer surveys recently have shown that home shoppers expect home prices to continue to inch up, and they want to cash in before they rise too much higher.

“Every single thing about housing is flashing green” with household formation rising, inventory falling, and affordability hovering at record highs, James Dimon, chief executive of J.P. Morgan Chase told CNBC last month.



In 2013, rising rents are expected to push more renters to buy, The Wall Street Journal reports. Also, investors who’ve had a big appetite for housing in recent years may start to decrease their share in some markets that have seen prices rise, such as Phoenix, and focus on other markets still in recovery mode, like Chicago and Atlanta.

“Rising prices could eventually encourage more sellers to put their homes on the market, which would help boost demand even further,” The Wall Street Journal reports.

To meet the expected increase in demand in 2013, some real estate companies are going on a hiring spree. For example, Redfin says it plans to increase its 400 agents nationally by 50 percent by the end of January after having to send about half of its referrals to other companies earlier this year because demand outstripped its supply of agents.

Source: “2013: How Rising Prices Could Boost Housing Demand,” The Wall Street Journal (Dec. 18, 2012)

 





 

Could a Chinatown in Miami-Dade become a reality?
Date: Thursday, December 13, 2012, 4:20pm EST

The vibrant colors, aroma of steamed dumplings and tones of Asian languages that attract visitors to Chinatowns across the globe, could soon be part of the cultural melting pot in Miami-Dade County.
Mikki Canton, a longtime corporate law attorney, looks to establish Chinatown Miami/El Barrio Chino de Miami, a mixed-used project that would cater to the Asian community and feature a grocery store, senior center, charter school, housing and offices for professional services. The complex would serve as the center for an international district that would be similar to the Uwajimaya Village in Seattle, said Canton, who has an interest in Asian cultures and its influence in Miami.
The Uwajimaya Village is a mixed-use complex located in Seattle’s Chinatown International District. It features the Uwajimaya grocery store, an Asian bookstore, a bank, a food court and housing.
The village is located in an area that has been populated by Asians for over 100 years, said Don Blakeney, executive director of the Chinatown International District Business Improvement Area of Seattle.


“The key is not making it a fortress,” he said. If you have retail around the complex then it really makes it porous and people can come in and out, he added.
This is the plan for a Miami version of the complex.
Canton is working with Tibor Hollo to find a location in Miami-Dade where Chinatown Miami could grow organically and spur economic growth, she said. The cities of North Miami Beach and Miami, which have large Asian populations, are being considered for the project, Canton added.
The most important thing is the international district component of the project, which has to have accessibility, has to be attractive for the Asian community and not be a tourist attraction, Canton said. “This is a living, breathing, working, everyday Chinatown Miami international district project,” she added. However, it is inevitable that could become a tourist attraction.
Canton is working as a consultant to the city of Miami in its quest to become an EB-5 regional center. Hollo’s Panorama project is being used as a signature project on the city’s EB-5 regional center application.
The name Chinatown Miami was purchased by Canton in 2008. She estimates that the project could come to fruition in two years and would cost about $40 million to build without the land included. It would be funded through private equity, but she does not envision it as an EB-5 project.
Chinatown Miami/El Barrio Chino de Miami would include a Latin component since many Latin American countries have Chinatowns, Canton said.
In addition, the Asian and Latin cuisines feature many of the same ingredients, such as cilantro and coconut.
“It will help unite Asian Americans in Florida and that will make us a little more visible,” said Dr. Joy Bruce, founder of the North Miami-based National Alliance to Nurture the Aged and the Youth, and past president of the Asian American Federation of Florida.
A Chinatown is something the Asian community in South Florida has wanted but did not know how to do, Bruce added.

South Florida Business Journal by Ashley D. Torres, Web Producer

 





 

 




 

NAR: Job Creation Forecast to Lift Commercial

DAILY REAL ESTATE NEWS | MONDAY, NOVEMBER 26, 2012
Most major commercial real estate sectors are improving and are easily absorbing the relatively small amount of new space that is becoming available, according to the National Association of REALTORS®' Commercial Real Estate Outlook, a quarterly commercial real estate forecast.

The association reports a full recovery has taken place in the multifamily market and expects a more hopeful tone in the nation's capital will pave the way for a more generalized commercial recovery.

“The primary factor holding back greater job creation has been uncertainty over regulations and associated costs,” NAR Chief Economist Lawrence Yun said. “With the elections behind us and Washington apparently resolved to prevent a fiscal cliff, it’s hoped that ambiguity over regulatory issues will clear relatively soon so employers can understand the rules of the game and the layout of the field.”

Yun added that he expects vacancy rates to decline over the next four quarters in the office, industrial, retail, and multifamily markets. He noted that the main impediment to commercial in the near future is the tight credit environment, especially for smaller properties.



The Commercial Real Estate Outlook  offers projections for four major commercial sectors and analyzes quarterly data in the office, industrial, retail, and multifamily markets. Historic data for metro areas is provided by REIS, Inc. Here's a breakdown of the projections in each market:

    • Vacancy rates in the office sector are projected to fall from an estimated 16.7 percent in the fourth quarter to 15.7 percent in the fourth quarter of 2013. The markets with the lowest office vacancy rates presently are Washington, D.C., with a vacancy rate of 9.6 percent; New York City, at 10.1 percent; and New Orleans, 12.9 percent. Office rent is expected to increase 2 percent this year and 2.5 percent in 2013. Net absorption of office space in the U.S., which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 21.7 million square feet in 2012 and 49.0 million next year.

   • Industrial vacancy rates should decline from 10.1 percent in the fourth quarter of this year to 9.5 percent in the fourth quarter of 2013. The areas with the lowest industrial vacancy rates currently are Orange County, Calif., with a vacancy rate of 4.3 percent; Los Angeles, 4.4 percent; and Miami at 6.5 percent. Annual industrial rent is forecast to rise 1.7 percent in 2012 and 2.2 percent next year. Net absorption of industrial space nationally will probably total 93.4 million square feet this year and 89.6 million in 2013.
    

   • Retail vacancy rates are expected to ease from 10.8 percent in the fourth quarter to 10.6 percent in the fourth quarter of 2013. The markets with the lowest retail vacancy rates include San Francisco and Fairfield County, Conn., both at 3.9 percent; Long Island, N.Y., 5.1 percent; and Orange County, Calif., 5.4 percent. Average retail rent should increase 0.8 percent this year and 1.4 percent in 2013. Net absorption of retail space is estimated to be 9.1 million square feet this year and 19.8 million in 2013.
  

 • Multifamily housing is projected to see vacancy rates decline from 4 percent in the fourth quarter to 3.9 percent in the fourth quarter of 2013; vacancy rates below 5 percent are considered a landlord’s market with demand justifying higher rents. Areas with the lowest multifamily vacancy rates currently are Portland, Ore., at 2.1 percent; New York City, 2.2 percent; and Minneapolis, 2.3 percent. Average apartment rent should increase 4.1 percent in 2012 and another 4.6 percent next year. Multifamily net absorption is likely to be 219,700 units this year and 234,600 in 2013.


Source: "Commercial Real Estate Vacancies Slowly Declining, Rents Rising," NAR’s Commercial Division.

 





 

As Miami-Dade hotel market booms, more players want in
 
Miami-Dade is in the throes of a hotel buying-and-building boom. Or, more appropriately, a re-building boom.

A birds-eye view atop a Collins Avenue construction site shows the past, present and future of South Beach, set to a symphony of construction noise.

The trailblazing Delano, which revitalized the destination in 1995 and is now being marketed for sale after an $11 million renovation, is flanked by the historic National Hotel, in the midst of a major restoration, and the Philippe Starck-designed SLS, formerly the Ritz Plaza, which opened in June after eight years and about $85 million.

“Miami is a hot market now, so it’s hard to get a hotel,” said Keith Menin, principal of Menin Hotels, which is developing the latest — but certainly not last — addition to the busy scene. The company’s 87-room Gale South Beach & Regent Hotel at 1690 Collins Ave. is set to open in early December, more than a year after finishing most of the renovations on the family-owned Shelborne just up the road.

After a recession-fueled pause, when visitor numbers dropped and financing dried up, Miami-Dade is in the throes of a hotel buying-and-building boom. Or, more appropriately, a re-building boom.

Local investment is following a national trend.



 

SHELLING OUT BILLIONS

According to a recent report from Bjorn Hanson, a dean at the Preston Robert Tisch Center for Hospitality, Tourism and Sports Management at New York University, the lodging industry is expected to shell out a projected $5 billion this year on upgrades after curtailing spending since 2009.

Improvements could include everything from redesigned lobbies to better technology in rooms and meeting areas and more appealing fitness centers and restaurants, according to the report, which notes that the expected spending boost is due to vastly improved occupancy numbers and average daily rates.

In Miami, industry experts say robust tourism numbers, the scarcity of available land and the willingness of banks to lend money again are drawing waves of investors who see hotels in the destination as a must for their portfolios. Potential buyers include private equity firms, real estate investment trusts, major brands and some foreign investors.

“Miami is improving faster than a lot of the other markets, and it is a major, major market,” said Suzanne Amaducci-Adams, head of the hospitality group at the Bilzin Sumberg law firm. “So everybody wants to be here.”

Through September, hotels in Miami-Dade were more than 76 percent full, a small gain over the first nine months of 2011 despite a dip during the summer. But room rates have continued to climb, up nearly 7 percent to almost $163. And hotels countywide are making more revenue per available room; that figure grew about 8 percent to more than $124.55 through September.

Observers say the area is also gaining stature internationally because of the growth of arts and culture, as well as its ability to attract business from places including Russia and Asia in addition to Latin America.

“We really are just maturing and becoming a much more sophisticated global destination, and that’s really what is driving this,” Amaducci-Adams said.

Hotel transactions volume is expected to reach $650 million in the county this year, a 13 percent increase over 2011, according to brokerage Jones Lang LaSalle Hotels. And that figure doesn’t includes the hundreds of millions more being poured into upgrades at properties including the Perry Hotel South Beach (formerly Gansevoort Miami Beach) and Trump Doral Golf Resort & Spa, which mogul Donald Trump says he’s spending $200 million to fix up after he bought it for $150 million earlier this year.

Like the Doral and a few sites near Miami International Airport, a sliver of the current action is happening on the mainland. Only a Hampton Inn has gone up in the downtown Miami or Brickell area since the JW Marriott Marquis opened in late 2010, capping a decade that saw the arrival of the Mandarin Oriental, Four Seasons, JW Marriott, Conrad, Viceroy and Epic.



 

HOTEL UPGRADES

Now, the stalwart InterContinental Miami is about to wrap up a $30 million upgrade and the former Continental Bayside Hotel is undergoing a renovation that is expected to finish in early 2013, when the property at 146 Biscayne Blvd. will become the first hotel in the budget-friendly b2 brand.

But the bulk of the investment action is happening in Miami Beach, which still commands the highest room rates.

Gregory Rumpel, managing director of Jones Lang LaSalle Hotels in Miami, calls it “a truckload of cash” that will reinvigorate the remainingproperties in disrepair to push rates even higher when all the projects are done.

“Once we get these derelict buildings renovated and repositioned, I think it really helps the image, improves the vibe,” he said. “It creates more velocity, more activity.”

Like Menin’s Gale, many projects are resurrections of dilapidated, decades-old buildings that are historically significant. Because most of the popular areas for hotels lie within protected historic districts, any changes are subject to tough standards and approval.

“It would be a lot cheaper for developers to come in and knock down these buildings, but you can’t,” said Max Comess, a director in the hotel group at commercial real estate investment banking firm HFF. “And the trade-off is that you have some really amazing architecturally significant buildings to work with. I think that’s what makes Miami so appealing, not only to investors: It’s really like you’re staying in a museum.”



 

RESTORATION

Kobi Karp Architecture and Interior Design, a Miami firm, is working on a handful of such projects on the beach, including the restoration and addition of new buildings at the Surf Club in Surfside, which will include a condo-hotel; the transformation of a complex of decrepit buildings into boutique hotels in the Collins Park neighborhood of Miami Beach and the Hotel Versailles in Miami Beach.

The firm’s principal, Kobi Karp, said the volume of hotel restoration projects has increased in the last couple of years.

“They are challenging, but they’re also inspirational because you get to work with a history and a story that was there before you,” he said.

Comess is marketing the Haddon Hall hotel at 1500 Collins Ave. and adjacent apartments to potential buyers. That traditional South Beach area has been on the front end of development, with renovated properties on Ocean Drive and Collins Avenue including Hotel Breakwater, Dream South Beach, Room Mate Waldorf Towers, the Surfcomber and the Shelborne all coming online last year.

After a summer soft opening, the SLS at 1701 Collins Ave. holds its official grand opening event in early November, when the renovated and newly branded James Royal Palm also opens and the Ritz-Carlton, South Beach finishes a $10 million room refresh.

Many projects are still in the pipeline, including the transformation of the Continental Oceanfront South Beach Hotel at 1825 Collins Ave., which is scheduled to open next year as B South Beach.

The Chetrit Group, a New York-based developer that bought the Tides at 1220 Ocean Dr. last year and made it part of the hip King & Grove brand, is behind the planned restoration of the Collins Park buildings and the Hotel Versailles. The group is also planning an extension of the Tides as well as a project at the empty Fairwind Hotel at 10th Street and Collins Avenue.

Often finding themselves priced out of the heart of South Beach — or simply without anything to buy there at any price — investors are also looking north for opportunities.

New York-based Sydell Group, which owns the NoMad Hotel in Manhattan and developed the Ace hotels there and in Palm Springs, had five cities in mind when executives decided to start an upscale hostel concept. They found the first location off the beaten path in Miami Beach at the old Indian Creek Hotel, 2727 Indian Creek Dr., some 10 blocks north of the heart of South Beach buzz. After buying the hotel for $12 million in January and putting about $8 million into upgrades, the company will launch the new 65-room Freehand with a soft open in December.

Sydell Group CEO Andrew Zobler said the goal was to create a place with an affordable price point that would attract youth and energy — distance from the South Beach action notwithstanding.

“I really like the location. I think a lot of our audience are going to ride bicycles,” he said. “The beach is not that big a place. You can pop from one place to the next on a bicycle. I think a lot of the energy is moving up the beach.”

 


 

MORE BUZZ

At the Lifestyle/Boutique Hotel Development Conference at the Fontainebleau Miami Beach earlier this month, a panel of industry experts agreed that the south doesn’t have a monopoly on buzz.

“South Beach is starting to creep up to this part of the beach as well,” said Patrick Goddard, president and chief operating officer of Trust Hospitality.

The popular W South Beach, at 22nd Street, and Perry at 24th have already pushed the hip factor far north of Lincoln Road, and the upcoming Edition at 29th Avenue is expected to do the same when it opens late next year.

Marriott announced two years ago that it was buying the old Seville Beach Hotel to become an Edition, a chic and exclusive new brand formed in partnership with hotelier Ian Schrager. The Miami Beach location will be the only one in the United States when it opens.

Jay Coldren, Marriott International’s vice president of lifestyle brands, said at the hotel conference that the company’s investment in the Edition is unusual — Marriott does not typically own the hotels it operates — and a sign of Miami’s significance in the world.

“We’re really serious about this market, the future of this market and what it means to the global positioning of the brand,” he said.

Slightly north of the Edition, the Saxony hotel at 3201 Collins Ave. is coming back to life courtesy of Argentine developer Alan Faena. And the old Cadillac Hotel at 3925 Collins Ave., now the Courtyard Miami Beach Oceanfront, changed hands late last year for $95 million. New owner Hersha Hospitality Trust is adding a tower with another 93 rooms to the property, scheduled for completion by the end of 2013.

Hersha, a Philadelphia company that also has property in New York, Boston, Washington, D.C., Philadelphia and California, had been eyeing Miami for years before making the purchase. Back during the height of the real estate market, said CFO Ashish Parikh, prices were prohibitive.

“The market obviously went into a freefall,” he said. “At that point we really didn’t know where Miami was going to shake out. As we looked at the trajectory, we thought last year Miami was shaping up to have a nice long run — and it seems like that’s coming to fruition.”

Comess, of HFF, predicts a “wave” effect that started with reconstruction of oceanfront hotels and will move inland to properties across from the beach, then farther away from the water in Miami Beach, followed by downtown Miami, Coconut Grove and Coral Gables.

A fall newsletter from hospitality consulting firm HVS Miami suggests investors should consider looking beyond Miami-Dade to the Fort Lauderdale area, Florida Keys and West Palm Beach. While Broward has seen some investment, the volume is far less than its southern neighbor.


 

OTHER MARKETS

“Statistics show that Miami is not the only hotel market in South Florida illustrating strong performance indicators,” the HVS report says. “Investors could benefit from widening their ‘gateway city myopia.’ ”

But for those who are set on Miami-Dade, Comess said, Miami Beach could start to get too pricey.

“The premium’s obviously on the beach, and that’s the first place everyone wants to be,” he said. “But as pricing gets ridiculous on the beach and exceeds peak levels, both guests and investors will start coming inland to find more attractive deals in terms of places to stay.”

Some of the most talked-about future projects are planned for the mainland, though specifics are far from clear. Genting Group, the Malaysian company that bought the Miami Herald building for $236 million last year, had initially said it planned a 5,000-room resort complex with a casino. But after state legislators failed to approve expanded gaming, the company has said it plans to scale the project down.

Swire Properties plans to include a 265-room hotel in its $1.05 billion Brickell CitiCentre project, and developer Craig Robins has said his $312 million vision for the Design District includes a hotel.

And the market is clamoring for more select-service hotels such as Courtyard by Marriott, said Ezra Katz, chairman of real estate investment banking firm Aztec Group. In Miami-Dade, at least two Aloft hotels from Starwood are on the books for early 2013, in the Brickell area and Doral.

The Miami International Airport area also has potential for future development, Katz said.

“It’s a very healthy market, and that airport generates a lot of traffic,” he said. “You may not get rich, but you won’t get poor.”

The South Florida hospitality industry, of course, is wary of boom-and-bust cycles after recovering from the impact of the Sept. 11, 2001 terrorist attacks and the recent worldwide recession. Industry players say there doesn’t appear to be a bubble in the making but warn about the unexpected.

 


 

OUTSIDE INFLUENCE

Peter Zalewski, a principal with Bal Harbour-based consultancy Condo Vultures, said added inventory could be an initial drag on occupancy and pricing. And, he pointed out, hotels are especially vulnerable to outside events.

“We’re one international incident away from the whole scene changing,” he said.

In this post-recession phase, tourism boosters and visitors alike are enjoying the progress.

Interior designer Colette Anderson, visiting from the Atlanta area recently as part of the lodging conference held at the Fontainebleau, toured the new SLS with a group and “took 100,000 pictures.”

“It’s just quite fascinating that there’s a big construction boom down here in South Beach,” she said.

The constant redevelopment helps to keep interest fresh in Miami, especially as northerners are making their winter vacation plans, said Chanize Thorpe, editor of the Condé Nast site HotelChatter.com.

“You’ve got these kind of classic hotels that are reinventing themselves,” she said. “I think that’s one of the reasons why people will continually be interested in what’s going on.”

By Hannah Sampson, The Miami Herald
Sunday November 4, 2012

 




 

Home Buyers Grow Frustrated by Low Inventories

DAILY REAL ESTATE NEWS | TUESDAY, OCTOBER 02, 2012
Low inventories of homes for-sale are becoming troubling to home buyers, Inman News reports. Almost every major market in the U.S. has posted double-digit decreases in for-sale listings.

"The buyers tend to become a little frustrated as they are seeing homes that they want to 'think about' and before they can even get home to discuss it there are already multiple offers on the property," Sheri Moritz, a real estate broker with Keller Williams' Wake Home Team in Raleigh, N.C., told Inman News. In Raleigh, inventories have fallen 21 percent in the past year, according to Realtor.com data.

"I counsel buyers to be patient, and not get discouraged, that it may take extra time to find the suitable property," adds Tom Avent, broker-owner at Tom Avent Real Estate in Fresno, Calif., which has posted a 43.1 percent drop in inventories in the past year. "I have also seen some buyers give up looking, frustrated with low inventory and losing out in multiple-offer bidding."

Multiple bid situations are a common occurrence in many markets. But surveys show that home buyers lose their enthusiasm when faced with competition for a property, according to a recent survey by Redfin. Seven in 10 of home buyers surveyed reported that they’ve faced competition on at least one of their offers recently, but  31 percent say they would back off when faced with a multiple offer situation for a home, according to the Redfin survey.

Charles Roberts, a director at the Denver Board of REALTORS® and co-owner of Your Castle Real Estate, says that “urgency” is the new landscape greeting home buyers.

"Gone are the days of looking at 50 homes and taking months to make a decision,” Roberts told Inman News. “If there's a good property on the market, buyers need to act quickly, and yes, sometimes bid above asking price. The educated, thoughtful clients are getting great deals with astoundingly low interest rates. The clients that are still insisting on putting offers at 80 cents on the dollar are getting shut out of the market. They either learn that that strategy doesn't work anymore or they keep on renting. Our job as real estate agents is to teach them what the market looks like and guide them in their decision-making."

Source: “Low Inventories Thwarting Buyers,” Inman News (Oct. 1, 2012)




Contracts for future South Florida construction work up 99% in August
Date: Thursday, September 27, 2012, 1:45pm ED

Construction contracts for future South Florida projects were up 99 percent in August, with residential leading the way.

Good news for South Florida: Construction contracts for future projects in South Florida skyrocketed in August on a year-over-year basis, according to McGraw-Hill Construction.

Total construction contracts were up 99 percent, to $695 million from $350 million.
Non-residential work generated about $225 million of the contracts, and residential made up about $470 million.
Through 2012 so far, there were $3.5 billion in contracts for future work, an increase of 44 percent from the $2.3 billion that South Florida reported at the same point last year.

Non-residential work made up $1.6 billion of the contracts, with residential making up $1.9 billion of the future jobs.
The data is in line with development activity in South Florida, which is increasingly focused on developing luxury condominiums. Condo Vultures reports there are dozens of new condominiums proposed for development east of Interstate 95.
Lennar Corp., one of the country’s biggest homebuilders, also reported a strong third quarter, beating analyst expectations. Revenue was up, marking the company's sixth straight quarter of growth.
Miami-based Lennar reported net earnings of $87.1 million, or 40 cents a share, improved from net earnings of $20.7 million, or 11 cents a share, a year ago.
Revenue rose to $1.1 billion, a year-over-year increase of 34 percent. Orders also climbed 44 percent.
Another good sign: There were new orders of 4,198 homes, a 44 percent increase.

Oscar Pedro Musibay
Reporter- South Florida Business Journal




Shadow inventory less threatening

ORLANDO, Fla. – Sept. 26, 2012 – Two reports – one that covers Florida and another focused on the U.S. – find that shadow inventory continues to decline.

Shadow inventory – homes not yet in the for-sale inventory but at some stage of foreclosure with a likely chance to enter the market – has been a threat to the real estate recovery for a number of years. Many experts feared that home prices would stagnate if buyers continued to avoid the market or had trouble qualifying for a mortgage as a rising number of distressed homes entered the market.

“That problem seems less of a threat as time passes,” says Florida Realtors Chief Economist John Tuccillo. In an updated report issued by Florida Realtors Industry Data and Analysis (IDA), Tuccillo finds that the state’s shadow inventory continues to decline.

“Lenders show an increasing willingness to encourage short sales, so they don’t have to submit properties to the foreclosure process,” Tuccillo says. “In Florida, a foreclosure must go through a lengthy – and expensive – judicial process. While waiting for a final ruling, it costs lenders money to hold and maintain property.”

Tuccillo expects the shadow inventory to continue its decline. IDA’s complete report is available on Florida Realtors’ website. Click the “residential” box under “Research reports.”
 
Nationally, JPMorgan Chase released a report saying the U.S. shadow inventory declined by 1.2 million in the first half of 2012. Chase expects the trend to continue and suggests that the same number will exit shadow inventory before the end of the year, taking the complete national shadow inventory down to about 4 million – a reduction of one-third compared to the 6 million in 2010.

To calculate shadow inventory, Chase considered all homes at least 60 days late in a mortgage payment.

“Although re-defaults and new delinquencies will continue to keep shadow inventory elevated, the rapid decline should prevent downward pressure on home prices going into 2013,” Chase analysts say. “Combined with better existing home sales, investors have reason to be optimistic about running recovery scenarios.”

© 2012 Florida Realtors®




'Mortgage Cops' Target Strategic Defaulters

DAILY REAL ESTATE NEWS | MONDAY, SEPTEMBER 17, 2012
The Office of the Inspector General at the Federal Housing Finance Agency is trying to find strategic defaulters and collect on what they still owe. Strategic defaulters are often underwater home owners who walk away from their mortgages even though they still have the means to pay.

Experian has estimated that 20 percent of all foreclosures are from startegic defaulters. The OIG estimates that strategic defaulters owe more than $1 billion to Fannie Mae and Freddie Mac, and they’re ready to start collecting.

The OIG is reportedly working with Fannie Mae and Freddie Mac to develop a mechanism for identifying strategic defaulters.

"Debts that haven't been repaid don't just go away," an unnamed Treasury Department official told The Chicago Tribune. "It doesn't matter whether it's on your credit report or not."

The OIG has an even harsher warning for  strategic defaulters who have failed to disclose that they walked away from a previous loan on any new loan applications. The OIG says such walkaways have constituted mortgage fraud, and the OIG plans to refer them for criminal prosecution.

 "We're not just going to demand repayment," says Heather Wolfe, OIG assistant inspector general for audits. "We're going to lock [people] up."

Source: “Mortgage Cops Taking Tough Stance,” The Chicago Tribune (Sept. 16, 2012)





Survey: Buyers frustrated by lack of inventory

SEATTLE – Aug. 31, 2012 – Redfin released a quarterly survey of homebuyer attitudes, with opinions less than two weeks old. According to the company, data was collected from active home shoppers – people who expressed an interest in buying within the next twelve months. The survey included 829 home shoppers in 19 cities.

Key findings

• 46 percent believe now is a good time to buy, down two quarters in a row; and 32 percent believe now is a good time to sell, up two quarters in a row

• 61 percent believe prices will increase, up two quarters in a row

• 62 percent “very interested” in conventional sales, up from 57 percent in the second quarter and 48 percent in the first quarter

• 31 percent would step back from competing against other buyers for a home, compared to 28 percent in the second quarter

• 27 percent of respondents cited general economic weakness as a concern about buying this year, up from 24 percent in the second quarter and 20 percent in the first quarter

“Even as prices have begun to rise, the overwhelming issue for most of today’s buyers is the selection of homes for sale, not what they cost,” says Redfin CEO Glenn Kelman. “The value-driven investors scooping up foreclosures for pennies on the dollar have largely been replaced by first-timers seeking to buy a pretty house now when mortgage rates are below 4 percent. With so few houses for sale, many will come up empty. The only homeowners willing to sell now mostly are the ones who have to – for a job in a new city or for a new baby.”

© 2012 Florida Realtors®





Bal Harbour shops ranked No. 1 in sales per foot

The Bal Harbour Shops' $2,555 per-square-foot sales rank it first internationally, the retail center said, citing a ranking in the International Council of Shopping Center’s Shopping Centers Today.

The figure is nearly seven times the ICSC-estimated $451 per-square-foot industry average, the September cover story in the publication notes.
Bal Harbour Shops reported sales of $2,514 a square foot in June, up 20 percent, during what is usually a slow month, the Business Journal reported July 31.
“Our South American tourist season kicks into high gear, they are here in a big way in the summer. You might go to Worth Avenue in the summer and see a lot of closed doors, but that doesn't happen here," said operating partner Matthew Whitman Lazenby, who is the third-generation of the Whitman family involved in the business.

Bal Harbour is an affluent village with about 3,300 residents north of Miami Beach. On Aug. 3, the Business Journal reported that a buyer paid $24.6 million for five units at the St. Regis Bal Harbour Resorts & Residences, which is near the shopping center.
“The setting, the stores, the history and the attachment that shoppers feel to the center is what makes Bal Harbour Shops the world’s premier luxury retail center,” Lazenby said in a press release.

Worldwide, Bal Harbour Shops topped sales at such renowned locations as Westfield London and Westfield Stratford in the United Kingdom; Westfield Sydney in Australia; the Mall of the Emirates in Dubai and Ala Moana Center in Honolulu.Shopping Centers Today based its list on information gleaned from Green Street Advisors, KPMG, Thomas Consulting/Shopping Centre News, the REITs and owners of the shopping centers, and some extrapolations and estimates.
Sales at Bal Harbour have reportedly increased every year since its opening in 1965, with just two exceptions: 2001, in the wake of the 9/11 attacks, and in 2009, following the nationwide economic crisis, a press release said.

Ostensibly, the open-air shopping center is facing increased competition from projects in Miami's Design District. More than 20 retailers, including Hermès and Louis Vuitton, announced they were relocating there from the Bal Harbour Shops, the Business Journal noted in its June "Retail Revival" coverage.
Bal Harbour Shops ownership appears undeterred since it is planning space for 50 new tenants. The neighboring Church by the Sea recently voted in favor of relocating the church to allow room for the expansion.

South Florida Business Journal by Kevin Gale, Editor in Chief




Fla. has 26% of all U.S. international sales

TALLAHASSEE, Fla. – Aug. 27, 2012 – Florida Realtors® released its “Profile of International Home Buyers in Florida 2012” today. The survey, conducted by the National Association of Realtors (NAR), found that almost one in five Florida sales in the 12-month period ending in June involved an out-of-country buyer.

Researchers say that the 2012 results closely resemble those in 2011. It’s based on a survey taken by over 1,500 members of Florida Realtors.

The international real estate market – defined as non-resident foreigners who buy residential real estate in the U.S. – is important to Florida. Nationwide, 51 percent of all foreign sales take place in only four states – Florida, California, Texas and Arizona. Of those four states, Florida has the largest share: 26 percent of national sales to foreign buyers closed in the Sunshine State.

Overall, 19 percent of Florida home sales (by dollar volume) went to foreign buyers.

Report highlights

• Nearly all international sales were cash – 82 percent of transactions.

• The median price paid by international buyers was $194,700 compared to an overall Florida median price of $125,100 and a U.S. median price of $167,758.

• Canadian buyers tended to buy in the lower price range; European and Latin American buyers bought at a higher price range.

• Foreign buyers see the U.S. residential housing market as a good value, thanks, in part, to favorable international exchange rates.

• In the 2012 survey, Canadians led the way as United Kingdom buyers faded a bit. Brazil and Venezuela have increased as sources.

• Condos account for 45 percent of properties, townhouses 10 percent and detached single-family homes 36 percent.

• 61 percent of surveyed Realtors said that they worked with an international client in the past 12 months, down from 77 percent.

The complete Profile of International Home Buyers in Florida 2012 is available online.

© 2012 Florida Realtors®

Housing market lifts off from the ‘bottom’

WASHINGTON – Aug. 2, 2012 – Recent housing indexes have shown single-family home prices are on the rise, providing more evidence that the “bottom” of the market is already behind.

“We’re wiping out just about all of the decline,” Joel Naroff, chief economist at Naroff Economic Advisors, told NBC.com about recent housing data showing home prices inching up. “It indicates the market has turned the corner on the pricing side.”

Some recent housing indexes suggest that the “bottom” of the market was reached in January 2012. Since that time, housing prices have been picking up in many housing markets.

But “the turnaround in home prices was unexpected,” says Patrick Newport, an economist with IHS Global Insight. “The conventional wisdom in February, following that landmark agreement (of the $26 billion mortgage settlement with the nation’s five largest banks), was that we would see a surge in foreclosures of some size that would lead to lower home prices. This surge never materialized and home prices have turned.”

Newport points to several signs of a housing market on the mend. For one, housing starts are up after reaching a low in the fourth quarter of 2011. Also, he says the Federal Housing Finance Agency’s (FHFA) monthly House Price Index shows a 3.7 percent increase in May year-over-year, which he notes is higher than inflation and “means that real housing wealth, a consumer spending driver, was also up.”

The increase in home prices is also leading to a fewer number of homeowners underwater on their mortgages. The number of underwater homeowners fell from 12.1 million at the end of 2011 to 11.4 million at the end of the first quarter this year, according to CoreLogic data.

Source: “Evidence Mounts that Home Prices Hit Bottom Last Winter,” NBC News (July 31, 2012)

© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688




Miami Beach No. 2 most crowded beach in U.S.

Miami Beach is the second-most crowded beach in the U.S., according to a Travel + Leisure list.
Miami Beach receives 13.3 million annual visitors, according to figures provided by the U.S. Lifesaving Association. It was surpassed by Venice Beach, Calif., which attracts 16 million visitors annually.
Hollywood Beach also made the list at No. 7 with annual visitors reaching 7.7 million. The beach’s 2.5-mile boardwalk is considered one of America’s best beach boardwalks, Travel + Leisure reported.
Florida had the most crowded beaches on the list at four. The two outside of South Florida were Daytona Beach and the beaches of Brevard County.South

Florida Business Journal, Wednesday, July 25, 2012




Multifamily attracting foreign investors
NEW YORK – June 26, 2012 – Though it’s a good time to buy a house considering the low prices and interest rates, strict lending guidelines continue to drive more would-be homeowners to go the rental route. Enter overseas investors, who are well aware of the rising need for rental units and the low number of vacancies nationwide. These properties are drawing attention from investors across the globe, industry insiders say.

“Ninety percent of the buyers at our auctions are investor-based, with a tremendous amount of foreign money — they’re placing money into anything that provides a return,” says Lamar Fisher, president and CEO of Fisher Auction Company. “South American, Russian, and the Israeli buyers are the top three cash foreign buyers, and price is not a factor to them. They are closing transactions in two weeks. Foreign investors see this as protection for their money in light of their own country’s economic fluctuations. They feel the U.S. market will continue to improve and their investment is safe.”

This international interest shows that despite its recent economic issues, the U.S. is still seen by foreigners as the top option for investments. “There is a certain allure and prestige to being a U.S. investor. When people do well, they put their money in American real estate or a Swiss bank account,” says Faith Xenos of Singer Xenos, a wealth management firm in Florida that works with Brazilian clients.

One of the factors driving the costs of renting up is the low supply of units. The Wall Street Journal recently reported that the rental market is “the tightest it’s been in more than a decade, with only 5.2 percent of apartments nationwide vacant at the end of 2011, down from a high of 8 percent in 2009, according to real-estate data firm Reis.”

“It’s going to be a hot market for the next 18 months to two years” Fisher says. “If you can secure a multifamily property, it will bring off-the-charts money because that’s what buyers want in today’s marketplace. Also, land development parcels that are fully entitled to build apartments have become another hot commodity – the developers that are purchasing these sites are going right to build based on market rate rental.

Waterfront properties are also in high demand right now – I literally receive one or two calls a day from investor pools looking for waterfront multifamily properties.”

Source: PropertyAuction.com
© Copyright 2012 INFORMATION, INC. Bethesda, MD (301) 215-4688




Miami Home Prices Increase for Fifth Consecutive Month

Miami, FL – For the fifth consecutive month, Miami home prices posted strong gains in April.  The median sales price of condominiums in the Miami-Dade County increased 30 percent to $150,000 compared to a year earlier, according to the 25,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) system.   The median sales price of single-family homes rose 8.2 percent to $183,000.  The median sales prices for non-distressed properties sold in April in Miami-Dade were $253,400 for single-family homes and $246,250 for condominiums.

“Miami single-family home and condominium prices continue to trend upwards due to the record demand experienced last year,” said Martha Pomares, 2012 Chairman of the Board of the MIAMI Association of REALTORS.  “Price appreciation should continue due to limited supply and strong demand from both U.S. and international buyers and investors.”

Statewide median sales prices in April increased 10.2 percent to $144,350 for single-family homes and 16.1 percent to $108,000 for condominiums, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The national median existing-home price for all housing types was $177,400 in April, a 10.1 percent increase from April 2011.

The April average sales price for single-family homes in Miami-Dade County increased 17 percent, from $355,342 in 2011 to $415,046 in 2012.  The average sales prices for condominiums jumped 22.3 percent, from $242,616 to $293,717.  The average sales prices for non-distressed properties sold in April in Miami-Dade were $626,877 for single-family homes and $414,664 for condominiums.

The sales of existing single-family homes in Miami-Dade increased 7.2 percent in April, from 830 to 890, compared to record sales levels in April 2011.  Sales of condominiums were down 12.0 percent, from 1,404 to 1,237, compared to April 2011.   

Statewide sales of existing single-family homes totaled 17,544 in April 2012, down 0.7 percent compared to a year ago.  Statewide condominium sales totaled 9,765, down 4.9 percent from those sold in April 2011. Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops increased 3.4 percent from March and were 10 percent higher than they were in April 2011, according to the National Association of Realtors (NAR).

“The Miami residential real estate market continues to show remarkable strengthening compared to the rest of the nation,” said 2012 MIAMI Association of REALTORS Residential President Patricia Delinois.  “Miami is unique in many ways, including being the top market in nation for foreign buyers and investors.  There are many benefits to living and working in Miami, which is why migrating U.S. residents and retiring baby boomers as well as vacation and second home buyers, and global business headquarters are increasingly attracted to our amazing city.”

Inventory Continues Sharp Decline
Over the last year, the inventory of residential listings in Miami-Dade County has decreased 34 percent from 17,897 to 11,878.  Compared to the previous month, the total inventory of homes dropped 4.04 percent.   Total housing inventory nationally rose 9.5 percent at the end of April but was 20.6 percent below a year ago.

Distressed Properties
Strong demand for bank-owned (REO) properties and improved processing of short sales has resulted in rapid absorption of distressed listings and contributed to price appreciation.  In April, 47 percent of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 59 percent in April 2011 and 49 percent the previous month.  

International Buyers Fuel Cash Sales
In Miami-Dade County, 64 percent of total closed sales in March were all-cash sales, compared to 65 percent in March and 63 percent a year earlier.  Cash sales accounted for 46 percent of single-family and 77 percent of condominium closings.  Nearly 90 percent of international buyers in Florida purchase properties all cash.  Nationally, all-cash sales fell to 29 percent in April - from 32 percent in March and 21 percent in April 2011 - reflecting the stronger presence of international buyers in the Miami real estate market.

Note:  Statistics in this news release may vary depending on reporting dates. Statistics reported by MIAMI are not impacted by NAR’s rebenchmarking efforts.  MIAMI reports exact statistics directly from its MLS system.

Submitted by Lynda Fernandez on May 22, 2012 - 12:45pm

Market Stabilizing? Home Inventories Fall by Nearly 20%

DAILY REAL ESTATE NEWS | FRIDAY, MAY 25, 2012
Home inventories of for-sale listings continue to fall, which may help raise overall housing prices as demand picks up.

Inventory of for-sale single-family homes, condos, townhouses, and co-ops dropped by 18.85 percent in April compared to a year ago, according to housing data of 146 metro markets tracked byREALTOR.com.

“These key indicators continue to suggest the housing market may be at a turning point and headed towards a broad-based recovery,” REALTOR.com notes in a release on its April housing data. “Lower inventories, combined with faster moving markets and relatively stable median listing prices are indicative of the kind of balanced housing market that has not been seen in many years.”

On a national basis, the median age of inventory dropped nearly 12 percent year-over-year. The median age of inventory dropped by the highest percentages in the following metro areas:

1. Oakland, Calif.
Median age of inventory: 20
Year-over-year drop: 54.54%

2. Miami
Median age of inventory: 41.08%
Year-over-year drop: 76

3. Fort Lauderdale, Fla.
Median age of inventory: 36.19%
Year-over-year drop: 67

4. Seattle-Bellevue-Everett, Wash.
Median age of inventory: 34.28%
Year-over-year drop: 46

5. Pensacola, Fla.
Median age of inventory: 33.33%
Year-over-year drop: 106

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

South Florida’s real estate market looks hot again
MIAMI – May 24, 2012 – Bidding wars are erupting from Homestead to Weston, as home sales and prices take off, further reinforcing the end of a prolonged market slump.

A two-bedroom, two-bathroom, bank-owned condominium in Coral Springs sparked 64 offers within 10 days – selling for $71,000 on Tuesday, or 34 percent over its $53,000 listing price.

“It was a feeding frenzy. I’ve never seen anything like it,” said Marta DuPree, broker associate and vice president of the Keyes Company in Coral Springs. “It was a rentable building, so all the investors were out.”

In Broward County, the median sales price of single-family homes rose 17 percent in April to $205,000, and condominiums jumped 17.4 percent to $84,300, compared to prices in April 2011. And in Miami-Dade, home prices continued a five-month ascent – up 30 percent for condos, to $150,000, and 8.2 percent for single-family homes, to $183,000, compared to a year ago, according to figures released Tuesday by the Miami Association of Realtors.

Across South Florida, higher demand is leading to multiple bids and, in turn, elevating prices – as the real estate market keeps turning around.

“We have a very limited amount of inventory at this point and there are a lot less foreclosures on the market,” said Tony Garcia, district sales manager for the Keyes Company in Homestead. “What we are seeing is that people are going again to bidding wars ... We’re in a situation where for 80 percent of contracts there are at least three or four offers for the same property.”

Realtors say the inventory of residential listings is way down. It has decreased 34 percent in the past year in Miami-Dade, from 17,897 to 11,878, and down 4 percent since March, the Realtors’ Association said.

Similarly, in Broward, the inventory of residential listings has dropped 30 percent in the past year, from 15,781 to 11,086, also down 4 percent from March.

With a housing stock of 16,000 homes and condos in Weston, only 254 single-family homes and 91 condos are currently for sale, said Chip Rowand, assistant district sales manager for the Keyes Company’s Weston office.

Neighboring areas of Southwest Ranches, Pembroke Pines, Davie and Cooper City are all experiencing a similar dearth of inventory, said Fritz Hawkins, general manager for the Keyes Company.

“We can put a property on the market and we can have multiple offers in one day,” he said.

Investors with cash – predominantly foreign buyers – continue to fuel the market.

In both Miami-Dade and Broward, 64 percent of closed sales in March were all-cash sales, with the vast majority to international buyers, the Miami Association of Realtors said.

“We’re at a point where builder inventories are low, and in fact, for some builders, sales are proceeding faster than they can build,” said Brad Hunter, South Florida director for Metrostudy, a housing market advisory firm headquartered in Houston.

“For those who are waiting four or five or more years for home prices to stabilize and start edging back upwards, we are essentially there,” he said.

Meanwhile, distressed properties still make up a large number of sales.

In April, 47 percent of all closed residential sales in Miami-Dade were distressed, including REOs (bank-owned properties) and short sales, compared to 59 percent in April 2011 and 49 percent the previous month.

In April, 38 percent of all closed residential sales in Broward were distressed, compared to 50 percent in April 2011 and 41 percent the previous month.

Even more distressed properties are sure to hit the market, which could still dampen prices, analysts say.

“We still have 52,000 foreclosures that haven’t been sold, and it is still taking 809 days to process a foreclosure in Florida,” said Jack McCabe, chief executive of McCabe Research & Consulting, based in Deerfield Beach.

When those distressed properties become available, they may be sold online, rather than through Realtors, he said.

“Things are better, but they are still not great, and there is still a flood of distressed property yet to be sold,” McCabe said. “And that will have an impact on the marketplace.”

Statewide median sales prices in April increased 10.2 percent to $144,350 for single-family homes and 16.1 percent to $108,000 for condos, according to the Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The national median existing-home price for all housing types was $177,400 in April, a 10.1 percent increase from April 2011.

Copyright © 2012 The Miami Herald, Ina Paiva Cordle. Distributed by MCT Information Services.

U.S. housing market finally reaches a turning point
NEW YORK – May 16, 2012 – Home values will start to climb again and related consumer industries will grow in 2012 and beyond as the U.S. housing market finally turns the corner, according to a new study released today by The Demand Institute, a new nonprofit, non-advocacy group formed in February by The Conference Board and Nielsen.

According to the Institute, the housing market recovery will have “far-reaching impacts in the coming years across the United States and international markets as U.S. consumers increase their spending on buying, renovating, furnishing and maintaining their homes.”

It also won’t be like earlier recoveries, the Institute suggests, with homestead owners leading the way. Instead, real estate investors buying rentals will supply the homebuying demand.

The Institute’s report, The Shifting Nature of U.S. Housing Demand, predicts that average home prices will increase by up to 1 percent in the second half of 2012. By 2014, home prices will increase by as much as 2.5 percent.

From 2015 to 2017, the study projects annual increases between 3 and 4 percent, though unevenly nationwide. The strongest markets “could capture average gains of 5 percent or more in the coming years.”

“In these initial years, the prime driver of recovery won’t be new home construction, but rather demand for rental properties,” says Louise Keely, chief research officer at The Demand Institute and a co-author of the report. “This is a remarkable change from previous recoveries. It is a measure of just how severe the Great Recession has been that such a wide swath of Americans had to delay, scale back, or put off entirely their dreams of homeownership.”

Bart van Ark, chief economist at The Conference Board and co-author of the report, says he doesn’t expect to see the homeownership rate to change.

“Over 80 percent of Americans in recent surveys still agree that buying a home is the best long-term investment they can make,” van Ark says. “What will be intriguing to watch is how their aspirations around homeownership are affected by this period of extended austerity.”

Between 2006 and 2011, some $7 trillion in American wealth was wiped out when home prices dropped 30 percent after dramatic climb in valuations during the housing bubble. Looking forward, the moderate growth expectations for coming years suggest a return to normalcy. As home prices continue to drop and interest rates fall further, first-time buyers and others who remained relatively cautious will be drawn back into the housing market. And, as the market recovers, so too will consumer spending.

“As the U.S. housing market strengthens, almost every consumer-facing industry will be impacted in the coming years,” said Mark Leiter, chairman of The Demand Institute. “Business and government leaders will benefit by fully understanding the nature of this recovery. In doing so they will be better able to anticipate how consumer demand will evolve, and to formulate critical business and policy decisions to lead their organizations.”

Key findings

In addition to the projected gains in home prices, the report discusses in detail the dynamics at work in the U.S. housing market and the impacts across industries. What follows are highlights from the report:

• The recovery will be led by demand from buyers for rental properties, rather than, as in previous cycles, demand from buyers acquiring new or existing properties for themselves. More than 50 percent of those planning to move in the next two years say they intend to rent.

• Young people and immigrants will lead the demand for rental properties. Developers and investors will fulfill it: developers by building multifamily homes for rent, and investors by buying foreclosed single-family properties for the same purpose.

• Rental demand will help clear the huge oversupply of existing homes for sale. In 2011, some 14 percent of all housing units were vacant, while almost 13 percent of mortgages were in foreclosure or delinquent – increases of 12 and 129 percent respectively over 2005 levels. It will take two to three years for this oversupply to be cleared, and at that point homeownership rates will rise and return to historical levels.

• The housing market recovery will not be uniform. Some states will see annual price gains of 5 percent or more. Others will not recover for many years. The deciding factors will include the level of foreclosed inventory and rates of unemployment.

• There will also be vast differences within states. Here, additional factors count, such as whether local amenities, including access to public transport, are within walking distance of homes. The report looks at seven factors and then sorts cities and towns into four categories, with each category predicting the speed of a local home price recovery.

• The average size of the American home will shrink. Many baby boomers who delayed retirement for financial reasons during the recession will downsize. They will not be alone. Most Americans will scale back their housing aspirations. The size of an average new home is expected to continue to fall, reaching mid-1990s levels by 2015.

• Consumer industries including financial services, home furnishings and home remodeling will experience shifts in demand and new growth opportunities. Part of this spending is linked to increases in wealth from improving home valuations, while an even bigger part is tied to the “transaction” of buying or selling the home which sets in motion increased demand for a wide range of products and services.

• Despite the number of Americans who have been hurt financially by the housing crash, the desire to own a home remains strong. The Institute doesn’t expect to see a long-term drop in ownership rates.

© 2012 Florida Realtors®

5 Cities Where Rents Are Rising Most

DAILY REAL ESTATE NEWS | TUESDAY, MAY 08, 2012

Rents continue to inch up, soaring more than 5 percent nationwide in the 12 months ending April 31. In some places, rents have increased by more than 15 percent in that time period.

The following five metro areas have seen some of the biggest increases in rental prices — more than 10 percent — in the 12 months ending April 31, according to recently released data by Trulia:

1. Edison-New Brunswick, N.J.

Change in rent in 12 month period: Up 15.6 percent

2. San Francisco, Calif.

Change in rent in 12 month period: Up 13.2 percent

3. Miami, Fla.

Change in rent in 12 month period: Up 12.3 percent

4. Warren-Troy-Farmington Hills, Mich.

Change in rent in 12 month period: Up 11.8 percent

5. Indianapolis

Change in rent in 12 month period: Up 11.1 percent

Source: “Six Cities Where Rents Are Skyrocketing,” 24/7 Wall St. (May 4, 2012)

Florida second-best U.S. state for business

NEW YORK – May 3, 2012 – An annual survey of CEOs conducted by Chief Executive Group finds that Florida is the second-best U.S. state for businesses. The same survey in 2011 ranked Florida third.

Gov. Rick Scott cited the magazine’s results last year in his efforts to increase the number of jobs in Florida. In a letter, he jokingly told Texas Gov. Rick Perry that he was aiming for the No. 1 spot. The 2012 results still found Florida falling short of that goal, but it’s now nipping on Texas’ heels.

According to Chief Executive, the one-level boost in Florida’s ranking results from pro-business laws enacted since Scott came into office, including business tax and regulatory reforms, a 2.1 percent unemployment drop and 140,000 private sector jobs.

Texas received points for the quality of its workforce that, according to Chief Executive, is second only to Utah.

North Carolina, Tennessee, Indiana, Virginia, South Carolina, Georgia and Utah rounded out the top 10 states that are best for business. California landed at the bottom of the list.

The results are based on responses from 650 business leaders that graded states where they did business.

© 2012 Florida Realtors®

Miami International Airport reaches Q1 passenger high

Miami International Airport    has announced a record number of passengers in the first quarter.
More than 10.2 million travelers passed through MIA in the first three months of this year, an increase of 9.5 percent over the same time last year. Through March, international passenger traffic increased 11 percent and domestic passengers rose 8.1 percent.
The airport also announced that, for the last two quarters, it has surpassed John F. Kennedy International Airport    as the U.S. airport with the most international flights.

Increased service by American Airlines   and the launch of service by low-cost carrier Interjet and LAN Colombia contributed to the surge in passenger traffic. In addition, Latin American and Caribbean markets recorded a collective increase of more than 13 percent, year-over-year, and European airlines operating out of MIA had a growth in traffic of more than 26 percent.

The airport will see more growth this year with following additional flight services:
    • Dutch Antilles Express will begin daily, nonstop service from Curaçao, Netherlands Antilles, on May 11.
    • Brazilian low-cost carrier GOL will begin operating five weekly flight from São Paulo, Brazil, via Caracas, Venezuela, on June 29.
    • In June, American Airlines will increase service on its Brasilia, Brazil, and Belo Horizonte, Brazil, routes to daily flights, and will launch service to Manaus, Brazil, and Seattle.

South Florida Business Journal
Date: Monday, April 30, 2012, 3:05pm EDT

Inventory of For-Sale Homes Posts Big Drop

DAILY REAL ESTATE NEWS | TUESDAY, APRIL 17, 2012
The nationwide inventory of residential homes for-sale dropped 21 percent in March compared to a year ago, according to newly released housing data from Realtor.com, tracking 146 metro markets.

In fact, all 146 markets posted a drop in their inventory, except for two — Hartford, Conn., and Philadelphia.

The nationwide median list price in March also saw improvement, increasing more than 5 percent last month compared to last year at this time.

The housing picture is much different than last year at this time, when inventory was up 26 percent and list prices were down 4.81 percent.

“If the market continues to hold its own, 2012 could well mark the beginning of a broad-based housing recovery,” according to Realtor.com.

The metros that posted the biggest drops in listings of for-sale homes in the last year are:

1. Oakland, Calif.: -51.91 percent year-over-year drop in total listings

2. Bakersfield, Calif.: -50.35 percent

3. Phoenix-Mesa, Ariz.: -48 percent

4. Fresno, Calif.: -45.56 percent

5. Miami: -42.34 percent

6. Fort Lauderdale, Fla.: -39.66 percent

7. Seattle-Bellevue-Everett, Wash.: -39.38 percent

8. Atlanta: -39.26 percent

9. Orlando: -39 percent

10. Portland-Vancouver, Ore.-Wash.: -38.79 percent

11. Tampa-St. Petersburg-Clearwater, Fla.: -37.35 percent

12. Stockton-Lodi, Calif.: -36.18 percent

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

 

The Miami preconstruction market is back.
From the beach to downtown, Miami’s wild preconstruction condo market heats up again

Developer Gil Dezer isn’t launching sales of his 132-unit Porsche Design condo tower in Sunny Isles Beach until June. He’s spending $3 million on a swanky sales center that won’t be ready until then. He still doesn’t have a Web site for his building. He’s not planning to break ground on the 57-story development until the second or third quarter of 2013. And he says the building won’t be ready until the second quarter of 2016.

But word has spread about the Porsche Design building, with a robotic parking system that allows owners to store multiple cars next to their apartments, and many would-be buyers have expressed interest.

“We’re now taking private meetings with those who are interested in buying units,” says Dezer, who’s come up with a way to ensure he’s meeting with serious customers.

Dezer is requiring that potential buyers deposit $100,000 in escrow before they can schedule a meeting to discuss the luxurious condos, which are priced around $1,000 per square foot and range from $3.9 million to $14.5 million.

That money is refundable, of course, but nobody’s asked for a refund yet.

Dezer’s had 27 interested parties put $100,000 into escrow and is making appointments as far as 60 days out. So far, 15 meetings have resulted into 15 reservations for units, with the buyers — all Latin American, except for one US buyer and one Russian — each putting 10 percent down. This means deposits of around $400,000 or more for product that won’t be ready for more than four years.

And Dezer is also making buyers put another 10 percent down when they go into contract and another 10 percent beyond that when construction starts.

“That’s one of the selling points,” Dezer says of the building’s timetable. “We’re helping people plan for the future.”

It’s not just beach properties that are selling based on plans. Miami’s downtown, which had the feeling of an overbuilt wasteland just a couple years ago, is seeing buyers swoop in to buy units at bargain prices. And one can make the case that downtown could use more inventory.

A Miami Downtown Development Authority study in 2009 revealed that only 62 percent of the more than 23,000 condos downtown were occupied. That number climbed to 74 percent in 2010 and 85 percent in 2011. The 2012 study hasn’t been released yet, but Miami DDA executive director Alyce Robertson has “heard a rumor” that the occupancy rate will be upwards of 90 percent.

The Related Group, known for massive condo buildings all over Miami, started taking reservations for units at its MyBrickell condo building in September. Construction starts in March, but MyBrickell is close to 90 percent reserved and has increased prices due to high demand.

“We started selling units just under $300 per square foot,” says Carlos Rosso, president of Related’s condominium division. “We’ve raised prices from about $300 per square foot to $350 per square foot. We’re 192 units, 170 reserved. We’ve started converting to contracts, and 120 units have signed contracts.”

Related is asking buyers to put up 80 percent of the purchase price throughout the construction of the project and the final 20 percent at the closing table.

With the success of MyBrickell, Related is now planning Millecento Residences downtown, with about twice as many condos as MyBrickell and slightly higher prices of around $370 per square foot.

Nearby at BrickellHouse, a condo project that’s breaking ground in the summer, there are reservations with 10 percent deposits for 50 percent of its 374 units in less than four months of sales.

This, sales director Alicia Cervera Lamadrid says, is happening despite limited marketing resources.

“Our Web site is still under construction,” she says. “We don’t have a sales office.”

There was an on-site event with food trucks and a DJ last week, but it was on “basically a vacant lot,” Cervera Lamadrid says. “And we still don’t have a full-scale model of the building.”

But none of this has slowed down sales.

“We started with a target price right around $400 per square foot,” says Cervera Lamadrid, and BrickellHouse is hitting the target.

“One thing I like about it is that it’s very modern,” says Vince Pileggi, a BrickellHouse buyer from Toronto who’s purchasing an 800-square-foot one-bedroom condo with a terrace.

“I’ve always wanted to buy in Miami, and now there’s no better time with the prices,” says Pileggi. “With the location, and with the price it is right now, I think it’s basically the bottom [of the market] or starting to come back. And because it’s preconstruction, I have some time to save up some money.”

BrickellHouse developer Harvey Hernandez, who’s asking for 70 percent of each unit’s purchase price during the project’s construction, says he’s considered raising prices, but: “We don’t want to stop the momentum,” he says. “It’s a very fine line between raising prices and jeopardizing your sales.”

This measured approach to sales is just one example developers and brokers offer as a way of explaining how the upswing in Miami’s new-construction market doesn’t resemble the overheated days of 2007 and 2008. Many downtown apartments were selling for well upwards of $500 per square foot then, and projects all over Miami had many more condos to unload.

Dezer’s three Trump Towers buildings in Sunny Isles Beach alone have more than 800 units, about seven times what Porsche Design has. Related’s Icon Brickell has nearly 1,800 units, almost 10 times what MyBrickell has.

“The days of launching a project with 1,000 units and then another with 1,800 units, those days are long gone,” Rosso says.

Up in Hollywood, north of Miami, Related has started construction on Apogee Beach, which has 40 of its 48 condos under contract with 40 percent deposits.

“We started at $400 per square foot and are now close to $600 per square foot,” says Rosso, who adds that Related is now planning another condo development in nearby Hallandale.

Hollywood is also home to the preconstruction Positano Beach, which was announced this month and has reservations for about half of its 15 units, which average 3,600 square feet and start at $1.4 million. Marketing brochures still haven’t been printed. Positano Beach is the sister project of Hollywood’s sold-out Villas at Positano.

Of course, buyers who want new product they can move into sooner also have options in every price range.

Cervera Lamadrid is selling the Ocean House complex, on Ocean Drive in South Beach’s coveted South of Fifth area. Ocean House, which has sold about one-third of its 18 beachfront units, features high-priced residences including a nearly 5,000-square-foot, Artefacto-furnished model unit listed for $7.25 million.

Two buyers are already living in Ocean House while the development is being finished. The common amenity spaces will be ready in April.

And broker Diane Lieberman of SBI Realty has sold five out of 12 units in one month at Baylights on the north end of Miami Beach. The ready-for-occupancy new development offers condos priced around $350 per square foot, with some apartments featuring outdoor spaces that are larger than the interiors.

“Inventory is drying up in Miami, which is something people can’t imagine,” Lieberman says. “It’s a pretty strong market.”

By Andy Wang
The New York Post

 

Florida cuts population gap with New York in half
Date: Monday, April 2, 2012, 7:16am EDT

A new On Numbers analysis shows Florida trails New York state in population by 280,710 now, less than half the gap of 576,792 two years ago.
Florida's population is estimated at 19.23 million, up from 18.8 million, while New York is estimated at 19.51 million, up from 19.378 million.
California ranks first, at 37.95 million, while Texas is expected to hit 26.03 million residents on April 3.
South Florida Business Journal by Kevin Gale, Editor in Chief

Miami ranked third in luxury home market study

Luxury home prices in Miami grew by 19.1 percent in 2011, which trailed only two locations in Kenya, according to the new Knight Frank Prime International Residential Index.
The index confirms ongoing examples of eye-popping prices in the Business Journal's SoFla Luxe reports with buyers scooping up luxury waterfront locations and mansion-in-the sky condos. However, the report contrasts with other reports that show about 20 percent of homeowners in South Florida are 90 days or more behind in their mortgages.
"Emerging markets influenced performance far and wide, with wealth flows to the developed world's property hotspots driving growth in Miami, London and Vancouver," Knight Frank reported. "Meanwhile, price falls in some of Europe's luxury markets point to the ongoing impact of the global financial crisis; similar falls in Singapore, Sydney and Shanghai confirm the unravelling of price booms in Asia."
Miami has had an influx in international buyers partly because the market is seen as reasonable compared to cities like Sao Paulo, Brazil. The Latin American economy also has been generally strong, although buyers from countries such as Venezuela are often seeking safe havens for their money in South Florida.
When asked which nationalities will become most important as prime property buyers over the next five years, Chinese, Russian, Middle Eastern, Latin American and those from other growth economies consistently top advisors' lists, said the Knight Frank report, which was written in conjunction with Citi Private Bank.
So who beat out Miami? Nairobi ranked first on the list at a 25 percent increase while the Kenyan coast ranked second at 20 percent. Miami was followed by Bali, Indonesia, at 15.0 percent and Jakarta, Indonesia, at 14.3 percent.
The other U.S. locations listed as having positive increases were No. 17 Manhattan in New York City, up 3.1 percent; and no. 23 Aspen, Colorado, up, 1.0 percent.
After Aspen, the rest of the list had either no increases or dropping prices. The last location on the list, Mumbai, India, had a drop of 18 percent.

South Florida Business Journal by Kevin Gale, Editor in Chief
Date: Friday, March 30, 2012, 7:45am EDT

increased job openings

South Florida leads 30 areas nationally when it comes to an increase in job openings, according to SimplyHired.com.
The Sunnyvale-based company found 10.2 percent growth in South Florida openings, which ranked ahead of No. 2 Austin at 7.7 percent. The outlook would be welcome news in a region that was still experiencing 9.6 percent unemployment in December.
SimplyHired.com claims to be the world's largest job search engine, with eight million listings, and released its rankings as part of its March 2012 Employment Outlook. The report suggests that nationwide job openings have held steady and remained largely unchanged in February, increasing 0.2 percent month-over-month and 5.5 percent year-over-year.
For every one job opening, there are approximately three unemployed people.
“As we’ve noted before, the job market is becoming truly stable for the first time since the recession began in December 2007,” said Gautam Godhwani, CEO of SimplyHired.com in a prepared statement. “It’s encouraging to see employment numbers hold steady. We expect real growth to occur in the coming months.”Top metro job growth areas:
• Miami & Fort Lauderdale (10.2 percent)
• Austin (7.7 percent)
• Orlando (6.5 percent)
• Detroit (5.4 percent)
Metro areas with the largest decline:
• Pittsburgh (-10.9 percent)
• Greensboro & Winston-Salem (-7.2 percent)
• Grand Rapids (-7.1 percent)

South Florida Business Journal
Date: Tuesday, March 6, 2012

Miami Home Prices Spike in January, Sales Ease as Inventory Continues Sharp Decline

Miami, FL – Following a record sales year, Miami home prices posted strong gains in January.  The median sales price of condominiums in the Miami Metropolitan Statistical Area (MSA) spiked 36 percent to $122,500 in January compared to a year earlier, according to the 26,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) system.   The median sales price of single-family homes jumped 13 percent to $170,000.


“Record demand for Miami properties has caused inventory to rapidly decline, resulting in limited supply,” said Martha Pomares, 2012 Chairman of the Board of the MIAMI Association of REALTORS.  “Now home prices in Miami are significantly rising and sooner than expected, as the Miami real estate market continues to outperform the rest of the nation, mostly due to the strong impact of international buyers.”

Statewide median sales prices in January increased 18.8 percent to $95,000 for condominiums and 5.3 percent to $129,000 for single-family homes. The national median existing-home price for all housing types was $154,700 in January, a two percent drop from January 2010.

In January, the average sales price for single-family homes in Miami-Dade County increased 40.4 percent, from $238,527 in 2011 to $334,952 in 2012.  The average sales prices for condominiums jumped 45.2 percent, from $171,077 to $248,443.

Inventory Declines 37 Percent in One Year
The inventory of residential listings in Miami-Dade County dropped 37 percent from 24,507 to 13,610 over the last year. Compared to last month, the total inventory of homes dropped 3.4 percent.   Total housing inventory nationally fell 20.6 percent at the end of January.

The sales of existing single-family homes in the Miami MSA declined three percent in January, from 676 to 659, compared to January 2011.  Sales of condominiums dropped 16 percent, from 1,262 to 1,058, compared to January 2011.

Statewide sales of existing single-family homes totaled 12,044 in January 2012, down 5.5 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing.  Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops rose 4.3 percent from December and were 0.7 percent higher than they were in January 2011, according to the National Association of Realtors (NAR).

“Never before in history had we sold as many homes in Miami as we did last year,” said 2012 MIAMI Association of REALTORS Residential President Patricia Delinois.  “As supply is absorbed, there are fewer properties available to sell, and it will be difficult to match the record set last year.  But the good news is that home values are rapidly appreciating, as global buyers, investors and corporations focus on Miami.”

Distressed Properties
Heightened demand for bank-owned (REO) properties and improved processing of short sales has resulted in rapid absorption of distressed listings and price appreciation.  In January, 56 percent of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 70 percent in January 2011 and 54 percent the previous month.  Contrary to a year ago, there are now more short sales being transacted than REOs.

International Buyers Fuel Cash Sales
In Miami-Dade County, 66 percent of total closed sales in January were all-cash sales, compared to 63 percent in December and 66 percent a year earlier.  Cash sales accounted for 43 percent of single-family and 79 percent of condominium closings.  Nearly 90 percent of international buyers in Florida purchase properties all cash.  Nationally, all-cash sales were unchanged at 31 percent in January, reflecting the stronger presence of international buyers in the Miami real estate market.

Note:  Statistics in this news release may vary depending on reporting dates. Statistics reported by MIAMI are not impacted by NAR’s rebenchmarking efforts.  MIAMI reports exact statistics directly from its MLS system.
Submitted by Lynda Fernandez on February 23, 2012 - 4:31pm

 

Miami Home Sales Break Record in 2011

Miami, FL – Miami home sales set a new record in 2011, exceeding transaction levels during the height of the real estate boom in 2005, according to the 26,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).  Total 2011 sales, including both condominiums and single-family homes, in Miami-Dade County were 24,929, up four percent from the 24,025 in 2005 and 46 percent from 17,068 in 2010.  Year-end closed sales of condominiums surged 54 percent, from 9,760 in 2010 to 15,009 in 2011.  Total single-family home sales increased 36 percent from 7,308 in 2010 to 9,920 in 2011.

“The Miami real estate market exceeded all expectations in 2011, posting record sales that yielded rising prices,” said Jack H. Levine, 2011 Chairman of the Board of the MIAMI Association of REALTORS.  “Miami is a very unique city in most ways, and the real estate market recovery proved no different.  Miami is hot, and it’s not just the weather!”

The sales of existing single-family homes in the Miami Metropolitan Statistical Area (MSA) rose 16 percent in December, from 734 to 734, compared to December 2010.  Sales of condominiums increased 22 percent, from 985 to 1,200, compared to December 2010.

“2011 was a remarkable year for the Miami real estate market,” said Martha Pomares, 2012 Chairman of the Board of the MIAMI Association of REALTORS.  “Unlike other markets throughout the U.S., Miami has recovered faster and stronger than expected and is poised for further growth and double-digit price appreciation in 2012.”

Statewide sales dropped two percent to 6,836 for condominiums and two percent for single-family homes to 15,290.   Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops rose five percent from November and were 3.6 percent higher than they were in December 2010, according to the National Association of Realtors (NAR).

Median and Average Sales Prices Rise in December
In the Miami MSA, the median sales price of condominiums in December spiked 31 percent to $129,900 from a year earlier.  The median sales price of single-family homes jumped 16 percent to $182,300.  Statewide median sales prices in December increased four percent to $91,900 for

condominiums and one percent to $134,300 for single-family homes. The national median existing-home price for all housing types was $164,500 in December, a 2.5 percent drop from December 2010.

The year-end median sales price dropped nine percent for single-family homes and three percent for condominiums when comparing 2011 to 2010.

In December, the average sales price for single-family homes in Miami-Dade County increased 8.3 percent, from $302,098 in 2010 to $327,060 in 2011.  The average sales prices for condominiums jumped 21.5 percent, from $223,962 to $272,186.

“International buyers and investors continue to play a major role in boosting market performance in Miami,” said 2012 MIAMI Association of REALTORS Residential President Patricia Delinois.  “Miami is the top area in the U.S. for international real estate buyers.  These buyers from worldwide markets will continue to strengthen the Miami market long into the future.”

Inventory Declines 40 Percent in One Year
The inventory of residential listings in Miami-Dade County dropped 39 percent from 24,278 in to 14,087 over the last year. Compared to last month, the total inventory of homes dropped eight percent.   Currently, there is a 4.9-month supply of condominium inventory and a 5.8-month supply of single-family homes in Miami-Dade County, reflecting a very healthy marketplace. Total housing inventory nationally fell 9.2 percent at the end of December.

Distressed Properties
Heightened demand for bank-owned (REO) properties and improved processing of short sales has resulted in rapid absorption of distressed listings and price appreciation.  In December, 54 percent of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 59 percent in December 2010 and 56 percent the previous month.  Contrary to a year ago, there are now more short sales being transacted than REOs.

In Miami-Dade County, 63 percent of total closed sales in December were all-cash sales.  Cash sales accounted for 42 percent of single-family and 77 percent of condominium closings.  Nearly 90 percent of international buyers in Florida purchase properties all cash.  Nationally, all-cash sales accounted for 29 percent of transactions, reflecting the stronger presence of international buyers in the Miami real estate market.

Note:  Statistics in this news release may vary depending on reporting dates. Statistics reported by MIAMI are not impacted by NAR’s rebenchmaking efforts.  MIAMI reports exact statistics directly from its MLS system.

Submitted by Lynda Fernandez

About the MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating more than 90 years of service to Realtors, the buying and selling public, and the communities in South Florida.  Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 26,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage.  It is the largest local association in the National Association of Realtors, and has partnerships with more than 100 international organizations worldwide.  MIAMI’s official website is www.miamire.com.


Rental Rates Jump 9% In Greater Downtown Miami In 2011

The Greater Downtown Miami rental market is as active as it has ever been as tenants populate investor-owned units built during the South Florida real estate boom.

Tenants leased nearly 4,900 condos, townhouses, and apartments in 2011, representing a nearly four percent increase on a year-over-year basis compared to 2010, according to a new report fromCondoVultures.com. 

At the current leasing activity, Greater Downtown Miami is facing a possible shortage of rental properties as the current available inventory has been chipped down to less than 60 days of available product, according to an analysis by the Rental Division of the licensed Florida brokerage Condo Vultures® Realty LLC. 

As of Jan. 16, 2012, there are 765 properties available for lease in the Greater Downtown Miami market where tenants are renting an average of nearly 410 properties per month in 2011, according to the analysis based on Florida Realtors association data.  
 
CondoVultures.com is scheduled to profile the latest trends in the fourth quarter of 2011 in the seven largest coastal condo markets in the tricounty South Florida region of Miami-Dade, Broward, and Palm Beach counties.  
Beginning the week of Jan. 16, the Condo Vultures® Market Intelligence Report™ plans to begin publishing a seven-part weekly series analyzing new condo sales trends in Greater Downtown Miami, South Beach, Sunny Isles Beach, Hollywood / Hallandale Beach, Downtown Fort Lauderdale and the Beach, Boca Raton / Deerfield Beach, and Downtown West Palm Beach and Palm Beach Island.   

The strong demand for rental units is working to strengthen the median lease price in Greater Downtown Miami, where prices have increased by nine percent on a year-over-year basis to $1.86 per square foot per month in 2011, according to the report.
 
The completed leases do not reflect any deals that that may have been transacted without being marketed on the Multiple Listing Service.
 
Compare the current activity to the year 2010 when tenants leased an average of 392 properties per month at a median price of $1.70 per square foot per month in Greater Downtown Miami. A year earlier in 2009, renters leased an average of 348 units per month at a median lease price of $1.51 per square foot per month in Greater Downtown Miami, according to the report.
 
Of the Greater Downtown Miami properties currently available for rent, more than 265 properties have one bedroom with at a median asking price of $2.22 per square foot per month. An additional 325 properties have two bedrooms at an median asking price of $2.11 per square foot per month.
 
There are more than 70 properties with three bedrooms that are available for rent at a median asking price of $2.15 per square foot per month. There are five properties with at least four bedrooms that are available at a median asking price of more than $3.40 per square foot per month. An additional 15 studios are for rent at a median asking price of nearly $2.90 per square foot per month, according to the data.
 
Greater Downtown Miami is the epicenter of the South Florida condo crash. Foreign buyers and institutional investors have focused their attention on acquiring more than 80 percent of the nearly 22,250 units that were constructed in the area during the real estate boom.
 
At the end of third quarter of 2011, some 2,000 new condos were still unsold, according to the Condo Vultures® Official Condo Buyers Guide To Miami™. 
Greater Downtown Miami is a 60-block stretch from the Julia Tuttle Causeway south to the Rickenbacker Causeway, and Interstate 95 east to Biscayne Bay. The market is comprised of the neighborhoods of the Brickell Avenue Area, Downtown Miami, and the Biscayne Boulevard Corridor, according to CondoVultures.com.

It is important to note there are various stages to a residential real estate transaction in South Florida.

A transaction begins when a property is made available for sale and ends when a title is conveyed from one party to another party as a result of the recording of a deed with the local government.

As part of the process, a property typically goes under contract and into a due diligence phase by which a deal can be canceled. 

Published on 1/16/2012
© Copyright 2012. Condo Vultures® LLC. All Rights Reserved.
  

 

10 Cities Where List Prices Soared in the Last Year

DAILY REAL ESTATE NEWS | THURSDAY, JANUARY 26, 2012
List prices are heating up in Florida, as recovery takes hold in the Sunshine State. Florida boasts the highest number of cities in the top 10 for largest increases in median list prices in the last year. In Miami alone, median list prices have jumped 32 percent in the last year.

Nationwide, median list prices have inched up 5.03 percent from December 2010 to December 2011, according to Realtor.com data.

The following cities are where median list prices have increased the most in the last year, based on December 2011 data of 146 metro areas from Realtor.com:

1. Miami, Fla.
Year-over-year increase: 32.50%
Median list price: $265,000

2. Naples, Fla.
Year-over-year increase: 21.67%
Median list price: $365,000

3. Fort Myers-Cape Coral, Fla.
Year-over-year increase: 21.47%
Median list price: $229,375

4. Punta Gorda, Fla.
Year-over-year increase: 19.42%
Median list price: $179,000

5. Boise City, Idaho
Year-over-year increase: 19.25%
Median list price: $154,900

6. West Palm Beach-Boca Raton, Fla.
Year-over-year increase: 18.38%
Median list price: $219,000

7. Sarasota-Bradenton, Fla.
Year-over-year increase: 17.62%
Median list price: $241,000

8. Daytona Beach, Fla.
Year-over-year increase: 16.06%
Median list price: $179,900

9. Phoenix-Mesa, Ariz.
Year-over-year increase: 13.79%
Median list price: $165,000

10. Grand Rapids-Muskegon-Holland, Mich.
Year-over-year increase: 13.32%
Median list price: $137,000


By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Condo buyers frustrated in hunt for FHA mortgages

CHICAGO – Jan. 27, 2012 – Buying a condominium is getting trickier for anyone who wants to put down only 3.5 percent and have the government insure their mortgage.

The issue isn’t just the borrower’s financial wherewithal. It’s the building’s, and plenty of condos no longer get a thumbs-up from the Federal Housing Administration.

Since Feb. 1, 2010, condo buyers haven’t been able to secure unit-by-unit “spot” approval for FHA-backed mortgages if an entire building was not certified. Instead, the federal government set criteria to determine the financial viability of an entire building before deeming the project as FHA-approved, even if it had previously been certified. An approval lasts two years.

The number of rejected buildings is adding up, due to bad paperwork and bad balance sheets, as an increasing number of condo associations struggle with rentals, short sales and foreclosures. It is jeopardizing the plans of condo sellers who rely on the FHA’s stamp of approval as a marketing tool and condo buyers who either want or need an FHA-approved building.

The effects of those rejected buildings are likely to linger, particularly if more stringent downpayment requirements take effect for homebuyers, and could hamper any recovery of the housing market.

For the first nine months of 2011, the FHA’s share of the overall home purchase market was 37.4 percent nationally, but the share for condos would have been higher because FHA-insured loans are popular with condo purchasers, said Guy Cecala, CEO and publisher of Inside Mortgage Finance. “They have the most-used program out there,” he said.

Since Oct. 1, 38 percent of condominium communities that have gone through the certification process have been rejected by the FHA.

“It’s a critical year for buildings,” said David Hartwell, a Chicago attorney who represents condo and homeowner associations. “This is a whole new world that we live in now. I see more rejections than acceptances, and the reasons I see clients rejected aren’t quickly curable.”

For buyers like Kristy Fender, of Chicago, FHA certification is a must-have on her list, and not just because it lets Fender and her fiancé, Dan Harvey, make a smaller downpayment on a home purchase. She also figures that in approving buildings the FHA is doing the due diligence that she would otherwise have to do.

But the process has been much more complicated than Fender imagined, and she’s wasted a fair amount of her time. During the past few months that she’s looked at units in Chicago’s South Loop, she’s incorrectly been told that a unit can get spot approval and has looked at units that were listed as FHA approved, only to find out the certification had expired. Her real estate agent, Bette Bleeker of Prudential Rubloff, wound up routinely checking property listings against the FHA’s website of approved buildings.

“It’s been very frustrating,” Fender said. “There’s a lot of wishy-washy information out there.”

Fender and Harvey now plan to make an offer on a South Loop condo, but the offer will be contingent on the association getting the building certified for FHA financing. Bleeker has spoken with the building’s management company.

“If sellers were aware of it, they would certainly be more proactive with their management companies and not let their certification lapse,” Bleeker said. “There’s a whole education curve that needs to be done here, at the buyer level and the seller level.”

Many times, particularly in smaller buildings, it is a real estate agent or lender that informs an association that its certification has expired.

In addition to not knowing about the process, a lack of knowledge of the rules and the many gray areas within them is compounding issues for condo buildings. So, too, is not submitting all the required documentation. Many buildings are denied simply for missing or incomplete paperwork, which has led to the creation of a cottage industry of companies and attorneys that help shepherd associations through the process.

“It seems like there’s always something additional that (the FHA) wants,” said Steve Stenger, president of Condo Approval Professionals LLC. “Once it expires, FHA lending stops. Lenders can’t get case numbers; the FHA won’t insure them. That whole section of financing dries up.”

Among the specifics that the FHA looks at is that a building is 50 percent owner occupied, that no more than 10 percent of units are owned by one investor or entity, that no more than 15 percent of the units are 30 days past due on their monthly assessments, and that at least 10 percent of the association budget be set aside for capital expenditures and deferred maintenance. But some of those rules also come with a little wiggle room.

The FHA also looks at special assessments and pending litigation, two areas that can raise red flags.

“It’s really not that onerous,” said an FHA spokeswoman. “A lot of it is just basic information. We do have some that have been appropriately rejected because they are unstable.”

Financially, the 249-unit condo building at 1620 S. Michigan Ave. in Chicago is stable, said condo board President Jeanette Johnson. Nevertheless, she worries that the building won’t pass the test when its certification expires next month because of the high number of renters residing in units.

“I’m anticipating that the board will try to do the recertification, but I don’t know if we’ll qualify,” she said. “We’ll need to evaluate that before we spend any money. It’s definitely on the radar screen.”

If the building doesn’t qualify, Johnson said, it’s likely the board would look to change its declarations and bylaws, itself a difficult and lengthy process, to gradually reduce the number of renters allowed in the building.

The Community Association Institute believes the FHA’s requirements are having a “chilling” effect on the market, and the trade group has asked for flexibility in the guidelines.

“When it comes to the condo market, that is the gateway to affordable housing, and FHA should play a critical role in that,” said Andrew Fortin, a vice president at the trade group.

The FHA hopes to publish its condo certification rules in the Federal Register this year for public comment. Among the areas that may be open to additional flexibility is the requirement that no single entity can own more than 10 percent of a building’s units, a spokeswoman said.

But in the meantime, associations continue to grapple with the rules.

“There are new, more onerous guidelines to comply with, and there are definitely challenges,” said Jason Will, national condominium sales manager for Wells Fargo Home Mortgage. “The smaller or self-managed homeowners association might not be aware of the guidelines changes until they have a buyer. You actually have a real transaction in jeopardy.”

Some associations are deciding that the effort and the expenses tied to the application process, which can run into the thousands of dollars, aren’t worth the payoff and are letting their certifications lapse. In some instances, that position reflects a bias against what are thought to be lower-caliber buyers who need the FHA’s backing.

“It’s the owners that are trying to sell their units versus the owners that want to live in their units,” said Jonathan Bierman, a property manager at Forth Group, a condo association management company.

Many in the housing industry say that position is short-sighted, given consumer demand for FHA-backed mortgages.

“In an economy where it’s difficult to sell your condo, (FHA approval) is almost imperative,” said Kerry Bartell, a Buffalo Grove, Ill., attorney who represents homeowners associations. But, she noted, “We have a lot of clients that say they want to do FHA certification, and we say, ‘Don’t spend the money, because you’re not going to make it.’”

Copyright © 2012 the Chicago Tribune, Mary Ellen Podmolik. Distributed by McClatchy-Tribune News Service.


 

Foreclosures Post Big Drop, Reaching 2007 Levels

Foreclosure filings posted a 33 percent drop in 2011, falling to their lowest levels since 2007, RealtyTrac reports.

During 2011, one in every 69 homes received a foreclosure filing and 804,000 homes were repossessed — compared to 1.05 million homes that were repossessed during the foreclosure crisis peak in 2010, according to RealtyTrac.

Foreclosures have plagued many communities, putting downward pressure on overall home prices. In the past five years, more than 4 million homes have been lost to foreclosure.

So is the worst finally over for the housing market?

Not yet, analysts say. Banks took more time to process foreclosures last year, which explains some of the declines, housing analysts note. In fact, the average process time for a foreclosure rose to 348 days in the fourth quarter, up from 305 days one year prior.

RealtyTrac CEO Brandon Moore says that while he expects foreclosures to increase in 2012, he also expects foreclosures to  stay well below the 2010 peak. Refinancing programs, such as the government’s Home Affordable Modification Program, are helping more borrowers lower their payments and avoid foreclosure, Moore says.

Still, the biggest problems with foreclosures remains centered in certain areas, particularly where investors helped drive up home prices during the housing boom. For example, Nevada remains the No. 1 foreclosure hot-spot, in which one out of every 16 households received some kind of default notice during 2011. Arizona and California also are continuing to face some of the highest foreclosure rates in the country too, according to RealtyTrac data.

Source: “Foreclosures Fall to Lowest Level Since 2007,” CNNMoney (Jan. 12, 2012)

 

Miami area condo prices rocketing to recovery

The South Florida residential real estate market is on a tear – breaking per-square-foot records and setting a pace some believe is likely to continue for the foreseeable future.
As the year ends, Sofla Luxe in today's edition of the South Florida Business Journal, looks at some of the priciest recent deals, such as a $21.5 million condo on South Beach.
Ron Shuffield, president of EWM Realty, expects the price trend to continue.
“A decade ago, the rest of the world didn’t see Miami in the same light as they did other cities, like London, Paris or Caracas," he said. "Today, they have Miami high on their list or No. 1 on their list as a place to buy a second home.”


South Florida Business Journal by Jeff Zbar, SoFla Luxe. Friday, December 30, 2011

 

10 Cities Where List Prices Soared Last Month

DAILY REAL ESTATE NEWS | THURSDAY, DECEMBER 22, 2011
Median list prices nationwide have risen 4.05 percent on a year-over-year basis, according to November housing data of 146 metro areas from Realtor.com. Fewer cities are reporting year-over-year list price declines, “suggesting a growing optimism on the part of sellers about 2012 market conditions,” according to Realtor.com.

So where have prices risen the most in the last month? The following are the 10 cities that saw the largest median list price increases from October to November.

1. Central Fla.-Regional Statistical Area
Month-to-month median increase: 5.63 percent

Year-over-year increase: 14.27 percent

Median list price: $169,000

2. Phoenix-Mesa, Ariz.
Month-to-month increase: 4.46 percent

Year-over-year increase: 10.54 percent

Median list price: $164,700

3. Miami, Fla.
Month-to-month increase: 3.60 percent

Year-over-year increase: 29.50 percent

Median list price: $259,000

4. Tampa-St. Petersburg-Clearwater, Fla.
Month-to-month increase: 3 percent

Year-over-year decrease: -2.50 percent

Median list price: $144,200

5. New York, N.Y.
Month-to-month increase: 2.71 percent

Year-over-year decrease: -2.57 percent

Median list price: $379,000

6. Fort Myers-Cape Coral, Fla.
Month-to-month increase: 2.69 percent

Year-over-year increase: 21.63 percent

Median list price: $224,900

7. Iowa City, Iowa
Month-to-month increase: 2.50 percent

Year-over-year increase: 3.02 percent

Median list price: $204,900

8. Tucson, Ariz.
Month-to-month increase: 2.41 percent

Year-over-year increase: 2.41 percent

Median list price: $174,000

9. Sarasota-Bradenton, Fla.
Month-to-month increase: 2.13 percent

Year-over-year increase: 16.56 percent

Median list price: $240,000

10. West Palm Beach-Boca Raton, Fla.
Month-to-month increase: 1.86 percent

Year-over-year increase: 15.26 percent

Median list price: $219,000

By Melissa Dittmann Tracey for REALTOR® Magazine’s Daily News

 

South Florida could lead state housing comeback
Wednesday, December 7, 2011

Despite national and global headwinds, the state's real estate market is entering 2012 on an upward trend, according to three leading U.S. economists on Wednesday.
“Our state is in a mini-recovery,” said Florida Realtors    chief economist John Tuccilloat the state association's 2012 Real Estate & Economic Forecast Conference in Orlando. “Sales are trending up, listing inventories are falling, the supply of lender-related properties has stabilized, and we are seeing multiple offers on homes in some local markets.”
The outlook is rosier than a Tuesday report by CoreLogic, which showed Miami-Dade County barely squeezed out a price increase for home sales in October, while prices continued to drop in Broward and Palm Beach counties.
October sales of both existing condos and single-family homes in South Florida’s major urban centers jumped, with Miami condos spiking by 63 percent and home sales up by 41 percent, Florida Realtors reported previously.
Because of Florida's appeal to international buyers, Lawrence Yun, chief economist for the National Association of Realtors    , said he was optimistic about the outlook for South Florida, in particular.
“Don’t be surprised to see a gain in home prices in the Miami and Naples markets in the next 18 months,” he said. “From there, the recovery is likely to roll northward to Central Florida and then North Florida.”
An article in the Nov. 25 print edition of theBusiness Journal showed how some condo developers have been targeting the Brazilian market, which has helped fill a glut of condos in the Miami area.
Wells Fargo    senior economist Mark Vitner said the nationwide economy will continue to face challenges next year related to the European debt crisis, but as the U.S. economy continues to recover, Florida should be in a good position to see more economic recovery as well.
Yun said many Florida markets are showing sharp drops in inventories of homes for sale – a sign that demand is picking up and prices are stabilizing.
“That's a major change from just a year ago,” he said. “Buyers have stepped back into the Florida market.”

South Florida Business Journal

Miami Condominium Prices Rise for Third Consecutive Month

Miami, FL – Sales of existing single-family homes in the Miami Metropolitan Statistical Area (MSA) rose 41 percent in October, from 546 to 769, compared to October 2010, according to the 25,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) systems.   Sales of existing condominiums increased 63 percent, from 739 to 1,202, compared to October 2010.

Statewide sales increased 13 percent to 13,755 for single-family homes and 12 percent to 6,132 for condominiums compared to October 2010.  Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops rose 1.4 percent from the previous month and were 13.5 percent above October 2010, according to the National Association of Realtors (NAR).

“We are encouraged by the record-breaking performance of the Miami real estate market this year,” said Jack H. Levine, 2011 Chairman of the Board of the MIAMI Association of REALTORS.  “Rising demand and limited supply is yielding higher average and median sales prices, and we expect to see double-digit price appreciation in 2012.”

International Buyers Fuel Cash Transactions
The percentage of cash transactions rose to 64 percent, up one percent compared to the previous month.  Cash sales accounted for 43 percent of single-family and 77 percent of condominium closings.  Nearly 90 percent of international buyers in Florida purchase properties all cash.  Nationally, all-cash sales accounted for 29 percent of transactions, reflecting the stronger presence of international buyers in the Miami real estate market.

Condominium Prices Rise Again
The effect of short sales and foreclosures on the median and average sales prices for both single-family homes and condominiums has lessened particularly in some areas of the county.  In October, 57 percent of all closed residential sales in Miami-Dade County were distressed, including REOs (bank-owned properties) and short sales, compared to 61 percent in October 2010 and 60 percent the previous month.

In October, the median sales price for condominiums rose for the third consecutive month.  The median sales price of condominiums in October increased eight percent to $117,900. The median sales price of single-family homes decreased 12 percent to $174,600 from a year earlier.

“Miami is an enviable position, leading the nation in the real estate market recovery,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “International buyers continue to play a major role in fueling the local market strengthening.  Demand for local properties from domestic and foreign buyers will result in the local market outperforming the nation long into the future.”

Statewide median sales prices decreased four percent to $131,200 for single-family homes and increased nine percent to $87,800 for condominiums.  The national median existing-home price for all housing types was $161,600 in October, down 5.8 percent from October 2010.

The average sales prices for single-family homes in Miami-Dade County increased 6.5 percent, from $266,726 in October 2010 to $282,947 in October 2011. The average sales price for condominiums increased 14.3 percent, from $197,811 in October 2010 to $226,151 last month.

Inventory Continues Sharp Decline
The inventory of residential listings in Miami-Dade County has dropped 38 percent, from 24,501 to 15,127 active listings, in the last year. Compared to the previous month, the total inventory of homes dropped one percent from 15,264.  Since August 2008, existing housing inventory has decreased more than 65 percent, down from 43,100.

Total housing inventory nationally fell 2.2 percent to million at the end of October compared to the previous month.
 
Note:  Statistics in this news release may vary depending on reporting dates.

About the MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating more than 90 years of service to Realtors, the buying and selling public, and the communities in South Florida.  Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 25,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage.  It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide.  MIAMI’s official website is www.miamire.com.

Submitted by lynda@miamire.com on November 21, 2011 - 12:55pm

 

Fla.’s home, condo sales higher in Oct.

ORLANDO, Fla. – Nov. 21, 2011 – Florida’s existing home and existing condo sales continued to show gains in October, according to the latest housing data released by Florida Realtors®. Existing home sales increased 13 percent last month with a total of 13,755 homes sold statewide compared to 12,145 homes sold in October 2010, according to Florida Realtors.

“Statewide, both sales and prices are above where they were this time last year,” noted Florida Realtors Chief Economist Dr. John Tuccillo. “The monthly median prices have ticked down slightly for the past few months, but the overall trend continues to show gains year-over-year.

“These numbers, combined with reports from Realtors throughout the state, indicate that we’re seeing strong interest in purchasing Florida real estate from smart investors who are taking advantage of the current favorable market conditions,” Tuccillo said. “These folks tend to have a long-term outlook and plan to hold onto their property purchases for a while.”

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales in October; 12 MSAs had higher existing condo sales.

The statewide median sales price for existing homes last month was $131,200; a year ago, it was $136,600 for a decrease of 4 percent. According to analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in September 2011 was $165,600, down 3.9 percent from a year ago, according to NAR. In Massachusetts, the September statewide median resales price was $294,950; in California, it was $287,440; in Maryland, it was $228,879; and in New York, it was $217,600.

In Florida’s year-to-year comparison for condos, 6,132 units sold statewide in October, a 12 percent increase over the 5,473 units sold in October 2010. The statewide existing condo median sales price last month was $87,800; a year earlier, it was $80,500 for a 9 percent gain. The national median existing condo sales price in September was $163,800, according to NAR.

“The latest unemployment figures indicate that Florida’s jobs outlook is improving, mortgage rates remain at historical lows and buyers are able to consider a variety of housing options at affordable prices in communities across the state,” said 2011 Florida Realtors President Patricia Fitzgerald, manager/broker-associate with Illustrated Properties in Hobe Sound and Mariner Sands Country Club in Stuart. “This is a great time to consult a local Realtor® about homeownership opportunities in your local housing market.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.07 percent in October, down from the 4.23 percent average during the same month a year earlier. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Related: NAR: Oct. existing home sales rise, unsold inventory declines

© 2011 Florida Realtors®

Two real estate reports suggest Fla. rebound

CHICAGO – Nov. 17, 2011 – Two national studies – one from Realtor.com and one from Trulia – suggest that some Florida markets are poised for a real estate rebound.

“This is a positive trend for Florida,” says John Tuccillo, Florida Realtors chief economist. “While Trulia and Realtor.com aren’t completely accurate in home prices and sales – mainly because they base their numbers on only homes listed on their website – it’s useful to look at visitor behavior and note the trends. If Trulia says more visitors are doing a home search in the Miami market, for example, it probably follows that Miami is experiencing an upswing in demand.”

Realtor.com’s Top Ten Turnaround Report

In Realtor.com’s “Top Ten Turnaround Report,” six Florida cities were considered good bets for an upswing in sales. Realtor.com, which is owned by The National Association of Realtors®, says it created a formula to rank a city’s turnaround potential based on recent price appreciation, changes in inventory, median age of inventory, number of Realtor.com searches by visitors and area unemployment.

Realtor.com attributes the Florida cities’ success to year-over-year home price increases, reductions in inventory, lower unemployment rates and, in some cases, an upswing in international buyers.

Realtor.com’s turnaround list includes:

1. Miami: Ranked No. 1 in the report, Miami hit the top based on “a healthy inventory that is only half the size from a year ago,” a lower foreclosure rate than the national average, and an increase in condo sales.
2.  Orlando: While No. 2, Realtor.com says Orlando had more home searches than any other city when compared to the total number of listings. It also had a significant drop in the number of foreclosures.
3. Fort Myers-Cape Coral: Median prices in Fort Myers-Cape Coral have increased year-over-year, foreclosures are down, inventory is lower and foreign buyers are attracted to the area’s real estate prices.
4. Phoenix-Mesa, Ariz.
5. Fort Lauderdale: Inventory has decreased and prices have increased, says Realtor.com.
6. Sarasota-Bradenton: About one in 10 foreign buyers look in Sarasota-Bradenton for a home, Realtor.com says. Listing prices have increased and inventory has decreased.
7. Lakeland-Winter Haven: According to Realtor.com, the number of distressed sales has decreased significantly and prices have gone up.
8. Boise City, Idaho
9. Fort Wayne, Ind.
10. Ann Arbor, Mich.

Trulia’s Metro Movers Report

Trulia has debuted a new report that analyzed its home searches.

In one study, Trulia looked at the number of people who searched for housing in a city – including renters – and compared it to the number of city residents looking elsewhere for a home. An area with a high number of inbound searches and a low number of outbound searches, Trulia reasons, suggests an increased demand for housing.

According to the study, the North Port-Bradenton-Sarasota area had six times more searches by inbound people than outbound people, landing it in the list’s No. 1 position, but four other Florida cities also made the top 10 list:

1. North Port-Bradenton-Sarasota
2. Riverside-San Bernardino-Ontario, CA
3. Charleston-North Charleston-Summerville, SC
4. Fort Lauderdale-Pompano Beach-Deerfield Beach
5. Cape Coral-Fort Myers
6. West Palm Beach-Boca Raton-Boynton Beach
7. Fort Worth-Arlington, TX
8. Oxnard-Thousand Oaks-Ventura, CA
9. Las Vegas-Paradise, NV
10. Orlando-Kissimmee-Sanford
   
Trulia also looked at the Chicago and New York City markets to see where residents wanted to move. Three Florida cities ranked in the top 10 for Chicago residents: Tampa-St. Petersburg-Clearwater (No. 4), Cape Coral-Fort Myers (No. 6) and Orlando-Kissimmee-Sanford (No. 10).

In New York City, five Florida cities made the list: Miami-Miami-Beach-Kendall (No. 2), Orlando-Kissimmee-Sanford (No. 3), West Palm Beach-Boca Raton-Boynton Beach (No. 5), Fort Lauderdale-Pompano Beach-Deerfield Beach (No. 6) and Tampa-St. Petersburg-Clearwater (No. 7).

© 2011 Florida Realtors®

International tide lifts South Florida real estate market

MIAMI – Nov. 8, 2011 – South Florida is already the nation’s epicenter for residential real estate sales to foreign buyers, and experts said Monday that they expect those international sales to be even stronger in 2012.

“You have a unique opportunity for the next few years,” Moe Veissi, the president-elect of the National Association of Realtors®, told more than 200 people gathered for the 17th Miami International Real Estate Conference at The Biltmore Hotel in Coral Gables. “You are at the juxtaposition of the best global real estate market we’ve ever seen in this country.”

In 2007 and 2008, California led the nation in international sales, but Florida pulled ahead in 2009 and has been at the front of the pack ever since, accounting for nearly one-third of international transactions in 2011. Global buyers now account for $82 billion of residential purchases in the United States.

Of the international deals in Florida, 30 percent took place in the Miami-Miami Beach-Fort Lauderdale market, according to an international study by the National Association of Realtors. Distant runner-up was the Orlando-Kissimmee market with 14 percent of international sales in the state.

The Greater Miami area has transformed from a market with one of the largest inventory gluts in the nation to one where buyers, especially international buyers, are steadily chipping away at the backlog of unsold homes. The residential inventory for Miami-Dade fell from 25,769 last August to 15,405 this year, according to the Miami Association of Realtors.

“The absorption rate, especially in condos, has gone bananas,” said Veissi, who heads a South Miami real estate company. He served as president of Florida Realtors, the state Realtor organization, in 2002.

International buyers, especially from South America, see “real value” in South Florida real estate, he said. Veissi expects international transactions will be even stronger in 2012. “This is an excellent time to be an investor or buyer in Southeast Florida,” he said.

But the good news on the international front is tempered with home values that are still declining in some South Florida communities and a steady stream of foreclosed properties that continue to come on the market.

Still, “this will be a record-breaking year for the number of sales in the Miami market,” said Teresa King Kinney, chief executive of the Miami Association of Realtors.

To attract global business, Deborah Boza-Valledor, chief operating officer and chief marketing officer of the Miami Association of Realtors, suggested targeting international buyers through blogs or websites that provide buyers with real information about the market. “They can get listings from anywhere,” she said.

A new survey of the association’s members released Monday shows that Venezuela is still the leading international market with 15 percent of sales (compared to 28 percent last year), but Brazil is closing the gap, accounting for 12 percent of sales compared to 9 percent last year. Argentina, Canada and Colombia round out the top five markets.

One of the reasons local real estate agents are so enamored of international buyers is they are largely cash buyers. Eighty-five percent of Brazilians who bought property in Florida paid cash, 91 percent of Canadians, 90 percent of Western Europeans, and 88 percent of Venezuelans, according to the latest international report by the National Association of Realtors.

Foreign buyers also purchase higher-priced real estate. In August, the median sales price for a single-family home in the Miami-Dade market was $180,900, down 1 percent, while the median condo sales price was $118,800, up 13 percent, according to the Miami Association of Realtors. But the median sales price for a home purchased by an international buyer was $222,500.

Condos continue to be foreign buyers’ residence of choice with condominium sales accounting for more than 70 percent of purchases.

Eighty-three percent of the association’s members worked with at least one international client in the past 12 months, and 26 percent said international clients accounted for more than half of their business, according to the survey.

“That’s huge. There’s no other market in the United States that can boast these kinds of numbers,” said King Kinney. But she added, “No matter how much we have, we can always do more.”

The new survey also indicates that buyers from markets that weren’t a blip on the screen a few years ago are prospecting for South Florida properties. The survey reveals, for example, that buyers from India and China now each account for about 1 percent of international sales in the local market.

Copyright © 2011 The Miami Herald

Rental Market Posting Record Gain

Apartment rents and occupancies are nearing record highs as demand increases, particularly among former home owners who have faced foreclosure and are now forced to rent than buy. Nationwide, 1.5 million new rental households are expected in 2011 -- which would be a record number, according to Green Street Advisors.

By the end of the third quarter, 5.6 percent of apartments stood vacant, the lowest level since 2006, according to Reis Inc. Effective rents increased to $1,004 a month in the third quarter, which is a 2.3 percent gain from last year, Reis reports.

Rising rents are appearing even in the hardest hit cities, such as Orlando, Fla.; Detroit and Phoenix, that have faced some of the highest unemployment rates and biggest losses in housing values, The Wall Street Journal reports. Only Las Vegas rents declined compared to a year earlier, out of the 82 major markets that Reis analyzed.

A lack of supply in rental units to meet the increased demand is causing rents to rise. Reis reported that about 8,200 new apartments were added to the market in the third quarter, but that’s the second lowest number since the company began tracking that data in 1999.

Meanwhile, investors are seeing soaring profits from apartment buildings they may have purchased just a few years ago. In fact, due to rising rents and demand, some real estate companies are expected to post their highest gains since 2006 in property net income for this year and next, The Wall Street Journal reports.

Source: “Apartment Values Rise, as Do Rents,” The Wall Street Journal Online (Oct. 26, 2011)

 

Investors see bigger profits from rising rents

NEW YORK – Oct. 27, 2011 – Rental demand and prices continue to soar, and investors are cashing in. Rents are rising at a 5.17 percent annual rate – up from last year’s 4.72 percent rate. If rents continue to grow at their current pace, they won’t be too far behind the record-high reached in 2000 of 6.18 percent, according to Axiometrics Inc.

The rental market has added about 1.4 million new renters this year, some of whom were former homeowners who faced foreclosure or a short sale. Renters are increasingly showing an appetite for single-family homes owned by investors.

As such, the number of investors in the market is growing. Investors make up anywhere between 20 and 40 percent of monthly existing home sales, according to home-sale data. With home prices and interest rates low, more aspiring investors are jumping in. Nearly 60 percent of investors in a recent survey by Realtor.com considered themselves newcomers to real estate investing.

“This is a long-term investment,” says Greg Rand, CEO of OwnAmerica. “Rents are a steady return on your investment through the years, leaving you with an attractive asset when prices improve. And they will. The best profits in real estate accrue to long-term investors who take a long-term view.”

Source: “Rising Rents Improve Investors’ Return,” RISMedia (Oct. 20, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688


 

Foreigners’ sweetener: Buy house, get a visa

WASHINGTON – Oct. 21, 2011 – Sens. Charles Schumer (D-N.Y.) and Mike Lee (R-Utah) have proposed a new type of resident visa for foreigners who spend at least $500,000 to purchase real estate in the United States. The proposal calls for at least $250,000 to be spent on a residence, while the other $250,000 could be invested in other real estate. However, the entire amount must be a cash investment.

The provision, part of a larger package of immigration measures, would complement existing visa programs that permit foreigners to enter the country if they invest in new businesses that create jobs.

Supporters believe the initiative would help absorb a glut of housing supply – especially in markets like Arizona and South Florida, where foreign buyers have represented a rising share of home buying activity. According to National Association of Realtors® (NAR) research, 5.5 percent of Miami homes sell to international buyers.

International buyers snapped up $82 billion in U.S. residential property in the year ended in March, surging from $66 billion during the prior 12 months, reports NAR.

Source: Wall Street Journal (10/20/11) P. A7; Timiraos, Nick
© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

In the U.S., 2 housing markets and 2 directions
NEW YORK – Sept. 23, 2011 – In America, it’s starting to feel as if there are two housing markets. One for the rich and one for everyone else.

Consider foreclosure-ravaged Detroit. In the historic Green Acres district, a haven for hipsters, a pristine, three-bedroom brick Tudor recently sold for $6,000 – about what a buyer would have paid during the Great Depression.

Yet just 15 miles away, in the posh suburban enclave of Birmingham, bidding wars are back. Multi-million-dollar mansions are selling quickly. Sales this August were up 21 percent from the previous year. The country club has ended its stealth discounts on new memberships. And Main Street’s retail storefronts are full.

“We’re getting more showings, more offers and more sales,” says Ronni Keating, a real estate agent with Sotheby’s International.

Think of this housing market as bipolar. In the luxury sector, the recession is a memory and sales and prices are rising. But everywhere else, the market is moving sideways or getting worse.

In the housing market inhabited by most Americans, prices have fallen 30 percent or more since the peak in 2007. That’s a steeper decline than during the Depression. Some people have had their homes on the market for a year without a single offer.

Almost a quarter of American homeowners owe more on their house than it’s worth. Another quarter have less than 20 percent equity. About half of homeowners couldn’t get a mortgage if they applied today, says Paul Dales, senior U.S. economist for Capital Economics.

But then there is the other housing market, occupied by 1.5 percent of the U.S. population, according to Zillow.com. The one with outdoor kitchens and in-home spas; with his-and-her boudoirs and closets the size of starter houses. The one that is not local but global, with international buyers bidding in all cash. And where the gyrations of the stock market are cause for conversation, not cutting expenses.

In this land of luxury properties, the Great Recession seems over. Prices of $1 million-plus properties have risen 0.7 percent since February, according to Zillow. Prices of houses under $1 million have fallen more than 1.5 percent.

Normally, these two segments of the housing market rise and fall together. But now, they’re moving in opposite directions.

“Luxury is the best performing segment of the housing market right now,” says Zillow.com chief economist Stan Humphries.

After every recession since World War II, housing has led the economic recovery. Not this time. The renewed vitality in the comparatively small market for luxury homes is not enough to power a full-blown recovery. This bifurcation in the market is yet another reason Michelle Meyer, the chief economist at Bank of America Merrill Lynch, says her housing outlook is “increasingly downbeat.”

The phenomenon is not limited to real estate. You can see the same split in other gauges of the economy. Sales at Saks versus Wal-Mart. Pay on Wall Street versus Main Street. Corporate profits versus family balance sheets.

The divide is also making credit a perk of the rich. Mortgage rates are the lowest in decades. But what good are absurdly cheap rates if you can’t get a mortgage? The banks aren’t granting credit to anyone “who even has a smudge on their application,” says Jonathan Miller, founder of real estate consulting firm Miller Samuel. Applications for new mortgages languish at 10-year lows.

Across the country, prices on high-end homes fell after the subprime crash in the fall of 2008. The price on the $25 million mansion became $20 million, then $15 million. Such “bargains” are pushing more luxury buyers to commit to more deals.

There are other factors, too. In Detroit, a recovering auto industry is helping propel high-end sales. All those car executives who have helped turnaround the American auto industry used to rent. Now they are using their performance bonuses to buy homes.

Wall Street’s recovery has brought back the market for mansions in the Hamptons, on Long Island, where the number of closings has returned to the 2007 level, and for luxury co-ops in New York City. And because of social-network riches in Silicon Valley, twice as many homes have sold for $5 million or more this year than last.

But in the other housing market, an apartment tower built in 2007 in San Jose, Calif., recently converted to all-rental. The building had not sold a single unit. In Miami, a city that exemplifies the foreclosure epidemic, idled cranes dot the skyline. Unemployment shot up again this summer from 12 percent to 14 percent, a level not seen since the energy crisis in 1973. There are so many two-bedroom condos in gated communities with golf courses, private pools and rustic jogging paths that you can pick one up for $25,000, 66 percent off the price five years ago. But luxury condos priced at $1 million or more are selling as rapidly as they did during the boom.

“In the 20 years that I have been in South Florida real estate, I have never seen a greater divide between those who have and those who have not,” says Peter Zalewski, founder of the real estate firm Condo Vultures.

One big factor in the divide is foreign cash, at least in the world of property. For international buyers, U.S. real estate is the new undervalued asset, the new fire sale, and foreigners are big buyers of luxury properties. International clients bought $82 billion worth of U.S. residential real estate last year, up from $66 billion in 2009. In states like Florida, international buyers account for a third of purchases, up from 10 percent in 2007.

“Luxury properties are drawing buyers from all over the world,” says CoreLogic’s chief economist, Mark Fleming.

That’s true even in such seemingly all-American enclaves as Detroit. Step off a plane at the city’s futuristic new airport and the internationalization of the Motor City is obvious. All the signs – as well as the announcements on the public address system – are in both Chinese and English.

In the middle of the terminal sits a five-star Westin Hotel, the better to serve the global executive class that jets in and out as the U.S. auto industry regains its footing. Many of them are buying in Birmingham, where home values are up 3.1 percent this year, according to Zillow.com.

In Birmingham, local store owners say business is as good as it was during the boom years last decade. Chasta Fase, who owns Old World Olive Press, a boutique shop that sells $30 bottles of olive oil from all around the world says business “has been just awesome” since she opened her doors in November. And since April, she says, customers have been spending more than ever.

Real estate agent Keating says the same is happening to her sales. In June, she sold a lakefront mansion in Birmingham to a Russian entrepreneur. He had purchased a local steel company that he plans to turn around.

“They’re coming from all over,” says Keating, who for the past 30 years has sold most of the car barons their homes, from Roger Smith, the former CEO of General Motors, to former Chrysler CEO Bob Nardelli. “I don’t know who any of them are anymore.”

Copyright 2011 The Associated Press, Michelle Conlin, AP Business Writer.

15 Cities Where Listing Prices Are Rebounding
DAILY REAL ESTATE NEWS | FRIDAY, SEPTEMBER 23, 2011

Prices are rising in Florida: Florida cities have had the largest year-over-year increases in average list prices, according to the latest real estate data from Realtor.com. Florida cities make up 9 of the top 10 places for highest year-over-year list price spikes, based off of August data of 2.2 million listings in 146 markets.

Nationwide, the average list price is $320,325, up 2.36 percent year-over-year.

Here are the top 15 cities boasting the highest percentage of year-over-year increases in average list prices.

1. Miami
Average list price: $640,332
Year-over-year increase: 27.4%

2. Fort Myers-Cape Coral, Fla.
Average list price: $443,570
Year-over-year increase: 26.27%

3. Central-Fla.-RSA
Average list price: $405,809
Year-over-year increase: 19.41%

4. Punta Gorda, Fla.
Average list price: $267,066
Year-over-year increase: 16.37%

5. Macon, Ga.
Average list price: $193,520
Year-over-year increase: 15.98%

6. Sarasota-Bradenton, Fla.
Average list price: $466,785
Year-over-year increase: 15.86%

7. Naples, Fla.
Average list price: $713,087
Year-over-year increase: 15.13%

8. West Palm Beach-Boca Raton, Fla.
Average list price: $591,895
Year-over-year increase: 14.68%

9. Ocala, Fla.
Average list price: $193,360
Year-over-year increase: 12.07%

10. Lakeland-Winter Haven, Fla.
Average list price: $181,409
Year-over-year increase: 11.48%

11. Oralndo, Fla.
Average list price: $319,419
Year-over-year increase: 10.56%

12. Portland-Vancouver, Ore.-Wash.
Average list price: $314,537
Year-over-year increase: 10.52%

13. Boise City, Idaho
Average list price: $212,588
Year-over-year increase: 10.43%

14. Springfield, Illinois
Average list price: $174,537
Year-over-year increase: 9.12%

15. Shreveport-Bossier City, La.
Average list price: $211,414
Year-over-year increase: 8.34%

By Melissa Dittmann Tracey, REALTOR® Magazine Daily News

Luxury Real Estate Market Picks Up

DAILY REAL ESTATE NEWS | WEDNESDAY, SEPTEMBER 21, 2011
In luxury home markets, bidding wars are back and homes are selling quickly, serving as a stark contrast to everywhere else.

"Luxury is the best performing segment of the housing market right now," says Stan Humphries, Zillow.com’s chief economist.

Prices of $1 million-plus properties have risen 0.7 percent since February. Meanwhile, prices of homes under $1 million have fallen more than 1.5 percent, according to Zillow.

A rebound in Wall Street has helped fuel a thirst again for mansions in the Hamptons and on Long Island, as well as luxury co-ops in New York City, where closings are returning to 2007 levels. Also, a tech boom is driving sales in the luxury market in Silicon Valley, where twice as many homes have sold for $5 million or more this year than the year prior.

International buyers are a big part of the rebound in the luxury market, housing experts say. Foreign buyers purchased $82 billion worth of U.S. residential real estate last year--an increase from $66 billion in 2009. In Florida, foreign buyers now make up a third of all home purchases, up from 10 percent in 2007.

Source: “Luxury Properties Are Recovering. The Rest of the Housing Market? A Deep and Long Depression,” Associated Press (Sept. 21, 2011)

America's Millionaire Capitals

Where do this country’s most prosperous citizens hang out? How much money do they have? President Obama wants them to pay a bit more in taxes. But how much are they coughing up now?

Answers to these questions can be extracted from a little-utilized IRS database of income tax statistics. The file sorts tax returns by income range and by zip code.

Wary of releasing any data that might reveal something about individual taxpayers, the IRS slices its statistics into broad ranges. In this data set the top tier of income is $200,000 and up. Except, perhaps, to a politician looking for revenue increases, this scarcely qualifies a taxpayer as wealthy.

Slideshow: America's Millionaire Capitals

So I put a finer sieve on the database, zeroing in on communities where the average income within the 200K-and-up set is at least $1 million.

Result: a set of 130,400 tax returns from 64 hot spots of prosperity–suburbs, islands, parts of cities. The list of ritzy places ranges from Fisher Island, an enclave of yacht owners off Miami, to the Tribeca area of Manhattan, where wage slaves with seven-figure salaries have their chic loft apartments.

Ranked by income, the list of rich places starts with Fisher Island, at $3.2 million per high-bracket taxpayer. Then come Purchase, N.Y. at $2.2 million; two more New York City suburbs, New Vernon and Alpine, N.J., both at $2.1 million, and Atherton, Calif. at $1.9 million.

Residences on Fisher consist for the most part of ritzy condos with very stiff maintenance fees. You can’t get on the island except by boat. Mel Gibson and Oprah Winfrey have had places there.

I did something more with the data that the IRS doesn’t do: estimate net worths, using figures on dividend, interest and business income as starting points.

In estimated net worth, the richest five communities are: Fisher Island, at $57 million per high-bracket return; Alpine, at $28 million; Medina, at $26 million; Palm Beach, Fla., at $23 million, and the King’s Point/Great Neck area on Long Island, at $22 million.

The recent stock market swoon did some damage to net worths, but not as much as you might think. The moneyed set in this country hold a lot of bonds, too, and bonds have done well this year.

Where do the rich get their income? Just under half of the money coming in is from working: salaries, pensions, Social Security, IRA payouts. The upper-bracket folk in the 64 rich hot spots take in 52% of their income from property: stocks, bonds, real estate, oil wells and businesses.

For the average American taxpayer, property income is only 17% of the pie.

The fraction of income from property peaks at 85% for Fisher Island. Property accounts for 75% or more of income in two other Florida communities, Boca Raton and Key Largo, and in Charlottesville. It hits bottom in fast-paced New York. Tribecans get only 25% of their income from investments.

Tribeca, in other words, is for up-and-comers. Fisher Island is for people who made it a long time ago and are sitting on fat brokerage accounts.

By William Baldwin, Forbes.com
September 15, 2011

 

Rental market: Sweet spot in real estate

WASHINGTON – Sept. 8, 2011 – The rental market is continuing to heat up and can offer potentially big returns for buyers willing to jump into the landlord role.

For investors looking to take advantage of low record-reaching mortgage rates and big discounts on home prices, the opportunities are plenty. Rents are rising and demand is up too, partially due to the 4 million former homeowners who’ve faced a foreclosure and are now renters.

In response, more homes are turning into rentals: Nearly 35 percent of occupied homes were rented in 2010, which is a 33.8 percent increase from 2000, according to a recent study.

In more than 500 cities, demand for rentals has increased, with vacancies for rental housing reaching its lowest level since 2003, according to U.S. Census data. Plus, rents are on the rise too: Nationwide, rents increased 11.6 percent in 2010 to $1,320 a month, on average, according to Hotpads.com, a real estate research firm.

Investors are buying rental properties with the intention to hold onto it for a longer time too: On average, investors say they plan to hold onto the property for 10 years before selling, according to a survey by the National Association of Realtors®.

“Whereas leverage is dangerous when buying stocks, [buying a rental] can be a good long-term strategy with real estate,” real estate investor Marshall Sonenshine told Money Magazine.

Experts suggest the wisest move for investors is buying a property near their permanent residence and sticking to buildings with four units or fewer to avoid stricter financing requirements, such as larger downpayments and higher mortgage rates. Also, experts say rental income should cover at least the mortgage payments on the property as well as an extra 20 percent cushion to pay for any repairs, property management or get you through any vacancies.

Source: “Cashing in on Rental Property,” Money Magazine (Sept. 2, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

July 2011 Dade EHS: Miami Condominium Prices Rise in July

Miami, FL – Sales of existing single-family homes Miami Metropolitan Statistical Area (MSA) rose 47 percent in July, from 593 to 873, according to the 24,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) systems.   Sales of existing condominiums increased 33 percent, from 837 to 1,110, compared to July 2010.

Statewide sales increased 12 percent to 13,874 for single-family homes as well as 12 percent to 5,904 for condominiums compared to July 2010.  Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops decreased 3.5 percent from June but were 21 percent above July 2010, according to the National Association of Realtors (NAR).

“Miami is a hotspot for tourists, the entertainment industry, and global corporations, generating attention from around the world and boosting the local real estate market,” said Jack H. Levine, 2011 Chairman of the Board of the MIAMI Association of REALTORS.  “While local housing inventory has declined dramatically over the last three years, the local market still offers opportunities for all types buyers and competitive pricing compared to many U.S. and international markets.”

Cash Transactions
The percentage of cash transactions was unchanged from the previous month, 59 percent of closed sales were cash transactions.  Cash sales accounted for 39 percent of single-family and 74 percent of condominium closings.

Condominium Prices Rise
The effect of short sales and foreclosures on the median and average sales prices for both single-family homes and condominiums has lessened particularly in some areas of the county.  In June, 57 percent of all closed residential sales in Miami-Dade County were distressed, including REOs and short sales, compared to 65 percent a year earlier.

The median sales price of single-family homes in June decreased eight percent to $182,400 from a year earlier.  The median sales price of condominiums increased eight percent to $118,800.

“We continue to experience strong sales activity despite declining distressed inventory,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “July marks the first time since the boom that the median sales price has increased for condominiums.  This is a positive sign because it is indicative of demand for non-distressed properties, which will result in future market strengthening and rising home values.”

Statewide median sales prices increased four percent to $87,800 for condominiums and dropped one percent to $136,500 for single-family homes.  The national median existing-home price for all housing types was $174,000 in July, down 4.4 percent from July 2010.

The average sales prices for single-family homes in Miami-Dade County increased 9.3 percent, from $278,589 in July 2010 to $366,448 in July 2011. The average sales price for condominiums increased 17.9 percent, from $210,870 in July 2010 to $248,682 last month.

Local Housing Inventory Continues to Decline
The inventory of residential listings in Miami-Dade County has dropped 39 percent, from 25,595 to 15,697 active listings, in the last year. Compared to the previous month, the total inventory of homes dropped 3.4 percent from 16,252.  Since August 2008, existing housing inventory has decreased more than 64 percent, down from 43,100.

Total housing inventory nationally fell 1.7 percent at the end of July.

Note:  Statistics in this news release may vary depending on reporting dates.

Submitted by lynda@miamire.com on August 18, 2011 - 12:19pm

Miami-Dade Pending Home Sales Continue to Rise

Miami, FL – July cumulative pending home sales – including single-family homes and condominiums - in Miami-Dade County were 19 percent above what they were a year earlier, up from 10,113 to 12,014, and .7 percent above the previous month, up from 11,936, according to the 24,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) systems.

June Contract Activity
The total number of listings, including single-family homes and condominiums, that pended during the month of July increased 22 percent, from 2,759 in July 2010 to 3,359 last month.  Single-family home and condominium sales that pended during the month increased 25 percent and 20 percent respectively.

“Despite unnecessary restrictive mortgage credit and home appraisal practices, Miami continues to exhibit signs of a healthy and balanced real estate market,” said Jack H. Levine, 2011 chairman of the board of the MIAMI Association of REALTORS.  “Foreign buyers and investors have boosted the local market unlike any other in the state and the nation. A favorable lending and home appraisal environment would dramatically strengthen our market and improve consumer confidence.”

Cumulative Pending Sales on the Rise
In July, pending sales of condominiums performed better than that of single-family homes.  Pending sales of condominiums were 22 percent higher than they were a year earlier, up from 5,720, and are one percent above what they were the previous month, up from 6,909.  Pending sales of single-family homes were 15 percent above what they were a year earlier, up from 4,393 to 5,036, and .2 percent above the previous month, when pending single-family homes sales totaled 5,027.

“Record affordability is incentivizing buyers to take advantage of excellent opportunities to invest in primary residences, vacation homes and rental properties,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “Miami’s thriving rental market is a reflection of the strong demand that exists locally for housing and future rising home values.”

Nationally, the Pending Home Sales Index, a forward-looking indicator based on contract signings, decreased 1.3 percent to 89.7 in July from 90.9 in June, according to the National Association of Realtors. The index is 14.4 percent higher than the 78.4 index reported in July 2010.

Increased pending sales are an indication of increased future sales.  A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. 

Submitted by lynda@miamire.com on August 29, 2011 - 2:44pm

Genting Group is betting on Miami as future resort destination

The Genting Group may not be a household name in the United States when it comes to gaming, but it’s a safe bet that Chairman KT Lim intends to get there.

The company’s recent purchase of The Miami Herald property — with plans to create a $3 billion destination resort, hopefully with casino gaming — is Lim’s latest step to extend the family-owned company from a significant Asian player to a global high roller.

Since 2002, when he became chief executive of the company his father founded in 1965, Lim has cranked the conglomerate and its five closely-held, publicly-traded companies into a rapid expansion mode. He took the company to the Bahamas and Australia, although they have since exited those markets. In 2006, Genting became the largest casino operator in the United Kingdom. In 2010, the company opened Resorts World Sentosa in Singapore, a $5.5 billion destination resort that includes a Universal Studios Theme Park and a soon-to-come marine park.

Opening this fall is Genting’s first U.S. gaming facility: Resorts World New York at Aqueduct Race Track in Queens, a casino with 4,500 video terminals, restaurants and event space.

Also in the pipeline: prominent non-gambling ventures like Johor Premium Outlets, a premium outlet mall opening later this year in Southeast Asia, as part of a partnership with Simon Property Group.

While Genting continues to pursue global opportunities from Taiwan to Vietnam, developing a footprint in the U.S. remains a key part of Lim’s growth strategy.

“If you talk to Asians, everybody knows them. But outside of Asia up until recently they were probably unknown,” said Melvyn Boey, head of research for Bank of America / Merrill Lynch in Southeast Asia, who follows the Genting companies. “Last July they decided to take a more proactive role in exploring investments in the U.S. Miami is a natural extension of that. It’s part of their long-term aspiration to be one of Top 3 global gaming companies.”

Genting Malaysia Berhad, the subsidiary that purchased the Miami land, announced plans in 2010 to focus on international expansion. The move came as growth slowed at the company’s first signature resort property, Resorts World Genting, opened in the Malaysian Highlands in 1971.

The decision to spend $236 million for the 13.9 acre Miami property was a relatively easy one, says Lim, who knew he was getting one of the remaining prime waterfront development sites downtown. It helps that he has a fondness for South Florida dating from his first trip here 40 years ago as a college student in the United Kingdom. Plus, the area’s climate and international gateway location remind him of home.

“Personal exposure to a place always helps, especially when it leaves a good impression,” Lim said. “Miami is a place I understand. Downtown has really been cleaned up in the last 20 years. I’ve literally seen the transformation.”

When Genting built the Lucayan Beach Resort and Casino in Freeport in 1986 as part of a joint venture with the Bahamian government, the team was based in Miami. Then 11 years ago, Genting purchased Miami-based Norwegian Cruise Line and played a key role in turning around the brand. Genting still owns a 50 percent interest in the line.

Over the years, those and other business dealings have brought Lim to Miami at least 100 times. That familiarity primed Lim to move swiftly when McClatchy Co. in February canceled a long, drawn-out deal to sell the land adjacent to the Herald.

He quickly assembled a team of South Florida professionals to evaluate a handful of sites in the downtown area. On the list were the former Omni International Mall and the Park West site planned for the Miami World Center project just west of Biscayne Boulevard and the AmericanAirlines Arena. By mid-March, the team, minus Lim, flew to McClatchy headquarters in Sacramento to start the negotiating; the deal closed in late May.

Those who have worked with Lim and Genting say that’s indicative of the way they do business.

“Their style is to do very serious due diligence, but they are also capable of making relatively quick decisions,” said long-time Miamian Walter Revell, who helped Lim coordinate the South Florida team. Revell is a board member of Norwegian and has known Lim since Genting purchased the company. “These are smart people who do their homework. Right now they know more about Miami than many people in Miami. Genting has a global view but a local focus.”

It helps that unlike most U.S. publicly traded companies, Lim is both the top manager and the company’s largest shareholder. His family controls just under 50 percent of the Genting empire.

Lim admits the downturn in the real estate market spurred the Miami acquisition and the timing of the U.S. expansion. But that’s not the only attraction.

“It’s not just because it’s cheap,” he said. “I think the potential for the market turning around in Miami is better than anywhere else in the United States.”

That vision for Miami includes a plan to secure state legislative approval for Vegas-style resort casinos in Florida, something Lim and top execs at other gaming firms began lobbying for during this year’s session. Currently the only high-stakes gaming allowed in the state is on Indian reservation lands like the Seminole Hard Rock Hotel & Casino.

Without casino gambling, the development of the Herald site could take up to 20 years, Lim said.

“Perhaps it delivers less impact in terms of jobs created and economic benefits,” he said. “It’s not a question of not proceeding. Even without a casino, there should still be enough in the whole place to make it an enjoyable experience.”

If anyone can afford to take that kind of a long-term gamble, analysts say it’s Genting. The conglomerate has a combined market capitalization that fluctuates between $44 billion and $46 billion. Genting Berhad, the investment holding company, nearly doubled its profits in 2010 and saw revenues jump about 70 percent.

While Genting’s focus remains on leisure & hospitality, the company also has diverse interests including oil palm plantations, biotechnology, power plants and oil and gas exploration.

Genting Malaysia, which purchased the Herald, had $1 billion in cash and $700 million in net cash at the end of May, according to analysts reports. The company generates about $600 million a year in free cash flow, analysts estimate. Resorts World Genting earns a gross margin of 38 percent, one of the highest rates among casino operators in the world.

The Herald acquisition was an all-cash deal, but covering the cost of the project development is not expected to be any problem.

“They may get local debt for hedging purposes but they can easily finance it themselves,” Boey said. “The opportunity cost of capital is realistically pretty low. Any incremental investment immediately adds value to all shares.”

Yet, the announcement of the Miami deal was met with some concern by Asian investors, who feared Genting Malaysia was overextending its balance sheet.

Chi Wei Tan, an analyst with CLSA Asia-Pacific Markets, called those concerns “overblown.” She has the stock rated as “outperform” and calls it one of the most “attractively valued gaming stocks globally.”

“The key mitigating point is that Genting Malaysia did not overpay for the property,” Tan wrote in a recent note to investors regarding the Miami investment. “This means investors are largely neutral if Genting Malaysia hypothetically decides to exit Miami, as higher cash returns was not on the cards in the first place.”

While most companies have historically viewed a Las Vegas casino presence as the lynchpin of any U.S. gaming empire, Genting takes a different view. The company has been approached many times to take over or build a casino in Las Vegas, but the deals didn’t make financial or practical sense, said Christian Goode, senior vice president of development for Resorts World.

The closest Genting has come is investing about $100 million in MGM bonds during the recession, which sparked speculation that this could mark a strategy for entering the Las Vegas market and the equally high-profile gambling market of Macau, near Hong Kong. But Genting has since sold off that investment and nothing in Vegas is on the horizon.

“We just don’t think the long-term prospects of the market are rich enough in terms of growth,” Goode said. “As the proliferation of gaming in other locations continues, it’s going to get harder and harder to draw people to Las Vegas. I don’t think you can create a distinctive property there that hasn’t already been done.

“We love looking at places where we can find new opportunities,” he said. “As more and more new gambling markets open up, we don’t think Las Vegas is as critical as it used to be.”

Analysts say Genting’s approach has merit for a newcomer trying to break into the market. By setting up shop in New York and Miami, Genting can build a base of clients that already travels between the two destinations regularly. Capitalizing on the allure that exists for South Beach and Miami’s warm winter weather, Resorts World Miami could become an attractive weekend getaway for anyone in the Northeast.

“If you set it up properly, you could have a destination that really attracts a customer that wants a Vegas experience but wants the ability to get there easier,” said Brian McGill, gaming and lodging analyst with Janney Capital Markets. “Miami in itself is already an attractive destination; you’re just going to heighten that. You could easily take a potential trip away from Vegas. Rather than flying five hours to Vegas, I can get to Miami in two hours. There’s no question that’s a great way to start if you’re coming from outside the U.S. and trying to build a reputation.”

Goode says the company currently remains focused solely on Miami and New York, denying rumors that Genting is searching for additional properties elsewhere in South Florida, around the state and in other key U.S. markets.

“I don’t think they will stop in Miami,” Boey said. “There will be more assets built in the U.S. It will be more opportunistic, rather than specific target markets.”

Although Aqueduct is Genting’s first high-profile casino development in the United States, Lim is no stranger to U.S. gambling. Lim’s family-owned investment company, Kien Huat Realty, bankrolled the Mashantucket Pequot tribe’s 1991 development of Foxwoods Resort Casino in Connecticut with a $60 million loan; more than 20 U.S. financial institutions had turned them down. Kien Huat also later provided the Mashantucket Pequots with a $175 million line of credit.

In 2002, the company did the same thing for the Seneca Nation of Indians, loaning them $80 million to build the Seneca Niagara Casino and Hotel in Niagara Falls, New York. And the Lim family has also been supporting efforts by the Mashpee Wampanoag tribe to secure rights for gaming on tribal reservation land in Massachusetts.

Kien Huat in 2009 also became the majority shareholder of Empire Resorts, which runs a racino at Monticello Raceway in the Catskills.

But that investment threatened to turn into a stumbling block in Genting’s efforts to secure the rights to the Aqueduct project. During the bid process, Empire’s former Chief Executive Joseph Bernstein raised allegations of fraud and other improprieties by Genting executives.

The allegations were largely deemed unfounded by a vetting process conducted by the New York Lottery and the New York Racing and Wagering Board. The only violation found was that two Genting executives had acted without proper licensing relative to the operations of the upstate casino. The individuals were each fined $1,000 and Empire Resorts was fined $5,000.

A spokesman for the Racing and Wagering Board said no other investigations are pending. Bernstein declined to discuss his former employer.

Genting’s other key market is the United Kingdom, where it remains the largest casino operator. But the business hasn’t quite lived up to the potential Genting envisioned in 2006 when it made the acquisition.

“They got hit with a lot of bad luck,” said Warrick Bartlett, an independent gaming analyst based in the United Kingdom. “They probably paid too much money for it. A lot of the clubs were not designed to take on the smoking ban [enacted in Britain in 2007.]”

While Genting is still optimistic about the prospects for turning around the U.K. business, it doesn’t want the casino operations interfering with the bottom line performance of Genting Singapore, whose primary driver is Resorts World Sentosa in Singapore. The UK assets were transferred in 2010 from Genting Singapore to Genting Malaysia in a related party transaction that included a dramatic write-down on the asset value.

The destination resort, which bares some similarity to what Genting expects to build in Miami, last year drew 15 million visitors. This year Lim expects that number to reach 16 million. Universal Studios alone is expected to attract four million visitors. Currently 75 per cent of Sentosa’s visitors are foreigners. Hotel occupancy is at 79 percent and the average room rate is $232.

Between Genting’s Resort World Sentosa and its competitor Marina Bay Sands, owned by Las Vegas Sands, they boosted Singapore’s tourism by 20 percent. The two resorts posted revenues in 2010 just slightly less than the entire Las Vegas Strip and this year the performance is expected to eclipse Vegas.

The partnership at Sentosa has worked out well for Universal Studios, which was first approached by Genting in 2005 about participating in the project. Genting licenses the rights to the Universal brand, serving as the owner and operator of the project. Universal provides technical assistance.

“They’re an impressive company,” said Michael Silver, president of global business development for Universal Parks & Resorts. “They move quickly. They have access to a lot of cash. They seem to have very strong financing vehicles in place. They have a long-range view. I think it’s remarkable that they got this built in less than three years. Whether they can do the same thing in the U.S. where they have more stringent labor standards remains to be seen.”

Genting’s reputation for success in the tourism industry in Asia is what attracted Simon Property Group when the U.S. mall developer began seeking a partner with local market knowledge for a joint venture of a premium outlet center. The two companies joined forces in 2008 and broke ground last summer on the 330,000-square foot project that will bring more than 80 designer and brand name outlets. The first phase will open later this year. Located on the Malaysian peninsula between Resorts World Genting to the north and Resorts World Sentosa to the south, Johor Premium Outlets hopes to capitalize on cross-marketing with Genting’s existing hotel visitors and lure tourists from Indonesia and Thailand.

“There has been a good exchange of ideas and a mutual respect for the expertise that each company brings to the table,” said John R. Klein, president of the Simon Property Group premium outlets group. “We rely on our partners to teach us about the local market and specific characteristics of the consumer. Genting is a leader in tourism and as outlet centers are tourism and travel destinations, this is extremely important to the success of the project.”

That ability to capitalize on its Asian tourism base is an asset Genting also aims to bring to the Miami project. Lim envisions Miami as the gateway city connecting Asia, the United States and Latin America. He believes the Asian market is anxious for new destinations outside of California and New York for vacations and real estate investments. The key is getting direct flights from Asia to Miami.

“Florida can be the new California for the Asian market,” Lim said. “There’s a huge pent-up demand waiting to be released. We can be the lead factor to open up that flow. I’m confident this is going to be a transformational thing for Miami.”

By Elaine Walker @ Miami Herald

 

It’s not just economics: S&P’s political judgment

WASHINGTON – Aug. 9, 2011 – The S&P downgrade was more of a statement on the toxic political landscape in Washington than a comment on the nation’s ability to pay its bills. But S&P has its own checkered history. Just a few years ago, the company gave its top triple-A rating to some of the mortgage-backed securities that helped cause the Great Recession.

Could it be wrong again?


New York-based Standard and Poor’s was upfront about its focus on the political angle, citing the long standoff between President Barack Obama and Congress as a key factor in its unprecedented downgrade of the government’s credit rating.

“We think the debacle over raising the debt ceiling is one illustration of that,” John Chambers, head of S&P’s debt rating committee, said Monday. He said the political gridlock and S&P’s analysis of a rising U.S. debt burden in coming years prompted the downgrade.

Yet the credit-rating industry itself has been harshly criticized since the financial crisis of 2008-09, and S&P’s downgrade seems certain to increase congressional scrutiny.

The company was hardly revealing anything that wasn’t already well known by financial markets, politicians, analysts and probably most everyday Americans: The divisive political atmosphere in Washington has been leading to near-paralysis.

But is the rating agency qualified to make political as well as economic judgments?

“We didn’t need a rating agency to tell us that we need a balanced long-term approach to deficit reduction. That was true last week. That was true last year. That was true the day I took office,” Obama said Monday in his first remarks on the subject since the downgrade. “And we didn’t need a rating agency to tell us that the gridlock in Washington over the last several months has not been constructive, to say the least.”

But, he said, Washington has the power to fix its own political dysfunction. Furthermore, Obama asserted, “No matter what some agency may say, we’ve always been and always will be a triple-A country.”

Making its own judgments, Wall Street dumped stocks all day long. The Dow Jones industrials closed down 634.76 points – or 5.5 percent – in the first day of trading since the S&P downgrade. But investors sought refuge in Treasury bonds, a sign of confidence in the United States as a safe long-term investment despite S&P’s judgment. The price of Treasurys rose sharply, while yields, which move in the opposite direction from price, plunged.

Some lawmakers and economists have questioned whether the ratings agencies have the competence to evaluate the country’s finances, based on their own performance prior to the 2008-09 financial crisis.

S&P predicated its downgrade “on the theory that Washington might deliberately refuse to pay its debt because of a political impasse. But I don’t know what makes them experts at this,” said Rep. Brad Sherman, D-Calif., a member of the House Financial Services Committee.

“S&P’s main job is rating private issuers, and they have some expertise in that, although obviously they got it pretty wrong in mortgage-backed securities,” Sherman said.

“I find it interesting to see S&P so vigilant now in downgrading the U.S. credit rating,” said Sen. Bernie Sanders, I-Vt. “Where were they four years ago?”

Leading up to the financial meltdown in 2008, S&P and its sister credit-rating agencies gave coveted AAA ratings to some of the very mortgage-backed securities that later became nearly worthless, leading to staggering losses for many investors and funds. Also, the rating agencies had awarded top ratings to some of the financial firms that failed.

That gave them a black eye, and some analysts have suggested the S&P downgrade of U.S. debt was partly an effort to restore some of the lost confidence in the agencies’ ratings.

Stephen Hess, a former presidential adviser and a senior fellow emeritus in governance studies at the Brookings Institution, said S&P’s political discourse caught him by surprise.

“It suggests either that those of us on the outside either don’t understand what rating services do, or that there’s a new style there,” Hess said. “I felt I was reading a political judgment from an organization that I expected only gave financial judgments or economic judgments. It went well beyond the question of data.”

But Nigel Gault, chief U.S. economist with IHS Global Insight, based in Lexington, Mass., said he saw no problem with rating agencies delving into political matters.

“If they’re looking at Greece, for instance, they’ve got to consider whether or not the political system is able to take the action to stabilize debt,” said Gault. “You’re not looking at pure economics here because fiscal policy decisions are political decisions.”

Furthermore, Gault said, “there could be a default not because you can’t pay but because you choose not to pay. We got quite close to that.”

Neel Kashkari, a managing director at bond-fund giant PIMCO, said the recent budget deal made none of the hard choices that will be needed to bring the government’s budget closer to balance.

Kashkari, who earlier ran the government’s $700 billion bank bailout fund, told CNBC, “Until Republicans and Democrats show an ounce of backbone and do what’s in the interest of the American people, rather than what’s in their own immediate political interest, I can’t argue with S&P’s conclusion.”

Standard & Poor’s Financial Services is a subsidiary of The McGraw-Hill Companies, which publishes financial research and analysis on stocks and bonds. Tracing its roots back to the 1860s, S&P is also known for its stock index of 500 large U.S. companies.

The other two major credit-rating agencies, Moody’s Investor Service and Fitch ratings, also have warned of downgrades. But they have not joined S&P in doing so – for now.

The S&P action could lead to higher interest rates by making Treasury bills and bonds less attractive.

However, in practice, interest rates on Treasurys are already so low – and globally there are few safe-haven alternatives – that many analysts suggest it unlikely the downgrade would significantly affect the interest rates the U.S. government pays on its $14.3 trillion in debt.

The largest foreign holders of U.S. debt – China and Japan – have not signaled plans to dump their U.S. securities. Still, China strongly condemned America’s “addiction to debts.”

It was federal debt – U.S. bonds – that got downgraded, but so far stocks are taking the biggest hit.

Copyright © 2011 The Associated Press, Tom Raum. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

Fed to keep interest rate near zero for 2 years

WASHINGTON (AP) – Aug. 9, 2011 – The Federal Reserve said Tuesday that it will likely keep interest rates at record lows for the next two years after acknowledging that the U.S. economy is weaker than it had thought and faces increasing risks.

The Fed announced that it expects to keep its key interest rate near zero through mid-2013. It has been at that record low since December 2008. The Fed had previously only said that it would keep it low for “an extended period.”

Fed policymakers used significantly more downbeat language to describe current economic conditions. It said so far this year the economy has grown “considerably slower” than the Fed had expected. They also said that temporary factors, such as high energy prices and the Japan crisis, only accounted for “some of the recent weakness” in economic activity.

The more explicit timeframe is aimed at calming nervous investors. It offered them a clearer picture of how long they will be able to obtain ultra-cheap credit, and it was at least a year longer than many economists had expected.

But it didn’t seem to help on Tuesday. Stocks initially fell after the statement was released, possibly reflecting disappointment that the Fed did not announce another round of bond buying.

Fed officials met against a backdrop of speculation that they would say or do something new to address a darkening economic picture. The stock market has plunged and government data have signaled a weaker economy in the four weeks since Chairman Ben Bernanke told Congress that the Fed was ready to act if conditions worsened.

The economy grew at an annual rate of just 0.8 percent in the first six months of the year. Consumers have cut spending for the first time in 20 months. Wages are barely rising. Manufacturing is growing only slightly. And service companies are expanding at the slowest pace in 17 months.

Employers hired more in July than during the previous two months. But the number of jobs added was far fewer than needed to significantly dent the unemployment rate, now at 9.1 percent. The rate has exceeded 9 percent in all but two months since the recession officially ended in June 2009.

Fear that another recession is unavoidable, along with worries that Europe may be unable to contain its debt crisis, has rattled stock markets. The Dow Jones industrial average has lost nearly 15 percent of its value since July 21. On Monday, it fell 634 points – its worst day since 2008 and sixth-worst drop in history.

The tailspin on Wall Street was further fueled by Standard & Poor’s decision to downgrade long-term U.S. debt.

Bernanke didn’t speak publicly after Tuesday’s Fed meeting. The chairman this year made a historic change by scheduling news conferences after four of the Fed’s eight policy meetings each year, but Tuesday’s wasn’t one of them.

Later this month at the Fed’s annual retreat in Jackson Hole, Wyoming, Bernanke will likely address the weakening economy, the S&P downgrade and the market turmoil.

Earlier this summer, the Fed ended a $600 billion Treasury bond-buying program. The bond purchases were intended to keep rates low to encourage spending and borrowing and lift stock prices.

Copyright 2011 The Associated Press, Martin Crutsinger, AP Economics Writer.

 

Fewer Homes For Sale, Inventories Fall Sharply

DAILY REAL ESTATE NEWS | THURSDAY, AUGUST 04, 2011
High inventories of homes for sale have plagued many markets, but in a recent analysis of metro areas, inventories were found to be shrinking sharply during the second quarter, The Wall Street Journal reports.

About 2.34 million homes were listed for sale on the multiple-listing service by the end of June, the lowest level for that time of year since at least 2007, according to Realtor.com. What’s more, some inventory levels even reached their lowest levels since the housing crisis began five years ago, which has prompted some markets to even say their facing a shortage of homes on the market.

While a drop in inventories can often signal more demand -- and ultimately a boost to home prices -- some analysts aren’t so sure this signals a complete turnaround for the real estate market quite yet.

“While sales are picking up in some cities, analysts say the sharp decline in inventory also reflects the slow pace at which banks are processing foreclosures,” The Wall Street Journal reports. (The number of homes in foreclosure -- a backlog of 2.1 million -- is near a high.) Also, some sellers are taking their homes off the market due to low offers and waiting until they put it back on the market.

In its analysis, The Wall Street Journal found that of the 28 major metro areas evaluated inventory levels had dropped in all 28 -- except for three. What’s more, they found that inventories had dropped by double digits in 16 of those markets during the second quarter when compared to a year ago. For example, inventories dropped in Miami by 43 percent from a year ago; 30 percent in Washington, D.C.; and more than 20 percent in cities like Charlotte, N.C., Seattle, and San Francisco.

"We're in a shortage situation," Brett Barry, a real estate professional in Phoenix, told The Wall Street Journal. Phoenix has a four-month supply of homes listed for sale at its current pace. "It's a very artificial, 'Twilight Zone' kind of feeling, because we know there's a lot of homes out there."

Source: “Home Listings Fall But Woes Persist,” The Wall Street Journal (Aug. 3, 2011)

 

Pending Home Sales in Miami-Dade Continue Upwards Trend

Miami, FL – Total current cumulative pending home sales – including single-family homes and condominiums - in Miami-Dade County increased 15 percent compared to a year ago, from 10,366 to 11,936, and .23 percent, up from 11,860, compared to the previous month according to the 24,000-member MIAMI Association of REALTORS and the local Multiple Listing Service (MLS) systems.

May Contract Activity
The total number of listings, including single-family homes and condominiums, that pended during the month of May increased by 29 percent, from 2,718 to 3,508, compared to the previous year.

“International buyers increasingly are having a positive effect on the Miami real estate market, as sales continue to exceed last year’s levels, which were boosted by the homebuyers tax credit,” said Jack H. Levine, 2011 chairman of the board of the MIAMI Association of REALTORS.  “Current figures corroborate the healthy market activity agents are experiencing first-hand and the evident demand for local properties.”

Cumulative Pending Sales on the Rise
In the current month, pending sales of single-family homes performed better than that of condominiums.  Pending sales of single-family homes are 12 percent higher than they were a year ago, up from 4,490, and are 2.2 percent above what they were last month, up from 4,919.  Pending sales of condominiums are 18 percent above what they were a year ago, from 5,876 to 6,909, and a negligible .46 percent lower compared to last month, when pending condominium sales totaled 6,941.

“Affordability is another important factor contributing to rising pending and closed sales,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “Despite the sharp reduction in South Florida housing inventory, record affordability is motivating buyers, as substantiated by increased activity at lower price points.”

Nationally, the Pending Home Sales Index, a forward-looking indicator based on contract signings, rose 8.2 percent to 88.8 in May from a downwardly revised 82.1 in April, according to the National Association of Realtors. The index is 13.4 percent higher than the 78.3 percent reported in May 2010.

Increased pending sales are an indication of increased future sales.  A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. 

MIAMI Association of REALTORS
Submitted by lynda@miamire.com

 

Foreign buyers help housing market

MIAMI – July 6, 2011 – Foreign buyers are helping to stoke home sales in U.S. vacation hot spots decimated by the real estate crash, especially in southern Florida.

For the 12 months ending in March, 31 percent of Florida’s home sales were to foreign buyers, up from 10 percent in 2007, according to a survey by the National Association of Realtors.

In Arizona, 6 percent of sales in the same period were to foreigners. That was down from 11 percent last year but still up from 5 percent in 2007, the data show.

Foreign buyers are being enticed by low U.S. home prices, down 30 percent nationwide since peaking in 2006, and the weakened dollar, which makes their money go further. Since the start of 2006, the Canadian dollar has soared 18 percent against the U.S. dollar, while the euro has gained 22 percent, says data tracker Oanda.

U.S. home prices, meanwhile, have fallen far more than the national average in some places, down 55 percent from their peaks in Miami-Fort Lauderdale and Phoenix, and 36 percent in Los Angeles, says Zillow.com. Those are three of the most popular areas for foreigners searching for real estate on Trulia’s website, that company says.

Sales are so brisk in the Miami region now that more houses and condominiums could sell this year than in 2005, the peak year, says Ronald Shuffield, president of Esslinger-Wooten-Maxwell Realtors in Coral Gables, Fla.

“International buyers have been the fuel for the Miami recovery,” Shuffield says.

About 40 percent of buyers are international vs. less than 35 percent before the bust, he estimates. Many buyers are South American investors snapping up condominiums to rent out, says Peter Zalewski of market researcher Condo Vultures.

In the Phoenix region, there are at least 20 percent more foreigners in the market now than usual, says Don Hammer, manager of Realty Executives in Paradise Valley, Ariz.

One of those shoppers is retired hedge fund manager Peter Duerr of Austria. He’s planning to buy a home in Scottsdale, having sold one there in 2005. “The U.S. is a great buy right now,” Duerr says.

The largest share of foreign buyers, 23 percent, come from Canada, the Realtors’ survey found. China followed at 9 percent. The survey includes foreigners living abroad, those in the U.S. with long-term visas and new immigrants.

© Copyright 2011 USA TODAY, a division of Gannett Co. Inc., Julie Schmit.

 

Cash Buyers Continue to Dominate

For the fifth-straight month, cash buyers accounted for at least 30 percent of existing-home sales,the National Association of REALTORS® reported this week.

In May, all-cash buyers made up 30 percent of existing home sales, which compares to 25 percent in May 2010 and 12 percent two years ago, according to NAR.

Low prices from foreclosures are tempting cash buyers--who are mostly investors--and prompting them to snag deals. They’re turning many of their housing purchases into rentals and immediately finding quick profits, housing experts say.

"These are people who're ... getting back into the market because they see good value," says Stan Humphries, Zillow chief economist.

Cash buyers tend to dominate in cities where home prices have fallen the most and foreclosures are the most prevalent. For example, in Miami-Fort Lauderdale, 63 percent of first-quarter buyers paid in cash and in Las Vegas, which consistently boasts the highest foreclosure rate, cash buyers made up nearly 50 percent of first-quarter sales, according to Zillow.com.

Without cash buyers, "we would be in much worse shape than we are," says Jim Gillespie, CEO of Coldwell Banker Real Estate. "They recognize that this is the smartest time to buy." Home prices are 33 percent below the peak reached in 2006.

Source: “Cash Buyers Scooping Up Homes,” USA Today (June 22, 2011)

 

7 Cities Where Home Prices Are Rising

Nationally, median list prices are down 4 percent year-over-year, averaging $191,900, according to April housing data from Realtor.com of 146 markets. However, a handful of cities are bucking that trend and have seen list prices grow higher in the last year.

Here are seven markets that have seen its median list prices grow higher over the past year:

1. Fort Myers-Cape Coral, Fla.: Up 25.7% year-over-year for median list price
Median list price: $225,000

2. Miami: Up 8.64%
Median list price: $239,000

3. Shreveport-Bossier City, La.: Up 8.13%
Median list price: $173,000

4. Washington, D.C.-Maryland-Virginia-West Virginia: Up 5.99%
Median list price: $369,900

5. Columbia, Mo.: Up 5.07%
Median list price: $168,000

6. Peoria-Pekin, Ill.: Up 3.57%
Median list price: $144,900

7. Fort Collins-Loveland, Colo.: Up 3.48%
Median list price: $249,900

By Melissa Dittmann Tracey for REALTOR® Magazine

 

Miami Home Sales Continue to Trend Upwards in 1Q
   
Miami, FL – In the Miami Metropolitan Statistical Area (MSA), sales of homes – including existing single-family homes and condominiums – increased 71 percent in the first quarter of 2011, from 3,450 to 5,910, and 26 percent from the previous quarter.  This rise marks 11 consecutive quarters, since the third quarter of 2008, of increasing sales according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service.

Miami sales of existing single-family homes increased 47 percent in the first quarter compared to a year earlier.  The sales of existing condominiums in Miami spiked 91 percent compared to the first quarter of 2010.  Statewide sales of single-family homes increased 13 percent while that of condominiums increased 29 percent.

“First quarter figures indicate sales this year should surpass levels in 2005, which was the height of the real estate boom,” said Jack H. Levine, 2011 Chairman of the Board of the MIAMI Association of REALTORS.  “The Miami real estate market has generated much excitement and positivism in this strong first quarter, as international and domestic buyers continue to be attracted to our global city and the lifestyle and benefits it offers.” 

Median Sales Prices
The median sales price for single-family homes in Miami-Dade dropped 20 percent to $153,600 in the first quarter.  The median sales price for condominiums dropped 31 percent to $94,200.  Statewide, median sales prices dropped six percent to $123,600 for single-family homes and 16 percent to $80,700 for condominiums.

Short sales and foreclosures continue to have an impact on median and average sales prices for both single-family homes and condominiums especially in some areas of the county.

“Almost 50 percent of closed sales in the first quarter were bank-owned, said MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “These bank-owned properties are selling almost as quickly as they come on the market.  Currently, there is only a 20- and 30-day supply of bank-owned condominiums and single-family homes respectively in Miami-Dade County.  These rapid rates of absorption reflect the demand that exists for local properties.”

Inventory Levels
Total housing inventory in Miami-Dade County has decreased 26 percent from a year ago and 22 percent from the previous quarter.

Submitted by the MIAMI Association of REALTORS

 

Brickell mega mall

A massive new mega mall planned for downtown Miami has local shoppers ready to spend and local politicians seeing dollar signs.
The massive Brickell CitiCentre consisting of more than five towers will rise from the land bordered by Brickell on the East, Southwest 1st Ave. to the west and between Southwest 8th and Southwest 6th St.

The complex will be bigger than the Dolphin Mall’s 1.4 million square feet of retail space, bigger that Sawgrass Mills Mall — in fact about double the size of Sawgrass — at 4 million square feet.

”This is the biggest private works project in the U.S. this year

This is the biggest private works project in America,” said Miami City Commissioner Marc Sarnoff. “It’s going to bring Miami into the epicenter of retail shopping and that includes Coral Gables and even Aventura.”
The project will create 1,700 construction jobs every year for the four years it will take to complete construction. When it’s finished there will be 3,800 permanent full time jobs here.

And taxes will bring some $15 million to the city and county.

The City Centre will house not only retail shopping but office space, apartments or condos, and a hotel.

“I think that would be great. I don’t thank we have enough along Brickell,” said shopper Caline Assilan.

Restaurant operator Alex Pilat is hiring now, and sees a need for more workers and dollars signs. He just opened his sandwich shop right across from the site of the planned mega mall.

“It’s going to be excellent,” said Pilat. “It’s going to bring more people to Brickell and give people here more choices.”

“This is the biggest thing to happen in Miami in about 12 years,” Sarnoff said.


 

U.S. home sales by foreign buyers surge

WASHINGTON – May 19, 2011 – The U.S. continues to remain a top destination for foreign buyers as international purchases surged by $16 billion this year – one of the highest increases in recent years – according to the National Association of Realtors®’ 2011 Profile of International Home Buying Activity.

According to the survey, total residential international sales in the U.S. for the year ending March 2011 equaled $82 billion, up from $66 billion in 2010. Total international sales were split evenly between non-resident foreigners and recent immigrants, while combined total domestic and international existing-home sales in the U.S. reached $1.07 trillion.

Florida had 31 percent of total international transactions this year, the most of any state. California had 12 percent, Texas had nine percent, and Arizona rounded out the top four with six percent of international transactions.

“The U.S. has always been a desirable place to own property and a profitable investment,” says NAR President Ron Phipps. “In recent years, we’ve seen more and more foreign buyers coming here to take advantage of low prices and plentiful inventory. In addition to the advantageous market conditions, Realtors in this country have a global perspective and experience in working with clients from different cultures and real estate practices, helping them bring value to their international clients.”

Historically, foreign buyers have been attracted to property ownership in the U.S. for a number of reasons. U.S. homes are generally less expensive than comparable foreign properties, homes in this country are viewed as a secure investment, and the U.S. market offers rental opportunities and long-term appreciation potential.

More recently, Realtors have noticed new factors motivating foreign buyers. Many U.S. colleges and universities have a significant number of international students, and some foreign families are purchasing U.S. properties in college areas so their child has a place to live. Another source of international demand is foreign executives temporarily working in the U.S., some of whom prefer to purchase a residence instead of renting.

“Besides the strength of the dollar and the general economic trends in the U.S., international buyers are also recognizing the benefits of homeownership in this country, especially in the case of recent immigrants,” says Phipps. “Many foreigners perceive owning a home here as an important accomplishment in their efforts to become established in this country.”

Recent international buyers came from 70 different countries, up from 53 countries in 2010. For the fourth consecutive year, Canada was the top country of origin, with 23 percent of sales to foreigners. China was second most popular, with nine percent of international sales this year. Tied for third were Mexico, the U.K. and India. Argentina and Brazil combined reported an increase in foreign sales with five percent, up from two percent in 2010. The top five countries of origin accounted for 53 percent of international transactions in 2011.

The average price paid by an international buyer was $315,000 compared to the overall U.S. average of $218,000. However, 45 percent of international purchases were under $200,000. This price segment has grown significantly over the years, most likely due to overall price declines in the U.S., as well as the strengthening of some foreign currencies.

Almost every state had at least one international transaction in the past year. The four states with the heaviest concentration of international buyer activity have remained the same over the past five years.

Foreign buyers are primarily interested in three factors when deciding where to buy in the U.S.: proximity to their home country, convenience of air transportation, climate and location. Generally, the East Coast attracts European buyers. The West Coast remains popular for Asian purchasers. Mexican buyers are traditionally attracted to the Southwestern markets. Florida is most popular among South Americans, Europeans and Canadians.

Similar to last year, 28 percent of Realtors in 2011 reported working with an international client. Fifty-five percent served at least one foreign client, while the bulk of international transactions were handled by a small percentage of Realtors. Only eight percent of members obtained 50 percent or more of their transactions from international clients.

Sixty-one percent of foreign buyers purchased a single-family home while 36 percent bought a condo/apartment or townhouse.

In addition, 62 percent of international purchases were reported as being all cash. This percentage is significantly higher than all-cash purchases for domestic buyers, mostly due to the differences in international credit reporting standards.

Financing challenges continue to be a major hurdle for international buyers, with 32 percent reporting these as their reason for not buying a home. Many Realtors reported that their foreign clients faced mortgage financing issues, as well as problems with legal, tax and immigration laws.

To download the full report, visit NAR’s website.

© 2011 Florida Realtors®

 

Florida population: Census summary 2010

WASHINGTON – May 10, 2011 – Florida continues to grow. According to the 2010 Census, Florida’s population was 18,801,310 on April 1, 2010, an increase of 2,818,486 since April 1, 2000.

The 2000-2010 period was the fourth consecutive decade to see the Florida population grow by more than 2.8 million residents. Florida’s numeric population increase during the past decade was the third largest of any state, trailing only Texas and California. Its percent increase (17.6 percent) was the eighth largest in the nation.

County trends

Only Monroe and Pinellas counties saw a population decline over the decade, while 65 of Florida’s 67 counties logged an increase. Monroe lost 6,499 residents while Pinellas declined by 4,953.

Twenty-four of Florida’s 67 counties grew by more than 20 percent, and 52 beat the national growth rate of 9.7 percent.

Four counties grew by more than 50 percent – Flagler, Sumter, Osceola and St. Johns – while another eight – St. Lucie, Lake, Lee, Walton, Clay, Pasco, Wakulla and Hernando – grew by 30-50 percent. Growth has no clear geographic border, and Florida’s rapidly expanding counties can be found throughout the state, on both coasts and in the interior.

Only six counties grew by less than 5 percent since 2000: Hardee, Gadsden, Madison, Escambia, Monroe and Pinellas.

More than half of the state’s total population growth occurred in eight counties. In terms of numeric population growth, the largest increases occurred in counties located in central and south Florida. Orange, Miami-Dade, Hillsborough, Palm Beach and Lee each grew by more than 150,000 residents during the decade. Three other counties – Broward, Pasco, and Polk – grew by more than 100,000.

In contrast, thirty counties grew by less than 10,000 residents during the decade.

City trends

Florida is highly urbanized. More than 94 percent of Florida’s population lived in metropolitan areas in 2010, and the state’s population growth over the decade was slightly faster in metro areas. Approximately 55 percent of Florida’s residents currently live in incorporated cities and towns, compared to less than 50 percent in 2000.

Cities and towns show much more variation in population growth rates than counties do. Of the 411 incorporated places in Florida, 16 more than doubled in size between 2000 and 2010; 24 grew by 50-100 percent; 63 grew by 25-50 percent; 165 grew by less than 25 percent; four had no population change; and 130 lost population.

Nine new cities and towns were established during the decade and one (Cedar Grove) lost its official status as an incorporated place.

© 2011 Florida Realtors®

 

Cheaper to Buy Than Rent? In Most Cities, 'Yes'

Americans in 39 of the country’s 50 largest cities are finding it’s cheaper to buy a home than rent one, according to Trulia’s second quarter Rent vs. Buy index. In its index, Trulia compared the cost of buying and renting a two-bedroom apartment, condo, or town home in the 50 largest cities in the country.

When compared to the previous quarter, buying a home has become even more affordable than renting. Trulia found last quarter that in 72 percent of the cities it was better to buy than rent, but this quarter the number has grown to 78 percent of the cities studied.

Rising rents, falling home prices, and low mortgage rates have made home ownership make more financial sense in most areas of the country, according to Trulia.

"With home prices nearing a double dip and more foreclosures expected to flood the housing market over the next two years, the decision between renting and buying a home across most of the country has clearly moved in favor of buying," said Ken Shuman, Trulia's spokesperson, in a statement.

The cities where renting was a less costly option than home ownership were in New York, Fort Worth, Texas, and Kansas City, Mo.

Where It’s Cheapest to Buy vs. Rent

The following is a list of the top 12 cities where it’s cheapest to buy a home than rent.

1. Las Vegas
2. Phoenix
3. Arlington, Texas
4. Fresno, Calif.
5. Miami
6. Mesa, Ariz.
7. Jacksonville, Fla.
8. Sacramento, Calif.
9. Detroit
10. Omaha, Neb.
11. San Antonio
12. El Paso, Texas

Source: “Trulia Reveals Trend Towards Homeownership Where Affordability to Buy Versus Rent Extends to Almost Four in Five Major U.S. Cities,” Trulia.com (April 28, 2011)

Bargain prices help reduce glut of foreclosures

WASHINGTON – April 27, 2011 – A wave of foreclosures is forcing down home prices in most major U.S. cities. But economists and real estate agents are noticing what they call a key first step for any housing recovery: a drop in the glut of homes for sale in markets hit hardest by foreclosures.

Low prices are leading investors to snap up foreclosed homes in Detroit, Las Vegas, Miami, Phoenix and Tampa. Those cut-rate sales are reducing prices in the short run. Yet they’re also thinning the supply of homes – clearing the way for higher prices in the long run.

For some buyers, the deals are now too good to pass up. A studio apartment on the Las Vegas strip that cost $500,000 at the height of the housing boom is now selling for roughly one-third that price. Half the homes listed in the Tampa Bay area are selling for less than $100,000, not far from some of Florida’s top Gulf Coast beaches.

Such sales have helped shrink the combined supply of unsold homes in those five cities by 13 percent over the past year, according to local listing data analyzed by The Associated Press. Home prices in each of those markets are at or below 2002 levels, according to the latest reading of the Standard & Poor’s/Case Shiller 20-city home price index.

“If we were to see several consecutive months of supply getting smaller, it would point to an improving housing market,” said Celia Chen, senior director at Moody’s Analytics. “Even if it is investors buying them, they are renting them out in hopes that prices in the next several years will rise.”

Economists caution that a second wave of foreclosures, those that have been delayed by banks and backlogged courts, could throw the housing market back into turmoil. And few see home prices rebounding before the end of this year.

Home prices fell from January to February in 19 of the 20 metro markets tracked by the Case-Shiller index. At least 10 major metro areas are at their lowest point since the housing bubble burst. The index, released Tuesday, is slightly above the level reached in April 2009, the lowest point since the downturn began.

Getting rid of foreclosures and other risky properties is necessary for the market to turn around. When foreclosures and distressed properties are sold, home prices fall.

But as the supply of cheap homes shrinks, prices stabilize. Homeowners who had put off moving because they didn’t want to sell during the downturn grow confident that they can fetch a decent price. That prompts more buying and selling. Prices rise more.

Most of the current foreclosure sales involve investors: Private equity firms; foreign and out-of-state buyers seeking vacation houses; individual investors hoping to rent out or quickly sell properties for a profit.

Many are scooping up cheap homes with cash, said Andrew Duncan, a Realtor who runs a Keller Williams franchise in Tampa. In March, 35 percent of previously occupied homes sold were bought entirely in cash, according to the National Association of Realtors.

“When the bargains do hit, there’s more than one buyer looking for that bargain,” Duncan said. “Buyers are losing out left and right when they bid because it’s just so competitive.”

Foreclosures have flooded the market in Miami. Three out of five homes sold there are foreclosures or short sales. (Short sales occur when lenders allow homes to be sold for less than what’s owed on the mortgage.) Such sales have helped lower the median home price by 19 percent in the past year, to $159,800 in March.

At the same time, the supply of Miami-area homes for sale has dropped nearly 24 percent. It would take just seven months to clear those homes at the current sales pace. That’s down from a 17-month supply just six months ago.

In Tampa, it would take just six months to clear the supply of unsold homes off the market. That’s down from about eight months a year ago and 25 months in January 2008. Detroit’s inventory of homes for sale has fallen 17 percent in the last year.

In Phoenix, the number of homes for sale has dropped nearly 10 percent over the past year. The median sales price of a single-family home sold last month was $118,500 - down more than 12 percent from a year ago.

The supply of homes in Las Vegas could be cleared in less than seven months at the current sales pace. That’s down from a 26-month supply in December 2007.

“It’s like a feeding frenzy when a home goes on the market now,” said Mike Shannon, a Detroit real estate agent who specializes in foreclosures. “We’re getting a few dozen offers on some homes in a matter of days.”

The thinning supply is due, in part, to a lull in foreclosures. They’ve dropped more than 56 percent in Tampa and nearly 64 percent in Miami. In those areas, the number of homes receiving an initial foreclosure notice has plummeted.

That could change quickly. Many banks are revisiting thousands of foreclosure cases. They’ve been spurred into action by federal regulators who have ordered reviews of how foreclosures were carried out over the past two years.

The logjam has been compounded in states such as Florida, New York and New Jersey, where a judge must approve foreclosures.

There are 1.2 million foreclosures expected this year nationally, according to foreclosure tracker RealtyTrac Inc., and the decline in foreclosure filings is only temporary, said Mark Vitner, senior economist at Wells Fargo.

“The problems are still there,” Vitner said. “There are fewer early-stage delinquencies, so we are moving in the right direction. But the slowdown in foreclosures is just drawing the process out.”
 Copyright © 2011 The Associated Press, Derek Kravitz and Janna Herron, AP business writers. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

March 2011 Miami-Dade PHS: Miami-Dade Pending Home Sales Continue to Rise

Miami, FL – Total cumulative pending home sales – including single-family homes and condominiums - in Miami-Dade County increased 18 percent in March compared to a year earlier, from 9,751 to 11,544, and 3.24 percent, up from 11,182, compared to the previous month according to the 23,000-member MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).

The number of single-family listings that pended in the month of February increased by 17 percent from 1,280 to 1,498 compared to the previous month and by 20 percent from 1,245 compared to the previous year.  The number of condominium listings that pended in February increased by 16 percent from 2,168 to 2,511 compared to the previous month and by 55 percent from 1,617 compared to the previous year.

“All market trends indicate continued growth for Miami-Dade County’s real estate market,” said Jack H. Levine, 2011 chairman of the board of the MIAMI Association of REALTORS.  “This is very positive for the local real estate market.  Increased pending sales reflect the existence of pent-up demand and should result in strengthening home values as distressed housing inventory continues to be absorbed.”

Pending Condominium Contract Activity on the Rise
In March, pending sales of condominiums outperformed that of single-family homes.  Pending sales of single-family homes increased a 10.1 percent compared to a year ago, from 4,345 to 4,782, and increased two percent from 4,685 the previous month.  Pending sales of condominiums in March increased 25 percent from the previous year, from 5,406 to 6,762, and 4.1 percent from the previous month, when pending condominium sales totaled 6,497.

“In addition to the strong impact of international buyers unlike in any other market in the U.S., our market is again experiencing multiple offers reminiscent of the real estate boom of the last decade,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “Buyers who are offering full and above asking price are still losing out to higher bidders, which is evidence of strong demand.”

Nationally, pending home sales increased in February with notable regional variations, according to the National Association of Realtors®.  The Pending Home Sales Index, a national forward-looking indicator, rose 2.1 percent to 90.8 based on contracts signed in February, from 88.9 in January.  The index is 8.2 percent below 98.9 recorded in February 2010.

Increased pending sales are an indication of increased future sales.  A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. 

MIAMI Association of REALTORS
Submitted by lynda@miamire.com on March 28, 2011

 

Investors, Foreign Buyers Cashing in on Market

With affordability at an all-time high, the number of investors and international buyers taking advantage of bargains has reached a record number in all-cash purchases — and some experts predict that number will only grow higher.

A record 33 percent of existing-home sales were made to cash buyers in February, the National Association of REALTORS® recently reported. The proportion of cash deals could hit 40 percent by the end of this year, predicts Thomas Popik, research director for Campbell Communications in Washington, which conducts monthly surveys of 3,000 real estate brokers.

"Lenders have only been willing to lend to the cream of the crop in terms of credit scores," says Walter Molony, an NAR spokesman. "As a result, you're seeing a depressed level of traditional buyers."

But it’s not just investors moving in: Many of these cash deals are also coming from a growing number of international buyers. About 55 percent of international buyers paid cash for their U.S. homes, according to an April 2010 report by NAR.

The Cash Buyer Advantage?
Cities where about half of all purchases were done with cash include Detroit, Miami, Las Vegas, and Phoenix, in which prices have dropped considerably and foreclosure rates remain high, says Oliver Chang, a housing market analyst with Morgan Stanley.

Short sales and foreclosures accounted for 59 percent of last year's cash sales, according to a report by Morgan Stanley.

"You buy the house at a discount with cash. Then you flip it almost immediately to the first-time home buyer who's using a mortgage, simply because they were not able to buy at the foreclosure sale," Chang says.

Lenders increasingly reject mortgage applications for foreclosed properties because appraisals are often too far below the agreed-upon price or the transactions take too long to close, says Popik.

With tightened lending standards, cash purchases can provide buyers with more leverage and allow buyers to close properties more quickly.

Mike Simmons Troy, a Detroit real estate investor, says that if a house is listed at $40,000 and a buyer offers $35,000 cash, "nine times out of 10, the bank will take the cash."

Source: “Cashing in on Bargains,” Detroit Free Press (April 10, 2011)

 

 

Vacation Home Sales on the Rebound

Some of the hardest-hit cities in the housing downturn were from vacation home areas, but now these areas are seeing a surge in sales.

Condo sales in Hawaii and Florida are inching upward, Housing Predictor reports. For example, in the first two months of 2011, existing condo sales in Oahu, Hawaii, increased nearly 21 percent and the median prices on these units jumped 7 percent higher than more than a year ago.
“We’re definitely seeing continual strengthening of the market as more buyers are taking advantage of low prices and low rates to buy second homes and vacation homes,” says Jeff Proster, president of Brookfield Homes in Hawaii.

Meanwhile, closed transactions of existing condos in Miami jumped 58 percent higher in February compared to a year ago.
“We are even seeing instances in certain neighborhoods with multiple offers above asking price,” says Jack Levine, the Miami REALTORS® chairman.
Florida has seen improvement in its sales across the state with sales jumping 29 percent on condos and 13 percent for single family homes. However, seven out of 10 sales in the state were either foreclosures or short sales. Half of all sales also were from cash buyers.

 

Source: “Vacation Home Sales Surge Higher,” Housing Predictor (March 23, 2011)

 

Celebrities' Worst Real Estate Mistakes
From asking an unrealistic sales price to buying too many homes, celebrities and their super-size homes aren’t immune to a sluggish real estate market.

Business Insider recently revealed some of the top real estate blunders that celebrities have made. Here are three:

1. Underwater with too many homes: Actor Nicholas Cage’s love for real estate ($33 million invested in homes) hasn’t been a smooth ride. He has several homes that were sold for way less than what he bought for and some that have fallen into foreclosure. Cage’s $1.7 million Newport Beach, Calif., home is listed for less than $1 million. His $15.7 million Rhode Island estate is on the market for nearly half what he paid--$7.8 million. After some IRS trouble in 2009 with one of his Louisiana properties, his two $3.5 million homes in New Orleans have been sold back to the bank for a combined $4.5 million. His $8.5 million home in Las Vegas sold for $5 million, and a $9.5 million Manhattan apartment sold for $7.5 million. But among his biggest real estate losses: His Bel-Air Tudor mansion, which was originally listed for $35 million, fell into foreclosure and is now listed at $10.5 million.

2. Unrealistic price tag: Singer Lenny Kravitz first listed his 6,000-square-foot, five-bedroom, seven-bathroom duplex in New York’s Soho for more than $17 million. Three years later, he dropped his asking price to about $13 million. With still no takers, he took the house off the market in 2006 and sank $1 million into renovations. In a down market, he re-listed the home but even higher at $19.5 million. After another three years sitting on the market, Kravitz’ real estate agents convinced him to drop the hefty price tag to $14.9 million, which led to singer Alicia Keys and Swizz Beats finally stepping in to buy the home last year.

3. Foreclosure: Singer Toni Braxton, a six-time Grammy winner, also hasn’t had much luck with real estate. She had a $2.6 million home in Henderson, Nev., fall into foreclosure and eventually sell for about $1 million. Braxton filed for bankruptcy last September after running up to $50 million in debt. Most recently, her $1.2 million home in Duluth, Ga., is now in foreclosure proceedings.

Source: “5 More Celebrity Real Estate Blunders,” Business Insider (March 19, 2011)

February 2010 Miami-Dade EHS: Miami-Dade Pending Home Sales Rise 22 Percent in February

Submitted by lynda@miamire.com on February 28, 2011 - 2:22pm

 

Miami, FL – Total cumulative pending home sales – including single-family homes and condominiums - in Miami-Dade County increased 22 percent in February compared to a year earlier, from 9,164 to 11,182, and 4.5 percent, up from 10,698, compared to the previous month according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).

“Current statistics for pending sales reflect the positive performance of the South Florida real estate market over the last few months,” said Jack H. Levine, 2011 chairman of the board of the MIAMI Association of REALTORS.  “We have seen year-over-year increase for pending sales for nearly one year.  Pending sales have also increased month-over-month 10 out of the last 13 months.”

Pending Condominium Contract Activity on the Rise
Contrary to recent trends, month-over-month pending sales of single-family homes in Miami-Dade County outperformed that of condominiums.  Still year-over-year sales of condominiums saw a larger increase than that of single-family homes.  Pending sales of single-family homes increased a 16 percent compared to a year ago, from 4,042 to 4,685, and increased 8.4 percent from 4,322 the previous month.  Pending sales of condominiums in February increased 26.9 percent from the previous year, from 5,122 to 6,497, and two percent from the previous month, when pending condominium sales totaled 6,376.

“Current pending sales trends are positive indications of future local sales,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “We continue to see strong demand from international and U.S. buyers.  Buyers from the Northeast, who have experienced a harsh winter season,  in particular are exhibiting heightened demand for local properties.”

Nationally, pending home sales decreased in January for the second straight month, according to the National Association of Realtors®.  The Pending Home Sales Index, a national forward-looking indicator, declined 2.8 percent to 88.9 based on contracts signed in January from a downwardly revised 91.5 in December. The index is 1.5 percent below the 90.3 level in January 2010.

Increased pending sales are an indication of increased future sales.  A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. 


MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating more than 90 years of service to Realtors, the buying and selling public, and the communities in South Florida.  Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 25,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage.  It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide.  MIAMI’s official website is www.miamire.com.

 

The 6 Most Vacant U.S. Cities

The recession and economic woes caused once-booming cities to never reach the potential that some builders had forecast in housing. Overbuilding during the housing boom era and some cities' high unemployment has left several cities across the country facing a high number of vacant homes that are blanketing their landscapes.

Forbes recently released a list of America’s Emptiest Cities, analyzing single-family and rental vacancy rates of the 75 largest metro areas across the country.

The top most vacant cities, according to the Forbes.com list are: (Note: The vacancy rates listed below are from the fourth quarter of 2010.)

1. Orlando
Home vacancy rate: 4.3 percent
Apartment vacancy rate: 23.6 percent

2. Las Vegas
Home vacancy rate: 5.5 percent
Apartment vacancy rate: 13.5 percent

3. Memphis, Tenn.
Home vacancy rate: 4.7 percent
Apartment vacancy rate: 16.1 percent

4. Riverside-San Bernardino, Calif.
Home vacancy rate: 6.4 percent
Apartment vacancy rate: 10.4 percent

5. Dayton, Ohio
Home vacancy rate: 3.3 percent
Apartment vacancy rate: 26.4 percent

6. Phoenix
Home vacancy rate: 3.4 percent
Apartment vacancy rate: 15.5 percent

Nationwide, the single-family vacancy rate ended the year at 2.7 percent while rentals were at 9.4 percent.

Source: “America’s Emptiest Cities,” Forbes.com (March 2011)

 

Foreclosures Post Biggest Drop on Record

The number of foreclosure notices filed in February declined 14 percent compared with last month, and foreclosure notices dropped 27 percent compared to last year at this time. That marks the largest year-over-year decline that RealtyTrac, a foreclosure tracking site, has ever recorded.

The number of U.S. homes in some stage of foreclosure fell drastically last month, reaching a 36-month low, RealtyTrac reports.

Initial default notices, scheduled foreclosure auctions, and homes repossessed by lenders all dropped in February, RealtyTrac says.

"Allegations of improper foreclosure processing continued to dog the mortgage servicing industry and disrupt court dockets," says RealtyTrac CEO James Saccacio. "The industry is in the midst of a major overhaul that has severely restricted its capacity to process foreclosures.

Lenders repossessed 64,643 homes in February, a 17 percent drop from January.

Initial default notices dropped 16 percent from January — and 41 percent from a year ago. What’s more, foreclosure auctions dropped 10 percent from last month and 21 percent from February of last year, RealtyTrac said.

Rick Sharga, a senior vice president at RealtyTrac, says the real estate market isn’t out of the clear quite yet. He expects foreclosure activity to likely spike again as banks resolve foreclosure paperwork issues.

About 2 million households are in foreclosure proceedings. In addition, about 5 million borrowers are at least two months behind on their mortgage payments.

States With the Highest Foreclosure Rates

The states with the highest foreclosure rates for the month:

1. Nevada (which has held the No. 1 spot for 50 consecutive months, with one in every 119 households receiving a foreclosure notice)
2. Arizona (one in 222)
3. California (one in 239)
4. Utah
5. Idaho
6. Georgia
7. Michigan
8. Florida
9. Colorado
10. Hawaii

Source: “Foreclosures Plunge 27%-Biggest Drop on Record,” CNNMoney.com (March 10, 2011) and“Foreclosure Activity Slows Sharply in February,” Associated Press (March 10, 2011)

 

Americans confident of real estate recovery

WASHINGTON – March 11, 2011 – The majority of America’s potential homebuyers and sellers – 68 percent – believe that the real estate market and property values will recover in the next year or two, according to a survey released by Prudential Real Estate and Relocation Services Inc. That’s up from the 47 percent in a similar survey conducted in April 2010, underscoring a more bullish outlook for the real estate market today.

In addition, 86 percent of Americans still believe real estate is a good investment, despite the recent market volatility.

Attitudes
The survey found that six in 10 respondents are more interested in buying real estate (58 percent); and 59 percent are optimistic about buying given the momentum of the economic recovery. And although the price of many Americans’ homes declined during the recession, 89 percent recognize they can now buy a house at a lower price.

The survey tried to determine why some buyers who want a home are not yet shopping. The top reason (77 percent) was a fear about selling an existing home, followed by concern about getting a fair price for the home (67 percent) and emotions (58 percent).

Sellers
For those who sold a home in the past year, 78 percent report satisfaction with the sale. Of these, 32 percent were very satisfied with the final price, and 46 percent were grateful they were able to sell given market conditions. A relatively small number (22 percent) were disappointed or resentful about the price they received for their home.

Buyers
Of the 45 percent of survey respondents looking to trade up, 64 percent want more space or property, 49 percent a nicer house and 41 percent a better neighborhood. Only 21 percent want to scale down, while 34 percent want a similar home.

The survey highlighted the importance of listing a home at the right price: 74 percent of buyers believe that many homes could meet their needs, making price a significant consideration; and 26 percent will pay top dollar for a home that specifically suits their needs. In setting the right price, however, sellers were split, with 53 percent wanting to price right at, or slightly below, market rate to attract more bids; but 47 percent wanting to price slightly higher than market and hoping some buyer will pay more.

Real estate agents
The majority of respondents high
lighted the importance of real estate agents in the process of buying or selling their home. Seventy-five percent said that an agent is very important or essential, with only 24 percent saying agents are helpful but not imperative.

The Prudential Real Estate Outlook Survey of 1,253 Americans between the ages of 25-64 in the market for buying a home was conducted Jan. 20-27, 2011.

© 2011 Florida Realtors®

 

2011 rebound: Prices low, investors back

NEW YORK – March 4, 2011 – Plenty of signs point to the housing market finally bottoming out and moving into rebound mode this year, experts say in a recent article in The Wall Street Journal.

Investors, who were burned when the housing bubble burst in 2006, are back on the market, betting on a rebound and snagging up houses and condos in all-cash deals.

What’s more, housing is at the most affordable it has been in decades nationwide — when home prices and average incomes are taken into account, according to analysts at Moody’s Analytics. The cost of a house is equal to about 19 months of income for an average family, which is at the lowest level in 35 years. (Prices generally average nearly two years of pay.)

“Pricing is down so much in some markets that when you analyze renting versus owning it makes much more sense to own,” Michael Larson, a real-estate analyst at Weiss Research in Jupiter, Fla., told The Wall Street Journal.

Housing prices likely will bottom in 2011, says Scott Simon, a managing director at the money-management firm Pimco in Newport Beach, Calif. While he expects housing prices to possibly drop another 5 percent, he says that is a small amount when some markets prices have dropped by half or more since housing prices started falling in 2006.

Source: “Why 2011 may be the end of the housing crash,” The Wall Street Journal (Feb. 27, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688


 

Forecolsure: Strategic Default?
POMPANO BEACH, Fla. – March 1, 2011 – She has a sales job with a six-figure salary. He owns a successful tech company. And they are in foreclosure.

But unlike countless other Americans faced with losing their homes, this couple could make the $5,200 monthly mortgage on the waterfront property in Pompano Beach that they bought for $585,000 in 2004. Foreclosure was their decision – not the bank’s.

They crunched the numbers: $525,000 outstanding on their first mortgage and a $245,000 second mortgage on a home now worth about $319,000. His business was way down, her company was laying off workers and other investments had tanked. It made no sense to hang on to their underwater home. So they stopped paying their mortgage and waited for the foreclosure notice. It came in October.

It is called strategic default – borrowers who have enough money to make their mortgage payments but do not. They owe so much on a home that is now worth so little, that they decide to walk away.

It is not an easy decision. But it is not the inevitable blow to their credit score that troubles some strategic defaulters. It is the ethical dilemma of refusing to repay a loan when they are able to and worrying about what the neighbors will think.

“It felt like such an awful thing to do,” the woman said, who spoke on the condition of anonymity. “I got a car loan at 14 and paid $35 a week until I paid it off when I was 16. “

How prevalent are strategic defaults?

Although the exact number is unknown, half the homeowners in a study conducted by the Federal Reserve Board walked away when they owed twice what their home was worth. A Palm Beach Post analysis of foreclosed homes purchased since 2006 found 72 percent – about 4,124 homes – are worth less than half of the original loan.

In the business world, strategic default is a common tactic – considered a savvy move for financially troubled companies. However, “consumers have been browbeaten and trained to believe that it’s not honorable to not pay your debts,” said Margery Golant, a Boca Raton attorney who represents the Pompano Beach couple in default. “Why should it be any different for consumers?”

Last year, Morgan Stanley walked away from a $1.5 billion mortgage on five buildings in San Francisco despite record-breaking profits in 2009. Real estate giant Tishman Speyer Properties strategically defaulted on $4.4 billion in loans on two housing developments in New York after the properties lost $2.2 billion in value. The company had billions of dollars in assets, including Rockefeller Center and the Chrysler Building, which it could have leveraged to meet its loan obligations.

Even the Mortgage Bankers Association, whose president chastised homeowners who strategically default for the “message” it would send to their “family, kids and friends,” dumped its Washington headquarters in a short sale. After working out a deal with its lender, the MBA sold the building for $41.3 million last year. In 2007, the group purchased it for $79 million.

Ethicist OK with decision

“No, it’s not wrong,” said Randy Cohen, author of the weekly Ethicist column in The New York Times. Although homeowners are emotionally attached to their property, a house is still an investment.

“I don’t understand why you would be asked to make a decision on this investment any differently than you would on any other,” Cohen said. “Why should homeowners be held to a higher ethical standard?”

In many strategic default cases, the moral imperative is self-imposed. Among the arguments: Walking away from a mortgage will depreciate your neighbors’ property values. If all underwater homeowners walked away, the housing market would crash.

“Most people considering strategic default come to me and want my permission,” said Ronald Kaniuk, a Boca Raton foreclosure defense lawyer. “People who cannot pay their mortgage are apologetic. For people who can afford their mortgage or can just barely afford their mortgage and see it as a losing investment, they want absolution.”

They should not get it, according to Luigi Zingales, an economist and professor at the University of Chicago’s Booth School of Business, who became embroiled last year in a debate over the morality of strategic default.

“When you borrow money you make a commitment to pay it back,” Zingales said. “If you walk away because it’s in your interest to do so, you are violating the letter and the spirit of the law.”

Zingales wanted to know why it had become so easy for upside down homeowners to walk away. The answer was simple.

“The stigma is very much a function of how many people do it,” Zingales said. “Once you think it’s socially acceptable, it becomes easier to do.”

Expect more defaults

But there are consequences, including the long-term health of the housing market, Zingales said. Zingales predicts we will reach a tipping point where getting rid of a bad investment outweighs the damage to neighbors’ property values and the borrower’s reputation. In other words, expect more defaults.

“We’re not there yet,” Zingales said. “Clearly this creates a tension in society.”

On one side are homeowners who did not lose their jobs or live beyond their means and are now struggling to make their mortgage payment. Next door are neighbors who have stopped paying their mortgages and are living largely free until they are booted from their homes. “It’s a legitimate resentment,” Zingales said.

“We never bought cars or jewelry,” the Pompano Beach woman said. The second mortgage they took out on their home went toward purchasing and renovating a condominium as an investment rental property. When her husband’s business lost its best client and her company began layoffs, they decided to get out from under all their debt.

There will be consequences. They will lose the $65,000 in loan payments. The lender could get a “deficiency judgment” to go after the couple for repayment of the defaulted loan.

Their credit score will take a hit, but at least with a strategic default they won’t be homeless.

After liquidating some assets and scraping together what they could, the couple bought a new house – down the street and nearly identical to the old house – for $353,000. They walked away from $770,000 in debt.

“It felt like such an awful thing to do,” she said. “When this is all over I’ll feel like I made a good choice.”

Copyright © 2011 The Palm Beach Post, Fla., Christine Stapleton. Distributed by McClatchy-Tribune Information Services

 

Brazilian buyers put the luxe in real estate

MIAMI – Feb. 22, 2011 – Fabiana Pimenta, a real estate agent for Fortune International, is sitting on a white leather sofa in the model apartment at Jade Ocean with the expansive ocean views and the Fendi decor, waiting to begin a tour of the Sunny Isles Beach building.

Pimenta, a Brazilian who moved to Florida to attend college, is entitled to a little breather. In January, she and her team, which includes her brother in Sao Paulo, sold 15 high-end South Florida condos – all to Brazilians.

At 2,100 square feet with three bedrooms and both ocean and city views, this is the type of unit that is particularly popular with Brazilian buyers, she says. Seven months ago, Pimenta sold the last Jade Ocean penthouse, a 5,000-square-foot unit, to a Brazilian for $4 million.

An ultra-wealthy crowd of Brazilian real estate buyers is creating a boomlet for local real estate agents and other businesses that cater to their tastes.

There have been so many Brazilian buyers at Jade Ocean that the touch-screen that unit owners use to summon the concierge, order food from the Epicure market across the street or schedule a spa appointment has been translated into Portuguese.

Also popular is the Casa Fendi package, complete with a platform bed, pillows, leather croc-embossed wall covering, sleek furnishings and lighting. Buyers can purchase it or another decor package, then come back in a few months to a totally equipped condominium.

“If I take potential buyers out, it’s rare that I don’t close a deal,’’ says Pimenta, whose specialty is the Brazilian market. “When they visit, they buy.’’

Maria Helena Abreu, who splits her time between Belo Horizonte and Brasilia where she works for the government, made her first trip to Miami in 10 years recently and she was on the hunt for a two or three-bedroom apartment.

Abreu, her husband Joao Batista and her daughter Isabel returned to Brazil last week without making a purchase, but they’re thinking seriously about a unit at Icon Brickell.

“Miami looks a lot like Rio,’’ says Abreu. “It has really developed since the last time I was here – for the better. It’s become a city I adore. The people are very friendly, the city is very beautiful, the beaches are great and the climate is wonderful.’’

Plus, she says, she has many Brazilian friends who have already bought condominiums here.

“Brazilians follow each other – the right crowd, the right families,’’ says Edgardo Defortuna, president and chief executive of Fortune International. About a quarter of the company’s new sales are to Brazilians.

Another thing the Brazilians like about South Florida is the sense of freedom and security they have. Many are used to having armored cars and bodyguards at home, say real estate agents, and they like to be able to work around Bal Harbour or SoBe without being recognized.

In addition to the beach, the climate and the shopping, interior designer Mirtha Arrarian says her clients like Miami’s location as a half-way point between South America and the art objects, antiques and fashion of European capitals.

These wealthy clients will fly in on their private jets just to celebrate a birthday. They like coming to the boat shows and taking in tennis matches at the Sony Ericsson Open. Art Basel is also a big draw.

It’s not unusual among her clients for a family to buy one unit for themselves and another for their kids or for their guests, she says.

Her high-end clients include entertainers, TV personalities, and entrepreneurs – mostly from Sao Paulo. “That’s where the money is,’’ says Arrarian, who runs MAS Interior Design.

Most of her Brazilian clients, she says, prefer the area of South Beach along South Pointe Dr. – the SoBe Riviera – and tend to buy units in the $7 million to $10 million range.

One client who recently bought a condominium there, she says, is eyeing a nearby vacant lot as an ideal site to build a tennis court, quarters for the servants and an area to park more cars.

As Arrarian talks, she also checks out the sophisticated offerings at Ornare, a Brazilian-owned kitchen, bath and closet showroom in Miami’s Design District.

“The dream of Brazilians is to have an Ornare closet,’’ says Arrarian who has just examined a selection of leather and bullhorn closet handles and matte lacquer closet doors. “Now they want to have them here too.’’

Claudio Faria, the director of Ornare’s Miami showroom, says the company works hard to cultivate the Brazil-Miami nexus. During Art Basel, for example, Ornare flew in 30 Brazilian architects.

As Faria, who is Brazilian, demonstrates a high-tech kitchen faucet set against a backsplash of rustic reclaimed wood, he says, “This is the exquisiteness of Brazilian design – the unexpected.’’

And he’s quite excited about the possibility of showcasing Brazilian design to not only the Brazilians buying real estate in Miami but also to the world.

“Brazil is an extraordinary country at an extraordinary moment,’’ he says. “For the first time Brazil has a real opportunity to present its style to the world. Now the world is watching us.’’

Investors also are taking advantage of the low real estate prices.

Brazilian businessman Ricardo Dunin moved to Miami 20 years ago when Brazil’s economy was going through a rough patch and he worried about security in his homeland. For a number of years, he made a good living here in real estate development but the real estate crash has meant a change in strategy.

While Dunin and his partners have more than 20 development projects underway in Brazil, these days he concentrates on buying and selling real estate in the United States.

Right now in Brazil, he says, “Whatever you do works.’’

The Brazilian investors in South Florida, Dunin says, are “playing the distressed arena.’’

“We’re all buying in the U.S. below replacement value,’’ he says. “These are moves of opportunity.’’

Last summer, he and his partners in Miami-based Lionheart Capital paid $120 million for 146 unsold units at the former 2700 North Ocean condo on Singer Island. It was the most expensive bulk condo sale in Florida over the last five years.

The former condominium building has been transformed into Ritz Carlton Residences, Singer Island.

“There’s never been a better time for Brazilians to buy in Miami,’’ says Pimenta. “About a year ago the Brazilian market really started to fly.’’

There’s been a confluence of events that favors real estate sales to Brazilians.

Their currency, the real, is very strong against the dollar, making U.S. purchases very affordable; the Brazilian economy is robust – putting extra money in people’s pockets; and real estate prices in Brazil are soaring but cratering in South Florida.

There’s one more element, says Peter Zalewski, a principal in Condo Vultures, a Miami real estate consultancy. “With the economy doing so well there’s this sense of optimism. There’s this talk of this being the Brazilian century. As people’s confidence level builds up, it’s only natural that they think of buying real estate outside their country.’’

Copyright © 2011 The Miami Herald, Mimi Whitefield. Distributed by McClatchy-Tribune Information Services.

 

More Cash Investors Snag Foreclosure Deals

Real estate investors are starting to re-emerge, and they’re eyeing bargains in foreclosures and coming with cash.

In the Chicago area, Jen Ortman, manager of the new Prudential American Heritage office, says that investors mostly are purchasing single-family home listings for $100,000 or less.

Other buyers are usually unable to take advantage of these bargain deals because they can’t afford taxes on the properties, which often are $7,000 to $9,000. Also, some of the homes have mold or other problems so buyers are unable to get financing to purchase the home, Ortman says.

"Investors can buy what others cannot because they have cash and don't need a bank to finance them," Ortman said.
The cash investors are stepping in to buy these bargain foreclosures with the intention to fix them up and flip them for profit.

Source: “More Foreclosure Bargains Are Being Sold to Cash Investors,” Chicago Daily Herald (Feb. 13, 2011)

 

Cities where it’s cheaper to buy than rent

MIAMI – Jan. 25, 2011 – It’s cheaper to buy a home rather than rent one in 72 percent of the 50 largest U.S. cities, according to Trulia’s rent vs. buy index, which compares the total cost of homeownership to the cost of renting.

“Since the start of the ‘Great Recession,’ many former homeowners have flooded the rental market,” Pete Flint, CEO of Trulia, said in a news release about the index. “Following the principles of supply and demand, renting has become relatively more expensive than buying in most markets.”

The index compares the median sales price of homes with the median rent on two bedroom apartments, condos, and townhomes that were listed on Trulia as of Jan. 10, 2011.

Here are the top 10 cities where it’s best to buy than rent, according to the index:

1. Miami
2. Las Vegas
3. Arlington, Texas
4. Mesa, Ariz.
5. Phoenix, Ariz.
6. Jacksonville, Fla.
7. Sacramento, Calif.
8. San Antonio, Texas
9. Fresno, Calif.
10. El Paso, Texas

Source: “Cheaper to buy than to rent in 72 percent of largest U.S. cities,” Inman News (Jan. 24, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688


Miami Home Sales Strengthen in December and Year-End

Miami, FL – The sales of existing single-family homes in the Miami Metropolitan Statistical Area (MSA) rose 18 percent in December, from 623 to 734, compared to December 2009 and 70 percent compared to December 2008 according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).  Sales of condominiums increased 29 percent, from 766 to 985, compared to December 2009 and 116 percent compared to December 2008.

Statewide sales increased four percent to 6,673 for condominiums and four percent for single-family homes to 15,550.   Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops rose 12.3 percent from November but were 2.9 percent below December 2009, according to the National Association of Realtors (NAR).

“Sales figures for December and for all of 2010 are very encouraging,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI Association of REALTORS.  “Increasing sales denote the demand that exists for local properties and show significant strengthening from where we were two years ago.”  

Year End 2010
Total closed sales of condominiums spiked 43 percent, from 6,854 in 2009 to 9,778 in 2010.  Compared to 2008, condominium sales increased 114 percent last year.  Total single-family home sales increased nine percent from 6,685 in 2009 to 7,308 in 2010 and 67 percent compared to 2008.

Short sales and foreclosures continue to have an impact on median and average sales prices for both single-family homes and condominiums especially in some areas of the county.

Median and Average Sales Price
In the Miami MSA, the year-end median sales price dropped a negligible three percent for single-family homes and 18 percent for condominiums when comparing 2010 to 2009.  Statewide the year-end median sales price dropped four percent for single-family homes and 15 percent for condominiums.  The national median existing-home price for all housing types was $168,800 in December, a one percent drop from December 2009.

The median sales price of single-family homes in December decreased 15 percent to $173,600 from a year earlier.  The median sales price of condominiums dropped 33 percent to $99,100.  Statewide median sales prices decreased 17 percent to $88,100 for condominiums and five percent to $133,100 for single-family homes.

The average sales price for total single-family homes in Miami-Dade County increased five percent, from $286,644 in 2009 to $301,020 in 2010.  The average sales prices for condominiums dropped eight percent, from $241,226 to 221,330.

“While we have seen the Miami real estate market improve overall, many local areas and neighborhoods are surging,” said 2011 MIAMI Association of REALTORS Residential President Ralph E. De Martino.  “Sales prices and volume are increasing in various cities throughout Miami-Dade County.”

Inventory Levels Continue to Drop
The inventory of residential listings in Miami-Dade County dropped 7.6 percent from 25,021 to 23,116 since January 2010, according to the SEFMLS. Compared to last month, the total inventory of homes dropped 4.8 percent.   Total housing inventory nationally fell 4.2 percent at the end of December.

MIAMI Association of REALTORS

 

U.S. has best employment outlook in 12 years

WASHINGTON (AP) – Jan. 24, 2011 – Industry economists say the U.S. economic recovery is gaining strength, with more firms expressing positive hiring plans than in over a decade.

A new survey from the National Association for Business Economics (NABE) finds that economists are more hopeful about overall economic growth, the job market and demand for companies’ products and services by many measures than they have been since the start of the Great Recession.

The survey found that business decisions are now “being driven by the fundamentals of an improving economy,” said Shawn DuBravac, an economist with the Consumer Electronics Association who analyzed the findings.

The quarterly survey includes the views of 84 economists for private companies and trade groups who are NABE members. The data are reported by broad industry groups. Many results are expressed as Net Rising Index, or NRI – the percentage of panelists reporting better outlooks minus the percentage whose outlook is bleaker.

The number of economists who saw hiring by their firms increasing over the next six months was 42 percent, compared with 7 percent who expected to lay off workers. The NRI of 35 was the highest in the 12 years that the question has been asked.

However, more layoffs were expected in the transportation, utility, information and communications sectors.

That optimism followed increased hiring by the economists’ firms during the quarter ended Dec. 31. About one-third of those surveyed said hiring had improved at their companies, compared with 6 percent who said workers were laid off. The NRI of 28 represented a 10-point increase over the previous quarter.

All major industry groups saw more demand for their products and services, the sixth straight quarter of positive results. Demand grew by slightly less than in the previous quarter, but has held relatively steady since last spring, the NABE said.

Eighty-two percent of the economists expected the nation’s economy to grow by two to four percent in 2011, up from 54 percent in October. The latest government data had the economy growing at a 2.6-percent annual rate in the July-September quarter.

Economists who saw their companies’ profits grow in the final quarter of 2010 outpaced those who saw margins shrink by an NRI of 21 percent – the largest spread since 2005.

Only 6 percent expected their firms to cut back on capital spending, the long-term investment that creates crucial demand for big-ticket manufactured items. Most expected to invest more in the next 12 months.

More than half of those surveyed said they were selling to overseas markets. Within that group, 97 percent said foreign sales were increasing or unchanged.

The survey was conducted between Dec. 17 and Jan. 5.
 Copyright © 2011 The Associated Press, Daniel Wagner, AP business writer.

 

Multifamily rentals: NAHB sees rising demand, insufficient supply

ORLANDO, Fla. – Jan. 13, 2011 – Post-recession job creation is creating increased demand by new renters for apartments. However, apartment developers are not responding to demand quickly enough due to trouble accessing credit. According to the National Association of Home Builders (NAHB), that will cause rents to increase and a likely shortage of available apartments in the next few years.

“Although we are forecasting construction of 133,000 new multifamily residences in 2011, that is far short of the 250,000 to 300,000 units that would be required to keep supply and demand in balance,” says NAHB Chief Economist David Crowe. “In addition, we have yet to make up for the insufficient number of new apartments that should have been built over the last two years.”

Multifamily developer Bill McLaughlin, an executive vice president of the Avalon Bay Company, a real estate investment trust headquartered in Washington, D.C., said he sees demand for apartments increasing, but notes that the cutback in multifamily development in 2009 and 2010 has resulted in a “woefully inadequate supply” of new multifamily rentals to meet the rising demand.

Private development firms bore the brunt of the constrained supply of capital, but even affordable rental housing is feeling the pressure.

“Affordable housing, which is primarily driven by the Low-Income Housing Tax Credit program, is rebounding,” says Robert Greer, president of Michaels Development Company. “Investors are slowly coming back into the market, and deals are getting done … which is good news. But the bad news is that given the depth of the current recession, more people than ever need affordable housing, and the demand far outstrips the supply.”

© 2011 Florida Realtors®


 

December 2010 Miami-Dade Pending Home Sales Increase 29 Percent

Miami, FL – Total cumulative pending home sales – including single-family homes and condominiums - in Miami-Dade County increased 28.8 percent in December compared to a year earlier, from 8,105 to 10,437, and decreased .6 percent, down from 10,495, compared to the previous month according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service (SEFMLS).  December marks the fifth consecutive month of increased pending home sales in Miami-Dade County.

“The Miami residential real estate market has experienced strengthening and stabilization through 2010, despite the expiration of the homebuyer tax credit and the typically slower holiday season, said Jack H. Levine, 2010 chairman of the board of the MIAMI Association of REALTORS.  “Rising pending and closed sales indicate evident demand for local properties.  We expect the local market to continue to improve as the economy and job markets recover and the inventory of distressed properties continues to be absorbed.”

Pending Condominium Sales Rise 40 Percent
Pending sales of condominiums in Miami-Dade County continue to outperform single-family homes.  In December, condominium pending sales increased a significant 40.5 percent compared to a year ago, from 4,394 to 6,173 and increased 1.3 percent from 6,094 the previous month.  Pending sales of single-family homes in December increased 14.9 percent from the previous year, from 3,711 to 4,264, and declined 3.1 percent from the previous month, when pending single-family home sales totaled 4,264.

Distressed Properties Impact Local Market
In Miami-Dade County, 82 percent of current pending residential sales are distressed.  Eight-one percent of single-family homes and 82.3 percent of condominiums are either short sales or REOs.

 “Current pending home sale statistics are indicative of what we’ve seen throughout the year, as Miami outperforms most of the state and the country,” said Oliver Ruiz, 2010 residential president of the MIAMI Association of REALTORS.  “Unlike anywhere else in the U.S., Miami is a top market for international buyers and investors from almost every region around the world.  International buyers continue to represent a huge market segment in Miami, and this trend is expected to go on long into the future.”

Increased pending sales are an indication of increased future sales.  A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. 

Source:

MIAMI Association of REALTORS

The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida.  Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 24,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage.  It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide.

 

Foreclosures Reach Record Highs in 2010

Foreclosures were big in 2010 and buyers eager to own them came out in record numbers, Foreclosure Deals, a news source, reports.
Experts are expecting foreclosures to climb even higher in 2011.
"We saw a lot more repossessions, but we also saw record numbers of home buyers at foreclosure sales," said James Foxx, business analyst for Foreclosure Deals. "Foreclosures are selling at rock-bottom prices, and they remain the best way for first-time home buyers or investors to find the best deals. I think it's clear that statistics for foreclosures in 2011 are going to look very similar to those for foreclosure filings 2010."
While in early 2010 foreclosures appeared to be dropping, experts said the problem was masked by government policies that set out to curb foreclosures. The policies provided increased funding for foreclosure education and gave lenders incentives for providing loan modification and refinancing for troubled home owners. But the new policies, experts said, only stalled foreclosures.
By April 2010, data showed foreclosures in the first quarter were 35 percent higher than in 2009. However, most of the increase was in bank repossessions and REO homes, the final stage of foreclosure. A slower growth rate occurred in new foreclosures listings coming onto the market.
Last year, metro areas in particular seemed to be hardest hit by an increasing number of foreclosures, with California, Nevada, Florida, and Arizona home to 19 of the top 20 foreclosure cities in the nation.
Source: “Foreclosure Deals; Foreclosure Filings 2010 Statistics Show No Shortage of Foreclosed Homes,” Real Estate Weekly News (Jan. 7, 2011)

 

Which Celebrity Do You Want Next Door?

Americans would like to live next door to Sandra Bullock in 2011, according to the fourth-annual Zillow.com Celebrity Neighbor Survey.

Cast members of the reality TV show Jersey Shore were named the least desirable neighbors.

The Obamas and Sarah Palin took spots on the top 10 lists of both the “most desirable” and the “worst neighbor” lists.

Here are Zillow’s most desirable neighbors for 2011:
·    Sandra Bullock
·    Sarah Palin
·    Ellen DeGeneres and Portia DeRossi
·    The Obamas
·    Connan O’Brien
·    Lady Gaga
·    Katy Perry and Russell Brand
·    Justin Bieber

Here are the least desirable neighbors:
·    The Jersey Shore cast
·    The Obamas
·    Sarah Palin
·    Kanye West
·    Mel Gibson
·    Charlie Sheen
·    LeBron James
·    Mark Zuckerberg

Source: Zillow.com (12/28/2010)

 

Census Shows 9.7% Jump in U.S. Population

The U.S. Census Bureau on Tuesday released the first results from the 2010 census. It showed there are 308.74 million Americans, an increase of 27 million or 9.7 percent since 2000.

About 13 million of the increase is new immigrants, while 17 million came from births by existing residents. Nearly 80 percent of the population growth was among minority families, with Hispanics registering the biggest gains.

Most of the population growth is in the South and West. The 10 fastest-growing states had average population gains of 21 percent. The states were:

1.    Nevada
2.    Arizona
3.    Utah
4.    Idaho
5.    Texas
6.    North Carolina
7.    Georgia
8.    Florida
9.    Colorado
10.    South Carolina

States with slower growth included Ohio, New York, and Illinois. Michigan was the only state that actually lost population.

Source: The Wall Street Journal and Time, Stephen Gandel (12/21/2010)

 

Forecast: Fewer foreclosures on horizon

WASHINGTON – Dec. 10, 2010 – U.S. credit bureau TransUnion predicted Thursday the number of delinquent mortgage accounts would drop by nearly 20 percent next year.

The number of delinquent accounts – those with payments 60 days past due – is predicted to fall to 4.98 percent by the end of 2011 from 6.89 percent at the end of 2009.

“This is a welcome contrast to the year-over-year increases of 54 percent between 2006 and 2007, 53 percent between 2007 and 2008 and 50 percent between 2008 and 2009,” TransUnion said in a press release.

Steve Chaouki, group vice president in TransUnion’s financial services business unit, said the decrease in delinquencies could be attributed to “a slowly improving unemployment picture and continued stabilization in housing markets.”

“While there is continued price pressure in many markets, we expect a rise in property values along with some stabilization of values in those states and markets hardest hit by the recession,” he said.

TransUnion said Nevada would see a 24.77 percent drop in its delinquency rate next year while Arizona’s rate would drop 24.27 percent. In Florida, the rate would drop 23.9 percent.

“Interestingly, the states projected to experience the greatest decrease in mortgage delinquencies – Nevada, Arizona and Florida – are the same areas expected to have the highest 60-day mortgage delinquency rates at the end of next year,” TransUnion said.

The states most in need of improvement, in other words, are expected to experience the highest rates of improvement.

Copyright © United Press International 2010


 

3Q Miami-Dade Existing Home Sales: Miami Condominium Sales Rise 43 Percent in 3Q
Submitted by lynda@miamire.com on November 11, 2010 - 2:33pm

Miami, FL – In the Miami Metropolitan Statistical Area (MSA), sales of homes – including existing single-family homes and condominiums – increased 21 percent in the third quarter of 2010 compared to the third quarter of 2009 and 73 percent compared to the third quarter of 2008.  This rise marks nine consecutive quarters of increasing sales according to the MIAMI Association of REALTORS and the Southeast Florida Multiple Listing Service.

Miami sales of existing sinagle-family homes decreased one percent in the third quarter of 2010 compared to a year earlier but were up 43 percent from two years ago.  The sales of existing condominiums in Miami surged 43 percent compared to the third quarter of 2009 and 105 percent from the third quarter in 2008.  Statewide sales of single-family homes decreased seven percent while sales of condominiums increased 15 percent.

“These figures reflect the stabilization of the single-family home market in South Florida and the overall demand that exists for local properties,” said Jack H. Levine, 2010 Chairman of the Board of the MIAMI Association of REALTORS.  “Local sales are now at near normal levels, and we expect the local market to continue to strengthen.”

Median Sales Prices
The median sales price for single-family homes in Miami-Dade in the third quarter of 2010 was $191,100.  The median sales price for condominiums was $104,600.  Statewide, median sales prices dropped seven percent to $135,200 for single-family homes and 21 percent to $84,000 for condominiums.

Inventory Levels
Total housing inventory in Miami-Dade County has decreased seven percent from a year ago and four percent from the previous quarter.

“We are encouraged by the performance of the local market in the third quarter,” said Oliver Ruiz, MIAMI Association of REALTORS Residential President.  “Inventory levels are again declining while there continues to be strong demand from international and U.S. buyers.  Single-family home prices have also stabilized and are rising in many areas.  Once the excess of the distressed properties is eliminated from the market, condominium median sales prices especially should begin to experience appreciation.”

About the MIAMI Association of REALTORS
The MIAMI Association of REALTORS was chartered by the National Association of Realtors in 1920 and is celebrating its 90th year of service to Realtors, the buying and selling public, and the communities in South Florida.  Comprised of four organizations, the Residential Association, the Realtors Commercial Alliance, the Broward County Board of Governors, and the International Council, it represents more than 24,000 real estate professionals in all aspects of real estate sales, marketing, and brokerage.  It is the largest local association in the National Association of Realtors, and has partnerships with more than 60 international organizations worldwide. 

 

Americans see housing recovery still far off, survey found

MIAMI – Dec. 8, 2010 – More than half of Americans surveyed last month said they expect a housing market recovery won’t happen until at least 2013, and revelations about robo-signers abusing the foreclosure process have contributed to their attitude, the leaders of two real estate websites said Tuesday.

“As if prospective buyers and sellers needed more to be concerned about, the robo-signing issue caused a ‘what’s next?’ fear to surface in the minds of consumers who, frankly, have lost faith in banks and their government to make good decisions,” said Pete Flint, chief executive officer of Trulia, which released the study Tuesday along with RealtyTrac.

The underlying problem with the languishing market, however, is unemployment, Flint said. If unemployment remains high – especially at rates like those in South Florida – the housing market cannot recover.

“We do see the housing market to continue a slow path to recovery, but at the end of the day it comes down to jobs,” he said.

Those who are employed now “are afraid to take the risk … on a long-term financial commitment because they’re afraid they may be next” to lose their jobs, said Rick Sharga, senior vice president of RealtyTrac.

The most recent figures for South Florida show that Miami-Dade’s unemployment level is 13 percent and Broward’s is 10.1 percent. Statewide, Florida’s unemployment rate is 11.9 percent.

The survey found that about 70 percent of renters said it would be at least two years before they would buy a property.

But some buyers aren’t waiting. Veronica Cervera, president of Miami-based Cervera Real Estate, said condo buyers are keeping her busy and she believes their actions indicate a more robust market than those surveyed realize.

“Money trickles down,” she said. “To me it’s a good sign when the people who have more purchasing power start spending. Then everybody starts making money.”

She said sales don’t compare to the boom, but that wasn’t a “real market.” But this year, she’s confident enough in sales that she’s hiring new staff. Her buyers are, in turn, buying furniture, installing flooring and hiring painters.

“There are signs that it’s going to continue to be a healthy market,” she said.

Epicenter

South Florida, already one of the most troubled housing markets in the country, also has found itself at the center of a scandal in the last few months that has led some lenders to halt foreclosures temporarily. Several law firms here are under investigation for possibly mishandling thousands of foreclosure documents.

The November survey of more than 2,000 people found that because of those paperwork problems, in which foreclosure documents may not have been properly reviewed or were fabricated, half of U.S. adults have less faith in lenders, banks and the government. Another 35 percent believe the robo-signing issue will delay the housing market’s recovery, although so far, the paperwork problems don’t appear to have led to many foreclosures being overturned.

Walking away

In addition, the survey found that more Americans are willing to walk away from their homes if they owe more than they are worth than were willing to do so six months ago. The survey showed 48 percent of homeowners with a mortgage would consider a strategic default, compared to 41 percent in May.

It is difficult to assess how many people whose homes have been repossessed to date actually chose that path, Sharga said.

More encouraging: Two-thirds of adults surveyed said if they had trouble paying their mortgage, they would consider asking their lender for a modification of the terms on their loan.

More than 2.8 million homes received foreclosure notices last year, Sharga said, a record number that is likely to be topped by the end of 2010.

Copyright © 2010 The Miami Herald, Nirvi Shah. Distributed by McClatchy-Tribune Information Services.

 

Fannie Mae, Freddie Mac give the ‘go-ahead’ to resume sales of foreclosed homes

WASHINGTON – Nov. 29, 2010 – Fannie Mae and Freddie Mac gave the go-ahead this week to restart sales of their foreclosed properties, which had been on hold since September when it was revealed that flawed or fraudulent court documents may have been used to repossess homes.

Brokers received memos Wednesday from the government-sponsored enterprises saying that the homes could once again be marketed and sales finalized on properties already under contract. Fannie Mae’s letter explains that evictions and lockouts are still suspended on its properties.

In South Florida, the move releases thousands of houses for sale that were removed from the market earlier this fall, leaving buyers and Realtors in limbo.

Brokers were encouraged in Fannie’s letter to contact buyers who chose to cancel delayed contracts to see if they are still interested.

“I’ve already sent e-mails to clients who opted out,” said Bill Richardson, managing broker for the Keyes Company in Boca Raton and president of the Realtors Association of the Palm Beaches. “I had numerous people put on hold, and some of them canceled because it was very uncertain when the auditing process would be done.”

A Lake Worth broker said she received a similar memo from Freddie Mac on Wednesday, but a Freddie spokesman said he could not confirm it today because too many people were off for the Thanksgiving holiday.

Amy Bonitatibus, spokeswoman for Fannie Mae, said the decision to move forward with the sales was made after a review of property acquisitions, including those handled by the Plantation-based foreclosure firm of David J. Stern.

Fannie Mae and Freddie cut ties with the firm last month after former employees, one of whom had been fired, gave sworn statements to state investigators about wrongdoing at the company such as forged signatures on foreclosure documents and the hiding of flawed files from auditors. The Stern firm is one of four so-called “foreclosure mills” in Florida under investigation by the state attorney general’s office.

“Fannie Mae remains committed to ensuring that borrowers are treated fairly in accordance with the legal process and to allowing new homebuyers to close on transactions in a timely manner,” Bonitatibus said.

But some homeowner advocates said there are still too many unanswered questions about whether foreclosures have been handled legally. Concerns about obtaining a clear title are legitimate, said Tampa-based foreclosure defense attorney Mark Stopa.

The foreclosure paperwork problems already have led at least one former homeowner to challenge his foreclosure in Pinellas County. The man’s home, repossessed in 2008 by Bank of America, has since been sold to a family who has had to hire an attorney to defend their title to the property.

“There are still legitimate questions about the validity of title to these homes,” Stopa said. “Unfortunately, too few people in positions of authority care. The fraud is there and we all know it, but too many people think it’s easier or better to ignore it than fix it.”

Fannie Mae and Freddie Mac own or guarantee about half of all U.S. mortgages, or 31 million home loans worth more than $5 trillion.

About 12 percent of Fannie Mae loans in Florida are delinquent, while Freddie Mac has 17 percent of its Florida mortgages in arrears.

The embargo on selling foreclosed properties likely added to last month’s slump of existing home sales, which dropped 12 percent in Florida compared to September and 21 percent compared to October 2009.

Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.

 

 

 

Economists forecasting 1M new Fla. jobs in 7 years

TALLAHASSEE, Fla. (AP) – Nov. 23, 2010 – Florida will gain at least a million new jobs over the next seven years, which is 300,000 more than promised by Governor-elect Rick Scott without the tax cuts and other changes he’s seeking, state economists predicted Monday.

While their long-term forecast remained rosy, the economists from the Legislature and Gov. Charlie Crist’s office were gloomier about the immediate future than in July when they last updated their economic estimate.

They now are forecasting unemployment rates will remain at or near 11.8 percent and the housing market will stay depressed for longer than anticipated. That’s expected to reduce state revenues, which may widen a $2.5 billion budget gap earlier predicted for the next budget year.

The outlook is much more optimistic beyond the next couple years. The state now has about 7.2 million jobs, but that’s expected to increase to at least 7.7 million by the 2013-14 fiscal year and to nearly 8.3 million seven years from now in 2017-18.

The economists foresee a rebound to pre-recession prosperity, but it’s going to take a bit longer.

“Our belief is that there is nothing that has changed about Florida, its attraction to other states and other countries and that we’re slowly heading back to that same pace,” said Amy Baker, coordinator of the Legislature’s Office of Economic and Demographic Research. “Over the long run there’s still significant growth in our forecast.”

The job growth is expected to come from that economic rebound even if the state does nothing more to stimulate employment.

Scott, though, has proposed property and corporate income tax cuts, state budget reductions and the repeal of government regulations to reach his more modest 700,000-job goal.

A spokesman for the Republican governor-elect did not immediately respond to an e-mail seeking comment.

The economists’ new forecast actually calls for slightly fewer jobs than the 8.32 million they had predicted in July for 2017-18.

They also said the unemployment rate will remain about 11.8 percent through the first quarter of 2011 before dropping to 11.6 percent. That’s a quarter later than previously forecast. As before, they still expect the jobless rate to finally drop below 10 percent in the third quarter of 2012. It’s expected to continue falling until it reaches 5.5 percent in 2019-20.

The state outlook is based on a
national forecast the economists made last week except for the housing market, which is worse in Florida due in part to a high foreclosure rate that keeps dumping more homes on the market.

“We are flat out No. 1 in terms of the shadow inventory we need to get rid of,” Baker said.

The state forecast will serve as the basis for a general revenue estimate due next month for use in Scott’s first budget request to lawmakers early next year.

The revenue estimate doesn’t include potential tax losses from the Gulf of Mexico oil spill. Baker said that won’t be factored in until some time after Scott’s Jan. 4 inauguration.
 Copyright © 2010 The Associated Press, Bill Kaczor.


 

Foreclosure expert predicts new wave of bank repossessions

MIAMI – Nov. 18, 2010 – The foreclosure slowdown initiated by banks will lead to a sharp drop in bank-owned properties and an increase in short sales in the short term, followed by a new wave of bank-repossessions, foreclosure investor Rich Meyer told a group of Miami real estate professionals this week.

Meyer, a veteran of Broward County’s courthouse foreclosure auctions, said the current halt in new foreclosure inventory would be temporary, and predicted a return to record-high bank repossessions by mid-2011.

“There’s a backlog of future filings,” said Meyer, who now teaches investors how to navigate the foreclosure world. “Once the litigation is settled, it’s going to be a wave.”

About 30 potential investors attended the Condo Vultures workshop, looking to hear about what the foreclosure freeze means for the hottest sector of South Florida’s housing market.

As the market for bank-owned homes, or REOs, dwindles, there will be more competition and prices will increase, Meyer told them. Banks are also likely to favor short sales over foreclosures in the near term, he said.

The workshop took place just a few hours after bank executives and real estate experts testified before the U.S. Senate Banking Committee in Washington about problems plaguing the foreclosure process.

During the hearing, the president of Bank of America’s home loan unit, Barbara Desoer, acknowledged that mistakes were made in the bank’s foreclosure processes, causing some homeowners to be foreclosed on while they were on track for a mortgage modification.

About 20 percent of Bank of America’s defaulting loans are in Florida, Desoer said.

The Congressional Oversight Panel released a report this week stating that the potential fallout from “foreclosure irregularities” could be significant.

“Banks may be unable to prove that they own the mortgage loans they claim to own,” it read.

“If such problems were to arise on a large scale, the housing market could experience even greater disruptions than have already occurred.”

Meyer acknowledged that the road out of the current foreclosure mess is likely to be particularly difficult in South Florida, which has one of the nation’s highest default rates.

“It’s going to get ugly and the banks have recognized that it’s going to get ugly,” he said. “And that’s why they’ve pumped the brakes on these foreclosures.”

Copyright © 2010 The Miami Herald, Toluse Olorunnipa. Distributed by McClatchy-Tribune Information Services

 

 

When selling a house, what about the ghosts?

ST. PETERSBURG, Fla. – Nov. 1, 2010 – Haunted houses take front and center stage during Halloween, but purported real-life cases can be an issue for home sellers at any time of the year.

Minnesota is the only state in the nation with a real estate law that considers the concept of ghosts. “But they don’t have to disclose,” says Walter Molony of the National Association of Realtors. “The rules pertaining to psychological stigmas, which is what paranormal activity falls under, are as clear as mud.”

In Florida, at least one Realtor – Karen West – wants state law changed to reflect greater transparency for stigmatized properties. West co-founded a paranormal research group, The Spirits of St. Petersburg.

Ghost skeptic Gary Posner agrees with West, but mainly because it’s better to know the stories before moving in, even if they’re not true. He says that home buyers could start to believe ghost stories once they occupy a home reported to be haunted.

“Every little creak and bump becomes a ghost, and [the buyer] could wind up dumping the place for no reason and lose thousands of dollars,” he says.

The main problem with any haunted house is what constitutes a haunting – and even if such a thing actually exists.

“There is no hard-core standard for methodology in this field,” says Spirits director/co-founder Brandy Stark. “And what would happen (if a seller did have to disclose)? Do you have to start calling in teams of people to decide whether a place is haunted or not haunted?”

Source: Sarasota Herald-Tribune (FL) (10/31/10) Cox, Billy

© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688

 

Foreclosures 31% of defaults could be strategic

WASHINGTON – Nov. 1, 2010 – The financial crisis and ensuing recession apparently changed the mindset of Americans toward their homes, turning what long has been the American Dream into just another financial investment.

The result, strategic defaults – people walking away from the property and mortgages not because they have to, but because they can.

The key consideration is time, said Jon Maddux, of YouWalkAway.com, which helps people turn their properties back to their banks. Some experts estimate nearly a third of all mortgage defaults – 31 percent – are of the strategic variety.

RealtyTrac reported 2 million foreclosures in September and said one in 371 housing units received a foreclosure notice.

Easy mortgages made people glorified renters rather than proud homeowners, with no emotional or financial ties.

“People who made the decision to buy at the wrong time got stuck in a house that may not recover (its value) for 10 to 15 years. Does it make sense to keep it as an asset? No. It’s throwing good money after bad when it takes so long to break even. So they decide to stop now. Their credit will recover in three or four years,” Maddux told UPI.

“Life is too short,” Jeff Horton, 33, of Orlando, Fla., told the Chicago Tribune earlier this month. Horton has $400,000 in mortgages with Bank of America and said he decided to walk away from his loans because he can’t sell or rent the properties for enough money to cover the payments.

As the housing bubble burst, real estate values plummeted and homeowners found themselves “underwater” – owing more than their homes were worth.

“I felt guilty at first,” Horton told the Tribune. “It all stopped when I saw them (Bank of America executives) take $90 million in executive bonuses. They take bailout money and do nothing for the little guy. They wouldn’t do anything for me.”

Banks made the situation worse, giving people who wanted to refinance a hard time, even refusing to do anything for them at all – sometimes because the homeowners were still making payments.

Chris Deaner of Sun City, Ariz., told CBS’ “60 Minutes” he was fed up. Deaner and his wife bought a house in 2006 for $262,000 but the property is worth only $142,000 on today’s market. He asked his bank for help.

“They refused to,” he said. “They said it was gonna affect my credit and they were gonna take my house. And I pretty much said, ‘Go for it.’”

The federal government has to take some of the blame. As Washington pushed banks to make homeownership easier, bankers heard “open the floodgates,” Maddux said. Banks started offering no-money- or little-money-down mortgages to people who wouldn’t be able to sustain the payments for the long-term, then bundled the mortgages into security instruments and sold them off.

“They (the banks) didn’t hold the paper any more. They felt no responsibility to make good loans,” Maddux said. “They only had to be good for a little bit of time and then they could sell them off. It was make money quick and pass the hot potato.”

Gone are the days of George Bailey’s Building and Loan where the bank took its proceeds and invested them back into the community.

But home ownership still is usually one’s biggest investment and there are indications attitudes toward mortgages are changing.

Freddie Mac, the Federal Home Loan Mortgage Corp., reported last week people are putting more money into their mortgages rather than taking out when they refinance – something that was all but unheard of in recent years. The report said 33 percent of refinancers put more money into their principal, compared to 18 percent who pulled equity out.

Foreclosures are running 65 percent higher than last year in the third quarter, RealtyTrac reported.

“The underlying problems that are causing homeowners to miss their mortgage payments – high unemployment, underemployment, toxic loans and negative equity – are continuing to plague most local housing markets,” RealtyTrac Chief Executive Officer James Saccacio said. “And these historically high foreclosure rates will continue until those problems are resolved.”

And the foreclosure process itself is not without problems. A number of large mortgage lenders in the past month halted foreclosures because of paperwork errors and Wells Fargo last week admitted problems with 55,000 of its foreclosures, although saying the problems were minor and no one who was current on payments had been affected.

“People need to know a mortgage contract clearly spells out you have two options: You promise to pay and if you don’t you’ll give the property back to the lender. It’s not a solemn oath you’re going to pay,” Maddux said.

Copyright © 2010 United Press International, Marcella S. Kreiter

 

Stalled foreclosures could swamp local home-buying market

ORLANDO, Fla. – Oct. 25, 2010 – As big lenders’ recent freeze on foreclosures begins to thaw, local real-estate agents worry that those bargain properties will now flood the market and further sink housing prices.

Just a few weeks after Bank of America, J.P. Morgan Chase and other big banks announced a temporary halt to foreclosures because of concerns about improperly signed documents, they are preparing to restart the process. The question is: How many of those stalled foreclosures will lenders put on the market at the same time?

“That’s the big question – will they come back in a big thud or will they trickle in?” said Winter Park real-estate broker David Welch of Re/Max 200. “Unfortunately, I don’t know anyone who knows what the answer is. I think if they come flooding back it obviously won’t be a good thing in the market.”

Since the moratoriums were announced at the beginning of the month, 53 percent of the scheduled foreclosure sales in Orange County have been canceled – creating a backlog of as many as 850 properties that lenders pulled from the process just prior to their hitting the market. In the three weeks preceding the freeze, only 38 percent of the county’s auctions had been canceled, primarily because of judicial requirements for mediation and for face-to-face conversations between lenders and borrowers.

In Orange County Courthouse Room 350, crammed with investors attending the daily foreclosure auctions, longtime buyer Jack Coughlin said last week that he sees banks sitting on a growing inventory of foreclosed houses just waiting to hit the market.

“Are they going to release them all? If they do, there is going to be a 20 percent drop in values,” Coughlin said. “People ask, ‘Where are these properties?’ They are sitting in banks’ vaults.”

Thomas Kelly, a spokesman for J.P. Morgan Chase, said last week his company is still reviewing cases and had not announced any kind of timetable for releasing foreclosed properties to the market.

Orlando ranks 10th in the nation for foreclosure filings, according to a September report by the real estate research company RealtyTrac Inc. The crash that followed the peak-market conditions of three or four years ago has dragged down Orlando’s median resale price from $264,000 in July 2007 to $105,000 last month. Bargain-basement prices already dominate the market: More than 70 percent of the area’s existing-home sales currently involve bank-owned or short-sale properties that sell for less than market value, according to the Orlando Regional Realtor Association.

Lenders’ decision to halt foreclosures in early October did two things to Orlando’s real-estate market: drove up prices and drove down sales. The absence of those bargain properties from the market has caused the median price to spike about $10,000 in recent weeks, to about $115,000, said Welch, who continually tracks the market. And the inventory of active listings has dropped by about 3 percent, he added.

State attorneys general had stepped up pressure on lenders after it was revealed that bank employees had signed foreclosure affidavits without verifying that the documents were accurate – a process known as “robo-signing.” But after reviewing more than 100,000 documents in Florida and 22 other states, Bank of America announced last week that it was restarting the foreclosure process. GMAC Mortgage also said it was resuming work on its foreclosures.

The banks had never stopped litigating the cases; they had just canceled the foreclosure sales to give themselves time to investigate the suspect paperwork and signatures, said Orlando lawyer Matt Englett, whose firm handles tens of thousands of foreclosures. He said robo-signing can become apparent if the names of certain bank employees continually show up on certain documents.

People will still lose their homes, Englett said, but they may be able to walk away without a deficiency judgment against them – without owing any additional money, in other words – if it turns out their paperwork includes suspect signatures. Owners may also be in a better position to get their mortgage terms modified if their foreclosure paperwork has been tarnished in some way.

So far, local real-estate agents haven’t seen any signs of once-stalled foreclosures hitting the market.

“I had more than a third of my listings pulled,” Maitland real-estate agent Lee Acker said. “We had a buyer ready to close on one. It’s just frustrating. These were properties ready to go to owner-occupants.”

In the short term, Acker said, the moratoriums “created an artificial demand for the property that’s left. What I’m afraid of is when they go back on the market.”

Copyright © 2010, The Orlando Sentinel, Fla., Mary Shanklin. Distributed by McClatchy-Tribune Information Services.

 

Florida’s existing condo sales up in September 2010

ORLANDO, Fla. – Oct. 25, 2010 – Sales of existing condominiums in Florida rose 10 percent in September, with a total of 5,675 condos sold statewide compared to 5,140 units sold in September 2009, according to the latest housing data released by Florida Realtors®.

Ten of Florida’s metropolitan statistical areas (MSAs) reported higher existing condo sales in September. The statewide existing condo median sales price last month was $83,400; in September 2009 it was $102,300 for an 18 percent decrease. However, September’s statewide existing condo median price was 2.2 percent higher than the statewide existing condo median of $81,600 in August. The national median existing condo price was $174,000 in August, according to the National Association of Realtors® (NAR).

Meanwhile, in the year-to-year comparison for existing home sales, a total of 13,536 single-family existing homes sold statewide last month compared to 14,781 homes sold in September 2009 for a decrease of 8 percent. Florida’s median existing-home sales price in September was $133,400; a year earlier, it was $141,700 for a decrease of 6 percent. The median is the midpoint; half the homes sold for more, half for less.

“Like the rest of the nation, Florida’s housing market is feeling pressure from an uncertain economy,” said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. “Easing foreclosures and increasing job growth would go a long way in stabilizing the market and strengthening the economic recovery. However, current record low mortgage rates along with available and affordable inventory continue to offer a rare opportunity for consumers who are ready to buy a home.”

The national median sales price for existing single-family homes in August was $179,300, up 1.2 percent from a year earlier, according to the National Association of Realtors® (NAR). In Massachusetts, the statewide median resales price was $330,000 in August; in California, it was $318,660; in Maryland, it was $262,339; and in New York, it was $240,000.

NAR’s latest industry outlook calls for a gradual improvement in home sales in upcoming months. “Attractive affordability conditions from very low mortgage interest rates appear to be bringing buyers back to the market,” said NAR Chief Economist Lawrence Yun. “However, the pace of a home sales recovery still depends more on job creation and an accompanying rise in consumer confidence. The housing market is trying to recover on its own power without the homebuyer tax credit.”

In September, the interest rate for a 30-year fixed-rate mortgage averaged 4.35 percent, significantly lower than the 5.06 percent average during the same month a year earlier, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

 

4 things buyers need to know about robo-signing and the foreclosure freeze

I double-dog dare you to watch a TV news show or spend more than 5 minutes on the web without hearing about the massive "robo-signing" foreclosure scandal that is rapidly encompassing the biggest banks in the country.  Here are 4 things home buyers need to know about this breaking real estate news, and how it impacts them.

(Hint: I threw in a couple of bonus items at the end!)

1.  What is robo-signing is, and what all the fuss is about?  The phrase robo-signing refers to what we’re now realizing has been a very common practice in the banks’ foreclosure document processing divisions, where one person was essentially given the job of signing as many 10,000 foreclosure documents per month, by hand.  These individuals were supposed to be reviewing the files, making sure grounds for foreclosure actually existed, signing the docs in front of notaries. But because of the volume of documents, what they actually did was just sign thousands of documents at a time, without even reading them, and ship them off somewhere else to be notarized.

If you do the math on an 8 hour workday, you'll see that that only gives the staffer 1.5 minute to review each file and documents to make sure the foreclosure is warranted.  That's not humanly possible, which is how these staffers got the nickname “robo-signers”
   
Government regulators are very concerned that the banks may have been taking people's homes without following the proper legal procedures.  As a result, 40 states' attorneys general are teaming up to launch a multi-state investigation, and the federal Comptroller of the Currency and federal attorney general may also get involved in investigating this issue.

2.  Will the freeze will make the banks cancel buyer contracts on REO properties? Currently, the freeze impacts bank-owned properties that are owned and/or serviced by Ally Financial/GMAC Mortgage, JP Morgan Chase, and some properties that were owned by Bank of America. Generally, contracts to buy these homes are being put on hold and extended for 30 days.  As well, the banks are often reaching out directly to buyers and offering them the option to cancel their contracts and recoup their deposit money.

3.  Is it safe to buy a foreclosed home? There's lots of talk right now about the "clouds" that this scandal will create on the titles to homes that were foreclosed by the banks' foreclosure mills. And that makes sense: if the home wasn't properly foreclosed on in the first place, then the legitimacy of the bank's resale can be called into question.  Normally, I'd say: Don't worry about it, buyer - that's why you'll get title insurance!  But last week, 3 of America's largest title company insurers declared that they will not offer title insurance on a number of the homes that may have been involved in this scandal.

In the vast majority of cases – when the foreclosure was justified and a bona fide purchaser, someone who was not involved in the bank’s wrongdoing, has purchased the home, courts will not reverse these foreclosures or their sale to buyers.  But if you’re in the market for a foreclosure, get clear on which bank owns the place as soon as you can, and run the property past your title insurer before you get too far into the transaction to make sure they can write a policy of title insurance on the property before you spend too much money on inspections and appraisals.  (And see my Bonus Buyer Advice at the end of this blog post!)

4.  How the foreclosure freeze will impact American home values, say after you buy.  In the short term, these freezes might cause prices to stabilize, as we expect to see the supply of foreclosures for sale start to shrink.  However, if these freezes stretch out for a long period of time, they could simply be delaying many inevitable foreclosures, which could delay the recovery of the housing market and home prices, over time.  I wouldn't expect to see the freezes cause prices to drop much beyond where they are now, but if they stretch out, they could keep appreciation flat for a longer period of time.

P.S. - Bonus Buyer Advice from Tara: Don’t underestimate the deals you can get on non-foreclosed properties. You can often get just as good of a price on a better property with more flexibility on the seller’s part in terms of repairs and other negotiation points if you buy a home from an individual seller, as opposed to a bank-owned property. 

Written by Tara-Nicholle Nelson

 

Economists Say Housing at Bottom

Beacon Economics analyzed home affordability and came away feeling optimistic.

Beacon Economics founding principal Christopher Thornberg, whose firm advises a variety of business clients, says the high level of affordability is likely to drive demand and reduce the stock of excess inventory, ultimately resulting in the need for new housing, a rise in prices, and a pickup in new construction.

"While prices may fluctuate modestly over the next several months, we believe the worst of the housing crisis is behind us," says Beacon Economics Research Manager Jordan G. Levine. "We expect prices to stabilize around current levels and likely be higher in the next 12 months."

Source: Beacon Economics (10/11/2010)

Foreclosure freeze could undermine housing market

NEW YORK – Oct. 11, 2010 – Karl Case, the co-creator of a widely watched housing market index, was upbeat three weeks ago. Mulling the economy while at a meeting at a resort near the Berkshires, Case thought the makings of a recovery were finally falling into place.

“I’m a 60-40 optimist,” he said at the time.

Today, Case’s mood is far more subdued. In scarcely two weeks, he and other housing analysts have watched as the once-staid world of back-office bank procedures has spawned a scandal that threatens to further unhinge the housing market.

Allegations of possible mortgage fraud against financial giants GMAC, JPMorgan Chase and Bank of America read like a corporate thriller: forged documents, faked Social Security numbers, phantom titles, disappearing paper trails, “robo-signers” and mortgages sliced and diced so many times that nobody really knows who owns them.

On Friday, PNC and mortgage servicer Litton Loan Servicing joined those three financial institutions in suspending some foreclosures while they review how documents were handled. Bank of America, which had already announced a halt for 23 states, expanded the suspension to cover the whole nation. If other banks follow suit, it raises the specter of a national foreclosure moratorium.

In all, the banks will have to review the paperwork for hundreds of thousands of mortgages. On top of that, class action lawyers and state attorneys general have filed lawsuits and called for foreclosure moratoriums.

In the near term, the freezes could actually benefit both homeowners and the housing market. Homeowners would have time to live rent-free and chip away at their debt. Prices might stabilize because so many homes are penned up.

But the long-term implications are grave. Only a month ago, housing watcher Mark Zandi, chief economist at Moody’s Analytics, predicted that a housing recovery would be under way by the third quarter of next year. Now he believes the foreclosure scandal could prolong the housing depression for at least another few years.

The alleged document fraud could open up the entire chain of foreclosure proceedings to legal challenge. Some foreclosures could be overturned, others deemed outright fraudulent.

Before a housing recovery can occur, all those foreclosed properties have to be re-scrutinized by the banks and then sold. With any foreclosure-related deal open to legal challenge, that inventory could be taken off the market while the legal challenges make their way through the courts.

That’s not to mention the questions being raised about missing paper trails on mortgages owned by people who have never missed a payment. What started as simple paperwork bungling in a Pennsylvania office park now threatens to bring to a standstill the nation’s entire foreclosure machinery.

The development is especially troubling given how large the foreclosure market is. Before the scandal erupted, forecasters at John Burns Real Estate Consulting predicted that 41 percent of residential sales this year would be on distressed properties. Typically, distressed properties account for 7 percent.

Since housing is the engine that in the past seven recessions has pulled the economy out of recession, any further damage couldn’t come at a worse time.

“As far as I’m concerned, anything that slows the foreclosure process is a bad thing,” Case said this week.

The debacle injects yet more uncertainty into a frail recovery that is still trying to find its strength.

“This is definitely one of the last things anyone needed to have to deal with,” says Diane Pendley, managing director of Fitch Ratings.

The news that GMAC, recently renamed Ally Financial, and JPMorgan Chase and Bank of America were stopping foreclosure proceedings in 23 states was merely the beginning. Federal lawmakers are calling for a federal investigation, saying the excuses from the industry are not credible, and on Wednesday the Ohio attorney general filed a fraud suit against GMAC, calling it “the tip of an iceberg of industrywide abuse.” GMAC denies the allegations.

In at least six states, attorneys general are calling for foreclosure moratoriums and launching their own investigations. And this week, the attorneys general of up to 40 states are expected to announce a joint investigation into banks’ use of flawed foreclosure paperwork.

A person briefed on the investigation said over the weekend that an announcement of the 40-state investigation could come as early as Tuesday. The person spoke on condition of anonymity because the investigation was not yet public. Iowa Attorney General Tom Miller will lead the investigation.

The Obama administration is studying the situation. Problems with foreclosure procedures were discussed during two recent conference calls involving officials of the Treasury Department, Department of Housing and Urban development, White House and other agencies, an administration official said on condition of anonymity.

A top White House adviser questioned the need Sunday for a blanket stoppage of all home foreclosures, even as pressure grows on the Obama administration to do something about mounting evidence that banks have used inaccurate documents to evict homeowners.

“It is a serious problem,” said David Axelrod, who contended that the flawed paperwork is hurting the nation’s housing market as well as lending institutions. But he added, “I’m not sure about a national moratorium because there are in fact valid foreclosures that probably should go forward” because their documents are accurate.

Axelrod said the administration is pressing lenders to accelerate their reviews of foreclosures to determine which ones have flawed documentation.

“Our hope is this moves rapidly and that this gets unwound very, very quickly,” he said.

Lawyers who have already filed class action lawsuits in Maine and Kentucky are now signing up entire neighborhoods as new clients. They’re hiring private eyes to track down former industry employees and holding marathon conference calls to strategize on how to get every speck of dirt on the banks that they can.

The low-level bank employees in question were supposed to have reviewed mortgage documents in detail. Instead, they say they never so much as glanced at the papers. Nor did they even know where the papers were.

“They were just so haphazard and so gloriously incompetent to save a few pennies here and there,” says Barry Ritholtz, director of equity research at Fusion IQ. “But a few pennies times millions of documents is a billion dollars.”

The banks insist that most of the people involved in the foreclosure deals were legitimately behind on their payments. But even so, if the procedures that put them into foreclosure are deemed fraudulent, it will nullify the deals and require that the entire process start all over again.

The financial institutions insist that, in most if not all cases, there was no fraud, the borrowed missed their payments and the foreclosures are justified. Delays may occur, they say, but the outcomes will be the same. Moreover, they insist they are strengthening their procedures. They are chalking up much of the controversy to possible shoddy paperwork.

But the pronouncements have done little to assuage those connected to the mortgage industry, and the uncertainty is spreading fast.

On Sept. 23, Standard and Poor’s warned of a possible downgrade on GMAC. The next day, Moody’s Investors Service also placed GMAC on a watch. On Sept. 29, Fitch Ratings said it was reviewing the mortgage servicers’ practices.

Perhaps most worrisome was the news on Oct. 1 that title insurer Old Republic National – which provides protection to the homebuyer and mortgage provider in case any unpaid taxes, questionable ownership or other problems turn up – had ordered its agents to cease offering policies on foreclosed properties owned by GMAC or JPMorgan Chase. On Oct. 7, another title insurer, Stewart Title, issued an internal memo making it incredibly difficult – if not impossible – for an agent to write a policy for any foreclosure property connected to any of the now-tainted banks.

“Right now everyone in the industry is trying to understand the scope and breadth of the problem, and is looking to lenders to get their paperwork in order so that sales can resume,” says Kurt Pfotenhauer, chief executive of the trade group American Land Title Association.

Meanwhile, real estate agents who specialize in selling bank-owned properties say the market is locking up. Dorothy Buse, a Coldwell Banker agent in the Orlando, Fla., area, said that out of the 200 foreclosures she has listed for sale, 40 are now in the foreclosure freeze. Of the 40, 12 that were already under contract are now on hold.

“There’s nothing within my power – or my staff’s power – that we can do, except try to reassure them that we’re working on this,” Buse says.

In addition, legal challenges are mounting. On Sept. 24, a district court judge in Maine threw out a ruling in favor of GMAC to foreclose on a house owned by an unemployed mother of two. Now that case will go to a bench trial in Portland.

The court also sanctioned GMAC about its paperwork process, noting that “this case is not the first time that GMAC’s high-volume and careless approach to affidavit signing has been exposed.”

Michael Holmes is one of the thousands of mortgage holders whose house was put into foreclosure by the now infamous “robo-signer,” the GMAC employee who signed 10,000 foreclosure affidavits a month. On Oct. 1, GMAC informed Holmes that the foreclosure on his Belfast, Maine, home had been put on hold. The bank didn’t say for how long.

The temporary halt has done little to subdue Holmes’ stress. He spent the past year and a half fighting to get a loan modification from GMAC, a process he says yielded a file the size of a Manhattan phone book and virtually no response from the bank. He also claims he received no written notice of a foreclosure.

Now Holmes, a former hospitality executive at such Boston hotels as the Ritz-Carlton and the Copley Plaza, says he wants to fight to keep the Victorian he grew up in. But from one day to the next, he doesn’t know what will happen.

“The one safe place you have is your home,” Holmes says. “It’s your comfort zone, and to have that in limbo, it feels like the wolves are on my porch.”

Copyright © 2010 The Associated Press, Michelle Conlin, AP real estate writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. AP business writers Alan Zibel in Washington and David Pitt in Des Moines, Iowa, contributed to this report.

 

Foreign buyers see big opportunity in housing bust

MIAMI – Oct. 5, 2010 – The Viceroy, a swanky condominium complex in downtown Miami, gives the impression that the United States is in another real estate boom. The sales office is strangely exuberant. Buyers gush about the glam condos – designed by hipster tastemaker Kelly Wearstler – and their hotel-like amenities: poolside libations, daily housekeeping and room service food stirred up by a celebrity chef.

Since January, 262 of the Viceroy’s 372 units have sold. But there’s a twist: Almost 90 percent of the buyers are foreigners. And they all paid cash.

The Viceroy’s story is playing out across Miami. Individual investors from as far as Argentina, Canada, Colombia, France, Israel, Italy, Norway and Venezuela are swarming the city’s sales offices to get in on what they see as one of the greatest real estate fire sales in the history of the United States.

At one time, these people would have invested in the U.S. stock market. Now they see the opportunity of a lifetime in the nation’s debilitated housing market. The idea is to rent out the properties and then sell them once the economy turns around.

The math is seductive: Prices at the Viceroy are roughly 52 percent off the 2007 peak. Units once sold for as much $670 a square foot. Today the average price is $319.

“I have never seen such a high concentration of foreign nationals acquiring real estate,” says Peter Zalewski, who has been in real estate for 15 years and founded Condo Vultures, a consulting and brokerage firm. “Eighty percent of the sales in downtown Miami are foreign-based. This is unprecedented.”

Miami is hardly the only hot spot for buyers from outside the United States. Real estate brokers say they’ve seen a surge in Washington, New York, Las Vegas, Los Angeles and San Francisco. In Seattle, Asians are buying property sight unseen, says Joe Brazen of Brazen Sotheby’s International. In New York, 25 percent of buyers at the Armani-designed 20 Pine building, near the World Trade Center site, are from overseas.

“It’s a positive in a sea of negatives,” says Jonathan Miller, chief executive of Miller Samuel, a real estate consulting firm in New York.

This year in Phoenix, for the first time, there have been more buyers from Canada than from California, according to real estate data outfit Information Market. With the Canadian dollar approaching parity with its U.S. counterpart, the opportunity was simply irresistible to Jim Chuong, a 38-year-old Novartis sales manager from Toronto.

Chuong, whose house in Canada is already paid off, used to invest in U.S. stocks. Now he’s investing in Phoenix condos, paying $50 a square foot for units that would cost $500 a square foot in Toronto.

“It’s ridiculous is what it is,” Chuong says.

For foreigners with cash, the deals can make them money from day one. Chuong buys two-bedroom condos for less than $40,000 in low-crime areas. He only picks up units that already have renters. After paying association fees and taxes, he walks away with $300 a month, pre-tax, on each. The deals are now easy to do, thanks to the cottage industry of companies that has grown up to manage virtually everything for foreign buyers, down to badgering renters for the monthly check.

For the international investor class, the United States’ bloated inventory of homes, high unemployment and weak currency make for an unusually attractive buyer’s market.

“Never before have all these things come together like this,” says Patrick O’Neill, chief executive officer of the Hong Kong-based O’Neill Group, which helps Chinese invest in international real estate. O’Neill says Chinese buying in places like New York is on track to double this year.

“Unless you want to go to Baghdad,” O’Neill says, “the United States is the best you can get.”

The trend is showing up in the statistics. In a National Association of Realtors report released in July, 28 percent of brokers reported they had worked with at least one international client, up from 23 percent a year earlier. Among those, 18 percent had completed at least one sale, compared with 12 percent in the 2009 report.

“I was going to invest in the stock market, but I decided to invest in real estate instead,” says Diego Garcia, a Mexico City native on assignment in New York City with Pfizer Inc., where he is a regional finance director. Garcia paid $850,000 for a Manhattan one-bedroom in a gleaming new high-rise that he plans to live in for now. “I’m a conservative guy,” Garcia says, “and this was more conservative.”

That’s not to say there aren’t steep risks. An economic jolt could easily throw the whole plan into disarray. The housing market is far from a recovery. In many places, prices continue to fall. What happens if currency values reverse and a foreign owner needs a quick sale? Or a renter bolts in the middle of the night, leaving an empty unit and no cash flow?

It’s not as if foreign buying can be counted on for a housing market turnaround. Overseas buyers represent a mere 7 percent or so of today’s total. Yet in some cities, such as Miami and Washington, the foreign sales are helping to stabilize the markets.

In past downturns, buying a property in the U.S. was the prestigious purview of the wealthy, but today the market is within reach of the swelling ranks of the global upper-middle class.

Colombians, who often call Miami the most beautiful city in their country, have always been drawn to Florida. The difference now is the upside-down economics. It is cheaper to buy in Miami than in Bogota, and you can fly between the two cities for $59 each way.

“Muchos muchos muchos muchos opportunity,” says Elsa de Blaschke, who owns a construction company with her husband in Barranquilla, Colombia, and is hunting for an investment property to buy in Miami. De Blaschke chose not to invest the capital at home because she says Florida offers a better chance of a bigger return.

“The international buyer pool is better than we have ever seen it before,” says Phillip White, president of Sotheby’s International, based in New York.

To match demand, U.S. brokerages are hiring agents who can speak foreign languages and are pouring more resources into marketing overseas.

In October, agents from 11 Sotheby’s International branches will descend on Hong Kong’s convention center to regale wealthy buyers there with slick visuals on showcase properties. In Toronto, agents from Florida Home Finders play to crowds of 800 every other Sunday at a Holiday Inn banquet hall. Jenny Huertas, Condo Vultures’ international sales director, throws seminars for potential clients across South America.

“Their jaws drop. They can’t believe it,” Huertas says. “They think these deals are too good to be true.”

 

Consumers see mixed outlook for housing

WASHINGTON – Sept. 16, 2010 – Fannie Mae’s latest national housing survey finds that most Americans believe the housing market has reached bottom, but they are more cautious about owning a home. Respondents to the Fannie Mae National Housing Survey believe that home prices will hold steady (47 percent) or increase (31 percent) over the next year, and that rental prices will stay the same (46 percent) or go up (39 percent). Across the general population, the average expected rise in rental prices is four times that of home prices (3.6 percent versus 0.9 percent).

Seventy percent of Americans think it is a good time to buy a house, compared with 64 percent in a similar survey conducted in January 2010. But 33 percent – up from 30 percent – of all respondents said they would be more likely to rent their next home if they moved.

“These findings indicate a return to a more balanced and realistic approach toward housing,” said Doug Duncan, vice president and chief economist, Fannie Mae. “While this will likely weigh on the housing recovery in the near-term, it should, over time, help to build a stronger and healthier market focused on sustainable homeownership. Homeowners and renters alike continue to be wary of taking on risk, and they are less confident in the long-term outlook for housing.”

A majority of Americans (67 percent) continue to believe that housing is a safe investment; however, that number is down 16 percentage points from a similar survey conducted in 2003 – the largest drop by far among all investment types tracked since then. Delinquent borrowers and renters are notably more discouraged than mortgage borrowers and underwater borrowers about a home’s safety as an investment and the appeal of buying versus renting. More than 70 percent of all respondents believe it will be harder for the next generation to buy a home, up three points from the beginning of the year.

The Fannie Mae National Housing Survey polled homeowners and renters between June 2010 and July 2010. Findings were compared to a similar survey conducted by Fannie Mae from December 2009 to January 2010 and released in April 2010, and a similar survey conducted in 2003.

Overview of key findings

• A large majority of Americans (78 percent) believe that home prices either will remain flat or go up over the next year, up five points from the beginning of the year. Forty-seven percent believe prices will hold steady, while 31 percent think they will go up. This is a notable shift from January 2010, when these numbers were 36 percent and 37 percent, respectively.

• Thirty-nine percent think rental prices will increase over the next 12 months, while 46 percent said they would stay the same.

• Consumers continue to believe it is a buyers’ market; 70 percent said it is a good time to buy a house, up six points from January. However, 83 percent believe it is a bad time to sell a house.

• A majority of Americans (67 percent) continue to believe that buying a home is a safe investment, although this is down three points since January and 16 points since 2003. Housing ranked second behind putting money into a savings or money market account (76 percent).

• Fifty-four percent think it would be very difficult or somewhat difficult to get a home loan today, down six points since January. However, 71 percent of Americans think buying a home will be harder for the next generation, up three points since January.

Consumers continue to be cautious in housing decisions

• The number of respondents who said they would be more likely to rent rather than buy their next home if they were going to move increased from 30 percent in January to 33 percent in July.

• A majority of renters said they would be more likely to rent their next home if they were to move, increasing significantly from 54 percent in January to 60 percent in July, even though 69 percent of renters think it makes more sense to buy a home.

• Twenty-two percent of mortgage borrowers said they have reduced their mortgage debt significantly in the last year, and 27 percent of mortgage borrowers say they have reduced their non-mortgage debt significantly.

Views on homeownership diverge among sub-groups

• Mortgage borrowers (74 percent) and underwater borrowers (69 percent) are more likely to say owning a home is a safe investment than delinquent borrowers (57 percent) and renters (54 percent). However, this measure has fallen among all sub-groups since January, with delinquent borrowers and renters showing the largest declines, down eight and seven points, respectively.

• Mortgage borrowers (83 percent) and underwater borrowers (77 percent) said they are more likely to buy in the future than rent – both groups increased two points from January.

• The number of renters (37 percent) and delinquent borrowers (52 percent) who said they are more likely to buy in the future declined by seven and four points from January, respectively.

Economic and housing attitudes among minority respondents

• Forty-eight percent of African-Americans and 36 percent of Hispanics believe the economy is on the right track, compared to just 30 percent of the general public.

• Seventy-one percent of African-Americans and 58 percent of Hispanics expect their personal finances to get better over the next year, compared to 44 percent of the general public.

• African-Americans (65 percent) and Hispanics (72 percent) believe that obtaining a home mortgage today would be difficult, compared to 54 percent of the general public.

• African-Americans (75 percent) and Hispanics (76 percent) both still believe that owning a home is a good way to build up wealth that can be passed along to their families, compared to 58 percent of the general population.

A fact sheet containing a complete set of the survey’s key findings can be found (PDF format) at: Fannie Mae National Housing Survey Fact Sheet.

© 2010 Florida Realtors®

 

Miami High-End Condos Experience a Miniboom

It is past half-time for 2010 Southeast Florida real estate sales. After a rocky 2009, how did 2010 weather so far, is the million dollar question many are asking. Prices started tumbling since September 2008 - and in certain market segments, housing values are still down significantly, but there is also good news to report as to market research provided by Brosda & Bentley Realtors. Especially for new luxury oceanfront condo developments in Sunny Isles Beach, Miami Beach and downtown Miami in particular, sales are booming and prices in some areas are on the rise.

Jade Beach condo tower, in North Miami Beach was nearly sold out during 2009, despite the dramatic economic downturn in the United States. Jade Beach resales are now strong and closed units are setting new retail sales records. Its sister tower Jade Ocean condos, is an oceanfront, ultra-luxurious glass palace, towering 50 stories above the Atlantic Ocean and reporting more than 60 percent of sold condominium units. The Acqualina Resort & condos, a landmark in Sunny Isles Beach, claim the title of highest retail sales price per square foot in the city. During the summer, two units closed at $784 and $714 per square foot respectively. The elite Turnberry Ocean Colony condos boasts six retail sales, with the highest being at $733 per square foot.

Some of the most expensive Miami penthouses sold thus far in 2010 include the Marquis penthouse in downtown Miami. It sold a few days after LeBron James announced his engagement with the Miami Heat. Entrepreneur Russell Wright closed on the 67-story Marquis luxury residential condo, with reportedly the highest terrace and hot tub in Miami. Dwayne Wade of the Miami Heat sold his house in Davie and is now apparently looking for a trophy property in Miami, as is Chris Bosh of the trio. Russell Wright is quoted as saying that the economic force of the three basketball superstars playing in Miami "Is going to have an impact, I probably already made money on the condo."

In June, the 'Imperial Suite' or Penthouse Villa B sold at the über-luxurious Setai Resort & Residences in Miami Beach for a record breaking $15 million or $2,416 per square foot.

Downtown Miami condo sales were up 110 percent with 1,933 units sold in the first 6 months of 2010. Great downtown Miami condos that sell due to drastic price reductions include Met I, Epic and Icon Brickell, which sold 49 units, including at least one with a $100,000 over-the-odds premium, after LeBron James announced his switch to the Miami Heat. The average sales price of a downtown Miami condo in the first two quarters of 2010 was reportedly $356,100 or about 16 percent higher than in 2009.

In March, April and May of 2010, 135 condos sold in Miami-Dade County priced $1 million and above, nearly double the number compared to the same time period in 2009. At the beginning of the summer, impressive sales at One Bal Harbour for $8.7 million, at the Fontainebleau for $9 million and Santa Maria Brickell for $11 million kept Miami luxury real estate brokers abuzz.

A highly anticipated new oceanfront condo development is the St. Regis Resort and condo residences in Bal Harbour, destined to open in 2011. The three glass towers replaced the famous Sheraton in front of the gated entrance to the renowned Bal Harbour Shops. Over $40 million in sales were reported in the first half of 2010.

Brosda & Bentley Realtors features more than 50,000 residential and commercial Southeast Florida property listings on its website BrosdaandBentley.com. The company provides free usage of the database to registered users. Consumers may also opt to receive automatic updates on new listings, pre-foreclosure and short sale properties. Katerina Brosda, Broker and CEO of the company sold the 10 Museum Park penthouse in downtown Miami with its very own rooftop pool. "Most of our clients during 2009 and 2010 were cash buyers, not investing into Miami real estate per se, but actually pursuing to live in the homes they bought. Yes, these may still be third or fourth trophy properties, this goes especially for condos, but our clients invested heavily in upgrades, eclectic designs, electronic SMART Home features, custom fittings and furniture," Katerina Brosda stated. Brosda & Bentley also provides a one stop, turnkey, white-glove home furnishings and design conceptualization service to its clients.

"Miami Condo sales above the $1 million mark will continue to outpace single-family home sales in the same price category for the rest of 2010 and into 2011. Condominium living is the new lifestyle choice of the wealthy," said Katerina Brosda.

Brosda & Bentley Realtors projects luxury Miami condominium sales to remain strong. The average sales price for residential properties that sold in Miami-Dade County increased by 8.3 percent in July. Inventory levels have dropped 11.4 percent compared to July 2009. Condominium listings have dropped 11 percent and the average days a property stays on the market decreased 10.3 percent for single-family homes and 11.9 percent for condominiums or 100 and 114 days respectively.

Source: http://www.prweb.com

 

 

Miami Condo Sales Soar

 

Once the nation’s epicenter in the real estate collapse Miami, Florida condo sales are soaring, up 43% over year ago levels, according to the Miami Association of Realtors. The Miami housing market has now experienced rising sales for nearly two straight years.

Miami ’s condominium market tanked even before the financial crisis struck Wall Street two years ago as New York based hedge funds and banks cancelled financing agreements on dozens of new condo developments being constructed. The new construction condo market almost froze, nearly paralyzed as a result, triggering a plunge in prices forcing many developers into bankruptcy.

But the rise in condo sales is breathing new life into the Miami housing market. “Demand for local properties, including multiple bidding reminiscent of the boom during the last decade is driving values,” said Miami Realtors President Oliver Ruiz. “Median and average sales prices are rising, while condominium prices are expected to follow due to the considerable increase in sales.”

The time it takes to market a home for sale dropped to 100 days for single family homes and 114 days for condominiums, showing that the market is nearing stabilization, despite declining condo prices.

However, the market isn’t without its challenges. Sales of existing single family homes dropped 8% in July from year ago figures, indicating the market is anything but fully stabilized. But record low mortgage rates and some of the lowest priced condos for any metropolitan region in the country should usher in a robust return in sales over the remainder of the year. Residential sales have increased for 23 straight months.

Even as home sales sank in the majority of the country by 27.2% in July, according to the National Association of Realtors, Miami and the rest of Florida condo sales increased. The median sales price for a condo in Miami in July was $110,500 down 20% from a year ago as bargain hunters bought up condos at some of the lowest prices in more than 15 years. Florida median sales prices declined 7% to $138,000 for single-family homes.

The inventory of residential listings marketed by the Miami-Dade County Realtors association dropped 11.4% from July of 2009, indicating that the market is showing strong signs of finally entering the recovery phase after record housing deflation. Average home sale prices are rising after hitting 30-year low values in many single family home neighborhoods. But lower prices obtained for condos still hurt the overall market.

Source: http://www.housingpredictor.com/miami-condo-sales-soar.html

 

Inventory of homes for sale shrinks in South Florida

WEST PALM BEACH, Fla. – Aug. 17, 2010 – The number of homes and condominiums for sale across South Florida has steadily declined over the past two years, an encouraging sign for the region’s battered housing market.

Still, industry observers worry about a sizable “shadow inventory” of foreclosed homes that could complicate any real estate recovery.

Broward County had 19,869 properties on the market in July, down 35 percent from July 2008, according to a multiple listing service report compiled by the Keyes Co.

Palm Beach County’s inventory of homes and condos slid 31 percent to 23,947 during the same period.

The supply of new homes being built in the two counties also has decreased sharply in the past two years, said Brad Hunter of the Metrostudy research firm in Palm Beach Gardens.

In 2005, sellers rushed to list their homes, hoping to fetch record prices during the housing boom. But the frenzy led to a collapse and prices plummeted.

Thousands of foreclosures and short sales have clogged the market ever since, giving buyers plenty of choices and little reason to pay top dollar.

“You won’t get price appreciation until you get the inventory in balance,” said Mike Pappas, president of Keyes. “We’re making great strides.”

Declines in homes for sale already have helped stabilize prices recently.

The median price in Broward rose 7 percent during April, May and June to $209,800 from a year ago, the Florida Realtors said Wednesday. Palm Beach County’s median increased at the beginning of the year but dipped 2 percent in the second quarter to $235,500.

Pappas said his firm is handling fewer transactions involving foreclosed homes, and he thinks that’s an indication the foreclosure market has peaked.

But some analysts disagree, pointing to a recent surge in homes repossessed by lenders that is pushing inventory levels higher in recent months.

Banks are on pace to take back nearly 50,000 properties in Palm Beach, Broward and Miami-Dade counties this year, according to CondoVultures.com, a real estate consulting firm. Many lenders are careful to hold off listing those properties for sale all at once to prevent widespread price declines.

Sean Snaith, an economist at the University of Central Florida, expects more foreclosures to result from homeowners losing their jobs. And he said the sagging labor market likely will discourage potential homebuyers.

“You have to have a healthy labor market as a foundation for a healthy housing market,” Snaith said.

Another concern is the expiration of the federal homebuyer tax credits.

Buyers who signed contracts by April 30 and close by the end of September are eligible for the $8,000 and $6,500 tax rebates. But people who put homes under contract after April 30 don’t qualify.

While pending sales still are robust, demand for homes is expected to wane in the second half of the year. Fewer sales would keep the supply of homes elevated and ultimately hurt pricing, said Chris Lafakis, an economist covering Florida for Moody’s Economy.com in West Chester, Pa.

“Our forecast is that ... demand won’t be strong enough to work off the excess inventory fast enough to stave off future price declines,” Lafakis said. “But by this time next year, the worst of the declines will be over.”

Copyright © 2010 Sun Sentinel, Fort Lauderdale, Fla., Paul Owers. Distributed by McClatchy-Tribune Information Services.

 

REIT funds are flying high

NEW YORK – Aug. 16, 2010 – Analysts report that the surprising outperformance of exchange-traded funds that track real estate stocks since the first of the year suggests improvement in the economy and the battered commercial-property sector.

In their second-quarter earnings outlook, analysts at Keefe, Bruyette & Woods write that REITs have outperformed the broader market “in anticipation of upcoming growth opportunities, internally, through improving fundamentals, and externally via acquisitions.” The hottest REIT stocks so far in 2010 have been apartment sector ones, specifically Apartment Investment and Management Co. and Equity Residential Properties Trust.

Both companies posted quarterly earnings recently and the stocks have gained more than 30 percent since Jan. 1. A solid quarterly report from Equity Residential coupled with improving market conditions “should have a positive impact on the overall apartment sector,” reports Stifel Nicolaus analyst Rod Petrik. “The company appears well positioned to take advantage of positive market trends in the apartment industry.”

Source: MarketWatch, John Spence (08/01/10)

© Copyright 2010 INFORMATION, INC. Bethesda, MD (301) 215-4688
 

 

Florida’s existing home, condo sales up in 2Q 2010

 

ORLANDO, Fla. – Aug. 11, 2010 – Sales of existing single-family homes in Florida rose 21 percent in second quarter 2010 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 51,564 existing homes sold statewide in 2Q 2010; during the same period the year before, a total of 42,604 existing homes sold. It marks the eighth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

Statewide sales of existing condominiums in the second quarter rose 45 percent compared to the same time the previous year. This marks the seventh consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

Statewide sales activity in 2Q 2010 also increased over 1Q 2010’s sales figure in both the existing home and existing condo markets, Florida Realtors’ records show. For 2Q 2010, statewide sales of existing homes rose 32.7 percent over the 1Q 2010 figure; statewide existing condo sales in 2Q 2010 increased 24.2 percent over the 1Q 2010 level.

Looking forward, the University of Florida’s Bergstrom Center for Real Estate Studies’ latest quarterly survey of real estate trends reported that job growth and the BP oil spill were cited as top concerns for the future outlook of the state’s real estate industry. The survey polls market research economists, industry executives, real estate scholars and other experts.

The center’s director, Timothy Becker, noted in the report that the oil spill has created “a cloud of uncertainty that is affecting all markets across the state. Our respondents indicate that the effect of the oil spill is being felt across Florida despite the fact that oil is only showing up on some beaches in the Panhandle.”

The survey reported the outlook for investment in industrial properties continues to brighten and is becoming increasingly positive.

Seventeen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in 2Q 2010 compared to the same three-month period a year earlier; 18 of the MSAs showed gains in condo sales.

The statewide existing-home median sales price was $141,300 in 2Q 2010; a year earlier, it was $143,000 for a decrease of 1 percent. The 2Q 2010 statewide existing-home median sales price was 5.6 percent higher than the statewide existing-home median sales price of $133,800 in 1Q 2010. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 20,986 units sold statewide for the quarter compared to 14,430 in 2Q 2009 for a 45 percent increase. The statewide existing-condo median sales price was $98,900 for the three-month period; in 2Q 2009, it was $110,300 for a decrease of 10 percent. The 2Q 2010 statewide existing-condo median sales price was 3.2 percent higher than the 1Q 2010 statewide existing-condo median sales price of $95,800.

Low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.91 percent in 2Q 2010; one year earlier, it averaged 5.03 percent.

© 2010 Florida Realtors®

 

 

 

Low U.S. home prices, high loonie make it a good time to be a Canadian snowbird

 

TORONTO – Aug. 6, 2010 – Mary and Ron Ethier long believed a getaway home in the Florida sun would remain a retirement dream, but when a recent real estate turnaround opened the border to a growing flock of snowbirds, the couple suddenly saw an opportunity too tempting to pass up.

“We just felt with the prices that were happening down there, that it was out of our reach financially,” said Mary Ethier from her home in Pembroke, Ont. “But when their real estate market basically took a big hit and the Canadian dollar came up, we thought if we’re ever going to do it, now’s the time to get off our butts and go and do it.”

The couple, too busy with their lawn-care franchise to enjoy Ontario summers, toured homes in the Fort Myers, Fla., area in the fall of 2007 and made a lowball offer, expecting to negotiate, but instead found their deal accepted.

By January, they owned a condo in a gated community, a property foreclosed upon when the U.S. housing bubble burst and home prices began to plummet and many American homeowners realized they could no longer pay their mortgages.

The loonie has since risen to hover around parity while U.S. home prices have stagnated, creating new financial incentives for Canadians to act fast and scoop up American real estate deals.

“It’s a once in a lifetime opportunity for Canadians,” says Mark Dziedzic, a Canadian Realtor with Cross Border Realty and a snowbird himself.

The Sun Belt states of Texas, Arizona, California and Florida are favorites, while there are also deals to be had in Nevada and Georgia. The average price of a home in Phoenix, Ariz., is US$144,600, compared to $432,253 in Toronto.

“People are buying $40,000 to $50,000 condos in Phoenix right now. Condos (in Toronto) are selling for $400,000 to $500,000,” Dziedzic said. Taxes, condo fees and closing costs are also generally less expensive in the U.S., he added.

Prices in most U.S. regions have steadied after falling for three years, but a high number of foreclosures persist, lowering prices, especially in Florida and Nevada, said Bank of Montreal mortgage specialist Laura Parsons.

“This is the time to buy if you’re going to,” she said.

“I think you’ve got to look at this as a long-term investment because you’re getting such a deal. You’re going to have to hang on to it for a while,” and ride out any further downturns before the market picks up again, she said.

There is a fine balance between rushing to buy and waiting for lower prices. Economists predict the U.S. housing market will remain soft, but it’s futile to make decisions based on where a currency or a housing market is going.

“I don’t think you need to rush down and get a place, but the good stuff in the lower price range ... those are moving. The good ones come up and they’re sold,” Dziedzic said.

Buying real estate in the U.S. is becoming easier for Canadians as more snowbirds snap up getaway homes. But experts caution that the buying process, which takes about three to four months, is a different beast.

© The Canadian Press 2010

 

 

For South Florida market, a hopeful sign

MIAMI – Aug. 4, 2010 – South Florida’s housing sector asserted its independence from national trends in July as a key measure of the real estate market improved year-over-year, with the region’s international buyers and still-drooping prices propping up the local housing market.

In July, pending home sales in Miami-Dade County stood at 10,113, up 40.5 percent from July of 2009, according to figures released Tuesday by the Miami Realtors. In Broward, pending sales stood at 7,830 in July, up 25.4 percent from a year earlier.

Pending home sales refer to the number of housing contracts that have been signed, and offer an early indicator of sales activity because typical sales have a one- to two-month lag between a sales contract and a completed deal.

South Florida sizes up well when compared to the national picture, where the pending home sales index hit a record low 75.7 in June, according to the National Association of Realtors. It was the second monthly falloff after the April 30 deadline to enter the federal homebuyer tax credit program, with June’s pending sales down nearly 19 percent from the same month a year earlier.

The local market hasn’t been completely immune from the post-tax-credit slump. In the past three months, pending home sales are down 3.2 percent in Miami-Dade and down 5.1 percent in Broward.

“We are encouraged by the statistics for pending home sales in the South Florida real estate market even after the expiration of the homebuyer tax credit,” Jack H. Levine, chairman of the board of the Miami Realtors, said in a statement. “While the number of pending sales has dropped slightly month-over-month, they are still significantly higher than they were a year ago.”

With financing still difficult to obtain, all-cash buyers and deep discounts on distressed properties are propping up sales, said Peter Zalewski, a principal at Bal-Harbour-based Condo Vultures.

About 60 percent of South Florida sales have gone to foreign buyers, who are more likely to pay with cash and were never eligible for the tax credit.

Additionally, more than half of recent sales in Miami-Dade and Broward counties involve short sales or bank-owned home sales. In the last 12 months, the number of bank-owned condos and single-family homes sold has more than doubled.

A short sale occurs when a home is sold for a price that is less than the value of the outstanding mortgage. In what has become a notoriously lengthy process, both the seller and the bank must agree to the price.

Banks have recently become more willing to allow sellers to pursue short sales, which now account for one in four South Florida sales.

There were 944 short sales in Miami-Dade and Broward in June, up from only 379 a year earlier, according to analysis by Esslinger-Wooten-Maxwell Realty.

That’s a reason to be cautious while interpreting pending homes sales data in a market like South Florida’s, said Doug DeWitt, Miami-based real estate broker.

Many short sale contracts are rejected by the bank after a seller agrees to sell for a price below what they owe, meaning those pending sales don’t lead to closings.

Additionally, because short sales take months to process, many remain in the “pending” stage longer than normal, boosting pending sales numbers for multiple months.

In Miami-Dade County, more than half of the pending single-family home sales on the Multiple Listing Service are short sales, said DeWitt.

“I’d say at least half of those are not going to close,” he said. “I would say stick to the actual closed sales to make the true comparison, because there’s a lot of different ways that these pending sales can fall through.”

The increasing number of short sales and bank-owned properties coming to market has put downward pressure on prices in South Florida, said Jack McCabe, chief executive of McCabe Research & Consulting in Deerfield Beach. In June, median prices of existing homes stood at $203,300 in Miami-Dade, down about 4 percent from the same month a year earlier. Median existing condo prices, at $128,000, were down about 9 percent in Miami-Dade.

“When you’re in a neighborhood that has two foreclosures and a short sale that are priced $50,000 or $75,000 below what you thought you could get for your home, you do not set the barometer for the other [home] prices,” McCabe said. “They set the prices for you.”

Tejus Karia, who has been trying to sell his Davie townhouse for eight months, has cut prices multiple times.

He has slashed the price on the three-bedroom, from $185,000 to $165,000 to draw in buyers but didn’t get a single offer. He recently decided to rent it instead.

Zalewski said many sellers are coming to accept the new, lower pricing levels being dictated by the market, and are acting accordingly.

According to a report by Trulia, one in five home sellers in the Miami area slashed prices last month, with an average reduction of 13 percent.

Karia said the main obstacle for most of his buyers was the lack of financing: “Nobody could come up with the money. The banks aren’t lending money, and that’s going to leave a lot of these houses in limbo.”

Copyright © 2010 The Miami Herald, Toluse Olorunnipa. Distributed by McClatchy-Tribune Information Services.

 

 

 

 

 

Miami Existing Home sales

Miami, FL – The Miami real estate market continues to strengthen as a result of increased sales and stabilizing home prices.  In the Miami MSA, there was a 33 percent increase in condominium sales in June 2010 compared to June 2009 and a 58 percent increase compared to two years ago, according to the Realtor Association of Greater Miami and the Beaches and the Southeast Florida Multiple Listing Service (SEFMLS).

The sales of existing single-family homes in the Miami MSA increased one (1) percent in June 2010 compared to June 2009 and increased 55.2 percent compared to June 2008.  The Miami real estate market has experienced rising sales since August 2008, posting increases each of the last 23 months.  Statewide sales increased 33 percent for condominiums and 17 percent for single-family homes.

Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops decreased 5.1 percent from the previous month but increased 9.8 percent from June 2009, according to the National Association of Realtors (NAR).

The median sales price for single-family homes in the Miami metropolitan statistical area (MSA) in June dropped four (4) percent to $203,300 compared to a year ago but increased 3.4 percent from a month earlier.  The median sales price for condominiums in June was $128,800 down nine (9) percent from a year earlier and up two (2) percent from the previous month.  Statewide median sales prices decreased five (5) percent for single-family homes and 16 percent for condominiums.

“Despite the expiration of the homebuyer tax credit, demand for South Florida residential real estate continues,” said Terri Bersach, 2010 Chairman of the Board of the Realtor Association of Greater Miami and the Beaches.  “South Florida is a unique city and marketplace, and our market has definitely rebounded.  We expect Miami’s worldwide appeal to continue to drive sales and home values and to reveal that the market over-corrected itself after the record-breaking boom of the last decade.”

Average Home Sales Price Increases
The average sales prices, which have increased consistently over the last few months, for residential properties rose again considerably in June.  According to the SEFMLS, the average sales price for residential properties that sold in Miami-Dade County in June increased 7.2 percent from the previous year to $359,532 for single-family homes and 14.6 percent to $281,146 for condominiums.

Days on the Market and Inventory Levels Decrease
The inventory of residential listings in Miami-Dade County according to the SEFMLS has dropped 13 percent from 28,956 to 25,190 since June 2009.  The number of active single-family home listings is 16 percent lower compared to a year ago, while active condominium listings have dropped 11.4 percent.    Compared to last month, the total inventory of homes increased 1.9 percent.  The average days a property stays on the market decreased 17.4 percent for single-family homes and 10.9 percent for condominiums.  Nationally, total housing inventory at the end of June rose 2.5 percent from the previous month. 

According to the recently-released 2010 Profile of International Home Buying Activity by NAR, Florida continues to be the top state by far for international buying activity.  RAMB Residential President Oliver Ruiz says this factor will help the local market strengthen further both in the near and distant futures.

“International buyers have consistently been an important force in the local real estate,” said Ruiz.  “International buyers continue to take advantage of all Miami has to offer, as a world-class city with affordable properties, including vacation, second, and ocean front homes.  These foreign buyers are mostly purchasing condominiums and are largely cash buyers.”

Note:  RAMB and the Southeast Florida Multiple Listing Service are the sources for statistics reported by the National Association of Realtors and Florida Realtors.  RAMB reports average sales price as well as median sales price.

 

 

Foreclosures: One-third of Fla. sales

WASHINGTON – June 30, 2010 – According to a new report from RealtyTrac, foreclosure homes accounted for 31 percent of all residential sales in the first quarter of 2010. Additionally, the average sales price of properties sold while in some stage of foreclosure was nearly 27 percent below the average sales price of properties not in the foreclosure process.

A total of 232,959 U.S. properties in some stage of foreclosure – default, scheduled for auction or bank-owned (REO) – sold to third parties in first quarter 2010, a decrease of 14 percent from the previous quarter and down 33 percent from the peak during the first quarter of 2009, when sales of foreclosure homes accounted for 37 percent of all residential sales.

“First-time homebuyers and investors continue to buy foreclosure properties in large numbers and at substantial discounts,” says James J. Saccacio, chief executive officer of RealtyTrac. “As lenders have begun repossessing homes at record levels over the first half of 2010, it will be interesting to watch how they will manage the inventory levels of distressed properties on the market in order to prevent more dramatic price deterioration.”

The average sales prices on properties in some stage of foreclosure decreased 23 percent from 2006 to 2009, while the average discounts on foreclosure purchases steadily increased from 21 percent in 2006 to 27 percent in the first quarter of 2010. Discounts on REOs are larger than discounts on pre-foreclosures, although discounts on pre-foreclosures appear to be trending higher as short sales become more common.

Also from the RealtyTrac report:

• Foreclosure sales increased 2,500 percent from 2005 to 2009.

• More than 1.2 million U.S. properties in some stage of foreclosure sold to third parties in 2009, an increase of 25 percent from 2008 and an increase of nearly 327 percent from 2007.

• Total foreclosure sales in 2009 were up more than 1,100 percent from 2006.

• Foreclosure sales accounted for 29 percent of all sales in 2009, up from 23 percent in 2008 and up from 6 percent in 2007.


• The average sales price of properties that sold while in some stage of foreclosure in 2009 was 25 percent below the average sales price of properties not in the foreclosure process. That was up from an average discount of 22 percent in 2008 but down from an average discount of 26 percent in 2007.

• The average foreclosure discount in 2005 was 35 percent, driven by a nearly 50 percent discount on REOs; however, the discount on pre-foreclosures trended up slightly over the same five-year period, from nearly 12 percent in 2005 to 15 percent in 2008 and 2009.

• Nevada, California, Arizona posted the highest percentage of foreclosure sales in the first quarter. Foreclosure sales accounted for 64 percent of all sales in Nevada in the first quarter, the highest percentage of any state. California posted the second highest percentage, with foreclosure sales accounting for 51 percent of all sales there in the first quarter – up slightly from 50 percent in the previous quarter but down from 70 percent of all sales in the first quarter of 2009. Foreclosure sales as a percentage of all sales were also down in Arizona from the first quarter of 2009, but the state still posted the third highest percentage in the first quarter, with foreclosure sales accounting for 50 percent of all sales.

• Other states where foreclosure sales accounted for at least one-third of all sales were Massachusetts, Rhode Island, Florida, Michigan, Georgia, Illinois, Idaho and Oregon.

© 2010 Florida Realtors®

 

 

 

Trulia Launches 'Rent vs. Buy' Tool

Real estate Web site Trulia.com launched a Rent vs. Buy Index for 50 major cities Thursday.

The index compares the costs of buying a two-bedroom condo with the costs of renting one, including insurance, homeowner fees, taxes and mortgage insurance. The results can be extrapolated to other classes of homes, including larger single-family houses.

The index also reflects price stability – rents are usually more stable than sale prices, Trulia said. None of the intangibles are considered.

Here are the 10 cities where Trulia considers it better to buy than rent:
·    Minneapolis
·    Arlington, Texas
·    Miami
·    Fresno, Calif.
·    San Antonio
·    Mesa, Ariz.
·    Jacksonville, Fla.
·    Phoenix
·    El Paso, Texas
·    Las Vegas

Here are the 10 cities where Trulia thinks it is better to rent:
·    New York
·    Omaha, Neb.
·    Seattle
·    Portland, Ore.
·    San Francisco
·    Oklahoma City
·    Kansas City, Mo.
·    San Diego
·    Cleveland
·    Dallas

Source: Trulia.com (06/03/2010)

 

Foreign buyers are flocking to Florida condos again


TORONTO – June 1, 2010 – Nearly 800 Canadians jammed a hotel ballroom near the Toronto airport Sunday to hear the gospel of Florida real estate.

High-end Brazilian buyers prefer to be wooed more intimately – perhaps at a cocktail party or a small private dinner – but they are just as pumped.

Lured by rock-bottom prices, international buyers are now flocking to buy Florida properties. It’s especially true in countries where the currency is strong against the dollar.

“We’re telling Canadians this is a once-in-a-lifetime opportunity – the perfect storm,” said Brian Ellis, who heads Toronto-based Florida Home Finders of Canada. “The prices are just incredible and the Canadian dollar has been so strong.”

At least three of five buyers in the Greater Downtown Miami condo market are coming from abroad, estimates Jenny Huertas, international sales director for Condo Vultures, a real estate advisory and research firm.

The stampede from overseas is “kind of like a foreign subsidy helping us resolve our real estate problems,” said Peter Zalewski, a Condo Vultures principal. “This time the assistance isn’t coming from Washington. It’s coming from Caracas, London, Milan, Bogota.”

The buying frenzy was set off by developers lowering prices on new units to below what it costs to build in today’s market, Huertas said.

“There were many people on the sidelines watching for the floor. In the last three or four months there’s the perception that we’re there,” said developer Edgardo Defortuna, president and chief executive of Fortune International.

Cash customers

Most of the foreigners are cash buyers like Leroy Jean Francois, who has snapped up 47 properties since January for the two real estate firms he works for in France and Switzerland. The plan, he said, is to buy, fix up if necessary, rent out for the next five years, then sell – for a profit.

The Frenchman has already made a paper profit on a unit he closed on in January at Marquis Residences, a 67-story luxury tower in downtown Miami where prices for a one-bedroom apartment start at $375,000. His unit cost $317 per square foot – “a great price, incredible,” he said.

A recent plunge in the euro – it’s now worth $1.23, down from its high of more than $1.60 in 2008 – could cool things off a little. To buy a $1 million condo, it now takes around 814,000 euros compared to 625,000 euros under the old exchange rate.

Meantime, prices at Marquis Residences also have strengthened to around $400 per square foot.

But even the declining euro has barely given Francois pause.

“I think the euro will weaken more. But even if the exchange rate is $1 to 1 euro, South Florida real estate is still a great bargain for us,” said Francois, who is president of The Bridge, a real estate fund consultancy.

Average Joes

Luxury condos are once again popular among Latin America buyers who purchase them as investments but also as a home base. While their children attend school here, they attend to business interests or escape strife at home.

But for his Canadian buyers, Ellis scours South Florida for condo units at around the $150,000 price point. “We’re basically the Wal-Mart. We’re for the average Joe.”

And these days average Joe Canadian can afford much more. For decades the U.S. dollar was worth more than the Canadian dollar and buying in the U.S. was always more expensive for Canadians. But in September 2007, the Canadian dollar reached parity with the greenback for the first time in 31 years. It fell back again, but now the Canadian loonie, which takes its name from the loon pictured on the one-dollar coin, is near parity at around 95 cents.

So Ellis has been offering his Florida real estate seminars to packed houses in Ontario and is thinking about taking the show on the road to Montreal. There was so much interest in the latest seminar that he had to schedule two sessions for 400 people each this Sunday.

Most of his Canadian buyers are what Ellis calls “end-vestors,” meaning they plan on renting a unit out for now with an eye toward using it themselves down the road.

Since Home Finders is licensed as a brokerage only in Canada, it works with Florida brokers who complete the sales and pay the Canadian firm referral fees. By year’s end, Ellis said he expects to have facilitated 500 Florida closings.

Prices halved

Though Home Finders is now working with one Sunny Isles Beach property where condos are listed for up to $350,000, the Sun Vista Gardens in Tamarac is a more typical offering.

There, buyers can find a one-bedroom for under $75,000 and a two-bedroom for under $100,000. That same one-bedroom used to cost $190,000, according to Florida Home Finders’ website.

Ellis said he’s actually having a hard time coming up with enough Florida properties in the $150,000 range. Of course, he’s picky. He’s looking for good value, a good location and properties without legal complications. Most of the Canadians want condos, but Ellis said he has some requests for single-family homes.

Though buyers from Europe, Latin America – most from Argentina, Brazil, Colombia, and Venezuela – and Canada predominate in the South Florida market, a smattering of Chinese investors and African buyers also are starting to make purchases.

“We recently sold a $7.5 million penthouse at Jade Ocean to a Nigerian buyer,” said Defortuna. “They were here and they loved it.”

China, too

At Fortune’s 237-unit Artech building, Defortuna said 11 condos were sold to Chinese investors. Units in the building are selling for almost half the original asking price.

“I think China is still a marginal market,” said Defortuna. “The Chinese are more focused on the West Coast and New York, but small pockets [of Chinese buyers] can make a big difference in a building.”

With international offices in Mexico and Argentina, Fortune can tap directly into those markets, and it frequently holds seminars on the legal and financial aspects of owning property in the United States. At one recent event in Buenos Aires there was space for just 200 people, so Fortune decided to charge a $60 fee. “We still had to close reservations,” said Defortuna.

One big concern of foreign buyers is what happens to their properties when they lock up after a vacation, said Defortuna. But Fortune International’s property management division will take care of things like paying utilities and condo fees – and even turn over a client’s car engine once a week so the battery doesn’t die.

A number of local brokerages have country specialists on staff who work with their counterparts abroad to bring in buyers.

Elite Global Reality, for example, has sales associates who specialize in the French, Italian and Chilean markets, said Thiago Costa, executive director and sales associates.

Costa, who is Brazilian, travels frequently to his homeland where local partners have set up meetings with potential buyers in Sao Paulo, Rio de Janeiro or Belo Horizonte who are “willing and able to buy.”

He prefers to present one South Florida project at a time to 10 to 20 people at a cocktail party or even a dinner at the home of a potential buyer.

With Miami prices so low, the Brazilian currency (the real) strong, the Brazilian economy robust and real estate prices on the rise in cities like Sao Paulo, where a luxury property might cost $800 to $1,000 per square foot, Brazilians like what they see in South Florida.

‘Impossible to lose’

“They feel it’s almost impossible to lose money,” said Costa.

Africa Israel USA, the New York-based developer of the 292-unit Marquis Residences, also works with the brokerage community in target markets like Venezuela, the South of France, Mexico and Brazil. Working with brokers, it has put on events ranging from fashion shows to invitation-only cocktail parties and dinners, said Lori Odover, the managing director.

“It needs to be someone they know, that they have a one-on-one relationship with,” she said. So that means even an event at a synagogue or someone’s uncle’s pool party can be a selling opportunity.

Though most international buyers pay cash, there’s an international financing program at Marquis that has proven popular. Some 57 percent of Marquis’ foreign buyers have chosen it.

While the program’s 45 percent down payment for a five-year ARM seems steep, Bob Wuan, managing director of Americore Mortgage/Vacation Finance, said, “We find international buyers are more than willing to put 50 percent or more down. They want to put money in U.S. real estate as a currency hedge or an inflation hedge.”

Meanwhile, Ellis keeps telling Canadians what a great deal Florida is: “We believe Florida is in for quite a rebound. We just don’t know when.”

Copyright © 2010 The Miami Herald, Mimi Whitefield. Distributed by McClatchy-Tribune Information Services.

 

 

More People Are Choosing to Rent

More than 76 percent of people say they would prefer to rent a home than buy one, up 5 percent from 2009, according to this year’s survey from the National Apartment Association.

The survey also calculated that 60 percent of renters plan to continue renting in 2011, with only 12 percent planning to buy a home in the next year.

Some 64 percent of renters cited having no responsibility for major repairs or maintenance as the primary reason they prefer to rent, followed by 33 percent who cited not being impacted by an unpredictable real estate market or susceptible to foreclosure.

Source: National Apartment Association (05/24/2010)

 

April Homes Sales Spike 14.8%

Sales of new homes jumped in April, climbing 14.8 percent to a seasonally adjusted rate of 504,000 last month, up from 439,000 in March, the U.S. Commerce Department reported Wednesday.

Sales were up 47.8 percent over the same period a year ago.

The surge was driven by the home buyer tax credit, which expired April 30. "We got two solid increases in March and April," says Mark Vitner, senior economist at Wells Fargo. "We may see sales fall to a record low in the aftermath of the tax credit program, but any fallback should be short-lived."

The government estimates that there were 211,000 new homes on the market at the end of April, a five-month inventory.

Source: CNNMoney.com, Hibah Yousuf (05/26/2010) 

 

Florida’s existing home, condo sales rise in April

ORLANDO, Fla. – May 24, 2010 – Sales of existing homes in Florida rose 27 percent in April, which means that sales activity has increased in the year-to-year comparison for 20 months, according to the latest housing data released by Florida Realtors®. Another positive sign: Last month's statewide existing-home median price of $140,100 was 1 percent higher than the statewide median price in April 2009.

Existing home sales rose 27 percent last month with a total of 16,781 homes sold statewide compared to 13,244 homes sold in April 2009, according to Florida Realtors. Statewide existing home sales last month increased nearly 3 percent over statewide sales activity in March. Meanwhile, April's statewide existing-home median price was 2.3 percent higher than March's statewide existing-home median price of $137,000. It marks the second month in a row that the statewide existing-home median price has increased over the previous month's median.

"Buyers responding to the federal homebuyer tax credit before it expired helped to boost home sales across Florida," said 2010 Florida Realtors President Wendell Davis, a broker with Watson Realty Corp. in Jacksonville. "And buying conditions remain favorable, with a variety of housing options available in local markets at attractive and affordable prices. Plus, current mortgage interest rates are at historically low levels, which gives buyers more 'bang' for their buck."

Florida Realtors also reported a 55 percent increase in statewide sales of existing condos in April compared to the previous year's sales figure; statewide existing condo sales last month rose 2 percent over the total units sold in March. Though April's statewide existing-condo median price of $103,600 was down 3 percent compared to the year-ago figure, it was 6.9 percent higher than March's statewide existing-condo median price.

 
Seventeen of Florida's metropolitan statistical areas (MSAs) reported increased existing home sales in April while all but one MSA had higher condo sales. A majority of the state's MSAs have reported increased sales for 22 consecutive months.

Florida's median sales price for existing homes last month was $140,100; a year ago, it was $138,100 for a 1 percent gain. The median is the midpoint; half the homes sold for more, half for less.

Thenational median sales price for existing single-family homes in March 2010 was $170,700, up 0.6 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $301,790in March; in Massachusetts, it was $280,000; in Maryland, it was $235,785; and in New York, it was $209,900.

According to NAR's latest outlook, two trends are influencing a broader stabilization of home prices in housing markets across the nation: months of increased sales activity and lower levels of inventory. "Foreclosures have been feeding into the inventory pipeline at a fairly steady pace and are being absorbed manageably," said NAR Chief Economist Lawrence Yun. "With home values stabilizing, a revival in homebuying confidence will likely help the housing market get back on its feet even as the tax credit impact disappears."

In Florida's year-to-year comparison for condos, 7,291 units sold statewide last month compared to 4,703 units in April 2009 for an increase of 55 percent. The statewide existing condo median sales price last month was $103,600; in April 2009 it was $107,200 for a 3 percent decrease. The national median existing condo price was$170,600 in March, according to NAR.

Interest rates for a 30-year fixed-rate mortgage averaged 5.10 percent in April, up from the average rate of 4.81 percent during the same month a year earlier, according to Freddie Mac. Florida Realtors' sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Among the state's smaller markets, the Panama City MSA reported a total of 128 homes sold in April compared to 108 homes a year earlier for a 19 percent increase. The market's existing home median sales price last month was $160,000; a year earlier it was $156,800 for an increase of 2 percent. A total of 65 condos sold in the MSA in April compared to 53 units sold the same month a year earlier for an increase of 23 percent. The existing condo median price last month was $187,100; a year earlier, it was $172,900 for an 8 percent gain.

© 2010 Florida Realtors®

 

 

Fla. foreclosures dropped in April


TALLAHASSEE, Fla. – May 14, 2010 – The number of Florida foreclosures fell in April from a year earlier, mirroring a national trend that indicates a slowing of defaults on mortgages, according to data released Thursday by RealtyTrac.

Florida's foreclosure fell 18 percent from March and was down 25 percent compared to April 2009. Despite the improvement, the state still posted the second highest number of foreclosures in the nation, however, with 48,384 properties receiving a foreclosure filing during the month.

One in every 182 Florida properties received some type of foreclosure filing, the third highest rate (based on total population) in the country behind Nevada and Arizona. In Nevada, still the poster child of the housing bust, one in every 69 homes was in foreclosure.

Nationally, foreclosure filings fell 2 percent from April 2009, according to the Irvine, Calif.-based company that collects data from more than 2,200 counties nationwide.

The number of foreclosure notices issued fell nationally for the first time since the company began tracking foreclosures in 2005. April also marked an all-time high for bank repossessions, the company reported.

"We expect a similar pattern to continue for most of this year, with the overall numbers staying at a high level and ripples of activity hitting the various stages of the foreclosure process as lenders systematically work through the backlog of distressed properties." says James J. Saccacio, chief executive officer of RealtyTrac, in a statement.

The Fort Myers area posted the nation's fourth highest metro foreclosure rate, with one in every 105 housing units receiving a foreclosure filing. The region continues to dig out from under the housing collapse that followed an extraordinary boom in southwest Florida.

Orlando, meanwhile, dropped out of the top 10 to No. 11 in the monthly poll.

Easing credit and an uptick in economic activity are possible drivers to the lower figures. Federal programs have also helped.

Source: News Service of Florida, Michael Peltier

 

 

Florida’s existing home, condo sales up in 1Q 2010

ORLANDO, Fla. – May 11, 2010 — Salesof existing single-family homes in Florida rose 24 percent in first quarter 2010 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 38,846 existing homes sold statewide in 1Q 2010; during the same period the year before, a total of 31,410 existing homes sold. It marks the seventh consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

Statewide sales of existing condominiums in the first quarter rose 67 percent compared to the same time the previous year. This marks the sixth consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

"The first quarter data release from the Florida Realtors paints a picture of a housing market continuing down the long road to recovery," said Dr. Sean Snaith, director for the University of Central Florida's Institute for Economic Competitiveness. "Transactions in the single family market have extended quarterly year-over-year gains for nearly two years, and condo sales have also risen sharply. Median prices in most areas of the state continue to fall; however, the rate at which they are falling has diminished significantly and this is indicative of a bottom approaching.

"How long prices stay at the bottom and when price appreciation will reappear will depend in a large part on the improving fundamentals in the economy and credit markets."

The University of Florida's Bergstrom Center for Real Estate Studies' latest quarterly survey of real estate trends also notes positive signs of recovery in the state's real estate industry. The survey polls market research economists, industry executives, real estate scholars and other experts.

"Results indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types," said Timothy Becker, the center's director. Private capital – both foreign and domestic – continues to enter the state in search of quality investment deals, he added.

Seventeen of Florida's metropolitan statistical areas (MSAs) reported increased sales of existing homes in 1Q 2010 compared to the same three-month-period a year earlier, while all of the MSAs showed gains in condo sales.

The statewide existing-home median sales price was $133,800 in 1Q 2010; a year earlier, it was $140,900 for a decrease of 5 percent. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

Inthe year-to-year quarterly comparison for condo sales, 16,897 units sold statewide for the quarter compared to 10,131 in 1Q 2009 for a 67 percent increase. The statewide existing-condo median sales price was $95,800 for the three-month period; in 1Q 2009, it was $110,000 for a decrease of 13 percent.

Low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 5 percent in 1Q 2010; one year earlier, it averaged 5.06 percent.

© 2010 Florida Realtors®

 

Fueled by overseas buyers, condo sales soar

NEW YORK – May 12, 2010 – Nicola Schon, an Italian restaurateur with homes in Monte Carlo, Milan and New York, wanted the perfect pied-a-terre in Miami, with plenty of space, water views and amenities such as a spa, concierge and room service.

So he bought a $1.8 million condo at Epic in downtown Miami – and persuaded 19 friends from Italy to buy there, too.

"The building is half-Italian now," joked Schon, who owns eateries Quattro and Sosta in Miami Beach. "We should put an Italian flag on the roof!"

International buyers are quickly converting their currency into real estate in South Florida, snatching up property at floor-sweeping prices. At high-end Epic, Schon paid about 25 percent less than he would have at pre-construction prices a few years ago.

Add low interest rates and a deadline for federal tax credits, and overall sales of single-family homes and condominiums in South Florida soared during the first three months of 2010, according to quarterly figures released Tuesday by Florida Realtors. The association's April numbers will be out May 24.

In Miami-Dade, sales of condos skyrocketed 46 percent during the first quarter, to 1,920, compared to the same period of 2009. Median prices fell 9 percent to $136,100, figures from Florida Realtors show.

The numbers reflect a real estate market where prices have generally bottomed out, said analyst David Dabby, president of Coral Gables-based Dabby Group Advisors.

"It's a continuation of the trend that has been in place for close to a year now. Prices have been reduced by 50 percent over the 2006 highs, and that has increased sales significantly," Dabby said. "Hopefully it will continue, because since 55 percent of the sales are [short sales and foreclosures], the more sales we have, the quicker we will be able to clear the foreclosure pipeline."

In fact, real estate agents say that buyers who were on the fence before are signing contracts, and renters are realizing it now makes sense to own.

Another reason sales have picked up is federal tax incentives. Buyers had until April 30 to sign a contract to purchase a primary residence and until June 30 to close on it to be eligible for the federal tax credit of up to $8,000 for first-time buyers and up to $6,500 for repeat buyers.

In April, 907 condos sold in Miami-Dade, compared to 872 in April 2009, and 1,330 sold in April in Broward, compared to 1,003 the same month the previous year, according to figures from EWM Realtors, which compiles them from aggregated MLS data.

Veronica Cervera, president of Miami-based Cervera Real Estate, which specializes in condos on Brickell, downtown Miami, Miami Beach and Key Biscayne, said she has seen a surge in international buyers including those from Italy, Germany, Spain, Sweden, Greece and even China. Many are buying vacation homes, she said.

International clients tell her: "We know we'll never see prices like this in Miami again," said Cervera, who sold Schon his unit. "I know the market has turned – it's evident," she said. "We're in the process of negotiating more deals in the last two-week period than we did last year, in some of the buildings."

Fewer than 40,000 condominiums and town houses are now for resale in South Florida, the lowest number of available units on the market in the last 18 months, according to a new report from CondoVultures.com.

Resale units in Miami-Dade, Broward, and Palm Beach counties have dropped by 23 percent, compared to May 2009 when there were 52,000 on the market, the report said.

"As you look at inventory and what is being depleted, Dade is moving much faster than Broward," said Peter Zalewski, principal with Condo Vultures, a real estate advisory firm. "Miami is really ahead of the curve: it peaked first, it bottomed out first and it is now showing signs of stabilization – and the other counties are following behind."

During the first quarter, sales of single-family homes in Miami-Dade jumped 12 percent, to 1,530 homes, amid a drop in median prices of 6 percent to $191,200, Florida Realtors figures show.

In Broward, sales of condos rose 45 percent during the first quarter to 2,739, as median prices fell 15 percent to $71,900. Sales of single-family homes inched up by 7 percent to 1,756, as median prices dropped 6 percent to $196,700, the figures show.

Jeff Watts and his wife Najat, who had been renting in Fort Lauderdale and before that in Aventura, just bought a $360,000 townhome in downtown Fort Lauderdale's Rio Vista neighborhood for their growing family of four.

"When we ran the numbers of purchasing the townhome versus renting, it made economic sense to buy, because we had the money to put down," said Jeff Watts, 34, who works in banking. Luckily, they experienced a buyer's market, in terms of price negotiation and the amount of inventory, he said.

Liz Caldwell, the EWM Realtor who worked with Watts, said the townhome the Watts family purchased was priced at $550,000 to $600,000 at the peak of the market in 2006. She expects it to rise in value over time. "The worst is over probably in terms of values," said Caldwell, who specializes in Broward real estate from Weston to Fort Lauderdale.

"You will see some drop in value in the high-end, but for the average dual-income family looking to buy a $600,000-$700,000 house, those values have pretty much stabilized."

Copyright © 2010 The Miami Herald, Ina Paiva Cordle. Distributed by McClatchy-Tribune Information Services. 

 

Home prices could sink again

McLEAN, Va. – May 12, 2010 – Home prices are widely expected to fall now that a tax credit for homebuyers has expired.

That's raising concern about a possible double dip in home prices.

National housing prices stopped falling early last year and rose 0.3 percent over the 12 months ended in February, according to a study by real estate analytics firm CoreLogic.

The firm predicts prices will fall this year before starting to rise again in late 2010. Even so, next February's prices are likely to be 4.2 percent lower, it forecasts.

"Home prices will struggle for maybe another year," says Mark Fleming, CoreLogic's chief economist.

A shrunken pool of buyers due to the tax credit's expiration is one reason.

"The tax credit is the big reason home prices have been so buoyant, and sales will drop" with its expiration, says Paul Ashworth of Capital Economics. "You will see a double dip in housing prices."

Another reason is the number of distressed houses – including foreclosures and short sales – that are on the market or that will be in coming months.

Distressed homes, typically sold at discounted prices, accounted for 36 percent of first-quarter sales, the National Association of Realtors reported Tuesday. The first quarter's median single-family home price ($166,100) was roughly flat with a year earlier, despite gains in nearly two-thirds of 152 metro areas that the NAR surveys.

The NAR's survey isn't the first to show evidence of softening prices. The 20-city Standard & Poor's/Case-Shiller home price index has fallen for five-consecutive months through February.

"It is too early to say the housing market is recovering," David Blitzer, chairman of S&P's index committee, said when the Case-Shiller report for February was released last month.

There may be some good news for sellers in areas not hit so hard by foreclosures. When distressed sales are excluded, CoreLogic's home price index shows a 4.9 percent rise in U.S. prices from this February through next February.

While some economists expect home prices to weaken, they don't expect a major drop.

"I wouldn't expect anything like the meltdown we've had over the past couple years," says Jay Feldman, senior economist at Credit Suisse.

Copyright © USA TODAY 2010, a division of Gannett Co. Inc. Stephanie Armour.

 

Florida real estate market has hit bottom

GAINESVILLE, Fla. – April 29, 2010 – Florida real estate markets show the first tentative signs of recovering from the most painful recession in the state's history, according to the latest University of Florida (UF) report.

"Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types," says Timothy Becker, director of UF's Bergstrom Center for Real Estate Studies.

But while most of the survey respondents report the market probably won't get any worse, few say it has actually begun to improve yet, Becker says. "One of our respondents summed it up by stating that 'if anything, we will get less bad.'"

On the positive side, private capital – both foreign and domestic – is continuing to enter the state in search of quality investment deals. As banks start to deal with their problem assets, more deals will come to market.

Another good sign: Life insurance companies have started to re-invest in commercial properties after backing off for the last year and a half, Becker says. Because these companies use premiums from life insurance policies to make investments, they are not deterred by the lack of available bank financing.

"(Life insurance companies) see the fundamentals of the economy stabilizing and they see the opportunity to get quality assets at a good price," Becker says. "So if they think things aren't going to get worse and they may actually get better, it follows that they're going to want to start investing again."

On the negative side, unemployment continues to be one of the state's biggest problems, edging up to 12.3 percent in March, its highest level since the state began keeping count in the 1970s. Florida has lost more than 880,000 jobs since 2007.

Although there is a potential for job growth later in the year, even under the most optimistic assumptions it will take three to four years to return to 2006 levels, Becker says.

Also of concern is the continued reluctance of commercial banks to lend money because of pressure from regulators to manage risks along with depressed values that make it difficult to refinance mortgages.

The retail and office markets are the worst off, Becker says. "Until there is an increase in job growth, there is no need for more office space, and people aren't spending as much money as they used to."

Apartments continue to be the best market in the state due to high demand from people moving out of foreclosed homes. "More people are going to be living in temporary spaces than trying to buy homes just because it's gotten a lot more difficult to buy homes from a financing perspective," Becker says.

Statewide, Florida's new housing market will continue to be slow, a result of more foreclosed homes becoming available. "That competition makes it very difficult for new homes to get built and purchased because buyers can often get an equal or nicer home for a much cheaper price on the foreclosure market," Becker says.

One of the strongest areas of the state is South Florida, especially Miami-Dade and Broward counties, with their diverse economies, steady migration and influx of foreign capital. "The glut of condos in South Florida is actually starting to change hands – they're beginning to rent them – and I think there is more life in downtown Miami than there has been in a long time," Becker says.

Orlando, Tampa and Jacksonville also are picking up. "Florida's big cities – those four areas – are less bad off than the rest of the state, and they're going to recover quicker than other places," Becker says.

Jacksonville, in particular, is in a good position because its housing market never got as hot as other markets; and, as a result, it doesn't have as many foreclosures. "I think Jacksonville is primed to really take off, and with the expansion of the port is going to have a lot of jobs coming into the marketplace," Becker says.

A positive note overall is that survey respondents' confidence in their own business has risen for the fifth consecutive quarter. In previous breakdowns by profession, developers and lenders had extremely low expectations for their own businesses, and that has grown substantially in the last few surveys.

"It's always a good sign for us that the lenders think their business is going to get better," Becker says. "Maybe it means there is some light at the end of the tunnel, even though we're still not at a great spot."

© 2010 Florida Realtors®

 

New life in the big city as condos filling up

MIAMI – March 12, 2010 – Out of the ashes of the downtown Miami condo collapse, a bright spot is emerging: a community of full-time residents slowly starting to turn the area into a 24/7 city.

A new study by the Miami Downtown Development Authority, in partnership with Goodkin Consulting/Focus Real Estate Advisors, has found that 74 percent of the 22,079 urban condominium units built since 2003 are occupied. They stretch from the Brickell district south of downtown Miami north to State Road 112.

This reflects a 20 percent increase over the 62 percent occupancy rate reported in a similar study completed in May 2009 and means the glut of new condos is being absorbed more quickly than expected. Sharp price cuts and a willingness to rent units, rather than sell them in a down market, have paved the way.

Before the real estate bust, young professionals such as Melinda Reilly wouldn’t have been able to afford a two-bedroom condo at Met 1 in downtown Miami with its wrap-around balcony and view of Biscayne Bay. But last July she sold her suburban Hollywood house and moved downtown where she is renting.

“It’s cheaper than the mortgage on my house and I get more for my money, plus somebody to take care of everything,” said Reilly, 31, a group sales manager at Doral Golf Resort & Spa. “It’s exciting downtown. It’s really social. Whether it’s a Tuesday or Saturday, you always find a lot of people out in all the restaurants.”

A wave of new urban residents began arriving last year as developers and lenders got more aggressive about cutting prices to move units. At the same time, individual owners, who bought condos for investments, realized renters could at least generate some revenue to cover hefty mortgages.

For downtown leaders who have been pushing for years to revitalize the area, the condo bust has worked to their advantage.

“In a weird sort of way, it has been good for revitalization,” said Neisen Kasdin, vice chairman of the Downtown Development Authority. “It accelerated the revitalization of downtown. Without the overbuilding and the great pool of rental units, downtown would not have been populated to the same extent.”

The DDA study found that 68 percent of the 22,079 new condos in the area have been sold, a 6 percent jump from the May 2009 survey. The average sale price downtown was $300,306, although prices were significantly lower than that in every area of the greater downtown area except Brickell Avenue.

“It’s all about affordability,” said Craig Werley, president and owner of Focus Real Estate Advisors.

“The availability of discounted pricing and good rental values is what’s creating this dynamic. It’s a dramatic improvement over what might have been and what a lot of folks expected.”

Now, downtown is no longer a ghost town after 5 p.m. or on weekends. It’s not uncommon to see people walking their dogs or jogging along Biscayne Boulevard, and young families with baby strollers on Brickell Avenue.

“It’s like a little mini-Manhattan,” said Andreas del Corral, 28, who closed on his unit in Met 1 in May 2008. “When I first moved in, you would only see a few people here and there. Now, the restaurants and bars are filling up. You see groups of five and 10 people walking up and down Brickell, going out for the night.”

The study shows there are still 7,010 unsold units in the new downtown area condominiums, compared with the 8,000 that existed seven months earlier. The biggest chunk of remaining units -- 51 percent -- are in the Brickell area, followed by 23 percent in the Central Business District.

If occupancy trends continue, the study predicts that downtown Miami’s existing condo inventory would effectively be eliminated over the next 25 months.

But Werley and partner Lew Goodkin also caution that this is by no means a sign that the condo real estate crisis is nearing an end.

“For the developers and lenders we’ve got years ahead of us before we create a real true equilibrium,” said Goodkin of Goodkin Consulting.

Renters account for about 52 percent of the occupied condo units downtown.

As far as Landy Labadie is concerned, renters are better for business at his downtown restaurant and nightclub. The director of operations for Mia at Biscayne has been “shocked” since opening in August with the amount of foot traffic. Mia’s business is running about 20 percent over projections.

“Renters are the ones that have the disposable income to go out,” Labadie said. “Owners are typically older and they’re worried about paying the mortgage, maintenance and insurance.”

As the condo buildings fill up with new residents, it’s having an increasingly positive effect on downtown Miami’s commercial base. Residents want places to eat, drink and shop.

The number of retail businesses in downtown Miami grew by 42 in 2009, according to the DDA. That marked the third straight year the district has seen 40 or more net new openings. Since 2005, 152 new retailers have opened downtown. And the growth have come amid an economic downturn that has seen retail contract across the country.

A recent Integra Realty Resources survey of the 50 largest markets in the U.S. found that downtown Miami’s retail vacancy rate of 5.06 percent is among the five lowest in the nation. That’s a big drop from mid-2008, when the vacancy rate climbed as high as 12.5 percent, according to CoStar Group.

“I think people are looking to downtown in terms of leading the way for economic recovery,” said Leo Zabezhinsky, manager of business development and real estate for the DDA.

One of the newest retail arrivals downtown is New York Bagel Deli, which opened about three weeks ago. Already owner Evan Steinman has had to add more employees for the busy lunch hour and extend his closing time to 6 p.m.

“Business is a lot better than we thought, without even advertising or telling people that we’re there,” Steinman said.

At Ecco Pizzateca + Lounge, weekend crowds have grown over the last year to about 100 each night with a steady crowd of regulars, owner Brian Basti said.

“People are getting more accustomed to their surroundings and venturing out of their condos,” he said.

“It’s still dead some nights, but right now it’s really on the verge of turning the corner.”

Even downtown veterans such as retailer La Epoca see the impact of the new residents. La Epoca’s sales are up more than 25 percent so far this year.

“I see new people coming in and introducing themselves every week,” owner Tony Alonso said. “It’s definitely moving in the right direction. I’m a merchant. . . . I want more.”

Copyright © 2010, The Miami Herald, Elaine Walker. Distributed by McClatchy-Tribune Information Services.

 

To walk or not to walk: underwater homeowners face dilemma

DEERFIELD BEACH, Fla. – March 9, 2010 – Michael Keigans is “underwater” on his mortgage, owing $80,000 more than his Deerfield Beach house is worth.

Keigans figures it could take a decade or two to recover the lost equity, so he’s tempted to walk away, even though he has the money to pay. “Why keep putting money into a house that’s going down in value?” he asks.

It’s a question being debated in many households nationwide as the housing crunch continues. Some borrowers feel they have a moral obligation to pay the mortgage, but a growing number of homeowners and consumer advocates say walking away could be a smart business decision.

The scale of the problem is daunting: More than half of all residential mortgage holders in Broward County are underwater, California research firm First American CoreLogic said last week. In Palm Beach County, nearly half of mortgage holders fall in that category.

And there are several reason for the crisis: Homeowners who now are underwater have seen their property values plummet after they paid peak home prices from 2004 to 2006. Many of these borrowers bought with adjustable-rate mortgages, putting little or no money down. Some are underwater because they refinanced their homes at the market’s peak.

So should they walk? Hundreds of thousands of people are doing just that.

Keigans, 36, is considering it, too. First, he wants to try to unload the house in a short sale, in which a buyer would agree to pay current market value – probably no more than $200,000 – and his lender would forgive the remaining debt. If that doesn’t work, he sees little choice but to walk away.

But borrowers have to weigh several practical considerations of so-called strategic default. They risk being sued by the lender for the unpaid mortgage balance for up to 20 years. Their credit will take a huge hit, making it difficult to get a credit card or a car loan. And the poor credit rating could affect future employment and mean higher auto insurance rates.

Some homeowners, unable to strike deals with their lenders, are willing to face those consequences for the opportunity to shed burdensome mortgages.

“There is no easy way out,” said Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter.

In a recent study, global information services company Experian and consulting firm Oliver Wyman estimated that 588,000 borrowers nationwide chose to walk away from their mortgages in 2008, up 128 percent from 2007. The taboo of abandoning homes appears to be dissolving amid the mortgage meltdown, the report said.

Those who walk away and let their homes fall into foreclosure can expect to see their credit scores drop by 200 to 300 points, said Shari Olefson, a Fort Lauderdale real estate lawyer. Foreclosures stay on borrowers’ records for 10 years, and they won’t be able to get other mortgages for at least two or three years, she said.

“We should be encouraging people to meet their obligations,” said Olefson, author of Foreclosure Nation, a book about the housing downturn. “It’s the right thing to do. We should be setting a good example for our kids.”

Florida law allows lenders to seek personal judgments if homeowners default on the mortgage. The increase in homeowners walking away likely will result in more lawsuits from lenders seeking to recoup losses, credit counselors say.

There may be tax issues, too. If lenders forgive the mortgage debt, borrowers who walk away from investment properties risk having to pay federal income taxes on the forgiven amount. Forgiven mortgage debt through 2012 is not taxable income on a primary residence as long as the debt was used to buy or improve the house.

“We don’t think [walking away] is a good option for homeowners,” said Nancy Norris, a spokeswoman for banking giant Chase, which lends in all 50 states. “A mortgage is a contract. We expect you to pay the money back that you borrowed.”

But sometimes that doesn’t make financial sense, said Brent White, a University of Arizona law professor who wrote a research paper in December on underwater borrowers.

White contends that most underwater homeowners stay put to avoid the stigma of foreclosure and because of the “exaggerated anxiety over foreclosure’s perceived consequences.” Borrowers who have good credit before they walk away can rebuild their credit rating within two years of the foreclosure, White wrote.

He said homeowners should make decisions in their own best interests, without worrying about “unnecessary shame and guilt and fear.”

Lenders and other businesses break contracts without considering morals or ethics, White said.

He points out that securities giant Morgan Stanley announced plans in December to hand back to its lender five San Francisco office buildings to get out of the loan obligation.

“We have a double standard,” White said. “It’s indefensible.”

But legal, Cecala said. Businesses often buy assets by setting up corporate entities that protect them from liability. Generally, most underwriters for residential mortgages require borrowers to be on the hook personally.

Edward Sunshine, a theology professor at Barry University, says borrowers and businesses should honor their contracts if they have the financial means to do so. Deciding to walk away from a mortgage in anticipation of financial problems that have not yet happened is rationalization, he said.

“Our whole economic system is based on trust,” he said. “It is important for people to fulfill their obligations and do what they said they’d do.”

Keigans, the Deerfield Beach homeowner, bought the property for $327,000 in 2005. He didn’t make the February mortgage payment of about $2,100. And if he walks, he thinks he’ll be able to rebuild his credit faster than the house would regain the value of his mortgage.

He said he doesn’t feel the least bit guilty. He blames the banking industry for creating the mortgage mess by lowering lending standards to make homeownership attainable for many Americans who couldn’t comfortably afford it. The increased demand helped push prices to record highs.

“The financial minds that made these decisions had to know that someone making $40,000 a year couldn’t repay a $400,000 loan,” Keigans said.

Boca Raton resident Hilton Wiener said reaching out to lenders often is a waste of time.

Wiener, a Fort Lauderdale lawyer, has tried unsuccessfully to make deals with his lenders on 10 underwater investment properties he owns across Florida. But he said they wouldn’t work with him, either refusing to take back the properties or rejecting offers for short sales.

Unwilling to deplete his savings to cover the mortgages, Wiener has stopped making the payments. He said his first responsibility is to his family – not the banks.

“You have to make choices in life,” he said.
 
Copyright © 2010 Sun Sentinel, Fort Lauderdale, Fla. Paul Owers. Distributed by McClatchy-Tribune Information Services.

 

Buffett predicts downturn will end in 2011

NEW YORK – March 2, 2010 – Billionaire investor Warren Buffett predicted that the real estate market downturn would end by 2011 as the housing inventory declines.

“Within a year or so, residential housing problems should largely be behind us,” Buffett wrote in his annual letter to the shareholders of Berkshire Hathaway, where he is chairman and CEO. “Prices will remain far below ‘bubble’ levels, of course, but for every seller or lender hurt by this there will be a buyer who benefits. Indeed, many families that couldn’t afford to buy an appropriate home a few years ago now find it well within their means.”

He also pinpointed what he sees as the cause of the downturn. “People thought it was good news a few years back when housing starts – the supply side of the picture – were running about 2 million annually,” wrote Buffett, “But household formations – the demand side – only amounted to about 1.2 million.”

Source: Bloomberg News, Andrew Frye (03/01/2010)

 

Buyers Who Wait May Lose a Lot


Potential home buyers who delay have a lot to lose.

First-time home buyer and move-up tax credits worth $8,000 and $6,500, respectively, expire April 30. Buyers who qualify get a dollar-for-dollar reduction in taxes or a cash payment if they don’t pay enough taxes to cover the credit.

Other factors that should spur buyers:

Low mortgage rates. If the Federal Reserve stops buying mortgage-backed securities at the end of March, 30-year rates will almost certainly rise to more than 6 percent.

Rising prices. About 30 percent of markets are already experiencing price increases. Prices are falling in 12 percent of markets, says Fiserv (but that only helps if you want to live there).

Source: Money Magazine, Beth Braverman (03/02/2010)

 

Florida’s existing home, condo sales rise in 4Q 2009

 ORLANDO, Fla., Feb. 11, 2010 – Sales of existing single-family homes in Florida rose 44 percent in fourth quarter 2009 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 43,926 existing homes sold statewide in 4Q 2009; during the same period the year before, a total of 30,610 existing homes sold. It marks the sixth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

Statewide sales of existing condominiums in the fourth quarter rose 93 percent compared to the same time the previous year. This marks the fifth consecutive quarter for increased statewide sales in both the existing home and condo markets compared to year-ago levels.

To gain insight into current trends in Florida’s real estate industry, the University of Florida’s Bergstrom Center for Real Estate Studies conducts a quarterly survey of industry executives, market research economists, real estate scholars and other experts. The survey noted uncertainty over the tight credit market, foreclosures and the jobs outlook.

On the positive side, private investors – both foreign and domestic – are starting to “kick the tires” in many markets, said Timothy Becker, the center’s director. In addition, investor expectation for returns is starting to fall to more realistic levels, helping to close the spread between bidding and asking prices, he said.

“These developments bode well for the transaction market when quality properties start coming to the marketplace,” Becker added.

Eighteen of Florida’s metropolitan statistical areas (MSAs) reported increased sales of existing homes in the fourth quarter compared to the same three-month-period a year earlier, while all of the MSAs showed gains in condo sales.

The statewide existing-home median sales price was $140,000 in the fourth quarter; a year earlier, it was $160,600 for a decrease of 13 percent. According to industry analysts with the National Association of Realtors® (NAR), sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is a typical market price where half the homes sold for more, half for less.

In the year-to-year quarterly comparison for condo sales, 16,255 units sold statewide for the quarter compared to 8,410 in 4Q 2008 for a 93 percent increase. The statewide existing-condo median sales price was $105,500 for the three-month period; in 4Q 2008, it was $136,600 for a decrease of 23 percent.

Low mortgage rates remain another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.92 percent in 4Q 2009; one year earlier, it averaged 5.86 percent.

© 2010 Florida Realtors

 

Fourth Quarter Home Sales Surge 13.9%

Strong gains in existing-home sales were the predominant pattern in most states during the fourth quarter, with many more metro areas seeing prices rise from a year earlier, according to the latest survey by the NATIONAL ASSOCIATION of REALTORS®.

Sales increased from the third quarter in 48 states and the District of Columbia; 32 states even saw double-digit gains.

Year-over-year sales were higher in 49 states and D.C.; all but three states had double-digit annual increases.

Total state existing-home sales, including single-family and condo, jumped 13.9 percent to a seasonally adjusted annual rate of 6.03 million in the fourth quarter from 5.29 million in the third quarter, and are 27.2 percent above the 4.74 million-unit level in the fourth quarter of 2008.

Distressed property accounted for 32 percent of fourth quarter transactions, down from 37 percent a year earlier.

Florida’s existing home, condo sales rise in 4Q 2009

ORLANDO, Fla., Feb. 11, 2010 – Sales of existing single-family homes in Florida rose 44 percent in fourth quarter 2009 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. A total of 43,926 existing homes sold statewide in 4Q 2009; during the same period the year before, a total of 30,610 existing homes sold. It marks the sixth consecutive quarter that Florida has seen higher existing year-to-year home sales, according to the state association.

 

Miami Existing Condominium Sales Surge 98 Percent in November

Note: RAMB and the Southeast Florida Multiple Listing Service are the sources for statistics reported by the National Association of Realtors and Florida Realtors. RAMB reports average sales price as well as median sales price.

Miami, FL – In the Miami metropolitan statistical area (MSA), there was a 24 percent increase of existing single-family home sales in November 2009 compared to November 2008. The sales of existing condominiums in the Miami MSA increased a significant 98 percent compared to the same period last year. The year-to-date (January to November 2009) average monthly increase of single-family home and condominium sales in the Miami MSA is 57.4 percent and 51.4 percent respectively.
The Miami real estate market has experienced a surge in sales each of the last 16 months compared to same periods the previous year. Nationally, sales of existing single-family homes, townhomes, condominiums, and co-ops increased 7.4 percent from the previous month and 44.1 percent from November 2008.
“We began 2009 with the promise of a much brighter future for the South Florida real estate market,” said Rick Burch, 2009 Chairman of the Realtor Association of Greater Miami and the Beaches. “And beyond our expectations, home sales posted record increases, the absorption rate of available inventory rose significantly, and property values began to stabilize. This signaled the end to the recent market decline.”

 

Average Sales Prices Increase in Local Market Areas

The median sales price for single-family homes reported in Miami-Dade in November 2009 was $184,800, down only 18 percent from the previous year but up four (4) percent from the previous month. The median sales price for condominiums was $149,000, a 14 percent decrease from November 2008 but an eight (8) percent increase from the previous month.

Miami Existing Condominium Sales. . . /2 Due to an increased number of foreclosures and short sales, median sales prices continue to drop – but at a considerably slower pace.
“Sales have risen nearly every month since August 2008 for both single-family homes and condominiums in Miami-Dade and Broward counties,” said Burch. “Prices have also begun strengthening and even rising in some local areas and neighborhoods after the market touched bottom in June 2009 according to most notable economists.”
Statewide, median sales prices dropped 12 percent to $139,000 for single-family homes and 21 percent to $104,400 for condominiums.
According to the Southeast Florida Multiple Listing Service, the average sales price for residential properties that sold in Miami-Dade County in November was $317,441 for single-family homes and $248,528 for condominiums, an increase of 5.2 percent and a decrease of only 10 percent respectively compared to the previous year.


Days on the Market and Inventory Levels

The number of days a property stays on the market and inventory levels both continue to decrease substantially, other indicators that point to the local market recovery.
The inventory of listings in Miami-Dade County according to the Southeast Florida Multiple Listing Service has dropped more than 41 percent in the last 15 months - from 43,095 to 25,415 – and November 2009 brought a 2.8 percent decrease in just one month. Nationally, total housing inventory at the end of November declined 1.3 percent from the previous month.


Foreign investors in real estate committed to U.S. opportunities

WASHINGTON – Jan. 19, 2010 – Despite a lack of placement opportunities in 2009, foreign investors in real estate say they remain committed to the U.S. as their preferred real estate investment opportunity.

The sentiment is underscored by a dramatic increase in the number of respondents identifying the U.S. as the country providing the best opportunity for real estate capital appreciation, according to the results of the 18th annual Association of Foreign Investors in Real Estate (AFIRE) survey.

The survey was conducted in the fourth quarter of 2009 among the association’s nearly 200 members. Survey respondents own more than $842 billion of real estate globally including $304 billion in the U.S. The survey was conducted by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.

In this year’s survey:

Fifty-one percent of respondents identify the U.S. as providing the best opportunity for capital appreciation;

This compares to 37 percent in 2008, 26 percent in 2007, and 23 percent in 2006;

The last time respondents’ perceptions for U.S. real estate were this strong was in 2003, when the percentage once again reached 51 percent;

The U.K. emerges as the second-best country for capital appreciation, receiving 30 percent of respondents’ votes;

In third place, China receives 10 percent of respondents’ votes.

“Although foreign investors expressed every intent to resume investing in 2009, like everyone else, their plans were sidelined by a paralyzed marketplace with no precedent and limited investment opportunities,” said Werner Sohier, senior portfolio manager real estate, PGGM and AFIRE’s newly elected chairman. “However, new money is becoming available and the AFIRE survey points to an increased focus and interest in a few select markets for 2010, especially London and in the US, where prospects appear to be brightening.”

 According to survey results:

Two thirds of respondents plan to increase their investment in the U.S. in 2010 compared to 2009;

Investors say they plan to increase U.S. allocations above 2009 levels by 62 percent for equity and 83 percent for debt; at least half the survey respondents report a stronger appetite for both debt and equity investments in the U.S. than in other countries;

 Plan for global equity investment in 2010 exceed plans for 2009 by 46 percent; 2010 plans for global debt are 20 percent lower than planned for 2009;

By the middle of the fourth quarter of 2009, foreign investors placed only 62 percent of planned debt allocations and 43 percent of planned equity allocations globally; in the U.S. they placed only 35 percent of planned debt allocations and 23 percent of planned equity allocations;

As a portion of global real estate, U.S. 2010 allocations for debt represent 80 percent of the global pool; allocations for equity represent 49 percent.

Other U.S. trends

Among U.S. cities representing the best investment opportunities, survey respondents firmly select Washington, D.C. and New York, receiving much stronger scores than third-place San Francisco.

This year, Boston makes a significant climb into fourth place, and Los Angeles falls one spot into fifth place. As they did last year, survey respondents also express a firm interest in multi-family as their preferred property type followed by office, industrial, retail and hotel properties.

 “This is the second year in a row in which multi-family topped investors’ product preference,” said James A. Fetgatter, chief executive, AFIRE. “More notably, the gap between the top preference and the least-favored product, hotels, has not been this wide since 2000.”

 Survey respondents have also pushed their projections for the recovery of the U.S. commercial real estate market back by six months:

 In the June 2009 mid-year survey, half the respondents said they expected recovery by or before the second quarter of 2010;

 In the 2010 annual survey, half the respondents say they expect the recovery by or before the fourth quarter of 2010. But, optimism about the state of the U.S. real estate market remains strong:

 Thirty-three percent of survey respondents say they are more optimistic about the U.S. real estate market than they were in June 2009;

 Sixty-three percent say their perspective has not changed;

 Six percent say they are more pessimistic.

 Global Trends Globally three cities emerge as clear targets for investors’ real estate dollars:

 London surges into first place with a significant lead over both Washington and New York in second and third places respectively; Paris and Tokyo place as distant fourth- and fifth-place cities;

 The United States remains the country selected as the “most stable and secure real estate investment environment,” although with a declining lead:

 * The U.S. receives 44 percent of the vote; Germany receives 21 percent; and Canada receives 14 percent.

 This year, the percentage of respondents selecting the U.S. as the most “stable and secure country” falls from 53 percent in 2008 and 57 percent in 2007. This is the first time that the U.S. has fallen below 50 percent in the survey’s history.

 “The financial crisis of the past year has obviously affected investors’ perceptions of U.S. real estate as ‘stable and secure,’” explains Mr. Fetgatter. “However, it is also apparent that opportunity lies within this instability since the U.S., along with the UK, show substantially higher scoring for expected capital appreciation.”

 © 2010 Florida Realtors®

 
Expanded Tax Credit Offers Big Opportunity

 With a new April 30 deadline in place for clients to take advantage of a federal home-buyer incentive, real estate practitioners now have slightly less than four months to get their qualified prospects under contract before the cut-off date.

 In order to maximize this opportunity, it is recommended that real estate pros revamp their marketing materials to reflect changes in the rules — which now allow certain repeat buyers, as well as first-time buyers, to get a tax break.

 In addition to promoting home-buying based on today's lower home prices and historically low interest rates, it is also important for the real estate professional to convey to clients that there is no requirement that they sell their current residence at once — or ever.

 On top of polishing up their marketing approach, real estate professionals should free up their time so that they are available to spend more time guiding buyers and hosting property showings.

 They also must be thoroughly knowledgeable about the supply of properties priced up to $800,000, which is the maximum price for a home to qualify for the tax credit.

 Finally, agents must keep all other parties involved in transactions — from lenders to inspectors — on top of things and at the ready because most motivated house-hunters will want to move quickly once they have found their ideal property.

 Source: RISMedia, Margaret Kelly (01/08/10)

 Real Estate Investors Returning to Market

 Savvy investors are always the first to jump in a potentially profitable housing market and a new survey indicates things are heating up.

 More than 12 percent of homebuyers today plan to purchase a home as an investment, compared to less than half, only 5.6 percent, just seven months ago, according to a recent Move.com Homeownership Survey.

Foreclosure buyers account for 25.3 percent of consumers interested in purchasing a home and 42 percent of potential foreclosure buyers regard their purchases as investments, while 57.6 percent plan to live in the foreclosed home themselves.

 "This latest Homeownership Survey validates what many had hoped to see in the housing markets -- affordable prices and ample inventories are restoring the appeal of real estate to investors while providing opportunities for first time home buyers to enter the market," said Move, Inc.'s chief revenue officer, Errol Samuelson.

 Interest rates below 5 percent for much of the year and low home prices, which may be at or near market bottom, are also bringing investors back to the fold.

 The new and improved home-buyer tax credit, no longer just for first time home buyers, can also be a boost for those taking the practical approach to investing by buying their own home first.

 The survey of 1,004 consumers, conducted from October 16 to 18 this year, found:

Foreclosure buyers are confident they will profit from discounted purchase prices, as well as healthy appreciation rates over the next five years.

 Most foreclosure buyers, 58.2 percent, expect to pay 20 percent or less than market price for a foreclosure, while 38.5 percent expect a 25 percent or greater discount.

 Expectations are high -- 73 percent expect their properties to appreciate ten percent or more in five years, 28 percent expect their purchases to appreciate 20 percent or more.

 Given the current market of flat and falling home prices, that may sound like high hopes, but RealtyTrac.com explains that lenders want to unload overhead-heavy inventories of repossessed and foreclosed home.

 That forces lenders to list their homes below market and offer properties at a discount, giving the buyer some built in equity.

 Foreclosure buyers intend to convert their foreclosures into rentals (13.2 percent), fix them up for re-sale (11.3 percent), or house a family member until the home can be sold at a profit (17.4 percent).

 In some markets, especially resort and vacation rental markets, where rents are higher, conditions bode well for investors who want to enjoy positive cash flow as they wait for equity to build.

 "If you find a well priced property located in a healthy rental market and are able to manage and monitor the property and maintain a positive cash flow from the onset for a unit used strictly for income purposes, rather than being held with the expectation of price appreciation, this could be a good time to become a landlord," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.

 

Rates on 30-year home loans fall to 5.09 percent

 WASHINGTON – Jan. 8, 2010 – Rates for 30-year home loans inched downward this week, the first decline in a month, but remained above last month’s record lows.

The average rate on a 30-year fixed mortgage was 5.09 percent this week, down from 5.14 percent a week earlier, mortgage company Freddie Mac said Thursday.

 
 Fla.: Existing home, condo sales up in November

ORLANDO – Dec. 22, 2009 – Florida’s existing home sales rose in November, marking 15 months that sales activity has increased in the year-to-year comparison, according to the latest housing data released by Florida Realtors®.

 Existing home sales rose 61 percent last month with a total of 14,026 homes sold statewide compared to 8,694 homes sold in November 2008, according to Florida Realtors. Statewide sales of existing condos increased 111 percent last month compared to November 2008’s sales figure.

 For the second month in a row, all of Florida’s metropolitan statistical areas (MSAs) reported increased existing home sales and higher condo sales in November. A majority of the state’s MSAs have reported increased sales for 17 consecutive months.

 “The extended and expanded federal homebuyer tax credit will continue the positive momentum of the housing sector’s recovery – people will want to take advantage of this incredible, not-to-be-missed opportunity to buy a home of their own in Florida,” says 2009 Florida Realtors President Cynthia Shelton, CCIM, CRE, a broker and director of investment sales with Colliers Arnold in Orlando.

 “For 15 months now, statewide sales of existing single-family homes in Florida have increased each month compared to the year-ago figures,” Shelton says. “The continued, gradual absorption of housing inventory will help stabilize home prices. National research notes that housing affordability is at its peak and the highest on record: Along with still-low mortgage rates, it means that the buying power of a typical family has never been better.”

Florida’s median sales price for existing homes last month was $139,000; a year ago, it was $158,200 for a 12 percent decrease. Housing industry analysts with the National Association of Realtors® (NAR) note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes. The median is the midpoint; half the homes sold for more, half for less.

 The national median sales price for existing single-family homes in October 2009 was $173,100, down 6.8 percent from a year earlier, according to NAR. In California, the statewide median resales price was $297,500 in October; in Massachusetts, it was $287,000; in Maryland, it was $250,210; and in New York, it was $209,900.

 According to NAR’s latest industry outlook, home sales are experiencing a pendulum upswing. “Keep in mind that housing had been underperforming over most of the past year,” said NAR Chief Economist Lawrence Yun. “The tax credit is helping unleash pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future. In the second half of 2010, if home values show consistent stabilization or even a modest increase, then home sales could register normal healthy levels.”

 In Florida’s year-to-year comparison for condos, 4,889 units sold statewide last month compared to 2,320 units in November 2008 for an increase of 111 percent. The statewide existing condo median sales price last month was $104,400; in November 2008 it was $131,400 for a 21 percent decrease. The national median existing condo price was $172,900 in October 2009, according to NAR.

 Interest rates for a 30-year fixed-rate mortgage averaged 4.88 percent last month, a significant drop from the average rate of 6.09 percent in November 2008, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

 Among the state’s smaller markets, the Tallahassee MSA reported a total of 174 homes sold in November compared to 100 homes a year earlier for a 74 percent increase. The market’s existing home median sales price last month was $162,000; a year ago it was $170,00 for a 5 percent decrease. A total of 5 condos sold in the MSA in November, up 150 percent over the 2 units sold in November 2008. The existing condo median price last month was $110,000; a year earlier, it was $95,000 for an increase of 16 percent.

© 2009 Florida Realtors®

 

 

 

 

 
 

 




 

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