Beached in Miami Shores

A few months ago, I posted a blog titled Miami’s Boom to Bust. Since writing that post, I have walked through hundreds of distressed properties throughout Miami Beach and the surrounding areas. For a number of reasons, my recent experience of working on a property in Miami Shores is the epitome of that boom to bust cycle in Miami.

This house sits on a corner lot in a prime location in the popular suburb of Miami Shores. The property consists of a total living area of 1,658 square feet with 3 bedrooms, 2 bathrooms, a renovated kitchen and bathrooms, new roof, and features a large swimming pool and original wood floors. Originally built in 1949, this single family residence is in excellent condition and is a turnkey property.

The following is a chronological history of this single family home over the past 16 years -

05/93 – Sold for $94,000, or $57 PSF.

07/99 – Sold for $128,000, or $77 PSF, increased 35% in value over 6 years.

01/04 - Sold for $260,000, or $157 PSF, increased 103% in value over 5 years.

09/05 – Sold for $499,900, or $302 PSF, increased 92% in value over 18 months.

02/07 – Placed back on the market, asking $633,000.

06/09 - Available for $199,000, or $120 PSF, decreased 60% in value over 2 years.

It is very apparent from this quick analysis that our prices in Miami barreled ahead in the earlier part of this decade. Four years ago, the current owners did not think twice about paying $302 per square foot for this house. Wells Fargo provided ninety percent financing in the form of an 80/10 first and second mortgage, and within one year of ownership, the owner placed it back on the market for a $100,000 plus premium.

Now the question that everyone is asking is whether or not the $199,000 short sale price that has been approved by the bank, is the real market value in today’s market? With FHA financing up to 96.5% of the purchase price and up to six percent seller concessions, are we any closer to reality?

The above data was provided by the Southeast Florida Multiple Listing Service and Miami-Dade County public records. This information is believed accurate but is not warranted.