INSIDE MIAMI REAL ESTATE JOURNAL

Get the latest scoop on the area including inside tips and advice from our professionals.

Around Miami Weekly Pics

---

Shanghai’s Real Estate Exuberance mimicks Miami’s Boom

March 8, 2010

Miami’s incredible real estate boom and subsequent bust during the past decade has many similarities with China’s current hyper-development.

Developers are touting the same old “lifestyle” story and a buying frenzy has taken over Shanghai. Just as buyers camped out for days to purchase condos at the Mirador in South Beach, so to are long waiting lists the norm in Shanghai’s new developments.

According to a recent article published in the New York Times “prices in Shanghai have risen more than 150 percent since 2003, pushing the price of a …

---

Miami Real Estate – January 2010

March 1, 2010

Miami Real Estate Market Summary – January 2010

For the month of January 2010 versus December 2009, the total number of closed sales decreased to 233 in January 2010 from 384 in December 2009, which represents a decrease of 40 percent. The drop in closed sales is somewhat typical for this time of the year, in particular, with the banks looking to clean up their balance sheets before year end.

In the Miami Beach condominium market, we witnessed a positive turn in the tide in the less than $500,000 price range. The total number of distressed properties for sale, including …

---

South Beach’s Neighborhoods

February 15, 2010

South Beach, an area no larger than three square miles, consists of several residential neighborhoods each with their own distinct style, charm, history and green space. The Flamingo Park area or Historic District, for example, consists mostly of boutique art deco buildings that were developed in the 1930’s and 1940’s. Whereas, the South of Fifth neighborhood, features most of the upscale, luxury condo projects in South Beach.

It is important to recognize is that the tourist areas of South Beach are generally separate from the residential neighborhoods. …

---

Florida Condo Rules, Regulations & Rights

February 2, 2010

Depending on the location and who manages a condominium project, most condominium associations have different rules and regulations. However, they also have rules in common set by the State of Florida, including, but not limited to the following:

Condo associations are required to -

Hold a mandatory annual meeting of which all unit owners must be given adequate prior notice.
Be self-managed or hire professional management.
Make official records of the association available for the unit owner within five (5) working days after receiving a written request.
Mail or deliver a copy of the proposed annual budget to each unit owner.

Condo associations may restrict -

Parking and types of vehicles used on the premises.
Leasing / renting …

---

Miami Year in Review 2009

January 11, 2010

Home Flippers Return

This year marked the return of property investors flipping foreclosures in anticipation of quick profits. Due to the volume of foreclosure cases making their way through the courts and banks, it was an opportune time to take advantage of the disorganized lending institutions and court system.

The year started out with the presence of a few established investment groups, which grew exponentially as investors on the fence jumped in. Although the banks set unrealistic reserve prices and few properties traded at the Miami Dade public auctions, there were many successful short-term trades executed with returns of 30 to 40 percent.

One particular sale at the Miami Dade public auction epitomized …

---

Miami Real Estate – November 2009

January 7, 2010

Summary – November 2009

For the month of October 2009 versus October 2008, the total number of closed sales increased over 100 percent, which is consistent with the upward trend in sales volume this year. However, the number of closed sales for November 2009 versus October 2009 remained flat. Another noticeable trend is that demand has remained somewhat constant these past few months, while at the same time, the inventory of properties for sale continues to shrink. If this trend continues it may result in less downward pressure on home prices, which would allow for the market to stabilize …

---

Miami Real Estate – October 2009

December 16, 2009

Summary - October 2009

During the month of October 2009, the Miami real estate market experienced  a decrease in the median sales price for single family homes from $173,000 to $167,500, and the median sales price for condominiums and townhouses also decreased from $135,000 to $130,000.

The number of closed sales that are distressed properties continues to shrink on a month-to-month basis. However, we experienced a dramatic month-over-month increase in the number of short sales that closed. In the Miami Beach sub-market, for example, the percentage of distressed sales dropped to 39 percent, of which, the number of short sales practically equaled the number of …

---

Perform a Condo Stress Test

December 14, 2009

During the past year, Miami’s real estate market has been all about distressed sales. As such, when considering investing in a Miami condo, performing a stress test to determine the financial health of the condominium association should be a critical part of your evaluation.

Why?  You need to determine if the condo association has sufficient capital buffers to withstand the impact of an economic environment that is more challenging than expected. It also important to point out that in general the most attractive condo deals are typically located in the most financially strapped buildings.

There is no simple mathematical equation or “health index” that can be applied. However, utilizing the following Condo …

---

Foreclosure “Trick or Treat”

November 27, 2009

In Miami, as in other cities with such a large number of foreclosures, there is much to be aware of when purchasing a bank owned or foreclosure property. Yes, buying a foreclosure is not for the feint of heart, so here is a general guide to common foreclosure tricks and treats -
Foreclosure Tricks:

The purchase price it too good to be true – The bank may have priced it below market to create competition and buyers will artificially bid up the price, and/or the property may require significant repairs or renovations.
The seller or bank offers to pay for your owner’s title insurance policy if you work with their assigned title agent – This may save you a couple of thousand …

---

Distressed Pricing

November 21, 2009

During the real estate boom from early 2002 through late 2007, the concept of “distressed” pricing was foreign to homeowners and real estate practitioners alike. The question today is not whether distressed real estate should be included when considering comparable sales, but to what extent? 

There are several schools of thought in today’s distressed real estate environment. I consider the following to be relevant when pricing to either buy or sell in today’s market.

The first is the principle of substitution. If you have the ability to purchase a discounted short sale or foreclosed property, why would you pay retail? So long as there remains a pipeline of …

---

How important are Rental Restrictions when making that Condo Investment?

November 14, 2009

One of the many considerations when purchasing an investment condo or apartment includes the current rental restrictions of the building or condo project. These restrictions, if any, will be detailed in the Bylaws or Rules and Regulations of the Condominium Association.

So why is this important? The condo rental restrictions will affect your ability to rent out the property on a short or long- term basis, which in turn, may have an effect on the re-sale value and your use …

---

Miami Builds Momentum

October 29, 2009

In the past few months, there have been several positive indications that investors are increasingly confident and willing to pull the trigger on Miami real estate. Last month, there were two major transactions involving the sale of the historic 105-room Raleigh Hotel in Miami Beach, as well as the $78 million sale of  a 10-acres oceanfront development deal on Key Biscayne.

The vacant art deco Leslie Hotel, located at 1244 Ocean Drive in South Beach, finally sold to local hotel group Ocean Hotels Development Corp., headed by Juan D’Onofrio, principal of Alquimia Hospitality Group. The sellers, Leslie Beach Associates LLC, which according to Miami-Dade Public …

---

Miami Real Estate – September 2009

October 26, 2009

Summary - September 2009

For the month of September 2009, the Miami real estate market experienced a modest increase in closed sales, which was mostly due to the sale of single family homes. While the median price for single family homes  increased slightly from $173,000 to $178,000, the median prices for condominiums and townhomes remained flat at $135,000.

The demand for “affordable” primary residences and investment properties remains strong. New foreclosure listings routinely command multiple offers and many achieve sales prices over and above the original listing price. We are encouraged this month to have experienced a decrease in the overall number of distressed sales in …

---

REO Attrition Warfare

October 16, 2009

Def. Attrition Warfare – Attrition warfare is a military strategy in which one side attempts to win a war by wearing down its enemy to the point of collapse. The war will usually be won by the side with greater resources and superior numbers.

Def. REO Attrition Warfare - A banking strategy in which the bank attempts to wear down the enemy/buyers to a point of collapse/bidding. The war is always won by the side with greater resources, superior numbers, and ability to manipulate the market by starving the enemy/buyers of a material/affordable REO properties.

So how many of you can relate to this? A bit extreme you’re thinking, well, perhaps not. What about the missing shadow inventory …

---

Investor Confidence Increases in Miami Real Estate

October 2, 2009

In recent weeks there have been two high profile transactions in the Miami real estate community. In my opinion, these two sales represent both a positive psychological shift as well as boost of investor confidence in the Miami real estate market.

The Sonesta Beach Hotel on Key Biscayne, which was the first major resort hotel to be constructed on Miami’s prestigious Key Biscayne community in 1969, was sold to Argentine investors. According to local sources, Consultatio S.A., a publicly traded company based in Buenos Aires, Argentina, purchased one of the largest remaining develop-able oceanfront sites on Key Biscayne, which consists of the …

---

Miami Pending Sale Index

October 1, 2009

Today the National Association of Realtors released the Pending Home Sale Index that increased month over month by 6.4 percent, which represents the seventh month of consistent increases in pending sales. The pending sale index is supposed to be an indicator of future closed sales.

According to the data in the Southeast Florida Multiple Listing Service, the Miami area has realized significant growth in the past twelve months in pending sales as follows:

Those of you that were in the real estate business in Miami last year will never forget the “deep freeze” that we felt in …

---

Miami is on Sale for Foreign Buyers

September 26, 2009

With the continued depreciation of the U.S. Dollar and the realization that attractive real estate in Miami is relatively cheap by international standards, the activity level of foreign national buyers purchasing prime Miami real estate is going to continue to increase.  You may argue that the dollar is going to continue to devalue, and you may be right. However, for the average investor, there is no better hedge to a devaluing currency or inflation, than real estate.

There have been several encouraging transactions in the bulk condo market these past few months. The sale of the Caribbean condo project, located at 3737 Collins, by …

---

Priority of Liens in a Foreclosure Sale

September 22, 2009

September 22, 2009 – Last year, I published a blog post summarizing the Florida laws pertaining to foreclosure sales. Subsequently, one of the most common questions that we have received are specific to the priority of  liens in a foreclosure sale in Florida. Chapter 702 of the Florida Statutes governs foreclosures of mortgages, agreements for deeds and statutory liens in Florida.

In a foreclosure sale, certain liens become superior to the lien being foreclosed. Therefore, some creditors will receive their money and some creditors might not. Real estate taxes, special assessment liens and federal estate taxes will take precedence over all other liens. Special assessment liens, which is typically a tax levied by a city for …

---

Highest and Best Scenarios

September 21, 2009

September 21, 2009 – A few months ago having to explain a highest and best request form to your client was unheard of. In today’s “affordable” price range under $200,000, it is almost always a requirement and many asset managers even add it to their preliminary document package when submitting the initial offer.

First, let’s talk about asking prices of bank owned properties. In South Florida, many asset managers and listing agents are purposefully pricing their new product at very attractive prices. There may have been one or …

---

Miami Real Estate – August 2009

September 19, 2009

Summary - August 2009

For the month of August 2009, the Miami real estate market experienced a slight drop of 13 percent in overall closed sales. While the median price for single family homes remained constant at $173,000, condominiums and townhomes actually realized an increase in the median price from $126,670 in July 2009 to $135,000 in August 2009.

We think that this slight increase in the median price of condominiums is primarly due to the pent up demand for second homes and investment properties in Miami. In today’s market, it is not uncommon to find multiple cash offers on condominums in desirable locations and …

---

Surviving A Short Sale Swamp

September 11, 2009

A short sale transaction is like pulling your Achilles tendon.  It’s painful, needs lots of massaging, plenty of ice, and it keeps reminding you that it’s not going away for a very long time.

After working diligently with a listing agent and seller on a short sale for four months, when the bank and investor finally offered us verbal “terms” to make it happen, my client quickly accepted and was jumping with joy. But the seller had a different plan and pulled a white rabbit out of his hat. Out of left field one of his “relatives” popped …

---

Has Miami Turned The Corner?

August 25, 2009

With today’s report on CNBC.com ”Home Prices Up Again”, as well as the slew of positive recent economic data in the media, have we now hit bottom and turned the corner in Miami?

Unfortunately, I think that we have a way to go. Yes, there is much improvement in the single family home numbers as more and more buyers continue to enter the market and hunt for bargains. The $100′000 to $200′000 price range remains red hot. However, our South Florida rate of unemployment continues to tick upward and the percentage of owners behind on their mortgage payments has jumped over last year as well.

So what does this mean? We will continue to see a …

---

Miami Property Appraiser In Denial

August 17, 2009

Monday, August 17, 2009  -  We have a number of major challenges facing the real estate market in Miami. It is difficult to say which pill is the most painful to swallow, but property taxes are certainly represent the big white elephant in the room.

Unlike his peer, Broward County Property Appraiser Lori Parrish, Miami’s Property Appraiser, Pedro J. Garcia, finally stated his position on foreclosure sales. According to an article in the Miami Herald this past weekend “Garcia has decided to disregard foreclosure sales — homes sold off by banks after foreclosing on the previous owner — when determining a neighborhood’s …

---

Miami in Review – Q2 2009

August 13, 2009

MIAMI MARKET ACTIVITY JUMPS

During the second quarter of 2009, we experienced a substantial increase in the number of closed sales of residential properties in Miami. Year-to-date the number of closed sales jumped from 3,469 to 4,735 in single family homes and from 3,303 to 5,022 condominiums units sold. This represents a year-over-year increase of 44 percent, or 2,985 closed sales.

Closed sales - The total number of closed sales in Q2 increased by 26.8% or 1,154 closed sales over Q1. This increase was consistent in both the number of condo and  single family residences ["SFR "] sold. The percentage of closed sales that were distressed sales [foreclosures …

---

Miami Foreclosures: The Facts

August 5, 2009

There has been much talk in the press lately of a rebound in the housing market. According to the most recent RealtyTrac report, while several states indicated a remarkable improvement for the first six months of 2009 over that of 2008, Florida is up a whopping 42 percent in the number of foreclosure filings in 2009 over 2008.

So what is the story in Miami? Although we have seen a decrease in monthly foreclosure filings since peaking at 7,103 in March 2009, we are up a significant 38 percent, at 34,679 foreclosure filings for the period of January through June 2009, …

---