INSIDE MIAMI REAL ESTATE JOURNAL

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

Around Miami Weekly Pics

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Banks releasing more distressed real estate in Miami market

July 21, 2010

July 21, 2010 – While the majority of the country is experiencing a slowdown in real estate activity, Miami is defying the nation as the sale of existing condos, townhouses and single family residences, continues to increase.

During the first and second quarter of 2010, there was a total of 11,719 properties sold, which represents a 16.7 percent increase over the same period in 2009. In addition to the increase in the sales of existing homes, a recent study published by Condo Vultures stated that “an average of nearly 500 new condos traded per month in Greater Downtown Miami between April and June 2010, representing a 105 percent increase compared to …

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Banks and Investors show confidence in Miami Beach real estate

July 9, 2010

Since the onset of public auctions moving to an online platform and opening up to global investors earlier this year, we have witnessed a number of changes to the old system of bidding in person at the Clerk of the Court’s office in Miami-Dade County.

The result? Substantially more properties are transferring ownership at public auction and we are witnessing some impressive all cash bids.

First, the number of bidders has changed dramatically. In the past, there would be less then 10 serious bidders at the auction, with up to 20 players on a busy day. Now, there are hundreds of “virtual bidders” bidding against each other from all corners of the …

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Miami Developer’s Push To Sell Discounted Luxury Condos

June 24, 2010

During the past two years, we have experienced several new twists and turns in the Miami residential real estate market. In particular, the condo market which appeared doomed is now clawing its way back.

In spite of the fact that we have some of the most architecturally appealing and inspirational designed condo projects around the globe, with such unrealistic pricing, I have avoided most new projects like the plague. That is, until recent months.

It has taken massive legal bills, extensive negotiations between banks and developers, and some painful decisions by investors, but we are finally moving on from a holding pattern to selling the unsold inventory of luxury condos. The Icon Brickell is a perfect example, and with …

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Is Europe’s Debt Crisis Affecting Miami Real Estate?

June 10, 2010

As concerns over Europe’s sovereign-debt crisis spread, the euro currency dropped to levels against the dollar not seen in four years. Many are wondering if this affected the Miami real estate market, in particular the areas where international buyers target, such as Miami Beach and downtown Miami.

Statistics show that if there is to be much fallout, that any damage remains to be seen.

Real estate, much like the equity markets these past two years, is also very much driven by the psychology or sentiment of investors. We are all looking for signs of improving economy with less shocks to the financial system, increasing confidence, lower unemployment, availability of financing, and subsequently …

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South Beach vs. Brickell? Pricing Trends in Select Miami Condos

May 20, 2010

While real estate buyers or investors have the tendency to focus on macro real estate data, they often ignore the micro side of the equation in condominium projects. Are monthly maintenance fees exhorbitant for the size of the building and amenities offered versus the competitive set? Are maintenance fees trending upwards? Have there been any recent major assessments or are any planned in the near future? What is the percentage of distressed sales out of all closed sales?

These are just a few of the many questions that you should be asking your realtor and considering in your investment decision.

When an appraiser determines the market value of a condominium, it is standard practice to obtain two …

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Hidden Closing Costs in Short Sales

May 10, 2010

Recently, I published an overview of what to look out for when purchasing a short sale titled Short Sale Cat and Mouse. There are many moving parts in a short sale, however, when dealing with a condominium or homeowners association pay particular attention to the payoff to the association.

If an owner or seller is behind on making their mortgage payments then they are most likely behind on paying their condo maintenance fees or homeowners association fees as well. So what does this mean for you they buyer? You need to learn as early as possible in the process, and preferably before your deposit becomes non-refundable, the breakdown of …

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Short Sale Cat and Mouse

March 20, 2010

The Miami residential real estate market is now two years deep into this short sale debacle. Do you know what you are getting into when purchasing a property that is a short sale?

Although the U.S. Government has implemented several incentives and procedures to expedite short sales, closing a short sale transaction requires significant work, patience and extensive negotiations.

With so many moving parts, the game is constantly moving from one party to the next. It’s no wonder that there is so much fraud in the short sale space. Between real estate agents, sellers, mortgage servicing companies, mortgage investors, buyers, condo associations, title companies and attorneys, everyone is trying to get a leg …

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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 …

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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 …

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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. …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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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 …

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