Miami Real Estate – August 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 somewhat “stable” condo projects.  Additionally, according to the MLS data on the sale of bank owned condos in the Miami Beach area priced at under $500,000, more than 80 percent of all closed sales were all cash transactions. Additionally, there were several examples where the purchaser closed at a price up to 25 percent over the asking price.

The majority of properties trading in the lower price ranges continues to be dominated by distressed properties.  While buyers appear to be having more success closing on short sale deals with financing, if you are looking to be competitive and negotiate terms, be prepared to come with an all cash offer.

Featured Sales - 

800 S Pointe Dr #1203, Miami Beach “The Apogee”

Balconies in the Apogee feature complete outdoor kitchens

According to Miami Dade Public Records, attorney Jan Carson Cheezem of Cohen Fox P.A. in Miami, purchased this 3 bedroom 3.5 bathroom luxury condo in The Apogee on South Beach for $3.8 million or $1,378 per square foot. This unit on the 12th floor, which overlooks Miami Beach to the north, downtown Miami to the west and the oceanbeach to the east, was on the market for 248 days with an asking price of $4.1 million.

1200 West Ave #807, Miami Beach “The Mirador”

The Mirador apartment buildings located on West Avenue in South Beach, were built in the 1960’s and then converted to condominiums by the developer and condo converter Crescent Heights in 2005. With lines of prospective buyers camping out on West Avenue the entire week before the developer opened sales to the public, this condo project was the epitomy of condo conversion frenzy during the Miami real estate rush. This 1 bedroom 1.5 bathroom corner unit with 1,019 square feet of living area, was originally sold by the developer in 2005 for $265,900, then flipped four months later for $383,000, and again six months later in May 2006 for $515,000, only to be taken back by the subprime lender, New Century Mortgage, in December 2008. In this most recent sale last month, the purchaser paid $147,000 or $144 per square foot.

The data used to generate this chart/data is gathered from the Multiple Listing Service (“MLS”) and the Miami Dade Clerk of the Courts. The data in the MLS is deemed reliable but not guaranteed. This data is for August 2009 for single family homes, unless otherwise indicated as condominiums/townhomes. The prices are the actual sales prices of all single family or condos/townhomes that closed during the month of August 2009 and are published in the MLS as of the date of this post.

Miami Real Estate – March 2009

Summary - March 2009

For the month of March 2009 vs. February 2009, we experienced an 14% increase in the number of closed sales from a total of 206 to 235 closed sales. The inventory of properties for sale increased marginally by 10% over the previous month.  This is the third month in a row that we have seen an increase in the overall number of closed sales, and we are up an impressive 35% in the past two months alone.

While the average sale price of single family residences in Miami Beach with a price under $1 million continues to decline from $653,282 in January 2009 to $513,800 in March 2009, the average closed sale price of condominiums in Miami Beach (under $500,000) and in the Downtown/Brickell market actually increased. This is the second month in a row that we have seen prices increase in the Downtown market, and are up from $231,767 in January 2009 to $296,252 in March 2009 respectively.

This leads us to a bit of a quandry in regard to the prices of foreclosure and distressed properties. While we all hear that prices continue to drop, and in relative terms and year-over-year this is the case, the banks are playing a game of cat and mouse with their REO properties. Here is the spiel – offer the property to the public at a bargain basement price, allow multiple offers to accumulate, play it off for a few weeks, and many suckers will bid up the price to more than asking.  It’s simple enough, but works time and time again.

Another interesting change in sentiment this month is indicated in the sale of five single family residences in Miami Beach in the $1 million plus category. For the past few months, we have witnessed lackluster sales with many luxury home buyers sitting on the sidelines. With five closed sales in the luxury category, and an average closed sale price of $2.4 million, the luxury home buyer has re-emerged in Miami Beach.

Featured Sales -  Two Luxury Miami Beach Homes

28 W San Marino Dr, Miami Beach

This Bauhaus inspired house built in the 1930’s, is located on the prestigious San Marino Island in Miami Beach. With six bedrooms and six bathrooms, a total living area of 4,716 square feet, and incredible views of the Miami skyline, the property sold to Venetian Marino Investments Inc, Hubert Jean Marie Weisslinger as president and director, for $3,830,000 or $812 per square foot. This house was placed on the market in December 2008 with an asking price of $4,450,000 and was only on the market for 47 days before going under contract.

5777 Pinetree Drive, Miami Beach

The data used to generate this chart/data is gathered from the Multiple Listing Service (“MLS”) and the Miami Dade Clerk of the Courts. The data in the MLS is deemed reliable but not guaranteed. This data is for March 2009 for single family homes, unless otherwise indicated as condominiums/townhomes. The prices are the actual sales prices of all single family or condos/townhomes that closed during the month of March 2009.

Foreign Interest in Miami Increases

Although there is no official data available, the estimated percentage of second and investment properties owned by foreigners in Miami is as high as thirty percent. We attract investors and second home owners from all over the world, with our primary feeder markets coming from flight capital leaving Latin and Central America. This is one of the reasons that we have a somewhat unique residential market, and what is now helping us turn over so many foreclosed properties.

We even have certain areas where foreign investors look to purchase residential property. In South Florida, for example, Doral and Weston are two preferred areas for Venezuelans. Known locally as Little Buenos Aires, Argentines love the mid-Miami Beach area.  In the past few years, Sunny Isles Beach in North Miami is fast becoming a Russian enclave for vacation and second homes. Meanwhile, European clients prefer the many waterfront areas of Miami Beach, including the South Beach, Venetian Islands, Normand Isle, Treasure Island, Sunset Islands and Harbor Island.

So while our traditional second home American buyers out of Chicago, Washington D.C., Boston and New York have taken a back seat, international buyers have been flocking to our market to buy distressed real estate.  This year, the range of our international clientele has been extremely diverse and from all corners of the globe, including Turkey, Switzerland, Germany, France, Argentina, Bahamas, Bermuda, Canada, Israel, South Africa, Angola, India, Italy, Brazil, Ecuador, Guatemala, Spain and England.

So what has prompted this surge of international buyers in Miami?  The following driving factors are what we most commonly hear from our international clients buying in our market  -

1. Miami remains an alluring international destination. It is the American Riviera, our own little Sardinia, St. Tropez, Cyprus or Capri.
2. Miami is a cultural Mecca, a tropical paradise where the many cultures of the Americas live, work and play.
3. The cities of Miami and Miami Beach have invested hundreds of millions of dollars to develop the arts, history and culture of our area.
4. Miami is an international hub and easily accessible from most continents. We are a major international airport, sea port for cargo and trade, tourist hub, and regional business center for Central and Latin America.
5. A foreign owner enjoys the same fundamental rights to ownership* as that of a U.S. resident or citizen.
6. Although our country is suffering from a major recession, Miami is a safe place to enjoy, relax and revitalize oneself.
7. The Miami lifestyle is very unique and different to other major cities. This is a city that is always alive and it shows in our people, places, colors, festivals, and experiences.
8. While Miami has one of the highest rates of foreclosures in the country, the value that Miami offers today surpasses that of ten or even twenty years ago.

One of the tools still available to most foreign investors today, is the ability to obtain financing for a second home. Fair enough, relative to three or four years ago when most banks offered generous terms to foreign nationals, it is more difficult to obtain mortgage financing today.

However, one of the common misperceptions of our clients is that the difficulty lies in the program either not being available, or that the rates and loan-to-values are unattractive.  This is mostly an incorrect assumption as today interest rates are far more appealing AND foreign investors may still borrow up to 70% loan-to-value, or 70% of appraised value, whichever is less.

The real difficulty lies in getting approved to purchase a condominium in a project that does not meet today’s guidelines. The personal or borrower requirements, however, for proof of employment, six months reserves, sixty (60) day sourcing of the down payment in a local bank account, and letters of credit, are practically the same.

For further information on any of our properties, or Miami real estate, please call our office at    (305) 673-5300    or email us at info@miamiangelproperties.com.

 * Note that time spent in the United States and immigration status will determine tax liability. Foreign investors should consider title options carefully. There are a several legal issues and tax consequences for foreign investors from purchase to sale of the property – the advice of a qualified accountant, finance professional and attorney should be sought.

Coconut Grove Foreclosure

PRICE: $369,900  **PENDING SALE**

Description | This new townhouse was only built three years ago and offers a one car garage and swimming pool, and best of all, there are no homeowner association fees. This property is perfect for a family looking for a fantastic Coconut Grove location at an affordable price of only $160 per square foot  – Call or email us today to view this property -305.673.5300 or info@miamiangelproperties.com.

Address | 3095 Ohio St, Coconut Grove  -   map it

Property Type | Townhouse
Year Built | 2006
Living Area | 2,555 SF or 237 m2
Bedrooms | 3
Bathrooms | 2.5
Waterfront | N

Download a full description (PDF):

3095_ohio_street (Right click the link and choose “Save link as”)

The Miami Lifestyle

This weekend I spent several hours biking on Collins Avenue and A1A with a few of my local cyclist friends. While we are dealing with major oversupply in the real estate market and continued news of major layoffs, we are truly blessed to live in this diverse and beautiful city. Let’s face it, for many living in Miami is a ”lifestyle” choice. While the rest of the country is enduring freezing temperatures or major snow storms, here we are living it up on the beach and swimming in the warm clear azure waters of the Atlantic Ocean.

Miami is growing up. Our downtown area may appear to be a concrete jungle, but if you look closely, it has the makings of one of the most striking urban centers in the world. When is the last time you looked at downtown from across the Biscayne Bay at night? This past weekend the annual Miami Marathon kicked off from the American Airlines Arena. The 26.2 mile race covers one of the most unique courses of all major marathons. In the early morning hours runners pass through and experience the Port of Miami, South Beach, Ocean Drive, Miami Beach Golf Club, the Venetian Isles, Brickell Avenue, Coconut Grove and Key Biscayne. We are constantly spoiled and exposed to major cultural, art, drama and professional sporting events in our city, lest not we forget our incredible architecture, organic farmers markets and a constant flow of international visitors.

This city never ceases to surprise me. Browsing  through the December edition of Ocean Drive Magazine, I read about several new culinary superstars and recent restaurant openings. In the new Fontainebleau Miami Beach, we have Gotham Steak, Scarpetta, Hakkasan and La Cote. In the new W Hotel Miami Beach, which is scheduled to open this Spring, Mr. Chow and Serafina will make their debut. In Miami Beach, we continue to welcome new restaurants such as Gaia Ristorante on Ocean Drive, the famous Parisian restaurant Au Pied De Cochon,  Sean Brasel’s Meat Market on Lincoln Road, Red Steakhouse, Fogo de Chao, and Philippe Chow’s “Philippe” in the Gansevoort South.

We may not have a large employer base, Silicon Valley, nor the most reliable workforce, but we do have something that keeps people wanting to move and live here. It’s a love hate thing. I am confident, however, that for most of us it is a lot more love than hate. This is a special city and we are fortunate to enjoy it in all of her glory.

Location, Location, Location

There is way too much media bombardment about the challenges and difficulties of owning real estate in the current housing market. I must take responsibility as well and admit that at times I am guilty of this. However, we should also celebrate the successes and see what we can learn from them.

On November 17, 2008, Jose and Deyrdre Reyes sold their home in Coconut Grove for $2.58 million, or $434 psf. They originally purchased this custom built home two years prior in October 2006, for a price of $2.0 million. While the property was on the market for 271 days before finally selling, and it sold for almost $1.0 million less than asking, the fact that it sold in the current housing market for a sizeable return is a resounding success. So what happened?

The property is located in one of the most sought after areas of Coconut Grove and Miami. This two story home features 6  bedrooms, 5.5 bathrooms, formal living and dining rooms, 5,900 square feet of living area, gourmet kitchen, and a built in BBQ adjacent to the swimming pool. The “south” Grove is a unique neighborhood with so much history, culture, green space, excellent private schools, and an almost Bohemian lifestyle all with easy access to downtown, South Beach, Coral Gables and Miami International Airport. 

Let this be a good reminder to all of us that in real estate there is no substitute for a great location!

For additional information on homes in Coconut Grove or other Miami neighborhoods, please do not hesitate to contact us or call 305.673.5300.

Florida’s Property Tax Conundrum

Working with buyers of Miami residential real estate can be a lot of fun and full of adventure. We have so many unique neighborhoods, eclectic architectural styles, and such a diverse culture, including homes from tropical bohemian bungalows in Coconut Grove to high-tech modern waterfront homes on the Venetian Isles. Eventually, however, you have to cross that shaky old “real estate tax” bridge. PROPERTY TAXES ARE WAY TOO HIGH, and are a major factor in the property buying decision process.

YES, prices have come down considerably, and in some cases way below the threshold that any of us in this business imagined. Fantastic, that $2.1 million home in the Grove is now available at $850,000!

YES, unless you are in the $5 million and up range, there is a huge inventory of properties to choose from across the board. Superb, short sales and foreclosures galore!

YES, with only a minimum required down payment of 3%, attractive FHA financing is available. Wooohoo, my bank offered me is an amazing rate of 5.5% on 30YR fixed rate mortgage!!

SAY WHAT? Although my purchase price is $129,900 and I am purchasing a wonderful foreclosure property at 40 cents on the dollar, the property appraiser is not going to adjust my market value down to the purchase price in 2009!

According to the Miami Dade Property Appraiser, the current market value of this home is $322,205, and the 2007 real estate taxes were $8,113. This means that I am required to pay as much in real estate taxes as in principal and interest. Does that sound reasonable and workable to ANYONE?

There is some silver lining in this box. Several proposals are out there to drastically reduce the cost of real estate taxes in Florida. People we need to get with the program and talk to our Florida legislators. Check out one proposal out there called Cut Property Taxes Now, for example. They propose capping property taxes to a maximum of 1.35% of market value.

No matter which direction you think best, let your voice be heard and let’s push for CHANGE!

If you would like a FREE consultation on the value of your property or to discuss your real estate tax situation, please feel free to send us a request at info@miamiangelproperties.com or call Ross at (305) 673-5300.