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.

Miami Real Estate – December 2008

Summary - December 2008

For the month of December 2008 vs. November 2008, we experienced a substantial 74% increase in the number of closed sales versus the prior month. This increase in sales was predominantly focused in the Downtown/Brickell, Miami Beach and Coral Gables areas.

Recently, everyone has been talking about the big increase in sales of bank-owned properties or those in pre-foreclosure [short sales] and here is why. If you look at the combined total of 165 sales in Downtown/Brickell and Miami Beach condos [under $500k], a total of 95, or 58%, fell into this category. We think that the supply of bank owned properties will continue to climb as will the percentage of bank owned sales. Another fact that we should pay attention to, whether you are a real estate practitioner or investor, is that the majority of December’s distressed sales, or 73%, were bank owned properties and not short sales.

There was also an impressive increase in the number of sales of condos over $500,000 in Miami Beach versus November 2008. It should also be noted that more than 50% of these sales included some form of “jumbo” conventional financing. Apparently, the supply of jumbo mortgages is not so dire for Miami condos. I would also like to add that five luxury homes traded hands in Miami Beach in December, including waterfront locations on the Sunset Islands, Pinetree Drive, Allison Island, San Marino Island and Rivo Alto Island.

Featured Sales – A Downtown Loft and A Luxury Home

The Baylofts - 455 NE 25th St., Miami

This month’s featured sale was the purchase of a 2 bedroom, 2 bathroom loft condo in a new building near the Miami Performing Arts Center. The all-cash buyer paid $130,100 for 965 square feet [90 m2] of living space in a building that was constructed in 2004, which equates to a price of $135 per square foot! This unit features a wrap around balcony, 10 foot ceilings and stainless steel appliances. The best part is that the monthly maintenance fee is only $383, and with such a low purchase price, this condo was an absolute steal. We should also recognize that the most recent sale of an identical two bedroom unit in this building was at a purchase price of $238,100. This was a bank-owned property which was on the market for only 35 days and the original asking price was $129,900.

Sunset Island – 1525 N View Dr., Miami Beach

A Swiss buyer, Sonja Berchtold, as director of JP Investments I Inc., purchased this luxury waterfront home in late December for an all cash price of $6.25 million. This Caribbean Colonial residence has over 6,600 square feet (613 m2) with 5 bedrooms and 5.5 bathrooms and sits on almost an acre of land and with 165 feet (15.3 metres) of open bay frontage and direct access to the ocean. The seller, Rand Skolnick, purchased the home in February 2002 for $4.2 million. The original asking price was $8.9 million and after six months on the market the home sold for practically thirty percent less, or $6,250,000.

For any additional information on Miami real estate, foreclosures, short sales or bank owned properties, please contact us at info@miamiangelproperties.com or call 305.673.5300.

The data used to generate this chart is gathered from the Multiple Listing Service (“MLS”). The data in the MLS is deemed reliable but not guaranteed. This data is for December 2008 for single family homes, unless otherwise indicated as condominiums. Homes that are pending sales have had offers made on them, and those offers have been accepted by the seller, however the sale has not yet closed. The prices are the actual sales prices of all single family or condos that closed during the month of December 2008.

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.

Miami Real Estate – October 2008

Summary - October 2008

For the month of October vs. September 2008, we did note that there was a dramatic increase in the number of condominiums sold in the price range of less than $500,000. Additionally, that the number of single family homes that sold in Coral Gables increased by 400%, or from 5 to 25, due to the sale of several distressed properties. This was also the case in Miami Beach where the majority of the units sold were either a short sale or a bank owned property.

October’s Featured Sale

This month’s featured sale was the sale of the top floor of the North Tower of the Canyon Ranch, located at 6801 Collins Ave in Miami Beach. According to the Daily Business Review and Miami Dade Public Records, Betty Saks, a Smith Barney financial consultant, and her husband, Bart Kavanaugh, paid $5,449,700 for units 2701, 2703 and 2704, with a total of 5,100 square foot or 474 square metres, which is the entire twenty seventh floor of the development’s North Tower. The couple obtained a $3.0 million mortgage from CitiMortgage as purchase financing, structured as a three year adjustable rate mortgage with a starting interest rate of 5.125%. And you thought we were in a credit crunch!!

For additional information on Miami real estate, foreclosures, short sales or bank owned properties, please contact us at info@miamiangelproperties.com or call 305.673.5300.

The data used to generate this chart is gathered from the Multiple Listing Service (“MLS”). The data in the MLS is deemed reliable but not guaranteed. This data is for October 2008 for single family homes, unless otherwise indicated as condominiums. Homes that are pending sales have had offers made on them, and those offers have been accepted by the seller, however the sale has not yet closed. The prices are the actual sales prices of all single family or condos that closed during the month of October 2008.

Miami Short Sales – Know the Law

Opportunity is Knocking

A few weeks ago I wrote a brief introduction to short sales titled Short Sales 101. As a buyer in today’s Miami real estate market, it is essential that one become an expert to navigate the challenging, and at times, perilous seas of short sales.

This is an example of a typical scenario that I worked on recently, and one in which there was plenty of questionable, unethical and illegal activities. Here is a short version of what transpired:

1. After an exhaustive search for a “steal” in Coral Gables, my client, the buyer, decided that he loved a single family home that was listed as a short sale. He instructed us to make an offer at $1.8 million.
2. The seller’s agent, upon receipt of the offer, disclosed to us that the buyer had engaged a “loss mitigation” expert to handle the deal. When asked about this individual the listing agent did not know  this “expert’s” role or how they were to be compensated.
3. The following day, the contract was accepted and returned with the buyer’s name altered to that of the “loss mitigation expert” along with a limited power of attorney.
4. We contacted the “expert” to discuss our concerns over the power of attorney and questioned how they were to be compensated. He stated that ”the seller tried to handle this himself and he could not get it done with the lender,” and “he is too busy to deal with his own property,” and “there is no problem as I have the authority to legally bind the seller,” and “don’t worry about compensation, i have this worked out with the seller on the side!” Say what?
5. Following many further heated discussions to determine what is really going on the deal was exposed. The “expert” had an agreement with the seller to get paid a $15,000 “loss mitigation fee” at closing [on the HUD] and had his own purchase contract in with the lender to purchase the property at a lower price. He would then close in double escrow, pocket the difference of around $150,000 plus the loss mitigation fee.
6. You can only imagine my next conversation with the “expert,” who was essentially asking my client to pay more than what the lender was willing to accept, and swindle the new lender, existing seller and buyer all at the same time. Does this sound familiar?
7. Upon our clear objection to such a scheme, the “experts” next offer was to be paid just a straight real estate commission instead of the loss mitigation fee. 
8. As such, we immediately informed our client that he should cancel the contract and walk away from the deal. Additionally, that we were not willing to be party to the transaction. The buyer signed the release and escrow monies were returned.

This leads me to my next point. It is important to be aware and knowledgeable of the new Florida law titled Foreclosure Rescue Fraud Prevention Act, which took effect on October 1, 2008. This law protects homeowners who face the threat of foreclosure from individuals who would prey upon them, including the payment of any upfront fees to mitigate any loss.

The flood of Miami short sales has no end in sight. You need to be motivated and willing to do the work. To help navigate the way for you in buying a short sale property in Miami, please contact Ross now at info@miamiangelproperties.com or call 305.673.5300.