Miami in Review – Q1 2009

For many of us, reflecting on the state of the Miami real estate market for the first quarter of 2009 versus the first quarter of 2008, is much like this monkey trying to make sense of his reflection in the camera lens. While we appear to have made significant progress as properties are selling and inventory is shrinking, just what is the reality and where is the market heading?

Single Family Residences

For the first quarter of 2008, a total of 1,149 single family residences were sold with a median sale price of $316,500, or $173 per square foot, and an average of 87 days on the market. For the first quarter of 2009, a total of 1,909 single family homes were sold with a median sale price of $180,000, or $104 per square foot, and an average of 104 days on the market. While the sales of single family homes has increased by over 65% for the same period in 2009, the average sale price per square foot has dropped by approximately 40%, and it is taking longer to sell a house.

Condominiums/Townhouses/Villas

During the first quarter of 2008, a total of 1,338 units were sold with a median sale price of $267,500, or $249 per square foot, with an average of 105 days on the market. During the first quarter of 2009, a total of 2,086 units were sold with a median sale price of $145,000, or $127 per square foot, and an average of 83 days on the market. Clearly, the sales of condos and townhouses has dramatically increased year over year as well. However, the average sale price per square foot has plummeted by 49% and properties are selling a lot quicker.

SUMMARY

In order to look more objectively at the above data, I think that it is important to pay attention to the inventory of distressed real estate in the market. During the first quarter of 2008, we had a total of 22 bank owned properties and 437 short sales, or pre-foreclosures, available for sale. For the same period of January through March 2009, a total of 1,091 bank owned properties and 3,784 short sales were available for sale. That is practically a 1,000% increase in the number of distressed properties available in the market from 2008 to 2009.

So we know that the number of foreclosures filed in Miami are up more than 30% for the first quarter of 2009 as well, and with the increase in distressed inventory available in the market, we will certainly continue to see additional pressure on pricing for several months and perhaps even through 2010.

So what has prompted the dramatic increase in sales in such a distressed real estate environment?  In many cases, prices of today’s real estate is less than ten or even twenty years ago. If one were to compare the city of Miami today to the Miami of the mid 1990’s, it is relatively easy to recognize how much more value Miami offers today. What is clear is that when buyers see value, they will invest.

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/data is gathered from the Southeast Florida Multiple Listing Service (“MLS”) and the Miami Dade Clerk of the Courts public records. The data in the MLS is deemed reliable but not guaranteed. This data is for January through March 2009 for single family homes, condominiums, townhouses, and villas, unless otherwise indicated. 

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.