March 2009 Newsletter Sean Greco Realtor, CIPS, CDPE, CLHMS, GREEN Certified, TRC, REOS Designations and Certifications are explained at the end of the newsletter Buy the Beach Realty, Cell 786 877 9220, buybeach.com Greetings from Warm South Florida, I hope this email finds you well and looking forward to comparing this month s data with last month s data to spot trends and decide for yourself the status of the local Real Estate market, of which I work within 24/7. You are receiving this because we have been in touch about Real Estate here in the South Florida area, most likely property at the Beach. As you read the newsletter from month to month it will contain data that will help you to analyze market conditions. In addition, it is an unobtrusive way to stay in touch with you regarding my Real Estate Consulting Services. Please remember to view the Trends and Graphs to analyze where the market has been and make predictions on where you think the market is heading: http://www.miamipropertiesandparadise.com/professional11.shtml If you are a bargain hunter looking for distressed properties, please click the following link that will take you to some of the better priced foreclosures. In the course of continually researching and familiarizing myself with the inventory of the very localized market in which I practice, along with the banking relationships I have cultivated, I have been able to do a lot of the research and legwork recognizing the best potential values in my target markets, or in some instances in other specific buildings or locations where there is excellent value for the product. Please understand that this list is by no means all inclusive, as there are certain brokers whom do not allow advertising of their listings on the internet, and my banking relationships allow me to realize certain properties that are for sale that might not show up in our MLS. So please don t hesitate to contact me directly for any such information. Also, please contact me should you want to discuss in more detail opportunities for distressed sales of multiple units. The below chart is data from the past 90 days for Condominiums, ending 2/28/09. The data is taken from South East Florida s Multiple Listing Service (MLS) for the cities and townships of Miami Beach (South Beach, Mid Beach, & North Beach), Surfside, Bal Harbour, Bay Harbor Islands, and Fisher Island. The paragraph below the data will explain in more detail what is included in this analysis. Please don t hesitate to pose any questions you may have, or simply give me a call or send me an email to discuss Real Estate in general. This data will help to analyze market conditions from month to month. Price Range Active Closed Listings % Listing % Sold Avg DOM Average Discount New vs Resale $0 - $199,999 983 108 221 22.48% 10.99% 118 8% 3 vs. 105 $200,000 - $249,999 366 25 117 31.97% 6.83% 157 12% 2 vs. 23 $250,000 - $299,999 432 18 131 30.32% 4.17% 159 12% 5 vs. 13 $300,000 - $349,999 267 13 86 32.21% 4.87% 157 14% 4 vs. 9 $350,000 - $399,999 323 33 98 30.34% 10.22% 128 12% 14 vs. 19 $400,000 - $499,999 414 20 109 26.33% 4.83% 142 12% 8 vs. 12 $500,000 - $599,999 348 8 76 21.84% 2.30% 196 9% 8 vs. 0 $600,000 - $699,999 248 13 51 20.56% 5.24% 204 15% 8 vs. 5 $700,000 - $799,999 179 6 40 22.35% 3.35% 82 15% 4 vs. 2 $800,000 - $899,999 126 4 31 24.60% 3.17% 166 7% 4 vs. 0 $900,000 - $1,179,999 190 7 34 17.89% 3.68% 152 9% 3 vs. 4 $1,180,000 - $1,399,999 146 12 32 21.92% 8.22% 214 18% 9 vs. 3 $1,400,000 - $1,799,999 157 7 30 19.11% 4.46% 123 13% 6 vs. 1 $1,800,000 - $2,199,999 102 8 16 15.69% 7.84% 191 17% 8 vs. 0
$2,200,000 - $2,699,999 92 6 19 20.65% 6.52% 267 16% 5 vs. 1 $2,700,000 - $3,199,999 63 3 9 14.29% 4.76% 223 26% 3 vs. 0 $3,200,000 - $3,999,999 80 5 8 10.00% 6.25% 101 14% 3 vs. 2 $4,000,000 - $4,999,999 46 2 9 19.57% 4.35% 217 18% 2 vs. 0 $5,000,000 + 83 5 21 25.30% 6.02% 406 41% 4 vs. 1 Totals: 4645 303 1138 24.50% 6.52% 179 15% 103 vs. 200 As you can see, I have broken the data into price ranges, and then you can see the amount of Active condos for sale, how many Real Buyers Closed on a condo for sale, how many of those listing agreements unsold, then further calculated what percent of the Active condos for sale and Sold. Then I calculated the Average Days on Market (Avg DOM), which is the amount of days it took the condos that sold to obtain a Real Buyer. Then I show the Average Discount, which is the percentage the Listed Price was discounted to the Actual Sale Price for all Closed Sales. The last column is for Closed Sales that were newer construction, which I considered to be anything built after 1995, versus older buildings built before 1995. I track this data for Condominiums and Single Family Homes separately due to their differences. I also track the data for the more luxurious buildings of South Beach, please feel free to email or call for that data. The next set of data below is the same information for Single Family Homes. The one difference is that the last column is the Average Age of the homes Sold. Listings % Listing Avg DOM Average Discount Price Range Active Closed % Sold $0 - $399,999 24 6 7 29.17% 25.00% 58 7% 1951 $400,000 - $499,999 31 5 9 29.03% 16.13% 131 16% 1946 $500,000 - $649,999 53 3 9 16.98% 5.66% 56 13% 1947 $650,000 - $799,999 54 3 13 24.07% 5.56% 266 8% 1948 $800,000 - $999,999 58 5 11 18.97% 8.62% 216 13$ 1943 $1,000,000 - $1,299,999 49 0 8 16.33% 0.00% n/a n/a n/a $1,300,000 - $1,599,999 43 1 8 18.60% 2.33% 139 12% 1950 $1,600,000 - $1,999,999 53 0 6 11.32% 0.00% n/a n/a n/a $2,000,000 - $2,999,999 72 0 8 11.11% 0.00% n/a n/a n/a $3,000,000 - $3,999,999 41 2 7 17.07% 4.88% 326 14% 1977 $4,000,000 - $4,999,999 24 1 2 8.33% 4.17% 177 18% 1950 $5,000,000 - $5,999,999 17 0 3 17.65% 0.00% n/a n/a n/a $6,000,000 - $6,999,999 13 0 2 15.38% 0.00% n/a n/a n/a $7,000,000 - $9,999,999 21 1 1 4.76% 4.76% 183 30% 1955 $10,000,000 + 34 0 3 8.82% 0.00% n/a n/a n/a Totals: 587 27 97 16.52% 4.60% 172 15% 1952 Average Age Don t forget to look at the overall data I have been collecting and determine for yourself what trends, etc. you see; please click here to take you to some graphs that should prove to be very insightful: http://www.miamipropertiesandparadise.com/professional11.shtml Below are very brief summaries on key issues that have a direct affect on South Florida Real Estate: PROPERTY TAXES & INSURANCE: As a property owner or potential property owner, I urge you to keep up to date on the various progress, legislation, and proposed legislation in order to help you better understand how these important issues affect you; please see the below link that will take you to the Florida Association of Realtors Legislative Center, which will help to explain the numerous moving parts concerning these issues: http://www.floridarealtors.org/legislativecenter/topinitiatives/index.cfm
HOME SALES UP: Foreclosures and sales of other distressed properties pushed prices down further in January and lower prices spurred more sales, which continue to shrink the number of existing homes for sale. Market watchers are quick to caution that the Realtor group s numbers provide a broad snapshot and that home prices and sales trends may vary significantly in particular sub markets, such as Bal Harbour or Miami Beach (South Beach included). The recovery will be very neighborhood and even building specific, said Ronald Shuffield, president of Esslinger Wooten Maxwell, a residential brokerage that operates in South Florida. The increased activity locally was in contrast to the national housing market, which saw both prices and sales drop. In January and December, 68 percent of the closings in Miami Dade County were either short sales or foreclosed properties. For condos, the number was 62 percent. More market activity has continued to shrink the excessive number of homes for sale, which is a key step for the market to recover. Source: The Miami Herald 2/26/09 JANUARY EXISTING HOME SALES FOR MIAMI DADE COUNTY, expressed year over year Source: FAR, EWM, The Miami Herald 2/26/09 Single Family Homes Condos Sales up 47 percent Sales up 27 percent Prices down 38 percent Prices down 48 percent Inventory down 9 percent Inventory down 10 percent QUICK HEADLINES: South Florida registered an impressive trade surplus in 2008, $19.6 billion, or 65 percent higher than 2007, and was one of the few districts to end up in positive territory. South Florida s international trade reached an alltime high of $90.2 billion in 2008, up by more than 14 percent over the previous year. Source: The Miami Herald 2/13/09, U.S. Government figures compiled by WorldCity More than 20 insurance companies are angling to write policies for customers who are losing their State Farm home coverage. Source: The Miami Herald 2/4/09 Florida Gov. Charlie Crist welcomed Spain s King Juan Carlos to the Florida Spain Business Forum, an event to promote business and investment between Spain and Florida. Spain, already an important investor in Florida, can use its extensive experience in developing and applying renewable energies to help Florida achieve its clean energy goals. Source: The Miami Herald 2/21/09 After selling a majority stake in Miami based City National Bancshares last November, Leonard Abess Jr. took the $60 million of net proceeds and handed it to his tellers, bookkeepers, clerks, everyone on the payroll. All 399 workers on the staff received bonuses, and he even tracked down 72 former employees so they could share in the windfall. The big hearted banker s selfless deed stands out, especially in these times. Source: The Miami Herald 2/15/09 AS PRICES COME DOWN, AFFORDABILITY RISES: In South Florida, the years long spike in home prices far outpaced the rise in household income. At the market s peak, the median priced single family home in Miami Dade cost nine times the median household income. A South Florida home is generally considered affordable when it costs 3.5 to 4 times the buyer s income. Condo listings are well within that range. Foreclosures and distressed properties have pushed prices down by as much as 43 percent since they peaked in 2006 and 2007, putting them snugly within the affordability range of police officers, teachers and others long priced out of the South Florida market. At the peak of the market, affordable housing was so scarce that companies had difficulty recruiting workers from outside the region. I need a few more weeks to get to 20 percent, said Thomas Krusin, a sea freight broker for an international transportation company. Krusin, 30, has ridden his bike through Surfside, admiring houses that 2 years ago were selling for twice as much as he hopes to pay about $350,000. And that s for a place close enough to the beach that he can walk to it. I am looking now because real estate prices are dropping and the interest rates are so low, it s a good combination, he said. For
those who don t need a loan and can pay cash, there s a gold rush of sorts going on. There are a lot of investors searching throughout South Florida with cash. The latest Realtor association statistics reflect the renewed interest from buyers. Sales for Miami Dade and Broward counties were up by a combined 51 percent for single family homes and 37 percent for condos in the last quarter, compared to 2007. Those sales figures reflect home prices dropping to earthly levels. Source: The Miami Herald 2/8/09 RENTERS DILEMMA: These days, as the housing downturn enters another year, the question of whether the time has come to take the plunge is not as easily answered. The case for buying now: Median home prices in South Florida are back to 2003 levels and some new, never lived in property is selling for less than it would cost to build a similar home. Additionally, the median price for a single family home now around $216,500 is starting to come within reach of households earning around the median income in Miami Dade and Broward counties. That could unleash pent up demand. Interest rates today are at record lows. This could save a buyer thousands more than buying at a cheaper price down the road when interest rates may be higher. There are eye popping bargains out there due to foreclosures and short sales. The excess of homes and condos on the market also means prices are low. A new $7,500 tax credit is available for first time home buyers until July 1. This can be used to offset the cost of a down payment. Source: The Miami Herald 2/15/09 RENT VS. BUY: This analysis was in the newspaper (Miami Herald on 2/15/09, page 4H) and from the brokerage firm, EWM, for the specific project outlined The Property: Toscano Condominium, Unit 310 S, 7350 SE 89 th St., Miami Description: 1 bedroom, 759 square feet Purchase Price: $220,800 BUY RENT Principal and Interest: $1,114.65 Monthly Rental: $1,350 Homeowner s assn. fee: $337.18 Renter s Insurance: $40 Real estate taxes: $291.00 Mortgage ins. premium: $96.96 Interior insurance: $75.00 Total monthly cost: $1,914.79 (monthly tax saving based on deductions for interest, real estate taxes, etc.): 304.39 Principal build up: 285.06 Net monthly ownership cost: $1,325.34 Monthly rent cost: $1,390 Monthly savings for a buyer: $64.66 *Based on a 30 year mortgage at 4.625 percent purchased by a single person earning $63,000 to $73,000 and $7,728 cash to close. Analysis does not assume any price appreciation of the unit* Source: The Miami Herald 2/15/09 INTEREST RATES & RELATED NEWS: It is important to note that different types of loans are pegged to different rates, so please make sure to stay in touch with your mortgage broker or banker to keep up to date on interest rates, as this can directly affect many Real Estate related decisions. In addition to the lowered rate when securing a mortgage to buy
property, another common question you will see throughout the upcoming year with lowered rates is whether or not it is a good idea to refinance. This discussion might be a good one to have with a reputable mortgage broker or your banker and see if this would make sense financially. Or feel free to visit my website and the Mortgage Center for more helpful information. This is the website to the Federal Reserve s Monetary Policy section: http://federalreserve.gov/monetarypolicy/default.htm FOREIGN BEACHEADS: Some of the biggest commercial real estate deals of 2008 came from outside the U.S.: Nakheel Hotels, managed by the Dubai government, bought 50 percent of the Fontainebleau Miami Beach hotel for $375 million. A subsidiary of Japanese investment firm Sumitomo paid $260 million for the Miami Center office tower. Hong Kongbased Swire Properties, which developed most of Brickell Key, paid $41.3 million for 5.5 vacant acres just off Brickell Ave. And a Mexican company affiliated with the Jose Cuervo Group became partners in 396 Alhambra, a planned $130 million office project in Coral Gables. As a credit crunch dries up U.S. capital for deals, many in the industry expect international investors to again be major players throughout 2009. They often have the stomach and the cash to buy now even as vacancies rise and values drop. They re not as squeamish as some of the investors in the U.S., said real estate broker William H. Kerdyk Jr., president and CEO of Kerdyk Real Estate in Coral Gables. Foreign buyers often work with longer time frames and have more cash than domestic groups. They have clear confidence in South Florida s long term economic strength. And for many, this country is still the safest place to move flight capital. International firms have a different perception of risk. Latin American investors, for example, have dealt with such economic events as government appropriation in Venezuela, regular threats from guerrillas and drug gangs in Colombia and the total collapse of the banking sector and massive devaluations in Argentina. They know that in the U.S., by contrast, contracts will be respected and the rule of law upheld. The possibility of slightly overpaying for an asset or that rents will continue to drop for several years almost pales in comparison, to what they ve dealt with in their own countries, points out Francisco J. Cerezo, a shareholder in law firm Greenberg Traurig. Kerdyk says his clients especially Brazilians, thus far more insulated from the global economic crisis are in fact aggressively buying property and investing in development here. Having experienced their own economic downturns before, they have more of a stomach for it. And they can t see the U.S. not getting stronger in the long term. International businesspeople see South Florida particularly Miami, Miami Beach and Coral Gables as an international locale, a destination point for going into the Americas, and eventually, for going into Cuba, said Carolina Rendeiro, CEO of Business Centers International. Many foreign groups are sitting on significant amounts of cash from recent liquidity events or conservative investing. And most in the industry expect international investors to come on stronger in 2009, and that they will remain more active than domestic investors. For those investors with cash, this market is one of opportunity says Developer Eduardo Avila. I think the world still sees the U.S. as a good place to invest long term, he said. And people feel that now all real estate is at a bargain basement price. Those people who are liquid will make a lot of money. Source: The Miami Herald 2/2/09 Another place where you can view some International research more specific to Real Estate, please go to the following link and you will find a 2008 NAR Profile of International Home Buying Activity and 2007 NAR Profile of International Home Buying Activity in Florida: http://www.miamipropertiesandparadise.com/professional37.shtml
Exchange rates play a vital role in Real Estate related decisions for foreign buyers or sellers, a good source to track currency exchange rates is: http://www.xe.com/ucc/ That is all for this month s newsletter and I welcome suggestions, feedback, and of course I am here if you or anyone you know is thinking of buying or selling property here in South Florida. If you wish to further discuss any of the above issues in more detail, or any other Real Estate related topics, please don t hesitate to call or email. I would like to leave you with 1 quote I feel is more relevant than ever, by genius Albert Einstein: A man should look for what is, and not for what he thinks should be. DESIGNATIONS AND CERTIFICATIONS: These Designations and Certifications were specifically chosen by me to give my effort, time, and money, as well as meeting the required experience because I feel that this shows my dedication to continually learning and evolving as a Real Estate Consultant. Plus, the market that I practice in is a natural one to achieve such designations to separate myself from the other professionals within my field. Keep in mind these not only prove education but also transactional experience in order to obtain the designations and certifications. Realtor Membership in the largest professional association known as the National Association of Realtors or N.A.R. C.I.P.S. Certified International Property Specialist, member of CIPS network; Designation shows education and transactional experience in the International Arena of Real Estate. C.D.P.E. Certified Distressed Property Expert, member of Distressed Property Institute; Designation shows education and experience in the continually evolving and complicated short sale and foreclosure markets. C.L.H.M.S. Certified Luxury Home Marketing Specialist, member of Million Dollar Guild; Designation shows education and transactional experience in the top tier level within my market, Million Dollar Guild is the highest level of membership with proven experience in numerous $1M+ transactions. GREEN Certified also known as GCREP GL, Green Certified Real Estate Professional Green Leadership; Certification shows education and leadership within the Green Real Estate Industry. T.R.C. Transnational Referral Certification; Certification shows education in researching Real Estate throughout the world and allows me to refer and to be referred from 28 International Real Estate Organizations in the Global marketplace. R.E.O.S. Real Estate Owned Specialist, shows extensive experience and knowledge in the distressed property class known as REO, also known as foreclosures or bank owned properties. If you wish to be removed from this mailing list, please REPLY to this email placing REMOVE in the subject line.