November 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 Hello from South Florida, Below are brief summaries on key issues that have an effect on South Florida Real Estate, followed by the target market specific data. Click here for graphs of the data to help analyze trends in the market place. Please make note of the trends and data points as this will be key in timing the purchase or sale of a property to your benefit. Also, it is more important than ever that you understand the incentives that might end up being the deciding factor for those whom have been thinking about buying for quite some time. HOUSING PRICES CONTINUE TO RISE: Home prices in South Florida continued to eke out modest gains, evidenced in the Standard & Poor s/case Shiller home price index released 10/27/09. For Miami Dade, Broward and Palm Beach counties prices climbed 1.1 percent from July to August its fourth consecutive gain. Nationally, the index was up 1.2 percent. Meanwhile, after improving for 3 straight months, Florida s Consumer Confidence Index was flat in October versus September. The survey is key because consumers account for about two thirds of all spending and their confidence levels are often an accurate predictor of retail sales. Real estate watchers found reason for hope. The Case Shiller index suggested a widespread turnaround, with prices rising month over month in 15 out of 20 metro areas since June. Locally, the prices of homes and condos are more affordable than they have been in years, said David Dabby, a Coral Gables based real estate analyst. All the speculative price increase that occurred during the boom years has disappeared, he said. We are basically back to levels that are economically justified. Source: The Miami Herald 10/28/09 NEW PLAYER IN CONDO MARKET: South Florida s battered condo market just got a major new player. Starwood Capital Group s deal to acquire a big stake in a basket of condo construction loans and projects of failed Corus Bankshares from the Federal Deposit Insurance Corp. puts the Greenwich, Conn. based private equity giant in charge of roughly 21 percent of the unsold condo inventory in greater downtown Miami. That makes Starwood the second largest force in downtown behind Jorge Perez s Miami based Related Group, which held about 3,000 units at the end of the third quarter, or 36 percent, according to new research from Condo Vultures. Corus $4.5 billion portfolio included about $1 billion in loans secured by condo projects in South Florida, almost all in varying states of distress. The rest of the loans back projects elsewhere in Florida and in Las Vegas, San Diego and Atlanta, among other spots. The terms of the deal, the single largest sale of distressed commercial real estate in the current downturn, allowed Starwood to acquire a 40 percent equity stake in a limited liability company created to hold the Corus assets. The price: $554.4 million in cash, plus $1.38 billion in zero coupon debt issued by the FDIC. A big bonus: Starwood gets access to a $1 billion credit line to finish construction on incomplete buildings and cover other costs. The winning bid was 20 percent above the nearest competitor, including $100 million more of their own cash. Federal regulators seized Chicago based Corus in September. Another Chicago bank assumed its deposits, but the FDIC kept the assets and put them up for bid in hopes that would be the least costly blow to its insurance fund. The FDIC is keeping a 60 percent stake valued at $831.6 million. Both the credit line and notes must be paid off before cash distributions will be made to Starwood. The total purchase price of about $2.77 billion means Starwood pays 60 cents on
the dollar for the former Corus portfolio, which, in South Florida, includes some very nice projects (email me to get details on these). Developers and other real estate investors viewed Starwood s deal as a new market for the region s real estate market. The strong bid received for the Corus portfolio is a further indication that many perceive that the market has reached bottom and that Florida real estate, in particular, presents a great investment opportunity, Jorge Perez, chairman and chief executive of The Related Group, said in an email. The buyers are very savvy investors and will be disposing of the portfolio in a way that will be positive for the overall residential market. This is a very good sign, said Robert Willis, president of Foxcode real estate, which recently launched a new private real estate fund to raise $50 million for distressed property. It s a healthier sale than some people thought it would be, said Steve Coyle, chief investment officer of Global Realty Partners, the unit of Cohen & Steers that invests in private equity real estate funds. My initial thought was it would trade at 30 to 40 cents per dollar of face value. Source: The Miami Herald 10/7/09 & 10/8/09 Also, please contact me should you want to seriously discuss in more detail opportunities for distressed sales of multiple units. This market presents unique opportunities that very well may never be seen again in one s lifetime. Please give me the opportunity to help you take advantage of this situation. I am very involved in high level discussions with many of the decision makers regarding distressed projects. QUICK HEADLINES: Brazilians view the winning bid to host the 2016 Summer Olympics as an enormous lunge forward for their country, a game changing boon not just for Brazil but for Miami Dade and Broward County businesses. Rio de Janeiro will be the first city in South America to host the games. Source: The Miami Herald 10/3/09 ICON Brickell is offering buyers with existing contracts 30 percent off to get more of them to close. Email me today so I can help you take advantage of this situation, even if you aren t an original buyer under contract. Source: The Miami Herald 10/20/09 Loews Hotel in South Beach is spending $50 million to renovate its resort. Source: The Miami Herald 10/9/09 After 20 years, Miami is celebrating the completion of Brazilian landscape architect Roberto Burle Marx s geometric designs for Biscayne Boulevard downtown. Source: The Miami Herald 10/3/09 Miami commissioners passed the city s most comprehensive zoning code ever one that promises a healthier city and friendlier walking corridors. It was passed 10/22/09 with a 4 1 vote, and is called Miami 21. Source: The Miami Herald 10/23/09 DON T FORGET ABOUT THE HOME BUYER TAX CREDITS: There are 2 separate tax credits for qualified home buyers. The most recently passed tax credit for $8,000 that does not need to be repaid, is for those purchasing a principal residence on or after 1/1/09 and before 12/1/09. And on 5/29/09, The Federal Housing Administration released details of a plan in which borrowers who use FHA loans can get advances from lenders that effectively let them receive the credit before they complete their taxes (Source: The Miami Herald 5/30/09). There are income limits and other guidelines, of which the below website will help you understand better. Or you can contact your accountant for more specific details. The other home buyer tax credit is for $7,500 and does have to be repaid over time. It is available for those that purchased a principal residence on or after 4/9/08 and before 1/1/09.
Source: http://www.federalhousingtaxcredit.com The below chart is data from the past 90 days for Condominiums, ending 10/31/09. 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 - $199,999 921 143 211 22.91% 15.53% 114 7% 5 vs. 138 $200,000 - $249,999 289 28 62 21.45% 9.69% 106 1% 9 vs. 19 $250,000 - $299,999 334 32 77 23.05% 9.58% 148 11% 5 vs. 27 $300,000 - $349,999 214 23 35 16.36% 10.75% 104 8% 12 vs. 11 $350,000 - $399,999 270 33 54 20.00% 12.22% 207 10% 15 vs. 18 $400,000 - $499,999 298 35 65 21.81% 11.74% 173 10% 13 vs. 22 $500,000 - $599,999 271 29 42 15.50% 10.70% 183 9% 16 vs. 13 $600,000 - $699,999 186 18 46 24.73% 9.68% 117 9% 12 vs. 6 $700,000 - $799,999 113 10 33 29.20% 8.85% 119 15% 9 vs. 1 $800,000 - $899,999 94 5 25 26.60% 5.32% 361 12% 4 vs. 1 $900,000 - $1,179,999 154 9 26 16.88% 5.84% 134 8% 8 vs. 1 $1,180,000 - $1,399,999 102 6 19 18.63% 5.88% 205 18% 5 vs. 1 $1,400,000 - $1,799,999 119 12 29 24.37% 10.08% 317 12% 12 vs. 0 $1,800,000 - $2,199,999 74 5 12 16.22% 6.76% 334 13% 5 vs. 0 $2,200,000 - $2,699,999 82 3 7 8.54% 3.66% 314 31% 2 vs. 1 $2,700,000 - $3,199,999 43 8 11 25.58% 18.60% 209 27% 6 vs. 2 $3,200,000 - $3,999,999 49 3 9 18.37% 6.12% 149 21% 3 vs. 0 $4,000,000 - $4,999,999 37 4 5 13.51% 10.81% 279 20% 4 vs. 0 $5,000,000 + 59 1 11 18.64% 1.69% 182 17% 1 vs. 0 Totals: 3709 407 779 21.00% 10.97% 198 14% 146 vs. 261 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 40 13 10 25.00% 32.50% 142 7% 1945 $400,000 - $499,999 19 8 6 31.58% 42.11% 259 9% 1948 $500,000 - $649,999 32 8 10 31.25% 25.00% 79 7% 1950 $650,000 - $799,999 37 6 9 24.32% 16.22% 244 11% 1948 $800,000 - $999,999 43 3 13 30.23% 6.98% 94 11% 1946 $1,000,000 - $1,299,999 47 4 9 19.15% 8.51% 124 16% 1934 Average Age
$1,300,000 - $1,599,999 41 2 2 4.88% 4.88% 441 7% 1950 $1,600,000 - $1,999,999 45 5 6 13.33% 11.11% 118 21% 1984 $2,000,000 - $2,999,999 70 7 7 10.00% 10.00% 223 18% 1965 $3,000,000 - $3,999,999 38 1 10 26.32% 2.63% 60 12% 1937 $4,000,000 - $4,999,999 17 0 2 11.76% 0.00% n/a n/a n/a $5,000,000 - $5,999,999 16 1 1 6.25% 6.25% 87 15% 1933 $6,000,000 - $6,999,999 14 1 0 0.00% 7.14% 293 41% 1933 $7,000,000 - $9,999,999 21 1 2 9.52% 4.76% 310 27% 1984 $10,000,000 + 28 2 5 17.86% 7.14% 732 24% 2006 Totals: 508 62 92 18.11% 12.20% 229 16% 1954 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 If you are a bargain hunter looking for distressed properties, please contact me so that I may setup an automatic short sale or foreclosure search notification for you. I have found that the best deals usually go the quickest, and to be proactive in your distressed property search is the best way to go about finding a bargain. 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 service I provide adds significant value to the process, and only contact me if you are serious about buying and planning to be loyal. Please don t hesitate to contact me directly for any such information. WI FI NOW FREE FOR ALL ON MIAMI BEACH: After a $5 million contract with IBM for citywide, wireless Internet, the system is up and running. On 10/21/09, North Beach residents were able to create personal log ins for the free service. The city is asking people in other neighborhoods to try out the service, depending on where they live. We re told we are the first in the country to have a free, citywide hotspot, City Manager Jorge Gonzalez said. With the launch of citywide wireless fidelity, also known as Wi Fi, Miami Beach will have 95 percent coverage outdoors and at least 70 percent coverage indoors up through the second floor of a building, according to the city. Gonzalez said the system will increase communication and public safety by allowing immediate access to government employees with laptops, such as police. It should also save the city on numerous air cards currently paid for by the month, he said. Gonzalez said the new service should also help the city market itself to tourists. Wi Fi is that much more predominant now than when we began and travelers today kind of expect that there is Wi Fi availability, he said. We can now advertise: Come to Miami Beach. There is free Wi Fi anywhere you want. You can go to the beach and open your laptop. Users will have two networks to choose from, including a content filtered network for children. A third network is for government use. Source: The Miami Herald 10/22/09 SEPTEMBER CONDO SALES DATA FOR THE STATE OF FLORIDA: The Florida Association of Realtors said September condo sales rose 77 percent statewide from a year ago. It was a 9 percent climb from August, with about 5,000 units changing hands. The median price for the one year period is down by one third to $102,500. All but one of the state's metropolitan areas showed a gain in condo sales, and a majority of those have posted increased sales for 15 consecutive months. Source: GlobeSt, Florida Association of Realtors
ON A NATIONAL LEVEL, CONTRACT ACTIVITY FOR PENDING HOME SALES: has risen for six straight months, a pattern not seen in the history of the index since it began in 2001, according to the National Association of Realtors : http://www.realtor.org/press_room/news_releases/2009/09/record_roll PLEASE CLICK HERE FOR THE 2009 PROFILE OF INTERNATIONAL HOME BUYERS IN FLORIDA PLEASE CLICK HERE FOR A RETIREMENT VISA STUDY FROM APRIL 2009: Please email me for contact information of an Immigration Attorney that specializes in various types of Visa programs. 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 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 with rates near historic lows 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 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/ 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. 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 the following quote by Thomas Jefferson: Nothing can stop the man with the right mental attitude from achieving his goal; nothing on earth can help the man with the wrong mental attitude 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.