South Florida Home Price Growth Is Slowing

By Sunny Isles Real Estate Expert on August 20th, 2015

Miami real estate

While the homes in South Florida have seen nearly continual increases over recent years, a new analysis by RealtyTrac shows that those rises are starting to slow. The analysis showed that while home prices increases grew by 20 percent year over year in 2013, they dropped to only 10% in February of this year.

While Pompano Beach and Fort Lauderdale also saw the same drop to only a 10% increase, this is actually reflected on a national level as well, with other major cities seeing the same rates of slowing appreciation. Overall, however, some experts feel that this decline is not necessarily a bad thing.

Potential Issues with Continued Increases

Ob Jacobi, who is the president of Windermere Real Estate in Seattle explained that “if homes were to continue appreciating in the double digits for too long, we could run into the same boom/boost market of years past”. Considering that the wages have not kept up with the increases in home prices, this may be a very true statement in Miami. The report also indicates that future expectations for home prices is that they will rise only single digits, rather than the double digits that realtors and investors have come to expect in the area.

Other Statistics

The report also provided other notable statistics as well. While average home prices have seen a decrease, those that have a $1 million price tag or higher have actually increased in the percentage of sales by 4.25%, which is higher than the previous year’s 3.46%.

The report also showed a few interesting changes in median home prices and foreclosed properties. As of February, the US median home price was $183,000, which is an increase of 14% over the previous year. Foreclosed property prices also increased by 17%, leading to an average price of $127,000. This jump shows that the previous savings seen on foreclosed properties after the 2013 mass distressed buying is waning, which will also help slow appreciation levels down to single digits as home buying returns to a more even market.

New Highs in Other Cities

While Miami and a majority of other major metropolitan areas saw decreases in home prices, there are others that fared much better. Denver, Colorado, San Jose, California and Austin, Texas all saw historic median home price increases over the last year.

Increase Drivers in Miami

The reason that there is not much concern over the 50% decrease in Miami is simple. The boom in Miami luxury condos and residences, many of which were purchased with foreign cash, is one of the main reasons the home prices were increasing so dramatically. As these multi-million dollar homes were moving in and being sold, it was driving the prices of single-family homes up, as well. This was since many middle-class residents started moving further inland.

Even with these on-going changes, there is little doubt that the Miami real estate market is still growing strong, and as far as luxury homes go, doesn’t show any sign of slowing in the near future.

Foreign Real Estate Investors in the US

By Sunny Isles Real Estate Expert on August 13th, 2015

Miami condos for sale

The top five foreign retail investors in United States real estate have invested over $17 billion as of the first quarter in 2015, but the numbers show that Singapore is overall leader.

First Quarter Investments

Real estate in the US has become a major investment for foreign countries, with Manhattan proving to be the most popular choice. The current NGKF Capital Markets report shows the breakdown of the more than $17 billion, and the results are surprising:

• Germany – $1.4 billion
• Australia – $1.7 billion
• China – $2.5 billion
• Canada – $3.6 billion
• Singapore – $8.1 billion

Singapore’s massive investment is staggering on its own, but considering they did not make it to the top five list at all in 2014, these rankings become even more impressive. At the current investment pace, and with Singapore’s stunning investment increase, 2015 could prove to be a record year for foreign real estate investment.

Manhattan Foreign Investment

Even though Singapore has seen a drastic increase in their US real estate investments, they don’t come close to any of the other major players when it comes to investing in Manhattan. A majority of the top five, as well as several other countries, spend their money in Manhattan, which made up 31.6 percent of the overall foreign investment capital. Over the past 12 months, investments in the city are as follows:

• Malaysia – 2.4%
• Germany – 3.3%
• Qatar – 3.7%
• Japan – 5.3%
• Brazil – 5.8%
• Norway – 12.3%
• Canada – 25.6%
• China – 26.6%

China and Canada are the foremost investors in Manhattan, and they have made a number of lucrative investments in premier skyscrapers in the city. January saw the Ivanhoe Cambridge investment firm spending $2.2 billion on the 3 Bryant Park office building in a deal with Blackstone. During the month of February, the Chinese Anbang Insurance Group closed a deal on the iconic Waldorf Astoria for $1.95 billion, making it the largest single Manhattan property investment for China.

Record New York Investment Levels Expected

According to the Preqin research firm, sovereign wealth funds have already shown a major increase in investments in the past year, with a staggering $6.31 billion growth. New York’s, and most importantly, Manhattan’s, popularity as an investment destination for sovereign wealth funds has already climbed to over $2 billion within the past 12 months. Those figures are expected to continue rising.

New York’s popularity as an investment destination is based on two things: its stability overall, and its ability to soak up massive sums of money quickly. Recent purchases in the Big Apple, such as the Norway-based Norges Bank Investment Management investing $1.74 billion in office buildings and the $337 million investment by Abu Dhabi Investment Authority on the Ian Schrager New York Edition Hotel, are impressive. These investments, along with others that are currently in negotiations, show that there is plenty of potential for a major increase in the amount of money that could be heading into New York in the coming year from foreign investments.

Residential Home Sales Rising

By Sunny Isles Real Estate Expert on August 8th, 2015

Miami Beach homes for sale

A new report released by the Miami Association of Realtors shows that homes sales are continuing to rise in Miami. The largest increase was in Miami single-family homes, which saw a year over year increase of 14.2% over February of last year. Condos are also still on the rise, with an increase of 1.4%.

These increases brought the total home sales in Miami in February up to 2,174, which is an improvement over last February’s sales of 2,036. So what’s behind these increases? Many realtors believe it’s a combination of buyer demand and seller confidence. (Click Here to view recent home sales in Miami)

As confidence and buyer demand continue to grow, they are creating listings that are more active, as well as driving sale prices higher in the process.

Cash Sales

Cash sales are another major part of Miami’s real estate market. While there was a decrease year over year compared to last February, the sales did increase from January to February. With all-cash sales last February making up 62.5% of all closed sales, and this February’s numbers being at 58.8%, there was a noticeable drop. However, month to month increases from January to February were 57.2% and 58.8% respectively.

While the Miami Association of Realtors believes the year decrease is due to the lack of loans from the Federal Housing Administration, Miami is still doing well. In fact, Miami all-cash home sales are over double the national average, which is a good indication that Miami is the place that buyers go when they want luxurious homes.

Other Real Estate Numbers for Miami

Considering how Miami compares to the national averages, there are also other benefits in the real estate market. The number of short sales from February of 2014 to February of 2015 saw a decline, with 35% of the total residential sales in South Florida being distressed sales. Last year, those sales were at 36%.

At this time, active listings are also up by nine percent over the year, with almost a nine-month supply of available condos, and over a five month supply of single family residential homes available. On average, the real estate market in an area is considered balanced when there is a six to nine month supply of available homes. While single family homes aren’t quite there, these numbers are expected to continue increasing based on the comparison of numbers from February 2014.

The current level of homes and condos, as well as the increased sales in Miami, have made them one of the most active in the entire United States. The demand for homes is both from local domestic buyers and overseas buyers. The number of foreign buyers continues to increase in the area, and a majority of these represent the all-cash sales as well. These buyers are coming to Miami and South Florida for investment and second homes.

While it will remain to be seen if Miami maintains year over year increases in home sales, the growing popularity with foreign buyers looking for luxury homes is still on the rise, and this provides major benefits to the SoFla economy.

No Housing Bubble in Sight

By Sunny Isles Real Estate Expert on July 21st, 2015

Miami real estate

Statistically speaking, housing is on a roll. Year-to-date home sales are up 6.3 % and prices in May were 7.9% higher than a year earlier. The trends are expected to stay positive and are likely to boost business dollar volume by as much as 15% in 2015. These statistics don’t even include new home construction, which is growing at a strong clip as well.

But this rosy picture does raise concerns about affordability. After all, wages are rising by only 2% annually and renters are getting squeezed, having to endure 4% rate hikes while home prices accelerate more quickly. In addition, mortgage rates have notched their highest level of the year, reaching about 4% in June, and should continue to rise well into next year.

Some armchair analysts have suggested that we’re entering a new housing market bubble. But hard facts suggest otherwise. Underlying conditions today are fundamentally different from the bubble of a decade ago. Back then, credit was easy to obtain and home sales were running at more than 8.5 million a year (existing and new homes combined). New home construction volume topped 2 million annually.

By comparison, credit today is extremely tight, which has led to an unusually high level of all-cash sales. Home sales are barely over 5 million and new home construction is barely scratching 1 million units. Meanwhile, for the past eight years, total mortgage balances have failed. The reasons show what’s changed from 10 years ago: home owners are paying their mortgages on time and few are seeking cash-out refinances.

It’s fair to ask, though, whether at some point affordability problems will choke off home buying. That’s possible. But there’s my thinking about what could neutralize those fears. After running various scenarios, I expect home prices to rise continuously as long as mortgage rates remain under 6%. Early in the summer, the average rate was 4%. It may rise to 5.5% by the end of next year. Should mortgage rates cross the 6% mark, maybe two years down the road, then either home prices will be flat or other forces will be evident. Going forward, keep in mind that robust job creation and meaningful increases in income levels will help propel home prices. For now, though, no bubble or impending crash is in sight.

By Lawrence Yun, NAR (National Association of Realtors) chief economist.

S&P Case-Shiller Indices Show Miami Had Highest Gains

By Sunny Isles Real Estate Expert on June 30th, 2015

Sunny Isles Oceanfront condos

According to the S&P Case-Shiller Home Prices Indices for January 2015, Miami real estate – view website had the second highest gain year over year in the last 12 months, with an 8.3% increase in home prices. Additionally, the city tied with San Diego and Charlotte for month-over-month increases, with .7% rises.

Year over Year Increases

S&P Case-Shiller provides both 10-City and 20-City Composites for year over year prices, and both saw increases for year over year numbers over December’s totals, with the 10-City showing an increase of 4.4% compared to December’s 4.3%. The 20-City Composite shows an increase to 4.6% compared to the previous 4.4% increase.

Month over Month Indices

The month over month indices, however, showed a decline of .1% with a majority of the cities showing no change. The report explained that the noticeable decline in cities such as San Francisco, which has a .9% decrease, and Washington, D.C., which had a .5% decrease, could have been due to the weather that was unseasonably wet and cold during the period.

Overall, there continue to be price gains across the housing market. While this is a major benefit that is likely led by an increase in consumer confidence, low inflation, cheap oil, and low interest rates, there are some difficulties in the housing market, as well.

Market Difficulties

The housing market still faces difficulties for a few different reasons, which include:

• Wage Deficit – While home prices are increasing, wages are not seeing the same growth. In fact, the home prices are rising at nearly twice the rate of average wages. This means that if the home prices continue on the same pace, without the wages catching up, would-be homebuyers will not meet the median income requirements to qualify for homes that meet their needs.
• Interest Rates – While the interest rates are currently low, the differences between wage and home price increases could cause problems. If the interest rates increase the slightest bit, it could result in a major setback as homebuyers are put under even more pressure.
• Residential Construction – New residential home construction has still not made it back to the pre-crisis peak, and the current level of one million is not comforting. Historically, any time prior to 2008 when these numbers were that low, the economy was suffering from a recession. Due to this, the new home sector is still considered weak, and this can present its own problems if there are changes in the future.

Miami developers are still seeing increases, which is a major bonus for them and the South Florida economy. However, one area that has shown some decreases is the sale of condos. While these numbers are still higher than previous years, there are some that believe that this sector may be reaching its peak. Time and future indices will tell, but for many in the Miami housing market, the future is still looking bright, and the area is expected to continue growing due to interest from foreign buyers.

Miami – Ranked Number Four of Top Ten Healthiest Cities

By Sunny Isles Real Estate Expert on May 15th, 2015

Miami Beach apartments for sale

If the sun, sand and amazingly luxurious homes weren’t enough to make everyone love Miami, there is one more thing to add to the list. According to Livability, a research site dedicated using research to explore cities throughout the country to determine what’s great about them, Miami ranked number four on the top ten list of healthiest cities.

What Goes Into the Rankings?

The rankings on this list were determined by several different factors in order to come up with a complete picture of the overall healthiness. These factors include:

• Access, affordability and quality of healthcare
• Obesity rates in adults
• Access to healthy eating options
• Doctor to patient ratios and number of hospitals
• Whether the city promotes healthy lifestyles with walking paths, parks, and farmer’s markets
• Cleanliness of the water and air

Miami’s Results

Miami’s number four ranking was based on a few different things, beyond its overall beauty that most associate with it. The most important considerations for their healthy living ranking were:

• Number One Ranking in Florida – As far as healthiest lifestyle options, this county ranked the highest in all of Florida! This is due to most residents exercising at least three times per week, an obesity rate of less than 23 percent and a lack of residents that partake in smoking and drinking.
• Many Beaches, Parks, and Recreation Areas – Miami offers numerous areas and locations that promote healthy exercise and activity, including playing in the surf, visiting parks, deep-sea fishing, golf, and tennis.
• Everglades National Park – This factored into the ranking due to the miles of biking and hiking trials, as well as kayak and canoe opportunities.
• Healthcare – Miami offers a high doctor to patient ratio, high-ranking doctor’s offices and hospitals in the healthcare community and most residents report that they make annual health screenings a priority.
• Access to Healthy Eating – Miami also offers numerous co-ops and farmer’s markets that provide organically grown produce, as well as juice bars, smoothie shops and many different vegan and vegetarian restaurant options.
• Clean Air and Water – When compared to the rest of Florida, both the air quality and drinking water quality are considered clean.

All of these reasons landed Miami in their fourth place finish. However, there are other locations that were just a bit better. Minneapolis, Minnesota ranked as number one due to 17% of the city being part of the park system, a high number of insured residents and a low number of smokers.

On the other end of the spectrum, Yonkers, New York ranked 10th due to its high number of walkable areas and parks, and a recently unveiled Green City initiative and a high doctor to patient ratio.
When comparing Miami to some of those other cities, there is no denying that the city has plenty to offer residents. After all, a beach bod doesn’t happen by itself! With all these benefits thrown into the mix, it only makes Miami an even better place to live, work and play. To see Miami Beach properties for sale please click this link: www.sunnyislesmiamirealestate.com/Miami-Beach/

$35 Million Spec Home in Bal Harbour

By Sunny Isles Real Estate Expert on May 6th, 2015

Bal Harbour home for sale

A new waterfront mansion is being added to the many other luxury homes in Bal Harbour, and this one is sure to gain notice. With an incredible $35 million price tag, it shows that there is no end to what luxury homebuyers are willing to pay to the home that meets any needs they may have.

Chad Oppenheim Design

The luxe spec home was designed by Chad Oppenheim, of Oppenheim Architecture, and developed by Shlomy and Oren Alexander. It has an “urban subtropical modern” design according to Oren, and takes the stunning beauty of Brazilian nature and incorporates it into the home. The result is 13,500 square foot mansion that combines indoor and outdoor living spaces to total 20,000 square feet of space.

Features

This home has plenty of features that make it stand out as a truly luxurious space. Once completed, it will have a total of eight bedrooms and eight bathrooms, with numerous courtyards, and nearly every room in the home opening up to either an ocean view or a garden. There are also sliding doors that lead directly to outdoor living spaces, as well as a rooftop Jacuzzi, fire pit, and bar.

The home will also include a wealth of high-end materials, including personal chosen Romana Italian travertine stone, Belgian oak, and over $1 million worth of furniture for staging.

The mansion is being built on a 20,197 square foot lot that was purchased in 2012, according to the property records in Miami-Dade, for $5.55 million.

The developers’ goal in creating this spectacular home was simple, and involved three points:

• Purchase the best available property
• Hire only the best architect
• Use only the highest-quality, high-end materials throughout

One of Many Developers Helping with Spec Fever

There has been a major influx of luxury spec homes in South Florida, and the Alexanders’, which is slated for completion in May, is only one of several. Developers are attempting to cash in on the major buyers, most of them foreign, who are choosing south Florida as their second home, but still expect the absolute best. Some of the most notable beyond the Alexanders include:

• To Better Days Development – Launched by the investor, Peter Fine, this developer is currently building three different waterfront spec mansions, ranging from price from $18 million up to $30 million
• Posner Group – Developer Todd Glaser has a $35 million, 11-bedroom mansion on Star Island
• Home builder Bart Reines recently sold a $10.5 million waterfront home on North Bay Road

There are also other spec homes that are currently being built or have already been completed in Pinecrest and Coral Gables. See all Bal Harbour homes for sale here: http://www.sunnyislesmiamirealestate.com/Bal-Harbour/.

The surge in these multi-million dollar homes leaves little doubt that the market is certainly back, and perhaps even better than ever. Developers and real estate firms are confident that the switch to luxury spec homes will continue, as more foreign investors continue to flock to South Florida for their second homes, which also helps them to secure their fortunes in the process – and this creates a win-win situation for all parties involved.

Shakira May be Selling Home

By Sunny Isles Real Estate Expert on April 26th, 2015

Miami Beach house for sale

There’s a rumor going around right now that pop star Shakira could be selling her home in Miami Beach, and that the current asking price is $12.9 million. The price asked for the home in 2013 was 14.95 million, and this discount may help the property to gain more traction amongst potential buyers. The house is not currently listed on the multiple listing service, or MLS, and there’s no guarantee that the house is actually up for sale. Ben Moss, the managing director of the sports and entertainment division for One Sotheby’s International Realty, actually says that the house is not up for sale at all.

However, others dispute this claim. DesignTrend.com, the New York Post, and the Miami New Times all say that the property is indeed for sale, and that the asking price is $12.9 million. Shakira has been the owner of the home since 2001, and at the time, she paid a mere $3.38 million for the property. The home is 8,355 square feet and features six bedrooms and nine bathrooms. It is located at 3140 North Bay Road and is on Biscayne Bay. Click here to view all North Bay Road homes for sale here. It features a nursery, gym, dock, and much more. Some of the former celebrity neighbors include Ricky Martin and Matt Damon. Last year, Damon actually sold his neighboring home for $15.4 million.

While it’s still up in the air whether the sale is real, most of the signs seem to point to it, just that it will be a quiet affair. Given the fact that Shakira now lives in Barcelona with Gerard Pique and their son, chances are high that she’s looking to sell the home now that she no longer lives there. It’s a large property that’s too large for a vacation home for most people, so selling makes sense.

Why Don’t Celebrities List Houses on MLS?

When celebrities sell their homes, it’s often done rather quietly and for good reason. They do not often put their homes on the MLS, as it simply invites too many people who have no real intention of buying and who only want to see where a celebrity lived to come out to the property. This can be distracting and problematic when it comes to trying to sell these types of homes. Thus, keeping things quieter and private is generally the order of the day. This is a whisper listing, and it’s what the NY Post believes is happening with Shakira’s home. Given her high profile, this makes quite a bit of sense.

They will be able to limit the number of people who come through the home, and they will be able to prescreen the potential buyers to see if they are motivated and legitimate. This helps to keep provide the celebrities with a bit more privacy. You will find that most high profile people, whether they are singers, actors, athletes, or simply very wealthy, like to keep as many of the details of selling their homes private whenever possible.

Luxury Homes Selling Big in Miami

By Sunny Isles Real Estate Expert on April 9th, 2015

Florida real estate for sale

Over the course of 2013, 20% of the sold single family homes in Miami were priced over a million dollars, and this trend of high-priced luxury homes continued through 2014 and into 2015. The demand for luxury homes is still very strong, and there are a couple of reasons for this. For example, since the economy recovered and since the taxes and interest are still favorable for buyers, getting into a new luxury home is a good idea.

More Families Moving to Miami

One of the things that many real estate agents are seeing is an influx of buyers from other countries, such as Brazil and Mexico. While homes in the area have always been popular for people from these nations, the political and financial insecurities in those and other nations are making many with money want to come to Miami – view Miami waterfront homes for sale here.

Many real estate specialists are also seeing a difference in the types of homebuyers who are coming to buy these properties in Miami. Namely, there are many more families with children who are buying homes and moving to South Florida. Many business professionals are taking the plunge and moving to Miami as well, and they are bringing their families with them.

Many from NYC are looking into buying luxury property in Miami as well. Even though the prices for homes in Miami are getting to be higher than they’ve ever been, that’s not any sort of deterrent for those buyers, since the prices are still lower than or on par with those in New York City.

There are not only great homes, but the schools throughout many parts of the area have great reputations. Coral Gables and Key Biscayne, for example, have high quality schools.

Miami Offers More

Miami is quickly becoming a truly global city. They are growing quickly in a number of different areas, including sports and entertainment. There is a thriving culture in the city that’s appealing to many people, and is certainly one of the big draws. Additionally, architects are seeing all of the fantastic opportunities they have to bring their skills to the city and to create some truly unique and opulent homes. These world-renowned architects are creating homes that people really want, and the prices for some of the homes are reaching $3,000 per square foot.

It is currently a good market for both buyers and sellers. There are plenty of people who want to buy in the city, and those who want to sell can certainly find some motivated buyers. The demand increases and the prices will surely increase along with that demand. It’s a good idea for buyers who find a property that they like to act quickly and purchase it before it is gone.

Many areas in South Florida are doing well right now, but one of the best is Sunny Isles. It has a number of condos and towers that have a wide range of luxury homes perfect for many types of buyers. It is a great place to invest and a perfect time to invest.

Home Prices on the Rise Nationwide

By Sunny Isles Real Estate Expert on April 5th, 2015

Florida real estate for sale

A few short years ago, the real estate market was in a substantial amount of trouble. Home prices were dropping, people were unable to buy and to keep up with their mortgages, and it was a bleak time for most. Fortunately, the economy has strengthened, and things have started to change quite a bit for buyers, sellers, and real estate professionals. The prices of homes are going up around the country, and this means that the market is recovering nicely. Some feel that it’s already back to the point before the last storm, and that the additional safety measures in place today will reduce the chance of another crash.

Prices Going Up

When comparing the home prices across the country from November 2013 to November 2014, you can see that there is an increase of 5.5%. This is no small amount, and it’s important to remember that this is just an average of all of the states. In some areas, such as South Florida, the prices are doing even better. Look at the Miami area, for example. Prices are up by about 8% in the same timeframe, and it doesn’t appear as though the price increase will be slowing anytime soon.

It’s important to remember that even though the prices are getting higher and more favorable, things are not quite back to the same levels prior to the recession. For example, Nevada, Florida, Arizona, Rhode Island, and Connecticut still have a long ways to go before they are able to match those previous prices. Still, most experts feel as though the prices will continue to go up for a number of reasons. See Florida real estate here: http://www.sunnyislesmiamirealestate.com/

Buyers from Around the World Want US Property

They feel that any lulls in price increase will only be temporary, and that the prices will keep rising as more and more people start to get into the market to buy homes. There are plenty of domestic buyers who have an interest in the South Florida area, and they are starting to look into new properties. New Yorkers, for example, find that even with the increased prices for Miami homes for sale, the cost is far less than what they would be paying for properties in NYC.

It’s not only domestic buyers who have an interest in purchasing properties in the US though. In fact, there are many buyers from China, South America, Europe, and Russia who have quite a healthy interest in the Miami area, and they are starting to snatch up properties. Some are looking to move to the US, while others are looking for vacation homes. Some are investors. There are many reasons to buy, and this is helping to push the demand for properties in the area.

Even though there is a surplus of properties in some locations, that’s not stopping developers, who know that the demand is continuing to grow. Many new luxury condo towers are going up in Miami all the time and buyers are trying to get in on the action now, before the prices go up even further.