Miami Home Sales Break Records over the Summer

By Sunny Isles Real Estate Expert on November 24th, 2015

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This past June was a record breaker for home sales in Miami. 1,390 single-family homes were sold. This was a record-breaking month as the highest month totaled 1,310 in June 2005. The month of July 2015 closed almost as many with 1,354 homes sold.

This is exciting news in the market as the prices for these homes have continued to rise year-over-year. Currently the price for a single-family home in Miami is up 8.6% and up 2.6% for condos. A single-family home that may have sold before for $255,950 is now $278,000. Condos that sold for $190,000 will now sell for $195,000.

Miami condos this summer also saw an increase in sales growing 4.8% year-over-year. 1,471 condos sold in July compared to last year’s number of 1,403.

This rise in home sales is thought to be from the city’s improving job market and low mortgage rates. Christopher Zoller, the 2015 Residential President of Miami Association of Realtors, refers to Miami as being “a global city with the second largest financial hub in the country.”

Mortgage Loans

The interest rate is down for a 30-year fixed rate mortgage. In July 2014, the rate was 4.13%. In July 2015, it had dropped to 4.05%.

The Miami Association of Realtors had this to say about mortgage loans in Miami in a recent report, “Despite the rise in sales, access to mortgage loans for existing condominium buyers remains limited. The lack of Federal Housing Administration loans for a large number of existing Miami condominium buildings is preventing further market strengthening.”

“Of the 8,523 condominium buildings in Miami-Dade and Broward Counties, only 29 are approved for FHA loans, according to statistics released earlier this year from the Florida Department of Business and Professional Regulation and FHA.” The statement goes on to report that only 0.0034% of local condos are approved for FHA loans. The U.S. average is 30%.

More Affordable Condos

Although the prices have seen increase year-over-year when compared to condominiums in global cities, Miami’s condos are quite affordable. A Miami condo which sells for $149,900 is comparable to condos in London ($960,840), Hong Kong ($776,280), and New York ($1.6 million).

The homes tend to sell near asking price. The Miami Association of Realtors reports that the average amount of days on market is only 41, compared to 43 in July 2014. The original list price received was 95.6%. As for condominiums, the days on market remained at 59, the same as July 2014 and the average list price received was 93.8%.

Cash Buyers

Cash purchases accounted for 48.2% of total home sales in July 2015. The national average is 23% in comparison. Miami’s number of high cash purchases is due to the fact the city attracts international buyers that tend to purchase properties in cash, according to the report.

The outlook for the housing market continues to be bright as increases in home sales continue despite the lack of FHA and price increases.

Phil Collins Buys Jennifer Lopez’s Home in Miami Beach

By Sunny Isles Real Estate Expert on October 28th, 2015

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To say that Miami Beach is popular with celebrities would be a massive understatement. Songs have been written about Miami, celebrities are always enjoying the entertainment and nightlife, spending time on the beaches, and thinking about buying a home in the area. Even though they might live in Hollywood or as far away as England, having a property in Miami Beach is more than just a status symbol. It’s a place to call home when visiting one of the most vibrant cities on the planet.

Phil Collins Buys Miami Beach Home

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You know Phil Collins from his work with Genesis, as well as his solo work. He’s one of the most famous and successful singer/songwriter musicians in the world with hits ranging from “Invisible Touch”, “Land of Confusion”, “Another Day in Paradise”, and “Groovy Kind of Love”. He also happens to love the United States almost as much as his homeland of England. That has led him to buy a fantastic property located in Miami Beach that once belonged to another famous face – Jennifer Lopez.

Collins bought the mansion on North Bay Road, and he paid a hefty $33 million for the property. He bought the property from Mark Gainor, a healthcare executive, who bought it from Lopez in 2005. At that time, the Gainors paid $13.9 million for the mansion. Collins closed on the sale in early June.

What Does the Property Offer?

The mansion is extremely large for starters. It is 12,153 square feet and offers seven bedrooms. In addition, it has eight full bathrooms and three half bathrooms. It also features a Jacuzzi and a pool. The home has some lovely modern features thanks to updates, even though it was built in 1929. One of the best features of the property is that it offers 200 feet of waterfront right on Biscayne Bay.

Another nice feature is that it is on enough land to provide some privacy for Collins. One of the problems with many homes bought by celebrities is that they don’t actually have enough privacy. They are willing to pay more for that added sense of security and privacy.

It’s a mansion for sure, and it takes someone with the status and money of Phil Collins to get into a property like this. The location, along with the property features, helps to make it well worth the price tag. It also shows just how strong the market is in Miami right now. When there are homes in South Florida that are routinely selling for more than tens of millions, it shows that people see just how much potential the area has. Many buyers from other countries, like Collins, love Miami and know that the property has the potential to go even higher.

In the future, you can expect to see even more celebrities purchasing homes in Miami Beach and the surrounding area. The city is only getting more popular, and that means the rich and famous will be spending more time here.

Second Quarter Sees Growth of Home Sales in Miami

By Sunny Isles Real Estate Expert on October 3rd, 2015

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There is no question that Miami is one of the hottest cities when it comes to real estate, and it has been doing quite well every since the economy and the real estate market started to recover. They city and surrounding area has seen a nice increase in the number of sales, as well as the price of homes, in the second quarter of 2015 when compared with the previous year.

Miami Is Still the Place to Buy

During the second quarter (April, May, and June) of 2015, there were 3,913 homes sold in Miami. This number marks an increase of 7.2% over the same months in 2014. During that time, the median home price happened to go up as well. It rose 10.6% from $245,000 to $271,000. Normally, when the prices go up by more than 10%, you don’t see the number of sales go up as well. People tend to slow down and consider other areas. Of course, Miami doesn’t have that trouble at all.

People want to live in Miami, even if they might be paying more than they would have a year ago. The vibrant city, the proximity of the beach, and the fact that the real estate value has such a potential to keep rising is encouraging more and more people to buy in Miami. Some of the buyers are from the United States, but there are a number of foreign buyers as well. Canada and China are just two countries that have a lot of residents looking at Miami property.

Another thing to keep in mind is that the number of homes offered between last year and this year has remained about the same. Even though there is approximately the same number of homes on the market, the sales have picked up, and that means that buyers are going to be competing for properties. Naturally, this has the potential to push the prices higher, as it becomes a seller’s market.

Both buyers and sellers are confident in the market, and that is really helping to push the sales to the next level. Considering the fact that mortgage rates today are actually very low, and that the price of the homes, even though they’ve been rising, are still affordable for many buyers, and it is easy to see why the sales have been growing this year.

While the single-family homes have been doing very well, the sale of condominiums has slowed down slightly. According to reports, even though the sales prices for condos increased, the number of sales dipped by about 1.8%. New listings for condos dropped as well, but that certainly doesn’t mean condos are necessarily struggling.

The Miami condominium market is faring decently when compared with many other areas, and with the increased interest in Miami, it is possible that the sales will pick up between now and the end of the year. With all that Miami has to offer, it is no wonder the desire to live in the city is continuing to rise.

Hibiscus Island Popular with European Buyers

By Sunny Isles Real Estate Expert on October 1st, 2015

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Beautiful Hibiscus Island has been a very popular location for luxury Miami waterfront homes for years, and that popularity is now crossing the pond. European buyers have been purchasing high-end multimillion dollar properties that are right on the water recently. Even though the value of the Euro is not as high as it once was, this has not really stopped the popularity of the Miami area. Buyers from Europe are still very interested in Miami homes, and they want nothing less than the best. That’s just what they are finding on Hibiscus Island.

Why Hibiscus Island?

Well, there is a lot to love about the island. Many of the lots are very large. One home that sold recently was a 5,643-square foot house that sits on a lot that’s 13,781 square feet. Another property offers a 4,251-square foot home on 15,750 square feet of land on the waterfront. Many of these homes are large and have massive properties. Those who are looking for larger properties that can offer a greater element of privacy tend to like this option.

They also love the fact that they have an ideal location. Those who live on the island are only a short distance from both Miami Beach and downtown Miami. It really is a perfect location. Since it’s on an island, it tends to be very safe. Getting around the area can be fast and simple, and the residents love the convenience. Whether they want to find entertainment in the downtown area or spend some time relaxing on the beach, it’s all very easy.

One of the interesting things about the properties on Hibiscus Island is the fact that the Europeans who are buying are not using them as investment properties that they will rent out. While it’s possible to charge a substantial amount for rentals on the island – some can fetch more than $40,000 a month – the buyers are looking for places that they can actually call home. They buy the property and become the end user. Some may want to make changes to the property and to develop it further with the goal of creating a true dream property.

More Buyers Are Looking at the Island

The Island has seen several large sales over the past couple of months, and as soon as property goes up for sale, you can be sure that it will have plenty of eyes on it. While the Europeans are some of the most prominent buyers, there are actually buyers from plenty of other locations that are falling in love with Hibiscus Island. The homes tend to be on the higher end of the pricing scale, but given their size, the land, and the amount of things that the buyers can do to upgrade the properties, which might not be possible with condominiums, makes the price well worth it. This is certainly one of the areas that you will want to watch if you are interested in the movement of real estate in the Miami area.

South Florida Home Price Growth Is Slowing

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

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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

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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

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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

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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

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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

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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: