December saw Impressive Home Price Growth for Miami & South Florida Real Estate

By Sunny Isles Real Estate Expert on January 28th, 2016

Miami real estate for sale

While the residential real estate market in South Florida is experiencing a slight battle with the global economic crisis, this has not put a damper on housing prices in the region. These prices are steadily appreciating and there is no end in sight for this upward trend.

The prices for Miami and South Florida homes grew by 8.1 percent year over year in November. This data was gathered from a report published by S&P/Case Shiller.

In Palm Beach County, the median price for pre-existing single-family homes hit $305,000, which was an 11 percent increase from the previous year, even more than the average of 8.1 percent. However, there were several other areas that saw this kind of growth, as well. Broward County had a median home price that was also $305,000, which represents a seven percent increase from the prior year. This was the first time that either of these county’s crossed the threshold of $300,000 since over the summer.

Faster Growth in SoFla

This means that the tri-county area saw a faster pace of price growth than almost all of the remainder of the United States. In fact, the only areas that were ahead of South Florida were Dallas, Texas at 9.4 percent, Seattle, Washington at 9.7 percent, Denver, Colorado at 10.9 percent, San Francisco at 11 percent and Portland, Oregon at 11.1 percent.

It is not the entire economy that is suffering. In fact, the consumer portion, which includes automobile sales and housing, was actually quite strong in the previous year. In fact, this improved economy has provided homebuyers with the confidence necessary to actually enter into the market; however, there are some who have been less than overjoyed with the options available, specifically in the range of $150,000 to $400,000 homes. Thanks to strong sales in the past few years, a large number of listings have been depleted all throughout the region. The current owners are still unable or unwilling to test the market, with some not understanding what they could actually get for their home currently.

Economic Struggles in Miami

However, other parts of the economy are not doing quite as well. For example, businesses in the energy and oil sectors have begun to suffer from the significant drop in oil costs over the past 18 months. The strong buying power of the U.S. dollar is also resulting in slower exports. Unfortunately, the housing market is not big enough to help and offset these weak areas.

In December, the national housing market also saw a number of similar gains. In fact, prices increased by 5.3 percent year over year, which accelerated quite a bit from the 5.1 percent jump seen in October.

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Lions Gate, Domino Sugar, and Goldman Sachs Big Wigs Purchase in Faena House

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

Faena Condo Miami Beach

Faena House, the first of four ultra-luxury condo towers being constructed on Collins Avenue in Miami Beach, represents the ultimate in extravagant living. With its modernized lines and amenities like a state-of-the-art fitness room, multiple pools, beach club, and children’s playroom, it’s no wonder the project has attracted prominent buyers like Lions Gate Entertainment chairman Mark Rachesky.

Rachesky, who also heads MHR Fund Management – a $6 billion investment company – closed on his brand new pad in September, for the tidy sum of $13.5 million. Unit 11-BD now belongs to the entertainment mogul, according to public deed records. Earlier this year Rachesky sold a fifth of his holdings in Lions Gate for a reported $320 million, bringing his stake in the company from 36% to 28%.

An Elite Group

Rachesky joins an impressive group in his purchase at Faena. The chairman and CEO of Goldman Sachs, a global multi-billion dollar investment firm, has also bought into the luxury condo tower. Lloyd Blankfein, along with wife Laura, purchased unit 8-A for $9.5 million. Blankfein became CEO of Goldman Sachs in 2006, after joining the company in the early ‘90’s. According to Bloomberg the investment kingpin is now worth over $1 billion. Blankfein is rumored to have been one of the first buyers in the Faena project.

Yet another unit in the exclusive building solid to Jose F. Fanjul, Jr., manager of Sobe 8-C LLC. The Fanjul brothers, owners of Fanjul Corp., play a major role in the American sugar industry; subsidiaries of the company include Domino Sugar, Florida Crystals, Redpath Sugar, and the California and Hawaiian Sugar Company. Florida Crystals itself has become involved in development, breaking ground last year on a 395-unit project in Delray Beach called Atlantic commons.

The Finer Things

Faena House has been drawing much attention in the real estate world of late, particularly when the $60 million penthouse sold earlier this fall. The 12,000+ sq. ft. residence, which features nearly 10,000 sq. ft. of outdoor space (complete with rooftop infinity pool) was purchased by Citadel CEO Kenneth Griffin.

The rest of the building, while not quite as over the top as the penthouse, still offers the luxuriant beachfront living that is becoming all the rage as Miami developers continue to build up high-end condo inventory in SoFla. Every unit has a wraparound terrace that the developers call an “alero”, floor-to-ceiling windows, marble flooring, Miele appliances, and an automated touchpad that operates the thermostats, lights, motorized shades, and more.

This first completed complex is just the beginning. The developers, a Delaware company led by Alan Faena and Len Blavatnik, now turn their attentions to the construction of Faena Hotel Residence, Faena Versailles Contemporary, and Faena Versailles Classic (see website here). The hotel will feature 13 penthouse residence units, while the Versailles buildings will house 41 and 22 condo units, respectively.
Questions have been raised about whether the projects can attract enough upscale buyers to support such extravagant developments. Considering Faena House was sold out before it even opened, the complex’s future looks pretty bright.

How Miami’s Economy Has Become Dependent on Brazil

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

Miami real estate Brazil

There are more than 44,000 Brazilians living in Miami, not including tourists. Brazilian buying power has increased over the last several years, giving a boost to Miami’s economy. Real estate plays a pivotal role as 11% of all international deals are with Brazilians. They are also known to spend more on average per property according to NAR research.

Miami-Brazil Connection

South Florida by the Numbers is a column that reports real estate statistics in Miami (see Miami real estate website here). This column reported on the “Miami-Brazil Connection” and its future in light of Brazil’s economic downturn.

Here are a few of those statistics:

• Brazil is ranked number one for searching for real estate online in South Florida. In the last 18 months, Brazil has topped the list for all but three months. Brazilians spend the most on South Florida properties, averaging $495,000, compared to other international buyers.

• Brazil’s currency is dropping in the exchange rate. According to the Miami Harold, investors may begin to look elsewhere for properties that are less expensive. Brazil’s currency, the real, has dropped by 30% since last year. The Dow Jones is estimating that Brazil’s gross domestic product will decrease by 1.01% in 2015.

• There is an amazing amount of millionaires coming out of Brazil each week. Twenty-two new millionaires each week and many are finding homes and opportunities in Miami. It was only five years ago that Miami was in the real estate crisis and Brazil’s economy was beginning to grow. In 2015, Brazilians account for most of the cash purchases made in real estate in Miami.

• Giraffas Brazilian Grill has ten franchises in Florida with a goal to bring 150 stores across the nation by 2020. This fast growing company is helping to boost the economy in Miami. Giraffas has given Re/Max Advance Realty the exclusive power to handle lease negotiations, site selections, and market studies, among other tasks crucial to opening franchises during a dramatic growth period.

• The New York-based company, HFZ Capital Group, purchased the Shore Club for $175.3 million. Plans to reopen the hotel and residences are underway. The opening is set for the end of 2017 under the new name Fasano Hotel and Residences. This will be the first hotel opened in the United States by this brand as they currently own and operate four hotels and fifteen restaurants.

Brazil’s Economic Future

Brazil’s economic upturn helped to rebuild Miami after the real estate crisis. However, experts worry that Brazil’s upcoming economic troubles may fall over onto Miami like a domino effect. As President Dilma Rouseff faces impeachment and the economy falls into a recession, the unemployment rate skyrockets in Brazil.

The Miami Harold reports that in the first nine months of 2015, as many as 657,761 people lost their jobs. Even worse, it is forecasted that 1.5 million more Brazilians will lose their jobs in the remainder of 2015.

Miami Home Sales Break Records over the Summer

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

Miami homes for sale

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.

Brazil Is Still Ranking Number One For Miami Real Estate

By Sunny Isles Real Estate Expert on November 18th, 2015

Miami Beach real estate

Brazil is ranking number one for online searches for South Florida property, according to the Miami Association of Realtors. Brazil has held this spot for 13 months straight. When it comes to
purchasing property in Miami, Brazilians are serious buyers. They purchase more per property than other countries, averaging $495,000 per property. This accounts for 11% of all of Miami’s international real estate purchases. The only other two foreign countries that dominate the international real estate purchases are Venezuela (16%) and Argentina (12%). Most of the Brazilian buyers are upper-middle-class families working as professionals or entrepreneurs.

Christopher Zoller, the 2015 President of the Miami Association of Realtors, stated, “Brazilians not only love Miami’s shopping, restaurants, and beaches, but they love Miami’s diversity and are totally at home here. Miami, which has thousands of Brazilians living here, is America’s most international city with 51% of residents born in foreign countries.”

Russia and the Ukraine

Currently interest in South Florida properties is on the rise again for buyers in Russia and the Ukraine. Russia placed fifth in June 2015 for online property searches, while the Ukraine placed sixth, entering the list for the first time.

The following is the complete list from the Miami Association of Realtors of the top ten countries searching for South Florida properties in June 2015:
1. Brazil
2. Colombia
3. Canada
4. Venezuela
5. Russia
6. Ukraine
7. Argentina
8. India
9. France
10. Italy

U.S. Markets for Miami

The Miami Association of Realtors also tracks the states interested in real estate in South Florida. The top ten states in June 2015 included: California, Texas, New York, Georgia, Illinois, Alabama, Louisiana, Nevada, and New Jersey.

Brazil Ranked #1

However, with all of this tracking it is clear that Brazil remains the number one foreign country looking for South Florida property. Miami is considered a global city and has seen an upturn in the economy, thanks in large part to Brazilians living in the city as well as tourists. Although real estate prices have continued to rise, the properties in South Florida are still quite affordable compared to other global cities like London, Hong Kong, and New York City.

The Miami Association of Realtors describes this comparison as, “A 120-square meter condo in Miami-Fort Lauderdale-Miami Beach costs $149,900 on average, according to the National Association of Realtors 2015 Profile of Home Buying Activity of International Clients. The average prices for the same condo in London ($960,840), Hong Kong ($776,280), and New York ($1.6 million) were at least five times higher.”

Even with the downturn in Brazil’s economy as of late, Brazilians are still searching for properties. With more Brazilian businesses opening in the South Florida area, the trend should stay high for a while longer despite the economy and political turmoil. Brazil helped Miami during the real estate crisis five years ago during their employment boom. As more Brazilian businesses open in South Florida and are patronized by locals and tourists, perhaps this will help the Brazilian people to stabilize once again.

Faena House Attracts Big Name Buyers

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

Faena Miami Beach Penthouse

In early September the first of the four highly anticipated Faena condo towers (see all available Faena condos for sale here) reached completion. Faena House, or the 3315 Tower condominium, stands 18 stories and houses 44 ultra-luxury units. Transactions for the project started to be recorded on September 3, according to deed records in Miami-Dade County.

It wasn’t long before names of buyers started coming out in the world of real estate news. It certainly comes as no surprise that many of those buyers are highly recognizable players in finance and other high-powered industries.

Timeline of Early Faena Sales

On September 25, real estate publication The Real Deal reported that the rooftop penthouse at Faena had sold for an astonishing $60 million, a price that shattered the existing Miami residential record by $13 million. With eight bedrooms and 9900 sq. ft. in exterior living space alone (featuring a 70 ft. rooftop infinity pool), the 12,516-sq.-ft. luxury pad went for just under $4800 per sq. ft.

By early October TRL learned that the penthouse had been purchased by Kenneth Griffin, the billionaire hedge fund manager and CEO of Citadel, an investment company. This revelation shouldn’t have come as a surprise as Griffin has reportedly spent nearly $300 million on luxury real estate in New York, Chicago, and Miami Beach over the past couple of years.

On the heels of Griffin’s massive purchase came the sale of unit 9-B, to Brian and Randye Kwait of Greenwich, Connecticut. Brian Kwait is one of the founders of Odyssey Investment Partners, a private equity firm that has raised over $5 billion in funds since its inception in 1998. The Kwaits will enjoy 5400+ sq. ft. of luxury, including four bedrooms, five bathrooms, and an elevator that serves as the unit’s entrance.

On September 30 TRL revealed that yet another one of Faena House’s premium condos had sold. This one, on the sixth floor, was purchased by Aventura-based company ABF6A LLC for $11.75 million. Unit 6A boasts four bedrooms, six bathrooms, and more than 4700 sq. ft. of living space, plus a terrace nearly a third the size of the condo itself.

TRL again reported on a Faena buyer on October 12, this time the CEO of a London-based transportation company called Addison Lee (a competitor of Uber). Daryl Foster, also a shareholder in Infinity Creative Media Ltd., shelled out $8.8 million for a handsome 5466-sq.-ft., four-bedroom, five-bathroom piece of the Faena pie. Unit 7B has 4165 sq. ft. inside and 1301 outside. Foster’s address on the deed was listed in Monaco.

Faena Miami Beach condo for sale

The list of elite buyers into the luxury condo building continues with names like Mark Rachesky (CEO of Lions Gate Entertainment), Goldman Sachs chairman Lloyd Blankfein, and sugar mogul Jose F. Fanjul, Jr.

With this phase of the project sold out, developers Alan Faena and Len Blavatnik turn their focus to the remaining towers – Faena Hotel (the former Saxony Hotel), Faena Versailles Contemporary, and Faena Versailles Classic.

Office and Retail Space in Miami Popular with Foreign Investors

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

Commercial real estate in Miami

The Miami area is not only a great place to live and to buy residential property, but also a fantastic place to buy retail space and office property. In fact, a number of people from Latin America, and other countries, have been looking for both office buildings and properties with just a single-tenant building all around Miami, as well as in other parts of the county. The number of purchases and clients looking for these properties has skyrocketed over the course of the last year and a half or so.

Why Are These Properties So Popular?

While we certainly know that the real estate market for residential homes is doing well, the other parts of the Miami economy are growing just as quickly. Smart businesspeople want to get in on this action, and that has set them racing toward buying up these office properties as fast as they can. In fact, they are buying at a rate that’s faster than what even many of the real estate experts in the Miami area had anticipated. Many of the buyers seem to be coming from Latin America, as there have been an increasing number of purchases made by people from Argentina, Brazil, and El Salvador.

International investors from all around the world see the potential that Miami is offering. It is a multicultural city that is a major hub for all types of business, and the area is continuing to grow quickly. They realize that investing now and holding onto those retail and office spaces has the potential to provide them with a nice return on their investment.

Many of the buyers already have at least one home in the Miami area. They might be using this as an investment rental, or as a vacation home. They have the money to buy – with the average investor able to purchase retail and office properties between $3 and $5 million in most cases. Some of the wealthier buyers are even able to buy property and build their own. In other cases, developers are looking at the need for more of these types of properties and are building them for clients, knowing that they will be able to sell them. The Solution Group said that they are building an office condo in Coral Gables to meet the demands of their customers. Others are doing similar things to help increase their sales.

It Keeps Growing

The power of commercial property in Miami and the surrounding area is growing quickly, and foreign investors do not want to waste time getting properties in the country that they can then lease, or even start their own business. The commercial market has seemingly limitless potential right now, so you should expect to see even more investors from other countries snapping up properties as soon as they become available. Since there are limited properties now, it is a seller’s market. However, with developers starting to build new properties, this could change in the future.

Phil Collins Buys Jennifer Lopez’s Home in Miami Beach

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

Miami Beach property for sale

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

Miami Beach homes for sale

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.

Home Prices Rise and Foreclosures Drop

By Sunny Isles Real Estate Expert on October 19th, 2015

Miami real estate for sale

Miami has been doing very well in the world of real estate over the past several years. When the market started to recover, the prices in Miami – a very popular home buying destination – rose very quickly. People wanted to snatch up properties as quickly as they could, knowing that the market was gaining strength and that they were making a great investment. Today, the prices in Miami are still on an upward trend, albeit a bit slower than it has been in over the course of the past few years.

The Price Increase Slows Slightly

In the metropolitan area of Miami, there was an overall 8% increase in prices over the past year. However, it is important to note that there was only a 0.8% growth between April and May. Still, this continues a good trend, despite some slight dips in the market in recent months. In fact, it’s actually normal. Think about the growth that the area saw over the past three years. Since the end of the downturn, the increase in prices, not to mention interest in the area, has been phenomenal, as usually happens during a market turnaround. For three years, the prices rose steadily, and now they are hitting the point where they will stabilize, and that’s certainly not a bad thing for buyers who are interested in the area.

The interest in Miami is not slowing at all, and new buildings are still being constructed, not to mention there are still a number of units readily available. The fact that the prices are stabilizing could actually mean even better news for the developers as well as area owners who are trying to sell. They should be able to find more potential homebuyers who are able to afford the properties.

Foreclosures Drop in Miami

There is some more good news coming out of Miami as well. A report from CorelLogic shows that the rate of foreclosure in Miami and other areas of Dade County are down again. This year, the number of foreclosures in the area represented only 3.68 percent of the foreclosures across the entire country. Last year at the same time, the rate of foreclosure was over 6.5%. In fact, over other parts of Florida the number of foreclosures is down as well, by around 2.43%. Even the number of delinquent accounts is down. In fact, it is down by around 4.11%. (See all Miami foreclosure condos for sale)

Why are the rates going down? It’s likely several factors coming into play. First, there are more stringent requirements when buying a property today than there were several years ago when foreclosures were unfortunately common. This means that the people who are getting into the homes today are actually able to afford the properties, reducing the risk of foreclosure. In addition, the overall economy is better than it was a few years ago, which means people are making more money and are far less likely to become delinquent on their mortgage. (See all Miami foreclosure homes for sale)

The stronger market and the stabilizing prices continue to be great news for Florida real estate, particularly in the Miami area.

Home Price Increases in Miami Slow Over The Summer

By Sunny Isles Real Estate Expert on October 10th, 2015

Miami homes for sale

Over the past several years, Miami real estate professionals have seen some massive growth in the home prices in Miami. However, as with any increase in this business, there comes a time when things start to stabilize, and it looks like that’s what is happening right now. The home prices from June 2015 are beginning to level off. This should not be seen as a bad thing at all. It’s a natural correction that the market needs to go through to remain on the right track. This ensures that the prices do not get to the point where the number of buyers is too limited, for example.

The price of homes in Florida has been rising steadily since the end of the downturn. The recovery period has been very good to Florida, as it has with many other states. In fact, many states in the country have seen a significant return to the strength of their real estate market. There have been steady increases in home prices for 40 months and counting.

What’s Happening to Slow Things Down?

Data shows that there is still growth; it just happens to be slower. Between May and August of 2015, there was a growth of 0.3%. Even though it is an increase, it is the lowest increase in the year so far.

In addition, the number of homes for sale in the area is starting to shrink. However, the number of buyers is certainly not shrinking. If anything, it is growing stronger. People are very excited about buying condo in Miami. They are simply finding fewer properties available, which could certainly lead to a seller’s market, and that could help to keep the prices where they are, or keep them rising at a slow pace.

While it is possible that the prices could increase significantly in a buyer’s market, we’re unlikely to see a big spike. As mentioned, the market is trying to correct itself right now. What is more likely to happen is that the increased demand for properties will encourage more sellers who have been on the fence to list their properties, knowing that they have a very good chance of selling quickly and of making a good return on their investment. This is slowly but surely getting people more interested in selling their properties in Miami.

What does it mean for buyers and sellers? It means that right now is probably a very good time to start looking for a property in South Florida. Since the prices are not getting out of hand, it is possible to find some quality properties. Just keep in mind that there are quite a few others out there doing the same thing, so you don’t want to get into a bidding war over a piece of property if you can help it. Look for properties that are new to the market. Though there are fewer homes available now than in the past, there are still plenty of options that might be just what you need.