South Florida Real Estate
Archive for the 'Investment Real Estate' Category
You know what they say about real estate, location, location, location, and boy does 1542 Drexel Avenue #205 have it. Location: 2 blocks from Lincoln Road. Location: 1 block from Espanola. Location: 3 blocks to the Ocean. In the heart of Miami Beach, yet on a quiet, low traffic street, this fully furnished unit is the perfect Miami Beach Pied-A-Terre. Rarely available one bedroom. The last one bedroom for sale in this boutique building was in 2011!
If you are looking for an investment property instead of a weekend get-a-way, the last fully furnished unit that rented in this building was a studio that rented for $1500 per month! Listed for sale, fully furnished (minus the art work) for $170,000.
Single Family home sales increased 21% in 2012. Those listed between $300,000 to under $1 million increased 50%. Home sales for those over $1 million increased 64%.
Condo sales increased by 6%. Condos between $300,000 to under $1 million increased 45% and those listed over $1 million increased 62%
With that amount of activity, low inventory and cash still flooding our market, many buyers are frustrated. If you are one of them, there are several things you can do to have your offer considered on a new listing.
1) The most important item to have clear is the financial aspect of your purchase. If you are a cash buyer, make sure you have proof of funds ready to accompany an offer. If you are going for financing, have your pre-approval letter from your mortgage company with as few contingencies as possible.
2) Have your real estate agent put you on a system where you are being notified the instant a property that meets your criteria hits the market.
3) Make the time to go see the property the first day. There are a lot of buyers who are making offers the first day because they have been familiarizing themselves with the market and know that if the property is priced right, it will sell.
Black Friday brings out buyers looking for bargains and buyers looking for Miami real estate investment properties are here in droves. While most people are enjoying time with family and friends, Realtors are busy selling properties. Driven by news reports of increasing prices, decreased inventories, and increasing rents both local and foreign buyers continue to purchase Miami real estate for investment.
The top places where my buyers are looking, not in any particular order:
- Brickell: Currently there are 526 condos for sale in the Brickell area. They range from $146, 900 for 580 square feet to $16.8 million for 9080 square feet.
- Downtown Miami: There are 567 condos for sale in Dowtown Miami. Prices start at $124,900 for 400 square feet up to $4.4 million for 5650 square feet.
- Midtown, Wynwood: The new “in” place to be does not have a lot of residential units. There are currently 112 condos for sale in the Midtown/Wynwood area ranging in price from $82,000 for 872 square feet to $2.4 million for 3988 square feet.
- Downtown Dadeland: There are 30 condos for sale in Downtown Dadeland with prices starting at $177,000 for 700 square feet and going up to $400,000 for 1,429 square feet.
- Coconut Grove: Coconut Grove does not have a lot of condos and few were built during the boom. There are currently 120 condos for sale in Coconut Grove that are either condos are town homes. They range in price from $60,000 for 409 square feet up to $14.5 million for a 9110 square foot unit at the Grovenor House.
- Coral Gables: There are only 100 condos for sale in Coral Gables. They range in price from $91, 500 for a 994 square foot foreclosure with extensive fire damage to another foreclosure at $7.9 million for 11,402 square feet at the Gables Club.
- Pinecrest: There are very few condos and town houses in Pinecrest, an area mostly comprised of single family homes, so it is not surprising that there are 13 condos for sale in Pinecrest. The lowest price is $99,900 for a 574 square foot short sale at Monterey Gardens to a 2, 226 square foot unit at the Reserve at Pinecrest for $599,000.
These neighborhoods are all located near public transportation, restaurants, entertainment and shopping, and all of them are in demand with people looking to rent.
Tuesday night, CBS 4 reported on a homeowner whose house has been taken over by squatters. According to the story, the house was sold and when the Realtor went to the final walk through before closing, she found people living in the house. The people living there claim they were duped and rented the property.
During the height of foreclosures, many properties had sqatters move in. This house, however, was not in foreclosure, was actively listed with a real estate agent and had probably had activity with showings and, most likely, inspections. The owner had to hire an attorney. The “tenants” have 40 days to move out.
Watch the video and let me know what you think.
In case you think that the investment in Miami is starting to ebb, there is an article in today’s Business Monday about Fort Capital Management, a private equity firm, buying up prime South Florida real estate. Their most recent purchase it the Surf Club in Surfside.
Miami-Dade’s strong rebound in the tourism industry is driving up sales of hotels and fueling construction.
I attended a very informative windstorm insurance session at the Miami Realtors Association this afternoon. The presentation by Lee Gorodetsky, The Home Insurance Guru and President of L & S Insurance, was my third insurance update of the year because that is how much of a moving target Florida insurance has become.
So why is property insurance a more important issue than taxes in South Florida? It is not because hurricane Sandy is churning off the coast of our neighbors in the Bahamas. It is because we only have a sales tax and property tax, no state income tax and Citizens, what has been the major insurer in Florida, is so grossly overexposed that it is changing all of the rules to minimize it’s exposure if The Big One hits.
In Miami, property insurance prices for a primary or secondary home range from 1-3% of the replacement cost of the home, calculated by multiplying the living area square footage by $135 for an average standard home. Luxury homes would use a higher dollar amount. The 1% is for homes built after 2006 that receive all of the current wind mitigation credits. Most homes are closer to the 3% range. Property insurance runs at about 2% of the purchase price and as long as you have homestead exemptions, it cannot go up more than 3% or CPI per year, whichever is lower.
The rates on Citizens insurance are expected to increase dramatically next year to raise money to try to close the gap they have between their reserves and their risk exposure. They will also be dropping an estimated 300,000 policies, mostly in south Florida.
There are three amendments relating to property taxes on this November’s ballot and not one amendment addressing insurance.
Related Post: Hurricane Insurance: Will It Be The Next Shoe To Drop In The Recovering Real Estate Market
Unit 208 is an updated 1 bedroom 1.5 bath that would be great for an investor. Rented until April of 2013.
In most markets in the country, Labor Day is the official end of summer because children are back in school and the weather starts getting cooler. Along with students settling in their seats, the real estate market also starts to slow down since parents try to make their move to align with the start and end of school.
As anyone who lives here will tell you, Miami is not like most cities in the country about anything and real estate is no exception. We actually have two real estate markets, the “traditional” one that is from Spring to Summer and the “snowbird” market that is from Fall to Spring. So basically, year round!
With the huge number of sales we are posting in 2012 and the amount of cash that is still out there, I do not see the market slowing down.
If you are a seller that had been considering selling but were holding back until prices came up, now is a good time to list your home. Inventory is down, demand is up, and prices in many of our neighborhoods have increased. If most sellers wait until the “traditional” listing season, you will have more competition next Spring.
If you are a buyer, know that competition is tight. You are going to need to be prepared if you want your offer to be accepted. If you are not paying cash, be pre-approved for a mortgage. The more money you put down, the stronger your offer will be. Know the market and the listing history of the house you are putting an offer on. If the house is price well based on relevant sales in the neighborhood and the house has not been on the market long, don’t make a lowball offer. It isn’t the buyer’s market it was two years ago.
EWM’s Coral Gables office had another amazing week in sales. Over $23,000,000 in sales and leases this week, the week before schools start. That follows last weeks’ $19,800,000+ in sales and leases. The fact that sales are so high the last two weeks of summer vacation is a sign that the real estate market in Miami-Dade County continues to recover. The number of sales (25) equaled the number of leases this week and were only slightly lower last week (21 sales and 25 leases). This week we had 14 new sales listings. Last week we had 8 new sales listings.
- The breakdown in price range for the sales for single family and condosin our office over the last two weeks was:
- 11 between $1,000,000 -$4,000,000
- 9 between $500,000 & $999,999
- 12 between $300,000 & $499,999
- 12 between $100,000 and $299,999
- 2 under $100,000
These numbers show that the luxury market is starting to recover, the lower priced inventory has significantly dropped as investors pick up properties, and demand in the middle price range is still strong. If you are in the market to buy or sell, give me a call to discuss prices in your specific area.
Miami is a very international city with lots of foreign investors. If you are buying property here, you need to make sure to ask if the seller is a foreign investor or you could be on the hook for money owed to the IRS.
Under FIRPTA, Foreign Investment in Real Property Tax Act, there is a mandatory 10% withoholding of contract sales price at closing for all foreign sellers of real estate. It is the BUYER’S responsibility to make sure the 10% is withheld EVEN IF THEY ARE WORKING WITH AN ATTORNEY &/OR TITLE COMPANY. The withholdings must be remitted to the IRS within 20 days of sale along with a special tax return.
There are exceptions to the withholding that your Realtor, title company or attorney can walk you through, but you first must ask the question.