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Still Doubt An Economic Recovery Is Taking Place In Miami?
There was so much good news about economic activity in the Miami Today, today that I had to share some of the ones that popped out at me. In addition to the one about all of the economic growth numbers from November (see tomorrow’s post), the following things jumped out at me as a good sign that Miami, despite the economic downturn, has continued pursuing projects that focus on long term growth
- Record number of passengers arrive at Port of Miami
- Downtown Miami condos are filling, resulting in new activity at Bayside Marketplace
- Seagis Property Group buying up more industrial space with long term plans to stay in Miami market
- Major film and entertainment projects are heading into town (The Magic City, Bones, Charlies Angels)
- Downtown population jumped 81% over the past 10 years
- Codina is getting ready to build a 230 unit luxury rental in Doral
- Twin 27-story residential towers close to getting okay
- 369 unit condominium project moving forward with plans to begin in second quarter
- Tech incubator at FIU lands million-$ military contract
I point all this out because it is easy to focus on the negatives of unemployment, short sales, and foreclosures, all of which are very real and very painful. The fact that companies are investing here, tourists are visiting, inventories are getting absorbed, and developers are getting ready to start building again, all tell me that we are bouncing along the bottom, but the end is in sight. Since unemployment is a lagging indicator, it will be one of the last economic indicators to pick up. All of the items listed above will help the unemployment rate, which in turn will further help stabilize our battered housing market.
Miami Beach, FL Real Estate – Market Summary
5 Star Island Dr., Miami Beach
Market information from the Multiple Listing Service for single family homes for the month of January are as follows:
- Closed sales: 8. Two were short sales, two were REOs. 4, including the $2.7 million sale, were cash sales.
- Price range of closed sales: $2.7 million – $370,000
- Pending sales: 58. 27 short sales, 8 REOs
- Price range of pending sales: $6.8 million – $195,000
- Active listings: 353. 26 short sales, 4 REOs
- Price range of active listings: $50 million – $199,000
Distressed sales are still making up the larger part of the market in terms of listings going to contract. Based on the number of active listings, distressed sales make up about 8% of the market, but half of the closed sales.
What does this mean if you are a buyer? Based on the number of active listings to closed sales, there is still a lot of inventory to work through, so it is still a buyers market. Once you narrow down your price range and specifications however, there won’t be as much to choose from, so use the statistics and market information to negotiate your price. If the house you like is a regular sale and it is priced right, you won’t have as much room to negotiate as you will on one that is overpriced. If you are going to make an offer on a short sale bring patience and realize that when the bank finally does answer, they may ask for more than what you offered, even if what you offered was the full asking price.
What does this mean if you are a seller? You have a lot of competition so price really does matter. Look at the active sales that most closely match your home in terms of size, location, updates, lot size, amenities. Consider pricing it 10-15% below your closest competition, make sure it has great curb appeal, and de-clutter and freshen up the inside with some elbow grease and a fresh coat of neutral paint. The good news is that if your house is priced right compared to your competition, it will sell.
Pinecrest, FL Real Estate – Market Summary
Market information from the Multiple Listing Service for single family homes for the month of January are as follows:
- Closed sales: 7. None were short sales or REOs. 2, including the $2.1 million, were cash sales.
- Price range of closed sales: $2.1 million – $570,000
- Pending sales: 29. 16 short sales, 3 REOs
- Price range of pending sales: $2.75 million – $265,000
- Active listings: 184. 20 short sales, 4 REOs
- Price range of active listings: $5.7 million – $300,000
Distressed sales are still making up the larger, 65%, part of the market in terms of listings going to contract, but the actual closings for the month are of regular sales. Based on the number of active listings, distressed sales make up 13% of the market.
What does this mean if you are a buyer? Based on the number of active listings to closed sales, there is still a lot of inventory to work through, so it is still a buyers market. Once you narrow down your price range and specifications however, there won’t be as much to choose from, so use the statistics and market information to negotiate your price. If the house you like is a regular sale and it is priced right, you won’t have as much room to negotiate as you will on one that is overpriced. If you are going to make an offer on a short sale bring patience and realize that when the bank finally does answer, they may ask for more than what you offered, even if what you offered was the full asking price.
What does this mean if you are a seller? You have a lot of competition so price really does matter. Look at the active sales that most closely match your home in terms of size, location, updates, lot size, amenities. Consider pricing it 10-15% below your closest competition, make sure it has great curb appeal, and de-clutter and freshen up the inside with some elbow grease and a fresh coat of neutral paint. The good news is that if your house is priced right compared to your competition, it will sell.
Rental Property Owners Must Issue 1099′s
The Small Business Jobs Act that passed Congress last year requires all property owners that rent out properties to file a 1099 for each vendor who does $600 or more in work. Even if you only rent out a single property, you must collect the following for each vendor:
- name
- address
- Social Security or Federal Employer Identification Number
The details to the exceptions to this requirement have yet to be ironed out but the exceptions include:
- burden: if gathering the required information and issuing the forms create a hardship
- duration: the property is only a temporary rental of your own residence
- income: your income from the rental doesn’t meet minimal threshold requirements (as yet unidentified)
If you are renting out a property, make sure you, your bookkeeper, and/or CPA have a way of tracking each vendor starting January 1, 2011.
Fannie Mae and Freddie Mac Increasing Interest Rates and Fees
Starting in March 1 for Freddie Mac and April 1 for Fannie Mae interest rates for loans over 15 years could almost double, even if you have perfect credit.
Remember, if you are a buyer the cost of owning a home is more important than the price of the home. Obviously you don’t want to overpay for a home, but by waiting for prices to “bottom out” you may be overlooking the most important part of purchasing a property or home – interest rates. Trying to time the real estate market perfectly is like trying to time the stock market.
You Have Heard It But Do You Believe It
Miami Real Estate – If You Are Looking To Invest, Miami Is Top Choice
According to Mark Vitner, an economist for Wells Fargo, Miami is his top choice of a market poised for economic growth. How can that be? We have one of the highest unemployment, foreclosure and number of underwater homes in the country. However, Vitner stated that Miami is currently posting some of the highest taxable sales and number of jobs created in the state.
Miami has always been blessed with gorgeous weather, colorful landscapes, tourquoise waters, and beautiful beaches. One of the main reasons our economy has been chugging along better than most is due to our popularity with tourists, especially international ones, who have helped both our tourism and retail industries.
5601 Collins Avenue #810, Miami Beach, FL
According to AccuWeather.com, it was 29 degrees in New York and Boston yesterday, and 74 degrees on Miami Beach. This is the view from every room in this beautiful one bedroom apartment, smack dab on the beach. Instead of shoveling snow, you could be frolicking in the surf, playing volleyball or taking a leisurely stroll down the beach.
Wish you were here?
Free Things To Do Tonight
So many of my friends complain that Miami is an expensive town. Like any city I know, it can be but there are also a ton of things that you can do for free or near free.
Here are some things to do tonight to get your weekend started:
- Viernes Culturales – this event takes place the last Friday of every month in the Little Havana neighborhood of Miami. In addition to an art walk, there is live music, domino competitions, and latin dancing lessons.
- Visit the Wolfsonian – Free admission on Friday nights from 6-9 pm
- Take a picnic to the park at the New World Center on Miami Beach, watch the large screen and see what everyone is talking about.
Miami Real Estate – Condo Inventory Continues to Shrink
According to Condovultures.com, only 16% of the 22,231 condo units built in Greater Downtown Miami during the latest boom are still available for sale. If you continue to wait for prices to drop further, you will probably find you missed the boat. That doesn’t mean prices are going to appreciated rapidly, or at all, in the next year or two. We still have short sales, older construction, and regular owner foreclosures (vs developer foreclosures) to work our way through.
Waiting Until After The Super Bowl To List Your Home?
Common belief in the residential real estate industry is that nothing happens until after Super Bowl Sunday
, which this year happens to be February 6. Many sellers hold off on listing their home until after then. That may be a mistake. Sales are currently up. In Miami-Dade County, 893 single family homes and 1,397 condos or townhomes have gone under contract since January 1. Buyers are out there and you will have a lot more competition after Super Bowl Sunday.
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