South Florida Real Estate
Our Coral Gables office had another great week with over $15 million in sales. Out of our 17 sales, four went for asking price and two went over asking. There were 17 new listings. For an overall market update, check out our video.
The lack of inventory in Miami’s real estate market resulted in 5 of EWM’s Coral Gables’ office sales going under contract for above asking and 2 going at asking this week. Considering we had 17 sales, that bodes pretty well for well-priced listings that are about ready to come on the market.
Several changes to the previously government subsidized flood insurance program will affect you. If you are staying in your home:
- If your flood zone is in any A or V zone, including AE, AB, AH, your flood insurance premiums will be increasing 25% per year until the premiums come in line with the actual flood insurance rates
- If your flood zone is in B, C, or X, your premiums will increase 20% per year until the premiums match the actual flood insurance rates
If you are buying a home, the new flood rates will affect how much of a mortgage you qualify for.
If you are selling your home, have your flood elevation certificate on hand to provide it to the new buyers.
Going through my Google Alerts this morning, I came across so many articles that mentioned Florida and taxes that I decided I needed to blog about it. Although it is not the only consideration to take when making a move, either as a business or an individual, taxes appear to be taking on a great degree of importance in terms of luring both companies and individuals to a state.
According to an article in the Detroit Free Press, The most tax friendly states for business, Florida ranks 5th. The states who ranked higher were Wyoming (No. 1), South Dakota (No. 2), Nevada (No. 3), and Alaska (No. 4). Based on that analysis, it is ironic that business interest groups are trying to reduce a 6% tax on commercial leases. Supposedly Florida is the only state to charge a tax on leases.
Fox Business News’, Do you live in a bad tax climate state, listed New York and New Jersey as the worst states for businesses when it comes to taxes.
Even luxury yacht owners fare better in Florida than other states, based on KUOW’s, Luxury Yachts Set Out To Sea To Dodge State Taxes.
Since we don’t have a state income tax, and are obviously pretty low on other tax criteria, we need to be careful not to overdue the race to be the lowest tax state across the board. It is taxes that pay for education and infrastructure, which are extremely important in keeping our state a place where both individuals and businesses want to move.
A couple of weeks ago, I wrote a post about how cheap flood insurance is if you don’t live in a flood zone. After last Wednesday’s heavy rains, even many of us who do not live in flood zones witnessed flooded streets and front yards. Before you go out and buy flood insurance, you need to be aware that on Tuesday, October 1, federal flood insurance rate hikes kicked in. That does not mean you should not get the insurance, since it is still affordable compared to other forms of insurance, but depending in what flood zone you live or are buying, in, the rate hike could increase nearly tenfold. If you purchased prior to July 6, 2012, the increases will be at 25% per year until you reach the new non-subsidized rate. Many states, including Florida, are trying to delay the federal hikes until the impact on the real estate market can be taken into consideration, but the current congressional stalemate has tied up the bill.
The second insurance factor to consider when buying your home is hurricane insurance. By now everyone has heard that Citizen’s, our insurer of last resort, wants to get out of the insurance business and is giving incentives to smaller insurance companies to take over windstorm insurance. Although wind mitigation discounts are still given, there is a good chance that insurance premiums are going to increase fairly significantly. Both of these insurances should be taken into consideration in your financial calculations when you are purchasing your home. Phil Lyons, at Insource Insurance, can assist you in determining how much properly insuring what is most likely your biggest asset will cost.
I work with a lot of international clients who buy and sell real estate in Miami and often recommend they speak to a local attorney and/or CPA to discuss the tax implications of owning property here. I came across a great article from Bilzin Sumberg Attorneys that addresses tax planning for foreigners buying real estate .
In order to give short sale properties an opportunity to receive “highest and best” offers, new Fannie Mae guidelines state that each new short sale listing must remain active in our MLS system for a minimum of 5 days and must include at least one weekend. If you are a buyer making an offer on a short sale, realize it may be a while before you receive an answer from the seller.
Congratulations! You either have the cash, or have been approved for a mortgage, to buy a home or investment property. Now that you have determined how much you can afford, remember to keep in mind your closing costs, which will run between 3-4% of your purchase price for closings with a mortgage and less than 1% for a cash deal. Closing costs typically include the following “Out of Pocket” expenses:
Courier (federal express)
Digital Imaging/Archiving Fee
Documentary Stamps on the Note: $.35 per $100.00 of note amount
E-recording fee: $4.00 per instrument to be recorded
Flat Fee Commission if company you use charges one. Usually $200-$300
Inspection Fees and other lender’s fees
Intangible Tax on the Mortgage: $.20 per $100.00 of mortgage amount
Title Insurance: Lender’s Policy
Recording Fees: $10.00 first page, $8.50 each additional page
Survey / Termite Report / Roof Report (if required)
2 to 13 months property taxes (changes depending on time of the year closing takes place)
14 months hazard insurance
14 months flood insurance (if required)
14 months of windstorm insurance (if required)
P.M.I. Premium (if loan to value ratio is higher than 80%)
Prepaid Interest (from closing date to the end of the month)
In today’s Miami Herald, there was an article about the new Centro Lofts that are going up in downtown Miami. This building will not have a parking garage and will instead opt for a Car2Go, bike racks, and public transportation to get it’s residents around. I moved from San Francisco and love the idea of not needing a car, but I am not sure Miami is quite ready for buildings without parking. First of all, it is hard enough to park downtown without all of the residents that are moving down there and this will only work if residents don’t have cars, not if they have cars and just park them elsewhere. The second thing is that it will work for people who work downtown or in an area with Metrorail service, but south Florida’s discombobulated public transportation system is not conducive for no car. How would someone who works in Doral get there? Don’t get me wrong, I love the idea, I am just asking do you think Miami is ready to go carless?
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.