South Florida Real Estate
Today during our open house tour, I was pleasantly surprised with a series of new single family homes for sale in North Coral Gables. With the exception of 1220 Capri, which is beautifully updated, these are all Old Spanish homes that have been modernized without losing the character that buyers of Old Spanish homes look for.
All listings are courtesy of EWM International Realty.
Based on EWM’s activity this week, it appears we may be starting to get into a more neutral market. EWM’s Coral Gables’/South Miami office did over $22.5 million worth of transactions this week, with an almost even split between sales (26), and leases (24). Seven of the sales were over $1,000,000.
Eight out of the 15 sales listed under $500,000 went for at (4) or above (4) asking price. Although that is pretty indicative of the seller’s market we have been in, we also added 27 new listings and had 17 price reductions. With the increase in inventory, if your home has been on the market for over 30 days it is time to decrease your list price. We are expecting inventory to increase every month as we move closer to the Spring listing season.
On December 20 I wrote a post about some changes to federal laws that may affect Miami’s real estate market in 2014. I neglected to include two more (well one is a Florida State Law, but I will include it here anyway). The first one I thought would be extended by now, but since we are coming up on New Year’s eve I thought I should mention it in case Congress lets it lapse. It may not be that big of an issue since, due to the rising real estate prices, many real estate owners are no longer under water but the tax deduction on forgiven mortgage debt will end on January 1, 2014. Although there are many benefits to short sell, even without the tax benefit, instead of foreclose the sun-setting of this deduction could decrease the number of short sales sellers participate in. Should seller’s stop participating in short sales, this will put pressure on already short inventory since the foreclosure process usually takes longer. Which leads me to the second change.
HB 87, the Fair Foreclosure Act, went into effect on June 7, 2013, but we will really start to see its affects in 2014. Known as the “Speedy Foreclosure Law”, this law will help speed up the foreclosure process. Prior to passage of this bill, foreclosing on a mortgage took approximately 853 days, which was more than twice the average. This should help ease some of the shortages in inventory by getting at least a portion of the 350,000 plus foreclosure cases currently tied up in Florida courts through the process much faster.
Realty Trac’s November Foreclosure Market Report shows that foreclosure start in Florida dropped 18.02% from the previous month and a whopping 45.9% drop year-over-year; completions were down 2.72% month-to-month and 15.59% from previous year; and overall foreclosure activity was down 15% and 23% respectively.
These decreases show that the foreclosure crisis is almost over, but the Florida still leads the nation in foreclosures, with one in every 392 homes getting a foreclosure filing and Miami is one of the highest cities with foreclosures in Florida. There are currently 617 Miami-Dade foreclosed homes listed on the MLS.
Although all real estate is local, this Bloomberg Report with Jeff Taylor, Managing Partner of Digital Risk, sums up the overall U.S. new housing numbers, current mortgage rates and lending practices, and provides a glimpse of mortgage lending criteria in the near future.
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.