I usually save my market updates until the end of the quarter, but with so much activity going on I figured I should write a quick snapshot in case you are thinking of buying or selling a home in the next couple of months.
Since January first of this year, there have been 58 new listings of single family homes for sale in Pinecrest. Out of those new listings, 13 are already under contract, two are short sales and one is a foreclosure. A total of 17 homes have gone under contract since January first and there has been one closing, which is pictured above. The majority of the pending sales were for homes under $1,000,000. Six of them are short sales and one is a foreclosure.
If you are thinking of selling, now is the time. There are buyers out there looking and if your property is priced right, it will go under contract quickly. If you are a buyer who has been looking for a while, don’t hesitate in making a solid offer when you see the house you like.
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.
Pinecrest Foreclosure Listed by Avatar Real Estate Services
Another banner week at EWM, with our Coral Gables office sales for the week totaling over $23,000,000 and our Miami Beach office totaling over $12,000,000!
EWM’s Gables office had 24 sales, with 7 going at or above asking, and 23 new listings, 6 of which are foreclosures.
Sales are going strong due to a still- limited inventory and strong demand from buyers trying to get into the market.
Pinecrest Home Sold By EWM agents Valerie Byrne (listing agent) and Monica Betancourt (selling agent)
Many of my clients have been calling me, shocked at how rapidly home prices have risen over the last year and questioning whether the South Florida real estate market is entering a new bubble. Although this graph confirms that prices have gone up, we are a long way off from the peak. Given that we arrived at inflated pricing due to speculation, easy and bad mortgages, and fraud, I think we will stay off the peak for quite a while.
The reason for our current rise in prices is due to a lack of inventory. Many homeowners who bought at the peak are still under water and will be for quite some time; foreclosures and short sales have been slow to work through the backlog; there are investors with large amounts of cash looking at real estate; mortgages are still difficult to get; and appraisals have been off of what buyers with mortgages are offering thereby keeping owner/occupiers out of the housing market. Now that builders have started to construct new homes and buildings, inventory should start to creep up again.
Based on the Miami Herald’s Economic Time Machine in the July 1 Business Monday, at the current pace of value increases, we won’t hit a new peak until July of 2018.
Palm Bay-Melbourne-Titusville, Lakeland, Tampa, Jacsonville, Orlando and Miami are among the top cities in the nation to buy foreclosures, according to RealtyTrac. That being said, foreclosures have not been overwhelming the Miami real estate market and the demand for these properties far outstrips the current supply. If you are a buyer, do not be fooled into thinking there are a ton of foreclosures available for purchase.
I have had several long-time customers ask me what I think is going to happen to the Miami real estate market come January. Although I don’t have a crystal ball, and the real estate market in Miami in general has been doing well with inventories down and prices up, with bidding wars happening as multiple offers come in, I decided to use a building that I am currently working on to throw a bit of a reality check into the current market euphoria.
2734 Bird Ave., Coconut Grove
In October of 2011, one bedroom units in this building were selling for between $45,000-$50,000. The last sale this year was for $90,000 and there are multiple offers on a foreclosure listed for $99,900. According to property tax rolls, nine out of the 39 total units in the building are in some stage of foreclosure. Whether or not any or all of them will go into foreclosure, short sale, or have a loan modification worked out, is yet to be seen, but if you look at the iMapp, Inc. snapshot of what is going on around this building, I have to believe that there are still going to be buying opportunities out there next year and that prices could go down. All of those little hammers are properties that are in the foreclosure process. Since the process takes over a year, where these all are in that process and how fast they come on the market will all come into play in the supply and demand cycle of 2013.
Foreclosure Around Bird Ave in the Grove
Not all markets look like this. Brickell has a lot less hammers. If you are a buyer, find out what the foreclosure map in the area you are considering purchasing looks like. Don’t be discouraged, just be realistic in your offer and your expectations as to where the market really is. If you are a seller, you also need to look at the map in your area. The map, along with relevant sales in your area, will help you set your list price in a range where your property will sell. Whether you are looking short term or long term, your perspective on where the real estate market is headed in 2013 depends on whether you are a glass half full or half empty person. Oh, and then there is the fiscal cliff…. Where do you think Miami’s real estate market is headed?
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.
I have written several posts about short sales and the benefits of short selling versus a foreclosure. An article in the Miami Herald last month stated that a short sale can cause a person’s FICO score to drop by 150 points or more, thereby making it difficult for the seller to borrow in the future. This is true, but the hit of a foreclosure is even higher.
Further evidence of the improving Miami real estate market can be seen in EWM’s Coral Gables office sales for last week. The total of sales and leases was $20,484,380. Residential sales represented 90.5% of those transactions. The total for all of EWM’s Miami Dade County offices was over $36,000,000.
