Economy Investment Real Estate

Miami Leads US Property Market Recovery

Miami Leads US Property Market Recovery

The tide is finally turning in the U.S. real estate market and the charge is being led by increased prices and sales in Miami. The city got a head start by drawing attention from foreign investors early on and the attention has not waned despite rising prices. The Miami Association of Realtors report that prices were up again in August, making it the ninth consecutive month of gains. A shortage of homes for sale is helping to drive prices up faster and higher than in other areas of the country, but it doesn’t seem to bother investors who are still finding deals on properties in the Floridian hotspot. For more on this continue reading the following article from Property Wire.

Miami, which is considered as leading the property revival in the US, saw home prices rise again in August, the latest figures from the Miami Association of Realtors show. It is the ninth consecutive month of appreciation with buyers from overseas in particular fueling the growth of the real estate market.

The median sales price of Miami-Dade condominiums increased 28.4% to $146,500 compared to a year earlier, with prices having now increased for each of the last 14 months. The median sales price of single family homes rose 10.8% to $195,000. Despite the shortage of housing inventory, Miami home sales remain strong and continue to drive significant price appreciation, according to Miami Association of Realtors chairman Martha Pomares.

There is evident demand for Miami properties, particularly from foreign buyers and investors who recognize Miami?s desirability and profitability. Miami remains the top market for foreign buyers in the nation, and local international activity continues to grow, she said.

In August the average sales price for condominiums in Miami-Dade County increased 20.9% to $283,497. The average sales prices for single family homes increased 28.4 percent to $408,810. Statewide median sales prices in August increased 5.8% to $147,000 for single family homes and 13.2% to $102,980 for condominiums, according to data from the Florida Realtors Industry.

Total residential sales in Miami-Dade County increased 7% compared to a year earlier, compared to record sales levels in August 2011. The sales of existing condominiums in Miami-Dade increased 8% from 1,382 to 1,492.

Sales of single family homes increased 5% from 1,009 to 1,059, year on year. Statewide sales of existing single-family homes totalled 18,669 in August 2012, up 10.8% compared to a year ago. Statewide condominium sales totalled 8,767, up 5.7% from those sold in August 2011.

‘Miami is experiencing a mini-boom fuelled mostly by demand from international buyers but also by population growth resulting from migration from other states, baby boomers, and local consumers,’ Patricia Delinois, residential president of the Miami Association of Realtors.

‘Miami’s firm position as a major global city is expected to continue to draw demand long into the future, as businesses, residents, visitors and tourists, investors, and vacation and second homebuyers take advantage of all that our vibrant and unique city has to offer,’ she added.

Over the last year, the inventory of residential listings in Miami-Dade County has dropped 26% from 15,405 to 11,431. Compared to the previous month, the total inventory of homes decreased 0.2%. The figures also show that currently there are 4.2 months of supply in Miami-Dade.

Strong demand for bank owned (REO) properties and improved processing of short sales continues to yield absorption of distressed listings and to contribute to price appreciation.

In August, 45.8% of all closed residential sales in Miami-Dade County were distressed, including REOs and short sales, compared to 56% in August 2011 and 47% the previous month. In Miami-Dade County, 64% of total closed sales in August were all cash sales, compared to 62% in August 2011 and 64% the previous month. Cash sales accounted for 45% of single family and 78% of condominium closings.

Nearly 90% of foreign buyers in Florida purchase properties all cash, reflecting the stronger presence of international buyers in the Miami real estate market.

Miami Leads US Property Market Recovery

Economy Investment Real Estate

Genting cools interest in buying Miami-Dade School District property

The cash-strapped Miami-Dade School District has several options to consider from developers interested in buying its prime downtown real estate, but interest has cooled from its biggest suitor — the Genting Group.

In December, the Malaysian investors told the School Board they were interested in buying the district’s downtown property, which spans more than 10 acres of parking lots and office buildings on eight separate parcels.

But on Monday, the group said it is pursuing scaled-back plans for a luxury development — for now without a casino — on The Miami Herald’s bayfront property, which Genting purchased last year from the newspaper’s parent company.

“Though we initially indicated interest in the School Board properties, we have since decided to move forward developing Resorts World Miami on the nearby Miami Herald site, independent of the school bpard land,” said Jessica Hoppe, vice president and general counsel for Resorts World Miami.

Starting with its purchase of The Miami Herald property, the Genting Group has invested about $500 million in real estate in the Omni area. The group is moving ahead with a luxury complex on the bay after its bid to build the world’s largest casino faded in February in the Florida Legislature.

“We understand Genting’s decision, and the matter remains under the cone of silence,” John Schuster, spokesman for the school district, said in an email.

Last fall, the district issued a request for letters of interest in the property, the first step in selling or developing it, and got some proposals.

Superintendent Alberto Carvalho has not recommended any option to board members, but released the letters in a Feb. 9 memo to the board for “informational purposes.”

“We have a structured process if we were to proceed,” said Jaime Torrens, the district’s chief facilities officer. “There’s no pricing at this point. It’s very conceptual.”

Among the proposals:

–One from 1550 The Chelsea to buy the district’s lot at 1535 NE Second Ave. The developers are working on a mixed-use tower near the Omni hotel. It owns the Brickell Flatiron, which includes the bar Baru, and has plans for a park and to build Park Lane Towers in a vacant area.

“We’re the natural purchasers,” said managing member Mallory Kauderer. “I’ll pay a good price because we’re on Biscayne Boulevard.”

–An offer to buy one of the district’s parcels, 1610 NE First Ct., for $908,440 in cash from Prince Albert, a company of the Kluger family, who own other properties in the area.

–A pitch to market and sell the district’s eight parcels separately by Ryan Shaw with Marcus & Millichap, a national real estate brokerage. In his letter, Shaw estimated the value of each of the district’s properties for a total of more than $40.7 million.

“It would be in the School Board’s best interest to bring these properties to market separately,” Shaw said. “They’re sitting on equity that could be better served in the school district by building more facilities more centrally located and getting out of downtown.”

–A conceptual plan from Town Square Neighborhood Development, a nonprofit focused on developing the area around the Adrienne Arsht Center. The group has no funds, but has a wish list to make over the performing arts area.

Any timeline to sell the district’s property would likely take at least a year, given the deal’s complexity and need to find a place for the district to relocate its headquarters, Torrens said. Atsthe nerve center of the fourth largest school district in the country, the district oversees more than 300 schools, 30,000-plus employees and nearly 350,000 students.

Torrens said the district could weigh other alternatives, too. “It isn’t just sell. There are different types of leases or developments,” he said.

Genting cools interest in buying Miami-Dade School District property
By Laura Isensee, Miami Herald

Investment Real Estate

Genting Group downsizes plans for Miami resort site

With gambling approval denied in Tallahassee, Genting Group scales back its design to initially use just a fraction of the bayside resort site.


Even without casino gambling, Genting Group said Tuesday it is moving ahead with a dramatically scaled down mixed-use plan for Resorts World Miami.

The five acres where The Miami Herald currently sits would become the site for a five-star luxury hotel, luxury condominiums, waterfront restaurants, some limited retail and an 800-foot long promenade along Biscayne Bay.

It’s still too early to tell exactly what it would look like because the project is being designed by Miami’s Arquitectonica. There are no renderings available, no specifics about the size of any of the elements or any idea what would happen to the rest of the 13.9 acres on the Herald site.

“With more and more people traveling to downtown Miami and a growing number of residents calling the area home, we are going to seize the opportunity to convert this prime piece of bayfront land into the centerpiece of a thriving neighborhood.” Bernardo Fort-Brescia, co-founder and principal of Miami-based Arquitectonica, said in a statement released by Resorts World Miami.

Early indications are that this version of Resorts World Miami will be a far cry from the original $3.8 billion project with 5,200 hotel rooms, the world’s largest casino, more than 50 restaurants and bars and a retail shopping mall. That plan drew the ire of many community leaders for the being out of scale with the neighborhood surrounding the Adrienne Arsht Center for the Performing Arts and having the potential to create a traffic nightmare.

“It sounds more modest and more reasonable; somebody is listening,” said Jack Lowell, a Miami commercial broker who was a Genting advocate in the business community. “I think it is also reflective of the current market and seems to make some sense.”

The first inkling of Genting’s latest plan comes about six weeks after the Florida Legislature shut down efforts to approve destination resorts in South Florida. A proposal can be revived next year.

Miami City Commissioner Marc Sarnoff, whose district includes the site, said he has been told renderings will be available in 30 to 60 days. During meetings with Genting, Sarnoff was told the project would include a pedestal with two or three towers on top. But the design would not include the futuristic look of the original project with irregular shapes designed to resemble a coral reef.

“I’m expecting to see a lot of rectangles with some architectural nuance to it,” Sarnoff said. “You could build the fish with casino gambling, because gambling allows you to do anything. It covers up all your mistakes. I like to see people build efficient buildings. These buildings will work across the board. They’re coming back with a footprint that is more germane for the way things get built in Miami.”

The new vision is also good news to Arsht Center leaders, who had been among the biggest critics of the original Genting plan because of the potential impact it would have on their facility.

“I think the Arsht Center and the neighborhood would benefit from that kind of development,” said Armando Codina, chairman of the Town Square Neighborhood Development Corp, the nonprofit created to protect the interests of the Arsht Center and the surrounding area. “It would be a very welcome addition. I just hope that the addition to the tax base will be used by the CRA to meaningfully improve the rest of the neighborhood.”

This time around Genting seems to be taking a go-slow approach. The company has been quietly discussing its new plans with select city leaders and distributing only a three-paragraph press release with limited specifics.

Last time around, Genting unveiled its ambitious proposal with a slick video and cocktail party for community leaders at the Four Seasons Hotel.

The new proposal would take up only a fraction of Genting’s 30 acres in the Omni neighborhood. Since purchasing the Herald land last May, Genting has invested about $500 million in real estate, including the Omni Center and other parcels. Genting is expected to continue operating the existing hotel at the Omni Center and leasing the remainder of the vacant office space on the site.

Genting Chairman K.T. Lim had always said that if gambling didn’t get approved, development of the Herald site could take up to 20 years.

“They said from Day One they would bring a project to market that meets market demand, and that’s what they’re doing,” said Tadd Schwartz, Genting’s South Florida spokesman. “They want to let the public know they are committed to Miami. This project will be within the scale of what currently exists in downtown Miami’s luxury hotel and condo market.”

The Herald, which has an agreement to remain on the property rent free for two years, is scheduled to move to a Doral site by May 2013.

Genting’s development plans, as they exist now, call for demolishing the Herald building and removing what has for decades been a barrier to public access of the waterfront. The idea is to create a gathering place where people can stroll or dine overlooking Biscayne Bay. Plans call for a waterfront promenade 50 feet wide that spans 800 feet. The design will also maintain 100-foot corridors on either side of the development with landscaped green space to allow a view of Biscayne Bay.

“The new design for Resorts World Miami will bring to life one of Miami’s most underutilized pieces of waterfront land after decades of inactivity,” Fort-Brescia said.

The Genting project also seeks to capitalize on what is quickly becoming a limited supply of luxury condominiums downtown. A recent study by the Downtown Development Authority found 93 percent of the nearly 23,000 condominiums built after 2002 are occupied. Of that, only about a third are occupied full-time by owners, with the majority serving as rental apartments.

“If we’re going to keep up with our growth, we have to get some projects in place,” said Alicia Cervera Lamadrid, managing partner of Cervera Real Estate. “There are not that many sites left. I don’t think there’s anything else being planned directly on the waterfront.”

Read more at Miami Herald

Economy Real Estate

House Prices: Window of Opportunity Beginning to Close

WindowsThere have been conflicting opinions as to where housing prices are headed. We want to give our opinion on this subject for the short term. We believe sellers have a window of opportunity for the next 90-120 days in most parts of the country in which to sell their homes for maximum price. We believe there will be increased downward pressure on home prices throughout the rest of the year.

Why renewed downward pressure?

Any item’s price is determined by ‘supply and demand’. In many parts of the country, existing housing inventory has dropped to historic norms in the last few months. However, an inventory of distressed properties (foreclosures and short sales) will be coming to market this year. This inventory has been delayed for over a year as the Federal and state governments crafted an agreement with the five largest banks and mortgage servicers to establish a roadmap for how a foreclosure must be properly completed. That agreement, the National Mortgage Settlement, was reached two weeks ago.

What Impact Will the Agreement Have on Foreclosures?

Brandon Moore, chief executive of RealtyTrac, explains:

“The settlement sets forth clear guidelines for lenders and servicers to follow when foreclosing, which should allow them to push through some of the delayed foreclosures from last year.”

How Many Foreclosures Could We Be Talking About?

Mark Vitner, a senior economist at Wells Fargo Securities tells us:

“The settlement helps the housing market in the long run because it allows banks to proceed with millions of foreclosures that have been stalled.”

What will this mean to home prices?

As this inventory comes to market, it will impact prices in two ways:

1) It will bring to market discounted competition for buyers
2) It will impact the appraisal values of all homes in the area

Which States Will Be Impacted the Most?

The states that have the largest backlog of properties currently in the foreclosure process will be the states that will see the greatest price depreciation.

Bottom Line

There is a window of opportunity currently which sellers should take advantage of. Waiting until later this year will not guarantee a higher sales price. If anything, in many regions of the country, it probably guarantees the exact opposite.

House Prices: Window of Opportunity Beginning to Close