FHA Finance: It’s no secret that the Federal Housing Administration has been under pressure for several years by housing, community associations, and other groups to revamp its condo finance program.
As of last month, their wishes were granted as the Senate unanimously passed a bill which will require the FHA to make its condo financing regulations less strict and make FHA financed loans more readily available to home buyers with moderate incomes, many of whom are purchasing a home for their first time, as condominiums are the most affordable option.
The Federal Housing Administration, generally known as “FHA”, provides mortgage insurance on loans made by FHA-approved lenders throughout the United States and its territories. FHA insures mortgages on single family and multifamily homes including manufactured homes and hospitals.
It is the largest insurer of mortgages in the world, insuring over 34 million properties since its inception in 1934.
New bill passed following significant decrease in FHA financed condos
The bill (H.R. 3700) passed following a downfall in FHA-financed condo mortgages. In 2010, the FHA finance was the main source of condo financing for buyers purchasing a home for their first time. It helped finance roughly 90,000 condo mortgages and in the last year the number has dropped to a mere quarter of that figure.
To make matters worse, the FHA placed stringent restrictions on condo communities making eligibility for financing become extremely difficult, so much so that thousands of condo associations fled the program. The Community Associations Institute found that less than ten percent of condo associations are currently eligible for FHA loans.
FHA finance bill seeks to fix key problems
The changes required by the new bill will help correct the following key issues currently facing condo associations and future condo buyers:
The FHA will be forced to streamline the re-certification process for condo associations and make it easier for them to be in compliance with the government’s regulations.
The minimum owner-occupancy ratio will be reduced from 50 percent to 35 percent, unless the higher percentage is sufficiently justified by the FHA.
Exceptions to FHA finance restrictions on commercial space inside condo projects will be allowed. Currently, the limit is set at 25%.
Transfer fees will be allowed. In the past, the FHA has rejected condominium projects that collect transfer fees when a unit is sold.
More flexibility will be granted with regards to how much commercial space is allowed in condo developments.
Bill’s success depends on two factors
Although it’s unclear that the changes will be enough to revive the struggling FHA program, it’s a step in the right direction. The success of the new FHA bill will depend on two factors: how fast the FHA puts the procedures into practice, and whether the thousands of condo associations who’ve left the program decide to jump back in.
While the new FHA finance bill is currently in ‘wait and see’ state, there is no doubt that Miami is one of the best markets for prospective condo-owners. Miami has historically been known as a hot vacation destination due to its gorgeous beaches and vibrant nightlife.
Today, it is widely recognized as a top place to live for its rich culture, world-class arts and entertainment, and international commerce. Miami’s having a cultural renaissance and it’s clear there’s never been better time to invest in the magic city.
Neighborhood: Miami Real Estate
Developer: The Related Group
52 stories building
Location: 1300 S Miami Ave (next to Infinity Brickell)
SLS Brickell: New venue, concerts, restaurants and entertainment
SLS Hotel will open in a very unique project in the heart of Brickell, specifically on the site of the former Infinity II.
SLS Hotel Brickell, or called SLS Hotel and residences or just SLS Brickell. Related Group brings another first class building to Brickell. Designed by Architectonica, SLS will follow the success of Millicento, Icon Bay and My Brickell.
SLS Hotel Brickell will shape a whole new level of entertainment and dining experience in Brickell. Featuring the following restaurants; Katsuya by Philippe Starck, Bazaar by Jose Andres, and a new restaurant by Michael Schwartz of Michael Genuine.
SLS Brickell will consist of 10 stories of Hotel with interiors by Philippe Starck, SLS Brickell will be very luxurious, offering an amazing array of services.
“The project will be located at 1300 South Miami Avenue in Brickell. It will have retail at the ground level featuring 3 on-site restaurants. The hotel component of the building will begin at the lobby level and go up to the 9th floor, where there will be an elevated 200 ft long pool, spa deck, and amenities such as the HYDE Bar and Lounge and CIEL Spa. The residential units will start from the 10th and up. There will be 11 units per floor. This is not a condo-hotel.
Residents will be able to enjoy many of the Hotel’s services. Rooftop pool for Resident’s use only. Business center. 8000 sqft Ballroom. Private Spa, State of the Art Fitness Center, Screening room. One assigned parking space per unit.” says Christian Tupper, Related Group.
If you know SLS Hotel, you know the level of sophistication and exclusive services they offer.
Residences from approximately 700 sqft to 1500 sqft. with extended balconies.
11 units per floor
1 Bedrooms , 1 Bedrooms + den from about 700 Sq.Ft.
2 bedrooms, 2 Bedrooms + den from about 956 Sq.Ft.
3 Bedrooms from 1500 Sq.Ft.
Now taking reservations:
To ensure the best pricing, reservations will be accepted at the following price ranges.
$30,000 – 1 bedroom
$40,000 – 2 bedroom
$50,000 – 3 bedrooms / PH
SLS Brickell – Price ranges
Units in the low floors will start approximately in the lows $400 p/Sq Ft and higher floors around $500/Sq Ft
NOW TAKING RESERVATIONS
SLS Hotel and residences – Deposit structure:
10% with Reservation (April)
10% at Contract (Approx. July)
10% at Groundbreaking (Approx. November)
10% at 25th floor (9 months after groundbreaking-Approx. August 2014)
10% at Top off (Approx June 2015)
50% at closing (mid 2016)
SLS Brickell – Photo Gallery
SLS Hotel and residences – The Views
This project has not officially released, information within is inaccurate and subject to change without notice.
Contact us now for more information!
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Oral representations cannot be relied upon as correctly stating the representations of the developer. for correct representations, reference should be made to the purchase agreement and the documents required by section 718.503, Florida statutes, to be furnished by a developer to a purchaser or lessee. Not an offering where prohibiting by state law. Prices subject to change without notice. Photography and artwork in this website is for informational purposes and might be stock photography used to depict the lifestyle to be achieved rather than any that may exist. We are pledged to the letter and spirit of us policy for the achievement of equal housing opportunity throughout the nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing because of race, color, religion, sex, handicap, familial status or national origin.
Zaha Hadid Is Designing A Skyscraper In Downtown Miami
According to Curbed Maimi, Zaha Hadid, the internationally acclaimed Pritzker Prize winning star architect, and one of the most revered architects of our time, is designing a condo tower at 1000 Biscayne Boulevard, her first skyscraper in the western hemisphere.
Curbed Miami has learned via email from Gregg Covin, one of the developers of the project, the other is Louis Birdman. The building will fill a gap in the section of the “Biscayne Wall” of condo towers across from Museum Park in Downtown Miami. The site is currently occupied by a BP Station, which Curbed Miami had theorized months ago might soon be built upon. The tower’s designs will be unveiled early next year and will be the “most iconic tower ever to be built in Miami.”
Economic news will be saw-toothed through the winter, but the real estate industry is finally starting to create jobs, and will keep doing so in 2013, regardless of who becomes the next US president.
No one at this point is even arguing that real estate has rebounded. Last February, Redfin was one of the first to call the bottom, at a time when others were still revising their 2012 forecasts downward.
Now, Goldman Sachs predicts that home prices will increase 2% over the next 12 months, rising another 2.8% the year after that. JP Morgan CEO Jamie Dimon said on Friday that housing has turned the corner. Only 11% of consumers now expect home prices to decline.
US banks have already benefited, both from increased mortgage applications and fewer real-estate-related write-downs, with the biggest two reporting record profits. The only questions now are whether it will last and what it means for the overall economy. On the ground and in national statistics across the board, we see ample evidence that prices recovered in 2012, and now expect that sales–and jobs—will follow suit.
Why real estate jobs matter
The reason real estate leads America in and out of recessions—of the 14 times American home prices have declined, 11 have resulted in a recession—is because it employs so many people in so many places, contributing as much as 18% of the gross domestic product. The US has more than 1 million licensed real estate agents but less than half that have recently served a customer. The construction industry has lost roughly 2 million jobs in the past five years, mostly due to the real estate crash. Many of these folks struggle to find jobs in other industries.
Because of trade deficits, electoral politics and nostalgia, we talk almost exclusively about the ebb and flow of manufacturing in Michigan and Ohio, but the auto industry’s impressive recovery has only added 250,000 jobs. Even a modest increase in real estate jobs can swing the economy even further, reaching every corner of the country. Any town big enough to have a gas station and a pizza parlor usually has a real estate office, with plenty of empty desks. This is why an uptick in real estate sales has far-reaching effects.
Breaking ground on big projects
One of the first sectors to add jobs will be construction. The reason builders have had a great year in 2012 is because they’ve been able to build more without hiring more. Skeleton crews finishing off half-built projects—often bought for pennies on the dollar from bankrupt competitors—haven’t added many jobs. It takes fewer cooks to prepare leftovers for dinner.
But now the builders are hiring big teams to break ground on new projects; housing starts are up 29% over last year. The Federal Reserve just reported not only strengthening home sales, but more construction across most of the country. In almost every American city, there are more cranes in the sky and holes in the ground, and more jobs.
Rising prices don’t create jobs, sales do
So why has it taken so long for real estate to contribute to a recovery? Prices rose this spring due to demand, but sales lagged. And sales are what matter most, putting money in the pockets of brokers and builders.
It’s hard for sales to increase more than a few points when inventory is down 29% from last year. The Federal Reserve spurred demand with record-low interest rates, throwing a party for the real-estate industry that many sellers decided to skip.
So when will sellers and buyers hook up? The truth is that there’s always a lag. When real estate prices first start to move up, builders hesitate to build and sellers hesitate to sell. As in other cyclical industries, it takes most of a year just for everyone to believe it’s real.
The end of the foreclosure era
The first inflection point came in 2011, with stabilizing prices. Prior to that, banks were still the market-makers in most cities, controlling inventory levels and setting prices through sales of foreclosures. But then last fall, the number of foreclosures for sale began to drop steeply; few individual home-owners were willing to pick up the slack by listing their own home, especially at the prices set by the banks. Inventory fell so far so fast that we soon began to see bidding wars, and prices stabilized.
Eventually rising prices will bring sellers back to the market. Every day this year, Redfin agents have been meeting regular people to discuss whether to list now or hold off in the hope of a higher price next year. Many, at our encouragement, have been holding off.
If you think we’re anywhere near the bottom, and you don’t mind waiting, why sell now? The inventory crunch has been compounded by rising rents and falling interest rates. In most American cities you can easily find a renter willing to pay your monthly mortgage and then some.
Shadow demand: Hundreds of thousands of buyers waiting for inventory
We believe the sellers will start to come out in greater numbers next year. Waiting for them will be hundreds of thousands of would-be US home-buyers, who are now headed toward the holidays frustrated at having failed to find a listing in 2012. We think of these buyers as a source of shadow demand, perhaps not of the same magnitude as the shadow inventory one held back by the banks but very large.
Already in the shoulder season before Thanksgiving, we’re seeing plenty of “domino listings,” where one home-owner puts his house on the market and immediately gets a sale, emboldening his neighbor to follow suit.
More significantly, 2013 will be the first year in the last seven that will begin with a broad consensus that home prices are rising. Inventory has already started to increase in at least one market, Phoenix, as higher prices there induce owners to sell. As more listings appear nationwide next January, more sales will follow.
Return of the flips
Another more subtle change is driving employment: the amount of money people are putting into the homes they buy and sell. Economists often talk about home prices in abstract terms, as if people were simply paying less in 2010 for the exact same asset that sold in 2005.
But in fact, Americans stopped putting money into homes over the past six years. Hard-nosed buyers stopped falling in love with finishes, and just did the math on how much they were paying per square foot. And sellers took note. Banks selling off their foreclosures stopped mowing the lawn, much less renovating the kitchen. The value of American real estate plummeted in part because America itself just started to look shabbier.
That’s changing. Builders are trying to justify higher appraisals with expensive add-ons. In markets like Washington D.C. and Orange County, California, we see homeowners investing in a new kitchen or an extra bedroom and convincing themselves they’ll recoup part of the cost next year in a sale. Investors are pouring $50,000 into a home so they can sell it for an extra $200,000. This means that carpenters, electricians, plumbers and builders are getting more work and staying off the dole.
Employment will improve next year because more of these folks—and more real estate agents, lenders, inspectors and appraisers too—will have jobs. This doesn’t mean real estate will grow to the proportions it had at the height of the Bush-era bubble, when it was two and a half times larger than it is today. But it does mean that things will get much better. In fact, it’s why they already have.
We welcome your comments at email@example.com.
The real reason the US economy is starting to improve
By Glenn Kelman
Glenn Kelman is the CEO of Redfin, a technology-powered real estate broker. Previously, he co-founded Plumtree Software, with a 2002 IPO.
A 6,755-square-foot apartment at Hong Kong’s luxurious 12-unit Opus has been sold for HK$430 million (U.S. $55 million). That is $8,130 per square foot. The price makes the apartment Asia’s most expensive flat on a per square foot basis, and the second-most costly in the world after London’s One Hyde Park, according to Eva Lee, head of Hong Kong and China property research at UBS.
The average price of a standard-sized 600 square-foot apartment is about HK$4.5 million ($580,135 U.S.) In 2 1/2 years, property prices have increased 85 per cent.
Hong Kongers’ median monthly incomes increased 15 per cent to HK$20,200 last year, from HK$17,500 in 2009.
Li Xueying Asia News Network (MCT) reports Government data show the price index began climbing from the first quarter of 2009. It barreled past the previous 1997 peak, and every quarter since last year has registered new highs.
MCT notes one way of measuring affordability is the price-to-income ratio. Hong Kong weighs in at 18.6. This means a household has to save 18.6 years of its annual income without consumption to buy a standard flat.
By contrast, a four-room Build-to-Order HDB flat in Bukit Panjang takes the average Singapore household three years to pay off, while a resale five-room flat in Ang Mo Kio takes 7.3 years.
MCT states analysts estimate Hong Kong apartment prices have to fall by 19 per cent to 30 per cent before the “sandwich class” earning between HK$20,000 and HK$30,000 can enter the market.
Among the 10 points in Chief Executive Leung Chun Ying’s recent proposal are that the government will speed up the approval process of presale consent for private flats; sell public flats meant for rental; and re- zone government institution or community (GIC) sites for homes.
MCT states Hong Kong analysts estimate about 150,000 housing units, private and public, will enter the market in the next five years.
Based on population trends, Lee says Hong Kong needs 25,000 flats a year. With the under-supply of 5,000 flats a year from 2003 to 2009, she estimates 185,000 units will be needed by 2017.
But a closer look at the measures shows it is unlikely that all the promised 150,000 units will materialize, and even if they do, it will take awhile, MCT states.
One handicap the government has is an inability to control record-low interest rates, the news agency points out. The Hong Kong currency is pegged to the US dollar. That means rock-bottom interest rates set by the U.S. Federal Reserve are feeding the city’s housing boom as well, notes Dr. Edward Yiu of Hong Kong University.
Hotel Real Estate Boom on Miami Beach Signals Demand for the Destination
There’s been a major real estate boom in Miami Beach recently but what’s changing hands aren’t lofty penthouses on Collins Avenue but small to mid-size luxury hotels that are being bought, sold, managed and renovated. In just the last few months:
– We saw the arrival of the $85 million SLS South Beach Hotel on Collins Avenue
– The Royal Palm Hotel was sold for $130 million and is being rebranded as the James Hotel
– The Gansevoort hotel was sold and renamed The Perry and is being managed by Starwood
– Kimpton beat out Doubletree for the management of the Surfcomber Hotel which sits at a prime location at 17th and Collins Avenue
– The Delano hotel is for sale (although its owners still want to manage it after the sale)
– And David Edelstein, the developer and owner of the W South Beach, along with the SLS Group have reportedly just bought Collins Avenue neighbor the Raleigh hotel for $55 million
“The unprecedented sales, purchase and renovation upgrades of hotel properties all over Miami Beach are indicators of the strength and demand for the destination,” says Jeff Lehman, Chair, the Miami Beach Visitor and Convention Authority. “Miami Beach’s consistent placement in the top ten of varied Best Of lists, continued allure in a competitive vacation market, ongoing infrastructure updates, sophisticated cultural, gastronomic and social options and of course, our great weather entices business-savvy hotel operators who realize this city is the best place to invest in now and for the future.”
Renovation projects currently underway include the B Hotel (the former Continental) and the Saxony hotel which is getting a dramatic makeover courtesy of star architects, Rem Koolhaas and Lord Norman Foster, continuing the tradition of star architects bringing their talents to Miami Beach. The reconstruction of the historic beachfront Seville Hotel, is also underway, soon to be branded a Marriot Editions as envisioned by Ian Schrager, the celebrity hotelier who invigorated South Beach with his launch of the Delano hotel 15 years ago. A number of properties are also actively courting buyers – if the price is right.
Luxury properties have become particularly in demand on Miami Beach with hotels like the SLS South Beach (designed by celeb designer, Phillipe Starck), the Mondrian (designed by famed Dutch designer Marcel Wanders), the W, Standard and Setai opening their doors in recent years and other properties getting significant makeovers like the Betsy, Surfcomber (also managed by Kimpton hotels), Fontainebleau and coming up, the Loews. Major hoteliers see Miami Beach as a sure bet in a tough economy. “We encourage business growth and development on the Beach,” says Lehman, “but all the attributes of Miami Beach make it easy to see why everyone wants to be here.”
About Miami Beach
With an average year-round temperature of 75 degrees, Miami Beach has an unrivaled reputation for culinary offerings, nightlife, culture, fashion, and luxurious hotels. Also a popular destination among travelers, Miami Beach was recently ranked by Trip Advisor as number one on its Top Winter Sun Vacation Rental Getaway Destinations for 2011 list and was included on both the Top 25 Beaches in the World and Top 25 Destinations in the U.S. lists. Boasting seven miles of breathtaking beaches, Miami Beach is easily accessible from the Port of Miami and Miami International Airport. The City of Miami Beach has just been named one of the top cities worldwide for ‘walkability’ and is equally easy to navigate by bike or by boat. Home to unique museums, to the New World Symphony and Miami City Ballet, to over 17,000 luxury, boutique and resort hotel rooms, 12 public parks and to the Miami Beach Convention Center, Miami Beach is a destination for all seasons. Miami Beach is like no other place in the world!