Q: I am in the process of selling my home through a short sale and have been told that no bank will give me a new loan because of this. I need to purchase a less-expensive home and don’t want to rent and keep bouncing my family around. Is there any bank that will lend to me? -- Roberta
A: Roberta, the Federal Housing Administration has announced that as long as you are current on your existing mortgage at the time of your short sale, the agency will provide mortgage financing if you decide to purchase a new home for your family. You will, however, still need to qualify and meet all existing FHA guidelines, but the government is offering an option for people in your situation.
Q: I am unemployed and in need of cash until I find a job. I do not have life insurance, and no 401(k) plan to tap into, but I own my home. Is there any way I could tap into my home’s equity while I am still unemployed and looking for work? I know that having no job or income is something that would ordinarily disqualify me for a loan. What is your opinion, other than looking for a job, which I am constantly doing? -- Steve
A: Steve, you are not alone in this situation. Unemployment is at record highs and looks to be on pace to get worse before it gets better. The only viable option I see for you is private or “hard money” financing. Generally, the main criteria for this comes down to the amount of equity in your home. If you have substantial equity, this may help you bridge your situation until you get a job and then can refinance out of this loan into a traditional mortgage. Also, I would suggest seeking out even part-time work, which can lead to a full- time position down the road. Lastly, if you have a family member who would be willing to co-sign on the loan, you may be able to use a Federal Housing Administration non-occupant co-borrower option that allows the government to lend to your family member on your home even if your relative doesn’t live there. More due diligence would be necessary to see if this would be feasible, but it could be an option.
Q: I am looking to buy my first home but don’t want to commit until I know for sure that housing prices won’t keep going down. I only have a small amount of money for a down payment and don’t want to be underwater right after I purchase. Where do you see the market trending? -- Janice
A: Janice, U.S. home prices rose 0.5 percent in November from a year earlier, the first annual gain since 2007, as home buyers who expected a federal tax credit to expire stepped into the market. The 12-month gain, the first since December 2007, was led by a 2.9 percent increase in the region that includes California, as reported by the Federal Housing Finance Agency in Washington, where prices also rose 0.7 percent from October. Clearly, no one has a crystal ball, but it does look like we are seeing some initial signs that it may be turning around.
Q: I am married with two young children and need to purchase a home for my family but have been told that the down payment assistance programs of the past no longer exist and I need to put down 3.5 percent, plus closing costs for an FHA loan. Is there any assistance in the marketplace that can help me since I don’t have that amount of money available? - Leticia
A: Leticia, a bill introduced by U.S. Representative Al Green, a Texas Democrat, and supported by the U.S. Conference of Mayors would restart a program that allows nonprofit groups to donate the 3.5 percent down payment that low-income buyers need to get FHA-insured mortgages. The plan, which funded the purchase of more than 1 million homes over 10 years, was halted by lawmakers concerned about rising defaults and evidence that some buyers were charged more than others. Shaun Donovan, the secretary of Housing and Urban Development, is against the idea and is creating resistance against this bill passing. I would suggest you write to your local congressman expressing that you are in favor of this bill and believe it should be supported and passed. Without this, there are very few options, if any, for down payment assistance.
Source: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2010/01/ask_a_real_estate_professional_12.html
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
Friday, January 29, 2010
Thursday, January 28, 2010
Bidders Show Up to Vie for Bankrupt South Beach Condo Conversion
MIAMI BEACH, FL) -- Nineteen bidders, each clutching $75,000 deposit checks, vied for Fairway Village, a bankrupt 118-unit South Beach condo conversion that was sold for $6.2 million or $53,000 per unit - nearly half of its original purchase price.
A new report from CondoVultures.com states one-year-old Alton Michigan LLC of Palm Beach County, FL, with RAM Realty II REIT as managing partner, bought the property at a Chapter 7 liquidation auction, outbidding 18 other individuals and groups.
The property is at 1920 Michigan Ave., which is at the intersection of Alton Road and Michigan Avenue in Miami Beach's South Beach neighborhood.
Other bidders competing on the nine-building complex included Cyric Chiosa, Tony Dipiazza, Ryan Freedman, Andrew Gale, Bruce Litsky, Miguel Poyastro, Horacio Rozenblum, Daniel Stauber, Chaim Scmochet, and Thomas Sullivan, according to U.S. Bankruptcy Court records.
The nine buildings total 84,976 gross square feet of Art Deco-type walkup units, according to LoopNet. Their average range is 477 square feet to 678 square feet.
"There is a strong interest in distressed residential product in South Beach," says Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures, LLC.
"The fact that nearly 20 groups showed up at the auction with $75,000 deposits in hand to bid is proof of just how deep the demand really is in South Beach," Zalewski says.
"Unfortunately, many of the distressed projects in South Beach have already been acquired or secured which is why the buyer interest was so strong for the Fairway Village."
Zalewski says South Beach has some of the most expensive real estate in South Florida with prices hovering around the $1,000 per square foot mark in certain buildings.
Overall, the area is home to nearly 16,400 units located in 147 projects with at least 30 units, according to the newly released Condo Vultures Official Condo Buyers Guide To South Beach.
This is only the sixth bulk deal to close in Miami Beach since July 2008, Zalewski says. During this time, there have been 37 transactions for more than 3,100 units for a price of nearly $900 million, according to the Condo Vultures Bulk Deals Database.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-peter-zalewski-miami-beach-condo-foreclosures-distressed-miami-real-estate-fairway-village-condo-vultures-alton-michigan-llc-ram-realty-ii-reit-1942.php
A new report from CondoVultures.com states one-year-old Alton Michigan LLC of Palm Beach County, FL, with RAM Realty II REIT as managing partner, bought the property at a Chapter 7 liquidation auction, outbidding 18 other individuals and groups.
The property is at 1920 Michigan Ave., which is at the intersection of Alton Road and Michigan Avenue in Miami Beach's South Beach neighborhood.
Other bidders competing on the nine-building complex included Cyric Chiosa, Tony Dipiazza, Ryan Freedman, Andrew Gale, Bruce Litsky, Miguel Poyastro, Horacio Rozenblum, Daniel Stauber, Chaim Scmochet, and Thomas Sullivan, according to U.S. Bankruptcy Court records.
The nine buildings total 84,976 gross square feet of Art Deco-type walkup units, according to LoopNet. Their average range is 477 square feet to 678 square feet.
"There is a strong interest in distressed residential product in South Beach," says Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures, LLC.
"The fact that nearly 20 groups showed up at the auction with $75,000 deposits in hand to bid is proof of just how deep the demand really is in South Beach," Zalewski says.
"Unfortunately, many of the distressed projects in South Beach have already been acquired or secured which is why the buyer interest was so strong for the Fairway Village."
Zalewski says South Beach has some of the most expensive real estate in South Florida with prices hovering around the $1,000 per square foot mark in certain buildings.
Overall, the area is home to nearly 16,400 units located in 147 projects with at least 30 units, according to the newly released Condo Vultures Official Condo Buyers Guide To South Beach.
This is only the sixth bulk deal to close in Miami Beach since July 2008, Zalewski says. During this time, there have been 37 transactions for more than 3,100 units for a price of nearly $900 million, according to the Condo Vultures Bulk Deals Database.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-peter-zalewski-miami-beach-condo-foreclosures-distressed-miami-real-estate-fairway-village-condo-vultures-alton-michigan-llc-ram-realty-ii-reit-1942.php
Wednesday, January 27, 2010
Reverse Foreclosure Ruling could give embattled associations relief
The days of banks delaying the foreclosure process to avoid financial responsibility for distressed residential properties may be coming to an end.
In a “reverse foreclosure,” a Miami-Dade Circuit Court judge has forced a bank to take title to a property from a homeowners association. The HOA had agreed to waive its rights to the property.
“It’s new, and it addresses what we think is a huge problem in Florida,” attorney Ben Solomon said of the strategy. Solomon and David Arnold of North Bay Village’s Solomon & Furshman represented the South Miami-Dade homeowners group in the case.
The association had foreclosed on the home and obtained title but couldn’t sell it because of the bank’s lien. The bank had foreclosed but hadn’t pursued the case over a period of 2½ years, Solomon said, leaving the homeowner’s association stuck with a home and no one paying dues.
Florida law says that banks are only required to pay 12 months in past-due homeowners’ association dues — the lesser of six months or 1 percent of the mortgage, in the case of condos, Solomon said.
“Their liability is capped. Plus, once they take title, they’re liable for attorney fees and taxes,” he said. “With all their upside-down mortgages, they don’t want to take on that additional liability until they find a buyer. So they’re simply not pursuing the cases they’ve filed.”
“That stalling is crippling our clients,” he said.
Solomon said his firm is taking the most “flagrant” cases to court, telling the judge that as the defendants in the foreclosure, they want a summary judgment against themselves. Then they request an immediate sale date, waiving their rights to a waiting period. He said the firm has filed another 82 similar reverse foreclosure requests in courts around the state.
The association in this case, Keys Gate Community in Homestead, has 3,000 homes and owns title to about a dozen of them through foreclosures, Solomon said. The reverse foreclosure can only be filed after a homeowner is out of the picture and the home is legally the property of the homeowner’s association.
“That waiting period protects the consumer, but banks are taking advantage of the judicial backlog, and then in many cases they are canceling the sale date and resetting it,” he said. “What we did was tell the judge, we don’t need more time.”
HSBC Bank USA, which acted as trustee in the case, declined to comment.
Quick Transfer
Circuit Judge Jerald Bagley granted the homeowners’ association motion, and the title was awarded to the bank the same day.
“We’re not saying they need to complete a foreclosure more quickly than normal,” Solomon said. “But there’s no good reason why that lender has taken 2½ years to foreclose on this particular unit.”
Attorneys familiar with foreclosure cases said the tactic was innovative.
“This was pretty ingenious,” said Alan Kluger, a commercial litigator who has represented financial institutions and associations in foreclosure cases. “It’s basically saying, ‘Hey, they want this [house.] Give it to them.’”
“Banks understand if they take title, they have all these responsibilities, so they decide not to. It’s a business decision,” said Kluger of Kluger Kaplan Silverman Katzen & Levine.”The banks are doing this all over town.”
Jorge Gonzalez del Valle, a foreclosure attorney, also said the case was unique.
“It’s an interesting twist to file for a summary judgment against yourself,” he said. “When banks delay like that, they’re really avoiding their obligations. The people who are getting screwed are the condo associations. What the association has done is get the bank to pay sooner rather than later. The associations are starving right now. They need their dues paid now.”
Solomon credited Miami-Dade Clerk of Courts Harvey Ruvin with helping his client get the title transferred quickly after the judge signed the order. Ruvin said his office is working on ways to limit the number of times and reasons cases can be delayed.
“One of the problems is that we’re setting these cases, and we keep getting a lot of delays and resetting of dates without any basis,” he said. “We’re trying to tighten up the criteria for getting a reset, because those create additional costs.”
There are more than 115,000 open foreclosure cases in Miami-Dade, with 7,000 more being filed each month, he said.
“The quicker we can move these distressed properties through the process and into the hands of somebody who will pay a mortgage and pay taxes and pay their dues, the quicker we can get our economy back on track,” he said.
Bill Raphan of the state condo ombudsman’s office in Fort Lauderdale, said he applauded anything that helped associations struggling to deal with so many distressed properties.
“We get so many calls about these kinds of problems,” he said. “Anything that would provide some kind of relief for these associations that are in such dire straits would be welcome.”
Source: http://www.dailybusinessreview.com/news.html?news_id=60105
In a “reverse foreclosure,” a Miami-Dade Circuit Court judge has forced a bank to take title to a property from a homeowners association. The HOA had agreed to waive its rights to the property.
“It’s new, and it addresses what we think is a huge problem in Florida,” attorney Ben Solomon said of the strategy. Solomon and David Arnold of North Bay Village’s Solomon & Furshman represented the South Miami-Dade homeowners group in the case.
The association had foreclosed on the home and obtained title but couldn’t sell it because of the bank’s lien. The bank had foreclosed but hadn’t pursued the case over a period of 2½ years, Solomon said, leaving the homeowner’s association stuck with a home and no one paying dues.
Florida law says that banks are only required to pay 12 months in past-due homeowners’ association dues — the lesser of six months or 1 percent of the mortgage, in the case of condos, Solomon said.
“Their liability is capped. Plus, once they take title, they’re liable for attorney fees and taxes,” he said. “With all their upside-down mortgages, they don’t want to take on that additional liability until they find a buyer. So they’re simply not pursuing the cases they’ve filed.”
“That stalling is crippling our clients,” he said.
Solomon said his firm is taking the most “flagrant” cases to court, telling the judge that as the defendants in the foreclosure, they want a summary judgment against themselves. Then they request an immediate sale date, waiving their rights to a waiting period. He said the firm has filed another 82 similar reverse foreclosure requests in courts around the state.
The association in this case, Keys Gate Community in Homestead, has 3,000 homes and owns title to about a dozen of them through foreclosures, Solomon said. The reverse foreclosure can only be filed after a homeowner is out of the picture and the home is legally the property of the homeowner’s association.
“That waiting period protects the consumer, but banks are taking advantage of the judicial backlog, and then in many cases they are canceling the sale date and resetting it,” he said. “What we did was tell the judge, we don’t need more time.”
HSBC Bank USA, which acted as trustee in the case, declined to comment.
Quick Transfer
Circuit Judge Jerald Bagley granted the homeowners’ association motion, and the title was awarded to the bank the same day.
“We’re not saying they need to complete a foreclosure more quickly than normal,” Solomon said. “But there’s no good reason why that lender has taken 2½ years to foreclose on this particular unit.”
Attorneys familiar with foreclosure cases said the tactic was innovative.
“This was pretty ingenious,” said Alan Kluger, a commercial litigator who has represented financial institutions and associations in foreclosure cases. “It’s basically saying, ‘Hey, they want this [house.] Give it to them.’”
“Banks understand if they take title, they have all these responsibilities, so they decide not to. It’s a business decision,” said Kluger of Kluger Kaplan Silverman Katzen & Levine.”The banks are doing this all over town.”
Jorge Gonzalez del Valle, a foreclosure attorney, also said the case was unique.
“It’s an interesting twist to file for a summary judgment against yourself,” he said. “When banks delay like that, they’re really avoiding their obligations. The people who are getting screwed are the condo associations. What the association has done is get the bank to pay sooner rather than later. The associations are starving right now. They need their dues paid now.”
Solomon credited Miami-Dade Clerk of Courts Harvey Ruvin with helping his client get the title transferred quickly after the judge signed the order. Ruvin said his office is working on ways to limit the number of times and reasons cases can be delayed.
“One of the problems is that we’re setting these cases, and we keep getting a lot of delays and resetting of dates without any basis,” he said. “We’re trying to tighten up the criteria for getting a reset, because those create additional costs.”
There are more than 115,000 open foreclosure cases in Miami-Dade, with 7,000 more being filed each month, he said.
“The quicker we can move these distressed properties through the process and into the hands of somebody who will pay a mortgage and pay taxes and pay their dues, the quicker we can get our economy back on track,” he said.
Bill Raphan of the state condo ombudsman’s office in Fort Lauderdale, said he applauded anything that helped associations struggling to deal with so many distressed properties.
“We get so many calls about these kinds of problems,” he said. “Anything that would provide some kind of relief for these associations that are in such dire straits would be welcome.”
Source: http://www.dailybusinessreview.com/news.html?news_id=60105
Monday, January 25, 2010
Florida tipped as best for bargain property in 2010
Florida is set to be one of the bargain hotspots of 2010 for real estate investors with some properties selling for as little as $47 a square foot, according to a new report.
As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market and national house price declines are predicted to improve by the middle of the year.
New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report from Winkworth International.
It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices. Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.
Florida’s loss can be a UK buyer’s gain, according to Charles Peerless, director, Winkworth International. ‘With low prices on a wide range of top quality luxury homes and condominiums in world class developments, combined with a favourable exchange rate and low interest rates, buyers who seek sun, golf and wide ranging lifestyle attractions can now buy a home here for about half what they would have paid in 2005,’ he explained.
Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida. The imbalance of supply and demand puts the buyer in the driving seat. Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.
‘All this means that there has seldom been a better time to get into the Florida property market. According to most local experts, prices have nowhere to go but up and a home in Florida bought at today’s bargain prices should prove to be a laudable investment five years from now,’ added Peerless.
New home construction in Florida suffered more than expected. In the second quarter of 2009 housing starts fell to an annual rate of 35,352, an 88% decline in starts from peak to trough.
There are some pockets of Florida that have been affected more substantially by the downturn than others which now offer excellent opportunities to investors in high quality new developments, Peerless points out. In Orlando, buyers can pay $140 per square foot down from $250 in 2006 and in Sarasota prices that were $350 per square foot are now as low as $47.
He added that this region of Florida enjoys relatively uncongested areas, is sophisticated, less crowded than the east coast. Sarasota was recently highlighted on NBC as the top place in the whole of the US to buy a home and is known for its fine restaurants, beaches, theatres, arts, shops and lifestyle. Prices are at 2002/2003 levels and there has been little or no new construction in the area for four years, so high quality inventory is being snapped up.
The report predicts that central Florida with attractions like Universal Studios and Disney World should experience a quicker comeback than most other areas in Florida. While south Florida is described as the place to buy a condominium. There are sales being made well below construction cost. The major reason for the decline in the Miami condo market is the difficulty in getting finance which tends to be more available on houses. As such, condos offer an excellent opportunity for cash buyers, the report says.
Prices are discounted in North West Florida and are around 2005 levels. ‘Buyers get so much more for their money in Florida than in Europe. Spacious high specification properties, spectacular golf communities, high future capital growth predicted, excellent transportation and, of course, the ever popular Florida lifestyle including sunshine, beaches, golf, cruises, theme parks, shopping and dining,’ it concludes.
Source: http://www.propertywire.com/news/north-america/florida-prices-at-bargain-level-201001253837.html
As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market and national house price declines are predicted to improve by the middle of the year.
New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report from Winkworth International.
It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices. Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.
Florida’s loss can be a UK buyer’s gain, according to Charles Peerless, director, Winkworth International. ‘With low prices on a wide range of top quality luxury homes and condominiums in world class developments, combined with a favourable exchange rate and low interest rates, buyers who seek sun, golf and wide ranging lifestyle attractions can now buy a home here for about half what they would have paid in 2005,’ he explained.
Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida. The imbalance of supply and demand puts the buyer in the driving seat. Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.
‘All this means that there has seldom been a better time to get into the Florida property market. According to most local experts, prices have nowhere to go but up and a home in Florida bought at today’s bargain prices should prove to be a laudable investment five years from now,’ added Peerless.
New home construction in Florida suffered more than expected. In the second quarter of 2009 housing starts fell to an annual rate of 35,352, an 88% decline in starts from peak to trough.
There are some pockets of Florida that have been affected more substantially by the downturn than others which now offer excellent opportunities to investors in high quality new developments, Peerless points out. In Orlando, buyers can pay $140 per square foot down from $250 in 2006 and in Sarasota prices that were $350 per square foot are now as low as $47.
He added that this region of Florida enjoys relatively uncongested areas, is sophisticated, less crowded than the east coast. Sarasota was recently highlighted on NBC as the top place in the whole of the US to buy a home and is known for its fine restaurants, beaches, theatres, arts, shops and lifestyle. Prices are at 2002/2003 levels and there has been little or no new construction in the area for four years, so high quality inventory is being snapped up.
The report predicts that central Florida with attractions like Universal Studios and Disney World should experience a quicker comeback than most other areas in Florida. While south Florida is described as the place to buy a condominium. There are sales being made well below construction cost. The major reason for the decline in the Miami condo market is the difficulty in getting finance which tends to be more available on houses. As such, condos offer an excellent opportunity for cash buyers, the report says.
Prices are discounted in North West Florida and are around 2005 levels. ‘Buyers get so much more for their money in Florida than in Europe. Spacious high specification properties, spectacular golf communities, high future capital growth predicted, excellent transportation and, of course, the ever popular Florida lifestyle including sunshine, beaches, golf, cruises, theme parks, shopping and dining,’ it concludes.
Source: http://www.propertywire.com/news/north-america/florida-prices-at-bargain-level-201001253837.html
Friday, January 22, 2010
Miami Real Estate: Showing Signs Of Life
While the Miami real estate market continues to be impacted by economic uncertainty, a recent mini boom in short sales has started to propel the residential market forward. Condominium units are starting to sell as investors take advantage of bargain basement prices, and developers and bankers reach agreements that allow for developers to sell units at reduced prices.
Bright lights burst with radiance from Miami Beach condo balconies in the night's darkness. Towers of high-rise condos that stood without signs of life just a few months ago are lighting up, indicating that more residents are moving into the half empty buildings.
Mired in the muck of one of the nation's worst housing crashes, Miami Beach and neighboring Miami are seeing legal disputes between developers and bankers begin to thaw. A growing number of condominiums are selling, albeit at bargain basement prices that just a few years ago seemed unimaginable.
For the first time in years sales of condos and homes are showing an improvement in an otherwise financially tinged marketplace. Miami is the east coast's epicenter of the housing crash, but improving conditions are beginning to get real estate agents and appraisers busy again.
South Florida's market is still caught in the web of the financial crisis, legal disputes and hedge funds that financed many of the developments gone bankrupt. Entire blocks of projects remain at a standstill, fenced off as partially finished developments sitting to rot in the Florida sun.
Investors have swarmed to Miami, many of whom are cash paying foreigners looking for bargains. But growing numbers of would-be buyers feared purchasing units in only partially sold buildings concerned about condo associations and developers going bankrupt, leaving them in economic jeopardy.
An impasse that developers had with bankers, buyers and sellers has all but ended a feud allowing developers to sell units for less than what condos were originally constructed for when they were new. The resulting short sales have prompted a mini boom helping propel the marketplace forward.
Miami is rife with economic uncertainty even though one would hardly know it in posh South Beach, where hotels and restaurants bustle with paying guests. But even in South Beach waiters and bartenders say business is slower these days as the financial crisis strains the local economy. Unemployment hovers around 14% and foreclosed homes and condos remain a growing threat. The local economy and the housing market is anything but stable.
During the boom Miami saw more new condos constructed than ever before at one time since its incorporation. More than a third of all the new units – estimated at more than 14,000-- constructed remain empty even as investors look for properties to purchase. The housing crisis will take years to over come in Miami, but more condo sales demonstrate an improving trend.
Banking problems haven't been the only thing troubling new condominium developments. Half darkened developments got the assistance of Florida courts to collect condominium owner association fees from tenants, whose dead-beat owners refused to pay their monthly fees to keep on water, collect garbage and upkeep on pools and other amenities.
In many cases, receiverships were a last ditch effort by developers to stave-off bankers from foreclosing. Dozens of developments were on the brink of failure as a result of the hardship. "We've already collected well over $100,000 in rent under receiverships for our clients," said Ben Solomon, an attorney credited with the program. "It's resuscitating some of these associations."
On a clear moon-lit night the Miami skyline reflects the stark reality behind the still troubled marketplace. A number of towering new buildings built during the boom are seeing more lights shine above showing a growing presence of residents.
Source: http://www.nuwireinvestor.com/articles/miami-real-estate-showing-signs-of-life-54474.aspx
Written by: Mark Collingsworth
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.
Bright lights burst with radiance from Miami Beach condo balconies in the night's darkness. Towers of high-rise condos that stood without signs of life just a few months ago are lighting up, indicating that more residents are moving into the half empty buildings.
Mired in the muck of one of the nation's worst housing crashes, Miami Beach and neighboring Miami are seeing legal disputes between developers and bankers begin to thaw. A growing number of condominiums are selling, albeit at bargain basement prices that just a few years ago seemed unimaginable.
For the first time in years sales of condos and homes are showing an improvement in an otherwise financially tinged marketplace. Miami is the east coast's epicenter of the housing crash, but improving conditions are beginning to get real estate agents and appraisers busy again.
South Florida's market is still caught in the web of the financial crisis, legal disputes and hedge funds that financed many of the developments gone bankrupt. Entire blocks of projects remain at a standstill, fenced off as partially finished developments sitting to rot in the Florida sun.
Investors have swarmed to Miami, many of whom are cash paying foreigners looking for bargains. But growing numbers of would-be buyers feared purchasing units in only partially sold buildings concerned about condo associations and developers going bankrupt, leaving them in economic jeopardy.
An impasse that developers had with bankers, buyers and sellers has all but ended a feud allowing developers to sell units for less than what condos were originally constructed for when they were new. The resulting short sales have prompted a mini boom helping propel the marketplace forward.
Miami is rife with economic uncertainty even though one would hardly know it in posh South Beach, where hotels and restaurants bustle with paying guests. But even in South Beach waiters and bartenders say business is slower these days as the financial crisis strains the local economy. Unemployment hovers around 14% and foreclosed homes and condos remain a growing threat. The local economy and the housing market is anything but stable.
During the boom Miami saw more new condos constructed than ever before at one time since its incorporation. More than a third of all the new units – estimated at more than 14,000-- constructed remain empty even as investors look for properties to purchase. The housing crisis will take years to over come in Miami, but more condo sales demonstrate an improving trend.
Banking problems haven't been the only thing troubling new condominium developments. Half darkened developments got the assistance of Florida courts to collect condominium owner association fees from tenants, whose dead-beat owners refused to pay their monthly fees to keep on water, collect garbage and upkeep on pools and other amenities.
In many cases, receiverships were a last ditch effort by developers to stave-off bankers from foreclosing. Dozens of developments were on the brink of failure as a result of the hardship. "We've already collected well over $100,000 in rent under receiverships for our clients," said Ben Solomon, an attorney credited with the program. "It's resuscitating some of these associations."
On a clear moon-lit night the Miami skyline reflects the stark reality behind the still troubled marketplace. A number of towering new buildings built during the boom are seeing more lights shine above showing a growing presence of residents.
Source: http://www.nuwireinvestor.com/articles/miami-real-estate-showing-signs-of-life-54474.aspx
Written by: Mark Collingsworth
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.
Thursday, January 21, 2010
Cities With The Fastest-Falling Home Prices
For our list of cities with the fastest-falling home prices, we used Altos Research's January market update, which looks at asking prices, inventory and days on the market single-family homes--but not condominiums--in 27 of the country's closely watched real estate markets. It uses homes for sale in each city's Metropolitan Statistical Area--a census-defined area that the federal government uses to collect statistics--for its data.
Miami is the only city of the 27 markets Altos tracks that saw asking prices rise over the last three months. Prices there were up 2% from October to a median price of $494,992. The reasons for this are mixed: While the numbers are somewhat promising, Miami's good fortune is also a reflection of just how long it took for the hard-hit Florida housing market to regain its footing. And even with the recent upturn, it's the city where homes sit on the market for the longest by far. Homes here stay for sale for a median of eight months. Not to mention Altos' analysis only reflects single-family homes--not condominiums, a section of the Miami's real estate market that has yet to stabilize.
Therefore, Miami's upswing should be taken skeptically, says Simonsen. "Miami lagged behind everything else, and so is only now starting to feel the impact of the stimulus."
But a decision on Jan. 7 by mortgage entities Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) to begin backing some Miami condominium loans that they previously hadn't touched might help rejuvenate sales.
Big Apple Trouble
Most markets have seen price drops of less than 3%, and that's true for New York City, where home prices have fallen by 2.3%, to a median of $638,082. But there may be trouble in store for the Big Apple, which peaked late and whose real estate market was more directly affected by the Wall Street implosion of late 2008. Its inventory of listed homes has increased by 4.2% since October. Phoenix is the only other market that saw inventory rates rise during a seasonally slow season in which it typically falls. Slimming down inventory is necessary to curb price declines.
In New York, onerous real estate laws mean that foreclosures take roughly six months to complete, and post-foreclosure sales don't usually close for another four months after that. This has kept buyers away, and hamstrung real estate recovery in the area.
"In states with complex foreclosure laws, the recovery is clearly being delayed," says Simonsen. "For example, there are investment funds that will buy in Texas and California, but won't buy in New York because it takes so long to foreclose--and then you have to go to court."
New York prices likely have much farther to fall.
Although the rate of decline has mellowed from stomach-turning to gentle nationwide, these numbers show that any jubilation over a recovered real estate market would be premature.
Charlotte, N.C., the city with third-greatest drop in asking prices (falling 4.4% to a median price of $248,543 in December), suffered from exuberant pricing early in the year. But the Wall Street collapse hit Charlotte hard, as it's a financial hub that is headquarters to Bank of America Corp. ( BAC - news - people ), among other major banking institutions. Now the area's housing market is suffering.
"In Charlotte, at the beginning of the year, new sellers thought they would get a nice premium, and they were pricing above the median price," says Scott Sambucci, vice president of data analytics at Altos Research. "They were reading all those articles about the national housing market saying, 'That's not happening here.' But there was a lag effect."
Source: http://www.forbes.com/2010/01/18/falling-home-prices-lifestyle-real-estate-foreclosures.html?boxes=Homepagechannels
Miami is the only city of the 27 markets Altos tracks that saw asking prices rise over the last three months. Prices there were up 2% from October to a median price of $494,992. The reasons for this are mixed: While the numbers are somewhat promising, Miami's good fortune is also a reflection of just how long it took for the hard-hit Florida housing market to regain its footing. And even with the recent upturn, it's the city where homes sit on the market for the longest by far. Homes here stay for sale for a median of eight months. Not to mention Altos' analysis only reflects single-family homes--not condominiums, a section of the Miami's real estate market that has yet to stabilize.
Therefore, Miami's upswing should be taken skeptically, says Simonsen. "Miami lagged behind everything else, and so is only now starting to feel the impact of the stimulus."
But a decision on Jan. 7 by mortgage entities Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) to begin backing some Miami condominium loans that they previously hadn't touched might help rejuvenate sales.
Big Apple Trouble
Most markets have seen price drops of less than 3%, and that's true for New York City, where home prices have fallen by 2.3%, to a median of $638,082. But there may be trouble in store for the Big Apple, which peaked late and whose real estate market was more directly affected by the Wall Street implosion of late 2008. Its inventory of listed homes has increased by 4.2% since October. Phoenix is the only other market that saw inventory rates rise during a seasonally slow season in which it typically falls. Slimming down inventory is necessary to curb price declines.
In New York, onerous real estate laws mean that foreclosures take roughly six months to complete, and post-foreclosure sales don't usually close for another four months after that. This has kept buyers away, and hamstrung real estate recovery in the area.
"In states with complex foreclosure laws, the recovery is clearly being delayed," says Simonsen. "For example, there are investment funds that will buy in Texas and California, but won't buy in New York because it takes so long to foreclose--and then you have to go to court."
New York prices likely have much farther to fall.
Although the rate of decline has mellowed from stomach-turning to gentle nationwide, these numbers show that any jubilation over a recovered real estate market would be premature.
Charlotte, N.C., the city with third-greatest drop in asking prices (falling 4.4% to a median price of $248,543 in December), suffered from exuberant pricing early in the year. But the Wall Street collapse hit Charlotte hard, as it's a financial hub that is headquarters to Bank of America Corp. ( BAC - news - people ), among other major banking institutions. Now the area's housing market is suffering.
"In Charlotte, at the beginning of the year, new sellers thought they would get a nice premium, and they were pricing above the median price," says Scott Sambucci, vice president of data analytics at Altos Research. "They were reading all those articles about the national housing market saying, 'That's not happening here.' But there was a lag effect."
Source: http://www.forbes.com/2010/01/18/falling-home-prices-lifestyle-real-estate-foreclosures.html?boxes=Homepagechannels
Wednesday, January 20, 2010
Mortgage modifications double in December, with more in the wings
The number of properties heading to the market may be much larger than anyone thought and appears likely to swamp South Florida with more deeply discounted homes, clouding the prospects for a housing recovery.
Figures from the Florida Association of Realtors released Friday show that South Florida's median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks.
But an analysis of the so-called shadow market done for The Miami Herald suggests the number of homes and condos in the pipeline to come on the market in South Florida is nearly five times larger than all residential properties currently listed for sale by Realtors. LPS Applied Analytics, a firm that supplies loan data to the federal government, did the analysis on the shadow market, which refers to properties that will eventually be listed for sale -- because they are about to enter foreclosure, are in foreclosure or already owned by banks.
Economists and real estate analysts say the forces of supply and demand mean prices have further to fall because there will be more homes on the market than people to buy them, forcing sellers -- in this case, banks that have taken homes back in foreclosures -- to further cut prices.
``That's what everybody is afraid of,'' said Jesse Acevedo, president of the Realtor Association of Greater Fort Lauderdale. He recently conducted his own shadow market analysis by cross-referencing the public record with the MLS, a Realtor database, for properties in Tamarac. He said banks owned about 300 homes, but had listed only 81 for sale.
The Florida Association of Realtors numbers released Friday show that in September new buyers and investors continued to eat away at the mass of existing homes for sale at a steady pace.
Single-family home sales in Miami-Dade were up 51 percent from the same month a year ago; condo sales were up 73 percent. In Broward, home sales rose 31 percent from last year and condo sales jumped 57 percent, according to the Realtors.
But such figures provide only a partial snapshot of the overall housing market.
For every home sold in Miami-Dade, lenders took back almost four through foreclosure auction, according to LPS data. In Broward, for every sale, banks took back six properties, according to LPS' analysis, which uses sales information from the public record, not Realtor data that captures only sales through agents.
``This foreclosure hangover is going to prevent any substantial price recovery and could even lead general market statistics downward,'' said Adam Cappel, a market analyst and principal of Miami-based CondoReports.com.
While the number of homes on the market in Miami-Dade has shrunk 36 percent since last year to 26,296 homes, the number of loans 90 days or more past due or in the foreclosure process stood at 122,800 in September, according to LPS. In Broward, listings fell by 41 percent to 18,919, yet 88,863 homes were being queued up for the market.
A few caveats: A percentage of those homes, though small, will not be taken back by banks because they are sold or the owner catches up on loan payments. Also, some of them may already be listed for sale. Meanwhile, though, a flurry of activity at the lower price range reduced the median home price in Miami-Dade to $190,900, down 30 percent compared to a year ago, according to the Realtor data. The median condo price fell to $132,900, a drop of 37 percent versus last September.
In Broward, the median single-family home price fell to $200,000 from $259,300, a fall of 23 percent. The median condo price dropped to $78,000 from $129,000 last year, a 40 percent decline.
Earlier this week, Fiserv, a financial information and analysis firm, forecast that Miami average home values will plunge another 30 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Prices are forecast to fall another 26 percent in Fort Lauderdale.
David Stiff, Fiserv's chief economist, said the forecast is based on a number of economic variables, including home affordability, demographic trends and household growth. He said inventory levels going forward were a major concern.
``If you look at markets across the U.S., the Miami area has some of the largest foreclosure numbers. In addition to that, there was a lot of overbuilding,'' Stiff said. Ken Thomas, a Miami-based banking analyst and economist, however, said he expected prices to fall no more than 20 percent on average. But, he added, ``one thing this crisis has taught us is that no matter what we predict, things are always much worse than we believed.''
Acevedo, of the Realtor Association of Greater Fort Lauderdale, took a more optimistic view. As long as banks refrain from dumping homes on the market, and the courts, which are understaffed and overwhelmed, continue to serve as a kind of control valve, slowing the pace of bank take-backs, price can still hold.
``When are the banks going to put it out and how much at a time and why are they holding on to it? Everybody is speculating on those issues,'' he said.
As it is, bank-owned properties in decent shape are selling for above list prices as buyers compete for bargains. Good deals are dwindling, meaning buyers will have to choose from homes listed at higher price ranges.
``Right now, buyers can't find properties at the lower end because those foreclosures were feeding first-time home buyers and investors,'' Acevedo said.
Source: http://www.miamiherald.com/163/story/1297561.html
Figures from the Florida Association of Realtors released Friday show that South Florida's median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks.
But an analysis of the so-called shadow market done for The Miami Herald suggests the number of homes and condos in the pipeline to come on the market in South Florida is nearly five times larger than all residential properties currently listed for sale by Realtors. LPS Applied Analytics, a firm that supplies loan data to the federal government, did the analysis on the shadow market, which refers to properties that will eventually be listed for sale -- because they are about to enter foreclosure, are in foreclosure or already owned by banks.
Economists and real estate analysts say the forces of supply and demand mean prices have further to fall because there will be more homes on the market than people to buy them, forcing sellers -- in this case, banks that have taken homes back in foreclosures -- to further cut prices.
``That's what everybody is afraid of,'' said Jesse Acevedo, president of the Realtor Association of Greater Fort Lauderdale. He recently conducted his own shadow market analysis by cross-referencing the public record with the MLS, a Realtor database, for properties in Tamarac. He said banks owned about 300 homes, but had listed only 81 for sale.
The Florida Association of Realtors numbers released Friday show that in September new buyers and investors continued to eat away at the mass of existing homes for sale at a steady pace.
Single-family home sales in Miami-Dade were up 51 percent from the same month a year ago; condo sales were up 73 percent. In Broward, home sales rose 31 percent from last year and condo sales jumped 57 percent, according to the Realtors.
But such figures provide only a partial snapshot of the overall housing market.
For every home sold in Miami-Dade, lenders took back almost four through foreclosure auction, according to LPS data. In Broward, for every sale, banks took back six properties, according to LPS' analysis, which uses sales information from the public record, not Realtor data that captures only sales through agents.
``This foreclosure hangover is going to prevent any substantial price recovery and could even lead general market statistics downward,'' said Adam Cappel, a market analyst and principal of Miami-based CondoReports.com.
While the number of homes on the market in Miami-Dade has shrunk 36 percent since last year to 26,296 homes, the number of loans 90 days or more past due or in the foreclosure process stood at 122,800 in September, according to LPS. In Broward, listings fell by 41 percent to 18,919, yet 88,863 homes were being queued up for the market.
A few caveats: A percentage of those homes, though small, will not be taken back by banks because they are sold or the owner catches up on loan payments. Also, some of them may already be listed for sale. Meanwhile, though, a flurry of activity at the lower price range reduced the median home price in Miami-Dade to $190,900, down 30 percent compared to a year ago, according to the Realtor data. The median condo price fell to $132,900, a drop of 37 percent versus last September.
In Broward, the median single-family home price fell to $200,000 from $259,300, a fall of 23 percent. The median condo price dropped to $78,000 from $129,000 last year, a 40 percent decline.
Earlier this week, Fiserv, a financial information and analysis firm, forecast that Miami average home values will plunge another 30 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Prices are forecast to fall another 26 percent in Fort Lauderdale.
David Stiff, Fiserv's chief economist, said the forecast is based on a number of economic variables, including home affordability, demographic trends and household growth. He said inventory levels going forward were a major concern.
``If you look at markets across the U.S., the Miami area has some of the largest foreclosure numbers. In addition to that, there was a lot of overbuilding,'' Stiff said. Ken Thomas, a Miami-based banking analyst and economist, however, said he expected prices to fall no more than 20 percent on average. But, he added, ``one thing this crisis has taught us is that no matter what we predict, things are always much worse than we believed.''
Acevedo, of the Realtor Association of Greater Fort Lauderdale, took a more optimistic view. As long as banks refrain from dumping homes on the market, and the courts, which are understaffed and overwhelmed, continue to serve as a kind of control valve, slowing the pace of bank take-backs, price can still hold.
``When are the banks going to put it out and how much at a time and why are they holding on to it? Everybody is speculating on those issues,'' he said.
As it is, bank-owned properties in decent shape are selling for above list prices as buyers compete for bargains. Good deals are dwindling, meaning buyers will have to choose from homes listed at higher price ranges.
``Right now, buyers can't find properties at the lower end because those foreclosures were feeding first-time home buyers and investors,'' Acevedo said.
Source: http://www.miamiherald.com/163/story/1297561.html
Monday, January 18, 2010
Home Flippers Are Back in Florida. A Good Sign?
They're out there, again, constantly searching for and scooping up South Florida homes at steep discounts, hoping to turn a nice profit. A house might barely have time to get listed before it's gone — that is, before it's back on the market a few months later at a 20%, 30% (do I hear 50%?) markup.
Yes, the home flippers are back, beginning to dominate the real estate landscape in one of the epicenters of the housing crisis. Sounds like 2003 all over again? Are they harbingers of another housing free fall?
Real estate analysts say not to panic — yet. This new cohort of investors is kinder, smarter, less predatory. It might even mark the era of what experts are calling "the good flipper." "The first group blew it — they don't have any money left," says Bradley Hunter, who heads the South Florida office of Metro Study, a housing-consulting firm. "The current group of investors is made of [genuine]investors and not momentum flippers."
Those who bought seven years ago didn't care how high the price might be —they just assumed the price would keep going up. Things are different now. "Today's investors are saying, 'It's all about the price,' " Hunter says. Jack McCabe, a real estate consultant in Deerfield Beach, Fla., agrees. "These are not the cocktail-party investors of 2005," he says. "Today's flippers are generally long-term real estate investors with war chests of cash who were waiting for the debacle to unfold and for the opportunities it would present."
The current crop of investors, analysts say, are playing a crucial role in reviving the housing market, buying up homes that have been foreclosed on — and often torn up by the previous owners — and getting them back into shape. Many former owners hauled appliances away and ripped out the wires. Some got so boiling mad that they pulled off cabinet handles and smashed glass doors. Somebody's got to clean up those messes, and that's what the good flippers do, observers say. They might try to sell right away or rent the houses for a while. Either way, it's good for the whole neighborhood, because a house that might have sat fallow is now rehabbed, preventing drops in value all around it.
"They're vital," Hunter says of the good flippers. "I can't think of a conceivable way that we could turn the market around without them."
A group of investors that goes by the name Pudlit has bought up 59 homes in Palm Beach County since the fall. A three-bedroom house that the group bought in September for $95,700 is back on the market for $148,900 — a 55% bump. David Dweck, an investor and mortgage broker who founded the Boca Real Estate Investment Club in the 1990s, says he's done 50 deals over the past year as either the buyer, the broker or the lender. "Are you sitting down?" he asks, then describes a three-bedroom house he just snatched up, in the admittedly "spotty" West Palm Beach neighborhood of Northwood Hills, for $26,000. "It's got great potential," he says. "I can either sell it or rent it. It doesn't matter to me."
But even Dweck cautions against placing halos over South Florida real estate investors. Are some people out strictly for the quick hit that will inflate prices artificially? "Without a doubt," Dweck says. "We are in the fraud capital of the country." Even good flippers sometimes cut corners on home improvement, putting new doors on old cabinets in one Pudlit house — just in time for potential buyers to be escorted on a tour.
And there is still troubling game playing afoot, observers say. At a courthouse foreclosure auction, when a novice buyer has his heart set on a property that more seasoned buyers deem undesirable, sophisticated investors will routinely team up and place bids designed to jack up the price. The novice will get his house, but he'll have overpaid. That means he'll have to put a higher resale price tag on it to get a return on his investment, offering less competition to the more seasoned buyers who will have paid less for their homes. It also means less competition on other purchases, since the novice buyer might have put all his eggs in one overpriced basket. "That happens all the time," says Dweck. "They'll bid 'em up, let 'em have it, and laugh."
What's more — since "cash is king," as McCabe puts it — even good flippers can make things more difficult for the traditional buyer who needs to borrow. "It's difficult for those buyers to get the properties that they want," says Yanmei Li, an assistant professor in urban and regional planning at Florida Atlantic University who is researching the resales of foreclosed homes in Fort Lauderdale. "Sellers are willing to sell to the cash buyer even if it's a little bit lower than they want."
Artificial price inflation might be more prevalent than is generally acknowledged, she adds. For example, one Fort Lauderdale home she came across was bought from the bank at $60,000, then sold four days later for $20,000 more. That smacks of an unreasonable hike, though she acknowledges the bank may have simply wanted to unload it at a bargain-basement price. "Once the price is inflated on one property, the surrounding properties' prices will also be inflated," Li says. "I'm a little concerned that the prices might be more inflated in two or three years because the investors are doing that."
Li notes that lazy appraisals that take into consideration only price comparisons — rather than looking closely at the actual quality of the housing stock — are also to blame for the prospect of artificially inflating the market. In short, she says, the same age-old advice holds true: "The buyer has to be educated about the buying process." Which might go a long way toward preventing what got us into this mess in the first place
Source: http://www.time.com/time/nation/article/0,8599,1953022,00.html
Yes, the home flippers are back, beginning to dominate the real estate landscape in one of the epicenters of the housing crisis. Sounds like 2003 all over again? Are they harbingers of another housing free fall?
Real estate analysts say not to panic — yet. This new cohort of investors is kinder, smarter, less predatory. It might even mark the era of what experts are calling "the good flipper." "The first group blew it — they don't have any money left," says Bradley Hunter, who heads the South Florida office of Metro Study, a housing-consulting firm. "The current group of investors is made of [genuine]investors and not momentum flippers."
Those who bought seven years ago didn't care how high the price might be —they just assumed the price would keep going up. Things are different now. "Today's investors are saying, 'It's all about the price,' " Hunter says. Jack McCabe, a real estate consultant in Deerfield Beach, Fla., agrees. "These are not the cocktail-party investors of 2005," he says. "Today's flippers are generally long-term real estate investors with war chests of cash who were waiting for the debacle to unfold and for the opportunities it would present."
The current crop of investors, analysts say, are playing a crucial role in reviving the housing market, buying up homes that have been foreclosed on — and often torn up by the previous owners — and getting them back into shape. Many former owners hauled appliances away and ripped out the wires. Some got so boiling mad that they pulled off cabinet handles and smashed glass doors. Somebody's got to clean up those messes, and that's what the good flippers do, observers say. They might try to sell right away or rent the houses for a while. Either way, it's good for the whole neighborhood, because a house that might have sat fallow is now rehabbed, preventing drops in value all around it.
"They're vital," Hunter says of the good flippers. "I can't think of a conceivable way that we could turn the market around without them."
A group of investors that goes by the name Pudlit has bought up 59 homes in Palm Beach County since the fall. A three-bedroom house that the group bought in September for $95,700 is back on the market for $148,900 — a 55% bump. David Dweck, an investor and mortgage broker who founded the Boca Real Estate Investment Club in the 1990s, says he's done 50 deals over the past year as either the buyer, the broker or the lender. "Are you sitting down?" he asks, then describes a three-bedroom house he just snatched up, in the admittedly "spotty" West Palm Beach neighborhood of Northwood Hills, for $26,000. "It's got great potential," he says. "I can either sell it or rent it. It doesn't matter to me."
But even Dweck cautions against placing halos over South Florida real estate investors. Are some people out strictly for the quick hit that will inflate prices artificially? "Without a doubt," Dweck says. "We are in the fraud capital of the country." Even good flippers sometimes cut corners on home improvement, putting new doors on old cabinets in one Pudlit house — just in time for potential buyers to be escorted on a tour.
And there is still troubling game playing afoot, observers say. At a courthouse foreclosure auction, when a novice buyer has his heart set on a property that more seasoned buyers deem undesirable, sophisticated investors will routinely team up and place bids designed to jack up the price. The novice will get his house, but he'll have overpaid. That means he'll have to put a higher resale price tag on it to get a return on his investment, offering less competition to the more seasoned buyers who will have paid less for their homes. It also means less competition on other purchases, since the novice buyer might have put all his eggs in one overpriced basket. "That happens all the time," says Dweck. "They'll bid 'em up, let 'em have it, and laugh."
What's more — since "cash is king," as McCabe puts it — even good flippers can make things more difficult for the traditional buyer who needs to borrow. "It's difficult for those buyers to get the properties that they want," says Yanmei Li, an assistant professor in urban and regional planning at Florida Atlantic University who is researching the resales of foreclosed homes in Fort Lauderdale. "Sellers are willing to sell to the cash buyer even if it's a little bit lower than they want."
Artificial price inflation might be more prevalent than is generally acknowledged, she adds. For example, one Fort Lauderdale home she came across was bought from the bank at $60,000, then sold four days later for $20,000 more. That smacks of an unreasonable hike, though she acknowledges the bank may have simply wanted to unload it at a bargain-basement price. "Once the price is inflated on one property, the surrounding properties' prices will also be inflated," Li says. "I'm a little concerned that the prices might be more inflated in two or three years because the investors are doing that."
Li notes that lazy appraisals that take into consideration only price comparisons — rather than looking closely at the actual quality of the housing stock — are also to blame for the prospect of artificially inflating the market. In short, she says, the same age-old advice holds true: "The buyer has to be educated about the buying process." Which might go a long way toward preventing what got us into this mess in the first place
Source: http://www.time.com/time/nation/article/0,8599,1953022,00.html
Friday, January 15, 2010
Majestic Properties Top Producers of 2009!
Dear friends, family and colleagues, we are proud to be part of the Majestic Properties Top Producers of 2009! As you all know, it has not been easy the last couple of years, especially with this economy and all... So we wanted to thank you for all your support. Remember that with hard work and dedication, you can accomplish so much.
Thursday, January 14, 2010
New rules designed to speed up short sales
Financially stressed homeowners left hanging while their banks consider whether to approve the short sales of their properties may benefit from new federal guidelines that give lenders a 10-day limit in which to respond to purchase offers.
The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida's housing market, where about one in every five existing-home purchases involves a short sale.
Gary Balanoff, a real-estate agent with Re/Max Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury's expedited short-sale process emerges between now and April, he said, he's not going to tell his clients any differently.
"It's a very, very tough process to get some degree of standards," Balanoff said of short sales. "I think this will help - it will put more pressure to comply and get quicker results. ... Three or four months of waiting for an answer is not doing anyone any good - even lenders."
The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn't expect the new deadline measures to be applied or enforced evenly.
In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are "under water," meaning they owe more than their homes are currently worth.
According to the Orlando Regional Realtor Association, 20 percent of its members' existing-home sales in December were short sales. An additional 43 percent were bank-owned properties, and the remaining 37 percent were "normal" resales.
While short sales are considered an ideal solution for banks and for "under water" homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.
The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances - and for the sellers to not have to repay any of the debt.
Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale's proceeds to be distributed to less senior lenders.
The 83 loan servicers participating in the Obama administration's Making Home Affordable loan-modification program, including Bank of America and JPMorgan Chase, are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications.
The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000.
Sclafani, a 50-year-old psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. "I want to move on ... but I can't until somebody gives me permission to," she said. "I've heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help."
U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales "a more usable tool." Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen.
But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real-estate agents in exchange for releasing their claims and allowing the short sales to proceed.
"This is a great program if all these mortgages had only one lien holder," said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. "But many of these properties have two liens."
Some Florida real-estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks "the banks will still play their little games with people and make life difficult for everyone."
A spokeswoman for the Treasury says it will hand down "substantial" penalties to lenders that don't comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified.
Lenders have blamed short-sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don't submit proper paperwork in a timely manner.
Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association.
"That will be a challenge," he said.
In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties.
"I think the pressure on (the banks) is a good thing," Kellogg said.
Mary Shanklin of the Orlando Sentinel contributed to this report.
Source: http://www.miamiherald.com/163/story/1424542-p2.html
The rules from the U.S. Treasury, which also allow financial incentives for both sellers and lenders, could figure prominently in Florida's housing market, where about one in every five existing-home purchases involves a short sale.
Gary Balanoff, a real-estate agent with Re/Max Select in Oviedo, Fla., tells his clients to expect at least a 60-day wait when they try to buy or sell a home via a short sale. And as Treasury's expedited short-sale process emerges between now and April, he said, he's not going to tell his clients any differently.
"It's a very, very tough process to get some degree of standards," Balanoff said of short sales. "I think this will help - it will put more pressure to comply and get quicker results. ... Three or four months of waiting for an answer is not doing anyone any good - even lenders."
The effect of the new rules will likely be somewhat limited because only banks that owe the federal government TARP bailout funds must comply. And according to Balanoff, even when certain banks do push for faster short sales, there is so little consistency among mortgage negotiators that he doesn't expect the new deadline measures to be applied or enforced evenly.
In a short sale, the homeowner sells the property for less than what is owed on the mortgage, and the lender forgives the difference. Many of the single-family mortgage holders in Central Florida are "under water," meaning they owe more than their homes are currently worth.
According to the Orlando Regional Realtor Association, 20 percent of its members' existing-home sales in December were short sales. An additional 43 percent were bank-owned properties, and the remaining 37 percent were "normal" resales.
While short sales are considered an ideal solution for banks and for "under water" homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to decide what to do. Frustrated buyers sometimes walk away during the delays. In some cases, lenders insist that the borrowers share in the financial loss, which holds up the transactions even longer. As a result, homes stay on the market, prolonging the housing downturn.
The Treasury rules, in addition to imposing a 10-day deadline for bank decisions, call for sellers to receive $1,500 moving allowances - and for the sellers to not have to repay any of the debt.
Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing as much as $3,000 of a short sale's proceeds to be distributed to less senior lenders.
The 83 loan servicers participating in the Obama administration's Making Home Affordable loan-modification program, including Bank of America and JPMorgan Chase, are required to follow the guidelines for all borrowers who have requested short sales or who did not complete loan modifications.
The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which constitute about half of all U.S. mortgage debt. The two government-run mortgage companies are working on their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her South Florida home. A buyer has offered $155,000, and she owes $233,000.
Sclafani, a 50-year-old psychologist who lives in Margate, Fla., said she is eager for her bank to approve the deal so she can put the experience behind her. "I want to move on ... but I can't until somebody gives me permission to," she said. "I've heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help."
U.S. Rep Ron Klein, D-Fla., said the guidelines are meant to make short sales "a more usable tool." Klein notes that the rules provide standardized paperwork for all short sales, and give buyers and sellers a more reasonable time frame for finding out whether or not the sales will happen.
But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short-sale proceeds to less-senior lenders is not sitting well with second-lien holders, who have been demanding more money from sellers, the first lenders and real-estate agents in exchange for releasing their claims and allowing the short sales to proceed.
"This is a great program if all these mortgages had only one lien holder," said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. "But many of these properties have two liens."
Some Florida real-estate agents remain skeptical of the guidelines. Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks "the banks will still play their little games with people and make life difficult for everyone."
A spokeswoman for the Treasury says it will hand down "substantial" penalties to lenders that don't comply. The agency said it can fine lenders, withhold or reduce incentive payments, or require improperly rejected loans to be modified.
Lenders have blamed short-sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don't submit proper paperwork in a timely manner.
Because short sales involve so many moving parts, lenders will be hard-pressed to meet the 10-day deadline, said Anthony DiMarco, executive vice president of government affairs for the Florida Bankers Association.
"That will be a challenge," he said.
In many cases, the banks are not to blame for the delays, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. But he thinks the guidelines are necessary to help clear the market of so many distressed properties.
"I think the pressure on (the banks) is a good thing," Kellogg said.
Mary Shanklin of the Orlando Sentinel contributed to this report.
Source: http://www.miamiherald.com/163/story/1424542-p2.html
Wednesday, January 13, 2010
Busy holiday sparks hope for New Year in residential market
Hope springs eternal in the New York City residential market, especially now that 2009 -- the worst year in recent memory -- is over.
"If you survived 2009, you can survive anything," said Yael Dunayer, an executive vice president at Barak Realty.
Like many other brokers, he pointed to strong activity in the second half of last year as an indicator of a possible 2010 recovery. "The last six months of 2009 have been very active and brokers should look forward to riding this trend well into 2010," Dunayer said.
One reason for this optimism is that December -- usually one of the slowest months of the year -- saw more activity than usual, brokers said.
As the holidays approach, New Yorkers -- and would-be New Yorkers -- usually take a break from real estate shopping, preferring to gift-shop instead. But this year, low prices continued to lure buyers into the marketplace and prompted them to sign on the dotted line much later than usual.
"Last year, the brokers didn't show around the holidays. It's different this year," said Marilyn Harra Kaye, president of MLBKaye International Realty. "We even canceled an [office] meeting this month because the brokers were very busy."
Of course, December 2008 was much slower than usual, since it arrived in the aftermath of the Lehman Brothers collapse. But brokers said last month was busier than most holiday seasons, thanks in part to the perception that there are deals in the marketplace.
"December has been a buying frenzy," said Emily Beare, an executive vice president at the brokerage CORE. "People are taking advantage of the highly discounted market. We're seeing a tremendous increase in the number of sales."
Robb Pair, president of Harlem Lofts and co-chair of the Market Trends Committee of the Manhattan Association of Realtors, said his company had closings scheduled for the last two weeks of last month, during the popular vacation week between Christmas and New Year's.
In addition to low prices, Pair said federal homebuyer tax credits are spurring activity for homes priced below the maximum eligible sale price of $800,000. Originally slated to expire at the end of November, the tax credit was extended to June and expanded to include repeat buyers in addition to first-time homebuyers.
All of this is leading to enthusiastic projections for 2010.
"I think the market will get busier," said Noah Freedman, a principal at Bond New York. "You may even see some price appreciation again. I know it's almost sacrilegious to say that, but whenever everyone becomes so unanimously convinced a market, any market, will only proceed in one direction, it usually is about to do the exact opposite."
Gea Elika, the founder and principal broker of Elika Associates, said he expects strong interest from foreign buyers to prop up the New York market this year.
"[We] will likely see an increase in activity locally and from foreign buyers," he said, noting that British buyers in particular seem keen on buying property in New York. "The market bears, who are calling for another leg down and a 'W' recovery, may be pleasantly surprised with just a stumble instead."
Despite fears of shrinking or stock-heavy Wall Street bonuses, most brokers believe the annual pay surge in the finance industry will jolt the real estate market.
"I anticipate an uptick in the first quarter on high-price properties, due to some liquidity provided by bonus money," said Frances Katzen, an executive vice president at Prudential Douglas Elliman. In fact, the mere prospect of the upcoming bonuses is already leading to more activity in the mid-range of the market, which suffered mightily last year.
"The least active price range has been $1 million to $4 million," Elika said. "However, inquiries have picked up due to anticipated Wall Street bonuses that could help the New Year start off on the right foot."
However, any pending recovery could be dampened by the surge in inventory expected to hit the market this month. Many sellers take their homes off the market during the usually slow holiday season, putting them back on when things pick up after the New Year.
That trend will be even more pronounced than normal this year as sellers perceive that the market is on the mend, brokers predicted.
"As sales volume starts to increase, we expect the inventory will, too, and at a greater rate than usual," said Leigh Zaph, a principal at Manhattan Homes. "This will be due to owners --who refrained from listing their properties during the worst period -- deciding to sell as the market shows signs of improvement."
Meanwhile, unsold new development condos are piling up as the credit crisis continues, making it difficult for buyers to purchase them.
"The mounting inventory of new development coming up in the New Year will put more downward pressure on both sales and rentals," said Takeshi Yamaguchi, a broker at DJK Residential.
The increased availability of homes for sale "may hamper the speed with which the market starts its comeback, but not the recovery itself," Zaph said.
Brokers are cognizant of the possibility that prices may slide again (some economists have predicted prices will fall by another 15 percent in the New York metro area). But most believe the tumble won't be as severe, and that it won't take place for a few months at least.
"The market may still go down, but most feel that things have leveled off and will stay this way for a while," Beare said. "Although things are not significantly better, we don't think the market will get much worse."
"If you survived 2009, you can survive anything," said Yael Dunayer, an executive vice president at Barak Realty.
Like many other brokers, he pointed to strong activity in the second half of last year as an indicator of a possible 2010 recovery. "The last six months of 2009 have been very active and brokers should look forward to riding this trend well into 2010," Dunayer said.
One reason for this optimism is that December -- usually one of the slowest months of the year -- saw more activity than usual, brokers said.
As the holidays approach, New Yorkers -- and would-be New Yorkers -- usually take a break from real estate shopping, preferring to gift-shop instead. But this year, low prices continued to lure buyers into the marketplace and prompted them to sign on the dotted line much later than usual.
"Last year, the brokers didn't show around the holidays. It's different this year," said Marilyn Harra Kaye, president of MLBKaye International Realty. "We even canceled an [office] meeting this month because the brokers were very busy."
Of course, December 2008 was much slower than usual, since it arrived in the aftermath of the Lehman Brothers collapse. But brokers said last month was busier than most holiday seasons, thanks in part to the perception that there are deals in the marketplace.
"December has been a buying frenzy," said Emily Beare, an executive vice president at the brokerage CORE. "People are taking advantage of the highly discounted market. We're seeing a tremendous increase in the number of sales."
Robb Pair, president of Harlem Lofts and co-chair of the Market Trends Committee of the Manhattan Association of Realtors, said his company had closings scheduled for the last two weeks of last month, during the popular vacation week between Christmas and New Year's.
In addition to low prices, Pair said federal homebuyer tax credits are spurring activity for homes priced below the maximum eligible sale price of $800,000. Originally slated to expire at the end of November, the tax credit was extended to June and expanded to include repeat buyers in addition to first-time homebuyers.
All of this is leading to enthusiastic projections for 2010.
"I think the market will get busier," said Noah Freedman, a principal at Bond New York. "You may even see some price appreciation again. I know it's almost sacrilegious to say that, but whenever everyone becomes so unanimously convinced a market, any market, will only proceed in one direction, it usually is about to do the exact opposite."
Gea Elika, the founder and principal broker of Elika Associates, said he expects strong interest from foreign buyers to prop up the New York market this year.
"[We] will likely see an increase in activity locally and from foreign buyers," he said, noting that British buyers in particular seem keen on buying property in New York. "The market bears, who are calling for another leg down and a 'W' recovery, may be pleasantly surprised with just a stumble instead."
Despite fears of shrinking or stock-heavy Wall Street bonuses, most brokers believe the annual pay surge in the finance industry will jolt the real estate market.
"I anticipate an uptick in the first quarter on high-price properties, due to some liquidity provided by bonus money," said Frances Katzen, an executive vice president at Prudential Douglas Elliman. In fact, the mere prospect of the upcoming bonuses is already leading to more activity in the mid-range of the market, which suffered mightily last year.
"The least active price range has been $1 million to $4 million," Elika said. "However, inquiries have picked up due to anticipated Wall Street bonuses that could help the New Year start off on the right foot."
However, any pending recovery could be dampened by the surge in inventory expected to hit the market this month. Many sellers take their homes off the market during the usually slow holiday season, putting them back on when things pick up after the New Year.
That trend will be even more pronounced than normal this year as sellers perceive that the market is on the mend, brokers predicted.
"As sales volume starts to increase, we expect the inventory will, too, and at a greater rate than usual," said Leigh Zaph, a principal at Manhattan Homes. "This will be due to owners --who refrained from listing their properties during the worst period -- deciding to sell as the market shows signs of improvement."
Meanwhile, unsold new development condos are piling up as the credit crisis continues, making it difficult for buyers to purchase them.
"The mounting inventory of new development coming up in the New Year will put more downward pressure on both sales and rentals," said Takeshi Yamaguchi, a broker at DJK Residential.
The increased availability of homes for sale "may hamper the speed with which the market starts its comeback, but not the recovery itself," Zaph said.
Brokers are cognizant of the possibility that prices may slide again (some economists have predicted prices will fall by another 15 percent in the New York metro area). But most believe the tumble won't be as severe, and that it won't take place for a few months at least.
"The market may still go down, but most feel that things have leveled off and will stay this way for a while," Beare said. "Although things are not significantly better, we don't think the market will get much worse."
Miami foreclosure auctions shift from courthouse steps to Web
MIAMI -- In a move that could speed the sale of massive numbers of distressed properties on the market, Miami-Dade County officially launched online bidding for foreclosures Monday, bringing together bidders from across the globe and launching hopes of an accelerated return to normalcy in the real estate industry.
The new system, managed by Plantation-based RealAuction.com, will completely replace the traditional courthouse procedure, and is expected to save the county $750,000 annually while cutting out a lot of the paperwork that has weighed down the process, said Miami-Dade Clerk of Courts Harvey Ruvin. The move comes at a time of high anxiety at the foreclosure division of Miami-Dade Clerk of Courts office, as it tries to balance a ballooning backlog of foreclosure cases and a slashed budget.
"This couldn't be happening at a better time for us," Ruvin said. "We are in an enormous avalanche of foreclosures. We have over 110,000 open foreclosure files, with an additional 7,000 coming in each month."
Ruvin says the new online system - capable of handling four times as many auctions per week as the courthouse - will help reduce the troublesome backlog.
Foreclosure-ravaged Florida is the first state to adopt an online auction system for distressed properties, using the software in nine counties, with three more to be added by March. Broward County is expected to launch an online auction system before March. The state has sold more than 20,000 homes via Internet auction since 2008, when the Legislature changed the law to allow for online public sales, said Lloyd McClelland, CEO of RealAuction.com.
Forty-six homes were auctioned off on Monday - including a Miami Beach studio and a South Dade 3-bedroom single-family home at $150,000 and $313,000, respectively. A New York investor was the only bidder to close a deal on Monday, purchasing a Miami Beach condo for an undisclosed amount.
In the months ahead, the county's online auction could sell as many as 2,000 properties per week, compared to the 450 homes the courthouse procedures regularly logged, allowing the county to reduce its caseload. Since the program needs minimal human maintenance, most of the 23 employees dedicated to running the traditional auction process will be redeployed to attend to other areas of the foreclosure process, Ruvin said.
In order to participate, potential buyers have to register at http://www.miamidade.realforeclose.com. Registration is free, and once bidders have completed this step, they can access thousands of foreclosed properties, view pictures, link to a property appraiser's report, take a street-level virtual tour of the neighborhood and check a profile on Zillow.com.
To get started, bidders have to put down a refundable 5 percent deposit - which can be paid online or in person. After entering a maximum bid, they can let their computer take over and bid on their behalf, or monitor the auction and bid manually.
By the time Monday's auction began, more than 2,500 people had registered at the site, and more than $1.9 million in deposits had been taken in, RealAuction's McClendon said.
With home prices in Miami-Dade down by more than 18 percent since last year, people from other parts of the U.S. and the globe are looking to take advantage of the Web's portability to score a bargain.
"The word is out," Ruvin said. "This has gone global - we're getting acknowledgment and bidders that are registering from all over the world. That just opens the universe to our process. We hope to have more people competing; therefore the prices will go up."
The site has seen visitors from dozens of countries, including Australia, Jordan and India, McClendon said.
Julian Dominguez, president of Foreclosure Investment Systems and a regular at county courthouse auctions, said the online setting will make the process more pleasant for first-timers by preventing courtroom bullies from using intimidation tactics.
"We have people that have created a level of stress across the system by their actions," Dominguez said of the traditional auction process. "It just created a tense atmosphere for those that came new, and we're looking for the new system to help with that."
County officials never worried about technological hiccups or first-day confusion, Ruvin said. Launching in 2010 allowed Miami-Dade officials to monitor RealAuction.com in action in Florida cities such as Jacksonville and Bradenton, which started online auctions in 2008.
For South Florida-based RealAuction, Monday's launch could be a catalyst for national expansion, McClendon said. Miami-Dade County has one of the highest foreclosure rates in the country and is the largest metropolitan area to adopt the online auction procedure so far. The company, which receives a "success fee" of up to $70 for each property sold, has its sights on moving into other high foreclosure states like Nevada and California.
"If this can be proven to work in Miami-Dade, there's no county in the country where this can't work," McClendon said of his privately held business. "So this is a really important launch for us."
Source: http://www.miamiherald.com/classifieds/real-estate/story/1420051.html
The new system, managed by Plantation-based RealAuction.com, will completely replace the traditional courthouse procedure, and is expected to save the county $750,000 annually while cutting out a lot of the paperwork that has weighed down the process, said Miami-Dade Clerk of Courts Harvey Ruvin. The move comes at a time of high anxiety at the foreclosure division of Miami-Dade Clerk of Courts office, as it tries to balance a ballooning backlog of foreclosure cases and a slashed budget.
"This couldn't be happening at a better time for us," Ruvin said. "We are in an enormous avalanche of foreclosures. We have over 110,000 open foreclosure files, with an additional 7,000 coming in each month."
Ruvin says the new online system - capable of handling four times as many auctions per week as the courthouse - will help reduce the troublesome backlog.
Foreclosure-ravaged Florida is the first state to adopt an online auction system for distressed properties, using the software in nine counties, with three more to be added by March. Broward County is expected to launch an online auction system before March. The state has sold more than 20,000 homes via Internet auction since 2008, when the Legislature changed the law to allow for online public sales, said Lloyd McClelland, CEO of RealAuction.com.
Forty-six homes were auctioned off on Monday - including a Miami Beach studio and a South Dade 3-bedroom single-family home at $150,000 and $313,000, respectively. A New York investor was the only bidder to close a deal on Monday, purchasing a Miami Beach condo for an undisclosed amount.
In the months ahead, the county's online auction could sell as many as 2,000 properties per week, compared to the 450 homes the courthouse procedures regularly logged, allowing the county to reduce its caseload. Since the program needs minimal human maintenance, most of the 23 employees dedicated to running the traditional auction process will be redeployed to attend to other areas of the foreclosure process, Ruvin said.
In order to participate, potential buyers have to register at http://www.miamidade.realforeclose.com. Registration is free, and once bidders have completed this step, they can access thousands of foreclosed properties, view pictures, link to a property appraiser's report, take a street-level virtual tour of the neighborhood and check a profile on Zillow.com.
To get started, bidders have to put down a refundable 5 percent deposit - which can be paid online or in person. After entering a maximum bid, they can let their computer take over and bid on their behalf, or monitor the auction and bid manually.
By the time Monday's auction began, more than 2,500 people had registered at the site, and more than $1.9 million in deposits had been taken in, RealAuction's McClendon said.
With home prices in Miami-Dade down by more than 18 percent since last year, people from other parts of the U.S. and the globe are looking to take advantage of the Web's portability to score a bargain.
"The word is out," Ruvin said. "This has gone global - we're getting acknowledgment and bidders that are registering from all over the world. That just opens the universe to our process. We hope to have more people competing; therefore the prices will go up."
The site has seen visitors from dozens of countries, including Australia, Jordan and India, McClendon said.
Julian Dominguez, president of Foreclosure Investment Systems and a regular at county courthouse auctions, said the online setting will make the process more pleasant for first-timers by preventing courtroom bullies from using intimidation tactics.
"We have people that have created a level of stress across the system by their actions," Dominguez said of the traditional auction process. "It just created a tense atmosphere for those that came new, and we're looking for the new system to help with that."
County officials never worried about technological hiccups or first-day confusion, Ruvin said. Launching in 2010 allowed Miami-Dade officials to monitor RealAuction.com in action in Florida cities such as Jacksonville and Bradenton, which started online auctions in 2008.
For South Florida-based RealAuction, Monday's launch could be a catalyst for national expansion, McClendon said. Miami-Dade County has one of the highest foreclosure rates in the country and is the largest metropolitan area to adopt the online auction procedure so far. The company, which receives a "success fee" of up to $70 for each property sold, has its sights on moving into other high foreclosure states like Nevada and California.
"If this can be proven to work in Miami-Dade, there's no county in the country where this can't work," McClendon said of his privately held business. "So this is a really important launch for us."
Source: http://www.miamiherald.com/classifieds/real-estate/story/1420051.html
Monday, January 11, 2010
New rules could speed short sales of distressed homes
The federal government is setting guidelines for short sales of homes, giving lenders a 10-day limit to respond to offers, freeing borrowers from debt and providing financial incentives to lenders.
The new rules seek to address the many criticisms of short sales and figure to play a significant role in South Florida, where distressed properties dominate the market as the housing slump meanders into a fifth year.
"The cloud could be lifted," said Domenic Faro of the Fort Lauderdale Real Estate firm. "This could bring us back to some normalcy."
In a short sale, the homeowner unloads the property for less than what's owed on the mortgage, and the lender forgives the difference. Nearly half of all single-family mortgage holders in Palm Beach, Broward and Miami-Dade counties are "under water," meaning they owe more than their homes are worth, according to third-quarter data from Zillow.com, a Seattle-based real estate firm.
While short sales are considered the perfect solution for "underwater" homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to respond to offers. Frustrated buyers walk away during the delays. In some cases, lenders insist that borrowers share in the financial loss, holding up the transactions even longer.
To speed up the process, the U.S. Treasury is calling for lenders to respond to short sale offers within 10 business days. Sellers are eligible for $1,500 moving allowances, and they will not be on the hook for repayment of any debt.
Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing up to $3,000 in short sale proceeds to be distributed to less senior lenders. Loan servicers participating in the Obama Administration's Home Affordable Modification Program are required to follow the guidelines.
The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which represent about half of all U.S. mortgage debt. The two government-run mortgage companies are working to finalize their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her Margate home. A buyer has offered $155,000, and she owes $233,000.
Sclafani, a 50-year-old psychologist, said she's eager for the bank to approve the deal so she can put the experience behind her.
"I want to move on ... but I can't until somebody gives me permission to," she said. "I've heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help."
U.S. Rep Ron Klein, D-Boca Raton, agrees, saying the guidelines are meant to make short sales "a more usable tool." Klein points out the rules provide standardized paperwork for all short sales and give buyers and sellers a more reasonable time frame for whether or not the sales will happen.
But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short sale proceeds is not sitting well with second lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed.
"This is a great program if all these mortgages had only one lien holder," said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. "But many of these properties have two liens."
Meanwhile, some local real estate agents remain skeptical of the guidelines.
Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks "the banks will still play their little games with people and make life difficult for everyone."
Edward Goldfarb of RE/MAX PowerPro Realty in Davie doubts the Treasury will enforce the new rules. "There's no teeth to them," he said.
A spokeswoman for the Treasury says it will hand down "substantial" penalties to lenders that don't comply. They can include the withholding or reduction of payments and requiring improperly rejected loans to be modified.
Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don't submit proper paperwork in a timely manner.
In many cases, the banks are not to blame, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. Still, he thinks the guidelines are necessary to force lenders to clear the market of so many distressed properties.
"I think the pressure on (the banks) is a good thing," Kellogg said.
Source: http://www.sun-sentinel.com/business/fl-short-sale-changes-20100111,0,2830786.story
The new rules seek to address the many criticisms of short sales and figure to play a significant role in South Florida, where distressed properties dominate the market as the housing slump meanders into a fifth year.
"The cloud could be lifted," said Domenic Faro of the Fort Lauderdale Real Estate firm. "This could bring us back to some normalcy."
In a short sale, the homeowner unloads the property for less than what's owed on the mortgage, and the lender forgives the difference. Nearly half of all single-family mortgage holders in Palm Beach, Broward and Miami-Dade counties are "under water," meaning they owe more than their homes are worth, according to third-quarter data from Zillow.com, a Seattle-based real estate firm.
While short sales are considered the perfect solution for "underwater" homeowners on the verge of foreclosure, the deals often drag on as lenders take weeks or months to respond to offers. Frustrated buyers walk away during the delays. In some cases, lenders insist that borrowers share in the financial loss, holding up the transactions even longer.
To speed up the process, the U.S. Treasury is calling for lenders to respond to short sale offers within 10 business days. Sellers are eligible for $1,500 moving allowances, and they will not be on the hook for repayment of any debt.
Also, lenders will get $1,000 to cover administrative and processing costs, while investors owning the mortgages will receive a maximum $1,000 for allowing up to $3,000 in short sale proceeds to be distributed to less senior lenders. Loan servicers participating in the Obama Administration's Home Affordable Modification Program are required to follow the guidelines.
The rules do not specifically apply to loans guaranteed by Fannie Mae or Freddie Mac, which represent about half of all U.S. mortgage debt. The two government-run mortgage companies are working to finalize their own guidelines.
The Treasury plan, which must be implemented by lenders no later than April, is meant to help sellers like Dawn Sclafani, who has been waiting since October for her lender to approve a short sale offer on her Margate home. A buyer has offered $155,000, and she owes $233,000.
Sclafani, a 50-year-old psychologist, said she's eager for the bank to approve the deal so she can put the experience behind her.
"I want to move on ... but I can't until somebody gives me permission to," she said. "I've heard that this is a horrendous process. The banks are just not very cooperative. I do believe these new rules will help."
U.S. Rep Ron Klein, D-Boca Raton, agrees, saying the guidelines are meant to make short sales "a more usable tool." Klein points out the rules provide standardized paperwork for all short sales and give buyers and sellers a more reasonable time frame for whether or not the sales will happen.
But Klein and others say the government may have to increase the financial incentives. The $3,000 cap on short sale proceeds is not sitting well with second lien holders, who have been demanding more money from sellers, the first lenders and real estate agents in exchange for releasing their claims and allowing the short sales to proceed.
"This is a great program if all these mortgages had only one lien holder," said Travis Hamel Olsen, chief operating officer for Loan Resolution Corp., an Arizona company that helps lenders complete short sales. "But many of these properties have two liens."
Meanwhile, some local real estate agents remain skeptical of the guidelines.
Broward County agent Ron Rosen, who urged Klein last summer to push for new regulations, said he thinks "the banks will still play their little games with people and make life difficult for everyone."
Edward Goldfarb of RE/MAX PowerPro Realty in Davie doubts the Treasury will enforce the new rules. "There's no teeth to them," he said.
A spokeswoman for the Treasury says it will hand down "substantial" penalties to lenders that don't comply. They can include the withholding or reduction of payments and requiring improperly rejected loans to be modified.
Lenders have blamed short sale delays on the complicated nature of the transactions, sheer numbers of deals and on borrowers who don't submit proper paperwork in a timely manner.
In many cases, the banks are not to blame, said Ward Kellogg, chief executive of Boca Raton-based Paradise Bank. Still, he thinks the guidelines are necessary to force lenders to clear the market of so many distressed properties.
"I think the pressure on (the banks) is a good thing," Kellogg said.
Source: http://www.sun-sentinel.com/business/fl-short-sale-changes-20100111,0,2830786.story
Friday, January 8, 2010
Fannie Mae plan could bring life to condo sales
In a bid to jump-start sluggish Florida condo sales, Fannie Mae has launched a special project to identify stable, established condominium projects in the state where it is willing to lend.
The government-sponsored corporation that buys or backs mortgages on Thursday unveiled a list of 51 projects in Miami-Dade County that already have gotten ``special approval,'' signaling to mortgage bankers that Fannie Mae will accept loans made on condo units at those locations.
More condo projects in South Florida and across the state will be added to the list.
In 2009, Fannie Mae implemented a slew of new regulations governing condo projects that some claimed strangled the market by stigmatizing Florida condo loans. Some frustrated lenders weren't even sending loans for approval.
``This is great news for our market,'' said Ed Wilburn, a managing director for the residential lending division at Great Florida Banks in Miami. ``This takes away a lot of the uncertainty for lenders.''
A team of six Fannie Mae representatives has been dispatched to examine hundreds of condominium projects around Florida -- ground zero for the nation's housing debacle -- to identify those that may not meet Fannie's usual criteria but seem stable enough for lenders to originate mortgages that are turned over to Fannie Mae.
``It's a positive step to think that our largest lending institution in the country is focusing on our market,'' said Ron Shuffield, president of real estate firm Esslinger Wooten Maxwell. But he said, ``This is certainly not as dramatic as the tax credit program when you're giving buyers cash money back.''
The Fannie Mae team will be looking at specific criteria, including a project's occupancy, delinquency rates on homeownership association dues, the financial stability of the project, and the maintenance and condition of the property.
Up until now, Fannie Mae has made special exceptions to its condo eligibility guidelines on a case-by-case basis when mortgage lenders filed requests but not many lenders were testing the waters.
The new procedure aims at streamlining the process by clearly listing Florida projects that are eligible.
The approved list includes projects such as the 810-unit Grand Condominium at 1717 N. Bayshore Dr., the 420-unit Latitude on the River at 185 SW 7th Street, and the 330-unit Blue at 601 NE 36th St., all in Miami. Also making the list were Roney Palace, a 569-unit condo at 2301 Collins Ave., Miami Beach, and the Jockey Club, a 169-unit project at 11111 Biscayne Blvd. in Miami.
The special approval designations are effective for periods of 9 to 18 months.
``This new initiative is geared toward providing maximum support for Florida's distressed condo market as we continue to provide liquidity to the housing market more broadly,'' Karen Pallotta, a Fannie Mae executive vice president for single family mortgage business, said in a statement.
Peter Zalewski, a condo market analyst and broker with Condo Vultures in Bal Harbour, was muted in his reaction.
While Fannie Mae's effort marks another step toward restoring financing in Florida's condominium market, Zalewski said, he doubts the list of approved condos will spur many bankers to resume making condo mortgages. Among banks, ``most regionals and locals are not even going to look at it. They're in hibernation mode,'' Zalewski said.
Most sellers, Zalewski said, are looking for cash buyers rather than those whose offers are contingent on financing. ``The sellers are looking for someone who can close quickly.''
Fannie Mae's initiative to ease the mortgage credit crunch comes as South Florida's bleak condominium market is beginning to show encouraging signs of improvement.
Sales have been picking up, albeit at bargain basement prices. In November, sales of existing condos in Miami-Dade were up 48 percent from the prior year, while the number of listings was down by 30 percent. That still means there were 16,665 condos in Miami-Dade for resale, a two-year supply and almost twice the number of single-family homes.
Source: http://www.miamiherald.com/1382/story/1415119.html
The government-sponsored corporation that buys or backs mortgages on Thursday unveiled a list of 51 projects in Miami-Dade County that already have gotten ``special approval,'' signaling to mortgage bankers that Fannie Mae will accept loans made on condo units at those locations.
More condo projects in South Florida and across the state will be added to the list.
In 2009, Fannie Mae implemented a slew of new regulations governing condo projects that some claimed strangled the market by stigmatizing Florida condo loans. Some frustrated lenders weren't even sending loans for approval.
``This is great news for our market,'' said Ed Wilburn, a managing director for the residential lending division at Great Florida Banks in Miami. ``This takes away a lot of the uncertainty for lenders.''
A team of six Fannie Mae representatives has been dispatched to examine hundreds of condominium projects around Florida -- ground zero for the nation's housing debacle -- to identify those that may not meet Fannie's usual criteria but seem stable enough for lenders to originate mortgages that are turned over to Fannie Mae.
``It's a positive step to think that our largest lending institution in the country is focusing on our market,'' said Ron Shuffield, president of real estate firm Esslinger Wooten Maxwell. But he said, ``This is certainly not as dramatic as the tax credit program when you're giving buyers cash money back.''
The Fannie Mae team will be looking at specific criteria, including a project's occupancy, delinquency rates on homeownership association dues, the financial stability of the project, and the maintenance and condition of the property.
Up until now, Fannie Mae has made special exceptions to its condo eligibility guidelines on a case-by-case basis when mortgage lenders filed requests but not many lenders were testing the waters.
The new procedure aims at streamlining the process by clearly listing Florida projects that are eligible.
The approved list includes projects such as the 810-unit Grand Condominium at 1717 N. Bayshore Dr., the 420-unit Latitude on the River at 185 SW 7th Street, and the 330-unit Blue at 601 NE 36th St., all in Miami. Also making the list were Roney Palace, a 569-unit condo at 2301 Collins Ave., Miami Beach, and the Jockey Club, a 169-unit project at 11111 Biscayne Blvd. in Miami.
The special approval designations are effective for periods of 9 to 18 months.
``This new initiative is geared toward providing maximum support for Florida's distressed condo market as we continue to provide liquidity to the housing market more broadly,'' Karen Pallotta, a Fannie Mae executive vice president for single family mortgage business, said in a statement.
Peter Zalewski, a condo market analyst and broker with Condo Vultures in Bal Harbour, was muted in his reaction.
While Fannie Mae's effort marks another step toward restoring financing in Florida's condominium market, Zalewski said, he doubts the list of approved condos will spur many bankers to resume making condo mortgages. Among banks, ``most regionals and locals are not even going to look at it. They're in hibernation mode,'' Zalewski said.
Most sellers, Zalewski said, are looking for cash buyers rather than those whose offers are contingent on financing. ``The sellers are looking for someone who can close quickly.''
Fannie Mae's initiative to ease the mortgage credit crunch comes as South Florida's bleak condominium market is beginning to show encouraging signs of improvement.
Sales have been picking up, albeit at bargain basement prices. In November, sales of existing condos in Miami-Dade were up 48 percent from the prior year, while the number of listings was down by 30 percent. That still means there were 16,665 condos in Miami-Dade for resale, a two-year supply and almost twice the number of single-family homes.
Source: http://www.miamiherald.com/1382/story/1415119.html
Thursday, January 7, 2010
Homebuilder Lennar reports rise in new home orders
Lennar Corp. said Thursday that orders for new homes increased for the first time in more than three years as homebuyers took advantage of lower prices and a federal tax credit.
The Miami-based homebuilder also said it posted a profit in its fiscal fourth-quarter earnings as the homebuilder benefited from an adjustment in its income taxes.
Company CEO Stuart Miller said the housing market continued to move toward stabilization during the quarter. Orders of new homes rose 3 percent to 2,652, the first year-over-year increase since the first quarter of 2006.
The surge in new orders comes as first-time homebuyers raced to take advantage of an $8,000 tax credit that had been set to expire at the end of November. That deadline never came, however, as Congress extended the incentive through April and threw in another $6,500 tax credit for repeat homebuyers.
Lennar shares were up almost 6 percent in premarket trading to $14.50, from Wednesday's close of $13.70.
Investors are closely watching major homebuilders like Lennar because their performance is key to the housing market's recovery, which has been dampened by job losses and tight access to credit for many would-be buyers.
Sales of new homes plunged 11 percent between October and November to the lowest level since April. It was the second monthly drop in three months. Meanwhile, the number of people preparing to buy a home in November also fell sharply.
The big question now for Lennar and the rest of the sector is what happens when the buyer incentives go away a month into the traditional spring homebuying season. In September, Lennar said it would be profitable this year, assuming the economy remains stable.
"For all these builders, including Lennar, we're trying to see how sustainable these order trends are going to be … after the tax credit expires," said John Tomlinson, a senior analyst with Majestic Research. "That's definitely a concern now."
Lennar said it earned $35.6 million, or 19 cents per share, in the quarter ended Nov. 30. It had a loss of $811 million, or $5.12 a share, a year earlier.
The tax gain reported in the fourth quarter came from a change in federal accounting rules that allowed the company to reverse previous writedowns of deferred tax assets.
Without the tax benefit, the homebuilder would have lost $284.9 million, or $1.15 per share. The tax benefit was offset by charges totaling 89 cents per share related to adjustments in the value of land and other write-offs.
Revenue fell 29 percent to $913.7 million from $1.28 billion, due to a 22 percent drop in the number of home deliveries. The average selling price of homes dropped 9 percent to $238,000 from last year's fourth quarter.
Analysts polled by Thomson Reuters were expecting a loss of 48 cents a share, on average, on $863 million in revenue.
The company improved its cancellation rate compared with last year's fourth quarter, to 20 percent from 32 percent.
For the full fiscal year, Lennar posted a loss of $417.1 million, or $2.45 per share, compared with a loss of $1.1 billion, or $7 per share, in 2008. Revenue fell 32 percent to $3.1 billion.
Orders for new homes in 2009 dropped 14 percent to 11,510. The cancellation rate improved from 26 percent to 18 percent.
Lennar has operations in 17 states and was ranked the nation's fourth-largest homebuilder in 2008 by Builder magazine.
Source: http://www.sun-sentinel.com/business/fl-home-sales-20100107,0,3615872.story
2010, South Florida Sun-Sentinel
The Miami-based homebuilder also said it posted a profit in its fiscal fourth-quarter earnings as the homebuilder benefited from an adjustment in its income taxes.
Company CEO Stuart Miller said the housing market continued to move toward stabilization during the quarter. Orders of new homes rose 3 percent to 2,652, the first year-over-year increase since the first quarter of 2006.
The surge in new orders comes as first-time homebuyers raced to take advantage of an $8,000 tax credit that had been set to expire at the end of November. That deadline never came, however, as Congress extended the incentive through April and threw in another $6,500 tax credit for repeat homebuyers.
Lennar shares were up almost 6 percent in premarket trading to $14.50, from Wednesday's close of $13.70.
Investors are closely watching major homebuilders like Lennar because their performance is key to the housing market's recovery, which has been dampened by job losses and tight access to credit for many would-be buyers.
Sales of new homes plunged 11 percent between October and November to the lowest level since April. It was the second monthly drop in three months. Meanwhile, the number of people preparing to buy a home in November also fell sharply.
The big question now for Lennar and the rest of the sector is what happens when the buyer incentives go away a month into the traditional spring homebuying season. In September, Lennar said it would be profitable this year, assuming the economy remains stable.
"For all these builders, including Lennar, we're trying to see how sustainable these order trends are going to be … after the tax credit expires," said John Tomlinson, a senior analyst with Majestic Research. "That's definitely a concern now."
Lennar said it earned $35.6 million, or 19 cents per share, in the quarter ended Nov. 30. It had a loss of $811 million, or $5.12 a share, a year earlier.
The tax gain reported in the fourth quarter came from a change in federal accounting rules that allowed the company to reverse previous writedowns of deferred tax assets.
Without the tax benefit, the homebuilder would have lost $284.9 million, or $1.15 per share. The tax benefit was offset by charges totaling 89 cents per share related to adjustments in the value of land and other write-offs.
Revenue fell 29 percent to $913.7 million from $1.28 billion, due to a 22 percent drop in the number of home deliveries. The average selling price of homes dropped 9 percent to $238,000 from last year's fourth quarter.
Analysts polled by Thomson Reuters were expecting a loss of 48 cents a share, on average, on $863 million in revenue.
The company improved its cancellation rate compared with last year's fourth quarter, to 20 percent from 32 percent.
For the full fiscal year, Lennar posted a loss of $417.1 million, or $2.45 per share, compared with a loss of $1.1 billion, or $7 per share, in 2008. Revenue fell 32 percent to $3.1 billion.
Orders for new homes in 2009 dropped 14 percent to 11,510. The cancellation rate improved from 26 percent to 18 percent.
Lennar has operations in 17 states and was ranked the nation's fourth-largest homebuilder in 2008 by Builder magazine.
Source: http://www.sun-sentinel.com/business/fl-home-sales-20100107,0,3615872.story
2010, South Florida Sun-Sentinel
Wednesday, January 6, 2010
Some Helpful Tips in Finding a Florida Commercial Real Estate Property
The Florida commercial real estate market is vast. Aside from the several different opportunities, the number of places to choose from can be confusing. But with ample market research and effective decision-making, you can eventually choose the best place in the state for your own startup. And when you are looking for the right property, here are some places to start with.
After choosing the right Florida commercial real estate market to enter, the next step to take is to find the right commercial property. A good place to start is in the local newspaper. Regardless of the city you’ve chosen, the local newspaper will most likely carry real estate ads not only for residential property hunters but for investors as well. Many ads in the newspaper are posted by the owners themselves. This is a great way to collect property options and check them out individually.
If you don’t find the Florida commercial real estate property you are looking for in the local newspaper, you can consider investing in some legwork. This is an easy way of combining your property search with a location hunt. Instead of doing a city-wide search for the right property candidates, you can save some travel time by limiting your search to the places you are most interested in. Remember that the location plays a major role in commercial real estate investing and real-estate investing in general. You have to be careful in choosing the perfect location for the property. And if you still don’t find what you are looking for, there are still other ways to go at it.
You can also find a property by word-of-mouth. If, for instance, you are dining out or simply sipping coffee on a local café and heard something about a potential commercial real estate investment, you can directly ask for the location of the property from the person who is talking about it. You have to remember, though, that this method may be quite expensive, especially if you are only starting out. You have to prepare a finder’s fee just in case the person asks for it.
Lastly, another excellent place to start looking for the perfect Florida commercial real estate property is online. In fact, a huge majority of homebuyers take to the internet for their real-estate needs. Before they start going around town looking for potential properties, they first search for them online to minimize the travel costs. You can certainly try your hands on online search to help you narrow down your choices and locate the right property for your business.
Source: http://www.iqrealestate.com/ShowNews.cfm/NEWS/59548
Mark Michael Ferrer
Florida Commercial Real Estate
After choosing the right Florida commercial real estate market to enter, the next step to take is to find the right commercial property. A good place to start is in the local newspaper. Regardless of the city you’ve chosen, the local newspaper will most likely carry real estate ads not only for residential property hunters but for investors as well. Many ads in the newspaper are posted by the owners themselves. This is a great way to collect property options and check them out individually.
If you don’t find the Florida commercial real estate property you are looking for in the local newspaper, you can consider investing in some legwork. This is an easy way of combining your property search with a location hunt. Instead of doing a city-wide search for the right property candidates, you can save some travel time by limiting your search to the places you are most interested in. Remember that the location plays a major role in commercial real estate investing and real-estate investing in general. You have to be careful in choosing the perfect location for the property. And if you still don’t find what you are looking for, there are still other ways to go at it.
You can also find a property by word-of-mouth. If, for instance, you are dining out or simply sipping coffee on a local café and heard something about a potential commercial real estate investment, you can directly ask for the location of the property from the person who is talking about it. You have to remember, though, that this method may be quite expensive, especially if you are only starting out. You have to prepare a finder’s fee just in case the person asks for it.
Lastly, another excellent place to start looking for the perfect Florida commercial real estate property is online. In fact, a huge majority of homebuyers take to the internet for their real-estate needs. Before they start going around town looking for potential properties, they first search for them online to minimize the travel costs. You can certainly try your hands on online search to help you narrow down your choices and locate the right property for your business.
Source: http://www.iqrealestate.com/ShowNews.cfm/NEWS/59548
Mark Michael Ferrer
Florida Commercial Real Estate
Monday, January 4, 2010
Miami Condo Project Acts as Test Case
MIAMI—The three-tower Icon Brickell condominium project is turning into a test case for how lenders should deal with distressed real estate.
As they acquire control of more condo towers in Miami and other cities, banks face a dilemma: Should they sell whole buildings or large blocks of condos to big investors looking to acquire property on the cheap? Or sell condos one by one to individuals?
DISTRESS TEST: Lenders for the Icon Brickell condominium towers in Miami are selling single units one by one, instead of using large block sales to big investors, often at steep discounts, Will their strategy pay off?
.Selling in bulk brings cash in quickly and avoids the risk that prices will keep falling. But investors interested in bulk purchases insist on steep discounts from the prices buyers of single units would be expected to pay.
In the case of Icon Brickell, which features a 100-yard-long pool on a deck with Japanese blueberry trees and whose early residents include the singer Jennifer Lopez, lenders led by HSBC Holdings PLC, which effectively control the project since the developer ran into trouble over debt payments, have opted to sell more than 1,600 remaining condo units one by one. They are counting on lots of demand from Latin Americans able to pay cash and eager for a prestigious address in Miami. And they believe they can get a better price selling "retail" to end users rather than "wholesale" to investors, even if it means they must hold and manage the properties longer.
"The distress opportunities may not be as great as we all expected" because banks aren't being forced to sell huge quantities of condos in a hurry, said Manuel de Zárraga, executive managing director at Holliday Fenoglio Fowler LP, which advises real-estate developers and investors.
That is partly because federal regulators have given banks some slack: In October, regulators issued guidelines that let banks keep loans on their books as "performing" even if the values of the underlying properties have fallen below the loan amount.
The Icon Brickell will be competing for buyers with a group of investors led by Starwood Capital Group that has become the largest player in the Miami condo market. That group in October bought control of 14 condo buildings in Miami, Fort Lauderdale and Palm Beach, among other real estate, in a $2.77 billion purchase of construction loans made by Corus Bank of Chicago before regulators shut it down in September.
The Icon Brickell in Miami. Lenders have opted to sell more than 1,600 remaining condo units one by one.
.Starwood Capital has indicated that it isn't planning to dump its property back on the market.
"In many cases, the best option will indeed be to be a long-term hold as there were many attractive properties in the Corus portfolio," a Starwood spokesman said.
But the slow-sell strategy could backfire if prices keep falling.
Peter Zalewski, the owner of Condo Vultures Realty LLC in Miami, said lenders would be better off arranging a sale of one or two of the three Icon Brickell towers to investors. He believes that it will take too long, perhaps several years, to sell the units to individual buyers. Meanwhile, the lenders will have to cover tax and maintenance costs.
Condo supply remains in a glut. In Miami-Dade County, 16,665 units were listed for sale at the end of November, or enough to last 18 months at the recent sales rate, according to Esslinger-Wooten-Maxwell Inc., or EWM, a real-estate brokerage in Miami. Still, that is down from a peak of 24,905 listings in May 2008. About a quarter of the condo listings are priced at $100,000 or less, a price category that barely existed three years ago.
"Miami is 50% off," said Ron Shuffield, president of EWM. "It's just like having a sale at Macy's."
If priced low enough, properties can move. Units at the 46-story building called Brickell on the River South sold out quickly after the developer, Groupe Pacific, cut prices last spring to a range of $175 to $225 per square foot from $325 a square foot in 2008, said Scott Wadler, an analyst at Holliday Fenoglio Fowler.
But whether sales will go quickly at more expensive buildings, such as the Icon Brickell, remains unclear. The Icon Brickell is the marquee project of Related Group, a Miami condo developer. Related has invested about $1 billion in the three towers, including $15 million for giant statues of heads that resemble those on Easter Island, according to the closely held company's chairman, Jorge Perez. In a recent interview, Mr. Perez said loans secured by the three buildings total about $700 million.
Most of the Icon Brickell was completed in 2008 and 2009. So far, 117 purchases have been completed. The average price was cut in October to $419 per square foot from a peak of about $650. A typical two-bedroom unit now would cost about $550,000.
Mr. Zalewski, of Condo Vultures, said prices at Icon Brickell will have to come down further if the units are to be sold quickly. He said the typical market price in the neighborhood is now $200 to $215 per square foot, and Icon's cachet can't support more than a 35% premium to that.
Source: http://online.wsj.com/article/SB10001424052748704134104574624592077914048.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop
Write to James R. Hagerty at bob.hagerty@wsj.com
As they acquire control of more condo towers in Miami and other cities, banks face a dilemma: Should they sell whole buildings or large blocks of condos to big investors looking to acquire property on the cheap? Or sell condos one by one to individuals?
DISTRESS TEST: Lenders for the Icon Brickell condominium towers in Miami are selling single units one by one, instead of using large block sales to big investors, often at steep discounts, Will their strategy pay off?
.Selling in bulk brings cash in quickly and avoids the risk that prices will keep falling. But investors interested in bulk purchases insist on steep discounts from the prices buyers of single units would be expected to pay.
In the case of Icon Brickell, which features a 100-yard-long pool on a deck with Japanese blueberry trees and whose early residents include the singer Jennifer Lopez, lenders led by HSBC Holdings PLC, which effectively control the project since the developer ran into trouble over debt payments, have opted to sell more than 1,600 remaining condo units one by one. They are counting on lots of demand from Latin Americans able to pay cash and eager for a prestigious address in Miami. And they believe they can get a better price selling "retail" to end users rather than "wholesale" to investors, even if it means they must hold and manage the properties longer.
"The distress opportunities may not be as great as we all expected" because banks aren't being forced to sell huge quantities of condos in a hurry, said Manuel de Zárraga, executive managing director at Holliday Fenoglio Fowler LP, which advises real-estate developers and investors.
That is partly because federal regulators have given banks some slack: In October, regulators issued guidelines that let banks keep loans on their books as "performing" even if the values of the underlying properties have fallen below the loan amount.
The Icon Brickell will be competing for buyers with a group of investors led by Starwood Capital Group that has become the largest player in the Miami condo market. That group in October bought control of 14 condo buildings in Miami, Fort Lauderdale and Palm Beach, among other real estate, in a $2.77 billion purchase of construction loans made by Corus Bank of Chicago before regulators shut it down in September.
The Icon Brickell in Miami. Lenders have opted to sell more than 1,600 remaining condo units one by one.
.Starwood Capital has indicated that it isn't planning to dump its property back on the market.
"In many cases, the best option will indeed be to be a long-term hold as there were many attractive properties in the Corus portfolio," a Starwood spokesman said.
But the slow-sell strategy could backfire if prices keep falling.
Peter Zalewski, the owner of Condo Vultures Realty LLC in Miami, said lenders would be better off arranging a sale of one or two of the three Icon Brickell towers to investors. He believes that it will take too long, perhaps several years, to sell the units to individual buyers. Meanwhile, the lenders will have to cover tax and maintenance costs.
Condo supply remains in a glut. In Miami-Dade County, 16,665 units were listed for sale at the end of November, or enough to last 18 months at the recent sales rate, according to Esslinger-Wooten-Maxwell Inc., or EWM, a real-estate brokerage in Miami. Still, that is down from a peak of 24,905 listings in May 2008. About a quarter of the condo listings are priced at $100,000 or less, a price category that barely existed three years ago.
"Miami is 50% off," said Ron Shuffield, president of EWM. "It's just like having a sale at Macy's."
If priced low enough, properties can move. Units at the 46-story building called Brickell on the River South sold out quickly after the developer, Groupe Pacific, cut prices last spring to a range of $175 to $225 per square foot from $325 a square foot in 2008, said Scott Wadler, an analyst at Holliday Fenoglio Fowler.
But whether sales will go quickly at more expensive buildings, such as the Icon Brickell, remains unclear. The Icon Brickell is the marquee project of Related Group, a Miami condo developer. Related has invested about $1 billion in the three towers, including $15 million for giant statues of heads that resemble those on Easter Island, according to the closely held company's chairman, Jorge Perez. In a recent interview, Mr. Perez said loans secured by the three buildings total about $700 million.
Most of the Icon Brickell was completed in 2008 and 2009. So far, 117 purchases have been completed. The average price was cut in October to $419 per square foot from a peak of about $650. A typical two-bedroom unit now would cost about $550,000.
Mr. Zalewski, of Condo Vultures, said prices at Icon Brickell will have to come down further if the units are to be sold quickly. He said the typical market price in the neighborhood is now $200 to $215 per square foot, and Icon's cachet can't support more than a 35% premium to that.
Source: http://online.wsj.com/article/SB10001424052748704134104574624592077914048.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsTop
Write to James R. Hagerty at bob.hagerty@wsj.com
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