It's a new beginning in America's home-buying market. More and more buyers are saying no to expensive and convoluted bank loans and paying cash instead for bargain properties.
The Wall Street Journal reports scores of bargain-basement deals being closed by cash-bidding buyers who feel the bottom has been reached in the market.
Where are they getting the cash from? They are selling other investments like paintings, cars and jewelry.
For example, In Atlanta, 62-year-old piano teacher Virginia Hall-Busch paid cash for a 93-year-old three-bedroom, one-bath bungalow in scenic Stone Mountain, GA.
The property initially listed for $159,000, then dropped to $129,000 and then to $79,900. The piano teacher didn't think her bid of $52,500 would be taken seriously. It was. She is the new owner.
In Miami Beach, Richard Stoker, a 73-year-old retired sales executive, paid cash for two condominiums and soon plans to close on a third. He is paying $1.8 million, $1.2 million and $1 million for properties that were initially listed for double those amounts.
The Stokers have a home in Potomac, Md., but spend most of the year in Florida. Stoker doesn't plan to rent out any of his new properties. He tells the WSJ he and his wife will live in one with two dogs, his son might live in another and the third will house an older dog and guests.
Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year, according to an analysis from real-estate portal Zillow.com.
In the fourth quarter of 2006, they represented just 13% of deals. Meanwhile, downtown Miami prices rose 15% in 2010 from a year earlier, according to the Miami Downtown Development Authority.
The percentage of buyers in Phoenix paying cash hit 42% in 2010--more than triple the rate in 2008, according to Raymond James's equity research division.
Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008, when the trade group began tracking the measure.
The Federal Reserve reports that Americans increased their use of credit cards in December 2010 for the first time since August 2008.
Henry Schlangen
"Some of the cash purchases reflect a tight lending environment, where even people with good credit and ample down payments are sometimes turned away for conventional borrowing," reports the WSJ.
"The rates are great but the underwriting is brutal," said Henry Schlangen, an agent with real-estate firm Pacific Union International who buys and sells for clients, mainly in Napa Valley, CA.
Schlangen tells the WSJ, "They (lenders) hang these people upside down and shake them till they see what falls out of their pockets. So people are buying with cash and maybe they'll 'Refi' later."
Schlangen, who deals in higher-end properties such as vineyard estates, estimated that 95% of his deals last year were all-cash, up from about half in previous years.
"The deals that are consummating, these are buyers who feel they got a great deal," he said. He notes the number of buyers from China are increasing.
Mohammed Siddiq
Cash buyers can often command 5% to 10% more off the asking price than a potential buyer using a mortgage, Mohammed Siddiq, a real-estate professional in Fort Lauderdale, FL, tells the WSJ.
Sellers prefer cash deals since they close more quickly and avoid risks such as a buyer's job loss or a bank's changing its mind, he says.
Nationally, it isn't clear whether prices have bottomed.
The Case-Shiller index of housing prices in 20 cities showed a steep decline in prices until 2009, when they appeared to bottom and began to trend upward.
But in the second half of last year, prices began falling again. A Zillow index, meanwhile, never noted the uptick, reports the WSJ.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/raymond-james-zillowcom-national-association-of-realtors-henry-schlangen-pacific-union-international-mohammed-siddiq-stone-mountain-ga-miami-beach-skyline-3915.php
Posted by Alex Finkelstein
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.
Tuesday, February 22, 2011
Tuesday, February 15, 2011
Brazilians making an economic mark
President Barack Obama will visit Brazil during his first South American trip in March and Brazil is Florida’s top trading partner. But Brazilians are also snapping up beachfront luxury properties and downtown Miami condos, investing in everything from real estate to Burger King, and shopping voraciously.
It’s as if a “swarm of grasshoppers” has descended on South Florida, chomping through bargains from Dadeland to Sawgrass Mills, one tour operator says.
“The trend now is everybody comes to shop, shop, shop,’’ said Claudia Menezes, of Pegasus Transportation, which operates a fleet of buses for conventional tours as well as the shopping excursions that are so popular with Brazilians. “They’re buying up everything from $10 creams at Victoria’s Secret to Luis Vuitton and Prada.’’
Testimony to Brazilian consumerism: When Pegasus buses return Brazilians to the airport for their flights home, Menezes says, they have to put on extra trailers behind to haul the loot.
To keep the Brazilian visitors coming, American Airlines now offers 52 flights a week to Brazil from Miami International Airport.
“Brazil is breaking all sorts of records,’’ said Rolando Aedo, senior vice president of marketing for the Greater Miami Convention and Visitors Bureau. “It has been our rock-star market.’’
When all the numbers are tallied for 2010, Miami-Dade expects to have rolled out the welcome mat for more than 500,000 Brazilian visitors who spent more than $1 billion.
That would move Brazil into the top spot for international visitors, dethroning Canada, the perennial leader.
During the oil boom years, Venezuelans were legendary for their dame-dos (give me two) ways and Latin Americans have long loved South Florida shopping. But what sets the Brazilians apart is there are so many more of them and they’re really big spenders.
To cater to the Brazilian crowd, the tourism bureau has published shopping guides, maps and other materials in Portuguese.
Even though Fort Lauderdale Hollywood International Airport has no direct Brazilian flights, the number of Brazilian visitors to Broward County has increased by 50 percent to 300,000 annually in the past year. Brazil now ranks as Broward’s second most important foreign market after Canada.
“They may enter though Miami, but they go to Sawgrass Mills,’’ said Francine Mason, a spokeswoman for the Greater Fort Lauderdale Convention & Visitors Bureau.
And they also visit their relatives. Broward County, especially the Pompano Beach/Lighthouse Point area, is home to the largest contingent of resident Brazilians in the state.
The Brazilian Consulate in Miami estimates that there are 250,000 to 300,000 Brazilians living in Florida with the largest populations in Broward and Miami-Dade counties and Orlando.
What’s spurring the Brazilian stampede?
Brazil’s economy is booming and expected to become the world’s fifth largest by 2016. Unemployment is at record lows. And perhaps most important, Brazil’s currency — the real — is extremely strong against the dollar, making Florida trips and shopping sprees affordable for Brazilians.
Coming to South Florida for a week is often cheaper for a Sao Paulo resident than a vacation in Northeast Brazil.
“Real estate is extremely high in Brazil right now — untouchable for many people,’’ said Claudia Bacelar, a Brazilian who works as a Realtor at the Esslinger-Wooten office in Coral Gables.
Edgardo Defortuna, president and chief executive of Fortune International, says, for example, that an apartment equivalent to a three-bedroom unit at Jade Ocean in Sunny Isles Beach that goes for $1.6 million might cost $2.5 million in Belo Horizonte, a state capital in southeastern Brazil.
And there’s another reason so many Brazilians are visiting: They just like it here.
“Florida has always been a favorite – the warm tropical weather and the beaches with the benefit of the shopping and now, of course, it’s so much more affordable,’’ Bacelar said. “When Brazilians come here and I see how they shop, I’m in shock.’’
At Dolphin Mall near Miami International Airport, for example, Brazilians are the top international tourists, urging past Venezuelans for the first time last year, said Madelyn Bello Calvar, director of sponsorship and marketing.
And they typically spend about three times what local customers do, she said.
At Sawgrass Mills, Marcos Freire, the assistant general manager, has watched with satisfaction as shoppers speaking Portuguese flood the mall and buses full of Brazilian tourists in matching T-shirts pull in.
Mall surveys show that Brazilians are the most numerous international shoppers, followed by Colombians and Canadians. But Freire says, “The Brazilians are way ahead.’’
As shoppers, he says, they are extremely brand-conscious, loading down their carts with Nike, Adidas and Tommy Hilfiger plus high fashion, televisions, video games, and the latest technology.
They know their way around American retail, said Freire, who is originally from Rio de Janeiro. “They’ve done their homework and they know where they’re going.’’
Menezes, whose company often runs shopping tours that stop at Sawgrass, said the trend used to be that Brazilian groups would ask for some time at the beach, Orlando or the Everglades and maybe a day of shopping.
“Now we have some groups that are coming four or five days just to shop,’’ she said. “This year for the first time we even had shopping tours for Black Friday.’’
It’s not just hotels and stores that are benefiting from Brazilians planting their green and yellow flag around South Florida.
• Real Estate — Real estate sales to Brazilians also are booming.
“Today, they’re the most important foreign sector of the South Florida market,’’ Defortuna said. “During the past 12 months, they have come in very strongly.’’
So strongly that late last year, Fortune International opened an office in Sao Paulo to market its own luxury developments such as Jade Ocean as well as other projects it handles such as Icon Brickell and Trump Hollywood .
“I have never seen anything like this — such demand. I get calls and e-mails every single day with a new Brazilian contact or lead,’’ said Fabiana Pimenta, a top Brazilian Realtor at Fortune.
About a quarter of all new Fortune sales are now to Brazilians, Defortuna said.
They basically fall into two categories, he says: high-end buyers who are buying for themselves — although it may be their second, third or fourth home — and investors who tend to gravitate toward properties in the Brickell and downtown Miami areas.
If they’re buying for themselves, they like beachfront properties in Miami Beach and the Sunny Isles Beach area, real estate agents say.
The apartment-buying spree also is having a positive impact on other businesses.
Five years ago, Ornare, a high-end Brazilian kitchen, bath and closet store, opened its first U.S. branch in Miami’s Design District. And while the local housing market has slumped, Ornare’s business hasn’t.
Its closets with leather doors, sculpted bath fixtures and sleek, sophisticated kitchens have found a ready market here. Increasingly, it’s Brazilians who are doing the buying.
Sales are up nearly 40 percent since last year and now Ornare is planning showrooms in five other U.S. cities, says Claudio Faria, director of Ornare Miami, which imports nearly everything in its showroom from Sao Paulo.
In 2009, Brazilians accounted for just 5 percent of Ornare’s local sales. Now, it’s about 25 percent, Faria said.
Brazilian interior designer Mirtha Arriaran, who has run a Miami interior design business since 1995, says that one of her jet-setting clients recently purchased a Miami apartment as a 12th residence.
“These Brazilians are very, very rich,’’ she said. “They are not looking for bargains. They are the type of people who will pick out an apartment they like and then ask the price.’’
About 85 percent of Arriaran’s clients are Brazilians, and these days with all their new condo purchases, she’s so busy that her firm, MAS Interior Design, is not taking on new business.
But not all the Brazilian real estate buyers fall into the ultra-rich category.
“Now Brickell is very affordable for the middle class,’’ says Bacelar. She recently sold several smaller apartments there for just under $200,000 — with low maintenance fees, too.
• Airlines — Two years ago, American Airlines served just two Brazilian cities – Rio and Sao Paulo – from Miami. Now it’s added four more: Brasilia, Belo Horizonte and Salvador with continuing service to Recife.
“This is huge for us — to be in six cities in one country,’’ said Martha Pantin, an American spokeswoman. “American Airlines is very bullish on Brazil.’’
TAM , a Brazilian airline, also recently added direct service several times a week from MIA to Brasilia and Belo Horizonte to complement its daily flights to Sao Paulo, Rio and Manaus.
But the best may be yet to come. With the 2014 World Cup in Brazil and the 2016 Olympics in Rio de Janeiro, American is now negotiating to add extra flights to Brazil before and after the World Cup.
American believes Miami will be a transit point for many people from around the world as they head to the sporting events, says Pantin. “The World Cup,’’ she said, “also will introduce Americans to new destinations in Brazil.’’
• The Florida/Brazil trade and business connection — Brazil ranks as South Florida’s top trading partner as well as the Sunshine State’s top trading partner. Florida’s merchandise trade with Brazil during the first 11 months of 2010, the most recent statistics available, topped $14.4 billion, a 27 percent increase over 2009 figures.
Enterprise Florida recently reopened an office in Brazil. Its purpose is to not only promote Florida products and services but also to attract Brazilian investors to Florida.
Brazilian companies Embraer, an aircraft manufacturer, and Odebrecht, a construction firm, already have extensive operations in South Florida, and last fall 3G Capital, a private investment firm with Brazilian backing, acquired Burger King in a $4 billion deal.
“We think with the emergence of Brazil as a world economic power, it will become very fertile ground to recruit companies to Florida,’’ said Manny Mencia., vice president of international development for Enterprise Florida. “There’s no market going forward that offers Florida the opportunities that Brazil does.’’
Source: http://www.miamiherald.com/2011/02/13/v-fullstory/2065059/the-brazilian-stampede.html
By MIMI WHITEFIELD
mwhitefield@MiamiHerald.com
It’s as if a “swarm of grasshoppers” has descended on South Florida, chomping through bargains from Dadeland to Sawgrass Mills, one tour operator says.
“The trend now is everybody comes to shop, shop, shop,’’ said Claudia Menezes, of Pegasus Transportation, which operates a fleet of buses for conventional tours as well as the shopping excursions that are so popular with Brazilians. “They’re buying up everything from $10 creams at Victoria’s Secret to Luis Vuitton and Prada.’’
Testimony to Brazilian consumerism: When Pegasus buses return Brazilians to the airport for their flights home, Menezes says, they have to put on extra trailers behind to haul the loot.
To keep the Brazilian visitors coming, American Airlines now offers 52 flights a week to Brazil from Miami International Airport.
“Brazil is breaking all sorts of records,’’ said Rolando Aedo, senior vice president of marketing for the Greater Miami Convention and Visitors Bureau. “It has been our rock-star market.’’
When all the numbers are tallied for 2010, Miami-Dade expects to have rolled out the welcome mat for more than 500,000 Brazilian visitors who spent more than $1 billion.
That would move Brazil into the top spot for international visitors, dethroning Canada, the perennial leader.
During the oil boom years, Venezuelans were legendary for their dame-dos (give me two) ways and Latin Americans have long loved South Florida shopping. But what sets the Brazilians apart is there are so many more of them and they’re really big spenders.
To cater to the Brazilian crowd, the tourism bureau has published shopping guides, maps and other materials in Portuguese.
Even though Fort Lauderdale Hollywood International Airport has no direct Brazilian flights, the number of Brazilian visitors to Broward County has increased by 50 percent to 300,000 annually in the past year. Brazil now ranks as Broward’s second most important foreign market after Canada.
“They may enter though Miami, but they go to Sawgrass Mills,’’ said Francine Mason, a spokeswoman for the Greater Fort Lauderdale Convention & Visitors Bureau.
And they also visit their relatives. Broward County, especially the Pompano Beach/Lighthouse Point area, is home to the largest contingent of resident Brazilians in the state.
The Brazilian Consulate in Miami estimates that there are 250,000 to 300,000 Brazilians living in Florida with the largest populations in Broward and Miami-Dade counties and Orlando.
What’s spurring the Brazilian stampede?
Brazil’s economy is booming and expected to become the world’s fifth largest by 2016. Unemployment is at record lows. And perhaps most important, Brazil’s currency — the real — is extremely strong against the dollar, making Florida trips and shopping sprees affordable for Brazilians.
Coming to South Florida for a week is often cheaper for a Sao Paulo resident than a vacation in Northeast Brazil.
“Real estate is extremely high in Brazil right now — untouchable for many people,’’ said Claudia Bacelar, a Brazilian who works as a Realtor at the Esslinger-Wooten office in Coral Gables.
Edgardo Defortuna, president and chief executive of Fortune International, says, for example, that an apartment equivalent to a three-bedroom unit at Jade Ocean in Sunny Isles Beach that goes for $1.6 million might cost $2.5 million in Belo Horizonte, a state capital in southeastern Brazil.
And there’s another reason so many Brazilians are visiting: They just like it here.
“Florida has always been a favorite – the warm tropical weather and the beaches with the benefit of the shopping and now, of course, it’s so much more affordable,’’ Bacelar said. “When Brazilians come here and I see how they shop, I’m in shock.’’
At Dolphin Mall near Miami International Airport, for example, Brazilians are the top international tourists, urging past Venezuelans for the first time last year, said Madelyn Bello Calvar, director of sponsorship and marketing.
And they typically spend about three times what local customers do, she said.
At Sawgrass Mills, Marcos Freire, the assistant general manager, has watched with satisfaction as shoppers speaking Portuguese flood the mall and buses full of Brazilian tourists in matching T-shirts pull in.
Mall surveys show that Brazilians are the most numerous international shoppers, followed by Colombians and Canadians. But Freire says, “The Brazilians are way ahead.’’
As shoppers, he says, they are extremely brand-conscious, loading down their carts with Nike, Adidas and Tommy Hilfiger plus high fashion, televisions, video games, and the latest technology.
They know their way around American retail, said Freire, who is originally from Rio de Janeiro. “They’ve done their homework and they know where they’re going.’’
Menezes, whose company often runs shopping tours that stop at Sawgrass, said the trend used to be that Brazilian groups would ask for some time at the beach, Orlando or the Everglades and maybe a day of shopping.
“Now we have some groups that are coming four or five days just to shop,’’ she said. “This year for the first time we even had shopping tours for Black Friday.’’
It’s not just hotels and stores that are benefiting from Brazilians planting their green and yellow flag around South Florida.
• Real Estate — Real estate sales to Brazilians also are booming.
“Today, they’re the most important foreign sector of the South Florida market,’’ Defortuna said. “During the past 12 months, they have come in very strongly.’’
So strongly that late last year, Fortune International opened an office in Sao Paulo to market its own luxury developments such as Jade Ocean as well as other projects it handles such as Icon Brickell and Trump Hollywood .
“I have never seen anything like this — such demand. I get calls and e-mails every single day with a new Brazilian contact or lead,’’ said Fabiana Pimenta, a top Brazilian Realtor at Fortune.
About a quarter of all new Fortune sales are now to Brazilians, Defortuna said.
They basically fall into two categories, he says: high-end buyers who are buying for themselves — although it may be their second, third or fourth home — and investors who tend to gravitate toward properties in the Brickell and downtown Miami areas.
If they’re buying for themselves, they like beachfront properties in Miami Beach and the Sunny Isles Beach area, real estate agents say.
The apartment-buying spree also is having a positive impact on other businesses.
Five years ago, Ornare, a high-end Brazilian kitchen, bath and closet store, opened its first U.S. branch in Miami’s Design District. And while the local housing market has slumped, Ornare’s business hasn’t.
Its closets with leather doors, sculpted bath fixtures and sleek, sophisticated kitchens have found a ready market here. Increasingly, it’s Brazilians who are doing the buying.
Sales are up nearly 40 percent since last year and now Ornare is planning showrooms in five other U.S. cities, says Claudio Faria, director of Ornare Miami, which imports nearly everything in its showroom from Sao Paulo.
In 2009, Brazilians accounted for just 5 percent of Ornare’s local sales. Now, it’s about 25 percent, Faria said.
Brazilian interior designer Mirtha Arriaran, who has run a Miami interior design business since 1995, says that one of her jet-setting clients recently purchased a Miami apartment as a 12th residence.
“These Brazilians are very, very rich,’’ she said. “They are not looking for bargains. They are the type of people who will pick out an apartment they like and then ask the price.’’
About 85 percent of Arriaran’s clients are Brazilians, and these days with all their new condo purchases, she’s so busy that her firm, MAS Interior Design, is not taking on new business.
But not all the Brazilian real estate buyers fall into the ultra-rich category.
“Now Brickell is very affordable for the middle class,’’ says Bacelar. She recently sold several smaller apartments there for just under $200,000 — with low maintenance fees, too.
• Airlines — Two years ago, American Airlines served just two Brazilian cities – Rio and Sao Paulo – from Miami. Now it’s added four more: Brasilia, Belo Horizonte and Salvador with continuing service to Recife.
“This is huge for us — to be in six cities in one country,’’ said Martha Pantin, an American spokeswoman. “American Airlines is very bullish on Brazil.’’
TAM , a Brazilian airline, also recently added direct service several times a week from MIA to Brasilia and Belo Horizonte to complement its daily flights to Sao Paulo, Rio and Manaus.
But the best may be yet to come. With the 2014 World Cup in Brazil and the 2016 Olympics in Rio de Janeiro, American is now negotiating to add extra flights to Brazil before and after the World Cup.
American believes Miami will be a transit point for many people from around the world as they head to the sporting events, says Pantin. “The World Cup,’’ she said, “also will introduce Americans to new destinations in Brazil.’’
• The Florida/Brazil trade and business connection — Brazil ranks as South Florida’s top trading partner as well as the Sunshine State’s top trading partner. Florida’s merchandise trade with Brazil during the first 11 months of 2010, the most recent statistics available, topped $14.4 billion, a 27 percent increase over 2009 figures.
Enterprise Florida recently reopened an office in Brazil. Its purpose is to not only promote Florida products and services but also to attract Brazilian investors to Florida.
Brazilian companies Embraer, an aircraft manufacturer, and Odebrecht, a construction firm, already have extensive operations in South Florida, and last fall 3G Capital, a private investment firm with Brazilian backing, acquired Burger King in a $4 billion deal.
“We think with the emergence of Brazil as a world economic power, it will become very fertile ground to recruit companies to Florida,’’ said Manny Mencia., vice president of international development for Enterprise Florida. “There’s no market going forward that offers Florida the opportunities that Brazil does.’’
Source: http://www.miamiherald.com/2011/02/13/v-fullstory/2065059/the-brazilian-stampede.html
By MIMI WHITEFIELD
mwhitefield@MiamiHerald.com
Tuesday, February 8, 2011
Cash Buyers Lift Housing
Buyers in markets around the U.S. are snapping up homes in all-cash deals, betting that prices are at or near bottom and breathing life into some of the nation's most battered housing markets.
Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year, according to an analysis from real-estate portal Zillow.com. In the fourth quarter of 2006, they represented just 13% of deals. Meanwhile, downtown Miami prices rose 15% in 2010 from a year earlier, according to the Miami Downtown Development Authority.
The percentage of buyers in Phoenix paying cash hit 42% in 2010—more than triple the rate in 2008, according to Raymond James's equity research division.
Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008, when the trade group began tracking the measure.
The jump in real-estate purchases made with cash is another sign of the revival of animal spirits in the U.S. economy.
The Dow Jones Industrial Average rose 69.48 points Monday, or 0.6%, to 12161.63, and the Standard & Poor's 500-stock index rose 8.18 points, or 0.6%, to 1319.05.
Monday's announcements of $13 billion in acquisitions lifted stocks on hopes of more deals, share buybacks and dividends as companies regain momentum in an improving economy.
The two stock indexes have soared more than 80% since early March 2009.
The Federal Reserve reported that Americans increased their use of credit cards in December for the first time since August 2008, showing that consumers are getting less skittish about opening their wallets. Investors also were soothed Monday by encouraging signs in Egypt, including last weekend's reopening of banks.
Residential real estate has been slower to bounce back than stocks, but the presence of apparent bargains is luring in newly confident buyers.
Richard Stoker, a retired sales executive, recently plunked down cash for two condominiums in Miami Beach, and plans to close on one more in coming days. He loves the complex's ocean views, four swimming pools and activities such as yoga and Pilates.
But what also motivated the purchase, said the 73-year-old, was that "the prices were just irresistible. Florida's been hit pretty hard." To pay the $1.8 million, $1.2 million and $1 million prices on the condos, Mr. Stoker and his wife, Jane, cashed out of some financial investments and sold a Roy Lichtenstein painting and an Alexander Calder mobile.
Mr. Stoker could have taken out mortgages, but decided to pay cash. "It was a good time to lighten up in the art market and take on real estate at a favorable price," he said.
The harder a market has been hit, say economists, the higher the percentage of cash deals. Last summer, piano teacher Virginia Hall-Busch told a real-estate agent she met through the Rotary Club to keep her posted on deals on historic houses in Stone Mountain, Ga.
A few days later, Ms. Hall-Busch, 62, got a call about a 1918 bungalow with three bedrooms and one bathroom listed for "short sale," which in the real-estate world means at a price lower than what's owed on it. The home had been on the market for $159,000, then dropped to $129,000 and then to $79,900.
"I offered them 50," she said. "I figured, it wasn't like I needed a place to live. I can afford to be a little cocky here."
Ms. Hall-Busch closed in October for $52,500 and began renovations within weeks.
"When you have a bad economy, it's hard on lots of people," she said. "But right now if you've got the money to put down on a house, long term it's going to be good thing."
Some of the cash purchases reflect a tight lending environment, where even people with good credit and ample down payments are sometimes turned away for conventional borrowing.
"The rates are great but the underwriting is brutal," said Henry Schlangen, an agent with real-estate firm Pacific Union International who buys and sells for clients, mainly in Napa Valley, Calif.
"They hang these people upside down and shake them till they see what falls out of their pockets. So people are buying with cash and maybe they'll 'refi' later."
Mr. Schlangen, who deals in higher-end properties such as vineyard estates, estimated that 95% of his deals last year were all-cash, up from about half in previous years. "The deals that are consummating, these are buyers who feel they got a great deal," he said, noting a surge of buyers from China.
Cash buyers can often command 5% to 10% more off the asking price than a potential buyer using a mortgage, said Mohammed Siddiq, a real-estate professional in Fort Lauderdale, Fla. Sellers prefer cash deals since they close more quickly and avoid risks such as a buyer's job loss or a bank's changing its mind.
And while many buyers making low-ball offers dig their heels, Mr. Siddiq said he has started to see bidding wars and slightly increasing prices.
Nationally, it isn't clear whether prices have bottomed. The Case-Shiller index of housing prices in 20 cities showed a steep decline in prices until 2009, when they appeared to bottom and began to trend upward. But in the second half of last year, prices began falling again. A Zillow index, meanwhile, never noted the uptick.
Since mid-October, Canyon Ranch in Miami Beach, the development Mr. Stoker bought into, has sold 35 units, with a third of the buyers from overseas and many others retiring from the Northeast.
The Stokers have a home in Potomac, Md., but spend most of the year in Florida. Mr. Stoker doesn't plan to rent out any of his new properties, saying he and his wife will live in one with two dogs, his son might live in another and the third will house an older dog and guests.
Source: http://online.wsj.com/article/SB10001424052748704570104576124502975117950.html#articleTabs%3Darticle
Cash buyers represented more than half of all transactions in the Miami-Fort Lauderdale area last year, according to an analysis from real-estate portal Zillow.com. In the fourth quarter of 2006, they represented just 13% of deals. Meanwhile, downtown Miami prices rose 15% in 2010 from a year earlier, according to the Miami Downtown Development Authority.
The percentage of buyers in Phoenix paying cash hit 42% in 2010—more than triple the rate in 2008, according to Raymond James's equity research division.
Nationally, 28% of sales were all-cash transactions last year, according to the National Association of Realtors. The rate was 14% in October 2008, when the trade group began tracking the measure.
The jump in real-estate purchases made with cash is another sign of the revival of animal spirits in the U.S. economy.
The Dow Jones Industrial Average rose 69.48 points Monday, or 0.6%, to 12161.63, and the Standard & Poor's 500-stock index rose 8.18 points, or 0.6%, to 1319.05.
Monday's announcements of $13 billion in acquisitions lifted stocks on hopes of more deals, share buybacks and dividends as companies regain momentum in an improving economy.
The two stock indexes have soared more than 80% since early March 2009.
The Federal Reserve reported that Americans increased their use of credit cards in December for the first time since August 2008, showing that consumers are getting less skittish about opening their wallets. Investors also were soothed Monday by encouraging signs in Egypt, including last weekend's reopening of banks.
Residential real estate has been slower to bounce back than stocks, but the presence of apparent bargains is luring in newly confident buyers.
Richard Stoker, a retired sales executive, recently plunked down cash for two condominiums in Miami Beach, and plans to close on one more in coming days. He loves the complex's ocean views, four swimming pools and activities such as yoga and Pilates.
But what also motivated the purchase, said the 73-year-old, was that "the prices were just irresistible. Florida's been hit pretty hard." To pay the $1.8 million, $1.2 million and $1 million prices on the condos, Mr. Stoker and his wife, Jane, cashed out of some financial investments and sold a Roy Lichtenstein painting and an Alexander Calder mobile.
Mr. Stoker could have taken out mortgages, but decided to pay cash. "It was a good time to lighten up in the art market and take on real estate at a favorable price," he said.
The harder a market has been hit, say economists, the higher the percentage of cash deals. Last summer, piano teacher Virginia Hall-Busch told a real-estate agent she met through the Rotary Club to keep her posted on deals on historic houses in Stone Mountain, Ga.
A few days later, Ms. Hall-Busch, 62, got a call about a 1918 bungalow with three bedrooms and one bathroom listed for "short sale," which in the real-estate world means at a price lower than what's owed on it. The home had been on the market for $159,000, then dropped to $129,000 and then to $79,900.
"I offered them 50," she said. "I figured, it wasn't like I needed a place to live. I can afford to be a little cocky here."
Ms. Hall-Busch closed in October for $52,500 and began renovations within weeks.
"When you have a bad economy, it's hard on lots of people," she said. "But right now if you've got the money to put down on a house, long term it's going to be good thing."
Some of the cash purchases reflect a tight lending environment, where even people with good credit and ample down payments are sometimes turned away for conventional borrowing.
"The rates are great but the underwriting is brutal," said Henry Schlangen, an agent with real-estate firm Pacific Union International who buys and sells for clients, mainly in Napa Valley, Calif.
"They hang these people upside down and shake them till they see what falls out of their pockets. So people are buying with cash and maybe they'll 'refi' later."
Mr. Schlangen, who deals in higher-end properties such as vineyard estates, estimated that 95% of his deals last year were all-cash, up from about half in previous years. "The deals that are consummating, these are buyers who feel they got a great deal," he said, noting a surge of buyers from China.
Cash buyers can often command 5% to 10% more off the asking price than a potential buyer using a mortgage, said Mohammed Siddiq, a real-estate professional in Fort Lauderdale, Fla. Sellers prefer cash deals since they close more quickly and avoid risks such as a buyer's job loss or a bank's changing its mind.
And while many buyers making low-ball offers dig their heels, Mr. Siddiq said he has started to see bidding wars and slightly increasing prices.
Nationally, it isn't clear whether prices have bottomed. The Case-Shiller index of housing prices in 20 cities showed a steep decline in prices until 2009, when they appeared to bottom and began to trend upward. But in the second half of last year, prices began falling again. A Zillow index, meanwhile, never noted the uptick.
Since mid-October, Canyon Ranch in Miami Beach, the development Mr. Stoker bought into, has sold 35 units, with a third of the buyers from overseas and many others retiring from the Northeast.
The Stokers have a home in Potomac, Md., but spend most of the year in Florida. Mr. Stoker doesn't plan to rent out any of his new properties, saying he and his wife will live in one with two dogs, his son might live in another and the third will house an older dog and guests.
Source: http://online.wsj.com/article/SB10001424052748704570104576124502975117950.html#articleTabs%3Darticle
Tuesday, February 1, 2011
Metro-Miami's Pending Home Sales Rise 28% Year-over-year
(MIAMI, FL ) -- According to the Miami Association of Realtors and the Southeast Florida Multiple Listing Service (SEFMLS), total cumulative pending home sales - including single-family homes and condominiums - in Miami-Dade County increased 28 percent in January compared to a year earlier, from 8,388 to 10,698, and 2.5 percent, from 10,437, compared to the previous month.
"Over the last few months, we have seen pending and closed sales gain momentum while inventory levels continue to drop, said Jack H. Levine, 2010 chairman of the board of the Miami Association of Realtors. "This trend in rising sales, particularly for condominiums, coupled with significant reductions in housing inventory, is a very positive sign for the local market. We expect this trend to continue as the job market, economy, and consumer confidence improve."
Pending Condominium Contract Activity on the Rise
Pending sales of condominiums in Miami-Dade County continue to outperform that of single-family homes. In January, condominium pending sales increased a significant 37.2 percent compared to a year ago, from 4,647 to 6,376 and increased 3.3 percent from 6,173 the previous month. Pending sales of single-family homes in January increased 15.531 percent from the previous year, from 3,741 to 4,322, and 1.4 percent from the previous month, when pending single-family home sales totaled 4,264.
Significant Reduction in Housing Inventory
The Miami-Dade real estate market continues to experience drops in housing inventory. Inventory for all housing types has dropped 47 percent since mid-2008 and eight percent compared to a year ago. Just over the last month, inventory in the county dropped six percent, pointing to increased demand for local properties.
"Local buyers are taking advantage of the many opportunities the local market offers, including high affordability that continues to boost contract activity," said 2011 Miami Association of Realtors Residential President Ralph E. De Martino. "International buyers continue to continue to have a significant impact in rising sales and declining inventory in the local market."
Increased pending sales are an indication of increased future sales. A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/miami-pending-home-sales-dade-county-home-sales-miami-association-of-realtors-southeast-florida-multiple-listing-service-sefmls-miami-condo-foreclosures-3826.php
Posted by Michael Gerrity
"Over the last few months, we have seen pending and closed sales gain momentum while inventory levels continue to drop, said Jack H. Levine, 2010 chairman of the board of the Miami Association of Realtors. "This trend in rising sales, particularly for condominiums, coupled with significant reductions in housing inventory, is a very positive sign for the local market. We expect this trend to continue as the job market, economy, and consumer confidence improve."
Pending Condominium Contract Activity on the Rise
Pending sales of condominiums in Miami-Dade County continue to outperform that of single-family homes. In January, condominium pending sales increased a significant 37.2 percent compared to a year ago, from 4,647 to 6,376 and increased 3.3 percent from 6,173 the previous month. Pending sales of single-family homes in January increased 15.531 percent from the previous year, from 3,741 to 4,322, and 1.4 percent from the previous month, when pending single-family home sales totaled 4,264.
Significant Reduction in Housing Inventory
The Miami-Dade real estate market continues to experience drops in housing inventory. Inventory for all housing types has dropped 47 percent since mid-2008 and eight percent compared to a year ago. Just over the last month, inventory in the county dropped six percent, pointing to increased demand for local properties.
"Local buyers are taking advantage of the many opportunities the local market offers, including high affordability that continues to boost contract activity," said 2011 Miami Association of Realtors Residential President Ralph E. De Martino. "International buyers continue to continue to have a significant impact in rising sales and declining inventory in the local market."
Increased pending sales are an indication of increased future sales. A sale is listed as pending when a contract is signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/miami-pending-home-sales-dade-county-home-sales-miami-association-of-realtors-southeast-florida-multiple-listing-service-sefmls-miami-condo-foreclosures-3826.php
Posted by Michael Gerrity
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