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."
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.
Wednesday, January 13, 2010
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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