Q: I am in the process of selling my home through a short sale and have been told that no bank will give me a new loan because of this. I need to purchase a less-expensive home and don’t want to rent and keep bouncing my family around. Is there any bank that will lend to me? -- Roberta
A: Roberta, the Federal Housing Administration has announced that as long as you are current on your existing mortgage at the time of your short sale, the agency will provide mortgage financing if you decide to purchase a new home for your family. You will, however, still need to qualify and meet all existing FHA guidelines, but the government is offering an option for people in your situation.
Q: I am unemployed and in need of cash until I find a job. I do not have life insurance, and no 401(k) plan to tap into, but I own my home. Is there any way I could tap into my home’s equity while I am still unemployed and looking for work? I know that having no job or income is something that would ordinarily disqualify me for a loan. What is your opinion, other than looking for a job, which I am constantly doing? -- Steve
A: Steve, you are not alone in this situation. Unemployment is at record highs and looks to be on pace to get worse before it gets better. The only viable option I see for you is private or “hard money” financing. Generally, the main criteria for this comes down to the amount of equity in your home. If you have substantial equity, this may help you bridge your situation until you get a job and then can refinance out of this loan into a traditional mortgage. Also, I would suggest seeking out even part-time work, which can lead to a full- time position down the road. Lastly, if you have a family member who would be willing to co-sign on the loan, you may be able to use a Federal Housing Administration non-occupant co-borrower option that allows the government to lend to your family member on your home even if your relative doesn’t live there. More due diligence would be necessary to see if this would be feasible, but it could be an option.
Q: I am looking to buy my first home but don’t want to commit until I know for sure that housing prices won’t keep going down. I only have a small amount of money for a down payment and don’t want to be underwater right after I purchase. Where do you see the market trending? -- Janice
A: Janice, U.S. home prices rose 0.5 percent in November from a year earlier, the first annual gain since 2007, as home buyers who expected a federal tax credit to expire stepped into the market. The 12-month gain, the first since December 2007, was led by a 2.9 percent increase in the region that includes California, as reported by the Federal Housing Finance Agency in Washington, where prices also rose 0.7 percent from October. Clearly, no one has a crystal ball, but it does look like we are seeing some initial signs that it may be turning around.
Q: I am married with two young children and need to purchase a home for my family but have been told that the down payment assistance programs of the past no longer exist and I need to put down 3.5 percent, plus closing costs for an FHA loan. Is there any assistance in the marketplace that can help me since I don’t have that amount of money available? - Leticia
A: Leticia, a bill introduced by U.S. Representative Al Green, a Texas Democrat, and supported by the U.S. Conference of Mayors would restart a program that allows nonprofit groups to donate the 3.5 percent down payment that low-income buyers need to get FHA-insured mortgages. The plan, which funded the purchase of more than 1 million homes over 10 years, was halted by lawmakers concerned about rising defaults and evidence that some buyers were charged more than others. Shaun Donovan, the secretary of Housing and Urban Development, is against the idea and is creating resistance against this bill passing. I would suggest you write to your local congressman expressing that you are in favor of this bill and believe it should be supported and passed. Without this, there are very few options, if any, for down payment assistance.
Source: http://weblogs.sun-sentinel.com/business/realestate/housekeys/blog/2010/01/ask_a_real_estate_professional_12.html
The Criscitos has been selling South Florida luxury and commercial real estate for over a decade and has sold over $1 billion dollars of property. They work as a multi-lingual team speaking english, Spanish, Italian and Portuguese. They carved out a niche as a leading boutique real estate company with two distinct divisions -residential and commercial- both personally overseeing by Marcela and Anthony Criscito.
Friday, January 29, 2010
Thursday, January 28, 2010
Bidders Show Up to Vie for Bankrupt South Beach Condo Conversion
MIAMI BEACH, FL) -- Nineteen bidders, each clutching $75,000 deposit checks, vied for Fairway Village, a bankrupt 118-unit South Beach condo conversion that was sold for $6.2 million or $53,000 per unit - nearly half of its original purchase price.
A new report from CondoVultures.com states one-year-old Alton Michigan LLC of Palm Beach County, FL, with RAM Realty II REIT as managing partner, bought the property at a Chapter 7 liquidation auction, outbidding 18 other individuals and groups.
The property is at 1920 Michigan Ave., which is at the intersection of Alton Road and Michigan Avenue in Miami Beach's South Beach neighborhood.
Other bidders competing on the nine-building complex included Cyric Chiosa, Tony Dipiazza, Ryan Freedman, Andrew Gale, Bruce Litsky, Miguel Poyastro, Horacio Rozenblum, Daniel Stauber, Chaim Scmochet, and Thomas Sullivan, according to U.S. Bankruptcy Court records.
The nine buildings total 84,976 gross square feet of Art Deco-type walkup units, according to LoopNet. Their average range is 477 square feet to 678 square feet.
"There is a strong interest in distressed residential product in South Beach," says Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures, LLC.
"The fact that nearly 20 groups showed up at the auction with $75,000 deposits in hand to bid is proof of just how deep the demand really is in South Beach," Zalewski says.
"Unfortunately, many of the distressed projects in South Beach have already been acquired or secured which is why the buyer interest was so strong for the Fairway Village."
Zalewski says South Beach has some of the most expensive real estate in South Florida with prices hovering around the $1,000 per square foot mark in certain buildings.
Overall, the area is home to nearly 16,400 units located in 147 projects with at least 30 units, according to the newly released Condo Vultures Official Condo Buyers Guide To South Beach.
This is only the sixth bulk deal to close in Miami Beach since July 2008, Zalewski says. During this time, there have been 37 transactions for more than 3,100 units for a price of nearly $900 million, according to the Condo Vultures Bulk Deals Database.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-peter-zalewski-miami-beach-condo-foreclosures-distressed-miami-real-estate-fairway-village-condo-vultures-alton-michigan-llc-ram-realty-ii-reit-1942.php
A new report from CondoVultures.com states one-year-old Alton Michigan LLC of Palm Beach County, FL, with RAM Realty II REIT as managing partner, bought the property at a Chapter 7 liquidation auction, outbidding 18 other individuals and groups.
The property is at 1920 Michigan Ave., which is at the intersection of Alton Road and Michigan Avenue in Miami Beach's South Beach neighborhood.
Other bidders competing on the nine-building complex included Cyric Chiosa, Tony Dipiazza, Ryan Freedman, Andrew Gale, Bruce Litsky, Miguel Poyastro, Horacio Rozenblum, Daniel Stauber, Chaim Scmochet, and Thomas Sullivan, according to U.S. Bankruptcy Court records.
The nine buildings total 84,976 gross square feet of Art Deco-type walkup units, according to LoopNet. Their average range is 477 square feet to 678 square feet.
"There is a strong interest in distressed residential product in South Beach," says Peter Zalewski, a principal with the Bal Harbour, Fla.-based real estate consultancy Condo Vultures, LLC.
"The fact that nearly 20 groups showed up at the auction with $75,000 deposits in hand to bid is proof of just how deep the demand really is in South Beach," Zalewski says.
"Unfortunately, many of the distressed projects in South Beach have already been acquired or secured which is why the buyer interest was so strong for the Fairway Village."
Zalewski says South Beach has some of the most expensive real estate in South Florida with prices hovering around the $1,000 per square foot mark in certain buildings.
Overall, the area is home to nearly 16,400 units located in 147 projects with at least 30 units, according to the newly released Condo Vultures Official Condo Buyers Guide To South Beach.
This is only the sixth bulk deal to close in Miami Beach since July 2008, Zalewski says. During this time, there have been 37 transactions for more than 3,100 units for a price of nearly $900 million, according to the Condo Vultures Bulk Deals Database.
Source: http://www.realestatechannel.com/us-markets/residential-real-estate-1/real-estate-news-peter-zalewski-miami-beach-condo-foreclosures-distressed-miami-real-estate-fairway-village-condo-vultures-alton-michigan-llc-ram-realty-ii-reit-1942.php
Wednesday, January 27, 2010
Reverse Foreclosure Ruling could give embattled associations relief
The days of banks delaying the foreclosure process to avoid financial responsibility for distressed residential properties may be coming to an end.
In a “reverse foreclosure,” a Miami-Dade Circuit Court judge has forced a bank to take title to a property from a homeowners association. The HOA had agreed to waive its rights to the property.
“It’s new, and it addresses what we think is a huge problem in Florida,” attorney Ben Solomon said of the strategy. Solomon and David Arnold of North Bay Village’s Solomon & Furshman represented the South Miami-Dade homeowners group in the case.
The association had foreclosed on the home and obtained title but couldn’t sell it because of the bank’s lien. The bank had foreclosed but hadn’t pursued the case over a period of 2½ years, Solomon said, leaving the homeowner’s association stuck with a home and no one paying dues.
Florida law says that banks are only required to pay 12 months in past-due homeowners’ association dues — the lesser of six months or 1 percent of the mortgage, in the case of condos, Solomon said.
“Their liability is capped. Plus, once they take title, they’re liable for attorney fees and taxes,” he said. “With all their upside-down mortgages, they don’t want to take on that additional liability until they find a buyer. So they’re simply not pursuing the cases they’ve filed.”
“That stalling is crippling our clients,” he said.
Solomon said his firm is taking the most “flagrant” cases to court, telling the judge that as the defendants in the foreclosure, they want a summary judgment against themselves. Then they request an immediate sale date, waiving their rights to a waiting period. He said the firm has filed another 82 similar reverse foreclosure requests in courts around the state.
The association in this case, Keys Gate Community in Homestead, has 3,000 homes and owns title to about a dozen of them through foreclosures, Solomon said. The reverse foreclosure can only be filed after a homeowner is out of the picture and the home is legally the property of the homeowner’s association.
“That waiting period protects the consumer, but banks are taking advantage of the judicial backlog, and then in many cases they are canceling the sale date and resetting it,” he said. “What we did was tell the judge, we don’t need more time.”
HSBC Bank USA, which acted as trustee in the case, declined to comment.
Quick Transfer
Circuit Judge Jerald Bagley granted the homeowners’ association motion, and the title was awarded to the bank the same day.
“We’re not saying they need to complete a foreclosure more quickly than normal,” Solomon said. “But there’s no good reason why that lender has taken 2½ years to foreclose on this particular unit.”
Attorneys familiar with foreclosure cases said the tactic was innovative.
“This was pretty ingenious,” said Alan Kluger, a commercial litigator who has represented financial institutions and associations in foreclosure cases. “It’s basically saying, ‘Hey, they want this [house.] Give it to them.’”
“Banks understand if they take title, they have all these responsibilities, so they decide not to. It’s a business decision,” said Kluger of Kluger Kaplan Silverman Katzen & Levine.”The banks are doing this all over town.”
Jorge Gonzalez del Valle, a foreclosure attorney, also said the case was unique.
“It’s an interesting twist to file for a summary judgment against yourself,” he said. “When banks delay like that, they’re really avoiding their obligations. The people who are getting screwed are the condo associations. What the association has done is get the bank to pay sooner rather than later. The associations are starving right now. They need their dues paid now.”
Solomon credited Miami-Dade Clerk of Courts Harvey Ruvin with helping his client get the title transferred quickly after the judge signed the order. Ruvin said his office is working on ways to limit the number of times and reasons cases can be delayed.
“One of the problems is that we’re setting these cases, and we keep getting a lot of delays and resetting of dates without any basis,” he said. “We’re trying to tighten up the criteria for getting a reset, because those create additional costs.”
There are more than 115,000 open foreclosure cases in Miami-Dade, with 7,000 more being filed each month, he said.
“The quicker we can move these distressed properties through the process and into the hands of somebody who will pay a mortgage and pay taxes and pay their dues, the quicker we can get our economy back on track,” he said.
Bill Raphan of the state condo ombudsman’s office in Fort Lauderdale, said he applauded anything that helped associations struggling to deal with so many distressed properties.
“We get so many calls about these kinds of problems,” he said. “Anything that would provide some kind of relief for these associations that are in such dire straits would be welcome.”
Source: http://www.dailybusinessreview.com/news.html?news_id=60105
In a “reverse foreclosure,” a Miami-Dade Circuit Court judge has forced a bank to take title to a property from a homeowners association. The HOA had agreed to waive its rights to the property.
“It’s new, and it addresses what we think is a huge problem in Florida,” attorney Ben Solomon said of the strategy. Solomon and David Arnold of North Bay Village’s Solomon & Furshman represented the South Miami-Dade homeowners group in the case.
The association had foreclosed on the home and obtained title but couldn’t sell it because of the bank’s lien. The bank had foreclosed but hadn’t pursued the case over a period of 2½ years, Solomon said, leaving the homeowner’s association stuck with a home and no one paying dues.
Florida law says that banks are only required to pay 12 months in past-due homeowners’ association dues — the lesser of six months or 1 percent of the mortgage, in the case of condos, Solomon said.
“Their liability is capped. Plus, once they take title, they’re liable for attorney fees and taxes,” he said. “With all their upside-down mortgages, they don’t want to take on that additional liability until they find a buyer. So they’re simply not pursuing the cases they’ve filed.”
“That stalling is crippling our clients,” he said.
Solomon said his firm is taking the most “flagrant” cases to court, telling the judge that as the defendants in the foreclosure, they want a summary judgment against themselves. Then they request an immediate sale date, waiving their rights to a waiting period. He said the firm has filed another 82 similar reverse foreclosure requests in courts around the state.
The association in this case, Keys Gate Community in Homestead, has 3,000 homes and owns title to about a dozen of them through foreclosures, Solomon said. The reverse foreclosure can only be filed after a homeowner is out of the picture and the home is legally the property of the homeowner’s association.
“That waiting period protects the consumer, but banks are taking advantage of the judicial backlog, and then in many cases they are canceling the sale date and resetting it,” he said. “What we did was tell the judge, we don’t need more time.”
HSBC Bank USA, which acted as trustee in the case, declined to comment.
Quick Transfer
Circuit Judge Jerald Bagley granted the homeowners’ association motion, and the title was awarded to the bank the same day.
“We’re not saying they need to complete a foreclosure more quickly than normal,” Solomon said. “But there’s no good reason why that lender has taken 2½ years to foreclose on this particular unit.”
Attorneys familiar with foreclosure cases said the tactic was innovative.
“This was pretty ingenious,” said Alan Kluger, a commercial litigator who has represented financial institutions and associations in foreclosure cases. “It’s basically saying, ‘Hey, they want this [house.] Give it to them.’”
“Banks understand if they take title, they have all these responsibilities, so they decide not to. It’s a business decision,” said Kluger of Kluger Kaplan Silverman Katzen & Levine.”The banks are doing this all over town.”
Jorge Gonzalez del Valle, a foreclosure attorney, also said the case was unique.
“It’s an interesting twist to file for a summary judgment against yourself,” he said. “When banks delay like that, they’re really avoiding their obligations. The people who are getting screwed are the condo associations. What the association has done is get the bank to pay sooner rather than later. The associations are starving right now. They need their dues paid now.”
Solomon credited Miami-Dade Clerk of Courts Harvey Ruvin with helping his client get the title transferred quickly after the judge signed the order. Ruvin said his office is working on ways to limit the number of times and reasons cases can be delayed.
“One of the problems is that we’re setting these cases, and we keep getting a lot of delays and resetting of dates without any basis,” he said. “We’re trying to tighten up the criteria for getting a reset, because those create additional costs.”
There are more than 115,000 open foreclosure cases in Miami-Dade, with 7,000 more being filed each month, he said.
“The quicker we can move these distressed properties through the process and into the hands of somebody who will pay a mortgage and pay taxes and pay their dues, the quicker we can get our economy back on track,” he said.
Bill Raphan of the state condo ombudsman’s office in Fort Lauderdale, said he applauded anything that helped associations struggling to deal with so many distressed properties.
“We get so many calls about these kinds of problems,” he said. “Anything that would provide some kind of relief for these associations that are in such dire straits would be welcome.”
Source: http://www.dailybusinessreview.com/news.html?news_id=60105
Monday, January 25, 2010
Florida tipped as best for bargain property in 2010
Florida is set to be one of the bargain hotspots of 2010 for real estate investors with some properties selling for as little as $47 a square foot, according to a new report.
As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market and national house price declines are predicted to improve by the middle of the year.
New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report from Winkworth International.
It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices. Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.
Florida’s loss can be a UK buyer’s gain, according to Charles Peerless, director, Winkworth International. ‘With low prices on a wide range of top quality luxury homes and condominiums in world class developments, combined with a favourable exchange rate and low interest rates, buyers who seek sun, golf and wide ranging lifestyle attractions can now buy a home here for about half what they would have paid in 2005,’ he explained.
Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida. The imbalance of supply and demand puts the buyer in the driving seat. Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.
‘All this means that there has seldom been a better time to get into the Florida property market. According to most local experts, prices have nowhere to go but up and a home in Florida bought at today’s bargain prices should prove to be a laudable investment five years from now,’ added Peerless.
New home construction in Florida suffered more than expected. In the second quarter of 2009 housing starts fell to an annual rate of 35,352, an 88% decline in starts from peak to trough.
There are some pockets of Florida that have been affected more substantially by the downturn than others which now offer excellent opportunities to investors in high quality new developments, Peerless points out. In Orlando, buyers can pay $140 per square foot down from $250 in 2006 and in Sarasota prices that were $350 per square foot are now as low as $47.
He added that this region of Florida enjoys relatively uncongested areas, is sophisticated, less crowded than the east coast. Sarasota was recently highlighted on NBC as the top place in the whole of the US to buy a home and is known for its fine restaurants, beaches, theatres, arts, shops and lifestyle. Prices are at 2002/2003 levels and there has been little or no new construction in the area for four years, so high quality inventory is being snapped up.
The report predicts that central Florida with attractions like Universal Studios and Disney World should experience a quicker comeback than most other areas in Florida. While south Florida is described as the place to buy a condominium. There are sales being made well below construction cost. The major reason for the decline in the Miami condo market is the difficulty in getting finance which tends to be more available on houses. As such, condos offer an excellent opportunity for cash buyers, the report says.
Prices are discounted in North West Florida and are around 2005 levels. ‘Buyers get so much more for their money in Florida than in Europe. Spacious high specification properties, spectacular golf communities, high future capital growth predicted, excellent transportation and, of course, the ever popular Florida lifestyle including sunshine, beaches, golf, cruises, theme parks, shopping and dining,’ it concludes.
Source: http://www.propertywire.com/news/north-america/florida-prices-at-bargain-level-201001253837.html
As the global recession eases and the recovery begins, experts are forecasting that investor confidence will flow back into the US real estate market and national house price declines are predicted to improve by the middle of the year.
New home sales should post an increase of around 20% from the very low levels seen in 2009, according to the report from Winkworth International.
It points out that few real estate markets have suffered more than Florida where oversupply has been a major factor in driving down prices. Foreclosures and a glut of unsold condominiums have especially contributed to slowing down the Florida housing market.
Florida’s loss can be a UK buyer’s gain, according to Charles Peerless, director, Winkworth International. ‘With low prices on a wide range of top quality luxury homes and condominiums in world class developments, combined with a favourable exchange rate and low interest rates, buyers who seek sun, golf and wide ranging lifestyle attractions can now buy a home here for about half what they would have paid in 2005,’ he explained.
Sean Snaith, economics professor and forecaster for the University of Central Florida in Orlando, agrees. ‘For international buyers, 2010 will be a great time to buy in Florida. The imbalance of supply and demand puts the buyer in the driving seat. Large inventory, pricing power and the continuing weakness of the dollar when compared to other currencies mean awesome deals in the housing sector,’ he said.
‘All this means that there has seldom been a better time to get into the Florida property market. According to most local experts, prices have nowhere to go but up and a home in Florida bought at today’s bargain prices should prove to be a laudable investment five years from now,’ added Peerless.
New home construction in Florida suffered more than expected. In the second quarter of 2009 housing starts fell to an annual rate of 35,352, an 88% decline in starts from peak to trough.
There are some pockets of Florida that have been affected more substantially by the downturn than others which now offer excellent opportunities to investors in high quality new developments, Peerless points out. In Orlando, buyers can pay $140 per square foot down from $250 in 2006 and in Sarasota prices that were $350 per square foot are now as low as $47.
He added that this region of Florida enjoys relatively uncongested areas, is sophisticated, less crowded than the east coast. Sarasota was recently highlighted on NBC as the top place in the whole of the US to buy a home and is known for its fine restaurants, beaches, theatres, arts, shops and lifestyle. Prices are at 2002/2003 levels and there has been little or no new construction in the area for four years, so high quality inventory is being snapped up.
The report predicts that central Florida with attractions like Universal Studios and Disney World should experience a quicker comeback than most other areas in Florida. While south Florida is described as the place to buy a condominium. There are sales being made well below construction cost. The major reason for the decline in the Miami condo market is the difficulty in getting finance which tends to be more available on houses. As such, condos offer an excellent opportunity for cash buyers, the report says.
Prices are discounted in North West Florida and are around 2005 levels. ‘Buyers get so much more for their money in Florida than in Europe. Spacious high specification properties, spectacular golf communities, high future capital growth predicted, excellent transportation and, of course, the ever popular Florida lifestyle including sunshine, beaches, golf, cruises, theme parks, shopping and dining,’ it concludes.
Source: http://www.propertywire.com/news/north-america/florida-prices-at-bargain-level-201001253837.html
Friday, January 22, 2010
Miami Real Estate: Showing Signs Of Life
While the Miami real estate market continues to be impacted by economic uncertainty, a recent mini boom in short sales has started to propel the residential market forward. Condominium units are starting to sell as investors take advantage of bargain basement prices, and developers and bankers reach agreements that allow for developers to sell units at reduced prices.
Bright lights burst with radiance from Miami Beach condo balconies in the night's darkness. Towers of high-rise condos that stood without signs of life just a few months ago are lighting up, indicating that more residents are moving into the half empty buildings.
Mired in the muck of one of the nation's worst housing crashes, Miami Beach and neighboring Miami are seeing legal disputes between developers and bankers begin to thaw. A growing number of condominiums are selling, albeit at bargain basement prices that just a few years ago seemed unimaginable.
For the first time in years sales of condos and homes are showing an improvement in an otherwise financially tinged marketplace. Miami is the east coast's epicenter of the housing crash, but improving conditions are beginning to get real estate agents and appraisers busy again.
South Florida's market is still caught in the web of the financial crisis, legal disputes and hedge funds that financed many of the developments gone bankrupt. Entire blocks of projects remain at a standstill, fenced off as partially finished developments sitting to rot in the Florida sun.
Investors have swarmed to Miami, many of whom are cash paying foreigners looking for bargains. But growing numbers of would-be buyers feared purchasing units in only partially sold buildings concerned about condo associations and developers going bankrupt, leaving them in economic jeopardy.
An impasse that developers had with bankers, buyers and sellers has all but ended a feud allowing developers to sell units for less than what condos were originally constructed for when they were new. The resulting short sales have prompted a mini boom helping propel the marketplace forward.
Miami is rife with economic uncertainty even though one would hardly know it in posh South Beach, where hotels and restaurants bustle with paying guests. But even in South Beach waiters and bartenders say business is slower these days as the financial crisis strains the local economy. Unemployment hovers around 14% and foreclosed homes and condos remain a growing threat. The local economy and the housing market is anything but stable.
During the boom Miami saw more new condos constructed than ever before at one time since its incorporation. More than a third of all the new units – estimated at more than 14,000-- constructed remain empty even as investors look for properties to purchase. The housing crisis will take years to over come in Miami, but more condo sales demonstrate an improving trend.
Banking problems haven't been the only thing troubling new condominium developments. Half darkened developments got the assistance of Florida courts to collect condominium owner association fees from tenants, whose dead-beat owners refused to pay their monthly fees to keep on water, collect garbage and upkeep on pools and other amenities.
In many cases, receiverships were a last ditch effort by developers to stave-off bankers from foreclosing. Dozens of developments were on the brink of failure as a result of the hardship. "We've already collected well over $100,000 in rent under receiverships for our clients," said Ben Solomon, an attorney credited with the program. "It's resuscitating some of these associations."
On a clear moon-lit night the Miami skyline reflects the stark reality behind the still troubled marketplace. A number of towering new buildings built during the boom are seeing more lights shine above showing a growing presence of residents.
Source: http://www.nuwireinvestor.com/articles/miami-real-estate-showing-signs-of-life-54474.aspx
Written by: Mark Collingsworth
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.
Bright lights burst with radiance from Miami Beach condo balconies in the night's darkness. Towers of high-rise condos that stood without signs of life just a few months ago are lighting up, indicating that more residents are moving into the half empty buildings.
Mired in the muck of one of the nation's worst housing crashes, Miami Beach and neighboring Miami are seeing legal disputes between developers and bankers begin to thaw. A growing number of condominiums are selling, albeit at bargain basement prices that just a few years ago seemed unimaginable.
For the first time in years sales of condos and homes are showing an improvement in an otherwise financially tinged marketplace. Miami is the east coast's epicenter of the housing crash, but improving conditions are beginning to get real estate agents and appraisers busy again.
South Florida's market is still caught in the web of the financial crisis, legal disputes and hedge funds that financed many of the developments gone bankrupt. Entire blocks of projects remain at a standstill, fenced off as partially finished developments sitting to rot in the Florida sun.
Investors have swarmed to Miami, many of whom are cash paying foreigners looking for bargains. But growing numbers of would-be buyers feared purchasing units in only partially sold buildings concerned about condo associations and developers going bankrupt, leaving them in economic jeopardy.
An impasse that developers had with bankers, buyers and sellers has all but ended a feud allowing developers to sell units for less than what condos were originally constructed for when they were new. The resulting short sales have prompted a mini boom helping propel the marketplace forward.
Miami is rife with economic uncertainty even though one would hardly know it in posh South Beach, where hotels and restaurants bustle with paying guests. But even in South Beach waiters and bartenders say business is slower these days as the financial crisis strains the local economy. Unemployment hovers around 14% and foreclosed homes and condos remain a growing threat. The local economy and the housing market is anything but stable.
During the boom Miami saw more new condos constructed than ever before at one time since its incorporation. More than a third of all the new units – estimated at more than 14,000-- constructed remain empty even as investors look for properties to purchase. The housing crisis will take years to over come in Miami, but more condo sales demonstrate an improving trend.
Banking problems haven't been the only thing troubling new condominium developments. Half darkened developments got the assistance of Florida courts to collect condominium owner association fees from tenants, whose dead-beat owners refused to pay their monthly fees to keep on water, collect garbage and upkeep on pools and other amenities.
In many cases, receiverships were a last ditch effort by developers to stave-off bankers from foreclosing. Dozens of developments were on the brink of failure as a result of the hardship. "We've already collected well over $100,000 in rent under receiverships for our clients," said Ben Solomon, an attorney credited with the program. "It's resuscitating some of these associations."
On a clear moon-lit night the Miami skyline reflects the stark reality behind the still troubled marketplace. A number of towering new buildings built during the boom are seeing more lights shine above showing a growing presence of residents.
Source: http://www.nuwireinvestor.com/articles/miami-real-estate-showing-signs-of-life-54474.aspx
Written by: Mark Collingsworth
This article has been republished from Housing Predictor. You can also view this article at Housing Predictor, a real estate analysis and forecasting site.
Thursday, January 21, 2010
Cities With The Fastest-Falling Home Prices
For our list of cities with the fastest-falling home prices, we used Altos Research's January market update, which looks at asking prices, inventory and days on the market single-family homes--but not condominiums--in 27 of the country's closely watched real estate markets. It uses homes for sale in each city's Metropolitan Statistical Area--a census-defined area that the federal government uses to collect statistics--for its data.
Miami is the only city of the 27 markets Altos tracks that saw asking prices rise over the last three months. Prices there were up 2% from October to a median price of $494,992. The reasons for this are mixed: While the numbers are somewhat promising, Miami's good fortune is also a reflection of just how long it took for the hard-hit Florida housing market to regain its footing. And even with the recent upturn, it's the city where homes sit on the market for the longest by far. Homes here stay for sale for a median of eight months. Not to mention Altos' analysis only reflects single-family homes--not condominiums, a section of the Miami's real estate market that has yet to stabilize.
Therefore, Miami's upswing should be taken skeptically, says Simonsen. "Miami lagged behind everything else, and so is only now starting to feel the impact of the stimulus."
But a decision on Jan. 7 by mortgage entities Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) to begin backing some Miami condominium loans that they previously hadn't touched might help rejuvenate sales.
Big Apple Trouble
Most markets have seen price drops of less than 3%, and that's true for New York City, where home prices have fallen by 2.3%, to a median of $638,082. But there may be trouble in store for the Big Apple, which peaked late and whose real estate market was more directly affected by the Wall Street implosion of late 2008. Its inventory of listed homes has increased by 4.2% since October. Phoenix is the only other market that saw inventory rates rise during a seasonally slow season in which it typically falls. Slimming down inventory is necessary to curb price declines.
In New York, onerous real estate laws mean that foreclosures take roughly six months to complete, and post-foreclosure sales don't usually close for another four months after that. This has kept buyers away, and hamstrung real estate recovery in the area.
"In states with complex foreclosure laws, the recovery is clearly being delayed," says Simonsen. "For example, there are investment funds that will buy in Texas and California, but won't buy in New York because it takes so long to foreclose--and then you have to go to court."
New York prices likely have much farther to fall.
Although the rate of decline has mellowed from stomach-turning to gentle nationwide, these numbers show that any jubilation over a recovered real estate market would be premature.
Charlotte, N.C., the city with third-greatest drop in asking prices (falling 4.4% to a median price of $248,543 in December), suffered from exuberant pricing early in the year. But the Wall Street collapse hit Charlotte hard, as it's a financial hub that is headquarters to Bank of America Corp. ( BAC - news - people ), among other major banking institutions. Now the area's housing market is suffering.
"In Charlotte, at the beginning of the year, new sellers thought they would get a nice premium, and they were pricing above the median price," says Scott Sambucci, vice president of data analytics at Altos Research. "They were reading all those articles about the national housing market saying, 'That's not happening here.' But there was a lag effect."
Source: http://www.forbes.com/2010/01/18/falling-home-prices-lifestyle-real-estate-foreclosures.html?boxes=Homepagechannels
Miami is the only city of the 27 markets Altos tracks that saw asking prices rise over the last three months. Prices there were up 2% from October to a median price of $494,992. The reasons for this are mixed: While the numbers are somewhat promising, Miami's good fortune is also a reflection of just how long it took for the hard-hit Florida housing market to regain its footing. And even with the recent upturn, it's the city where homes sit on the market for the longest by far. Homes here stay for sale for a median of eight months. Not to mention Altos' analysis only reflects single-family homes--not condominiums, a section of the Miami's real estate market that has yet to stabilize.
Therefore, Miami's upswing should be taken skeptically, says Simonsen. "Miami lagged behind everything else, and so is only now starting to feel the impact of the stimulus."
But a decision on Jan. 7 by mortgage entities Fannie Mae ( FNM - news - people ) and Freddie Mac ( FRE - news - people ) to begin backing some Miami condominium loans that they previously hadn't touched might help rejuvenate sales.
Big Apple Trouble
Most markets have seen price drops of less than 3%, and that's true for New York City, where home prices have fallen by 2.3%, to a median of $638,082. But there may be trouble in store for the Big Apple, which peaked late and whose real estate market was more directly affected by the Wall Street implosion of late 2008. Its inventory of listed homes has increased by 4.2% since October. Phoenix is the only other market that saw inventory rates rise during a seasonally slow season in which it typically falls. Slimming down inventory is necessary to curb price declines.
In New York, onerous real estate laws mean that foreclosures take roughly six months to complete, and post-foreclosure sales don't usually close for another four months after that. This has kept buyers away, and hamstrung real estate recovery in the area.
"In states with complex foreclosure laws, the recovery is clearly being delayed," says Simonsen. "For example, there are investment funds that will buy in Texas and California, but won't buy in New York because it takes so long to foreclose--and then you have to go to court."
New York prices likely have much farther to fall.
Although the rate of decline has mellowed from stomach-turning to gentle nationwide, these numbers show that any jubilation over a recovered real estate market would be premature.
Charlotte, N.C., the city with third-greatest drop in asking prices (falling 4.4% to a median price of $248,543 in December), suffered from exuberant pricing early in the year. But the Wall Street collapse hit Charlotte hard, as it's a financial hub that is headquarters to Bank of America Corp. ( BAC - news - people ), among other major banking institutions. Now the area's housing market is suffering.
"In Charlotte, at the beginning of the year, new sellers thought they would get a nice premium, and they were pricing above the median price," says Scott Sambucci, vice president of data analytics at Altos Research. "They were reading all those articles about the national housing market saying, 'That's not happening here.' But there was a lag effect."
Source: http://www.forbes.com/2010/01/18/falling-home-prices-lifestyle-real-estate-foreclosures.html?boxes=Homepagechannels
Wednesday, January 20, 2010
Mortgage modifications double in December, with more in the wings
The number of properties heading to the market may be much larger than anyone thought and appears likely to swamp South Florida with more deeply discounted homes, clouding the prospects for a housing recovery.
Figures from the Florida Association of Realtors released Friday show that South Florida's median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks.
But an analysis of the so-called shadow market done for The Miami Herald suggests the number of homes and condos in the pipeline to come on the market in South Florida is nearly five times larger than all residential properties currently listed for sale by Realtors. LPS Applied Analytics, a firm that supplies loan data to the federal government, did the analysis on the shadow market, which refers to properties that will eventually be listed for sale -- because they are about to enter foreclosure, are in foreclosure or already owned by banks.
Economists and real estate analysts say the forces of supply and demand mean prices have further to fall because there will be more homes on the market than people to buy them, forcing sellers -- in this case, banks that have taken homes back in foreclosures -- to further cut prices.
``That's what everybody is afraid of,'' said Jesse Acevedo, president of the Realtor Association of Greater Fort Lauderdale. He recently conducted his own shadow market analysis by cross-referencing the public record with the MLS, a Realtor database, for properties in Tamarac. He said banks owned about 300 homes, but had listed only 81 for sale.
The Florida Association of Realtors numbers released Friday show that in September new buyers and investors continued to eat away at the mass of existing homes for sale at a steady pace.
Single-family home sales in Miami-Dade were up 51 percent from the same month a year ago; condo sales were up 73 percent. In Broward, home sales rose 31 percent from last year and condo sales jumped 57 percent, according to the Realtors.
But such figures provide only a partial snapshot of the overall housing market.
For every home sold in Miami-Dade, lenders took back almost four through foreclosure auction, according to LPS data. In Broward, for every sale, banks took back six properties, according to LPS' analysis, which uses sales information from the public record, not Realtor data that captures only sales through agents.
``This foreclosure hangover is going to prevent any substantial price recovery and could even lead general market statistics downward,'' said Adam Cappel, a market analyst and principal of Miami-based CondoReports.com.
While the number of homes on the market in Miami-Dade has shrunk 36 percent since last year to 26,296 homes, the number of loans 90 days or more past due or in the foreclosure process stood at 122,800 in September, according to LPS. In Broward, listings fell by 41 percent to 18,919, yet 88,863 homes were being queued up for the market.
A few caveats: A percentage of those homes, though small, will not be taken back by banks because they are sold or the owner catches up on loan payments. Also, some of them may already be listed for sale. Meanwhile, though, a flurry of activity at the lower price range reduced the median home price in Miami-Dade to $190,900, down 30 percent compared to a year ago, according to the Realtor data. The median condo price fell to $132,900, a drop of 37 percent versus last September.
In Broward, the median single-family home price fell to $200,000 from $259,300, a fall of 23 percent. The median condo price dropped to $78,000 from $129,000 last year, a 40 percent decline.
Earlier this week, Fiserv, a financial information and analysis firm, forecast that Miami average home values will plunge another 30 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Prices are forecast to fall another 26 percent in Fort Lauderdale.
David Stiff, Fiserv's chief economist, said the forecast is based on a number of economic variables, including home affordability, demographic trends and household growth. He said inventory levels going forward were a major concern.
``If you look at markets across the U.S., the Miami area has some of the largest foreclosure numbers. In addition to that, there was a lot of overbuilding,'' Stiff said. Ken Thomas, a Miami-based banking analyst and economist, however, said he expected prices to fall no more than 20 percent on average. But, he added, ``one thing this crisis has taught us is that no matter what we predict, things are always much worse than we believed.''
Acevedo, of the Realtor Association of Greater Fort Lauderdale, took a more optimistic view. As long as banks refrain from dumping homes on the market, and the courts, which are understaffed and overwhelmed, continue to serve as a kind of control valve, slowing the pace of bank take-backs, price can still hold.
``When are the banks going to put it out and how much at a time and why are they holding on to it? Everybody is speculating on those issues,'' he said.
As it is, bank-owned properties in decent shape are selling for above list prices as buyers compete for bargains. Good deals are dwindling, meaning buyers will have to choose from homes listed at higher price ranges.
``Right now, buyers can't find properties at the lower end because those foreclosures were feeding first-time home buyers and investors,'' Acevedo said.
Source: http://www.miamiherald.com/163/story/1297561.html
Figures from the Florida Association of Realtors released Friday show that South Florida's median home prices have stabilized over the past several months and sales are up year-over-year as the number of properties on the market shrinks.
But an analysis of the so-called shadow market done for The Miami Herald suggests the number of homes and condos in the pipeline to come on the market in South Florida is nearly five times larger than all residential properties currently listed for sale by Realtors. LPS Applied Analytics, a firm that supplies loan data to the federal government, did the analysis on the shadow market, which refers to properties that will eventually be listed for sale -- because they are about to enter foreclosure, are in foreclosure or already owned by banks.
Economists and real estate analysts say the forces of supply and demand mean prices have further to fall because there will be more homes on the market than people to buy them, forcing sellers -- in this case, banks that have taken homes back in foreclosures -- to further cut prices.
``That's what everybody is afraid of,'' said Jesse Acevedo, president of the Realtor Association of Greater Fort Lauderdale. He recently conducted his own shadow market analysis by cross-referencing the public record with the MLS, a Realtor database, for properties in Tamarac. He said banks owned about 300 homes, but had listed only 81 for sale.
The Florida Association of Realtors numbers released Friday show that in September new buyers and investors continued to eat away at the mass of existing homes for sale at a steady pace.
Single-family home sales in Miami-Dade were up 51 percent from the same month a year ago; condo sales were up 73 percent. In Broward, home sales rose 31 percent from last year and condo sales jumped 57 percent, according to the Realtors.
But such figures provide only a partial snapshot of the overall housing market.
For every home sold in Miami-Dade, lenders took back almost four through foreclosure auction, according to LPS data. In Broward, for every sale, banks took back six properties, according to LPS' analysis, which uses sales information from the public record, not Realtor data that captures only sales through agents.
``This foreclosure hangover is going to prevent any substantial price recovery and could even lead general market statistics downward,'' said Adam Cappel, a market analyst and principal of Miami-based CondoReports.com.
While the number of homes on the market in Miami-Dade has shrunk 36 percent since last year to 26,296 homes, the number of loans 90 days or more past due or in the foreclosure process stood at 122,800 in September, according to LPS. In Broward, listings fell by 41 percent to 18,919, yet 88,863 homes were being queued up for the market.
A few caveats: A percentage of those homes, though small, will not be taken back by banks because they are sold or the owner catches up on loan payments. Also, some of them may already be listed for sale. Meanwhile, though, a flurry of activity at the lower price range reduced the median home price in Miami-Dade to $190,900, down 30 percent compared to a year ago, according to the Realtor data. The median condo price fell to $132,900, a drop of 37 percent versus last September.
In Broward, the median single-family home price fell to $200,000 from $259,300, a fall of 23 percent. The median condo price dropped to $78,000 from $129,000 last year, a 40 percent decline.
Earlier this week, Fiserv, a financial information and analysis firm, forecast that Miami average home values will plunge another 30 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Prices are forecast to fall another 26 percent in Fort Lauderdale.
David Stiff, Fiserv's chief economist, said the forecast is based on a number of economic variables, including home affordability, demographic trends and household growth. He said inventory levels going forward were a major concern.
``If you look at markets across the U.S., the Miami area has some of the largest foreclosure numbers. In addition to that, there was a lot of overbuilding,'' Stiff said. Ken Thomas, a Miami-based banking analyst and economist, however, said he expected prices to fall no more than 20 percent on average. But, he added, ``one thing this crisis has taught us is that no matter what we predict, things are always much worse than we believed.''
Acevedo, of the Realtor Association of Greater Fort Lauderdale, took a more optimistic view. As long as banks refrain from dumping homes on the market, and the courts, which are understaffed and overwhelmed, continue to serve as a kind of control valve, slowing the pace of bank take-backs, price can still hold.
``When are the banks going to put it out and how much at a time and why are they holding on to it? Everybody is speculating on those issues,'' he said.
As it is, bank-owned properties in decent shape are selling for above list prices as buyers compete for bargains. Good deals are dwindling, meaning buyers will have to choose from homes listed at higher price ranges.
``Right now, buyers can't find properties at the lower end because those foreclosures were feeding first-time home buyers and investors,'' Acevedo said.
Source: http://www.miamiherald.com/163/story/1297561.html
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