Archive for the 'Real Estate Market Data' Category

Coral Gables Real Estate and the White-Collar Blues

posted on November 18th, 2010 filed under: Financial Responsibility, Real Estate Market Data

It can be hard for working professionals to find a nice home at a decent price in Coral Gables.  Seriously.  Even here, in boom-and-bust South Florida.  And even now, well into one of the worst real estate downturns of all time.

If you’re a hard-working professional making a couple hundred thousand dollars a year, you ought to be able to buy a handsome home by levering that income three to four times, as the old conservative banker’s formula would permit.

Unfortunately, that puts you in a price range — say, $750,000 and up — where sellers remain stubborn about lowering prices.  In recent market activity, sellers in the $500k to $750k price range were nearly twice as likely to reduce their prices as sellers in the $750k to $1 million price range.

Percentage of Listings Reduced in Price -- Area 41 (Incl. Coral Gables) -- Nov. 2010

Someone buying a in the $750k to $1 million price range is probably not much more wealthy than someone buying in the $500k to $750k price range.  Yet sellers’ behavior appears to be much more demanding.

Maybe that’s why there’s such an unusually dramatic inverse correlation between price ranges and sales activity, as noted previously.

posted by // Comments Off on Coral Gables Real Estate and the White-Collar Blues

Q2 Review: Closed Sales in Miami, Pinecrest and Coral Gables Real Estate, Zip Code 33156

posted on October 29th, 2010 filed under: Properties in Focus, Real Estate Market Data

The table below reports closed sales of single-family homes in zip code 33156, encompassing parts of Miami, Pinecrest and Coral Gables, FL.  Recently closed sales are the principal guide to current property values in a local real estate market.

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33156 -- 2Q10

Because The Real Estate Fountain focuses on mid-range to luxury properties, the table may exclude sales of smaller homes on smaller lots, or outside the usual areas of interest.

9050 Hammock Lake Dr.

9050 Hammock Lake Dr.

Data are from tax records, and thus are not limited to MLS transactions.

10300 SW 61 Ave.

10300 SW 61 Ave.

What someone got for $730k:

6000 SW 104 St.

6000 SW 104 St.

posted by // Comments Off on Q2 Review: Closed Sales in Miami, Pinecrest and Coral Gables Real Estate, Zip Code 33156

Months’ Supply of Homes in Coral Gables — Luxury Real Estate Sellers in Denial

posted on October 25th, 2010 filed under: Real Estate Market Data

The months’ supply of homes for sale is one the real estate market’s vital signs.  A previous post explained this indicator and noted that Coral Gables had been in relatively stable condition, with about a 14-month supply of homes for sale.  That was quite a bit higher than the 6-8 months in a normal market, but way down from the 40 to 50 months’ supply seen during the height of the credit crisis.

The number deteriorated in September to 23.7.  That’s very high.  Stability has given way to instability.

Another previous post noted that the luxury real estate market in Coral Gables was stuck in the muck, with a 30-month supply of homes over $1.5 million, well over the 10-12 months’ worth that is normal at the high end.

And now?  Based on September sales, there is an 82.5-month supply of homes for sale in the real estate market in Coral Gables.

Granted, September is not high season for closings, but this is dreadful.  Sellers of high-end homes in Coral Gables need to wake from their dreams and lower their prices.

Meanwhile, at the low end, the months’ supply figures are normal, even robust.  Segmenting the market by price range shows just how healthy the low end is, and just how sick the high end is.

Months' Supply of Homes for Sale -- Coral Gables -- Oct. 2010A picture is worth a thousand words:

Months Supply of Homes for Sale -- Coral Gables -- Oct. 2010

posted by // Comments Off on Months’ Supply of Homes in Coral Gables — Luxury Real Estate Sellers in Denial

Q2 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33143

posted on October 24th, 2010 filed under: Properties in Focus, Real Estate Market Data

The table below reports closed sales of single-family homes in zip code 33143, Miami and Coral Gables, FL, for the second quarter of 2010 (April 1 to June 30).  Recently closed sales are the principal guide to current property values in a local real estate market.

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33143 -- 2Q10Because The Real Estate Fountain focuses on mid-range to luxury properties, the table may exclude sales of smaller homes on smaller lots, or outside the usual areas of interest.

7901 Los Pinos Blvd.

7901 Los Pinos Blvd.

Data are from tax records, and thus are not limited to MLS transactions.

621 Gondoliere Ave.

621 Gondoliere Ave.

posted by // Comments Off on Q2 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33143

Homebuilding Industry, October 2010: Comme Ci, Comme Ca

posted on October 20th, 2010 filed under: Real Estate Market Data

Several gauges of the homebuilding industry released this week indicate slow progress at best — which is a whole lot better than some of the alternatives.

Housing starts rose a very tepid 0.3% last month, following a strong 10%+ jump the month before.  But that’s o.k.; the numbers are still tracing out a mild upward trajectory from the low in early 2009.

Housing Starts -- Chart -- Jan. 1990 to Sept. 2010

The National Association of Homebuilders released its Housing Market Index, a measure of sentiment in the industry.  The index rebounded to 16 from a dangerously low 13.  Prior posts here commented on the 14 to 15 area as a critical support level.  The cycle low was in the single digits.  It seems the support may have held.  Time will tell.

Homebuilder stocks are well off their lows in early 2009, but have lost the lustre they had during the government-handout days.  The HGX index has broken its uptrend and is clearly in a sideways trading range.

HGX Homebuilder Stocks Index -- Chart -- Oct. 2005 to Oct. 2010Source: moneycentral.msn.com

What does all this have to do with real estate in Miami and Coral Gables?  Do local home values really correlate with these nationwide measures of the housing industry?  No guarantees, but property sales and values in Miami and Coral Gables rose in tandem with these national measures, and rolled over and crashed with them too.  Maybe the local market will decouple from the national experience, but there’s no clear evidence of that yet.

posted by // Comments Off on Homebuilding Industry, October 2010: Comme Ci, Comme Ca

The Great Godot of Inflation

posted on October 14th, 2010 filed under: Financial Responsibility, Real Estate Market Data, Real Estate News

The previous post reported the current outlook of hedge fund manager Kyle Bass, who made a fortune off the recent collapse of the financial-realty complex.  Essentially, Bass sees hyperinflation in America’s future, like what happened in Zimbabwe.  At the same time, Bass sees median real estate prices staying flat at best for several more years, and high-end real estate prices heading lower.

Anyone see a contradiction in that?  Would real estate sputter along if hyperinflation took hold?  Hardly.  Real estate is a classic inflation hedge.  Property prices will skyrocket if hyperinflation develops, just like in Zimbabwe, where property prices increased at an annual rate of 5,000% during that country’s hyperinflation.

About the only thing confirming the hyperinflation thesis is the price of gold and other precious metals.  But that could well be a fad that will end in tears just like every other bubble that sucked in money from the weakest among us before popping.  The gold-bug advertising littering all media right now could signal that the end is near.

The last time gold shot to the moon (in 1979-80), inflation was already soaring into the double-digits, eventually exceeding 14% year over year.  Are we experiencing anything like that now?

U.S. Inflation -- CPI (YoY) -- Chart

Likewise, the last time gold shot to the moon, wages were leaping ahead in a desperate struggle to keep pace with inflation.  Now?  We’ve just finished the latest gap down in a 30-year, secular downtrend of wage and salary disinflation (i.e., lower and lower inflation).

Wages and Salaries Inflation -- Annualized -- BLS ECI

So far, the inflation crowd has been waiting for Godot.

Maybe someday the Fed will spur some inflation.  But there’s no clear evidence of that yet.  And until then, we’re sticking to our story.  Real estate in Miami and Coral Gables generally remains overpriced relative to the fundamentals: incomes, rents, historical values, and (in the upper price ranges) months’ supply.  Buyers have time on their side.

In other words, we agree with the Kyle Bass who sees real estate prices flat to down for several more years before a new phase of rising prices, not the Kyle Bass who sees hyperinflation.

posted by // Comments Off on The Great Godot of Inflation

Pending Home Sales Index Up Moderately, Still Low

posted on October 5th, 2010 filed under: Real Estate Market Data

The Pending Home Sales Index from the National Association of Realtors rose moderately for August 2010, but remain historically low.  The chart below shows the seasonally-adjusted annual rate (SAAR).

Pending Home Sales Index (NAR) -- August 2010 -- Chart, Graph

The depressed level of sales is obviously a result of the $8,000 government handout, which borrowed sales from the future.  But it is constructive that sales continue to advance off the low established in June.  If the government refrains from additional short-term incentives, future gains would be organic and credible.

Sales are counted as pending when contracts are signed.  A level of 100 corresponds to the average volume of contract signings in the year 2001.  The NAR notes that 2001 was the first of four consecutive record-breaking years of home sales — a disclaimer that seeks to excuse recent poor performance put the current numbers in perspective.

posted by // Comments Off on Pending Home Sales Index Up Moderately, Still Low

Q2 Review: Closed Sales in Coral Gables Real Estate, Zip Code 33146

posted on October 4th, 2010 filed under: Properties in Focus, Real Estate Market Data

The table below reports closed sales of single-family homes in zip code 33146, Coral Gables, FL.  Recently closed sales are the principal guide to current property values in a local real estate market.

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33146 -- 2Q10Because The Real Estate Fountain focuses on mid-range to luxury properties, the table excludes sales of smaller homes on smaller lots.

6311 Leonardo St.

6311 Leonardo St.

Data are from tax records, and thus are not limited to MLS transactions.

6505 Caballero Blvd.

6505 Caballero Blvd.

Data are believed accurate but not warranted.

4949 San Amaro Ct.

4949 San Amaro Ct.

posted by // Comments Off on Q2 Review: Closed Sales in Coral Gables Real Estate, Zip Code 33146

Cash Is King in Miami and Coral Gables Real Estate

posted on September 28th, 2010 filed under: Financial Responsibility, Real Estate Market Data

Looking to buy a house in Miami or Coral Gables?  Great!  How much will you need as a downpayment?  Why, 100%, of course!

Cash deals are not normal in real estate — not in Miami or Coral Gables, or anywhere else for that matter.  But these are not normal times.

All-cash deals have become a stupefying 60% of all single-family home sales in the Miami and Coral Gables area.

Miami and Coral Gables Real Estate -- Cash Deals -- Percent of All TransactionsFor luxury homes selling for more than $2.5 million in Miami and Coral Gables, the share of cash deals has reached 72.8%.  But you expect a high proportion of cash deals (o.k., not that high) from people who are truly wealthy.

The really amazing numbers are in the price ranges where you know people ordinarily borrow to buy.  For 63% of deals below $425k to be cash, or 53.9% of deals between $700k and $1 million to be cash, is flabbergasting.  Who knew everybody had so much cash lying around?

Are investors replacing failed would-be homeowners and suddenly deciding to become landlords in Miami and Coral Gables?  Or did this many people see it all coming, sell their houses near the peak and rent for a couple of years, so they can come back in now with cash?  A recent post showed how rentals rose dramatically and appear to have peaked.  But it’s hard to believe that so many people timed it all so well.  We’re talking 60% of sales.

Whatever the explanation, what happens next?  As economist Herbert Stein famously said: “If something cannot go on forever, it will stop.”

Certainly cash deals cannot continue to make up 60% of all transactions in the Miami and Coral Gables real estate market.  And indeed, the degree to which the percentage this year exceeds the percentage in 2009 is less than the degree to which the percentage in 2009 exceeded the percentage in 2008.  The second derivative is slowing.

As the cash buyers fade, what happens next?

posted by // Comments Off on Cash Is King in Miami and Coral Gables Real Estate

Q2 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33134

posted on September 24th, 2010 filed under: Properties in Focus, Real Estate Market Data

Closed sales data are key to understanding current conditions in the real estate market.  Although broad indices like the FHFA House Price Index or the S&P Case-Shiller Home Price Index break down the numbers by metro areas, including Miami, real estate values can be highly localized.

The table below reports closed sales of single-family houses in zip code 33134, which is mainly within Coral Gables.  Because The Real Estate Fountain focuses on mid-range to luxury properties, the table generally excludes sales of small homes on small lots, like the many bungalows found in north Coral Gables.

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33134 -- 2Q10Data are from tax records, and thus include transactions both on and off the MLS.

816 Castile Ave.

816 Castile Ave.

posted by // Comments Off on Q2 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33134