Archive for the 'Real Estate Market Data' Category

Q1 Review: Closed Sales in Miami, Pinecrest and Coral Gables Real Estate, Zip Code 33156

posted on May 2nd, 2010 filed under: Properties in Focus, Real Estate Market Data

The table below reports closed sales of select single-family homes in the portion of zip code 33156 east of Ludlam Road (SW 67 Ave.), including neighborhoods in Pinecrest and Coral Gables.  The 33156 zip code extends from Kendall Drive (SW 88 St.) south to Howard Drive (SW 136 St.), and thus includes the waterfront gated communities of Gables Estates, Journey’s End, Hammock Oaks and Gables by the Sea, as well as the gated lakefront community Snapper Creek Lakes, and the soon-to-be-gated lakefront community Hammock Lakes.

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33156 -- 1Q10

Recently closed sales are the principal guide to current property values in a local real estate market.  Data are from tax records, and thus include transactions not appearing on the MLS.

Because The Real Estate Fountain focuses on mid-range to luxury properties, the table focuses on the more desirable homes and locations in the covered area.

9801 W. Suburban Dr., Pinecrest

9801 W. Suburban Dr., Pinecrest

Although this is a first-quarter review, closed sales from December 2009 are included.  The originally scheduled November 30 expiration of the $8,000 homebuyer tax credit makes December 1 a more interesting time to start the real estate sales “quarter.”  The $8,000 credit should not have made much difference to buyers of mid-range to luxury real estate in Pinecrest and Coral Gables, but no market with human participants is fully rational.

11097 Paradela St., Hammock Oaks, Coral Gables

11097 Paradela St., Hammock Oaks, Coral Gables

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Q1 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33143

posted on May 1st, 2010 filed under: Properties in Focus, Real Estate Market Data

The table below reports closed sales of single-family homes in the portion of zip code 33143 east of Red Road (SW 57 Ave.), including neighborhoods in Miami and Coral Gables.  In that area, the 33143 zip code extends from Sunset Drive (SW 72 St.) south to Kendall Drive (SW 88 St.).

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33143 -- 1Q10

Recently closed sales are the principal guide to current property values in a local real estate market.  Data are from tax records, and thus include transactions not appearing on the MLS.

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

7270 W. Lago Dr., Cocoplum

7270 W. Lago Dr., Cocoplum

Although this is a first-quarter review, closed sales from December 2009 are included.  The originally scheduled November 30 expiration of the $8,000 homebuyer tax credit makes December 1 a more interesting time to start the real estate sales “quarter.”  If buyers behaved rationally, the $8,000 credit should not have made much difference for mid-range to luxury real estate in Miami and Coral Gables.  But you cannot assume the real estate market is rational.

510 San Servando Ave.

510 San Servando Ave.

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Case-Shiller Index Posts Another Small Decline for Miami Real Estate

posted on April 27th, 2010 filed under: Financial Responsibility, Real Estate Market Data

The Case-Shiller Home Price Index posted another small decline in Miami real estate for the three-month period ending February 2010.  This marks the fifth straight month of small monthly declines.  A similar pattern is playing out in the New York metro area, which posted its sixth straight small decline.

Standard & Poor's Case-Shiller Home Price Index -- Miami -- Feb. 2010

The real estate bubble in Miami and Coral Gables pushed the Case-Shiller index from a level of about 100 in January 2000 to nearly 280 in January 2007.  Perhaps needless to say, incomes did not rise 180% over that period, and as the bubble inevitably burst, the Case-Shiller index collapsed to about 145.

Since hitting a low of about 146 in May 2009, the Case-Shiller index for Miami has moved essentially sideways.  Despite this stabilization, questions remain about real estate values in Miami and Coral Gables:

  • Incomes have risen about 25% since 2000, not 45%.
  • Insurance costs have rocketed higher, driving up the cost of owning property everywhere in South Florida.
  • Public budgets continue to be balanced on the backs of new buyers who subsidize the capped property assessments and taxes of pre-existing owners.

Responsible buyers, and banks that have returned to old-fashioned lending standards, are again taking these ownership costs into account.  Sideways may be the new Up in Miami and Coral Gables real estate.

The Case-Shiller index is maintained by Standard & Poor’s, and tracks repeat sales of the same homes, thus avoiding the skew that can result from changes in the mix of expensive versus inexpensive homes sold.

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Q1 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33146

posted on April 27th, 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.  Data are from tax records, and thus includes transactions not appearing on the MLS.

5201 Alhambra Cir.

5201 Alhambra Cir.

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

Coral Gables Real Estate -- Closed Sales -- Single-Family Homes -- Zip Code 33146 -- 1Q10Although this is a first-quarter review, closed sales from December 2009 are included.  The originally scheduled November 30 expiration of the $8,000 homebuyer tax credit (since extended to April 30 for contracts, June 30 for closings) makes December 1 a more interesting place to start the real estate sales “quarter.”

1221 Campo Sano Ave.

1221 Campo Sano Ave.

An $8,000 tax credit credit, however, should not have had much effect on buyers of mid-range to luxury real estate in Coral Gables.

4100 Anderson Rd.

4100 Anderson Rd.

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U.S. New Home Sales Jump

posted on April 24th, 2010 filed under: Real Estate Market Data

New home sales in the U.S. posted a huge gain in March, to a seasonally adjusted 411,000.

Here’s a chart for the period from 1990 through March 2010, without seasonal adjustments:

U.S. New Home Sales -- 1990 to Mar. 2010

Last month’s observation holds:  Because new home sales did not make a lower low this past winter on a non-seasonally adjusted basis, they appear to have reached the bottom.

The risk to that idea, of course, is that the government has distorted the market with the $8,000 homebuyer tax credit.  The credit is available if you sign a contract by the end of this month (April 2010) and close by the end of June.  The new home sales data are based on contracts signed, not transactions closed (unlike existing home sales data, which are based on closings).  Therefore, these data are showing us in “real time” the effect of the upcoming tax credit expiration.

Some reports also noted that the supply of new homes for sale has hit a low not seen since the 1970s, nearly 40 years ago.  True enough:

U.S. New Homes for Sale -- 1965 to Mar. 2010

But it is a testament to how weak sales remain that even with that itty-bitty number of new homes for sale, the months’ supply (number of homes for sale divided by number sold in the past month) is still a bit higher than normal.

U.S. New Homes for Sale -- Months' Supply -- 1965 to Mar. 2010

As would be expected if the tax credit were a factor, the median price fell a bit from month to month (from $221,600 to $214,000) despite the big gain in sales.  Getting $8,000 from your rich (or profligate) Uncle Sam makes a bigger difference to buyers of cheaper homes, so more of those homes show up in the sales data.

U.S. New Home Sales -- Median Price -- 1990 to Mar. 2010

We’ve basically worked off the bubble in new home prices nationwide, and those prices may now be starting to rise again in line with the historical trend.

Do not, however, assume the same is true for all real estate prices, or for your local market.  The prices of existing homes here in Miami and Coral Gables, for example, remain elevated compared to the historical trendline.  More on that in an update coming soon.

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No Ordinary Recession

posted on April 24th, 2010 filed under: Financial Responsibility, Real Estate Market Data

Was the recession that began in 2007 just another typical downturn?  Or is it something more?

Consider the number of people employed.  In every recession since the Great Depression, the number employed has fallen, but in a pattern of higher highs and higher lows.

U.S. Nonfarm Employment -- 1939 to Mar. 2010

This time, for the first time since the Depression, the low is not a higher low, but roughly as low as in the prior recession.

U.S. Nonfarm Employment -- 1990 to Mar. 2010

To put it mildly, this is not normal.  Be careful out there.

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Miami Existing Home Sales Up, Median Price Down, in March

posted on April 24th, 2010 filed under: Real Estate Market Data

Miami Real Estate Photos -- Biscayne Bay 3

According to the Florida Association of Realtors, 649 existing single-family homes sold in the Miami metro area last month.  Sales were:

  • Up 46% from the 445 homes sold in Miami the month before (Feb. 2010), which is partly attributable to the normal pick-up in spring activity, probably boosted by the upcoming expiration of the $8,000 homebuyer tax credit, and perhaps reflective of an improving sense among buyers that the risk of buying real estate in Miami, Coral Gables and the surrounding area has diminished.
  • Up 17% from the 556 sold in March 2009, and much higher than the 445 sold in February 2010.

The median price was $197,500, which is:

  • Up from the prior month’s level of $191,100 (Feb. 2010)
  • Down from the year-before level of $205,600 (March ’09)

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Housing Starts and Homebuilder Stocks Say The Bottom Is In (But Not Necessarily for Real Estate in Miami and Coral Gables Just Yet)

posted on April 21st, 2010 filed under: Real Estate Market Data, Real Estate News

Those of us who have been negative on real estate values based our outlook in part on the enormous height that housing starts and homebuilder stocks scaled during the boom.  If real estate buyers in Miami and Coral Gables paid attention to such data, they could have sidestepped the brutal beating — even bankruptcy — that inevitably resulted from buying a depreciating asset with borrowed money.

But honest analysis demands that we acknowledge when housing starts and homebuilding stocks have bottomed.

Housing starts and homebuilding stocks appear to have bottomed.

Here are starts and stocks (HGX, an index of housing stocks) from 2008 to present:

U.S. Housing Starts -- 2008 to Mar. 2010

Homebuilder Stocks -- HGX -- 2008 to Apr. 2010

Here’s a longer view of housing starts (1990 to Mar. 2010):

U.S. Housing Starts -- 1990 to Mar. 2010

And a really long view (1959 to March 2010):

U.S. Housing Starts -- 1959 to Mar. 2010

Does this mean you should rush out to buy whatever home you can lay your hands on in Miami or Coral Gables?  No.  When bubble towns go bust, they can lag the national data both in turning down and in heading back up.  (More on this in an upcoming post.)  Starts and stocks thus serve as leading indicators.  Note that national housing starts and homebuilder stocks both peaked in 2005-06.  Real estate prices in Miami and Coral Gables did not peak until 2007.

U.S. Housing Starts -- 2004 to Mar. 2010

Homebuilder Stocks -- HGX -- 2004 to Apr. 2010

Real estate prices could easily fall for another year or two in Miami and Coral Gables.  The overpricing was too extreme for the local market to clear as fast as the national market.  Fundamentals — incomes, rents, historical price trends and the supply of homes on the market —  suggest that it is too soon to expect a sustainable rise in prices.  At least until wage and rent inflation rear their ugly heads.

The good news is that we are probably near enough to the bottom for real estate prices in Miami and Coral Gables that if you’re thinking of buying a house or condo here, you should be devoting a lot of time to shopping for a home and learning about the many neighborhoods and types of properties from which to choose.  And if you find the perfect home at an advantageous price, you can make your move without too much risk of loss.

Of course, to play defense and fatten your wallet, it’s always best to work with the broker who’ll give you half his commission.

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Q1 Review: Closed Sales in Miami and Coral Gables Real Estate, Zip Code 33134

posted on April 19th, 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.  Data are from tax records, and thus include transactions not appearing on the MLS.

3416 Alhambra Cir.

3416 Alhambra Cir.

Because The Real Estate Fountain focuses on mid-range to luxury properties, the table 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 -- 1Q10Although this is a first-quarter review, closed sales from December 2009 are included.  The originally scheduled November 30 expiration of the $8,000 homebuyer tax credit (since extended to April 30 for contracts, June 30 for closings) makes December 1 a more interesting place to start the real estate sales “quarter.”

709 Majorca Ave.

709 Majorca Ave.

That said, home prices in Coral Gables, and particularly in the mid-range to luxury properties covered in this table, are high enough that the credit should not have affected buyer behavior much.

522 Alhambra Cir.

522 Alhambra Cir.

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Threats to Luxury Real Estate Values in Miami and Coral Gables: Part II

posted on April 15th, 2010 filed under: Financial Responsibility, Real Estate Market Data, Real Estate News

Ah, tax day.  A fine time to point out another threat to the value of luxury homes in Miami and Coral Gables.

Seems that we got ourselves into quite a pickle by jacking up real estate prices with ever-looser borrowed money until the whole thing collapsed on itself like the Ponzi scheme it was.  So what did we do when our personal willingness and ability to borrow cratered?  We ramped up our public borrowing.  We the People are collectively borrowing to replace our private borrowing.

Federal Reserve Flow of Funds Data -- Home Mortgage Borrowing -- Table

There is a precedent for this.  Massive federal borrowing and spending replaced a collapse in private borrowing and spending during the 1930s — the Great Depression.  Similarly, the nation went deep in debt to fight two world wars.

How did we pay back all that debt?

Same way every time.  By raising tax rates.  Especially at the top.

Here’s a chart of the top tax rate since the federal income tax was adopted in 1913:

Income Tax and Real Estate in Miami and Coral Gables -- Top Rates -- U.S. -- FederalLow at first, rates rocketed higher to pay for WW I.  They plummeted in the 1920s (arguably producing the speculative bubble in real estate and stocks that led to the ’29 crash and Great Depression), and shot higher again to pay for the borrowing and spending that was used to fight the depression, and then higher still to pay for WW II.  Back down they went over the next several decades, arguably contributing to the greatest stock and real estate bubbles in human history.  Now the nation is living off public debt again.  As night follows day, taxes will rise.

How much?  Just to get the federal deficit to 3% of GDP — a mere few hundred billion a year , where it was under President Bush, rather than the $1.5 trillion it is now — will absolutely require significant tax increases.  According to a recent article by Diane Lim Rogers, Chief Economist with the Concord Coalition, an across-the-board, proportional hike in everyone’s marginal rates to reach the 3% deficit target would produce a top rate of 48%.  If only the top two brackets were hiked, they would go to 77% and 72%.

Ever feel like somebody has their eyes on you?

Income Tax Rates and Real Estate in Miami and Coral Gables -- Uncle Sam Wants YouHow does all this affect the value of luxury real estate in Miami and Coral Gables?  A cock-eyed optimist might say that people will pile into real estate for the sake of the deductions.  But you can’t deduct the interest on loan principal over $1 million, so the benefit is limited.  (Check IRS Pub. 936 for the rule applicable to your personal situation; for example, the limit is $500,000 if married filing separately.)

Think about it. If you went from making $600,000 a year after taxes on a $900,000 income, to making $450,000 a year after taxes on a $900,000 income, would that affect how much you would be willing to pay for a $2 million house in Coral Gables or condo in Miami Beach?

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