Archive for the 'Real Estate News' Category

Friday Fountain Photo

posted on February 19th, 2010 filed under: Real Estate News

The De Soto Fountain, piece de resistance among fountains in Coral Gables.  Located at the intersection of De Soto and Granada Boulevards — prime real estate between the Biltmore Hotel and downtown Coral Gables.

Coral Gables Real Estate Photos -- De Soto Fountain

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Coral Gables Foreclosures: Few Substantial Homes Have Been Foreclosed and Sold as REO

posted on February 17th, 2010 filed under: Real Estate News

Plenty of single-family homes in Coral Gables have been lost to foreclosure or short sale, but few have been substantial in size or quality.  And although a fair number of larger homes have been the subject of a foreclosure filing, that is a far cry from proceeding all the way to repossession and bank-owned sale.  Despite the disastrous real-estate market of the last few years, only about 20 REO (bank-owned) sales in Coral Gables have involved properties bigger than a breadbasket.

Coral Gables REO Foreclosure Sales -- Larger Homes Sold -- Jan. 2006 to Feb. 2010

Here are a couple of case studies:

  • 828 Valencia Avenue sold for $625,500 in January 2010, after selling for $1,225,000 in April 2006.  At 4,211 adjusted square feet, the 2010 sale represents a mere $148/sf.  But you get what you pay for.  Significant parts of that consisted of what appeared to be outdoor patio and brick porch space that had been enclosed.  At least one room seemed to have significant mold growth.  And most buyers would generally have seen a need for total renovation.  The property is located just off De Soto Avenue near the Coral Gables landmark Venetian Pool.

Coral Gables Real Estate Photos -- Sold Foreclosure Property -- 828 Valencia 2

  • 4901 Alhambra Circle sold for $563,750 in March 2009, after selling for $2,100,000 (courtesy of Countrywide Home Loans) in May 2006.  At 3,938 adjusted square feet, the 2009 sale represents $143/sf.  Again, the price was commensurate with the condition of the house, which had a leaky roof, interior water damage (which always raises the possibility of mold growth), and the usual Miami-foreclosure green pool.  But this property has already proved itself:  The buyer in foreclosure fixed it up and flipped it for $1,030,000 in a transaction that closed earlier this month.

Coral Gables Real Estate Photos -- Sold Foreclosure Property 4901 Alhambra Circle

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New Rule Requires Explanation for Last-Minute Cancellation of Foreclosure Sales in Florida

posted on February 16th, 2010 filed under: Real Estate News

Banks seeking to postpone foreclosure sales will be required to explain why the postponement is necessary, under a new rule adopted by the Florida Supreme Court.  (For details, go to the online docket and search for case number SC09-1460.)  Will this help solve the blight caused by vacant and abandoned foreclosure homes in Miami and (to a lesser extent) Coral Gables?

Theoretically, the rule could affect banks’ notorious practice of postponing repossession as a way of avoiding property taxes, maintenance costs and recognition of losses on balance sheets.  Hard to imagine, however, that bank attorneys will be at a loss for words when concocting the required note for why Johnny can’t come to school that day.  Indeed, bank attorneys don’t even need to make things up; the form serves up such softball boxes to check as “Plaintiff and Defendant are continuing to be involved in loss mitigation” and “Plaintiff has ordered but has not received a statement of value/appraisal for the property.”

Bottom line: Don’t expect the new rule to meaningfully reduce the number of vacant, unkempt foreclosure properties in Miami or Coral Gables.  Residents and real-estate values around foreclosure properties will continue to suffer the ill effects.

The new rule implements a recommendation in the August 2009 Final Report and Recommendations on Residential Mortgage Foreclosure Cases produced by the Task Force on Residential Mortgage Foreclosure Cases, a group assembled by the Florida Supreme Court to study the glut of foreclosure cases in the Florida court system.  The task force found that “many foreclosure sales set by the final judgment and handled by the clerks of court are the subject of vague last-minute motions to reset sales without giving any specific information as to why the sale is being reset.”  Requiring an explanation for the requested postponements is supposed to help “determine when [sales] can properly be reset, or whether the sales process is being abused.”

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University of Miami Baseball Season Set to Begin in Coral Gables

posted on February 14th, 2010 filed under: Real Estate News

Yesterday, on the cusp of the 2010 baseball season, the University of Miami Hurricanes baseball team hosted an afternoon of baseball fun for everyone.  The day included a home-run derby, face painting, pony rides, T-ball games and other fun stuff, and culminated in an alumni baseball game starring some of the team’s best former players (including major-leaguers).  Admission was free.

Coral Gables Real Estate Photos -- University of Miami -- UM Baseball 1

The highlight may have been current team leader Yasmani Grandal’s performance in the home-run derby, swatting a dozen out of the park and trouncing alumnus Ryan Braun, who plays left field for the Milwaukee Brewers.  One of Grandal’s shots soared over the right-field wall and hit the Ponce de Leon parking garage.  He’s surely destined for the majors.

The UM baseball team will start their 2010 season at home in Coral Gables with a three-night series against the Scarlet Knights of Rutgers University.  The games are at 7:00 p.m. Friday the 19th through Sunday the 21st.  General admission tickets are affordable ($10 adults, $9 kids).  The Hurricanes won the ACC championship in 2008 and remain one of the best college baseball teams in the country.

UM was founded as an integral part of the original plan for Coral Gables back in the 1920s, and can be a source of great enrichment for area residents.  If you’re thinking of buying or renting real estate in Coral Gables or Miami, don’t forget to take into account the many benefits of making your home near a major university.

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U.S. Homeownership Rate Continues Long Journey Home

posted on February 11th, 2010 filed under: Real Estate News

One of the hallmarks of the real-estate bubble was a near-universal belief that increasing the rate of homeownership was a worthwhile goal.

U.S. Homeownership Rate: 1965-2009

Oops.

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U.S. Single-Family Vacancies Remain High

posted on February 11th, 2010 filed under: Real Estate News

The Census Bureau recently reported that the percentage of single-family homes standing vacant ticked up in the 4th quarter of 2009.  At 2.3%, it’s down from the peak of 2.6% in 1Q08, but still much higher than the 1%-1.5% range that’s been normal over the years.

U.S. Single-Family Home Vacancies: 1969-2009

Of course, vacancies in Miami and Coral Gables real estate do not necessarily correspond to the national data.  Miami probably has a higher vacancy rate than the nation as a whole, because Miami has more homes in foreclosure.  The foreclosure rate in Coral Gables is probably not as high as in Miami.

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Friday Fountain Photo

posted on February 11th, 2010 filed under: Real Estate News

Fountains are commonplace on public and private properties alike in Miami and Coral Gables.  Here’s a nice one on the grounds of the Biltmore Hotel in Coral Gables:

Coral Gables Real Estate Fountain

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Luxury Property in Miami and Coral Gables: Can Sellers Look to London for Hope?

posted on February 9th, 2010 filed under: Real Estate News

Prices for luxury real estate in Miami and Coral Gables have been weakening, as stubborn sellers decide to get on with their lives and hit buyers’ bids.  The logjam of oversupply is breaking, and the result is lower prices.

But there’s been a remarkable rebound in one of the other markets that boomed in the mid-’00s:  London, England.  According to Bloomberg, luxury-home prices in London rose 12 straight months through December 2009, up 1.1% for the month alone and 11.5% from a year earlier.  Prices are still down from their peak, but only by 12%.  Brokers attributed the strength to an excess of buyers and a shortage of sellers.

Assets worldwide boomed in correlation, then busted in correlation.  But Miami and Coral Gables are not sharing London’s luxury-property pricing bounce yet.  Why?

It’s not as if London was the first to fall and first to recover.  For the market as a whole, real estate prices began falling in London in 2007 — about the same time as in Miami.

Maybe Miami never deserved to be taken so seriously in the first place.  London is a prime destination for international wealth — #2 on one top 10 list.  Miami and Coral Gables simply do not share that prestige.

Property values in Miami and London seem to have decoupled.

Source:

Peter Woodfield, London Luxury-Home Prices Increase Most Since 2008

Bloomberg.com, Feb. 03, 2009

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Miami Real Estate Prices Revert Toward Norm Relative to Incomes, But Affordability Still Ranks Relatively Low

posted on February 7th, 2010 filed under: Real Estate News

One measure of housing affordability compares median home prices to median incomes.  The National Association of Home Builders maintains a Housing Opportunity Index that tracks those data.

In 1998, before the greatest real-estate mania in American history, Miami was already among the less affordable real-estate markets in the United States:

  • 1Q98 median home price:  $106,000
  • 1Q98 median income:  $39,200
  • 1Q98 affordability ratio:  2.70
  • 1Q98 U.S. metro affordability ranking:  154 of 191 (80th percentile)

By the end of the boom, the relationship between incomes and home prices in Miami had become grotesquely distorted:

  • 1Q08 median home price:  $300,000
  • 1Q08 median income:  $49,200
  • 1Q08 affordability ratio:  6.10
  • 1Q08 U.S. metro affordability ranking:  217 of 223 (97th percentile)

Now, in the wake of the bust, the relationship between home prices and incomes in Miami has almost returned to the pre-boom level, and Miami has backed off its thrust toward the top of the unaffordability chart.  But because real estate has gotten so cheap nationwide, Miami’s relative affordability ranking remains significantly higher than before the boom.

  • 3Q09 median home price:  $160,000
  • 3Q09 median income:  $50,800
  • 3Q09 affordability ratio:  3.15
  • 3Q09 U.S. metro affordability ranking:  154 of 191 (80th percentile)

Incidentally, New York remains the least affordable metro area, with a median home price 6.5 times the median income.  Some dreams die hard.

Rankings based on the Housing Opportunity Index maintained by the National Association of Home Builders and Wells Fargo.

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What Is Real Estate Really Worth in Miami and Coral Gables?

posted on February 2nd, 2010 filed under: Real Estate News

“Supporting home prices is an explicit policy goal of the Government.”

Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), Quarterly Report to Congress, p. 126 (Jan. 30, 2010).

The great dilemma facing anyone who buys real estate, or would like to, is that prices are now a function of government intervention.  In Miami, Coral Gables and beyond, the true value of real estate is obscured.

As in physics, where the Heisenberg uncertainty principle holds that the act of measuring distorts what’s measured, government intervention is distorting the real-estate market.  You can bet that prices are higher than they otherwise would be.  But how much?  How much less would the house you buy today be worth tomorrow if government assistance abated?

The importance of the question is proportional to the magnitude of the intervention.  And make no mistake: the intervention is massive.

“To the extent that the crisis was fueled by a ‘bubble’ in the housing market, the federal government’s concerted efforts to support home prices . . . risk re-inflating the bubble in light of the Government’s effective takeover of the housing market through purchases and guarantees, either direct or implicit, of nearly all of the residential mortgage market.”

SIGTARP Report, p.6.

If that isn’t enough to make you uneasy, try this on for size:

“Stated another way, even if TARP saved our financial system from driving off a cliff back in 2008, absent meaningful reform, we are still driving on the same winding mountain road, but this time in a faster car.”

Id.

In such a grossly distorted, dangerous environment, your best approach is to heed fundamentals and history.  Properties occasionally come to market in Miami and Coral Gables at prices that are defensible as a matter of area incomes, rents and historical values.  Stay true to those basics, and you will be less likely to get hurt.

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