Almost Back to Normal Months’ Supply of Homes for Sale in Coral Gables

posted on October 16th, 2011 filed under: Financial Responsibility, Real Estate Market Data

The vast oversupply of homes for sale in Coral Gables has almost been worked off, even in the luxury segment of the market.  340 homes are currently for sale, and 40 sold last month, which works out to 8.5 months of supply.  This is a fundamental barometer for the real estate market.  Six to eight months’ supply is generally regarded as indicating a roughly equal balance of power between buyers and sellers.

Months Supply of Homes for Sale -- Coral Gables Real Estate -- Oct 2011 (Table)

Sales of luxury homes in Coral Gables continue to shows signs of life.  It’s normal for higher-priced homes to sell more slowly, but for a while, they were hardly selling at all.

Months Supply of Homes for Sale -- Coral Gables -- Oct 2011 (Chart, Graph)

Real estate in Miami and Coral Gables remains vulnerable to further price declines on several measures: historical valuations, the price-to-income ratio, and the cost of owning versus renting.  But those measures are decreasingly troublesome, and combined with the normalization of the months’ supply measure, suggest dissipating risk for buyers.

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Friday Fountain Photo

posted on October 8th, 2011 filed under: Fountains

Fountain at pool deck of Jade condo, 1331 Brickell Bay Drive, Miami, Florida.

Miami Real Estate Photos -- Fountain at Jade Condo Pool Deck -- 1331 Brickell Bay Dr

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FHFA House Price Index — Prices Still Falling in Miami and New York

posted on September 23rd, 2011 filed under: Financial Responsibility, Real Estate Market Data

According to the FHFA House Price Index, real estate prices are still falling in Miami and New York.

Keep your eye on the long-term trend line, which we warned long ago was our destiny.  At the time, that implied a potential 50% price decline for home values in Miami.  (Did any other real estate broker warn you about that?)

FHFA House Price Index -- Miami MSA -- 1Q1976 to 2Q2011 (NSA) -- with trend line

Home prices in New York have even further to go.  The New York real estate market remains one of the most overpriced in the country relative to income.

FHFA House Price Index -- New York MSA -- 1Q1976 to 2Q2011 (NSA) -- with trend line

At some point, property prices in Miami and New York could start moving sideways rather than down, and work off the remaining overvaluation as a function of time rather than price.  On the other hand, it’s also possible that prices overshoot to the downside — i.e., go below the long-term trend line before floating back up to it.  In any event, you should assume that the long-term trend is our ultimate destination.

Note: FHFA stands for the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, the government-sponsored entities that buy up most of the mortgages issued in the United States.  The FHFA House Price Index tracks repeat sales or refinancings of the same properties over time.

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Two Luxury Homes Sell on Santa Maria Street in Coral Gables

posted on September 12th, 2011 filed under: Properties in Focus, Real Estate News

Santa Maria Street is one of Coral Gables most desirable addresses.  The street runs up the middle of Riviera Country Club, and houses on both sides have golf course views.  Numerous historic homes and a canopy of old oak trees make Santa Maria and the surrounding neighborhood one of the most picturesque places to live in Coral Gables.

The grand home at 4415 Santa Maria changed hands at $3.5 million, or $607/sf.  It appears to have been a private sale, because the property was not really listed on the MLS (although the sale has been reported there).  Last sale was in October 2003 for $2.875 million.

4515 Santa Maria Ave.

4515 Santa Maria St.

Another fine historic home, at 4412 Santa Maria, sold for $2.7 million, or $456/sf.  Last sold in March 2006 for $3.78 million.

4412 Santa Maria Ave.

4412 Santa Maria St.

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Mortgage Rates Testing 2010 Low

posted on September 4th, 2011 filed under: Financial Responsibility, Real Estate Market Data, Real Estate News

The rate on the 30-year fixed mortgage averaged 4.27% last month (August 2011), according to Freddie Mac.  That’s just 4 basis points above the low of 4.23% set in October 2010.

Mortgage Rates -- 30-Year Fixed -- August 2005 to August 2011

Whether you’re getting a good deal on a home in Coral Gables, Miami or Miami Beach depends on a lot of other factors (including the quality of advice you get from a real estate agent).  But one thing you can’t complain about is the rate you’re going to pay on your mortgage.

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Friday Fountain Photo

posted on August 26th, 2011 filed under: Fountains

Fountains adorn the Jog Road traffic circles at the golf community in Pam Beach Gardens called The Country Club at Mirasol.

South Florida Real Estate Photos -- Fountain -- Country Club at Mirasol

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Months’ Supply of Homes Continues to Decline in Coral Gables

posted on August 21st, 2011 filed under: Real Estate Market Data

The months’ supply of homes for sale in Coral Gables, Florida has continued to decline toward relatively normal levels.  Excess inventory from the real estate bubble has been completely or nearly worked off in most price ranges.

Months Supply of Homes for Sale -- Coral Gables -- Aug. 2011 (Chart, Graph)

The aggregate months’ supply number of 8.3 is still a bit on the high side, but low enough to represent a roughly even balance between buyers and sellers.

Months Supply of Homes for Sale -- Coral Gables Real Estate -- Aug 2011 (Table)

The luxury-home segment in Coral Gables continues to be extremely oversupplied, although there was a spate of closings in July, which makes the current 28.2 months’ supply look good by recent comparison, if still historically bad.  As the chart below illustrates, there is no clear trend toward year-over-year improvement in luxury home sales.

Months Supply of Homes for Sale -- Luxury Homes -- Coral Gables -- Jan 2009 to July 2011 (Chart, Graph)

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Friday Fountain Photo

posted on August 5th, 2011 filed under: Fountains

Fountain at the Cosmopolitan condo in South Beach:

Miami Beach Real Estate Photos -- Fountain at Cosmopolitan Condo

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Large Homes in Coral Gables 33134: Historical Price Per Square Foot

posted on July 29th, 2011 filed under: Real Estate Market Data

The price per square foot of large homes in Coral Gables exhibits a rise and fall like the rest of the Miami market.

The charts below depict sales of houses between 3,500 and 6,000 square feet, in zip code 33134 (the northern part of Coral Gables, in the vicinity of Miracle Mile and the Biltmore Hotel), from January 1995 to June 2011.

Price Per Square Foot -- Coral Gables Real Estate -- Zip Code 33134 -- Homes 3500SF-6000SF -- 1995-2011 -- By Date

During the bubble, prices went ballistic, but sales dried up — one of the classic signs of a top in the real estate market.  Now that prices have receded to a range in line with the 2002-2004 period, sales have come back.

When the bubble began in about 2000, the norm of annual mid-single-digit price increases gave way to the mania of annual price increases ranging from 15% to 25%.  The 2002-2004 price range was excessive at the time, but with nearly a decade to work off that excess, the same prices may be defensible here in 2011.  In other words, trendline single-digit appreciation has more or less caught up with the boom-and-bust trajectory of Coral Gables home prices.  Of course, mean-reverting asset prices sometimes overshoot to the downside, so there’s no guarantee against further declines.

Displaying the sales in a one-by-one series rather than by date makes it easier to see the trajectory of prices in times of increased sales activity, like the recent post-bubble period.

Price Per Square Foot -- Coral Gables Real Estate -- Zip Code 33134 -- Homes 3500SF-6000SF -- 1995-2011 -- By Sale

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The Premium for New Construction in Coral Gables Real Estate

posted on July 14th, 2011 filed under: Properties in Focus, Real Estate Market Data

As noted previously, big old houses in Coral Gables have been selling for about $200 per square foot.  What about big new houses?

One of those will cost you quite a bit more, if recent sales are any indication.  The luxury home at 3716 Durango Street sold for about $375/sf, and the luxury home at 2000 North Greenway Drive (which has a golf-course view) sold for about $425/sf.

3716 Durango St.

3716 Durango St.

A premium for new construction may be worth paying to avoid the delay and disruption of renovations.  But are new homes really worth $200 per square foot more than existing homes?  That’s almost the cost of building from the ground up.

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