Miami Beach Real Estate Blog

I’m often asked by both buyers and sellers interested in purchasing or selling a waterfront (and non-waterfront) single family home on Miami Beach if we’ve reached a housing market bottom?  The answer for PRIME waterfront properties located on island communities such as Palm, Star, Hibiscus, Sunset Islands I – IV, and the various Venetian Island communities is that homes that are priced according to latest closed sales comparables are selling quickly.  As inventory continues to be absorbed, we are seeing price stabilization (especially for remodeled and turnkey homes and condos).

Waterfront condos, especially premier waterfront and oceanfront buildings such as Continuum North and South Towers, Apogee, The Portofino, The Murano at Portofino, Murano Grande, Icon, and even The Bentley Bay on West Avenue are also seeing significant sales taking place in the past several months AT REDUCED PRICES.  For South Beach landmark luxury buildings completed after 2001, if the price is right, we are seeing plenty of buyers willing to make reasonable offers.  Therefore, if you’re a seller that needs to sell, my advice is the same- work with an experienced and knowledgeable sales agent/broker that will price your property realistically and then market as agressively as possible.

In Miami-Dade County, pending home sales decreased by 2.21 percent in December compared to the previous month, from 8,288 to 8,105 according to the Realtor Association of Greater Miami and the Beaches (RAMB) and Southeast Florida Multiple Listing Service.  This slight decrease can be attributed to the holiday season, which traditionally results in fewer home sales.  Since March 2009, when our local real estate board began tracking local pending sales, pending home sales have increased 43 percent as buyers have taken advantage of record-setting affordability conditions, the first-time home buyer tax credit, and a wide selection of properties to choose from.  Closed sales have increased each of the last 16 months, a clear sign of the strengthening market and indicative of stabilization.

Pending sales of condominiums in Miami-Dade County also experienced a negligible decrease in December, dropping half of a percent from 4,414 to 4,394.  Pending sales of single-family homes dropped 4.21 percent in December from the previous month, from 3,874 to 3,711.

We believe that the Miami Beach real estate market has experienced a dramatic recovery over the last year and a half, posting record closed and pending sales increases coupled with strong declines in housing inventory.  Market opportunities resulting from record affordability, low interest rates, and a second wave of short sales and foreclosures will also fuel increased sales this year.  Additionally the always-strong international buyer market segment will remain a major force in the South Florida marketplace.

An illustrative example of a recent Miami Beach (Palm Island) Closed Sale:

Palm Island Home

This was the best opportunity on the Miami Beach market to purchase a home on a guard-gated island community. Surrounded by lush landscaping, this two-story residence is located on prestigious Palm Island, just minutes from downtown Miami, South Beach and world-renowned Ocean Drive. Features include high ceilings, 4 upstairs bedrooms, and an air-conditioned 2-car garage. Pristine conditions.

My opinion as to why it sold in just 66 days on market:  Amazing island community location, spacious floorplan and updated home, price reduced to sell.

Sold Price: $890,000
Original “For Sale” Price : $1,495,000 (3/2007)
Bedrooms: 4
Bathrooms: 3
House S.F.: 2,786 ($319/SF)
Land S.F.: 6,000 ($148/SF)
Sold Date: December, 2009
Discount from Original Asking Price: 40%

Recently, there has been flurry of articles in the newsmedia about a pronounced increase in home sales, which has also led to a stock market rally in the runup to the Thanksgiving Holiday. I’d like to take this opportunity to put a bit of local perspective on this latest sales trend:

75% of the homes sold between August through October in Miami-Dade County were priced under $300,000 and 23% of these sales were for homes listed under $100,000.

Price trends at the lower end of the market have been positive, however moving into the higher price ranges, those are areas that we are still seeing weakness.  Typically, when the supply of homes for sale stands at a year or more, prices tend to fall. With a six- to nine-month supply, prices remain flat. When the supply drops below six months, sales activity begins to spur price appreciation, as it has for recent home sold and priced under $100,000.

Below is sampling of the supply of houses listed for sale in Miami-Dade in October, according to the MLS:

• Under $100,000: four-month supply
• Under $300,000: eight-month supply
• $300,000 to $1 million: 21-month supply
• Over $1 million: four-year supply

Miami Beach’s luxury housing market falls into the upper end category, however, the supply is much more restricted due to the natural barrier (island community) limiting further supply.  Also, virtually no new construction is currently taking place, so we’re experiencing a decline in inventory levels for Miami Beach’s 33139 and 33140 zip codes:

• $300,000 to $500,000: less than six month supply
• $500,000 to $1 million: 14 month supply
• $1 million to $2 million: 18 month supply
• Over $2 million: 23 month supply

The conclusion from the above referenced data – there is no room in the Miami Beach housing market for overpriced listings. The strongest demand is for turnkey (completely remodeled) homes, where the new owners do not have to make an additional investment into the property.

To view latest Miami Beach sales data, visit our Miami Beach Real Estate website

* Data Sources: MLS & Miami-Dade Public Records

The Obama administration has finally begun to crack down on mortgage companies and loan servicers that are failing to do enough to help borrowers at risk of foreclosure.  Measures announced this week include sanctions and fines that will be imposed via the Treasury Department.  According to a random survey of approximately 50 of our clients who purchased property in Miami Beach after 2004, we have roughly estimated that only 25% of eligible borrowers who purchased premier waterfront properties in Miami Beach have been able to permanently modify their loans.

As part of the various Homeowner Relief Programs being advocated by policy makers in Congress, The Treasury Department, and The Obama Administration, over 35,000 homeowners received letters during the summer of 2009 from the Federal Regulators–offering them a new, more affordable mortgage payment. However, the real problem seems to be the bureaucratic bottleneck, disorganization, and lack of accountability on the part of loan servicers and banks.  In the past two weeks alone, I have had four separate clients tell me that their loan modifications have either been denied due to lost files, incomplete paperwork (because a form changed from time of application), and general lack of responsiveness and policy confusion from lenders.

The Federal Deposit Insurance Corporation (FDIC) is offering many delinquent borrowers significant concessions on past due mortgages–in many cases lowering interest rates to as low as 3%, extending loan amortizations schedules from 30 to 40 years, waiving traditional qualification requirements, and keeping payments under 38% of a borrower’s gross income.  Many Miami Beach homeowners who currently find themselves “underwater”, which is defined as owing more than the property is worth in today’s market, are anxious to participate in the loan modification programs.

Our sampling of Fortune International’s clients includes those that purchased a waterfront property as their primary residence on Sunset Island IV, Palm Island, Biscayne Island, and in Miami Beach condo buildings including The Murano at Portofino, The Portofino Tower, The Bentley Bay and The Continuum South Tower. Approximately 65% of those surveyed indicated a willingness to stay in their homes, as long as they were successful in lowering their monthly mortgage payments and bringing their cost of owning closer to the cost of renting a comparable property in Miami Beach (whether it be a condo or single family home).

As part of my marketing strategy of the past few years, I travel regularly to international real estate trade shows and meet with Brokers from around the world.  I’m usually asked about the state of Miami Beach luxury real estate (especially demand for waterfront single family homes).  Those with the financial resources (both from USA and International clients) ask about the possibility of purchasing a foreclosed, or bank owned, single family home in Miami Beach.  There continues to be a significant gap between the sought-after upper end luxury market and the less desireable, and generally non-waterfront properties.  Although waterfront luxury home sales are down significantly for Miami Beach overall (around 50% for first half of 2009), we’re seeing sales activity for turnkey homes that have come down in price significantly.

The most recent closed sales of waterfront homes in Miami Beach:

2046 North Bay Road Luxury Mansion – Drastically Reduced Waterfront Estate

2046 N.Bay Raod, Miami Beach

This was the best luxury waterfront deal in Miami Beach.  Priced to sell after being on the market for over 1,000 days! Featuring a private guard house – 80 ft infinity pool & private beach – elevator – generator – 4 car garage and much more.  This waterfront estate was featured on PlumTV.

My opinion as to why it sold :  Amazing architectural style & location on prestigious North Bay Road, amazing views, price reduced aggressively with lender approval.

Sold Price: $9,750,000
Original “For Sale” Price : $17,000,000 (5/2006)
Bedrooms: 7
Bathrooms: 11
House S.F.: 14,582
Land S.F.: 38,314
Sold Date: October 8, 2009
Discount from Asking Price: 42%
Search: North Bay Road Homes For Sale

The Venetian Island

127 East Rivo Alto, Miami Beach

Priced right!  Located on the best of the Venetian Islands-Rivo Alto Drive -and far in from the Venetian Causeway that links Miami and Miami Beach.  This 2 story home offered Frank Lloyd Wright inspired architecture. Open Floorplan, WATER VIEWS throughout, Updated Kitchen with high end appliances and well maintained bathrooms. Large backyard and pool which are perfect for entertaining or relaxing.

My opinion as to why it sold :  Great waterfront location, spacious floorplan, price reduced quickly and aggressively!

Sold Price: $2,040,000
Original “For Sale” Price : $2,590,000 (3/2009)
Bedrooms: 4
Bathrooms: 3
House S.F.: 3,361
Land S.F.: 10,500
Sold Date: October 16, 2009
Discount from Original Asking Price: 21%
Search: Venetian Island Homes For Sale

Hibiscus Island- Reduced Turnkey Waterfront Home

320 S. Hibiscus Dr, Miami Beach

This home has scenic bay and city views, tri-level and perfectly updated with attention to details.  Featuring marble and wood flooring throughout, with gourmet kitchen, stainless steel appliances, a beautiful and contemporary salt water bayfront pool, large master suite on the top level with incredible water views.  Two car garage, and ideally located on a quiet section of Hibiscus Island.

My opinion as to why it sold :  Great waterfront location in 24 hour guard gated community, amazing views, price reduced aggressively.

Sold Price: $2,500,000
Original “For Sale” Price : $3,250,000 (6/2008)
Bedrooms: 3
Bathrooms: 4
House S.F.: 3,590
Land S.F.: 10,500
Sold Date: September 29, 2009
Discount from Original Asking Price: 23%
Search: Hibiscus Island Homes for Sale

Source:  South Florida Regional MLS

Browse: Miami Beach Luxury Real Estate