Miami Beach Real Estate Blog

A spectacular winter afternoon in Miami Beach!

I’d like to take this opportunity to share with our readers that latest general Miami Beach real estate sales data courtesy of the Greater Miami & Miami Beach’s Board of Realtors:

For the Miami metropolitan statistical area (MSA), there was a 53 percent increase of existing single-family home sales year-end 2009 compared to 2008.  This represents the highest year-end increase for single-family homes of any major metro market in Florida and is 20 percent higher than the statewide increase of 31 percent.  The sales of existing condominiums in the Miami MSA also increased 50 percent year-end 2009 compared to 2008.

The 2009 average monthly increase of single-family home and condominium sales in the Miami MSA is 56 percent and 52.8 percent respectively.

The Miami real estate market has experienced a surge in sales each of the last 17 months compared to same periods the previous year, and 2009 marked the first full year of monthly increases of home sales.

In the Miami MSA, there was a 45 percent increase of existing single-family home sales December 2009 compared to December 2008.  This also was the highest December 2009 increase for single-family homes of any major metro market in Florida.  Statewide single-family sales increased 33 percent.  The sales of existing condominiums in the Miami MSA increased 68 percent December 2009 compared to the same period the previous year.

Nationally, sales of existing single-family homes, townhouses, condominiums, and co-ops fell 16.7 percent from the previous month and 4.74 percent from December 2008.

Overall, we are seeing a leveling off of prices, and a consistently declining inventory of unsold homes.

Average Sales Prices Increasing:
The median sales price for single-family homes reported in Miami-Dade in December 2009 was $204,300, down a negligible 5 percent from the previous year but up from the previous month. The median sales price for condominiums was $148,200, down only 16 percent from the previous year but an xx percent increase from the previous month.

The median sales price for single-family homes reported in Miami-Dade year-end 2009 was $195,300, down 29 percent. The median sales price for condominiums was $142,500, down 40 percent from the previous year.

According to the Southeast Florida Multiple Listing Service, the average sales price for residential properties that sold in Miami-Dade County in December was $323,308 for single-family homes and $248,107 for condominiums, decreases of 1.5 percent and 7.4 percent respectively compared to the previous year.

Days on the Market and Inventory Levels:
Inventory levels continue to decrease substantially, another indicator that supports the local market’s recovery.

The inventory of listings in Miami-Dade County according to the Southeast Florida Multiple Listing Service has dropped more than 42 percent in the last 17 months – from 43,095 to 25,021 – and December 2009 brought a 2.0 percent decrease in just one month.    Nationally, total housing inventory at the end of December declined 6.6 percent from the previous month

Miami Beach Inventory Levels:

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

• Under $500,000: eight-month supply of homes
• $300,000 to $1 million: 21-month supply
• Over $1 million: four-year supply

Miami Beach’s luxury housing market falls into mainly in the over $500K category, however, the supply is much more restricted due to the fact that these are islands communities.  Also, since there is no new construction taking place, I continue to expect Miami Beach’s housing inventory to slowly work it’s way down to a healthy six to nine month supply for the luxury segment of the market.

Miami Beach Housing Inventory:

• $300,000 to $500,000: less than six month supply
• $500,000 to $1 million: 15 month supply
• Over $1 million : 24 months supply

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%

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).