Miami Beach Real Estate Blog

It’s been a busy month for myself and my team, as we’re seeing strong buyer activity from so-called “Bargain Hunters”.  I’ve intentionally avoided weighing in on the technicalities of the financial crisis and the future impact of the Paulson Plan, as there are many more qualified sources out there to give readers their analysis.  However, now that we are seeing some stability return to the banking sector, I’ve noticed a strong surge in buyers looking to purchase prime real estate properties at significant discounts.  What’s  happening are that the properties in the best locations are being picked up now at prices that range from approximately 30%-50% discounted values from 2005 prices.

Waterfront homes (turnkey) in Miami Beach at reasonable prices are in surprisingly short supply, and these are the first of the “bargains” that have been purchased recently.  For example, I recently conducted a search for a client with a budget of $5 Million looking to purchase a luxury waterfront home (remodeled) on the Venetian, Palm Island, Hibiscus, Sunset Islands or Bay Drive in Miami Beach.  The real choices?  Just twelve waterfront homes!

Also, a few of our latest sales are indicative of the above referenced “deals” that are happening now:

Jade Beach- Prime Location Sale #1
Spectacular Lower Penthouse #4401 “F Line”- 4 beds / 4.5 baths – 3,136 S.F.
Contract Price: $2,475,000  ($789/S.F.)
2005 Sales Price:  $3,400,000 ($1,084/ S.F.)
Today’s Discount:  27%
•    A spectacular 51-story oceanfront tower
•    Designed by Carlos Ott and Fortune Development Int’l
•    Beautiful entrance with cascading fountains, lush landscaped gardens, reflecting pools, and contemporary décor throughout
•    Three-story Grand Entrance Lobby with direct ocean and pool views
•    Located directly on the Ocean close to Bal Harbour Shoppes and Aventura Mall, as well as easy access to Miami and Fort Lauderdale International Airports

(Next door condo Jade Ocean, is completed)

Jade Beach Floor Plan- Unit F

Jade Beach Condo

Jade Brickell- Prime Location Sale #2 (Bank Owned / Pre- Foreclosure Sale)
Spectacular 43rd Story Residence “E”- 4 beds / 4.5 baths – 3,415 S.F.
Contract Price: $1,600,000 ($468 / S.F.)
2005 Appraised Value:  $3,100,000 ($907 / S.F.)
Today’s Discount:  48%

Downtown Miami’s Most Luxurious & Lavish Building, the Jade Residences is a 49-story building offering 326 luxury residences with advanced technology. Spectacular Ocean and City Views, state-of-the-art security system, Infinity edge pool, Sauna, steam room, fitness center, European spa, racquetball, concierge services.
•    49 story architectural masterpiece designed by Bernard Zyscovich
•    Distinctive three-tiered tower offering views of Biscayne Bay, Downtown Miami and Key Biscayne
•    Grand entrance lobby graced breathtaking 21-foot ceiling with contemporary deco

Jade Brickell - Unit E

Jade Brickell condo - Miami

According to a recent study released by the National Association of Realtors, approximately 25% of all international purchases in the United States are occurring in the state of Florida, which represents a significant target market for anyone interested in selling in today’s buyers market environment.  Especially in the Miami Beach area (particularly in South Beach), which is a top tourist destination for Europeans and South Americans, this represents a great target market for today’s sellers.  We have a multi-platform and mixed media international marketing programs focused on targeting these foreign buyers.  I also have been attending real estate trade expos and have built an extensive brokerage & sales network covering major European & South American markets.

I’m also personally working with average of two new foreign buyers every week, with the ALL of them looking to take advantage of the still advantageous Dollar to Euro Exchange rate.  However, it’s important to note that these are also savvy buyers and ALL are looking for a “deal”, looking to take advantage of the extensively reported South Florida housing slump.

One of the key sales strategies that I constantly emphasize to my team is the necessity of educating these foreign buyers, and setting realistic expectations for a “great deal”.  For example, purchasing at the Continuum South Beach for just under $1,000/S.F. today is a “great deal”, but in downtown Miami a buyer can get a “deal” for around $325-$350/S.F.   We just sold a spectacular direct oceanfront two bedroom condo in the South Tower of Canyon Ranch (#S1705) for $667/S.F. using the above referenced sales & marketing strategy.

My unofficial Top 10 Miami Beach foreign buyers for 2008:

1.    Canadians
2.    Mexicans
3.    British
4.    Germans
5.    Italians
6.    Russians
7.    Brazilians
8.    French
9.    Venezuelans
10.  Argentinians

Some people will fiercely proclaim otherwise but the truth is right now, the Miami Beach condo market caters largely to buyers and is currently at a point that it hasn’t seen in many years with some of the lowest values that are still falling, at least if the Florida Association of Realtors (FAR) are to be believed. While it may have negative consequences in terms of weakening the economy, intrepid buyers and investors can find some incredibly valuable deals.

Why is it that now a good time to buy a Miami Beach home or condo per the FAR? It’s simple, really. The glut of existing homes for sale opens up plenty of options that range from more affordable, realistic prices to reduced mortgage rates that translate to much more convenient monthly payments than what is common during better market times. Do some research and you’ll also find that renting a condo or home, especially at the present time, is nowhere near as worthwhile an option as that of actually owning a home. To a lesser but still noteworthy degree, Miami Beach and its tropical lifestyle make it a great place to live.

Another truth: houses are still among your best bets in terms of strengthening your financial security and gaining an investment that will yield long term results. Equity continues to build and therefore, so does your overall wealth. The tax perks you receive as a homeowner as opposed to renting also make a strong case for buying a home.

National Association of Realtors experts are saying that the market has dipped to about as low as it’s going to get and this year will finally start to see it slowly return to a better climate, particularly during the latter part of the year as buyers start to regain confidence, seize upon the low prices, and sales remain relatively steady. Couple this with the efforts being made by the government to spur the economy and suddenly, buying a waterfront condo or single family home doesn’t seem quite as absurd.

This is my first blog post of the year, so I would like to wish everyone reading this a healthy and prosperous 2008! During my first full week back to work, I’d like to take a few moments to reflect on some of the different seller scenarios that I have most recently encountered:

Scenario #1: SHOULD HAVE SOLD LAST YEAR (Late on mortgage/tax payments, cannot continue with the fixed expenses, probably purchased property after 2003). Often characterized as a short sale with sale terms controlled by the lender. However, often times, the owner still gets to pick the Realtor/brokerage firm.

It is critical to be priced correctly from the start, and that the marketing be handled by an experienced, knowledgeable, detail-oriented, and top producing real estate salesperson/team. This should be someone that will be aggressive AND creative in the marketing of the property (be it a home, condo, or land). It is crucial to be working with a company/agent at the top of their field, and who will be a straight talker, positive but realistic, and gives the seller a good feeling that they will follow up with any and all potential buyers. I have recently seen several of these properties in Miami Beach, that are being poorly marketed. The owners (and banks) do not realize what this is potentially costing them.

Scenario #2: NEED TO SELL (Possible health reasons, relocating, retiring, some financial pressure, misc. life circumstances).

It is critical to price the property correctly from the start. I am writing this on January 10, 2008, and have personally spoken to over twenty potential buyers over the past week (and made two offers thus far within 10% of the asking price). Looking at recently closed sales (within three months), properties that are priced to sell usually receive lots of activity and sometimes multiple offers. These also are properties that are on the market for no more than 45 days. Obviously, the marketing needs to be handled by an experienced, knowledgeable, detail-oriented, and top producing real estate salesperson/team. Shockingly, I’ve seen several properties in South Beach that fall under this category, that are being poorly represented (no return phone calls/emails, disconnected phone numbers, agents that seem to have other jobs and don’t really care anymore, as well as poor pictures and text descriptions).

Scenario #3: CASHING OUT (Opportunity for greater returns from owning something else, owner of many years, general desire to move on).

We are certainly not at the top of the market, however, certain properties still receive strong buyer interest. Examples are certain PH-type units with unique locations/views/floorplans, and waterfront turnkey showcase homes in unique locations with strong curb appeal). Yesterday, I had the opportunity to see a comparison of SE Florida property prices versus major European/Caribbean and South American markets. Property in the greater Miami area is still relatively inexpensive, and the weak dollar is attracting a large percentage of European (especially Russian), Canadian, and some South American buyers. I am finding particularly strong buyer interest in Miami Beach and especially South Beach. Island waterfront homes, and South of Fifth Street (South Beach) premium location condo buildings are especially sought after by European buyers.