Philippe Diener

Miami: Buyers Abroad Flock to Condos

South Florida real estate developers and brokers are in the middle of a condo-buying frenzy. Throw in the state's high property appreciation rates, growing interest from foreign investors, and burgeoning population, and you end up with a real estate hotbed.

In Miami, where home values increased 20 percent last year, according to Florida Association of REALTORS® figures, condos are coming out of the ground at an unprecedented rate. Roughly 70,000 condo units are currently planned, under construction, or already for sale in the city.

Developers have jumped into the market feet first with new condo developments like Mary Brickell Village, the Avenue, the Plaza, and Neo Lofts. Other new projects include Continuum North Tower and Apogee, both in Miami's South Pointe beachfront region. Prices on such units run the gamut from $200,000 for basic, two-bedroom/two-bath units, up to multimillions for penthouses.

"There's very strong demand coming from the baby boomer generation, which is really driving our market right now," says Ralph DeMartino, president of Miami's Ocean International Realty, which has two offices and 15 sales associates. "Even the higher-priced condos are selling well, while the mid-priced ones (at $500,000 to $1.5 million) are becoming harder and harder to come by."

DeMartino, a board member of the REALTOR® Association of Greater Miami and the Beaches, says buyers come to Miami from up and down the Eastern Seaboard and from Latin American and European countries. "With the strength of the euro, the buyers come on strong," DeMartino says. "Their friends see that they're buying a place in Miami's beach area, and they want a piece of it, too."

Existing-home sales also are holding their own in the Miami market, where FAR reported a 2 percent increase in the total number of homes sold in June compared to the same period last year. The area's median sales price rose 27 percent to $363,100 in June, up from $285,900 last June. Where real estate practitioners are facing challenges is in their struggle to find listing inventory.

"There's not enough supply, and there is a big demand," says Jay Chernoff, chairman of the REALTOR® Association of Greater Miami and the Beaches and a district sales manager with Keyes Co., REALTORS®, in Aventura. "Homes sell quickly and usually receive multiple offers."

The area's economy also is showing strength. With a population of 362,470 (according to the Census 2000), Miami-Dade County is the most populous county in the state, with top employers including Publix Super Markets Inc. (with 25,500 employees), Tenet Healthcare Corp. (11,330), Wal-Mart Stores (10,390), HCA East Florida Division (10,000), and University of Miami (9,410).

The region's unemployment rate has dropped since 2004, according to the U.S. Bureau of Labor Statistics, which reported a May rate of 4.1 percent, compared to 4.8 percent during the same month last year. Statewide unemployment in May was 4.0 percent.

Chernoff expects the market frenzy to continue throughout the rest of the year and likely into 2006. However, he believes that talk of the difficulty of finding affordable properties may eventually have an effect on the market.

"All of the buyers are a little worried about putting out $1 million-plus for these properties right now," says Chernoff. "They're not holding back at this point, but they are a bit more apprehensive about moving forward."

-By Bridget McCrea for REALTOR Magazine Online

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Condo Owners Face Rental Dilemma

Condo owners who can't sell their units often consider leasing the space to tenants until the market improves. Yet, increasingly, such owners are discovering that their condo association has rules preventing them from doing so.

Rental policies vary by condo association, but generally associations limit the percentage of units that can be occupied by tenants. Some communities require owners to submit the lease they plan to use to the condo board for approval.

The rental restrictions are meant to guard against the condo being viewed as a risky investment by lenders who believe that buildings with a high concentration of rentals are harder to market to homebuyers. Fannie Mae will not guarantee a loan for a condo in which renters make up more than 49 percent of the occupants.

The rules generally stem from a feeling that renters don't take good care of a unit and can reduce the value of the unit.

Source: The Washington Post, Renae Merle (05/03/2008)

Miami Condo Market Competitive Spirit Hold On

Thursday, May 01 2008 @ 02:36 AM Central Daylight Time

It is important to consider that one of the popular demands in Miami is the condo market. So I assume that most of the investors and developers in the area are aware of the possibility that the market is indeed in higher contention although the common perception is that Miami is on a downward slide, let me state some facts that can be significant to the people who are investing in the market in such desire. I think that by pointing out how Miami condo market is fairing out will make people realize what it is going through and where does they stand in part of the market's life in Miami.People from all over the world are attracted to the vibrant Miami area and its supreme climate for relocation. The Miami condo market is very diverse and offers a large number of different solutions for those interested in purchasing or renting a condo. The recent decrease of the dollar value on the international market has made Miami condos an even more interesting option for many Europeans looking for a home away from home, a place in which to retire or just a good investment. Miami condos are also popular among vacationers as well as investors. This is naturally true for Miami real estate as well.Location is the mantra of the real estate business and this is naturally true for Miami real estate as well. Just by choosing a condo a few blocks away from the beach you can save huge amounts of money. A Miami ocean view is astonishing, but certainly not for free when we're talking real estate. The beach front condos are the most popular ones and consequently the most expensive ones to obtain. The Brickell region is commonly referred to as the Wall Street of the South and the condominium towers share the space with over 60 commercial banks. The Brickell community is inhabited by people who want to avoid long hours of commuting. This area is typically marketed as a stricter and upscale alternative to South Beach a neighborhood ideal for those who prefer a downtown environment instead of a sandy beach. The condos in Brickell are however still very reasonably priced compared to the condos located at Miami Beach. In Brickell it is possible to be close to work as well as to downtown entertainment, but still live in a relaxed area suitable for recreation. The fact that popular South Beach restaurants are beginning to setup finials in Brickell is only one of the signs that predicts how Brickell will turn into an even more sought for area in the future. A Miami Beach condo of the same type as the $200,000 Brickell condo would cost you at least $500,000. Downtown Miami has seen a lot of new development recently. Further expansion down Miami Beach is naturally another extremely lucrative business for Miami real estate developers since the Miami real estate market shows no signs of cooling down, particularly not when we're talking ocean front properties.

By: Jron Magcale

Florida Real Estate Inventory: A 5-year Condo Glut

A great article in Builder highlights Jack McCabe's research report which calculates that the Florida condo market has a whopping 5 years worth of inventory with cranes still hovering over new developments.
Talk about a real estate buyer's market in Florida - from now until whenever. Worried about missing the bottom? If you are in Florida you will only miss the bottom if you die - otherwise, don't worry about finding when the bottom of real estate market in Florida is.
From the article on the massive inventory of condo's in the Florida market:
"According to the Florida Association of Realtors and market expert Jack McCabe of McCabe Research and Consulting (www.mccaberesearch.com), there is currently a five-year supply of condo and townhouse units on the market in Dade County, which represents an inventory of more than 24,000 units. Not surprisingly, prices have dropped accordingly. Median sales prices for existing condo units in Ft. Lauderdale, Miami, and West Palm Beach/Boca Raton fell 10 percent from 2006 to 2007 and now range between $171,000 and $263,500.
"Unfortunately for the housing market, McCabe believes the situation will only get worse in 2008 and 2009. More than 19,000 condos are scheduled for completion in Miami-Dade County this year, with 6,400 additional units expected in 2009. "There are over 15,000 more condos under construction in Miami-Dade right now than were built and absorbed in 1995-2004," says McCabe, who estimates absorptions during that time at 1,000 units to 2,000 units per year."
Source: By Blown Mortgage

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