Article: Miami's Condo Corridor's Woes Create Boon For Renters

An article earlier this week spoke of how some developers and property investors are deciding to rent out their condos for the time being instead of facing the likely notion of offloading them for very low prices indeed. Whilst of course renting property in Florida isn't the subject of this blog...the article is still interesting as it highlights the extraordinary amount of construction that went on in the boom property years in southeast Florida.

I live in London, UK, and often hear that many property owners - from developers of new apartment blocks to those trying to sell family homes - opting to rent their properties for now with a view to then selling when the market picks up. Of course, this brings up further problems: for one, many find themselves in a situation of landlord, of which they have little experience; and secondly, it's very difficult to judge exactly when the property market will recover.

Still, it's interesting to see that some of the same concerns are affecting those on both sides of the Atlantic.

The Miami Herald article concentrated on downtown Miami, the area around what is now a rather plush Brickell Avenue. A truly amazing 23,000 condo units were constructed in the building frenzy that occurred there over the last few years.

Since 2003, 13,000 of these condos have been sold and a whopping 60% have been sold to investors or those who weren't intending to live in these units. Meanwhile, 10,000 condos are still in the hands of the developers of the buildings as they haven't yet been sold.

The offshoot of all this is that some developers are choosing to rent out their condo units instead of selling. The actual main subject matter of the article is that young Miami professionals are finding that they are able to rent out some rather plush pads and enjoy the high life, when such apartments would have been completely unattainable to them only a few years ago.

So, if you ever find yourself wanting to rent somewhere in Miami, it seems that the Brickell Avenue is the place to look - you might find yourself in a luxurious condo for a good deal! but overall, this is an example of just how much over-supply is really out there.

Article: Miami condo corridor's woes create boon for renters (Miami Herald, 21st April 2009)

Article: A Bumpy Real Estate Road Remains

Recovery of the southeast Florida property market is a while off, it seems. Yesterday's Miami Herald featured an article on this very subject which highlighted the fact that many experts predict no sign of an upturn this year, with any improvement in the market only expected in 2010 or 2011 at the earliest.

A major reason for this recovery being a while off yet is the vast oversupply of properties on the market. Although there is a considerable demand, with some purchasers grabbing some real bargains right now, the huge number of properties coming on for sale means supply will still outstrip demand for some time yet. The large property inventory in this part of Florida can, of course, be attributed to the increasing number of foreclosed properties that are coming up for sale.

As often mentioned before, in normal market conditions, there would be a six to twelve month supply of properties for sale. Currently, that time period stands at 35 months for Dade county and 24 months for Broward. Although other factors may indicate a recovery of sorts - for example, sales of properties in February 2009 were up 68% for houses and 71% for condos in Dade county, compared to the same month last year - until the supply of properties comes closer to demand,the property market in southeast Florida won't improve for some time. Current economic conditions and unemployment concerns also add to the property market's woes.

Nevertheless, as prices continue to tumble and more properties coming available every day, if you're interested in buying, now's a perfect time to start looking.

Article: A bumpy real estate road remains (Miami Herald, 19th April 2009)

Foreclosure Tours

I've written in the past about various rather inventive ways some real estate agents use to showcase the vast supply of properties - particularly foreclosed ones - that are currently available in Florida, in the southeast region of the state and elsewhere. For example, last week, I wrote about an agent in Cape Coral who was now undertaking boat tours of foreclosed houses by utilising the area's canals and waterways.

I've come across the website ForeclosureBusRides.com which basically offers just what it says. The company behind the website, City Realty Partners Inc, offer 4 hour bus tours of foreclosed properties in the Miami, Fort Lauderdale and West Palm Beach areas. Information on how to purchase such properties from agents and lawyers is also available on the tours. The website also provides listings of these foreclosed properties, as well as ones that are very recently new to the market, in some cases even exclusive.

Overall, it seems like a good introduction to anyone who's a little nervous about foreclosed properties, or is unsure about how to go about finding and purchasing one. These tours seem like quite a good idea to get your started on the buying process!

In case you're wondering - no, I'm not in any way connected with the website or company!

Article: Buyers stymied by tough rules on condos

Last month I wrote about an article, featured in the Arizona Star, on buyers having difficulties purchasing in condo developments due to tough new mortgage lending restrictions. Over the weekend, the Miami Herald published an article on the very same subject.

New rules put in place by Fannie Mae, one of the two big American mortgage lenders, mean that if anyone wishes to arrange a loan to purchase a condo must have a deposit of at least 40%. Furthermore, the development in which they are purchasing must have had at least 70% of its units sold AND no more than 49% can be owned by investors. Finally, the condo development must also not have more than 15% of its units over 30 days late in residents' association fees.

Tough restrictions, right? Although they were brought in to try and ensure that loans aren't given out to properties whose value plummets rapidly in the future, the restrictions mean that recovery in an troubled property market (with condos especially in difficulty) in a suffering part of America might be even futher away then anticipated.

The Herald states that demand for property and condos is certainly out there, but the tough new lending rules mean that some just can't raise the funds they need to buy. And if too many potential buyers are taken out of the equation, some developers will find themselves in serious trouble and in their desperation to sell their condos may seek to do so at vastly reduced prices - causing a further negative effect in the property market.

Fannie Mae has, however, stated that they may be flexible in their lending restrictions and may look at certain condo developments on a case by case basis to give their own approval even if not all of their criteria are met.

Article: Buyers stymied by tough rules on condos (Miami Herald, 12th April 2009)

$10 House for sale in Fort Lauderdale!

Okay, so the house isn't really on the market for a measly $10. This is in fact another case of Florida homeowners setting up a raffle to try and offload their home quickly and for a respectable price rather than officially putting it on the market for sale.

Miles and Laura Brannan own a six bedroom house in the Coral Ridge Country Club in Fort Lauderdale, which they bought in 2005 for $2.35 million. They are hoping to sell 300,000 tickets, with part of the proceeds benefitting a Miami church.

Of course, 300,000 tickets at $10 each equals a haul of $3 million! So for a property to be sold at that amount today when it was bought for $650,000 less four years ago is - to be putting it politely - a rather astonishing rise, given current economic conditions!

Too see the house, take a look at the Florida Luxury Auctions website.

Article: $10 raffle ticket could buy Fort Lauderdale home worth millions (28th March 2009, Sun Sentinel)

Article: Realtor Takes New Approach - By Sea

In the last year or so, there have been articles on the innovative ways estate agents or realtors are showing properties that are for sale. With the huge amount of stock, some agents offer tours (in mini buses and the like) for a small daily fee, where a group of people can view a number of properties in the space of a few hours - with some light refreshments and snacks thrown into the bargain.

One such agent, in Cape Coral (on the west coast of Florida - it is near Fort Myers) has returned to conducting such tours, but this time by boat. The agent in question, Marc Joseph, conducts tours of upscale foreclosed homes, using the canals in the area to navigate from one house to the next. Joseph shows a variety of homes per three-hour tour in different price ranges, almost all of which have had their prices slashed.

Joseph also suggests that now is a prime time to buy - he believes that the market will bottom out in the next six to eight months, and then an upturn will start as the oversupply of properties will reduce considerably. He also comments on what Florida is about by saying:

"The sun is still shining. Our roads are full, our beaches are packed. People
are down here looking. The product will not last long."

And, well, he does have a point. There may be much economic strife, but what Florida has to offer will never go away.

At the very least, going on a boat tour is a relaxing way to see properties!

Article: Realtor takes new approach -- by sea (28th March 2009, Miami Herald)