What makes Miami a hot spot for international real estate

What is so special about Miami?

Go to any real estate conference and you’ll hear all about the successes of real estate in Miami, and despite the housing and foreclosure crisis, international buyers continue to snatch up property in the city. But what makes Miami so special?

Greg Freedman, Partner at BH3 and Developer of Trump Hollywood told AGBeat that international buyers are increasingly buying luxury properties “Because they are perceived as cheap. People love Florida for the weather and favorable taxes (there is no State or City income tax in Florida), and the consensus is that there will always be a steady inflow of people that want to move to Florida.”

Freedman continued, “Ask anyone in the Northeast, Midwest, Europe, Russia or Canada in February where they would rather be, and 90% of them will say “Florida.” Ask anyone in Argentina and Brazil in June the same question and you will hear the same response. As a result of the international audience that Miami attracts, the old definition of “the Season” is now a misnomer. There is no season, there is only a difference in who is coming…and there is always someone coming where at that given time, the weather in Florida is much better than where they came from.”

Paola Garcia-Carrillo, Sales Director of Residences at Vizcaya added that “Luxury homes are being purchased by international buyers because people want to take their money out of their country and invest it in the best country in the world.”

Miami vs. America

Shawn Vardi, President of Think Properties notes that in recent years, the company broke ground in Miami, coming from New York, giving them a unique perspective. Vardi said, “Miami’s property market continues to outperform the rest of the country as condominium sales in 2011 increased by more than 50%, year-on-year. A current level of supply and demand on Miami Beach, where Boulan is located, denotes a healthy market that is expected to outperform others through out the U.S. long-term. Tourism, international buyers, and investors have had positive effects on the local economy and real estate market place. For Miami Beach and Downtown, the bottom is long gone and all these areas are already in an upward swing.”

Freedman explains why Miami is an anomaly, stating that the city is one of few markets in America “whereby it is an international city that draws audiences from not only Latin America, but also Canada, Europe, and Russia. The impact of the international community in Miami is the core reason that the overhang in inventory, which was once thought to be 10 years’ worth of supply in the Downtown market alone, has been fully absorbed in less than 3 years.”

“Additionally,” Freedman continues, “compared to other major cities such as New York and Los Angeles, Miami is perceived as being very affordable. It is important to note that this international influence is geared primarily towards the Miami Downtown market and the Beach corridor. Most areas West or North of these locations (i.e. Kendall, West Palm Beach) are still severely distressed and haven’t experienced increases in absorption or valuation. As such, the anomaly of Miami and its rebound are fairly insulated to core areas whereby the outlying areas are still experiencing similar trends to the rest of the country.”

Miami 2002 vs. Miami 2012

Garcia-Carrillo says that Miami today is different from Miami in 2002 because of the housing crisis. “Banks are tighter in lending & buyers have been a lot scarcer.”

Freedman explains that pricing today is that pricing is back to 2002 levels, “which was when real estate valuations really begun their unsustainable uptick. Since 2002, real estate valuations more than doubled at their peak in 2006 and have since returned to near 2002 levels in certain markets.”

Further, Freedman notes the core differences in the market today being the following:

“A paradigm shift of more baby-boomers embracing the condominium lifestyle, thus resulting in an exodus of this demographic away from their larger suburban single family residences;

Availability of mortgage financing for luxury product has slimmed, although government-sponsored financing for lower priced residences is now more fluid;

Interest rates, where financing is available, are at all-time lows;

The Miami market (specifically the Downtown & Beach market) has seen a large influx of international purchasers taking advantage of favorable currency valuations of their national currency compared to the U.S. dollar combined with market-corrected pricing of new developer inventory that was previously priced 30%-50% higher at the peak in 2006/2007. We refer to this as a “double-whammy” whereby a Brazilian looking to purchase a $1 Million condo in 2006 is able to purchase that same condo today for about 60% less as a result of both decreased real estate prices and the strengthening of their local currency.

The impact of national policy

With the introduction of dozens of national policy changes and an economic collapse, because Miami deals with international dollars so frequently, the market has felt various impacts, most notably with distressed sales.

Vardi said, “What has become apparent is the availability of cash buyers coming from Latin countries and especially with the new bill allowing foreigners to purchase over a certain amount in real estate, they can then obtain a visa.”

Garcia-Carrillo agreed, noting that “Shifts in national policy have impacted distressed sales in Miami by national policies that have been beneficial to our property is through the EB5, allowing buyers from other countries to obtain visas, This home buying bill was added on to a policy that has been around for 21 years and it is just now catching on. We have a large Mexican and Venezuelan circuit of buyers.”

Also alluding to the EB5 program, Freedman added that “the continued commitment of the government in its support of agencies like Fannie Mae to maintain lending liquidity in the marketplace, which has enabled both new purchasers to obtain affordable financing, and distressed owners the ability to either refinance their homes or take advantage of short sales.”

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Source: http://agbeat.com/real-estate-news-events/what-makes-miami-a-hot-spot-for-international-real-estate/

Jersey City's real-estate market is right up the urban dweller's alley

Looking for a cool condo, a stately Victorian, a spacious loft? Well look no further than Jersey City.

New Jersey's second-largest municipality has it all, including the featured spot today in The Record's real-estate section.

Six years ago, Brittin Bleakley walked into a friend's Jersey City home for a play date and fell in love with the place, according to The Record.

She adored the home's back yard, the original stained glass window, the finished basement and the size, four bedrooms.

"I said if you ever want to sell this house, I'm your gal," Bleakley told her friend, according to The Record. "It was a great house on a great street."

This past summer Bleakley, her husband, and their two young daughters moved into the Greenville home.

"She had done a lot of work on the house, it was move-in ready," said Bleakley, who paid $270,000 for the house. "It's wonderful. I'm so lucky."

As The Record story notes, those who believe all Jersey City has to offer are high-priced waterfront condos or boarded up buildings in crime-ridden neighborhoods are barking up the wrong real estate listings.

There's actually a myriad of styles of homes and neighborhoods for buyers to chose from. Besides the home in Greenville, The Record explores the Canco Loft condo complex near Journal Square, the Van Vorst Park and Hamilton Park neighborhoods, and speaks to a couple who purchased a two-family home in the Lincoln Park neighborhood.

There's also a some interesting stats in the story:

The average property tax bill is $6,491; 38 percent of Jersey City residents were born outside the U.S.; and out of 93,000 households, 34 percent make $35,000 or less a year in income and 36 percent make $75,000 or more a year.

As far as the housing stock goes, 45 percent of it is valued at $300,000 to $499,000, while 15 percent is valued at $500,000 or higher.

Source: http://www.nj.com/hudson/index.ssf/2012/02/jersey_citys_real-estate_marke.html

Real Estate Market Shows Positive Signs

Portland's real estate market is showing signs of stabilization. The average time a home was up for sale has dropped -- from 160 days to 136 days.

Home prices may have bottomed out. The average sales price of a home in January was about $249,000. Give or take a hundred dollars, that's about the same as it was last January.

While no change might not seem like positive economic news, it is when you consider the slide that home prices have seen over the last few years.

Nick Krautter of Keller Williams Real Estate says in some close-in Portland neighborhoods, he's seeing new listings attracting multiple offers.

"Right now what I'm seeing on the market in Portland is a lot few homes on the market to choose from. And that low inventory is being compounded by the fact that we have a pretty steady demand from buyers."

Foreclosures also continue to decline.

Oregon ranked 20th in the nation for foreclosure activity in January, according to the real estate tracking firm, RealtyTrac.

About one in every 1,000 homes is now affected by foreclosure.

Source: http://news.opb.org/article/real-estate-market-shows-positive-signs/

Michigan real estate market could be on the mend

ADRIAN, MICH. -- Could this be one of the first signs that the real estate market in Michigan is coming back? According to the Daily Telegram, Lenawee County hit a record with 560 properties being noticed for a show cause hearing on tax foreclosures in 2011. The number was reduced to 408 by the time of the hearing last year but a record 78 properties ended up in foreclosure and put up for auction in July.

Lenawee County Treasurer, Marilyn Woods said the numbers are still high but there were three percent fewer properties on a tax foreclosure list that went before a Lenawee County circuit judge on Monday.

"I am hoping our office will be kept busy through March by people paying off delinquent taxes and pulling properties out of foreclosure." Mrs. Woods said, “We’ll probably get quite a few payments in the next few weeks.”

Tax foreclosures in Lenawee County went up dramatically after the 2008 financial crisis. The number of properties noticed for a show cause hearing shot up from 269 in 2008 to 482 in 2009. The list continued growing to 506 in 2010 and 560 last year before falling 14 percent this year back to the 2009 level of 482. The Telegram also reported sales of tax foreclosed properties last year fell about $12,000 short of recovering $630,630 owed in back taxes. All but 15 of the 78 parcels were sold in public auctions in July, September and November.

“So, hopefully, things are getting better,” Mrs. Woods said.

A foreclosure hearing is scheduled for March 1. Property owners will then have until March 31 to pay back taxes or make arrangements with the treasurer.

Source: http://www.northwestohio.com/news/story.aspx?id=719907#.TzyPVsWMQT0

For Miami Real Estate, Better To Be A Foreigner

It’s not that Miami isn’t welcoming to Americans, or that developers prefer Brazilians. They don’t. But in this global city today, the big real estate buyers are all from abroad. And one of the reasons, especially when it comes to new developments, is the sales model.

“Latin Americans and Europeans are used to paying in cash for real estate. American’s are not. What we’re doing with our Brickell House property in Miami is telling people that they can pay us quarterly while the project is being built so that by the time it is done in two years, you have paid for almost 70% of your home,” says Harvey Hernandez, chairman of the Newgard Development Group, a luxury property developer in Miami.

“This is the best way to buy it. Or you can wait for the project to be complete, like Americans do, and pay about 40% more,” he says.

They pay-as-they-build sales model is popular in Latin America. It’s not unusual to see new residential high rises going up in São Paulo with floors being sold before the roof of the building is even in place. For Brazilians, in particular, Miami is their second or third home. Real estate prices in upscale beachfront property in Rio de Janeiro, for example, is more expensive than it is in Miami, a city in a developed country with all the bells and whistles.

Hernandez says that within just 90 days of trying to sell Brickell House’s 374 units, 190 of them have already gone, 90% of them to Brazilians, Venezuelans, Mexicans, Russians, Chinese and Europeans. One bedroom units cost around $300,000, chump change in Europe thanks to a favorable exchange rate.

The sales success at Brickell House is the result of the world’s rekindled love affair for South Beach and new, ultra-mod American luxury in a glam global city. South Florida is in the early stages of a new development wave to cater to the foreigners, with 22 newly-announced projects accounting for more than 4,000 units in a section of the city that’s basically sold out.

“The fact that Brickell House has reached the fifty percent sales mark in just four months is further proof that Miami’s condo market is back,” says Alicia Cervera Lamadrid, Managing Director of Cervera Real Estate.

Today, fewer than 1,500 condos in the Brickell Financial District are on the market, according to a June 2011 market study by the Miami Downtown Development Authority. With the continuation of this sales velocity, the remaining unsold inventory could be sold-out in the next year leaving an inventory gap in Miami.

“Miami’s existing condo inventory has been absorbed at a faster rate than anyone could have predicted,” says Hernandez. “We are still seeing strong interest from international buyers who appreciate Miami’s status as a global business and entertainment hub and see value in the city’s Brickell Financial District. We see our sales momentum continuing through our groundbreaking this summer and we expect to be sold out by the end of 2012.”

(Can a poor reporter get a copy of one of those properties? I’ll take a two bedroom without a view.)

Source: http://www.forbes.com/sites/kenrapoza/2012/02/14/for-miami-real-estate-better-to-be-a-foreigner/

Strong start for real estate sales in January

January 2012 data from the Real Estate Institute of New Zealand (REINZ) indicates a positive start to the year in the residential housing market, with 4,073 unconditional sales for the month. The volume of sales is up by 25.2% or 821 sales compared with the same time last year, and is the best January result the market has recorded since 2008. The national median house price remained steady at $355,000 in January compared to December and is up $15,000 (+4.4%) compared with January 2011.

In line with the usual pattern for this time of year, the January transaction numbers are lower than those of December. However, on a seasonally adjusted basis (which takes into account seasonal variations such as the New Year break) the national total was down just 4.0%. Only one region (Southland) recorded a decline in sales volume compared to January last year, with all other regions apart from Taranaki recording double digit growth.

Compared to December, Taranaki recorded the highest lift in prices for the month (+6.7%), followed by Manawatu/Wanganui (+6.5%) and Northland (+5.5%). Compared to January 2011, Taranaki also recorded the highest lift in prices (+11.4%), followed by Otago (+9.7%) and Canterbury/Westland (+8.3%). The REINZ Stratified House Price, which adjusts for some of the variations in mix which can impact on the median price, is 4.3% higher than January 2011 but has eased back in the past few months.

"The real estate market in January has continued on from the strong result in December, with a more than 25% lift in sales across the country compared to January last year and the highest number of transactions in a January month since 2008. " said REINZ Chief Executive Helen O'Sullivan. "A shortage of listings is still apparent in many areas with agents in a number of regions, including Auckland, reporting shortages of properties available to market and increasing levels of buyer frustration."

"Prices remain relatively stable despite the supply pressure, which probably reflects the reluctance of buyers to over extend themselves while economic uncertainty continues."

The national median 'days to sell' rose by 12 days in January compared to December, from 35 to 47 days; however on a seasonally adjusted basis the number of days to sell remained steady. Over the past five years the median days to sell has averaged 41 days across New Zealand.

Auckland recorded the shortest days to sell at 37 days (+6 days), followed by Canterbury/Westland with 39 days (+10 days) and Otago with 48 days (+17 days). Northland recorded the longest number of days to sell at 72 days (+18 days), followed by Waikato/Bay Of Plenty Lakes at 63 days (+16 days) and Manawatu/Wanganui at 61 days (+20 days.)

There were 231 sales by auction in January representing 5.7% of all sales, up from 137 sales (4.2%) in January 2011. Auckland represented the majority of auction sales at 68.9%, followed by Waikato/Bay Of Plenty (15.2%) and Canterbury/Westland (4.7%). All other regions combined accounted for the remaining 9.2% of auction sales.

In the Auckland region auction sales represented 11.2% of all sales, in line with the seasonal drop in auctions during January. After adjusting for seasonal factors, over 1 in 4 sales in the Auckland region are now concluded by auction.

Further Data

Across New Zealand the total value of residential sales, including sections was $1.72 billion in January, compared to $2.32 billion in December 2011, and $1.33 billion in January 2011.

The breakdown of the value of properties sold in January 2012 is:

$1 million plus 105 2.6%

$600,000 to$999,999 513 12.6%

$400,000 to $599,999 1,032 25.3%

Under $400,000 2,423 59.5%

All Properties Sold 4,073 100.0%

The REINZ Housing Price Index eased 1.4% in January compared with December. The REINZ Housing Price Index recorded falls in Auckland and Christchurch, with increases in Wellington, Other North Island, Other South Island and Section. Compared to January 2011 the REINZ Housing Price Index rose 4.3%, and the Index is now 3.8% below the peak recorded in November 2007.

Source: http://www.guide2.co.nz/money/news/property/strong-start-for-real-estate-sales-in-january/11/23214

Global real-estate markets continue promising trend

While economic uncertainty still affects the main commercial real-estate centres around the world, global real-estate markets are showing steady improvements, according to Jones Lang LaSalle's new suite of global forecasting reports.

The firm's Global Office Index reveals the fourth quarter of 2011 marked the eighth consecutive quarter where prime office rents have risen, up a further 0.8 per cent over the previous quarter and representing 6-per-cent growth over the fourth quarter of 2010. Global vacancy is edging down to the lowest point for the past two years at 13.6 per cent.

"The majority of global leasing markets are holding firm, and many are showing remarkable resilience, especially among the BRIC countries [Brazil, Russia, India and China], as well as robust showings from Canada, Australia, Germany and the Nordics," said Jeremy Kelly, director of Jones Lang LaSalle's Global Research team and author of the firm's Global Market Perspective. "While leasing markets in the major financial centres are softening, the limited supply pipeline should ensure that they do not move significantly out of balance."

Jones Lang LaSalle's Global Office Index tracks the rental performance of prime office space across 81 major markets in the Americas, Asia Pacific and Europe. Key findings of the Jones Lang LaSalle's Fourth Quarter 2011 Global Office Index include:

_ Rental growth rose the most in the Americas at 1.2 per cent in the fourth quarter over the third quarter of 2011, as landlord leverage gradually increased in the majority of markets.

_ Asia-Pacific markets saw rental growth decelerate from 2.5 per cent in the third quarter to just 0.9 per cent in the fourth quarter as corporate demand began to slow.

_ Despite the negative economic backdrop, Europe's office markets showed some improvement over the fourth quarter with growth picking up to 0.4 per cent from a virtual halt in third quarter 2011.

_ Leasing volumes will be steady in 2012 with positive rental growth expected in most major office markets. Beijing, Toronto and San Francisco are expected to top the charts with potential double-digit increases.

Investors, already wise to the resilient fundamentals in the commercial real-estate sector,

continue to choose real estate given its attractive investment status compared with alternative investments.

The Global Market Perspective shows robust capital market investment volumes in the fourth quarter 2011. A total of US$411 billion (Bt12.68 trillion) was transacted in full-year 2011, up 28 per cent on 2010. 2012 transaction levels are set to match 2011, with upside potential in the Americas.

Arthur de Haast, lead director of the International Capital Group at Jones Lang LaSalle, added that the markets are witnessing a "flight-to-quality", traditional in times of uncertainty, as investors pivot towards core assets in those major cities with strong economic fundamentals and/or with "safe-haven" characteristics. While there is capital available for commercial real estate, debt financing around the global will be more constrained in 2012. We're seeing capital appreciation slowing as yields flatten, and spreads between core and secondary assets widen.

While commercial real-estate expectations for 2012 have been tempered, barring significant financial system shocks, commercial real estate investment and leasing volumes are likely to be maintained at 2011 levels.

Source: http://www.nationmultimedia.com/business/Global-real-estate-markets-continue-promising-tren-30175734.html