New Orleans has a new waterfront master planned community and it is called Algiers Crossing. This is the only waterfront new construction available in New Orleans! While other areas of the country may have cooled off for investors, New Orleans is now the place to be. Algiers Crossing is located on the Mississippi River and offers unparalleled views of the downtown New Orleans skyline that no other project can match. Two powerful forces have joined to bring you Algiers Crossing, J.S. Karlton and International Sales Group.
As everyone knows New Orleans has suffered in the wake of hurricane Katrina, but now the future is looking brighter than ever with the creation of the GO ZONE act. The Go Zone provides investors with large tax breaks due to the 50% deprecation that can be taken in the first year of ownership. The US Government is also pouring 100 billion into the New Orleans area to spur growth, and you can imagine what that is doing for the area. If you are considering investing in the New Orleans area and if you have a vision for what the future may hold, please call us today to find out how to maximize your money.
- Price Range - $350,000 to $500,000s
- Size of units - 1/1, 1/1.5, 2/2, 2/2.5
- Majority of the units will have a view of the Mississippi River
- 5% deposit with letter of intent and 5% at contract
- Third 5% 6 months after contract and 5% at completion of exterior
- Project delivery 2009 and 2010
Please call today for a brochure and more detailed information.
Paul Hansen 786-586-4778
The decades-long explosion in residential square footage may be coming to an end, says Gopal Ahluwalia, the National Association of Home Builders vice president for research.
Although the size of the average home has been on the rise to 2,495 last year from 1,500 square feet in 1973 consumers are beginning to choose higher quality living spaces over additional square footage, according to Ahluwalia, who spoke at the recent International Builders Show in Orlando, Fla.
Architects, designers, manufacturers, and marketing experts who were asked by NAHB about their expectations for future homes agreed that home size would slip into the 2,300- to 2,500-square-foot range by 2015.
NAHB says that two-story homes will continue to dominate as increasing construction costs drive choices. As housing prices go up, so too does the share of two-story homes, says Ahluwalia, noting that two-story construction is less expensive than one story on a square-foot basis. U.S. Census Bureau data shows that 55 percent of the homes built in 2005 had two or more stories.
Demise of the Living Room?
On the chopping block are formal living rooms. Last year, 40 percent of newly constructed homes did not have a living room, and 55 percent of the architects, designers, and builders surveyed expect living rooms to vanish from the average home in the next 10 years. Thirty-one percent say it will evolve into a parlor/retreat/library or a music room.
Most likely to capture more square footage in both average and upscale homes is the family room. In upscale homes, 68 percent of those surveyed also expect kitchens to become even larger.
Master bedroom or master suite options are increasing as well, with 63 percent of upscale homes and 13 percent mid-level homes expected to have two master suites by the next decade. Such a configuration not only accommodates guests, but also offers the option of having a master bedroom on the first floor as well as the second floor to give owners more choice and also accommodate aging owners or relatives. The Renewed American Home, one of several show homes at IBS, featured a second-floor master suite and an additional first-floor suite that was a tad smaller.
High Ceilings Dominate
Smaller homes will not translate into less volume though, and the high ceilings that have characterized new homes in recent years are here to stay. Average homes in the future are expected to have 9- to 10-foot ceilings on the first floor. In luxury homes, 10- to 12-foot ceilings on the first floor will be standard.
Unusual weather patterns and problems in the sub prime lending marketplace are creating challenges in assessing housing market conditions, but a recovery is likely this year, according to the latest forecast by the NAR.
David Lereah, NARs chief economist, says there is some ambiguity about the current housing market.
Our goal each month is to fine-tune the forecast based on the latest housing data and a variety of economic indicators, but extraordinary weather variations are skewing home sales and clouding the picture, he says. Underlying trends point to a housing recovery in 2007, but it will take a couple months for us to get a better handle on it. Existing-home sales are expected to slowly improve from what appears to be the cyclical low last fall, but we think there will be some additional pain in the new home market, which hopefully will start to rise later in the year.
2007 Housing Projections
Here are some of NARs predictions for the coming months in housing:
- Existing-home sales are projected at 6.42 million this year and 6.66 million in 2008, compared to 6.48 million last year. The national median existing-home price is projected to rise 1.2 percent to $224,500 this year, following a 1 percent gain in 2006. Although existing-home sales will be marginally reduced due to sub prime lending restrictions, they should be gradually rising this year and next,” Lereah says. However, total sales this year will be fairly close to 2006 because last year started high and ended low.
Consumers are beginning to respond to more favorable housing market conditions, with existing home sales expected to steadily increase into 2008, according to the latest forecast by the NATIONAL ASSOCIATION OF REALTORS.
After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008, says David Lereah, NARs chief economist.
Existing home sales, which reached the third highest total on record of 6.48 million in 2006, are forecast at 6.44 million in 2007 and 6.64 million in 2008.
New construction, on the other hand, will take longer to recover. Following a fourth-best 1.06 million in 2006, new home sales projected to decline to 961,000 this year and then rise to 971,000 in 2008. We look for that sector to turn around later in the year, Lereah adds.
Among the other key highlights of NARs new forecast:
-Housing starts are likely to total 1.52 million in 2007, down from 1.80 million units in 2006, and then increase to 1.56 million next year. When new home demand begins to catch up with supply, builders will slowly increase construction probably in the second half of this year, Lereah says.
-The 30-year fixed-rate mortgage is forecast to rise to 6.7 percent by the second half of the year. Freddie Mac reported the 30-year fixed rate at 6.14 percent in December, but it has been trending up since. Mortgage interest rates remain favorable, and a gradual rise means potential buyers have some time to weigh purchase decisions, Lereah says. When existing-home supplies become more balanced between buyers and sellers this spring, we’ll see some modest price gains.
-The national median existing-home price should grow 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, with existing-home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
-The unemployment rate is seen to average 4.7 percent in 2007, compared with 4.6 percent last year. Inflation, as measured by the Consumer Price Index, is projected at 2.0 percent this year, down from 3.2 percent in 2006, while growth in the U.S. gross domestic product is likely to be 2.8 percent in 2007, down from 3.4 percent last year. Inflation adjusted disposable personal income will probably rise 3.7 percent in 2007, up from a gain of 2.7 percent in 2006.
Pending home sales are higher, affirming the stabilization that is occurring in home sales, according to the NATIONAL ASSOCIATION OF REALTORS.
The Pending Home Sales Index, based on contracts signed in December, rose 4.9 percent to an index of 112.4 from an upwardly revised level of 107.2 in November, but is 4.4 percent lower than December 2005.
The monthly gain was the biggest increase since March 2004 when the index rose 6.9 percent. A steady narrowing from year-ago readings has been observed since last July when the level of unsold housing inventory peaked at an all-time high.
David Lereah, NARs chief economist, says a moderate rise in existing-home contracts is a welcome relief.
Some of the monthly gain may be weather related, but it appears buyers are becoming more comfortable, sensing the timing is good and that their local market has bottomed out, he says. I expect modest sales gains throughout the year, with what I believe are sustainable levels of activity. 2007 promises to be the fourth-best year on record.
The upturn was broad based, with all regions showing an increase.
-The PHSI in the Northeast jumped 8.1 percent in December to 89.9 but was 4.8 percent below a year ago.
-In the West, the index rose 5.3 percent to 112.2 but was 4.9 percent below December 2005.
-The index in the South increased 4.3 percent to 129.8 but was 4.2 percent lower than a year earlier.
In the Midwest, the index was up 3.2 percent in December to 103.2 but was 4.3 percent below December 2005.
The index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.
The most expensive home in the United States is owned by none other than Donald Trump. His home is Palm Beach, Fla is now on the market for $125 million.
In 2004, Donald J. Trump bought former health care executive Abe Gosman's palace, Maison de L'Amitie, at bankruptcy auction for $41.25 million. With the refurbished version, complete with a ballroom, conservatory, 100-foot-long swimming pool and 475 feet of oceanfront. Trump aims to set a U.S. sales record. It is currently on the market and ready for sale. If you would like more information on this estate, please contact Paul Hansen 786-586-4778.
Residents of a coastal trailer park in Palm Beach County, Fla., called Briny Breezes have approved the sale of their community to a developer for more than $510 million.
The proceeds will be distributed based on the size and location of their lots, making most of the property owners millionaires.
Nearly all of the 488 share-owning trailer owners voted; 80 percent approved the sale, while 17 percent rejected it.
The vote clears the way for Boca Raton-based Ocean Land Investments to buy the 43-acre property. State and local officials still must approve new zoning to accommodate the 900 condo units, luxury hotel, and marina proposed by the developer.
Owner Kevin Dwyer says he understands why some people did not want to sell - they will have to give up oceanfront living. But he voted yes because the return was irresistible - about $800,000 for the singlewide trailer and lot he bought nine years ago for $37,500.
I do not have much money. It is a no-brainer for me, Dwyer says.
A home in need of repair can be a good deal, especially if buyers are able to do some of the repairs themselves.
Here are three major things to think about when considering a home in need of lots of improvements:
-Location, location location. Is the lot well located with good topography? Will the improvements you propose make it worth as much as - not a lot more - than other homes in the neighborhood?
-How much? Calculate what the home would sell for if it were in great shape. Subtract the cost of repairs, and then take off another 10 to 15 percent for unexpected problems. If you cannot get the property for that, then it is probably a bad deal.
-Prepare for the mess. Get ready for renovations to take longer than expected. Know that your life will be disrupted if you cannot afford to live somewhere else while the work is being completed.
The most expensive house sold in 2006 was an English-style, 10,000-square-foot Alpine, N.J., mansion with guest cottages, pool, and tennis courts, according to the Institute for Luxury Home Marketing.
The price tag for the 63-acre estate five miles from Manhattan: $58 million. Advanced Photonix CEO Richard Kurtz bought this years top seller from Henry Clay Frick II.
In 2005, the priciest house was an ocean-front estate that sold for $70 million to Ron Perelman of Palm Beach, Fla.
The Institute for Luxury Home Marketing estimates from not-yet-complete data that 2006 sales of homes priced at $5 million and above were up about 11 percent over 2005. And at least 10 buyers throughout the country were willing to shell out $28 million or more for high-end residences last year.
A stabilization trend in the housing market is likely to continue, according to the latest reading on pending home sales published by the National Association of Realtors® (NAR).
The Pending Home Sales Index, based on contracts signed in November, eased by 0.5 percent to 107.0 from an upwardly revised reading of 107.5 in October, and is 11.4 percent lower than November 2005. The decline from year-ago levels has been steadily narrowing since July, which was 16.0 percent lower than the same month in 2005.
David Lereah, NARs chief economist, says the narrowing from year-ago levels is a significant factor. Because there is a stronger parallel between changes in the index from a year ago and the actual pace of home sales in coming months, the index is pointing toward fairly stable home sales in the near future, he says. That is another indicator that home sales likely bottomed-out in September.
The index is derived from pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed; pending sales typically are finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined and the first of five consecutive record years for existing-home sales. There is a closer relationship between annual changes in the index and actual market performance than with month-to-month comparisons.
Although some monthly declines are possible, when we look at the forecast for existing-home sales in 2007 on a quarterly basis, we see gradual improvement over the course of the year, Lereah said. That will support future price appreciation as inventories are drawn down.
Only 28 percent of home buyers say what they read and hear from the media has any impact at all on their decisions to buy or not to buy a new home, according to a survey commissioned by the National Association of Home Builders.
"While the majority of the households we polled indicated that they found the media a reliable source of information on the housing market, what they read in the newspaper, saw on television or heard on the radio was no substitute for actually going out and shopping the market," says Thomas Riehle, a partner in RT Strategies, which conducted the research for NAHB.
Factors that did have an impact on the home-buying decision were:
* Price of home: 80 percent
* Potential for the new home to appreciate in value: 71 percent
* Likelihood of selling their former home at a fair price: 70 percent
* Mortgage interest rates: 69 percent
* Life changes like a new job or family member: 60 percent
For the last few months an identity theft ring has been targeting property owners, mortgage lenders and the title insurance industry -- an international scheme in that many of the suspects appear to be of Eastern European origin and much of the stolen money is being wired to accounts in Greece, the Slovak Republic, Russia, Latvia and elsewhere.
The scheme involves absentee-owned property and includes both vacant land and improved residential and commercial properties. In most of the cases reported, the true owners reside outside Florida. Additionally, in some of the cases, the properties are listed for sale through the local Multiple Listing Service (MLS).
"This involves millions and millions of dollars, and it's all over the state -- not just South Florida," says Doug Pollock,
President and Founder of Information Data Services, Inc.IDS, www.idsnetwork.com which serves the legal, corporate, title insurance and mortgage lending industry.
Borrowers continue to choose risky nontraditional mortgages, even after state and federal regulators have issued widespread warnings about the unstable and rapidly rising payments associated with this kind of financing.
About 26 percent of mortgage loan originations by dollar volume in the first six months of 2006 were interest-only loans, according to the Mortgage Bankers Association.
Another 13 percent were "option" adjustable-rate loans, which allow customers to pick their payment amount, including a low-cost choice that covers neither the full interest nor the principal.
The loans have been marketed aggressively by lenders to consumers who find them an attractive way to cope with rapidly rising home prices. Payments on the loans can double or even triple as rates adjust and reflect unpaid principal. Most home owners are making only the minimum payments, according to banking data.
Consumer demand is behind the growth in these loans, Doug Duncan, chief economist for the Mortgage Bankers Association, said in a statement. "As expected, consumers respond to changing opportunities in the marketplace, but it looks like these products serve an important need."
Let's face it, the reason most people use the "For Sale By Owner" or FSBO method is to save on the real estate commission. What those people don't understand is that the process of marketing and selling a home or condo is just that, a process. From start to finish the sale of your home can take up to six months. In the U.S.A. the National Association of Realtors (NAR) states that FSBO's sell for as much as 20% less than homes sold by Realtors. That is a far cry from the six percent real estate commission.
For a real estate agent there is one primary goal, selling your home or condo. The agent won't let his or her emotions get in the way like the owner of a home will. The truth is that most buyers feel very uncomfortable when the owner is home during a showing. Buyers tend to feel like they can't ask the questions they would like and can't voice their true opinions, so you can imagine what they feel like when they walk into a FSBO. When an owner shows their own home, they tend to make the entire experience too personal and geared toward their experiences there, and that turns off potential buyers which makes it harder to sell the FSBO.
FSBO's don't realize when they try to sell their own property that they will be subject to complete strangers walking through their home at all hours of the day. After a few weeks of FSBO's juggling their daily schedule to accommodate different buyers, FSBO's will generally get frustrated or completely stressed and call their local realtor to list their home for sale. Realtors will make sure that buyers coming through are pre qualified and looking for a property that is similar to your home.
If a FSBO does get lucky enough to finally get to contract, then comes the hard part, negotiating. Negotiating price and terms of the contract can be tricky and FSBO's tend to attract buyers looking to make low ball offers, or even worse commit fraud. They think if there is not an agent there looking out for the seller's best interest, that they can take advantage of them. Realtors are trained to spot fraud and help to keep potential buyers from bringing low ball offers.
Many times you will see FSBO's agree to accept an offer from a buyer being represented by a real estate agent, and since most serious buyers have an agent this happens all too often. This scenario can be catastrophic for the FSBO in the negotiating process. An experienced agent knows contracts and contingencies inside and out and will structure deals in the favor of their buyer. Without an agent on their side the FSBO will generally accepts price and terms far below what an experienced seller's agent would be able to get for them.
These are just a few reasons to use a Realtor when you are ready to sell your home or condo. The sale of a home is usually the largest and most stressful transaction that people make in their life, so why not make it a pleasant experience and enlist the services of a Realtor.
10. You open yourself to unneeded stress and aggravation.
9. FSBO's can be a security risk for the seller.
8. Unqualified strangers walking through your home.
7 Takes hours out of your day and some appointments never even show up.
6. You could end up negotiating with an experienced buyer's agent.
5. You may be unaware you are participating in fraud.
4. Advertising can be expensive and unreliable.
3. Most of the calls you will get will be from Realtors anyway.
2. You will probably overprice you home.
And the number one reason not to go FSBO.....who wants to ruin their weekend having an open house?
We are always interested on why people are looking for homes in South Florida. We look forward to your participation in our survey. Please give the South Florida real estate poll a second to load.
The percentage of first-time home buyers under age 25 has been increasing in response to low interest rates
As they begin to enter the housing market, many consumers in their 20s are more likely to buy a home at a younger age than their older brothers and sisters as well as their baby boomer parents, and are not necessarily waiting for marriage or even a long-term relationship before becoming homeowners.
The next generation of homeowners is beginning to exert its influence on the housing market, said Thomas M. Stevens, National Association of Realtors president from Vienna, Virginia, and senior vice president of NRT Inc. Many younger buyers have seen the wealth-building effects of homeownership in their parents and understand the value of housing as a good long-term investment.
The motivations, interests, and home buying approach of some younger buyers are chronicled in Tomorrow Buyers: Who They Are and What They Want in the September 2006 issue of Realtor Magazine. The report integrates NAR research with the experiences and attitudes of real-life buyers who represent different demographic populations, putting a human face on statistical trends.
The percentage of first-time homebuyers under age 25 has been increasing in response to historically low interest rates and continued confidence in the long-term housing market, from 11% in 2001 to 14% in 2005, according to the 2005 NAR Profile of Home Buyers and Sellers. Owning a home is no more burdensome than renting, and in the long term, it's the better investment, said Kristen Carreira, a 26-year-old homeowner in Pittsburgh.
Carreira is also part of a trend in single female home buyers. While married couples are still the norm, they represent a smaller share of the home buying public than they did just 10 years ago, from 70% of home buyers in 1995 to 61%, says NAR. During that same time, the proportion of single women buying homes has increased, from 14% in 1995 to 21%.
Younger buyers are also likely to use technology and the Internet in their home buying search. In 2005, according to NAR research, the median age of buyers who used the Internet to search for homes was 11 years younger than those who did not, at 38 and 49, respectively.
Realtors have adapted to meet the needs of this growing population of young home buyers, said Stevens. More than one-third of NAR's 1.3 million Realtor members have had special training and lots of experience in buyer representation and technology. That expertise is reflected in special designations and certifications, such as the Accredited Buyer Representative (ABR) designation and e-PRO certification. A commitment to understanding the demands of this changing marketplace is just one more way Realtors add value to the real estate transaction.
Today we just launced out new blog design for www.hansenhomesaventura.com. We would love to hear your feedback on the new look and navigation of the blog. If you have any suggestions on how we can make our blog better please leave us a comment. We also launched out new MLS listing system on the main site miami real estate . We will be adding unique features on a monthly basis. If there are any features that you would like to see please drop us a line or leave us a comment.
New mortgage applications are up. Pending home sales are up. The economy is expanding. Unemployment is at 4.6 percent. And mortgage rates are still historically low.
What kind of housing bust is this anyway?
All the dismal reports about the real estate market overlook the realities in the market place, some housing experts say.
The housing correction -- expressed through new home starts -- "may be closer to [its] trough than to [its] peak," says Federal Reserve vice chairman Donald L. Kohn.
Today's "unusually low" long-term mortgage-rate environment "stands in sharp contrast to some past downturns in the housing market that followed actions by the Federal Reserve to tighten credit conditions significantly," Kohn adds.
James Glassman of JP Morgan Chase is equally optimistic. He says 30-year fixed-rate mortgages at 5.75 percent are a distinct possibility if long-term rates in the global bond market keep easing. The current cyclical downturn in housing "is not your classic interest-rate story" he says.
Perhaps the most blunt appraisal comes from Mike Moran, chief economist of Wall Street’s Daiwa Securities America. Moran says the financial press is taking a normal and long-predicted cyclical rebalancing and "portraying it as a catastrophe."
The average household spends nearly $9,000 on products and services
linked directly to a home, or about $170 billion a year, according to a new survey by Move Inc. About half of the moving-related expenses pay for household goods and services, including home decorating, improvements and repair. People who are moving spend 60 percent more on such purchases than non-movers, the study found. The rest of the money is spent when switchingto new merchants for services like banking, cable or satellite TV, telephone service and Internet access. Movers also switch to new grocery stores, insurance companies, auto mechanics and pharmacies. The 2006 Mover Study analyzed consumers' timeline for buying
move-related products and services as well. It found that many buying decisions were clustered around the two weeks immediately before and after a move.
Since most people rarely deal in real estate transactions, terminology of the industry can be confusing and foreign. A website called www.realestatewords.com has listed just about every real estate term you can imagine with a definition. This website can be very helpful if you are dealing in any type of real estate transaction, or if you are a new agent in the business. If you are experiencing any difficulty in a real estate transaction, please feel free to give me a call for some friendly advice. I am always happy to help.
Rates on 30-year mortgages fell for a fourth consecutive week as a slowing economy eased concerns about inflation. Mortgage giant Freddie Mac said Thursday that 30-year, fixed-rate mortgages fell to 6.52 percent this week from 6.55 percent last week.
That was the lowest level for 30-year mortgages since they averaged 6.49 percent the week of April 13. Mortgages had been rising since April, hitting a more than four-year high of 6.80 percent the week of July 20 before easing down. Analysts attributed the rollback in rates to further evidence that the economy is slowing, which should ease inflation pressures. "Long term rates continue to relax as economic reports support a picture of a weakening housing sector and a slower growing economy," said Frank Nothaft, chief economist at Freddie Mac. Nothaft said this week's news that new home construction fell by 2.5 percent in July added to the belief that a slowing housing market will contribute to lower overall growth. This, in turn, will reduce inflation pressures and allow the Federal Reserve to call a halt to further rate hikes. The central bank last week left rates unchanged, breaking a two-year period of rate increases, although policymakers left the door open to further rate hikes if inflation becomes a problem. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.20 percent this week, unchanged from last week. For one-year adjustable-rate mortgages, rates dipped to 5.65 percent from 5.69 percent last week. Rates on five-year adjustable-rate mortgages fell to 6.18 percent this week from 6.21 percent last week. The mortgage rates do not include add-on fees known as points; a point is 1 percent of the total loan amount. Thirty-year mortgages and 15-year mortgages both carried a nationwide average fee of 0.3 point. One-year ARMS carried a nationwide average fee of 0.5 point, while five-year ARMs carried an average fee of 0.4 point. A year ago, 30-year mortgages averaged 5.80 percent, 15-year mortgages stood at 5.40 percent, one-year ARMs were at 4.58 percent and five-year ARMs averaged 5.34 percent.
Floridians can now apply for a free home inspection and professional recommendations on how to improve their homes' ability to withstand a hurricane.
Homeowners who undergo the My Safe Florida Home inspection may also qualify for matching grants of up to $5,000 to fortify their homes.
My Safe Florida Home is a $250 million mitigation program to help Floridians strengthen their homes against hurricanes and to reduce property losses in Florida.
The goal is "to strengthen as many homes as possible against hurricane damage," said Jeff Takacs, spokesman with Department of Financial Services, which administers the My Safe Florida Home program.
Tom Gallagher, Florida's chief financial officer and a gubernatorial candidate, said that as many as 50,000 Florida households will be served over the next year through this program. The program will help reinforce older homes -- those built prior to 2002 -- which represent 85 percent of all Florida homes, said Bob Lotane, spokesman with the Office of Insurance Regulation.
Those strengthened homes would be less susceptible to damage from hurricanes, making them more attractive to insurers, and resulting in lower premiums, Lotane said.
"If we can get these improvements on the home, the rates are automatically going to drop," he said.
But for the program to work, the premium savings would need to be high enough to justify the homeowner's cost of re-enforcing the home, said Jeff Grady, president of the Florida Association of Insurance Agents.
To be eligible to apply for a free home inspection, Floridians must live in a single-family, site-built home with an insured value of $500,000 or less and have a valid homestead exemption. Once an inspection has been done, the homeowner will receive a report within 10 days that would outline up to seven areas that could be improved to better protect the home against hurricanes. The homeowner would be provided an estimate of how much each of those improvements would cost, the expected savings if the improvements were made, and a rating of the home's current ability to withstand hurricanes.
Mortgage rates around the country dipped for a third week in a row, pushing 30-year mortgages to their lowest level in the last few months. Freddie Mac said Thursday that 30-year, fixed-rate mortgages fell to 6.55 percent this week, down from 6.63 percent last week. That was the lowest level for 30-year mortgages since they averaged 6.53 percent the week of April 20. Since that time, mortgages have been rising, hitting a more than four-year high of 6.80 percent the week of July 20.
Most analysts say that this latest decline is due to evidence that the economy continues to slow gradually. Job growth continues to look weak, and is another sign that the economy is probably slowing down.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, averaged 6.20 percent this week, down from 6.27 percent last week. For one-year adjustable-rate mortgages, rates held steady at 5.69 percent, the same as last week, after having been at 5.78 percent the week of July 27. Rates on five-year adjustable-rate mortgages fell to 6.21 percent this week, from 6.27 percent last week. If rates continue their decline or hold steady, this should help with sales in the real estate market.
The housing market is in a process of stabilizing with little change in overall sales volume expected over the balance of the year, according to the National Association of Realtors (NAR).
David Lereah, NAR�s chief economist, says the indicators already are leveling-off. �We�ve seen a minor easing in closed transactions of existing-home sales, and a slight increase in the leading indicator of pending sales based on contracts,� he says. �New-home sales and housing starts have been fluctuating, so the overall market is stabilizing.�
�On one hand is the rise in mortgage interest rates that has slowed sales in many higher-cost markets, and on the other is 3.8 million new jobs over the last two years,� Lereah adds. �This means many potential homebuyers could enter the market in the foreseeable future, especially in moderately priced areas where affordability conditions remain favorable. In fact, this is already occurring.�
Although sales will be fairly steady over the balance of the year, declines since last fall mean annual totals will be lower. Existing-home sales are forecast to fall 6.5 percent to 6.61 million this year, the third highest on record after 2005 and 2004. New-home sales are projected to drop 12.8 percent in 2006 to 1.12 million, also the third best on record. Housing starts should be down 9.1 percent to 1.88 million this year.
The 30-year fixed-rate mortgage is running nearly a percentage point higher than a year ago but is likely to rise very slowly in the months ahead, reaching 6.9 percent in the fourth quarter.
NAR President Thomas M. Stevens says current market conditions are favorable for buyers. �The rise in housing supply is the biggest change in the market over the last year,� says Stevens. �Clearly, this has taken pressure off of home prices and has significantly widened choices for buyers. At the same time, sellers are getting excellent returns -- but in this competitive environment they need real estate professionals more than any time since the 1990s to market their homes and maximize value.�
The national median existing-home price for all housing types is forecast to grow 4.3 percent this year to $229,000, while the median new-home price is expected to rise only 0.5 percent to $242,100 as builders offer incentives to clear unsold inventory.
The unemployment rate should average 4.7 percent for the balance of the year. Inflation, as measured by the Consumer Price Index, is likely to be 3.5 percent for 2006, while growth in the U.S. gross domestic product is projected at 3.5 percent. Inflation-adjusted disposable personal income is expected to grow 3.0 percent this year.
Population is the driving force in any real estate market. Each day 1,000 new permanent residents move to Florida. Most of the incoming population will move to South Florida. Florida is adding more residents than any other state.
Population Growth - Florida population will double by 2040. This is the equivalent of moving everyone now living in Pennsylvania and Maryland into Florida. These residents will need housing and would be willing to pay a lofty premium to be in the coastal region. In addition to this significant increase in housing Southeast Florida also benefits from a huge second home market discussed below.
Second Homes � South Florida is a prominent second home market, attracting international and U.S. buyers.
Baby boomers are in their peak earning years and many have purchased second homes, which often become retirement homes. The baby boomer impact will continue for another 10 to 15 years.
U.S. Migration to Florida - Home prices are getting big support due to many wealthy Northeasterners moving into Florida. They are selling their pricey homes in Boston and New York and elsewhere . . . and have the financial equity and capability to pick up - relatively speaking - affordable homes in Florida. Florida has the highest net in-migration in the country. According to the U.S. Census, 541,000 people moved to Florida from other states between 2000 and 2003. Certainly, Southeast Florida is a huge contributor to the figure. Again, these figures do not include either second home buyers or our large international buyer market� major additions.
Second Home, Vacation, and Investment Property Buyers
A recent study released by the National Association of Realtors� (NAR) shows sales of second homes surged in 2004, certainly continued in 2005. Investment property and second homes now make up more than one third of all residential transactions. South Florida�s unique market and location coupled with the continuous real estate growth make it a prime area for unprecedented buying opportunities � now and in the future.
Believe it or not the government actually subsidizes your home with income tax and property tax deductions. It may not seem like much, but it will probably be the largest deduction you will have over the course of a year. Imagine if you have a loan of $150,000, you could write off roughly $10,000 on your taxes for that year. That would translate into roughly a $3,000 savings depending on which tax bracket you are in.
Another very good reason to buy instead of renting is that rents inevitably will go up. If you are in a fixed mortgage, you will continue to pay the same amount year after year. Even if you have an adjustable rate mortgage you are capped at a certain rate. What makes more sense, to pay rent that continues to rise, or pay on a mortgage that is stable, with yearly income tax benefits.
One of the biggest benefits of owning a property is the building of equity. If you were to purchase a home or condo for $300,000 with 10% down, you would have an initial investment of $30,000. If your property appreciates at only 5% in one year, you will realize a 50% return on your initial investment, or $15,000. Not too shabby. I think you see where this is going. When you do the math, it only makes sense to purchase real estate instead or renting. Why build the landlords wealth when you could be building your own?
Pending home sales, a leading indicator for the housing sector, have risen for the last two months, according to the National Association of Realtors (NAR).
The Pending Home Sales Index, based on contracts signed in June, increased 0.4 percent to a reading of 113.9 from an upwardly revised level of 113.5 in May, but is 9.6 percent below June 2005.
The index is based on pending sales of existing homes. A sale is listed as pending when the contract has been signed and the transaction has not closed, but the sale usually is finalized within one or two months of signing.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing-home sales.
David Lereah, NAR�s chief economist, says the small rise in the index is good news, indicating that the trend is stabilizing. �Once again, we have various housing indicators moving in different directions, which itself is an indicator of a market in transition,� he says. �The housing market is striving for balance -- a process that will take several months. A quieting in the movement of indicators should restore confidence to home buyers who�ve been on the sidelines, waiting for the right time to get into the market, and now is the best time we�ve seen since the 1990s in terms of housing choices and flexible terms.�
Regionally, the PHSI in the South rose 2.5 percent in June to 130.7 but was 4.8 percent below June 2005. The index in the Midwest increased 1.9 percent to 103.3 in June but was 11.9 percent below a year ago. The index in the West was unchanged, holding at 110.1 in June, and was 14.2 percent lower than June 2005. In the Northeast, the index dropped 6.3 percent in June to 99.4 and was 11.6 percent below a year ago.
Don�t try to go it alone. Buying a home is a huge undertaking, and you want a professional guiding you through the process and looking out for your best interests. Plus, it is a free service for buyers!
Financial Preparation
Keep your credit clean, choose a loan officer and get pre-approved before you start looking. You�ll know exactly what you qualify for, and if you find a house you�re crazy about you won�t risk losing it because your financing isn�t in place. Once you are pre-approved, don�t make any major purchases or change jobs without talking to your loan officer, because it changes your financial situation and may impact your pre-approval.
Finding your dream home
Buying a home is one of the most significant events you will experience in a lifetime, a reflection of who you are, how you live and part of the fulfillment of your hopes and dreams. We�ll help you define your wants and needs, and patiently work with you to help you find the home that reflects your own unique sense of place.
Wherever you find a home that interests you... through our daily e-mails of new listings, in the paper or a magazine, driving by and seeing a sign, new construction complexes... we can help you buy them all and arrange for private showings. No need to wait for an open house to see the home that interests you!
Making an offer
When you find the home for you the next step is making an offer. Your written offer will include things such as how much you are willing to pay, how you plan to finance your purchase, when you want to close and take possession, and whether your offer is contingent on an inspection or the sale of another property. You will also submit an earnest money check of approximately 1-2% of the purchase price with your offer with the balance of 5 to 10 percent within a week to ten days of acceptance.
The sellers may counter your offer and negotiations sometimes go back and forth several times before coming to an agreement. Once you agree on the price and terms, then the process really begins.
Inspection
If your offer is subject to an inspection, the inspection usually takes place within 3-5 business days of coming to an agreement. After the inspection you can either accept the property as is, request that the seller fix or give financial compensation for certain items, or cancel the purchase agreement and have your earnest money refunded.
Application process
Most gated communities in Dade, Broward and Palm Beach counties require new buyers to fill out an application. Generally, it will cost $150 to process the application. Then a few days before closing the new buyer will go in for their final interview. Once the final interview is complete, an approval certificate will be issued which the buyer will take to closing.
Loan underwriting and closing
Many steps take place from purchase agreement to closing, including: the property is appraised, all conditions for loan approval must be met, you lock in your interest rate, the abstract and title work are completed, you secure a binder for the first year of property hazard insurance, you obtain your funds for closing.
While these steps are taking place, you will be planning and preparing your move in preparation for closing. You will do a final walk-through of your new home just before closing, and then sign papers to transfer title at the closing, get the keys... and move in and enjoy your new home!
For more information on the home or condo buying process, please visit www.HansenHomesAventura.com or call Paul Hansen 786-586-4778.
Well before Hurricane Wilma�s first rain drops fell in South Florida last October, Kathryn Danella, general manager of the community association for Boca Pointe, a development of 4,044 residences, had shifted into disaster mode. And thanks to her training as a certified manager of community associations (CMCA), her recovery program in the 1,000-acre community of 7,600 residents, located just outside the city of Boca Raton, was underway as soon as the last drops fell. The CMCA program is the only national certification designed for managers of homeowner and condominium associations, according to the National Board of Certification for Community Association Managers (NBC-CAM), which administers the CMCA certification. According to the Community Associations Institute, there are more than 286,000 such communities, home to one in five Americans or approximately 57 million people. The Community Associations Institute created the NBC-CAM in 1995. Since then, 6,000 managers have been trained. According to CMCA, CMCA specialists help reassure potential homebuyers that a community is well run, has adequate reserves and will continue to enhance the value of a property. They can also help real estate practitioners acquire relevant documentation and information regarding budgets, insurance, assessments and reserves when a residence is sold. �Our requirements for earning and maintaining the CMCA were designed to provide homeowners with a port in the storm -- a certified professional ready, trained and able to handle almost any situation -- from emergency conditions such as floods or fires to community management of finances and contracting,� says Judi Phares, NBC-CAM�s chair. Last year, disasters touched 48 states in some way, according to the Federal Emergency Management Agency (FEMA). In a recent survey conducted by NBC-CAM, 94 percent of those certified said they were better equipped to handle natural disasters than they had been prior to the training. Establishing on-going relationships with vendors ahead of time helps communities recover rapidly, says Danella. At Boca Pointe, she says, these relationships meant they were able to begin clearing roadways immediately after the storm. Another essential function for association managers facing a disaster is to be a communication hub for absentee residents and families of residents who remain on site. This means, says Danella, developing a Web site and having access to communications that can be maintained during power outages.
The National Association of Home Builders Economics Group
compiled U.S. Census Bureau statistics on single-family houses built
in 2005 and found that the average size was 2,434 square feet, while
the average price was $297,000. Other new home 2005 facts: Eighty-
nine percent have central air conditioning; 96 percent have at least two bathrooms while 28 percent have three or more; 88 percent have at least three bedrooms while 39 percent have four or more; 50 percent have a fireplace; 84 percent have a garage for at least two cars; 34 percent have vinyl siding; 53 percent have a porch; 46 percent have a patio; 27 percent have a deck; and 55 percent have two stories or more. Interesting statistics on homes. To find out more please visit www.HansenHomesAventura.com
"Contingency" is one of those words that often pop up when talking about real estate contracts. Every real estate contract contains contingencies that impact both buyers and sellers, so let�s demystify this word. Simply put, a contingency is a condition - if A happens, than B follows; or in order for X to happen, Y must occur first. For example, the buyer (and her lender) want to be sure that a property is worth its price, so the sale is 'contingent upon" (depends on) the appraisal. If the home is appraised at or above the purchase price, the sale occurs; if the appraisal comes in lower, than the contract can be cancelled or re-negotiated. This condition written into a contract is a contingency. What are the most common contingencies? The one described above is always present when the buyer is obtaining a mortgage. Another very common one is the Financing contingency - if the buyer is unable to obtain financing, the sale is off. Every smart buyer will also insist on an Inspection Contingency - the home must pass a property inspection, or the contract is renegotiated or cancelled. And the Title Contingency is an absolute must - the seller must deliver a clear title, or no deal. There are a number of other contingencies that both buyers and sellers can request depending upon the particular situation. A buyer may want the contract to be "contingent" upon the sale of her current home. The seller may want the contract to be "contingent" upon the buyer proving her creditworthiness. Whatever the case may be, properly written contingencies help both parties understand and anticipate certain events in the transaction, and outline rules for how those events will be handled. For more information on real estate contingencies, please contact Paul Hansen 786-586-4778.
The number of homes entering some stage of foreclosure declined in June, nationwide and across Florida, dropping to their lowest levels of the year, according to a national survey released Tuesday.
Most states posted at least some improvement from May to June, though the number of properties in financial stress nationwide remained well above levels of the same time a year ago, according to RealtyTrac, a California-based company that tracks foreclosures.
Florida's rate of foreclosure in June -- one new filing for every 849 households -- was the eighth-worst rate in the nation.
But Florida's foreclosure levels were improved from a year earlier -- down about 12 percent from June 2005 -- and down 3.29 percent from May, RealtyTrac reported.
Houston Briggs, an independent real estate agent who lives near Kissimmee, said he was somewhat surprised by the slowdown in foreclosures in Florida and said he expects the numbers to rise again.
"A lot of people will get caught" with house payments they cannot afford as interest rates continue to rise, said Briggs, an adjunct professor who teaches real estate at Valencia Community College.
Interest-only mortgages and adjustable-rate mortgages will test the ability of many homebuyers to pay the higher bills as they come due, Briggs said.
"Within the next three or four years, I do think we'll see more" foreclosures, Briggs said.
In Central Florida, Orange County continued to have the region's worst foreclosure rate -- one for every 657 households. Still, that was down 8 percent from May and 11 percent from a year ago.
Lake County -- with one filing for every 745 households -- continued to weaken, reporting 20 percent more foreclosures than in May and 6 percent more than in June 2005. Seminole showed the most improvement in Metro Orlando, with 28 percent fewer filings from May to June and 43 percent fewer than a year ago. Osceola County foreclosures were up slightly -- 4 percent higher than in May but still down 29 percent from a year ago.
Colorado had the nation's worst foreclosure rate in June for the fourth month in a row -- one filing for every 495 households. However, that was a 12 percent improvement from May.
Nationally, the number of foreclosures fell about 5 percent from May to June but remained 16 percent higher than in June 2005.
Smokers are finding fewer places to light up, and now even their own home is not an option. Apparently �smells don�t sell very well �. In a cooling housing market it seems people who smoke inside their homes are having trouble selling. With the smoking population in this country declining, you can imagine a non smoker not being very interested in buying the home of a smoker. We have all experienced it before whether it is someone�s home or maybe even a hotel room that has had excessive smoking that has taken place there. The smoke permeates just about everything in the house whether it is furniture, clothing and even drywall! Air fresheners and opening windows won�t help the problem. Replacing carpet, reupholstering furniture and repainting will help, but ultimately will not solve the problem. The only way to keep your home smelling fresh and appealing to buyers is to not smoke in your home or condo at all. Remember the average family stays in a home roughly five to seven years, which makes for a lot turnover. If you want to maximize your homes value, always remember �smells don�t sell very well�. For more helpful tips on how to sell your South Florida home or condo, please call or email the Hansen Homes Team. We specialize in Miami Dade and Broward counties.
There is no question that the red hot south Florida real estate market is seeing signs of cooling, but the idea that there is a bubble in the market is exaggerated. The bubble talk has been created to a large degree by the media with irresponsible reporting and lack of in depth research. There have been numerous articles written that may only use one or two sources to gather information, and the rest is pure speculation from a reporter with zero knowledge of the real estate market. Most of these reporters have probably never been involved in any type of real estate transaction in their lives. There are many factors that need to be considered before making any kind of speculative opinions on the South Florida real estate market.
A recent article in the Miami Herald said existing home sales plunged in South Florida as the real estate market continued to shift from go-go to so-so. Nowhere in the article did it mention that we had experienced a major hurricane in October that brought all business to a stand still for nearly a month. Many real estate transactions that were set to close were delayed for weeks or months and some probably did not happen at all. If there is a gap like that in the real estate cycle for close to a month, the affects do not show up until a few months down the road, which would be roughly the month of January. So it is no wonder real estate sales were down for that month. Reporters and editors should be held somewhat accountable for the sensational articles that that they produce without taking all factors into account. It is easy to publish an article bashing the real estate market, but it is not so easy to undo the damage they cause. Some articles compare the MLS active and closed sales statistics from the month of January 2004 to the month of January 2005. That makes it very easy for the reporter to create a large disparity in the number of condos or homes sold or on the market in 2004 compared to the numbers sold for the same month in 2005. Once again, this boils down to irresponsible reporting.
Another factor not being taken into account is the recent trend of developer run resale programs. These resale programs take place when a condo project is sold out and under construction and the developer begins to resell the condo units that had been pre sold one or two years earlier. These resales are not public record until they close and thus are not factored in to the overall numbers of South Florida real estate that has been sold. Due to the fact that these types of resale programs are relatively new (within the last two years or so) most of these sales have not been recorded in the public record. Developer condo resale programs are a very good thing for a couple of reasons. One, it weeds out investors that would otherwise have to wait until closing to sell their condo and cause a flood of units on the market. Two, and probably more important, is that pricing is controlled to a large degree. You won�t see any fire sales in a developer controlled resale program, thus creating a more stable real estate market place. That is a good thing for everyone.
It would be unreasonable to think the South Florida real estate market can maintain the rate of appreciation it has seen over the last two years. A more realistic view is that instead of seeing 25% to 30% in appreciation per year, it will be more in the range of 10% to 12% per year, which is still very good. When you see statistics that say prices are going down, that reflects the sellers that have to bring overpriced listings back to reality. There have been many overpriced listings on the market that have been reduced to a reasonable price in order to sell. That does not suggest that the real market value of South Florida real estate is declining. Considering the fact that there are more than 1000 people a day moving into Florida with the majority headed for South Florida, the outlook for the future is very good. Taking into account all of the baby boomers that will be moving to warmer climates in the next 10 to 15 years, South Florida real estate will continue to be in great demand. The population of Florida is projected to double by the year 2040. These new residents will need housing and will pay a premium to be in the coastal region.
In general, real estate price declines are rare. Historically speaking, nearly all local real estate market price declines were accompanied by large and prolonged job losses. The Miami region has added 126,000 jobs from July 2003 to July 2005, one of the highest in the country. The unemployment rate continues to drop in Miami and was 3.7 in December 2005, a record low. This is all very good news for the Miami Real Estate Market.
Compared to the rest of the country, South Florida is a unique real estate market due to the scarce amount of land available for development. Miami is considered to be the gateway to South America and is the main hub for Latin American business activity in the United States. South Florida has the strongest tourist market in the country and continues to draw millions of eager travelers each and every year. With all of these factors in its favor, the South Florida real estate market should continue to be in demand and grow for many years to come.
To hold their value in the red-hot U.S. residential market, condominium units need to offer more than zero-entry swimming pools and personal Jacuzzis. High-tech amenities that will support emerging technologies in the coming years have to be part of the package.
A new wave of voice, video and data systems with names such as VoIP, WI-Fi and IPTV are creating a kind of alphabet soup that has to be carefully digested before a consumer can properly assess a condo unit's likely market value in the years ahead. In a climate where several kinds of high-tech systems are vying for the same consumer base, it's the buyer who must exercise caution to avoid acquiring an abode that simply won't make the cut within a few years.
If a developer doesn't install some of these amenities during construction, "it can be cost-prohibitive or even technically impossible to do it later," says Carl Lender, vice president of sales and marketing for CSI Consulting, a South Florida-based firm that advises builders on emerging technologies. That, in turn, can sharply reduce a unit's resale value.
The Condo Boom
Condos are hotter than ever in urban settings around the country. In places like Atlanta, Chicago, Washington, D.C., and Miami the numbers show that more people than ever before are buying condos -- and paying higher prices for them. According to the National Association of Realtors, or NAR, sales of existing condos in August 2005 -- the most-recent data available -- were up 14.3 percent over August 2004. And those figures don't include sales at new developments.
The most interesting change is the rising cost of acquiring a unit, says Kenneth Harney, managing director of the National Real Estate Development Center and a writer for The Washington Post whose column, "The Nation's Housing," is syndicated in papers across the nation.
"Condos," Harney says, "now have a higher median price than single-family, detached homes" -- an unprecedented phenomenon, he says, that remains startling even though high-priced units in the resort condo market pull the numbers up to some extent.
The median price for an existing condo sold in August this year was $226,800, NAR's research shows. Prices for units in new luxury buildings frequently top $1 million.
Buyers are no longer limited to young singles and empty nesters, the folks who dominated the market for years.
"We're seeing the beginnings of a baby-boomer shift from detached to attached living," Harney says. "Early boomers and pre-boomers are cashing in their equity from suburban properties for the conveniences of condo life."
Developers who say retirees don't care about technological bells and whistles are out of touch with the market, Harney says. While other factors such as price, location and security are bound to take precedence over high-tech features, he says, "a surprisingly large percentage of older people are very much tuned into communications technology.
"Any appraiser will tell you it adds not only marketing sizzle but actual value. So in a given price class, the building with no such amenities is in trouble."
Emilio Cardenal, president and broker in the Miami office of Interinvestments Realty, which has branches across Florida, says that these days, Cat-5 wiring for high-speed connectivity is a must, and new condo developments that have Wi-Fi -- short for "wireless fidelity," a wireless network component -- in common areas or throughout the building are very popular. "People are really starting to get educated about high-tech features," Cardenal says. "Most attractive to buyers are high-speed connectivity and Internet control panels -- after built-in cappuccino machines, of course."
This is a recent article posted by Colleen Corley giving her views on the condo market in general. The outlook for a strong condo market to continue is very good even with rising interest rates. Rising construction costs and a lack of new land will help keep the Miami Real Estate market strong for years to com.
From condo developers to converters to speculators, everyone wants to know how fast the condo market will reach its inevitable slowdown. But as a panelist asked at the CPN Executive Summit 2005 yesterday, is the recent deceleration the beginning of the end, or just a hiccup?
In markets with supply constraints, job growth and solid fundamentals, the condo markets should be okay, said Arthur Nevid, managing director of investment and lending at Mountain Funding L.L.C. "(But) when you go to Miami and you know that 80 percent of the condos have been purchased by investors," he noted, "there has to be a slowdown in those types of markets."
Developer Enrico Plati said that a slight oversupply in the market, heightened construction costs and the anticipated rise in interest rates are all contributing to the slowdown. "(But) I was developing when rates were 18 percent--and I was selling," said Plati, who is president of Monaco Development L.L.C.
Plati added that he does more condo conversions than other projects now, but named the non-professional converters as responsible for a rise in condo prices. Co-panelist Louis Dubin, president & CEO of The Athena Group Inc., said that the market might experience a hiccup in 2006 as non-real estate professionals who have bought condos as investors--or, speculators--begin to see lower rates of return and exit the market.
"The professionals are going to take this industry back," Dubin said. "I look forward to the year of professionals getting back to their business." Dan Harrington, managing director of The Patriot Group L.L.C., and Dennis Russo, a partner with law firm Herrick, Feinstein L.L.P., also joined the panel.
1 Seventy-two percent of refinancers are using the technique to fund consumer expenditures or investments, the highest level in more than five years.
It's an eyeball-grabbing number for anyone interested in real estate: Nearly three of four homeowners who refinanced through Freddie Mac between July and October ''cashed out,'' walking away with what was often thousands of dollars of tax-free money.
Cashouts are hardly new, but the proportion of refinancers now using the technique to fund consumer expenditures or investments -- 72 percent -- is at its highest level in more than five years.
One key reason for the trend: Compared with the spiraling costs of home equity credit lines, fixed-rate cashout refis into 30-year or 15-year mortgages now look smart. Some equity credit lines carried starting rates below 4 percent a year ago. Today, a typical ''prime-plus-one'' (prime bank rate plus 1 percent) credit line starts at 8 percent. If, as expected, the Federal Reserve Board keeps bumping short-term rates upward in the months ahead, equity lines could float into the mid-8 percent range or higher.
Contrast that with a fixed-rate cashout. Say you need $100,000 for a down payment on a second home or to fund a business venture. Say you've also got at least $300,000 in net equity in your house, cream puff credit scores, and you qualify for the lowest fixed rates. You should be able to find a 30-year fixed rate refi in the 6 percent to 6.25 percent range, or a 15-year fixed rate in the 5.5 percent to 5.75 percent range. Since you've got loads of equity, your lender should have no objection to a cashout yielding you the $100,000 you need.
BRILLIANT MOVE?
Refinancing with a cashout right now has another strong point: Long-term interest rates appear to be headed for a slow but steady rise. Locking in 6 percent money today may look like a brilliant move a year or two down the road, when rates could be significantly higher.
If you do opt for a refi rather than a floating-rate equity line, you will have lots of company. Freddie Mac chief economist Frank Nothaft predicts that homeowners will pull a stunning $204 billion from their properties this year alone through cashout refis of their primary mortgages. During the quarter from July to October, $60.4 billion in equity was liquefied into cash through refis, according to Nothaft.
What are the downsides of cashouts? A couple are obvious. By definition, they mean you carry more debt secured by your house, which puts your most important asset at greater risk if you lose your job, get sick or run into other financial difficulties.
Mortgage rates finally paused for a breath, following a nine-week run-up. The average 30-year fixed rate mortgage remained at 6.42 percent, according to Bankrate.com's weekly national survey of large lenders. The 30-year fixed rate mortgages in this week's survey had an average of 0.35 discount and origination points.
The average 15-year fixed mortgage rate inched higher, but remains a shade under 6 percent at 5.99 percent. The average jumbo 30-year fixed rate nudged higher from 6.6 percent to 6.61 percent. Adjustable rate mortgages were mixed, with the average 5/1 adjustable rate mortgage dipping from 5.94 percent to 5.93 percent, while the average one-year ARM increased from 5.44 percent to 5.5 percent.
Inflation concerns have pushed mortgage rates higher over the past two months, but those concerns eased somewhat this week. The release of both the Producer Price Index (PPI) and Consumer Price Index (CPI) calmed fears that inflation might be getting out of hand.
With oil prices easing from $70 per barrel to below $60 per barrel, the PPI and CPI showed only moderate increases compared to last month's jump higher. With bond investors no longer headed for the exits, yields on government and mortgage-backed bonds stabilized. Inflation scares off bond investors because it erodes the value of the fixed payments bondholders receive. News of moderate inflation was countered by stronger than expected retail sales, which underscores the Fed's case for additional interest rate hikes.
After defying predictions for so long, fixed mortgage rates have increased significantly in the past two months. The average 30-year fixed mortgage rate on Sept. 14 was 5.84 percent, meaning that the monthly payment on a loan of $165,000 was $972.35. With the average 30-year fixed rate now 6.42 percent, the same loan would now carry a payment of $1,034.25. Failing to lock in a mortgage rate two months ago results in a monthly payment increase of $61.90 per month, and would amount to additional interest costs of more than $22,200 over the loan term. RIS Media
Though the four hurricanes that hit during the year-ago period make for less-than-stellar comparison quality, the median sales prices for homes in South Florida still show double-digit price increases.
Not only can hurricanes strip brokers of their main tools - telephones and computers - they can also lead buyers or sellers to back out of a deal as insurers hold off on writing policies and lenders demand re-certified appraisals.
But despite wind, rain and power outages, people do continue to buy South Florida homes.
The most recent numbers put the median sales price of a single-family, existing home in Fort Lauderdale at $383,900 in the third quarter, up 30 percent from $294,600 for the same period the year before.
For Miami, the price rose 27 percent, to $363,300 from $285,500.
In West Palm Beach-Boca Raton, the 24 percent increase put the median price at $399,900, up from $321,700.
Realtor sales were down 20 percent, though, in Fort Lauderdale, to 2,972 homes from 3,732 homes. The 2 percent decline in Miami lowered the number of sales to 3,070 homes from 3,147 homes.
The only boost in the number of sales came in West Palm Beach-Boca Raton, where a 5 percent rise put the number of homes sold at 3,802 homes, up from 3,636 homes.
Realtors have explained declining or slow sales as factors of not enough supply, not a lack of demand.
Helping to stoke sales: Interest rates for a 30-year, fixed-rate mortgage averaged 5.76 percent for the three-month period. That's lower than the 5.89 percent reported during the same quarter in 2004.
For the entire state, 64,978 homes changed hands during the most recent period, a 7 percent increase from the 60,462 homes sold in the third quarter of 2004.
The statewide median sales price for third quarter rose 31 percent to $248,600. A year ago, it was $189,900.
All the numbers are from the Florida Association of Realtors.
FAR's sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Americans overwhelmingly support retaining federal tax incentives to promote homeownership and oppose altering the current system to encourage investment in the stock market, according to results from a nationwide survey of 800 likely voters.
"Voters are sending a loud and clear message to policymakers in Washington: don't mess with the mortgage interest deduction and other important housing tax incentives that promote homeownership," says Jerry Howard, executive vice president and CEO of the National Association of Home Builders (NAHB).
Commissioned by NAHB to gauge the public reaction to the recommendations by the President's Advisory Panel on Federal Tax Reform to overhaul the current system, the survey was conducted Nov. 6-8 by Public Opinion Strategies.
The polling found that 81 percent of voters believe it is reasonable for the federal government to provide tax incentives to promote homeownership, and 76 percent oppose replacing tax incentives promoting homeownership with incentives to invest in the stock market.
Furthermore, when asked to rate the importance of preserving tax deductions in the current tax system, 73 percent of those surveyed indicated top support for the deduction of mortgage interest and medical expenses. These top two items were followed closely by the deduction for state and local taxes, including property taxes, at 69 percent.
Those respondents renting their current homes were also high on preserving the mortgage interest deduction. In ranking the importance of current tax deductions, renters said this provision came in second at 62 percent, behind the deduction for medical expenses.
The President's panel on tax reform has called for replacing the popular mortgage interest deduction with a considerably more limited 15 percent tax credit. Also gone would be deductions for state and local taxes (including property taxes) and interest deductions for home equity loans and second homes.
In rating national issues they believe it is important for the President and Congress to address, survey respondents put tax reform low on their list of priorities, behind the war in Iraq, national security and terrorism, ending corruption in Congress, protecting Social Security and Medicare, slowing the rising cost of prescription drugs, improving education, creating jobs and improving the economy, holding down gas and energy prices, reforming the nation's immigration laws and protecting the environment.
According to the survey results, one reason voters appear skeptical of the current push for tax reform is that few believe they will end up paying less in taxes. Only 14 percent believe their tax bill will fall if tax reform is enacted. Conversely, 30 percent expect to pay more taxes under a new tax code.
Brace for still more giant cranes draping across the landscape of Miami Real Estate.
Despite worries of an overheated real-estate market, developers are continuing to unveil high-rise condominium projects in Miami that are record in number and unprecedented in size -- one proposed two 1,200-foot towers on Biscayne Boulevard at Northeast Third Street.
Now some 14,000 condo units are under construction and more than 63,000 units are approved for construction or in the permitting process, according to the latest Large-Scale Development Report by the city of Miami's Planning Department.
By contrast, just 9,250 units were completed in Miami in the past 10 years, according to the report issued Friday.
"It's a scary number," said Jorge Perez, CEO of the Related Group of Florida. He has several major Miami projects ongoing but is not looking for any new ones in the city because of high land prices and other factors.
The frenetic boom -- which amounts to $5.6 billion in current construction, according to the city's report -- comes despite an unremitting wave of headlines warning of a real-estate meltdown, banks tightening the reins on lending, construction costs skyrocketing, and rising competition for skilled construction labor. Furthermore, the U.S. Federal Reserve has raised interest rates 11 consecutive times.
Yet, the pace of new projects in Miami continues at breakneck speed, even by the yardstick set by Miami's red-hot building boom.
In June, for example, when the construction boom was already well underway, there were 61,975 units either under construction, approved or in the permitting process, according to the Planning Department report. Since then the total number has jumped to 78,342 units.
To be sure, many of the plans now on paper will never be built.
"To get a project through the approval process, all you have to do is pay an architect and lawyer," said Daniel Kodsi, CEO of Boca Raton-based Royal Palm Communities, which has plans to build two high-rise condos in Miami. "But to take a building to construction is a whole different ballgame."
BEYOND THE PLANS
Kodsi said the relevant number is the units under construction, not what is approved or planned.
Indeed, many projects may struggle to get out of the ground, because of rising construction costs and increasing difficulty to win financing.
"The facts have not changed materially over the last year, but the constant barrage of press about the national housing bubble and Miami in particular has taken root with some investors," said Timothy Martorella, managing director of Miami-based Madison Capital Group, which seeks financing for condo developers. "There are projects out there that will not get financed."
Housing construction unexpectedly rose in September to the highest level in seven months, defying expectations of a slowdown in the booming housing market.
The Commerce Department reported Wednesday that construction of new homes and apartments rose by 3.4 percent last month to a seasonally adjusted annual rate of 2.11 million units, the fastest pace since last February.
Analysts had been forecasting that housing construction would decline by 1.7 percent in September, believing that increases in mortgage rates would finally start to cool the red-hot housing market.
Even with the September increase, the expectation remains that housing will slow in coming months because of the jump in mortgage rates.
Freddie Mac reported that 30-year fixed-rate mortgages hit 6.03 percent last week, the first time they have been above 6 percent since last March. Economists predict that those rates will continue to rise as the Federal Reserve keeps pushing interest rates higher to combat inflation pressures spawned by this year's surge in energy prices.
The 3.4 percent increase in construction reflected strength in both single-family and apartment activity. Single-family home construction rose by 2.6 percent to 1.75 million units while multifamily construction rose by an even stronger 7.8 percent to an annual rate of 361,000 units.
The report showed that the rise in building activity was led by a 6.9 percent increase in housing activity in the South, where the pace of building rose to a seasonally adjusted annual rate of 198,000 units. The government said that this increase was not affected by the devastation from Hurricanes Katrina and Rita.
Housing construction was up 1.9 percent in the Midwest to an annual rate of 368,000 units. Two regions showed no gains in September. The Northeast remained at an annual rate of 198,000 units, the same as August, while the West remained at an annual building rate of 561,000 units.
The forecast for home sales has trended up as the year progressed, fueled lately by added demand resulting from the impact of recent hurricanes, according to the National Association of Realtors�.
David Lereah, NAR�s chief economist, said that at the beginning of the year it was thought that 2005 would be the second best total for both existing- and new-home sales, but by June it was apparent that another record was in the works. �Post-Katrina, our sales projections for this year have moved even higher,� Lereah said. �Short-term momentum is very strong, and our Pending Home Sales Index just set a record. In addition to the housing needs of hurricane victims, we may be seeing some �fence jumping� from home buyers who are getting into the market before interests rates move higher.�
Existing-home sales are forecast to rise 4.2 percent to 7.07 million in 2005, while new-home sales are expected to increase 7.1 percent to 1.29 million. Total housing starts � single-family and multifamily � should be up 4.5 percent to 2.04 million units this year, the best showing since 1973, and single-family starts are seen at a record of 1.70 million.
�Inflationary pressures � driven by higher energy costs � have become a concern, so we anticipate two more hikes in the fed funds rate by the end of the year. In addition, long-term interest rates also are rising at a faster clip,� Lereah said. The 30-year fixed-rate mortgage is projected to reach 6.2 percent in the fourth quarter, and trend up to 6.7 percent by the end of next year.
The national median existing-home price for all housing types is forecast to increase 12.5 percent in 2005 to $208,400, while the median new-home price should rise 3.9 percent to $229,700.
NAR President Al Mansell of Salt Lake City said some easing in home sales is expected in 2006. �The rise in mortgage interest rates is likely to have a slight braking action on the housing market, and the upside of that is it would help to bring the market closer to balance between home buyers and sellers,� he said. �As a result, there should be a cooling in the rate of price growth � on balance, the overall market should continue to favor sellers with price appreciation remaining above the high end of historic norms. The investment fundamentals for housing remain solid.�
In 2006, NAR expects the median existing-home price to grow by 5.2 percent and the median new-home price to rise 7.1 percent. Historic home-price gains are 1.5 percentage points above the rate of inflation, which is seen at 2.6 percent next year.
�Although energy prices are the chief culprit in current inflation concerns, we project oil prices to settle early next year � that would cause inflation to quickly dissipate,� Lereah said. The Consumer Price Index is forecast to rise 3.5 percent for all of 2005 before easing early next year.
Inflation-adjusted disposable personal income is expected to grow by 1.4 percent for 2005. The U.S. gross domestic product (GDP) is seen at 3.5 percent for all of 2005, with GDP picking up early next year as hurricane rebuilding accelerates. The unemployment rate is projected to average 5.2 percent for the next three quarters, then decline to 5.0 percent in the second half of next year.
Another upscale Asian hotel is coming to Miami Real Estate, entering the US market through a venture on Watson Island.
A 147-room Shangri-La Hotel is to form part of Island Gardens, a $480 million Flagstone Property Group project that also is to feature a business hotel, Westin Miami.
This week, Shangri-La Hotels and Resorts announced plans to open in Chicago in 2009, a year after projected completion of the Miami property - its first venture outside Asia Pacific and the Middle East.
The group is based in Hong Kong, home to the Mandarin Oriental Hotel Group, which chose an island location on Brickell Key for its Miami hotel that opened in 2000.
The groups are targeting similar markets.
Mandarin Oriental will open in Chicago in 2008, a year before the Shangri-La.
Swire Properties clinched the deal to build the Mandarin Oriental in Miami on land it owns on Brickell Key. A senior Swire executive said that move, plus the presence of a major Asia-oriented bank, made the city more attractive to companies from the Far East.
"I think there will be greater interest on the part of Asian businesses," said Megan Kelly, vice president of Swire Properties. "The Mandarin Oriental and HSBC have huge visibility and act as beacons to other Far East interests. By persuading a hotel of the caliber of the Mandarin Oriental to come to Miami, Swire has validated this market for Asian businesses."
A hotel representative said the property blazed a trail for high-end brands.
"Mandarin Oriental was the first luxury hotel group to discover Miami," said Jorge Gonzalez, the hotel's general manager. "We saw the city as a high-growth market and as an international gateway.
"It's not that Miami has become a destination for Asian companies," said Mr. Gonzalez. "These few luxury Asian companies have now realized that Miami is a destination that can accommodate other luxury brands. After our five successful years of doing business in Miami, other companies are now seeing its great growth potential."
Another chain with a Hong Kong base has two condo-hotel offerings in the works in Miami-Dade County.
Regent International Hotels, founded in the former British territory in 1970, is to open Regent South Beach this fall. Regent Bal Harbour, a WCI Communities project, is to follow next year.
Even where there isn't an Asian link, developers are still looking to the Far East for inspiration.
Two weeks ago, the developers of a 21-story, 134-unit condominium project in Miami Beach unveiled blueprints for the project's interiors at an event at the Mandarin Oriental.
New York-based PMG Collins - a subsidiary of Property Markets Group - is using Hirsch Bedner Associates, the designer that worked on the hotel, for a development called Mei, meaning "beauty" in Chinese. The developer toyed with the name Tao but rejected it after having learned it is being used in the north of the state.
The 5875 Collins Ave. property is to feature a library, lobby and tearoom. Mei is slated for completion in spring 2007.
One after another, officials presiding at September budget hearings in South Florida communities acknowledged the fiscal blessings of the real-estate boom. For two years, soaring property values have pumped millions more dollars into tax coffers than originally predicted, allowing most local governments to reduce millage rates ever so slightly while increasing spending on services.
The windfall has generated unusually harmonious budget hearings. Yet the prevailing good mood on many daises hasn't disguised a certain foreboding best personified by Miami-Dade Commission Vice Chairman Dennis Moss' observation, ``We are riding a wave right now. I just have a real concern that in the future things aren't going to be as good as they are today.''
New development's impact
Mr. Moss is right. The housing boom may already be flattening, meaning those big tax surpluses eventually will fade, too. And the boon to local-government coffers can't be squirreled away for harder times because the cost of government services keeps climbing as the population keeps growing. Miami, for example, finally is considering hiking its impact fees for new development after realizing that all the new condominiums in and around downtown have created higher demand for services -- but not enough additional money to pay for them.
Another example: During the fiscal year that started Saturday, Miami-Dade expects to take in $192.4 million more in property taxes than it collected this year. Yet 90 percent of the new revenue is dedicated not to new services but to maintain existing services in the $6.8 billion 2006 budget. And this is not a Cadillac budget. County Manager George Burgess has cut about 800 budgeted positions over two years.
Two things plague Mr. Burgess and other administrators of the region's largest local governments: Past budget belt-tightening left millions of dollars in unfunded needs; and future budgets must devote increasing amounts to employee pensions and benefits, such as constantly rising medical-insurance rates. The future is already here in Miami, where the bulk of the 18-percent tax surplus for fiscal year 2006 will be paid out in pensions, in part because past administrations failed to put aside adequate funds.
U.S. existing home sales soared to the second-highest level on record in August, while prices took the biggest annual jump in 26 years, the National Association of Realtors said Monday.
Separately, Federal Reserve Chairman Alan Greenspan said "froth" in home sales may have spilled over into mortgage markets, as borrowers opt for exotic products such as interest-only loans. But he said the vast majority of homeowners, including those in the hottest areas, had sizable equity to weather a possible downturn.
The Realtors said sales of existing condos, single-family homes and co-ops rose 2% in August from July to a seasonally adjusted annual rate of 7.29 million. That's 7.8% above August 2004 and second only to June's 7.35 million pace. Condo sales surged 14.3% from 2004.
The median price for an existing home was $220,000, up 15.8% from the $190,000 of a year ago and the fastest annual appreciation since July 1979.
The group said Hurricane Katrina, which plowed into the Gulf area in late August had no measurable impact on the figures. The effect could be mixed ahead, with disruptions in the disaster area but higher sales in surrounding regions.
The market is being supported by 30-year mortgage rates of less than 6%. Economists were surprised by the strength of the report, though several noted the inventory of homes for sale rose to a 4.7-month supply, which could contain prices.
"Clearly, reports of the housing market's demise have been greatly exaggerated," says Stephen Stanley of Greenwich Capital Markets.
Sales declined 0.4% in the South. On an annual basis, sales were up 7.5% in the South, 8% in the Northeast, 6.5% in the Midwest and 8.3% in the West. Median prices ranged from $322,000 in the West to $176,000 in the Midwest.
Greenspan, quoting from a research paper he wrote, his first since 1996, said four-fifths of the recent rise in mortgage debt has come from borrowers extracting home equity. At least half the value of home equity loans and cash-outs has directly or indirectly supported consumer spending.
Still, less than 5% of homeowners have loan-to-value ratios exceeding 90%, with loan-to-value ratios lowest in states with the hottest markets. That means most homeowners have an equity cushion if prices fall, Greenspan said in a video speech to the American Bankers Association in Palm Desert, Calif. He said it was too early to tell whether the hot market was broadening or cooling.
With new evidence that the housing market remained red hot last month, Alan Greenspan said on Monday that the vast majority of homeowners are not yet stretched too thin.
Alan Greenspan cautioned about "exotic" home mortgages.
But Mr. Greenspan, the Federal Reserve chairman, warned that the use of "exotic" mortgages could be pushing prices higher and inducing some homebuyers to take on too much risk.
Even as he warned about the increasing use of interest-only loans and no-money-down loans, which can become risky if interest rates rise or housing prices fall, Mr. Greenspan argued that only about 5 percent of all families have borrowed more than 90 percent of the value of their houses.
"The vast majority of homeowners have a sizable equity cushion with which to absorb a potential decline in house prices," he said. Mr. Greenspan told a banking conference on Monday that speculation in the housing market may have spilled over into the mortgage markets as more and more people use interest-only loans and other techniques to buy homes they might otherwise be unable to afford.
"The dramatic increase in the prevalence of interest-only loans, as well as the introduction of other, more exotic forms of adjustable-rate mortgages, are developments that bear close scrutiny," he said.
Though such loans have appropriate uses, he continued, they could also provide a way for marginally qualified buyers to borrow heavily and buy homes at inflated prices.
"In the event of widespread cooling in house prices, these borrowers, and the institutions that service them, could be exposed to significant losses," he continued.
Though Mr. Greenspan said the vast majority of homeowners were not overextended, his comments on Monday were his sharpest warning yet about the proliferation of new loans that have helped push the household savings to a rate below zero. On Monday, the National Association of Realtors reported that the median sale price of existing homes hit a record $220,000 in August, up 15.8 percent from one year earlier.
Sales of existing homes climbed 2 percent in August and reached an annual rate of 7.29 million. That was just short of the record 7.35 million, set in June.
Analysts said there were some hints that the hot housing market may be cooling just a bit. The inventory of homes for sale edged up in August, and the amount of time that houses in many cities are sitting on the market is somewhat longer than earlier this year.
But many economists contend that a housing bubble is evident in many parts of the nation, especially around big cities on the East and West Coasts, and that housing affordability has declined to an unusually low level even though mortgage interest rates remain at nearly historic lows.
Mr. Greenspan's message on Monday was twofold: first, that the use of exotic new mortgages could be aggravating the run-up in prices and inducing some families to take on too much risk; second, that the finances of most households are still on solid ground.
George Clooney, Rande Gerber and Preeminent Real Estate Developers to Transform Las Vegas Skyline With Las Ramblas
Related Las Vegas and Centra Properties to Partner With Clooney and Gerber in Unprecedented Hotel-Condominium-Casino Complex Featuring City's First Open Air Promenade
First Phase of $3 Billion Project, Designed by Philippe Starck, Arquitectonica and Keith Hobbs, to be Complete in Early 2008
NEW YORK, George Clooney and Rande Gerber are joining together with the preeminent real estate developers, Related Las Vegas and Centra Properties, to create Las Ramblas -- a world-class hotel, condominium and casino complex that will be the largest residential project in Las Vegas and continue to transform the city into a first-class urban destination. Las Ramblas, a $3 billion project located on the burgeoning Harmon Avenue corridor situated just off The Strip, will encompass more than 25 acres and feature 11 towers with a luxury hotel, luxury residences (both condo and condo-hotel), bungalows, spa and health club, nightlife, dining, shopping and a proposed upscale casino. Evoking its name, Las Ramblas will also feature the city's first-ever, open air pedestrian promenade.
Las Ramblas is a collaboration among the world's great developers, architects, designers and entertainers. The project is being developed by a joint venture of Related Las Vegas and Centra Properties. Related Las Vegas is the Las Vegas development arm of the Related Group, the largest developer of condominium projects in the Unites States. In addition to transforming the Miami skyline through an array of developments, Related is responsible for such world-renowned, mixed-use urban developments as the Time Warner Center in New York and CityPlace in West Palm Beach. Related is also the developer and owner of two of the most successful hotels in New York -- the W Union Square and the Mandarin Oriental New York Hotel -- and is currently developing the W Hotel condo-hotel project in South Beach. Centra Properties is one of the most active developers in Las Vegas with such trendsetting projects as the 1.9 million square foot Town Square mixed-use project.
Phase one of Las Ramblas, a new world-class hotel, condominium and casino development, will include the first four of 11 towers, including a 300-room hotel with 370 additional condo-hotel units and a second adjacent tower of approximately 556 condo-hotel units (shown here), as well as two residential condominium buildings. The four towers will be designed by the renowned architecture and interior design firm, Arquitectonica. Construction of phase one begins in mid 2006, with expected completion in early 2008.
Construction on Las Ramblas commences in mid 2006. When completed, Las Ramblas will encompass more than 4,400 hotel, condo and condo-hotel units in 11 high-rise buildings comprising nearly 8 million square feet. It will include 300 hotel units, 2,764 condo units, 1,326 condo-hotel units and 19 bungalows. Phase one will be designed by the renowned architecture and interior design firm, Arquitectonica, and will include the first four towers, to be completed in early 2008. This includes the 300-room hotel with 370 additional condo-hotel units, a second adjacent tower of approximately 556 condo-hotel units, and two gateway residential condominium buildings at the entrance of the project, containing 285 and 344 units respectively.
Miami Beach September 2005 - Miami Beach has for some time and is still actively converting rental units and hotel rooms into condominiums. Years back, investors who flipped the units by converting them to condominiums purchased countless smaller South Beach apartment buildings. More recently, the North Beach area has been getting the same treatment.
Elderly South Beach residents (most without vehicles) were forced out as renters and replaced by younger residents who purchased the same units as condominiums. South Beach has since had to create neighborhood street restricted parking for these permanent residents. Many of which have two cars.
The City has had to react to these permanent changes by enacting various laws.
This past commission meeting Commission Bower put a discussion item on the agenda regarding low-income assisted condominium purchases. Some of these elderly reached out to the MBCDC (Miami Beach Community Development Corporation) and got Federal money to purchase their units on reduced payment mortgages. With these older buildings now needing repair, special assessments have been needed to fund these repairs. Once again, the lower income elderly are facing financial stress.
Once again, the City is being asked to enact some legislation.
With the South end coming alive with new clubs and old hotel renovations, South Beach once again became a popular place. New condominiums began to rise near these attractions. Condominiums on Ocean Drive selling for a mere $30,000 in 1985 were now offered for $200,000 less then 10 years later. People wanted to live where the "action was".
Yet some new residents desiring ocean access but not club action began protesting the late night music. They beat on the City Commissioners wanting noise controls.
Once again City laws needed to be created.
Back in the early 90's, Miami Beach needed more hotel room inventory and the Loews hotel was built to provide tourist/convention rooms. Next-door two derelict buildings were raised and the Lincoln south to 15th street complex became the convention visitors staying place. Interestingly enough they now are slated to be converted into condominiums.
One should ask who has better standing, the hotel strip invading condominium residences or the tourist hotels. These buyers want to be in the action produced by these attractions. One such condominium complex located at the north end of Ocean Drive (one of the most popular nightlife area of this City) came to the July commission meeting complaining of the Loews having an outside guest event at 4:30 pm IN THE AFTERNOON. "The boom boom of the base" was their problem.
Isn't it interesting that the north condominium, next door (an older conversion) did not complain but the new condominium (south) two blocks away that were the 'bitcher's'.
Once again, the City Commission has to revisit rules and laws on noise and special events.
This writer has to ask; "Is it time this City enacted condominium conversion legislation?" After all, hotels need to be profitable to exist. They need to provide more then just room space. They need entertainment for guest. They need to provide for wedding receptions, convention parties, and other such activities that may in fact take place after 6 pm.
People come to visit and life on Miami Beach because of the sun and warm air. Daytime rays are not comfortable to those in dress wear. So nighttime events are held OUTSIDE to enjoy the cooling ocean breeze and fresh air.
The preconstruction process is an innovative real estate investment opportunity in which you buy tomorrow�s property at today�s price. Preconstruction investing is a boon for the investor or buyer as well as the developer or builder. The biggest advantage of preconstruction process is that you can reserve your buy at discounted prices without investing a fortune. You simply have to make a small investment that is as low as 10% of the total cost to reserve a unit and pay the balance on achievement of different milestones.
For the buyer, preconstruction process provides an opportunity to seal a property deal with little margin money and achieve sizable discounts over the tentative price of the finished condos. For the developer it is an opportunity to presale the entire property even without laying a single brick and to procure a construction lending with relative ease.
In the preconstruction process, property developers place the building plans of a proposed real estate venture for pre-selling. Only thing made available to the buyer are architectural rendering and floor plans of the condominium, town house, or single-family residence. The good news is that preconstruction prices are normally at an attractive discount of the proposed sale price of complete units.
In theory, the buyer gets the discount because they display the grit and tenacity to invest on mere paper and �air�. However, in reality, they are getting discounts because they are a crucial piece of the puzzle for the developer because pre-selling of a particular percentage of the total units is a need for getting a prospective lender to fund the construction process.
If you are interested in investing in preconstruction property, you can check out the list of preconstruction offers available in your locality in the newspapers, on the Internet or with your real estate consultant; that is if you have those types of projects in your locale. When you have the list, you can shortlist the offers that are suitable according to your budget and needs. After that you must run a thorough check on the property and the developer on many issues. Certain key reasons are, the going and expected cost of the similar units in that locality; demand supply factors; whether the units are assignable and uniqueness of the property. You must also check for the future or proposed development plans in the vicinity to protect your view. This aspect is important because you might choose to buy an apartment in a preconstruction process at a premium due to the prefect view of lake or waterfront. However, after some time you may find out that another developer is building a project, which may blind your view.
After you have satisfied yourself with the suitability and pricing of the condominium, you can proceed for the reservation. Most preconstruction properties have a nominal reservation amount, which is normally 5-10% of the total cost and can go as low as $1,000. The reservation process has a simple �Intent to Purchase Agreement� in which you hold the right to first refusal. In this phase, you are safe because your money is in escrow account. For more information on Miami pre construction please visit HansenHomesAventura.com
Real estate markets are off and running again after a slight slowdown earlier this summer.
The red-hot U.S. housing market, after a typical summer slowdown, has taken off again and Hurricane Katrina contributed to up-ticks in several localities.
According to the National Association of Realtors, with inventory of homes available for sale across the country so tight anyway, rebuilding the Gulf Coast will place additional pressure on all home prices.
"New home prices will be immediately impacted because of increased construction costs," says NAR economist Lawrence Yun, "and that will filter down to existing home prices as well." That's because as new house prices rise, more homebuyers will consider existing homes, increasing the demand (and prices) for them.
Home sales have already spiked, as has rental demand, in regions surrounding the disaster zone in the Gulf Coast, according to NAR.
Michael Carliner, economist with the National Association of Home Builders, points to increased housing demand in Baton Rouge and Houston, which pre-Katrina, had a large inventory of vacant rental housing. Much of that has now been snapped up, he said.
In Baton Rouge, evacuees have bid up property values by up to 30 percent in just the last week or two. (See that story here.)
But it isn't just a Katrina effect. With home prices having gained so much in the past few years, skeptics have been waiting for what they consider to be an inevitable slowdown, and were quick to point to sluggish activity over the summer.
Those skeptics are still worried, but for the time being, there already are signs that the rally is picking up where it left off.
Florida remains strong
Katrina has had little effect on neighboring Florida markets, except for a trickle of hurricane evacuees in the panhandle area. Some businesses have also temporarily relocated to Tampa and other Florida towns, putting a little more pressure on markets.
Overall though, Sunshine State markets have continued strong and high prices are transforming landscapes. As single-family home costs have exceeded affordability for many Floridians, condo sales have boomed.
That has, in turn, affected the rental market -- investors are snapping up apartment buildings for condo conversion and sending their prices climbing.
Said Matthew Martinez, who owns rental properties in Boston and Florida: "I've looked at 22 apartment buildings in Miami in the past two weeks and bought none. The economics just don't make sense anymore."
Just north of the hot Miami Real Estate market, the situation is much the same. Elena Felipa, vice president of the Corcoron Group in West Palm, said "Lots of apartments are being converted to condos," she says. "There are few rentals around anymore."
Robert Katz of Palm Beach is taking an unusual real-estate gamble: He's betting his 10-year-old, tennis-playing son will want to attend college in nearby Boca Raton, Fla., home of tennis champ Andy Roddick.
Katz has snapped up two properties, not yet built, for more than $375,000 apiece. Both are in easy driving distance of the town's two big schools, Lynn and Florida Atlantic universities.
"He would have a really nice place to live, in a safe building, and he'd be able to choose his roommate," Katz said.
More parents are viewing their children's college experience as a way to get on the property ladder. As the real-estate market has taken off, so have parents' interest in off-campus housing. And while most wait to buy until the child's sophomore year, some parents, like Katz, figure the earlier, the better.
Historically low rates and flexible financing have driven the trend in recent years. The National Association of Realtors found last year that 6 percent of investment buyers purchased a second home for use by a child attending school, a figure that equates to about 169,000 properties. The association hadn't asked the question before, so a year-to-year comparison isn't available.
"We just started to hear about it," said Walter Molony, a spokesman for the association.
Many parents would rather buy a condominium or house rather than spend the money on campus housing, which has steadily risen.
For 2004-2005, room and board amounted to $7,434 at four-year private colleges and $6,222 at four-year public colleges, according to the College Board.
The real impetus, though, is diversification of the portfolio, financial planners say. Amid bubble concerns, the college market is perceived as more secure because of the steady flow of incoming students.
Parents can write off mortgage interest and property taxes, and either sell the place at graduation or keep it as a rental property.
"I'm seeing more people intrigued about doing it - more than ever," said David Gatheridge, general manager of the Wealth Enhancement Group's mortgage division in Minneapolis. "It has a lot to do with the fact that their primary residences have increased so much in value."
Parents of college-bound kids are jumping on the opportunity early, often when their child has just sent in applications, Getheridge said.
In Austin, home of the University of Texas, the heaviest buying season for parents is between April and August, said Mark Orr, manager of Texas lender Colonial National.
More than 48,000 students attend that university. "There's always a demand for housing, and a shortage of rental properties," he said. "Parents find it easier to go in and buy a condominium they can expect to appreciate."
A popular purchase for parents is a two-bedroom, two-bath condo, currently selling for about $185,000. Austin's fast-growing population makes it a hot real-estate market, Orr added.
Not as attractive is the smaller city of College Station, home of Texas A&M, where a two-bedroom, two-bath condo sells for $40,000, he said. Parents would have a hard time renting if they need to hold on to the condo longer than expected, he said.
Nicole Persley of Real Estate of Florida helped Katz find the properties for his 10-year-old son and often works with parents who want to buy condos for the Boca Raton schools and the University of Miami.
"The smartest move is if the parents have two or more college-bound kids at the same college," she said. "It's a no-brainer to buy versus rent or live in a dorm."
There are factors to consider, however. "It's not a get-rich-quick scheme," said Nancy Flint-Budde, a financial planner in Salem, N.Y.
For one, parents should factor in a long holding time in the event of a market dip, she said. Taxes and mortgage interest, while a write-off, may cause a cash-flow crunch.
While renting is an option, some parents might be ill-prepared to be landlords.
Parents might need to hire an agent to manage the property, especially if the condo or house is out of state. Parents also should consult a tax adviser about the differences between treating the property as a second home versus an investment property, she says.
And some question whether buying an apartment is the wisest parental choice. "Imagine getting as a high school graduation gift this stunning apartment in the best part of town," said Rebecca Kiki Weingarten, an education consultant and life coach in New York. "It really skews the whole sense of what it is to be on your own."
MIAMI � Fifty stories below the penthouse terrace of Jade Residences, a new luxury condominium high-rise, the turquoise waters of Biscayne Bay and the Atlantic Ocean beyond stretch endlessly.
Miami's 70-story Four Seasons tower includes condos.
Four Seasons
This mesmerizing view from the three-story, four-bedroom condo fetched $7 million in the hottest real estate market Miami has ever seen, and one of the hottest in the USA.
Florida's developers and real estate brokers are flying high amid an unprecedented condo-building and -buying wave they hope won't end anytime soon. The frenzied spending is coming to a large extent from outside Florida � well-to-do baby boomers from the North nearing retirement, and foreigners whose money for real estate has gained potency from a weak dollar.
Development is also setting records in other Florida coastal cities such as Tampa and West Palm Beach, but the boom has been most dramatic in Miami and its nearby beach communities.
Miami-area home values increased 20% in 2004, vs. a national gain of about 12%, the federal government says. But that measure fails to register the dizzying price escalation for new condos on or near the water. Developers of new projects are asking about $500,000 for a one-bedroom on the beach with an ocean view.
Today, an estimated 50 major condo projects are proposed or under construction within 50 city blocks in Miami on or near Biscayne Bay. There are so many gaping holes in the ground � where old buildings have been razed and new ones are planned � that downtown looks as if it has been bombed. A remarkable 69,000 condo units are currently in the permit pipeline or are newly built and for sale citywide. By comparison, Las Vegas � perennially among the USA's hottest housing markets � issued permits for 40,000 units of all types of housing last year.
The explosion in South Florida real estate comes despite four major hurricanes that roared across Florida last summer, causing $22 billion in damage and weeks of panic statewide. The Miami area was spared, but for a time, it seemed the phenomenon of four hurricanes could cause the entire Florida coastline to lose a bit of luster. That hasn't happened.
"South Florida is going through the largest urban redevelopment in its history," says Michael Cannon of appraisal firm Integra Realty Resources.
Cannon and other experts here are increasingly worried that paradise might be getting overbuilt. They fear investor speculation is driving too much of the condo demand � that some builders, developers and lenders might be heading for a crash, as has happened here before.
He and other experts suspect some projects will never get the construction loans they need to get off the ground because so many units have been pre-sold to speculators with small down payments, and banks know the speculators plan to resell at a profit, not live there. "Do I think all these projects will be built?" says real estate expert Lewis Goodkin of Goodkin Consulting. "Absolutely not."
Weak dollar draws Europeans
Powerful economic and demographic forces are driving the boom. Developers see an army of aging baby boomers looking for a warm place to vacation or retire. Low interest rates have made big mortgages more affordable. In the past five years, Miami real estate has been a far a better investment than the stock market.
The weak dollar makes Florida real estate look like a bargain abroad. To Europeans with euros to spend, for example, Florida property can seem like a deal because of the added buying power they get from a favorable currency exchange rate. Unlike the past, today's Florida developers aren't targeting just retirees or snowbirds from the Northeast and Latin America. Luxury buildings are targeting the wealthy worldwide.
For years, Miami suffered from negative perceptions fed by popular culture and reality. TV's Miami Vice glorified the fight against the violent cocaine trade. The series CSI: Miami still portrays this as an unusually murderous town. In the 1990s, police corruption, violent attacks on tourists and prosecutions of top politicians on bribery and voting-fraud charges shaped a banana republic image.
Today, Miami's business and government leaders are working to craft a world-class city. A performing arts center is going up downtown, and development is planned all around it. Blocks away, the American Airlines Arena houses Miami Heat basketball games and concerts by top stars. A few miles to the east lie the hot restaurants and nightclubs of South Beach. So fast is Miami's landscape changing that Mayor Manuel Diaz last weekend unveiled a master plan, "Miami 21," designed in part to bring order to frenetic development.
Prices for new condos have leaped. As of last year, the average price for a condo in Miami-Dade County hovered close to $300,000, a third higher than in 2000, according to Integra. But in downtown Miami's more desirable neighborhoods, one-bedrooms in new projects start at about $350,000 in the earliest stages of selling. In Miami Beach and other communities, one-bedroom units in new oceanfront projects start at close to $500,000 and run into the millions.
With prices at those levels, developers must inspire an irresistible urge to buy. To that end, some new projects are named for precious stones and metals: Onyx, Emerald, Platinum. Others evoke colors of the sea � Blue, Acqualina � and still others, rapturous states of mind -Apogee, Nirvana.
"They're not selling condos anymore," Cannon says. "They're selling sex."
"You sell a dream, " says Edgardo Defortuna, CEO of Fortune International, a Miami developer.
Developers, he says, must sell condos today before the first dirt is turned because construction lenders require sales-contract commitments upfront. Fortune's Jade project sold out a year before the building was completed last fall.
Now, Fortune is marketing a proposed oceanfront project called Jade Beach, where the penthouse is advertised at $11 million. Meanwhile, land prices in downtown Miami's handsome Brickell Avenue neighborhood, where Jade was built, have continued to soar. In 2001, Defortuna paid $19 million for Jade's 2.5 acre site. Today, an adjacent empty lot the same size is advertised at $100 million.
Developers are amazed at the diversity of buyers and shoppers. Ninety percent of Jade's buyers are foreign nationals, says Ana Cristina Defortuna, Edgardo's wife and the company's vice president for sales.
"We have people from every Latin American country," she says. "We have royalty in the building, singers, actors."
Mexicans are the top Latin buyers now, she says. Mexican pop music star Luis Miguel owns one of Jade's penthouses. Colombian race car driver Juan Pablo Montoya owns another one.
"Russians are very strong right now," she says. "They are the best: They don't negotiate price."
Other projects target U.S. buyers. At Trump Grande, an oceanfront high-rise development in nearby Sunny Isles Beach, buyers tend to be from the Northeast, where the Trump name is well known. Five condo towers are proposed on a total of 19 oceanfront acres where sleepy motels once stood. Prices range from $700,000 to a stunning $25 million for an 18,000-square-foot penthouse.
Developer Joyce Bronson, whose company Related Group is backing Trump Grande, says they have seen no signs the market is cooling off.
"There is a large buying population out there," she says. "When you compare the value of real estate here to other world-class cities, our numbers look pretty good � and we have sunshine."
Speculators eyed
Community leaders hail the burst of growth, the new property tax revenue and the revitalization of neighborhoods. But many real estate experts are warning that rampant speculation could jeopardize the vibrant market.
Consultant Goodkin estimates up to 70% of recent condo buyers are purchasing for speculation.
"People are betting rather than buying," he says.
Fueling the problem is "an absence of gatekeepers," Goodkin says. "There's a lot of liberal financing out there." Experts also note that a new crop of aggressive but inexperienced developers has been drawn to the market by the smell of quick profit.
"All the banks are concerned about the level of speculation," says Raul Valdes-Fauli, the senior lender at Union Bank in Miami. "In a market like this, banks really need to go back to the fundamentals, and do deals with people they know." Union is now "being more selective" about financing new condo projects.
He says many construction lenders are now requiring developers put "non-assignment" clauses in sales contracts forbidding buyers from flipping their units before they close. Others are requiring 30% down payments or limiting the number of units any one buyer can get to one or two.
If a building sells too many units to speculators who don't close, he says, "The first people who get burned are the buyers who just closed on their units." The value of their investment plummets.
Despite the investment risks, many buyers can't resist the hypnotic water views � and the possibility prices will keep going up. Drawn to the tropics, airline CEO Jonathan Ornstein of Phoenix-based Mesa Air Group shopped a long time for an oceanfront condo in Miami Beach.
Miami Beach is "a hip place," he says. "The condos are really on the beach. You walk out the door, and you're on the sand."
Ornstein just put 10% down on a small, furnished condo-hotel room in Fontainebleau III, a project adjacent to the oceanfront Fontainebleau Hilton Resort in Miami Beach. The building won't be completed for at least two years. At $580,000, the unit was $1,000 a square foot.
He knows he might have overpaid. "This could be a bubble," he says. If it is, he says, buying at the low end of the market gives him some protection. "The less you spend, the less you could lose."
Buyers from Europe, Latin America and the U.S. Northeast target city
MIAMI - They have thought-provoking names like Opera, Axis and The Venture, condominiums that will line Miami�s bayfront skyline.
These high-rises are part of a condo crush spawned by the nation�s housing boom and buoyed by active investors from Europe, Latin America and the U.S. Northeast that target the city because of its worldly feel and relative affordability.
�When you look around the world and you consider the factors of the environment, climate, amenities, risk and appreciation, Miami Real Estate ranks way high up there,� said Jorge Perez, chairman of The Related Group of Florida. The Miami-based developer plans to build more than 15,000 units in South Florida and Las Vegas in the next four years � with buyers already lined up for many of them
From Florida to California, condos are a growing housing option for people who have been priced out of the single-family home market or are seeking a more upscale, all-in-one lifestyle for a second home. They are also a growing market for speculators � many from abroad � looking for units to resell, or �flip,� to take advantage of low interest rates, cheap dollars and attractive supply and demand.
But prices are rising, community activists are railing against development, and observers are wary of a possible bust because of speculation fueled by investors in the pre-construction and condo-conversion markets. Perez and others say they don�t anticipate a collapse, but instead are preparing for a price correction that would level out the sales prices for condos.
According to the National Association of Realtors� statistics, 960,000 condos sold this year as of June, 12.4 percent more than all of 2004 and up 46.1 percent from all of 2002. The average condo price was $223,500 in June, up 14.8 percent from last year and 57.1 percent from three years ago.
In Miami, thousands of new condo units have been built in the past three years, and more than 30,000 units ranging from about $120,000 to millions of dollars are planned within the next few years, combined with retail and office space for more than $13 billion worth of mixed-use development, said Otto Boudet-Murias, head of planning and economic development for Miami.
The supply of new units, either through converting apartments into condos or building brand new ones, is being met by an international demand.
Alberto Saiz, assistant professor of The Wharton School at the University of Pennsylvania, said several factors have fueled the condo boom. He points to low U.S. interest rates and the weaker dollar, but also to the steady stream of immigrants from South America who come with cash.
Vacation destination
Miami has long been a vacation or second-home destination for people from the Northeast United States, but low interest rates, economic problems in Latin America and the dollars� struggles against the euro have led foreign investors to target Miami as a more affordable alternative to European real estate.
�We�re getting a lot of second home buyers from New York and Chicago and Boston,� Boudet-Murias said. �Miami is also the destination of choice right now for European buyers.�
One of the brokers seeking out new foreign investors is Igor Acosta Rubio, who regularly travels to Venezuela, Colombia and Mexico. Acosta said investors in countries such as Venezuela and Argentina that are experiencing economic or political instability are looking north.
�We�re the Latin American door for the United States,� said Acosta, of America Real Estate in Coral Gables. �People there are realizing there are other governments who are more reasonable in terms of investment.�
Pending home sales, a leading indicator for the housing market, have risen to the third highest level on record, according to the National Association of Realtors� (NAR).
NAR's Pending Home Sales Index (PHSI), based on data collected for June, rose 0.6 percent to a reading of 126.3, which is 3.6 percent higher than June 2004.
The index is based on pending sales of existing homes, including single-family and condos; a sale is pending when the contract has been signed but the transaction has not closed. Pending home sales typically close within one or two months of signing.
David Lereah, NAR�s chief economist, says the index shows historic levels of home sales will continue in the near future.
�Existing-home sales will stay in record territory for transactions in July and August,� he says. �There is some volatility to the index due to the short history of seasonal factors, so we�re not predicting another record month, but it certainly is possible.� Existing-home sales in June were at the highest level on record.
Regionally, the PHSI in the West increased 3.5 percent to 128.9 in June and was 7.3 percent higher than June 2004. The index in the Midwest rose 0.7 percent to 116.3 in June, but was 1.7 below a year ago. In the South, the index increased 0.4 percent to 138.0, and was 6.0 percent higher than June 2004. The Northeast index fell 3.2 percent to 113.2 in June, but was 0.9 percent higher than a year earlier.
An index of 100 is equal to the average level of contract activity during 2001, the first year to be analyzed. Coincidentally, 2001 was the first of four consecutive record years for existing-home sales. 2001 sales are fairly close to the higher level of home sales expected in the coming decade relative to the norms experienced in the mid-1990s. As such, an index of 100 coincides with a historically high level of home sales activity.
Broward and Miami-Dade home prices continued climbing skyward in June, as home prices nationwide leaped at the biggest rate in more than two decades.
Amid fretting that soaring home prices are hitting unsustainable heights, South Florida existing single-family home prices continued a dizzying rise in June, while home prices nationwide jumped at the fastest clip in nearly a quarter of a century.
The median price of a home in Broward soared 29 percent in June compared to June 2004, and prices in Miami-Dade surged 27 percent, according to figures released Monday by the Florida Association of Realtors.
Across the country, existing single-family home prices jumped 14.7 percent in June from a year earlier, the National Association of Realtors reported. That marks the biggest increase since November 1980, the Washington, D.C.-based trade group said.
''I have never seen a time like this,'' said Marilynn Obrig, a real estate broker at Intercoastal Realty in Fort Lauderdale with 26 years experience. ``I have seen a lot of ups and downs, and this is the longest up.''
In Miami-Dade, the median price of a home in June was $363,100; in Broward it was $378,000. Those prices mark hefty gains from just the prior month, May 2005, when a median-priced home sold for $354,600 in Miami-Dade and $367,000 in Broward.
Statewide, the June median price jumped to $248,700, a 31 percent rise compared to the same period a year ago and more than double the price of an existing single-family home in Florida five years ago.
Nationally, the median price for all types of housing now stands at $219,000. The median price is the point at which half of the homes are sold above and half sold below.
Experts attribute the roaring housing market to a range of factors, including stubbornly low interest rates and home-financing mechanisms like interest-only mortgages that enable people to buy homes they otherwise couldn't afford.
Observers say South Florida's robust job growth -- unemployment for instance is at a 20-year low -- is helping fuel the price gains. Meanwhile, the supply of South Florida homes remains exceptionally tight as the region continues to be a favorite for second-home buyers in the Northeast, Europe and South America. In addition, many investors now prefer real estate over the stock market.
But the lofty price hikes continue to raise concerns. Affordability, even for relatively well-paid wage earners, is becoming an increasing problem. Some employers and recruiters consider rising home prices a primary impediment to the region's economic development, because people can't afford to move here.
And the galloping market in South Florida, across the country, and in many parts of the world, has spawned worries the housing market is over inflated and poised for a tumble.
Last month, The Economist, a respected news magazine, asserted that the global housing boom is ``the biggest financial bubble in history.''
Yet many local observers contend the worst that will happen is a market wide slow-down in the rise of prices rather than a decline.
Bradley Hunter, South Florida regional director for research firm Metrostudy, said home prices are ''sticky,'' adding: ``If someone owns a real estate asset, especially if they are living in it, they can just hold rather than sell at a loss. A lot of people will have lost value in their house but won't realize their loss in a financial sense because they won't sell.''
Hunter predicts prices will begin to cool next year. And one real estate broker said there is already anecdotal evidence of a softening.
''The breaks are starting to be applied,'' said Jo Sumberg of the Masters Brokers Forum and Avatar Real Estate Services in Coral Gables. ``While people are asking crazy numbers, they are not getting them [sold] as fast.''
Some economists suggest that China's recent move to link the yuan to a basket of foreign currencies rather than solely the dollar may push up U.S. interest rates, which in turn would make real-estate mortgages costlier, damping housing demand.
Meanwhile, the number of existing single-family homes sold in South Florida in June was mixed. Broward was down 15 percent in June compared to a year earlier and Miami-Dade volume was up 2 percent.
Watching as the Miami real estate market soared, Alexander Midler decided to make his move.
After eyeing a number of condo projects, the 32-year-old Boston software engineer recently settled on a one-bedroom condo at Jade Beach in Sunny Isles near North Miami Beach.
The price: $800,000.
It wasn't the cheapest place he found, but he figured an oceanfront view in an exclusive building filled with wealthy South Americans and Europeans would buffer him from a potential economic or housing downturn.
"I was looking for the safest investment I could make," said Midler, who is planning to move to Miami in a couple of years.
And with condos in the immediate area appreciating as much as 75% annually, Midler figured that he might sell the unit before he closed and make a tidy profit.
That would make him one of the market's many "flippers," people not looking for a place to live, but rather a way to make a quick buck.
While some booming housing markets have cooled, Miami's continues to get even hotter. With land scarce, most of the growth is coming from high-rise condos.
In Miami, nearly 70,000 condo units are under construction or in the pipeline, including high rises designed to soar more than 70 stories.
Miami home prices, which include condos, have shot up about 30% over last year. Relative bargains just five years ago, the average condo now costs about $300,000.
"We are going through the greatest expansion in housing in south Florida � particularly in Miami- Dade � in its history," said Michael Cannon, president of Integra Realty Resources-South Florida.
A long period of low interest rates has fueled a housing boom nationwide. Miami stands out as a relative newcomer to the hot list of markets and for the sheer number of new condo projects under way.
Fueling demand are buyers from South America and Europe as well as second-home seekers from the Northeast, real estate watchers say.
In addition, a growing number of permanent residents with high paying jobs are moving into the area.
Along with Tampa, Miami in the first quarter led the nation with the sharpest increase in available jobs paying $100,000 or more, according to a survey by TheLadders.com, an online executive search firm.
"We have almost 200 people moving to Miami and Fort Lauderdale every day and who knows how many second-home buyers," said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors, or EWM, one of the largest realty firms in the area. "That means by the end of the week there will be at least 1,400 people who want to live in the area, or 6,000 new people a month."
Lack of supply is putting a lid on unit-sales growth.
"Our unit sales for the last two months are less than a year ago and the sole reason is we just don't have enough homes to show people," Shuffield said. "In some neighborhoods, we don't have anything to show."
Miami-Dade has just 2.8 months supply, Shuffield says. Just north in Broward County, which includes Fort Lauderdale, supply is at a record low 1.9 months. That compares to about five months of inventory nationwide.
Even with all the new supply in the pipeline, real estate observers don't expect the south Florida market to crash like it did in the mid-1920s and 1980s and early 1990s, when unsold units glutted the market.
"When you leave the beach and drive west in Miami or Fort Lauderdale you only have about 20 miles of dry land," said Shuffield. "We have now built on almost all of it."
Since there's little room to build on, developers are going vertical. They're targeting neglected areas in or near downtown and any vacant parcels near the water.
Just two years ago, single-family homes in Miami made up the majority of EWM's sales volume. That number is now reversed, with condos accounting for 58% of sales and single-family homes 42%. In Miami Beach, condos are 87% of EWM's total.
Many buyers are investors, or so-called flippers. They lock in at discounted pre-construction prices and sell as soon as they are able. Sometimes even before closing.
So far, they've found plenty of buyers willing to pay up.
"Condominiums have almost become a commodity," said Jorge Perez, chairman of the Related Group of Florida. "The (stock) market fluctuates daily. Oil is up, it's down. A lot of people are saying they feel more comfortable with a more tangible investment."
Developer Perez is happy to oblige. His firm has 14,000 condo units under construction, most of them in Miami.
They include the 60-story luxury project Icon Brickell, designed by the architectural firm Arquitectonica, whose trendy early buildings were featured on the TV series "Miami Vice." Interior design is by the well-known Philippe Starck.
The first 750-unit Icon tower sold out in two days. His most expensive project, the Apogee, just broke ground at the southern tip of Miami Beach. Units sell for $4 million to $15 million. "We have four units left. So come and get it," Perez said.
Shuffield expects real estate prices to eventually soften, but he's not too worried.
"This is like an escalator," he said. "The escalator may slow down a bit, but it always keeps moving. So it's just a question of what step you want to get on."
Builder confidence in the market for newly built single-family homes barely budged in July, edging down two points from an upwardly revised reading in June to a level that matches the strong index average for the year as a whole, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI).
"Builders have every reason to remain confident in the single-family marketplace," said NAHB President Dave Wilson, a custom home builder from Ketchum, Idaho. "While mortgage rates have risen slightly in recent weeks, financing conditions remain very favorable to families considering homeownership, and demand still outpaces the supply of new homes in many markets."
"July's HMI reading of 70 is right in line with the elevated index average for the year to date, and upbeat builder attitudes point toward continuation of strong sales and starts of single-family homes in the months ahead," said NAHB Chief Economist David Seiders. "Builders are, however, concerned about lot shortages and the high cost of land for development, especially in parts of the Northeast and West. Meanwhile, the relatively weak job market situation in the Midwest has had an impact on builder confidence in that part the country."
Derived from a monthly survey that NAHB has been conducting for approximately 20 years, the NAHB/Wells Fargo Housing Market Index gauges builder perceptions of current single-family home sales and sales expectations for the next six months as either "good," "fair" or "poor."
Builders are also asked to rate traffic of prospective buyers as either "high to very high," "average" or "low to very low." Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view sales conditions as good than poor.
July's HMI reading, at 70, is down two points from a slightly upwardly revised reading of 72 in June. It reflects moderate downward movement in both the index that gauges current single-family home sales -- which declined from a robust 77 to 75 this month -- and the index that gauges sales expectations for the next six months -- which declined from an even more robust 80 to a still-solid 77. Meanwhile, traffic of prospective buyers remained unchanged from the previous month's 55 reading.
Confidence gauges declined somewhat for builders across all four regions of the country, with Midwest builders posting the biggest decline, of six points, to a relatively weak 46 reading in July. Meanwhile, builder confidence in the West, Northeast and South was basically unshaken, with a one-point decline registered in the first region and two-point declines registered in the other two to readings of 88, 69 and 75, respectively.
HOTELS DOING WELL: Miami-Dade County is building a solid tourism season in the summer, traditionally slow. According to Smith Travel Research, county hotels averaged 65.8% occupancy in the first week of July, slightly surpassing the national average of 65.6%. It's a 7% increase from the same week in 2004. At the same time, room rates continue to rise. For July 3-9, room rates in the county averaged $105 per night, up 18.5% from 2004. Room rates around the nation and state averaged $88 and $90, respectively.
HOT SUMMER TOURISM: Miami-Dade County areas benefiting most from this month's increase in summer visitors are Miami Beach with 68.8% hotel occupancy, up 4.7% from a year ago, and airport areas with 67.8%, up 8%. Coral Gables also had increases, with hotels 65% full, up 9.6%. Downtown Miami had a 58.5% rate, a 9.8% increase from summer 2004. The Beach had the biggest jump in room rates, 25.4%, with per-night rates averaging $134, followed by downtown hotels at $89, an 11.8% spike. All statistics are for July 3-9, according to Smith Travel Research.
HOME IMPROVEMENT: Camillus House plans a number of improvements to its shelter at 726 NE First Ave., says president Paul Ahr. "We plan on taking down the overhang at Northeast First Avenue and Seventh Street," he said. "There will be significant repainting, and the entrance is to be moved to the side so that visitors have to cross the property. We also plan to have more manpower so that we are able to move people along." The capacity of the shelter will be increased to 50 beds from 26 to accommodate more people during severe weather.
FONTAINEBLEAU ANEW: Fontainebleau Spa & Resort, purchased May 13 by Turnberry Associates of Aventura, is about to undergo a $400 million renovation. The former Hilton property in Miami Beach will be expanded from 1,338 rooms to 1,750. The renovation includes new condo-hotel suites. According to Tom Bruny, the hotel's marketing vice president, construction should start next spring and be complete in early 2008. The hotel is to remain open during renovations.
TRANSIT-FUND HUNT: Officials plan an August trip to Washington, DC, to discuss financing for Metrorail expansions, said Tarnell Carroll, Miami-Dade Transit spokesman. The north corridor project, from 215th Street and Northwest 27th Avenue south to the Martin Luther King station on Northwest 75th Street, is estimated to cost $843 million and be ready in 2012. The $1.3 billion east-west link, to run from the planned Miami Intermodal Center to Florida International University, is to be finished in 2014. The Florida Department of Transportation has pledged to finance 25% of both projects if the federal government provides 50%.
BUDGETING IN AVENTURA: The city commission is to review Aventura's 2006 budget at 10 a.m. today (7/21) at the government center, 9200 W. Country Club Dr. Commissioners also are to set a tentative tax rate for 2005-06. "For the 10th consecutive year, we won't have a tax hike," Mayor Susan Gottlieb said, adding that the city has the lowest millage rate in the county at 2.227 per $1,000 of assessed property value.
CARGO SHOW RETURNS: Air Cargo Americas is returning to Miami. The biannual show is scheduled for Oct. 26-28 at the Radisson Centre, 777 NW 72nd Ave. This year's theme is Air Cargo Security: Safeguarding or Jeopardizing Trade? Speakers will include Miguel Southwell, assistant director of business development for the Miami-Dade Aviation Department; David Brooks, president of American Airlines' cargo division; and John Mullen, CEO of DHL Americas. Robert Berrios, Air Cargo Americas sales director, said the show in 2003 generated $147 million in business. Details: (305) 871-7910 or info@worldtrade.org.
ASIAN TALKS: The Miami Free Zone in Doral will host the Asian Business Conference on Aug. 4 with talks about opportunities in China, Japan and Korea. Speakers are to include the consul general of China from Houston, Hu Yeshun, whose jurisdiction includes Florida; Miami-Dade County Commissioner Jose "Pepe" Diaz; Doral Mayor Juan Carlos Bermudez; Enterprise Florida Senior Vice President Manny Mencia; and Miami Free Zone President Ralph Gazitua. Admission is $20. The Miami Free Zone is at 2305 NW 107th Ave. Details (305) 569-2639 or (305) 591-4300.
FAR EAST TRIP: The Asian Business Conference will preview an October mission to the Far East set up by Enterprise Florida, the Florida-China Association, the Southeast US Japan Association and the Korean Business Council. The group is to land Oct. 16 in Tokyo, travel to Korea to participate Oct. 20 in the Seoul International Air Show and then visit Beijing. Organizers may take up to 70 delegates. The trip is to extend to Oct. 28. "China is the United States' fastest-growing market," said Dave Woodward, executive director of the Florida-China Association. "As China gears up to the 2008 Olympics and the World Expo in 2010, the country becomes one of the world's greatest consumers." Details: (305) 569-2639.
MONEY TRANSFERS: The Florida International Bankers Association will present a congress on money remittances at 8:30 a.m. July 25 at the Hotel InterContinental Miami downtown. "This meeting aims to bring together money-transfer companies with their counterparts in Latin America to talk about issues that confront both parties," said Jorge Guerrero, CEO of Optima Compliance and Consulting, one of the organizers. "One solution is to create a hemispheric-wide association to develop recommended practices." Details: (305) 579-0086. Admission is $300.
AIRPORT VENDORS: The Miami-Dade Aviation Department will host a July 28 workshop for small and disadvantaged businesses seeking to sell products or services to Miami International Airport. The free workshop will provide information regarding financing, insurance and bonding. Details: Lourdes Borrego, (305) 876-7753 or lborrego@miami-airport.com. Reservations are required.
CHILD'S PLAY: The PlayGround Theatre for Young Audiences is $5,000 richer, thanks to the Miami branch of Smith Barney. The gift is to be used for a community outreach program that is to provide free tickets to children and families. The company, founded last year by Stephanie Ansin and husband Oleg Kheyfets, has hosted more than 2,600 children from groups that include Amigos for Kids, Big Brothers Big Sisters of Greater Miami and Make-A-Wish Foundation of Southern Florida.
SCHOOL GRADES: The Florida Department of Education has awarded Miami-Dade County Public Schools a "B" for the school year, up from a "C" last year. The county's schools achieved the third-highest point rise statewide in 2004-05 based on FCAT scores, student learning gains and improvements among the bottom 25%.
For a long time, anecdotal evidence from Realtors has suggested that international buyers play a sizable role in Florida home sales, but this study marks the first attempt to quantify the trend, according to FAR.
Of the 986 Realtors who participated in the 2005 Profile of International Home Buyers in Florida survey, 87 percent reported that they did at least one home sale transaction with international buyers in the previous 12 months (between May 2004 and May 2005). Two thirds -- 66 percent -- of those Realtors who brokered foreign-buyer purchases said that one to four of all their transactions were with international clients. Altogether, the Realtors surveyed closed 1,844 home sale transactions to non-U.S. buyers.
Highlights of the survey findings include:
* Most buyers chose South Florida, Central Florida or the Gulf Coast. Almost one third (30.4 percent) bought a home in Miami-Fort Lauderdale, followed by Orlando (22.7 percent), Naples-Fort Myers (13.7 percent), Tampa- St. Petersburg (9.9 percent), Sarasota (9.9 percent) and West Palm Beach (5.8 percent). Only 7.6 percent of foreign buyers bought homes elsewhere in the state.
* Florida's international homebuyers came from more than 100 countries in all areas of the world, but Europeans bought the majority of Florida homes -- 58 percent -- with more than half those European buyers from a single country, the United Kingdom.
* The United Kingdom alone accounted for one third of all international home purchases.
* One third of international buyers were from South America, Central America and the Caribbean.
* Over one third -- 36 percent -- of international buyers paid cash for their home compared to only 10 percent of all Florida homebuyers.
* For foreign buyers, an almost equal share purchased their Florida homes to use as a vacation home (38 percent) or as an investment (37 percent). Only 17 percent purchased a home to live in while traveling to the U.S. on business.
Non-U.S. residents purchased homes for many different reasons, according to the study: U.S. mortgage interest rates are low, many can get "more house for the money" here, the U.S. is seen as politically stable, airfares are generally affordable, and the "rise" of the Euro has spurred travel to the U.S. In addition, foreign baby-boomers -- like their American counterparts -- are looking for ways to maximize their return on investments.
For the survey, FAR defined a foreign homebuyer as someone who principally resides in another country (outside the U.S.), and is not classified as a foreign-born resident of the U.S. International buyers are not U.S. citizens (either naturalized or native-born and living outside the U.S.), a U.S. immigrant, or a foreign student or worker on a temporary visa.
The Mortgage Bankers Association is projecting robust economic growth of 3.5 percent through 2007. Total residential mortgage production in 2005 will be $2.74 trillion, the third-biggest year behind 2003 and 2002.
"At about 3.5 percent, economic growth will be solid this year, despite a drag from sharply higher energy prices and a widening trade deficit. Housing will continue to be a major contributor to economic growth. We expect the string of record-high home sales to continue for the fifth consecutive year. The labor market will remain strong, even with an expected pickup in productivity in the second half of the year. Core inflation should edge higher this year but remain near the Fed's (Federal Reserve) target of 1.5 percent. The Fed is expected to continue its modest tightening through next year to ensure that inflation remains under control," said Doug Duncan, MBA chief economist and senior vice president, research and business development.
"Long-term rates will remain quite low, supporting residential and commercial real estate finance activity," he adds. "Long-term rates should gradually increase from current levels by 20 to 30 basis points by the end of 2005, and another 40 to 50 basis points during 2006, finally reaching about 6.25 percent for a 30-year, fixed-rate mortgage in 2007. Despite a moderate increase from a currently low rate environment, interest rates will still be quite low by historical standards."
Following are the key points of the latest MBA forecast:
Real GDP growth will average 3.5 percent in 2005 through 2007.
The unemployment rate will decline from the current level of about 5.0 percent to 4.9 percent by the beginning of 2007. The labor market is expected to add an average of about 180,000 jobs monthly.
Fixed mortgage rates will rise from today's 5.5 percent to an average of 5.7 percent in the fourth quarter of 2005, 6.2 percent during the fourth quarter of 2006, and 6.3 percent in 2007.
Existing-home sales will increase by 2 percent to a new record level in 2005, but pull back by about 3 percent in 2006 and decline another 2 percent in 2007. New-home sales will also rise by nearly 2 percent to a record high in 2005, and slip by 4 percent in 2006 and about another 3 percent in 2007.
Home price appreciation is expected to moderate this year, with median existing home prices increasing by 6.8 percent during 2005, and 5.5 percent for new homes, compared with 9.3 percent and 13.3 percent in 2004, respectively. Price gains in 2006 and 2007 are expected to slow further to a more sustainable pace of 4 to 5 percent.
Residential mortgage originations for purchase loans will increase to $1.62 trillion in 2005, edging up to $1.64 trillion in 2006 and $1.68 trillion in 2007. Residential refinance loans will decline to $1.12 trillion in 2005, $863 billion in 2006 and $791 billion in 2007.
Total residential mortgage production in 2005 will be $2.74 trillion, the third-highest level ever.
The 2005 multifamily market will be similar in volume to 2004's market. Brisk property sales and refinancing are the underlying themes. This will be the front of an elevation of refinance activity due to the maturing of a significant volume of loans made a decade ago.
Mortgage bankers appear to be on pace to exceed last year's record volume of commercial loan originations. Commercial mortgage activity should remain strong as rates remain low, yield-maintenance clauses expire and loans get refinanced, and the strengthening economy improves underlying commercial property economics.
Just as in residential mortgage markets, there are differences in local economic effects on real estate finance activity - the same principle applies to regional and local commercial property markets.
There are both upside and downside risks to this forecast. On the upside, a rebound of inventory investment could boost growth in the second half of the year by more than projected. On the downside, higher oil prices, higher core inflation or more aggressive tightening by the Fed could result in a slower economic growth than projected.
Florida�s population increased an average of 1,100 people per day during 2004 according to the U.S. Census Bureau estimates. The Sunshine State gained 397,980 people, increasing the total population to almost 17.4 million. If this pace is maintained, Florida is set to surpass New York before the year 2020 as the third most populous state in the nation after California and Texas. Some of the forces fueling the growth are the workers seeking jobs, retirees and a steady flow of people moving to Florida from other states as well as from out of the country due to the state�s thriving economy, improved job market as well as climate and natural environment. At the current population level, Florida has almost doubled the 1980 count of 9.7 million. Also, leading all other states, 14 Florida counties are among the 100 fastest growing counties in the nation. Flagler County ranked number one between July 2003 and July 2004. Other counties are St. Johns, Osceola, St. Lucie, Lake, Union, Pasco, Hernando, Clay, Santa Rosa, Walton, Lee, Wakulla, and Okeechobee. On another note, Naples was the most popular second home market in the country last March.
-- June 3, 2005 -- Rates on 30-year mortgages hit their lowest level in four months after falling this week for the eighth time in the past nine weeks, according to an industry report. This will only help Miami Real Estatate.
Mortgage giant Freddie Mac said Thursday its weekly nationwide survey showed that rates on 30-year, fixed-rate mortgages averaged 5.62 percent, down from 5.65 percent last week.
The latest decline pushed the 30-year mortgage down to the lowest level since it dipped to 5.57 percent on Feb. 10, the low-point so far this year.
Mortgage Rate Trend Index: Despite a surprising trend of falling mortgage rates, or perhaps because of it, 67 percent of mortgage industry experts this week polled by Bankrate.com predict that rates will continue to drop over the next 30 to 45 days. Thirty-three percent expect rates to rise.
The steady in decline in mortgage rates over the past two months has helped spur sales of both new and existing homes to record levels in April and analysts predicted further declines in rates would produce more strong sales in May.
"Given the low rates we experienced last month, we expect home sales in May will remain strong," said Frank Nothaft, Freddie Mac's chief economist.
ST. PETERSBURG, Fla. -- May 31, 2005 -- If you're about to embark on a remodel of your home, no matter how large or how small, it's important to do your due diligence before hiring a contractor. The following tips will help you ask the right questions, increasing the chances that your costs will stay in check and the quality of the job will remain high.
1. Don't make a hasty decision. Solicit at least two or three bids from contractors, check their references and investigate company reputations.
2. Ask contractors lots of questions. Important questions include: How long have you been in business? What kind of workers compensation and liability insurance do you carry? How many projects like mine have you completed? Can I go see them? Are you a member of a national trade association?
3. Talk to previous customers. Ask: Did the contractor communicate well and do a good job of listening to you? Did the crew show up on time? Was the job finished on schedule? Would you hire the remodeler again without hesitation?
4. The lowest bid may not be best. Consider other key factors, such as the feedback you receive from past customers and the contractor's reputation for professionalism and quality workmanship.
5. Put it in writing. Even if the contractor is a friend, make sure all oral agreements and promises appear in a written contract you both sign.
6. Set a budget. Before work starts, define your budget by selecting the products and materials you want. Include your selections in the contract to avoid confusion and needless change orders.
7. Avoid liens. After completion of a large job, withhold a portion of the payment (about 10 percent) for 30 days in case any liens emerge. If a contractor doesn't pay his or her subcontractors or workers, they may hold you responsible and place a lien against your home.
8. Know how to pay for the job. Aim for a down payment of 10 percent or less, and schedule payments at weekly or monthly intervals or after completion of each phase of the project. Never make final payment until you are satisfied with the work done and know that all subcontractors and suppliers have been paid.
9. Baby steps can be beautiful. Especially if this is your first remodeling project, you might want to begin with a smaller project first. Doing a larger remodel in stages is a good way to minimize your initial cash outlay.
10. Look into Title 1 loans. If you don't have much equity in your home, you can apply for a Title 1 loan to cover nonluxury home improvements. Banks and other lenders make these loans, and the Federal Housing Authority insures them against possible loss. The maximum loan amount is $25,000 for a single-family home, $17,500 for a manufactured home and $12,000 for a multifamily dwelling unit.
AVENTURA, FL-Loft Marina Ltd., a joint-venture partnership between the Miami-based firms of Fortune International and Shefaor Development, obtained $15.7 million in financing for the acquisition of an 8.2-acre waterfront site here and pre-development funding for Artech Residences in Aventura. The plans call for a 251-unit condominium complex that includes a clubhouse, fitness center and boat slips among other amenities. Total construction costs are estimated at $100 million, as GlobeSt.com previously reported.
The Miami office of Keybank Real Estate Capital was the lender, and Orlando Gelpi, SVP, and Carlos Moore, VP, led the financing effort. Manuel de Zarraga, executive managing director, and Ike Ojala, director, of the Miami office of Holliday Fenoglio Fowler, arranged the loan from Keybank. Terms of the financing were undisclosed.
Carlos Ott, which heads the Uruguay-based architectural firm by the same name, designed the building, which Eduardo Imery, Fortune�s VP of finance, calls a �landmark state-of-the-art design.� He says a majority of the units are pre-sold. Pricing ranges from the $400,000s for a 913-sf studio, to the mid-$600,000s for a 1,556-sf one-bedroom, two-bath, plus den unit, and to more than $1 million for 2,814-sf penthouses, which contain three bedrooms, three baths and a half-bath along with a den.
The owner and developer of the Aventura Mall, Turnberry Associates, has announced plans for three new major retail projects outside of the state.
LAS VEGAS - Buoyed by its success in Florida, Turnberry Associates is looking to become a major player on the national retail development scene. At the International Council of Shopping Centers annual convention this week in Las Vegas, the Aventura developer unveiled expansion plans that would double the size of its retail portfolio.
Turnberry announced plans to build projects in Myrtle Beach, S.C., and San Antonio, Texas. Turnberry also unveiled a three-dimensional scale model and the tenants for Town Square Las Vegas, a 1.5 million-square-foot center scheduled to break ground this month on the Las Vegas Strip.
That doesn't include what Turnberry has on the drawing board in Florida. Expansions are in the works for its flagship property Aventura Mall and its newest addition, Destin Commons, an open-air center located in the Panhandle. Plus, the developer is trying to win approvals for a Town Square open-air project in Davie.
''This is an indication of our future in retail,'' said Jim Gdula, director of retail development for Turnberry Associates. ``We're serious about growing our retail portfolio. We're going to be branching out and doing more.''
Founded in 1967, Turnberry has developed 20 million square feet of retail, which also includes two malls in Pittsburgh. But it's the reputation of Aventura Mall, considered one of the nation's more successful properties, that has given Turnberry the clout in the marketplace.
`RECORD FOR SUCCESS'
''We have a track record for success and we want to build on that record,'' Gdula said.
Turnberry's retail expansion follows what the company, owned by the Soffer family, has been doing in other areas of its business. Turnberry already has built condominiums in Las Vegas and this month announced plans to bring Miami Beach's famed Fontainebleau resort to Las Vegas, including a hotel, casino and condominium.
Industry experts say that Turnberry's growth makes sense given the explosive growth of the real estate market and the difficulty in finding opportunities for large new projects within Florida.
''It's gotten so hard to find dirt in Florida that a lot of people are looking elsewhere,'' said Patrick Duffy, the Tampa-based chairman of the retail services group for Colliers International. ``There is so much demand everywhere and so much capital, now is the time to do it.''
`LIFESTYLE CENTER'
Turnberry's new retail projects will feature an open-air, town center-type design known in the industry as a ''lifestyle center'' because it aims to cater to the surrounding community and provide a local gathering place. This type of projects have become one of the most popular designs, as developers have moved away from traditional enclosed regional malls.
''Our customers like to go places where they can see and be seen,'' Gdula said. ``People like to live, work, eat and play in one location.''
A frenzy of condo-building will remake much of Miami in this decade. The likely result: a new skyline, more congestion and more wealth
In downtown, from Brickell Avenue north to the Edgewater neighborhood, up the Miami River and down historic Coral Way, great chunks of Old Miami are fast disappearing in a cloud of dust. In its place, the New Miami -- a dense, steel-and-glass forest of condo towers -- is rising from the rubble.
The scope, scale and speed of the transformation are breathtaking.
INTERACTIVE
More than 114 major projects, most of them high-rise condos, are under construction or in the planning stages in the urban core along Biscayne Bay.
Citywide, developers are proposing more than 61,000 new condominium units -- eight times the number built during the past decade.
The projects encompass the tallest skyscraper in Florida, a 74-story spire higher than any residential building south of Manhattan, almost four million square feet of new retail space (nearly as much as two Aventura Malls) and parking for more than 100,000 cars.
''You have a wave of development underway here in Miami that is unprecedented, bigger than anything, bigger than Hong Kong in the boom years of development,'' said former Portland, Ore., councilman Charles Hales, a transportation consultant working on a plan for a Miami streetcar line.
Not since the post-World War II housing boom that multiplied Miami-Dade County's population fivefold, to more than one million people, has the region experienced anything comparable. But that took almost 20 years.
''We are building an instant city; what should take 15 years will take three,'' said Michael Cannon, a Miami real-estate analyst.
The boom struck suddenly, unexpectedly, first a trickle of projects, then a torrent. Cash has poured in from Latin America, New York and, increasingly, Europe, the result of converging market forces -- slashed interest rates, a cheap dollar -- and a worldwide infatuation with Miami among the chic and moneyed.
It all amounts to a multibillion-dollar gamble, outdoing in risk and bravado the 1920s boom that made Miami a modern city: That given waterfront location, a sunny climate and a hip, international culture, intensive downtown residential development can catapult Miami into the first rank of world cities.
Elected officials, in particular Miami Mayor Manny Diaz and Miami Commissioner Johnny Winton, are counting on the boom to reverse downtown's long decline, to turn its seedy blocks and outlying neighborhoods into a scintillating, working urban hub with a vibrant street life.
''Just five years ago we were broke; we had zero development,'' Winton said. ``I'm going to bet you that when we're done -- I don't know when that will be -- historians will identify this as the most significant and rapid transformation of an American city.''
What precisely will the boom deliver? It's too soon to tell, experts say.
But this convulsion of development is already remaking not just Miami's skyline, but its streets and neighborhoods and likely its population, too.
If it stays on track, the boom promises a fundamentally different Miami -- more urban and congested, but also more cosmopolitan and, given the high prices the condos command, probably wealthier.
It also raises serious concerns. In the absence of a ready plan, how will the city cope with thousands of expected new residents and the traffic they will generate, given antiquated infrastructure, limited public transit and a shortage of parks and open space? Will Miami residents, among the nation's poorest urban dwellers, be displaced or priced out of new housing?
That is, if the planned condos actually get built, sold and occupied.
As the boom takes on the feel of a gold rush, real estate analysts, bankers and even some developers fear it's a mirage, a bubble fueled by speculators looking to resell condo units for a quick profit, and not by true buyer demand.
If developers build too much, and speculators can't find buyers for resale, the boom could bust, leaving Miami littered with vacant and bankrupted buildings or, worse, unfinished towers and bare lots.
SIGNS OF FUROR
For now, though, signs of the furor are everywhere.
Sales centers for multimillion-dollar condos that tout the merits of high-rise living sprout up across the city. Brokers push Miami condos in farflung locales, from Caracas and Bogot�o New York and France's Cte d'Azur. Lavish condo parties are thrown by developers several times a week, and advertisements for the high-rises fill the pages of local magazines and newspapers, including The Herald.
Downtown Miami is a thicket of construction cranes. Much of the landward side of Biscayne Boulevard has been razed, and the footings and columns of what will soon be a wall of six colossal condos, each more than 50 stories, are becoming visible.
''Where else are you near the water, 10 minutes from Miami Beach, 15 minutes from the airport and have access to public transportation?'' said Daniel Kodsi, chief executive of Boca Raton-based Royal Palm Communities, which plans a high-rise condo called Paramount Park across from AmericanAirlines Arena.
There is so much building that developers are struggling to find qualified contractors and subcontractors.
Sales and resales in the mid-six figures, and well beyond, have become commonplace. Towers of 300 units sell out in a day, with buyers coming in the main not from Miami, but from other parts of the country and the world.
''Miami, New York and Los Angeles have become the three cities in the U.S. where people want to be,'' said Joe Cayre, chairman of Midtown Group, which is building eight condo towers on the site of the old Florida East Coast Railroad yards in Wynwood.
They are people like Sal Loduca, who plans to leave Manhattan and his family's Long Island food business to open a brick-oven pizzeria at Cayre's Midtown Miami.
''Everyone's making the move to Miami. How could you not? It's a great opportunity. Miami's full of life,'' Loduca said.
NEW LANDMARKS IN THE MAKING? The venerable Freedom Tower, which was built in the 1920s, stands sentinel to the new construction along Biscayne Boulevard in Miami. The performing Arts Center, which is being built, can be seen in the background.
WASHINGTON -- May 17, 2005 -- U.S. housing starts rose 11.0 percent in April, again surprising experts who continue to expect a slowdown in home sales. Building permits, an indicator of future housing starts, also rose. The change follows a slowdown reported last month.
Housing starts rose for both single-family homes and multifamily housing, according to the U.S. Commerce Department. April housing starts ticked upward to 2.038 million units, compared to March's 1.836 million units, which was revised downward. Economists on Wall Street had predicted a rise in home starts, but only by about 7.8 percent.
Single-family home starts rose 6.3 percent to 1.635 million, following a drop of 14.9 percent in March. Multifamily housing starts -- housing with two or more units -- surged 35.2 percent in April following a 29 percent drop in March.
Building permits rose 5.3 percent to 2.129 million units, a significant increase over Wall Street analyst predictions of a modest 0.6 percent increase.
The greatest strength in new housing came in the South, where construction rose 25 percent in April for its biggest monthly increase since July 1995 when it hit 29.5 percent. In the Midwest, starts rose 6.2 percent; in the West, they rose 2.5 percent. Housing starts fell in the Northeast by 17.8 percent.
WASHINGTON -- May 13, 2005 -- The office, retail, industrial and multifamily commercial real estate markets can expect improvement over the next two years, according to a National Association of Realtors� (NAR) forecast. The announcement was presented Thursday at a commercial real estate forum during the NAR Midyear Legislative Meetings & Trade Expo.
David Lereah, NAR's chief economist, said there are pluses and minuses affecting the projection for the uptrend in the commercial market. "Corporate profits are strong, but business spending has been hesitant of late," he said. "On the other hand, jobs have been growing since the beginning of 2004."
Lereah added that some uncertainties could potentially impact commercial sectors. "The U.S. federal budget deficit poses a risk for the economy, as does the trade deficit and performance of the dollar," he said. Other concerns include high oil prices and the possibility of inflation.
So far this year, investment in office buildings has increased 30 percent over 2004, according to NAR, as ports and major distribution centers lead the industrial sector. Commercial lending is up, delinquencies are down, and construction levels have stabilized.
Office
Office vacancy rates have fallen along with slowing of new supply. The sector has benefited greatly from the growth in jobs, and rents are gaining traction, NAR said. "There's strong investor interest in the office market, both for real estate investment trusts [REITs] and foreign investors -- the strongest investment areas are in the West and Northeast," Lereah said.
Vacancy rates in the office sector should average 14.1 percent this year and 13.2 percent in 2006. Office rents are forecast to grow 2.3 percent in 2005 and 3.4 percent next year.
Net absorption of office space, which includes leasing of new space coming on the market as well as space in existing properties, is projected at 61 million square feet in 2005, and 56 million next year.
Retail
In the retail sector, merger activity continues while there's growth in retailers targeting the youth market. Rent gains are strong, as consumer spending growth is holding steady. Most new construction is in strip malls and power centers. "REITS also have been very active in the retail market, which offers the best long-term investment return," Lereah said.
The average retail vacancy rate is projected to average 6.3 percent this year and about the same during 2006; rent growth is forecast at 4.4 percent in 2005 and 4.0 percent next year. Net absorption of retail space is estimated at 34 million square feet in 2005, and 29 million next year.
WASHINGTON -- May 13, 2005 -- A growing number of metropolitan areas showed double-digit annual increases in median existing-home prices in the first quarter, with an upward trend in overall price appreciation, according to the latest survey by the National Association of Realtors� (NAR), with three Florida metro areas -- Bradenton, Sarasota and West Palm Beach-Boca Raton -- registering the highest percentage increases in the nation.
NAR's first-quarter metro area home price report, covering changes in 136 metropolitan statistical areas, shows a record of 66 areas with double-digit annual increases in median existing single-family home prices and only six areas posting modest price declines. The previous record was 62 metros showing double-digit price appreciation in the fourth quarter of 2004.
The national median existing single-family home price was $188,800 in the first quarter, up 9.7 percent from the first quarter of 2004 when the median price was $172,100. The median is a typical market price where half of the homes sold for more and half sold for less. In the fourth quarter of 2004, the national annual rate of home-price appreciation was 8.8 percent.
David Lereah, NAR's chief economist, points to the tight supply of homes available for sale. "We simply don't have enough homes on the market to meet demand," he says. "Low mortgage interest rates are drawing new households into the market, but some are disappointed by their inability to find a home that meets their needs. We think the supply situation may improve next year when interest rates are expected to be higher -- that should result in a lessening of demand and cooler price appreciation."
According to NAR's statistics, the strongest price increase was in Bradenton, where the first-quarter price of $275,100 rose 45.6 percent from a year earlier. Next was Sarasota, at $326,300, up 36.0 percent from the first quarter of 2004. Third was the West Palm Beach-Boca Raton-Delray Beach area, with a first-quarter median price of $362,800, up 35.9 percent in the last year.
In the South, the typical existing single-family home price rose 6.6 percent to a median of $166,600 in the first quarter from a year earlier. After the Bradenton, Fla., area, Sarasota, Fla., and the West Palm Beach-Boca Raton-Delray Beach area, the strongest increase in the South was in the Orlando area, at $194,400, up 28.7 percent from the first quarter of 2004. Next was Miami-Hialeah, at $315,700, up 28.4 percent, and Ocala, Fla., where the first-quarter median price of $122,200 was 27.0 percent higher than a year ago.
Eighteen other Southern metro areas experienced double-digit increases in their median price, including the Ft. Myers-Cape Coral-Punta Gorda area of Florida; the Washington, D.C., area; Norfolk-Virginia Beach-Newport News, Va.; Richmond-Petersburg, Va.; and Tampa-St. Petersburg-Clearwater.
NAR President Al Mansell says buyers need to do their homework. "If homebuyers find themselves in a market where price-bidding is common, they need to have a handle on comparable market values and avoid the temptation to take shortcuts," he says. "It's especially important to understand loan terms -- a real estate professional can help you to avoid riskier products, in addition to walking you through the transaction process."
In the small number of areas with price declines, none had previously experienced rapid price growth. Generally, these are lower-cost markets experiencing one or both of the conditions necessary for price softness -- local economic weakness, mainly in jobs, or a large supply of homes available in the local market; typically, these are temporary in nature.
By 2030, the population of Florida will have surpassed New York as the nation's third largest, the Census Bureau said Thursday.
Estimates show a gain of 11 million residents over the next 25 years. The latest census predictions show Florida's current population of 17.5 million approaching 20 million by 2010 and topping 21 million five years later.
About 40 percent of the projected growth will come from people 65 and older. The elderly will comprise 27.1 percent of Florida's population in 2030 - up from 17.6 percent in 2000. Florida will be one of 10 states where retirees will outnumber schoolchildren.
In 2000, children outnumbered people 65 and older in Florida by 840,000. But by 2030, there will be 2 million more older people than children younger than 18. Florida's youth will drop from 23 percent of the population to 20 percent.
Florida also will be among America's fastest-growing states, behind Nevada and Arizona. Florida's growth rate of 79.5 percent is nearly three times higher than that of the nation as a whole.
In the new census projections, Michigan and New Jersey drop out of the top 10 - replaced by North Carolina and Arizona. The figures show the continuing shift in the nation's population from the North and Midwest to the South and West.
Nearly two-thirds of the country will live in the South and West by 2030. The North and Midwest will see their share of the population decline from 42 percent to 35 percent from 2000 to 2030.
Driving down Miami's Brickell Avenue in his dark gray Mercedes-Benz S500 one recent morning, developer Jorge Perez did not like what he saw. Surveying a stark sidewalk edging bland office lobbies -- and even worse, a parking garage entrance -- Perez pronounced the avenue ``totally pedestrian unfriendly.''
Then Perez declared he will change that.
The 55-year-old high-rise condominium developer, more than anyone, is in a position to do it with seven towers planned for construction along Brickell Avenue, the boulevard at the heart of the city's financial district. His plan: erect new towers with ground-floor restaurants and shops and spruce up sidewalks with shade trees and benches.
The Brickell towers are just a fraction of the staggering number of Perez projects that, if all built, will put his imprint on the rapidly changing face of South Florida's cities, beachscapes and skyline.
At a time when even the most aggressive builders rarely have more than two or three projects going at once, Perez -- chairman and chief executive of Miami-based The Related Group of Florida -- has more than 40 condo towers in the works across South Florida. Projects in Fort Myers and Las Vegas boost that number to nearly 50, and Perez has plans for several more condo towers that have yet to be announced.
''We are in territory we have never seen before with Jorge,'' said Ezra Katz, chairman and chief executive of Coconut Grove-based real estate investment firm Aztec Group. ``There is no precedent anywhere in the 34 years I have been in real estate. I have never seen anything of this magnitude or production.''
In the last decade Perez, who got his start developing government-subsidized rental apartments in Miami, has become Florida's biggest condo developer with 14 completed buildings to his credit.
But now, in a move fraught with risk, Perez is making his biggest bet yet, throwing himself full force into a South Florida real estate market so frenzied some compare it to the dot.com boom of the late 1990s.
''It is so hard to even build one project, to get it financed and built efficiently,'' said developer Gregg Covin, who is building the Biscayne Boulevard high-rise Ten Museum Park and renovating South Beach's The Angler's Hotel. ``He is just an unbelievable force doing more than 40 buildings at the same time.''
If anyone can pull it off, it may be Perez. But even he acknowledges a downturn is coming in the superheated condo market.
His financial might, he maintains, will enable him to weather any market correction.
Unlike most South Florida developers of today, Perez has more than 25 years of experience. And he has demonstrated a knack for spotting and aggressively pursuing under-utilized markets before anyone else.
Perez was part of the development group that built City Place, the downtown mixed-use revitalization project that transformed West Palm Beach. Similarly, he built four high-rise towers in South Pointe, the once blighted neighborhood at the southern tip of Miami Beach that has morphed into some of the priciest real estate in South Florida.
CAUTIOUS APPROACH
''He is very careful with his money,'' said Matthew B. Gorson, a Greenberg Traurig lawyer who is Perez's attorney. ``He watches things, that is why he has done so well. Jorge is extremely disciplined.''
But Perez's huge bet on the condo market comes with equally enormous risks.
Though Florida's housing market, and the condo sector in particular, has been red hot, many observers suspect a downturn is looming.
The condo market is filled with speculators and the sheer number of condos going up or planned have led many to conclude it's all too much for even South Florida's booming market to digest.
Within the city of Miami, for instance, roughly 7,000 units were built in the last 10 years. Now some 62,000 units are in various phases of development.
In March, Credit Suisse First Boston downgraded the stock of Bonita Springs-based WCI Communities, one of the few publicly traded high-rise condo developers, due to concerns over ``investor speculation in high-rise real estate development, specifically in Florida.''
Similarly, Raymond James issued a report stating its belief that investors and speculators accounted for as much as 85 percent of condo sales in downtown Miami.
Perez himself predicts a correction, but maintains builders with staying power will see values rise to even higher levels longer term.
CYCLICAL INDUSTRY
''Real estate is extremely cyclical,'' Perez said at a National Association of Home Builders conference two weeks ago.
''Talking to fellow developers, you sometimes feel that has been forgotten,'' he said. ``But there will be a correction in the market... it is impossible to sustain the supply announced.''
Perez said he has socked away loads of cash and carefully selected properties that are either near the water or in a city center. Such sites, he contends, will not dramatically lose value in a downturn. And if need be, he said, he can rent rather than sell units until prices rise to new heights.
While Jeff Morr, chief executive of the Miami Beach-based brokerage Majestic Properties, thinks Perez will continue to succeed despite a downturn, he also wonders about the impact of Related's plans on the market.
''I think he is going overboard in the number of units he is bringing to market on an annual basis,'' said Morr. ``He has the potential of slowing down the market because of oversupply. He should leave a little room for other developers.''
CORAL WAY OFFICES
Headquartered in drab offices on Miami's Coral Way that contrast with many of the glitzy projects it develops, The Related Group of Florida is a privately-held, 500-employee company.
Perez owns the vast majority of Related while his long-time business partner, Stephen M. Ross, chairman and chief executive of New York City-based Related Companies, owns a small share.
The company's fortunes have rocketed skyward as it has aggressively built new condos. In 2000 The Related Group of Florida's revenue stood at $506 million. By 2003, annual revenue more than doubled to $1.083 billion. In 2004, it doubled again, coming in at $2.125 billion.
Condo sales, which account for 90 percent of the firm's revenue, are expected to total $6 billion for the years 2004, 2005, and 2006, said Perez. The company generally has a 20 to 30 percent profit margin on condo sales.
While refusing to disclose the size of his personal fortune, Perez recently said at a homebuilder conference that he has made ``unconscionable sums of money.''
The Related Group of Florida's success is built on its record, and reputation among lenders and buyers, for completing what it starts and quickly bringing its projects to fruition.
MEETING DEADLINES
''He will decide on a building, stick to the budget, and deliver it on time,'' said Carlos Migoya, 54, Wachovia bank president for Miami-Dade and Monroe counties. ``When you buy a unit from him and he says it will be done in 2006, he will deliver it in 2006.''
Now the slender Cuban-American developer -- known for his energy, art collection, liberal politics, affinity for fine food and tennis, and periodic tempestuous outbursts -- has set a dizzying pace.
Five of his condo towers are slated to go up in downtown Miami, an area with few residential buildings that is a virtual ghost town at night. Following Perez's decision to build there, some 20 downtown towers have been proposed by other developers.
Agency ? A legal relationship in which an owner?principal engages a broker?agent in the sale of property or a buyer? principal engages a broker-agent in the purchase of property.
Amortization ? The gradual repayment of a mortgage by installments.
Assessed Value ? The valuation placed on property by a public tax assessor as the basis of property taxes.
Assumption of mortgage ? An agreement whereby the buyer assumes responsibility for a mortgage owed by the seller; the seller remains liable to the lender unless the lender agrees to release the seller from the liability.
Binder ? An agreement, accompanied by a deposit, whereby the buyer evidences good faith.
Bridge Loan ? A short term loan made until a longer term loan can be arranged; it�s sometimes used when a person needs money to build or purchase a home before the present one has been sold.
Broker ? A person licensed by a real estate commission to act independently in conducting a real estate brokerage business. Although requirements for a broker�s licenses may vary, an individual must usually have at least one year of experience in the industry and pass an examination.
Cap ? The maximum amount an interest rate or monthly payment can change, either at adjustment time or over the life of the mortgage.
Cloud on title ? A lien or encumbrance that can prevent the seller from delivering clear title and the buyer from obtaining insurance.
Contingency ? A condition that must be met before a contract is binding.
Deed ? A legal document conveying title to a property.
Earnest money ? a portion of the down payment given to the seller by a potential buyer indicating the buyer�s intent to complete the purchase of the property.
Equity loan ? A loan based on the borrower�s equity in their home rather than on their credit worthiness.
Escrow ? The placement of money or documents with a third party for safe?keeping pending the fulfillment of a specified condition.
Graduated?payment?mortgage ? A mortgage loan in which the monthly payments increase by a specific amount each year, with the �over payments� applied to the principal.
Lien ? A legal claim against a property that must be paid when the property is sold.
Loan?to?value ratio ? The relationship between the amount of a home loan and the total value of the property. Lenders may limit their maximum loan to 80?95 percent of value.
Lock?in?rate ? A commitment made by lenders on mortgage loans to �lock?in� a certain rate pending loan approval. Lock-in periods may vary.
Market value ? The highest price a buyer will pay for a property and the lowest price the seller will accept.
Mortgage broker ? An individual or company that obtains mortgages for others by finding lending institutions, insurance companies, or private ources to lend the money; may also handle collections and disbursements.
Mortgage insurance ? A policy that provides protection for the lender in case of a default and guarantees repayment of the loan if the borrower becomes disabled or dies.
Negative Amortization ? An increase in the outstanding balance of a loan resulting from the failure of periodic debt service payments to cover required interest charged on the loan.
Points ? A dollar amount paid to a lender for making the loan. A point is 1 percent of the loan amount; also called discount points.
Private mortgage insurance (PMI) ? Insurance issued to a lender to protect it against loss on a defaulted mortgage loan. Its use is usually limited to loans with high loan?to?value ratios. The borrower pays the premiums.
Realtor� and Realtor Associate� ? The registered collective membership marks that identify real estate professionals who are members of the National Assoc-iation of Realtors� and subscribe to its strict Code of Ethics.
Shared equity mortgage ? A home loan in which an investor is granted a share of the equity, thereby allowing the investor to participate in the proceeds from resale.
Title ? A document that�s evidence of ownership.
Title Insurance ? Protection for lenders and homeowners against financial loss resulting from legal defects in the title.
Feb. 17 � Housing starts jumped 4.7 percent in January to a seasonally adjusted annual rate of 2.159 million units, the highest pace in 21 years, the U.S. Commerce Department reported. January�s housing starts also were 11.6 percent above the pace of a year ago.
The pace of single-family home construction reached an all-time high of 1.760 million units. This was 2.7 percent above the December rate and 12.5 percent above January 2004.
"These numbers show that housing is continuing to lead the way in our rebounding economy. President Bush is committed to building on these accomplishments so that people from every walk of life can have the opportunity to become homeowners," said Housing and Urban Development Secretary Alphonso Jackson. "The president's housing initiatives are breaking down the barriers and paving the way for more Americans, particularly minorities, to achieve that dream."
In 1895, a record freeze enveloped most of the north of Florida, where Henry Flagler's railroads were disgorging thousands of rich and powerful northerners who were coming to stay at his hotels and resorts. The freeze wiped out citrus crops and sent vacationers scurrying, and legend has it that Julia Tuttle (who owned large tracts of property here and had approached Flagler with the offer of partnership in exchange for the extension of his railroad to Miami, which he'd refused) went into her garden, snipped off some flowers and sent them to Flagler, who hightailed it down to Miami to see for himself.
What he saw was a tropical paradise. Flagler and Tuttle came to terms, and Flagler announced the extension of his railroad. At that, thousands of people whose livelihoods had been wiped out by the big freeze, including citrus growers and service industry workers like doctors and merchants, began heading down to Miami in anticipation of the boom that was to come. Passenger train service to Miami began 22 April 1896; in that year the city of Miami incorporated and development kicked off. The wave peaked during WWI, when the US military established an aviation training facility here.
After WWI, the first full-fledged Miami boom (1923-25) was fueled not just by the area's idyllic beachfront location and perfect weather, but also by gambling and the fact that it never really took to the idea of prohibition - though it was illegal, liquor flowed freely throughout the entire Prohibition era.
But the boom was cut short by a devastating hurricane, which was immediately followed by statewide recession and national depression. In the mid-1930s, a mini-boom saw the construction of Miami Beach's famous Art Deco buildings, and this reasonably prosperous period continued until 1942, when a German U-Boat sank an American tanker off Florida's coast. The ensuing freak-out created a full-scale conversion of South Florida into a massive military base, training facility and staging area.
After WWII, many of Miami's trainee soldiers returned and settled, and the city maintained its pre-war prosperity. In the 1950s, Miami Beach had another boom, as the area began to be known as the 'Cuba of America': gamblers and gangsters, enticed by Miami's gambling, as well as its proximity to the fun, sun and fast times of Batista-run Cuba, moved in en masse. After the Castro coup in Cuba in 1959 Miami's Cuban population swelled.
In 1965, the two 'freedom flights' that ran every day between Miami and Havana disgorged over 100,000 Cuban refugees. Tension built up between Cubans and the town's African Americans, who were relegated to an area north of downtown known as Colored Town. Riots broke out, skirmishes and acts of gang-style violence occurred. In the late 1970s, Fidel Castro opened the floodgates, allowing anyone who wanted to leave Cuba access to the docks at Mariel. The largest flotilla ever launched for non-military purposes set sail in practically anything that would float to cover the 90 miles (145km) between Cuba and Florida. The Mariel Boatlift, as it was called, brought 150,000 Cubans to Florida (including 25,000 prisoners and mental patients), and the resulting economic, logistical and infrastructural strain on South Florida only added to still-simmering racial tensions, which would explode on 17 May 1980, when four white police officers, being tried on charges that they beat a black suspect to death while he was in custody, were acquitted by an all-white jury. When the verdict was announced, fierce race riots broke out all over Miami, and lasted for three days.
In the roaring 1980s, the Miami area gained prominence as the major East Coast entry port for drug dealers, their product and the unbelievable sums of money that went along with them. A plethora of businesses and buildings sprung up all over Miami, and the downtown was completely remodeled. But it was still a city being reborn while in the grip of drug smugglers: shootouts and gangland slayings by cocaine cowboys were common. The police, Coast Guard, Drug Enforcement Agency, Border Patrol and FBI were in a tizzy trying to keep track of it all. And then it happened: Miami Vice.
The show, about two outrageously expensively (yet pastel) clad narcotics detectives driving around in a Ferrari and million-dollar cigarette boats, was responsible for Miami Beach rising to international attention in the mid-1980s. The show's slick look, soundtrack and music video montages glamorized the rich life in South Florida, and before long people were coming down to see it. By the late 1980s, Miami Beach had risen to international Fabulousness. Celebrities were moving in, photo shoots from all over the world were being shot here, and the Art Deco District was going through a renovation that turned the city into a showpiece of fashion and trendiness.
Miami Beach
Most people come to Miami Beach for its beaches, clubs and bars, and to witness one of the most spectacular redesigns in modern architectural history. The Art Deco Historic District, a collection of bright pink, lavender and turquoise buildings dating from the 1920s, is one of the largest areas on the US National Register of Historic Places. Its protection and renovation has been one of the major reasons for the rebirth of Miami as a top notch tourist destination. The Deco district is in the heart of funky South Beach (SoBe), the southwestern section of Miami Beach.
For a city beach, Miami Beach is one of the best around. The water is clear and warm, the sand relatively white and, best of all, it's wide enough and long enough to accommodate the throngs. The Promenade is a Deco-ish, wavy ribbon of concrete at the Beach's westernmost edge. If you've ever looked at a fashion magazine, you've seen it: it's the photo shoot site. If you show up early in the morning, you're likely to see shoots in progress. This is also the hot spot for in-line skaters, bicyclists, skateboarders, dog walkers and people watchers to mill about bumping into each other.
Miami Beach has a strong Jewish culture mixed with a dash of Latin flair: there's even a Cuban-Jewish Congregation. The city's Holocaust Memorial, in the middle of Miami Beach, was created through the efforts of Miami Beach Holocaust survivors. It's an elaborate, exquisitely detailed and moving memorial. Like the Kaddish, the Jewish prayer for the dead that does not once mention death but rather speaks only of life, the Memorial is a testament to humankind's perseverance and the hope for a better world.
Miami Beach is 12 miles (19km) long and attached to the city of Miami, 4 miles (6km) to its west, by a series of causeways.
Little Havana
After the Mariel Boatlift, the section of town to which Cuban exiles had been gravitating for years blossomed into a distinctly Cuban neighborhood, now known as Little Havana. Spanish is the predominant language here, and you'll run into plenty of people who speak no English. The heart of Little Havana is Calle Ocho (KAH-yeh AW-cho), Spanish for SW 8th St (actually it's Spanish just for 8th St, but what the hell). The entire length of Calle Ocho is lined with Cuban shops, cafes, record stores, pharmacies, and clothing and (most amusing) bridal shops.
But while the wall-of-sound-style speakers set up outside places such as Power Records are blasting salsa and other Latin music into the street, Little Havana as a tourist attraction is elusive. It's not concentrated like a Chinatown; it's actually not really a tourist attraction at all. It's just a Cuban neighborhood, so except during the occasional street fair or celebration, you shouldn't expect Tito Puente and Celia Cruz to be leading colorfully attired, tight-trousered men and scantily-clad women in a Carnaval parade. You're more likely to see old men playing dominoes in M�mo G� Park.
Little Havana occupies 10 square blocks, centered on Calle Ocho, southwest of downtown Miami.
Key Biscayne
South of downtown Miami, along Biscayne Bay's shore, lie a number of the city's best attractions. They're spread out, but if science and animals intrigue you, it's definitely worth heading this way.
The boundaries of 'season' in Miami - which used to be limited to winter - have been blurred by the huge number of people moving to the area and the stampede of fashion and film shoots. But the most popular time to come here is still between December and May, when temperatures average between 60-85�F (16-30�C), and average rainfall is a scant couple of inches. Miami's Carnaval, which takes place in early March, is the biggest and best reason to come, and hundreds do, so book early and prepare for the parading masses.
Summer can be summed up as very hot and humid, with thunderstorms every day at 3pm. August is the hottest month, with average temperatures between 78-89�F (26-31�C). Remember that it feels a lot hotter than 89�F when there's 90% humidity. However, the advantage of coming during the early summer, despite the higher temperatures and increased rainfall, is that you get more of the place to yourself.
The hurricane season - June to November - can be a perfectly pleasant time to visit, but be aware that it only takes one little hurricane to ruin a holiday.
For information on Miami Real Estate call Paul Hansen at 786-586-4778
It used to be called 'God's Waiting Room'. And even today, if you mention Miami to someone who hasn't been here or read about it lately, they might conjure up a blurry memory of octogenarians mingling poolside while Aunt Sadie implored them to wait half an hour after eating before going into the water. Today the old folks mingle with fashion designers, bikini models and Cuban �gr� and a city that once had the highest murder rate in the US attracts more than 11 million tourists a year.
The Greater Miami Area, which includes Miami and Miami Beach as well as distinctive neighborhoods like Little Havana and Little Haiti, is a melting pot that America's founding fathers would be proud of. Half of Miami's population is Hispanic, and its immigrant communities focus on what's happening in Havana or Caracas as much as they follow events in Washington DC, giving the city an international outlook. For the casual visitor this means a city peppered with the flavors of Latin American food, language, music, politics and spirit.
Most visitors head for Miami Beach, a city built on a sandbar across Biscayne Bay from Miami. Many of the beach's locals are imports from New York, people tired of sitting through five hours of snarled traffic on their way to the Hamptons, who decided that Miami Beach made a lot more sense. They brought with them a fledgling art and culture crowd whose numbers included many younger artists.
Destination Facts
Population: 600,000 in City of Miami; 95,000 in Miami Beach; Greater Miami 2.1 million
Area: 45 sq mi (117 sq km)
State: Florida
Time Zone: Eastern Standard Time (GMT/UTC minus 5 hours)
Telephone area code: Metropolitan Miami: 305; Miami and Miami Beach: 786
Feb. 10 �The Porto Bellagio Development in Sunny Isles, Florida is inviting dogs and their owners to spend a day at Porto Bellagio condominiums, enjoying the view, eating gourmet treats and drinking bottled water, Saturday, Feb. 19th at 11:00 AM.
With the condo boom in South Florida, developers are searching for ways to attract buyers. While other developers are showcasing live models and wild theme parties to show off their condos, Porto Bellagio concentrates on showcasing their luxury condominiums in a pet friendly environment. Most developments say no to pets, but not Porto Bellagio. The development has a strong pet friendly stance and it is helping their sales--over 30% of Porto Bellagio owners are dog lovers.
What attracts pet residents? The Porto Bellagio is equipped with conveniently located "doggie potties" within the bay-front walk ways and grass areas. The doggie potties feature trash cans, pooper scoopers and plastic bags to make cleaning up easy. The grounds are perfect for a day-time walk, dog retreat or to relax in the private courtyard.
"It is a rarity to find a luxury, waterfront condominium that not only allows pets over 20 lbs., but also, caters to them," said, Mike Pappas, Keyes Co. CEO/president. "With a variety of pet amenities and an array of dog activities, such as The Four Paw Event, The Porto Bellagio Development is attracting the vastly expanding quantity of dog owners searching for an affordable and comfortable home."
The Four Paw Event at Porto Bellagio will include: Gourmet treats, Training Tips, Doggie Boutique, A Staged Dog Presentation, Pet Taxi, Artist Renderings, Socializing, Dog Mind-Interpreters, Dog Walking Service and Dog Trick-Trainer. For more information, please call Paul Hansen at 786-586-4778 para informacion en Espanol Carole Ramirez-Hansen 786-586-4780
Feb. 10 � Sales of existing condominiums and cooperatives hit their ninth consecutive annual record in 2004, while the pace of sales activity in the fourth quarter eased but remained the third highest quarter on record, according to the National Association of Realtors�.
There were a total of 970,000 existing condo and co-op sales last year, up 8.0 percent from the previous record of 898,000 units in 2003.
The sales pace slipped 3.0 percent in the fourth quarter to a seasonally adjusted annual rate* of 972,000 units from a 1.00 million-unit pace in the third quarter. Sales were 3.4 percent above the 940,000-unit level of sales activity in the fourth quarter of 2003; quarterly records were set in the second and third quarters of 2004.
David Lereah, NAR's chief economist, said the sales performance underscores the significance of condo sales in the overall housing market. "The condo market has clearly matured over the last decade, accounting for a market share almost as big as the new home market, and has been appreciating faster than single-family homes," he said. Given this growth, NAR will now include condo sales in its monthly track of overall existing home sales, beginning with the January report.
In the fourth quarter, the median existing condo/co-op price was $203,200, which is 16.7 percent higher than a year ago. The median is a typical market price where half of the units sold for more and half sold for less. By comparison, the typical single-family home cost $187,500 in the fourth quarter, 8.8 percent higher than a year earlier.
NAR President Al Mansell, CEO of Coldwell Banker Residential Brokerage in Salt Lake City, said the reputation of condos as an investment has changed dramatically. "In much of the 1980s and early 90s, condos earned a reputation for slow price growth, in many cases because there was an oversupply on the market," he said. "With the maturation of this market segment, condos have been appreciating faster than single-family homes for the last four years. In the past, affordability was a bigger factor in condo sales � now, lifestyle choices have emerged as a driving force in their growing popularity."
For all of 2004, the median existing condo price was $193,600, up 17.0 percent from a median of $164,100 in 2003. At the same time, the typical single-family resale home price rose 8.3 percent to $184,100.
According to Freddie Mac, the national average commitment rate on a 30-year conventional fixed-rate mortgage was 5.73 percent in the fourth quarter, down from 5.89 percent in the third quarter; it was 5.92 percent in the fourth quarter of 2003.
In the Northeast, condo/co-op resales rose 1.2 percent between the third and fourth quarters to a 168,000-unit pace, and were 9.1 percent above the fourth quarter of 2003. The median price in the Northeast was $234,800, up 23.0 percent from a year ago.
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