South Florida Business Journal

4/29/2010

South Florida saw one out of every 46 homes fall into foreclosure in the first quarter of the year, according to Realty Trac.

The Irvine, Calif.-based marketplace for foreclosure properties ranked the Miami-Fort Lauderdale-Pompano Beach metropolitan statistical area 11th in the nation for properties with foreclosure filings.

Only two other Florida MSAs – Cape Coral-Fort Myers (third) and Orlando (10th) – had more.

In the first quarter, the South Florida MSA had 52,224 homes in foreclosure. That was up 10.36 percent from the fourth quarter of last year and up 71.3 percent from a year earlier.

The Las Vegas MSA continued to post the nation’s highest foreclosure rate, with one in every 28 homes falling into default. That’s 4.9 times the national average.

Nationwide, there were 932,234 properties with foreclosure filings in the first quarter, or one in every 138 homes. That was up 7.23 percent from the previous quarter and up 16 percent from a year ago.

GAINESVILLE, Fla. – April 29, 2010 – Florida real estate markets show the first tentative signs of recovering from the most painful recession in the state’s history, according to the latest University of Florida (UF) report.

“Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types,” says Timothy Becker, director of UF’s Bergstrom Center for Real Estate Studies.

But while most of the survey respondents report the market probably won’t get any worse, few say it has actually begun to improve yet, Becker says. “One of our respondents summed it up by stating that ‘if anything, we will get less bad.’”

On the positive side, private capital – both foreign and domestic – is continuing to enter the state in search of quality investment deals. As banks start to deal with their problem assets, more deals will come to market.

Another good sign: Life insurance companies have started to re-invest in commercial properties after backing off for the last year and a half, Becker says. Because these companies use premiums from life insurance policies to make investments, they are not deterred by the lack of available bank financing.

“(Life insurance companies) see the fundamentals of the economy stabilizing and they see the opportunity to get quality assets at a good price,” Becker says. “So if they think things aren’t going to get worse and they may actually get better, it follows that they’re going to want to start investing again.”

On the negative side, unemployment continues to be one of the state’s biggest problems, edging up to 12.3 percent in March, its highest level since the state began keeping count in the 1970s. Florida has lost more than 880,000 jobs since 2007.

Although there is a potential for job growth later in the year, even under the most optimistic assumptions it will take three to four years to return to 2006 levels, Becker says.

Also of concern is the continued reluctance of commercial banks to lend money because of pressure from regulators to manage risks along with depressed values that make it difficult to refinance mortgages.

The retail and office markets are the worst off, Becker says. “Until there is an increase in job growth, there is no need for more office space, and people aren’t spending as much money as they used to.”

Apartments continue to be the best market in the state due to high demand from people moving out of foreclosed homes. “More people are going to be living in temporary spaces than trying to buy homes just because it’s gotten a lot more difficult to buy homes from a financing perspective,” Becker says.

Statewide, Florida’s new housing market will continue to be slow, a result of more foreclosed homes becoming available. “That competition makes it very difficult for new homes to get built and purchased because buyers can often get an equal or nicer home for a much cheaper price on the foreclosure market,” Becker says.

One of the strongest areas of the state is South Florida, especially Miami-Dade and Broward counties, with their diverse economies, steady migration and influx of foreign capital. “The glut of condos in South Florida is actually starting to change hands – they’re beginning to rent them – and I think there is more life in downtown Miami than there has been in a long time,” Becker says.

Orlando, Tampa and Jacksonville also are picking up. “Florida’s big cities – those four areas – are less bad off than the rest of the state, and they’re going to recover quicker than other places,” Becker says.

Jacksonville, in particular, is in a good position because its housing market never got as hot as other markets; and, as a result, it doesn’t have as many foreclosures. “I think Jacksonville is primed to really take off, and with the expansion of the port is going to have a lot of jobs coming into the marketplace,” Becker says.

A positive note overall is that survey respondents’ confidence in their own business has risen for the fifth consecutive quarter. In previous breakdowns by profession, developers and lenders had extremely low expectations for their own businesses, and that has grown substantially in the last few surveys.

“It’s always a good sign for us that the lenders think their business is going to get better,” Becker says. “Maybe it means there is some light at the end of the tunnel, even though we’re still not at a great spot.”

© 2010 Florida Realtors®

The Miami Herald

3/19/10

Home buyer tax credit window closes on April 30

If you’re hoping to buy a home this year but have been on the fence about making your move, don’t forget that your window of opportunity to qualify for a potential tax credit is steadily closing.

First time and repeat buyers meeting the specified the requirements and to receive up to $8,000 and $6,500, respectively, in federal tax credits. The catch is that the homes must be purchased on or before April 30, 2010. In special circumstances, the credits are still available as long as first time or repeat buyers enter into a binding sales contract signed by April 30, 2010 with the purchase transaction completed by June 30, 2010.

The National Association of Home Builders have created a great  federal housing tax credit site with helpful information, tips and FAQs detailing the opportunities and conditions available to you through the Worker, Home ownership, and Business Assistance Act of 2009. For your convenience, we’ve provided some fast facts below, but we encourage you to check out additional resources or discuss these opportunities more closely with your agent or broker.
Fast Facts: First Time Buyer Tax Credit

• A first time buyer is defined as any buyer who has not owned a principal residence during the three-year period preceding the initial home purchase. For married taxpayers to qualify, this (non-)home ownership stipulation must hold true for both the buyer and his/her spouse.

• A first time buyer meeting the qualification and time limitation requirements is eligible to claim the federal tax credit for any principal home purchase, including new or resale, provided that the purchase price does not exceed $800,000.

• The first time buyer tax credit is equal to 10 percent of the home’s purchase price, up to a maximum of $8,000.

• The qualifying income limits are $125,000 for single taxpayers and $225,000 for married taxpayers filing a joint return. Partial tax credits apply for buyers with a modified adjusted gross income (MAGI) as defined by the IRS.

• Qualifying first time buyers can claim the tax credit on their federal income tax return, allowing for a dollar-for-dollar reduction in what they owe in taxes.

Fast Facts: Repeat Buyer Tax Credit

• A repeat buyer is defined as a long time resident who has owned and lived in the same home for at least five consecutive years of the eight years prior to the purchase date. For married taxpayers to qualify, both the buyer and his/her spouse must meet the required five years of principal residency stipulation.

• A repeat buyer meeting the qualification and time limitation requirements is eligible to claim the federal tax credit for any principal home purchase, including new or resale, provided that the purchase price does not exceed $800,000.

• The repeat buyer tax credit is equal to 10 percent of the home’s purchase price, up to a maximum of $6,500. The qualifying income limits are identical to the first time buyer tax credit requirements (including additional conditions for taxpayers with MAGI).

• Qualifying repeat buyers can claim the tax credit on their federal income tax return, allowing for a dollar-for-dollar reduction in what they owe in taxes.

Miami Herald

4/29/10

The real estate market in Florida probably has probably reached its lowest point, according to a survey of professionals across the state.

NEW YORK – April 20, 2010 – The darkest cloud over the economic recovery – the troubled commercial real estate market – may be clearing a bit.

Prices of commercial property are up slightly compared with last fall. Loan modifications have risen sharply the past six months. Commercial mortgage-backed securities (CMBS), a big funding source that was comatose for two years, has come to life recently.

The developments won’t alleviate the sector’s biggest problem: the rising pace of defaults. But they should contain the damage and provide a lifeline to better-performing properties, analysts say.

Developers put up too many commercial buildings earlier this decade and paid the price when the economy wilted as vacancies rose and rents fell. Default rates jumped to 3.8 percent from 1.6 percent in 2009 and will hit 5.1 percent this year, Real Capital Analytics says.

Many larger deals were financed by CMBS. Investment banks bundled loans for several projects into securities they sold to investors. A record $230 billion in securities were issued in 2007 vs. $3 billion last year, Commercial Mortgage Alert says. Already this year, $4 billion in deals have been done. Tom Fink of research firm Trepp predicts about $25 billion in CMBS will be issued in 2010.

Investors and banks have waded back into the market because property values have bottomed and lending standards have toughened, says David Nackoul of mortgage broker Holliday Fenoglio Fowler. And with bond interest rates at low levels, investors are seeking higher yields.

The money isn’t rescuing distressed properties. It’s refinancing high-quality loans as they mature. Even borrowers who bought projects before the real estate bubble have had a hard time refinancing because of scarce funding and lenders demanding higher downpayments.

Michael Glimcher, CEO of Glimcher Realty Trust, recently snared $100 million in loans that will be sold into the CMBS market. He’ll use the money to refinance loans for shopping centers in Tennessee and Ohio after struggling to refinance malls last year.

“The pipeline has opened back up,” he says.

The funds’ availability also could help some borrowers whose properties have fallen in value since they bought them but who are still making payments, Fink says. Deutsche Bank analyst Richard Parkus says most of the $1.4 trillion in mortgages maturing by 2013 won’t qualify for refinancing unless borrowers put up more cash.

That could lead to foreclosures, further depressing prices, though many lenders have extended loans on the hope prices will rebound. The new capital “will moderate (the slump),” Fink says.

Other good signs:

• Commercial real estate values have edged up 6 percent in recent months, Real Capital Analytics says. They fell 45 percent from 2007 to 2009.

• About $13.7 billion in loans were modified the past six months, Parkus says.

NOW ASKING $775,000.

The property consists of 2 separate folios sold together:  total of 16,550 Sq.Ft. lot with a 1,471 Sq.Ft. warehouse.

Corner warehouse with high visibility. Very well located a block away from Biscayne Blvd in Wynwood.  Close to Downtown, Design District, Performing Arts Center, Port of Miami, and Airport.

Can be used for  retail, showroom or  storage. Fully fenced with plenty of parking space and 2 roll-up gates. Owner financing available. Easy to show.

An article from Forbes.com posted on March 1st, 2010

Top 5 Most Troubled Real Estate Markets

1. Miami, Fla.
Delinquency rate: 28.8%
Comment: In greater Miami, including Fort Lauderdale and West Palm Beach, one-quarter of mortgages are 90 days past due or worse. In Miami proper, one-fifth of mortgages are in foreclosure or converted to REO. Worst in the country by far.

2. The Rest of Florida
Delinquency rate: 16%
Comment: The only significant metro area in Florida with a delinquency rate below 10% is Pensacola, where 9% of mortgages are 90 days or more past due.

3. Las Vegas, Nev.
Delinquency rate: 21.7%
Comment: Maybe building all those high-rise condo buildings off the strip wasn’t such a great bet after all. Mortgages in foreclosure or converted to REO here are 10.2% of the total.

4. Riverside, Calif.
Delinquency rate: 19.1% Comment: Riverside’s boom is a fading memory; 7.7% of the mortgages in this metro area are either in foreclosure or converted to REO. That’s twice the 3% national average.

5. Bakersfield, Calif.
Delinquency rate: 16.4%
Comment: In this quiet area north of Los Angeles values are way down and 6.4% of mortgages are in foreclosure or converted to REO.

1020 Meridian Ave. Apt # 601

Wow, location, location and location. Live in the heart of South Beach, across the street from Flamingo Park, and walking distance to Lincoln Rd, restaurants, shops and the beach. This bright and spacious 2bedroom 2 baths is a corner unit with a city and park view directly overlooking the pool.  The floor plan is one of the largest in the building and it is the least expensive two bedroom unit in the building.  The building was recently renovated and the assessments have been paid for.  The unit comes with one parking space assigned and bicycle storage available.  There are plenty street parking spaces available as well. This charming South Beach apartment is in the market for sale or rent.

When it comes to locations, this is unquestionably a great building to live in. It really caters to true South Beach lifestyle; “the Green Lifestyle” Being able to walk to the main hot spots in South Beach is not only practical but environmentally conscious.

Living across the street from Flamingo Park is another wonderful benefit that this apartment has. The park is a beautiful, tree-lined park located right in the heart of South Beach with great facilities. They include: a swimming pool with lap lanes, a water playground for children, several tennis and basketball courts, a baseball and a soccer field. If that was enough, there is also a very affordable gym which is sponsored by the Police Athletic League. There is also free parking available.

The apartment is vacant and in ready to move in condition. Call for showing instructions.

What Can You Buy With $100,000 in Today\’s Real Estate Market?

Today, it is extremely common to find ourselves in a middle of conversation about the current financial crisis, but it also seems to be a bit contradictory that in the same conversation we also hear that today is the time to buy. We assume that during a financial crisis no one is buying much of anything; however Warren Buffet, Chief Executive Officer for Berkshire Hathaway, says that the time to buy is when everyone else is too fearful to do so.

When it comes to Miami or Miami Beach, “the epicenter of the real estate boom and bust”, buying properties is indeed a good investment now. It has been for the past couple of years, and now we are seeing that people interested in purchasing income properties, can actually cover their mortgage and expenses with the rent itself. So, how far does our money go today?

Our company’s chief executive Officer, Ron Shuffield, a highly knowledgeable person when it comes to South Florida real estate, appeared last week on Nightline to discuss about our real estate market and how far can $100,000 take anyone. During his interview Ron cites: “With the economy today, there are opportunities for people to buy at prices that people didn’t dream, even two years ago, that they would be able to see these kinds of prices.”

We have being hearing about the amazing buying opportunities that will be available since the bust of the real estate bubble 2 years ago. Some people have already taken advantage of such great deals, but some are holding back waiting for prices to keep on dropping to finally buy their dream house. I strongly belief the time to buy is NOW! Just as Ron mentions in the interview, the prices in today’s market are truly amazing. The dream of owning a house is finally achievable for many families and this is something we need to take advantage of.

As you will see in the video, the houses that are selling for $100,000 today are brand new ones; some in private enclosed communities and some even with a pool in their backyards. Opportunities like the ones shown in the video are found throughout South Florida. Bargains can be found even in our beloved Miami Beach. I thought it was a great interview and decided to share it with you. I think is definitely worth watching and hope you enjoy it!

According to TIME magazine, “Heating, cooling and powering office space are responsible for almost 40% of carbon dioxide emissions in the U.S. and gobble more than 70% of total electricity usage.”

START NOW
If that’s not reason enough to consider going green, consider this:  There are ways to improve your business’ green factor that can save you money as well.  You may have already heard all about these, but the time to implement them is now!

‘IDLE’ TIME
One huge factor is computers.  You can set yours to power down after 15 minutes of idle use.  According to TIME, this will cut the energy usage by 70%.

DOWN THE DRAIN
Another huge factor: water waste with flushing toilets. Newer toilets use half the water.  An easy fix:  You can use less water by putting a brick (or two, or anything that will take up space but not dissolve or rust) in your tank (at home too).

PLUG UP THE HOLES
Seal all gaps around doors and windows. Add a storm door or self-closing mechanism to reduce the loss of cold air. And, take a hard look at your insulation. Consider adding additional cellulose insulation to your existing installation to decrease your cooling bills.

XERISCAPE
We already know about water shortages here in South Florida, but if you have landscaping that needs regular mowing and maintenance, consider saving the cost of mowing and watering with plants that don’t require so much maintenance (but still look good in the process).  If you cannot change your landscaping, be careful with watering and waste. Invest in a timer for your sprinklers and keep watering to a minimum.  Make sure the sprinklers aren’t watering the sidewalk.

SEEING THE LIGHT
As your old incadescent lightbulbs burn out, replace them with CFLs (compact florescent lights, you’ve seen them: the spiral ones). While CFLs cost more, they last ten times as long for savings of about $50 comparatively over the life of the bulb (according to ABC News).

GETTING SERIOUS
Start at the top!  The U.S. Green Building Council (USGBC) is a non profit organization that certifies sustainable businesses, homes, hospitals, schools, and neighborhoods through its LEED® (Leadership in Energy and Environmental Design) Green Building Rating System™—a way of giving credits (points) in 4 levels:  Certified, Gold, Silver, and Platinum.  If you are considering new construction, check out the advantages of going green. Commonfire.org is a great, easy-to-read site offering all the answers.