South Florida housing recovery on track

South Florida’s housing recovery remained on track last month.


Sales of existing single-family homes in Miami-Dade County jumped 16.4 percent in December 2012 from a year earlier, making 2012 a record year for sales, the Miami Association of Realtors said.
In Miami-Dade, the median price for a single-family home jumped 18.9 percent to $214,060 while that of an existing condominium soared 25.4 percent to $163,000 in December 2012 from a year earlier, marking 13 consecutive months of year-over-year gains. Miami-Dade condo sales climbed 9.8 percent to 1,395 units in December.
Broward County’s housing market is showing similarly strong demand and rising prices.
In Broward, the median price of an existing single-family home surged 21.1 percent to $230,000 in December from a year earlier, according to the Greater Fort Lauderdale Realtors. The median price of an existing condo or townhouse in Broward jumped 24.7 percent to $95,100 year over year, the group said.
Sales of single-family homes in Broward climbed 14.9 percent in December from a year earlier while the volume of condo and townhouse closings increased 4.7 percent over the period.
Sellers have gained the upper hand amid a tight inventory of properties for sale and often can choose between competing offers, according to Realtors.
The number of single-family homes on the market in Miami-Dade fell 27.5 percent in December to 5,000, while the number of condos declined 20.8 percent to 7,844 units, the Miami Realtors said.

Miami-Dade has just 5.2 months of supply of single-family homes and 5.7 months of supply of condos on the market — less than the six to nine months of inventory typical of a market balanced between buyers and sellers. “When it drops below six months of supply, you’re definitely going to see price appreciation”.
Cash remains king, especially for condo transactions, a segment where foreign investors play a huge role. In December 2012, 76 percent of Miami-Dade condo sales were all-cash transactions, as were 49 percent of single-family home deals.
“Buyers are quite surprised there is not more inventory after everything they have been hearing,” said Eyvonne Kafourus, an agent with Prudential Florida Realty in Fort Lauderdale. “I see a lot of people coming in from other states, for job transfers and retirement.”
The inventory of single-family homes in Broward fell 35.5 percent in December from a year earlier; the inventory of condos and townhomes for sale declined 25.2 percent year over year, the Fort Lauderdale group said.
“Buyers are getting aggravated, because they are losing deals,” said Charles Bonfiglio, who recently assumed office as president of the Greater Fort Lauderdale Realtors. “Eighty to 90 percent [of sales] are multiple-offer situations. They’ve got to move quickly.”
Bonfiglio said offers over asking price are common, although appraisals frequently do not follow suit.
The housing market in South Florida has continued to make gains despite a huge overhang of distressed properties that are a headwind on prices.
In Miami-Dade, distressed properties accounted for 41 percent of total sales in December, down from 54.4 percent a year earlier.
Demand is robust for bank-owned properties and short sales, agents say, and many would-be buyers find themselves outflanked by cash-rich professional investors.
“They don’t last long,” Kafourus said of foreclosures. “You have to be really on top of the market and searching every day. If you are looking to get a mortgage, you’re at a disadvantage to the cash buyers.”
The median days on the market for a single-family home in Broward dropped to 37 days in December from 56 days a year earlier, the Realtors group said.
Florida has been seeing a flow of new arrivals after a period of exodus during the downturn. In addition, foreign investors have rushed in to take advantage of the prices, which are still far below their highs before the crash.
“We’ve obviously turned the corner. We’ve noticed inventory tightening up,” said Philip Vias, a broker associate with Prudential in Fort Lauderdale.
Vias said more buyers seem to be coming in from the Northeast. “What’s held things up is homes weren’t selling up north. Now it’s starting to trickle down.”
Statewide in Florida, single-family home sales climbed 15.8 percent in December from a year earlier as the median price increased 14.1 percent to $154,000.

News for miami construction 2013

Construction starts in Miami-Dade County posted strong gains in 2012 after a deep six-year slide. With a host of projects on the horizon, the local construction outlook for 2013 is cautiously optimistic. Miami City Center  Deja vu all over again Residential projects under construction: Project Address Units Floors Bellini At Williams Island 4100 Island Blvd., Aventura 70 24 1100 Millecento Residences 1100 South Miami Ave., Miami 382 42 BrickellHouse 1300 Brickell Bay Drive, Miami 374 46 MyBrickell 30 SE Sixth St., Miami 192 28 Oceana Key Biscayne 350 Ocean Drive, 154 15 Residences at Miami Beach Edition 2901 Collins Ave. 26 11 Chateau Beach 17451 Collins Ave. 84 35 Mansions At Acqualina 17749 Collins Ave. 79 46 Regalia 19505 Collins Ave. 39 43 Residential projects gearing up: Project Address Units Floors Saxony 3399 Collins Ave. 67 19 Porsche Design Tower 18555 Collins Ave. 132 57 ICON Bay 450 NE 28th St. 300 40 Palau at Sunset Harbour 1201 20th St. 50 5 Grove at Grand Bay 2669 S. Bayshore Dr. 97 96 20 4701 North Meridian 4701 N. Meridian Ave., MB 145* 10 Unique 17141 Collins Ave. 62 44 Jade Signature 16901 Collins Ave. 192 55 One Ocean 2 Ocean Drive, MB 50 7 400 Sunny Isles 400 Sunny Isles Blvd. 230 20 321 Ocean Drive 321 Ocean Drive.; N/A 9 Village At Island Estates 5000 Island Estates Drive 148 8 Peloro Miami Beach 6610 Indian Creek Drive 115 7 Marina Palms Yacht Club and Residences 17301 Biscayne Blvd. NMB 468 24 Echo Aventura 3250 NE 188th St. Aventura 190 11 Harbor Park 9901 E. Bay Harbor Dr. 20 9 Edgewater Apartments Condo 9821 E. Bay Harbor Dr. 41 9 Club At Bay Harbor 1025 92nd St. 42 8 Ivory 9261 E. Bay Harbor Dr. 41 8 Merrick Manor 4133 LeJeune Road, Coral Gables 180 10 Commercial projects under way (unless noted): Project Address Brickell CityCentre 701 S. Miami Ave and surrounding area 1400 Biscayne** 1400 Biscayne Blvd. Miami Design District From NE 38th Street to NE 42nd Street and west of NE 2nd Ave Dadeland Mall 7535 N Kendall Dr. * Approximately 130 condos and 15 single-family homes ** Scheduled to break ground in mid-2013 Chris Gandolfo, senior vice president of development of Brickell CityCentre, stands on the Metromover platform at Eighth Street Station overlooking the construction site. The cranes are coming back to Miami. The battered construction industry is going higher in the new year after showing strong signs of life in 2012. Will Miami feel more like Manhattan in a few years? It just might. So far, there has been more talk than action, fewer shovels in the ground than grand announcements. Even so, construction is underway on a dozen new condominiums in Miami-Dade County — something that seemed beyond the realm of possibility not so long ago. Commercial building is picking up, too, particularly in Miami’s hot new urban core. The construction sector, which posted 62 consecutive months of job losses in Miami-Dade as of November 2012, is expected to finally begin adding jobs in 2013. By far the centerpiece project to date is Brickell CityCentre, a $1.05 billion shopping and mixed-use project that broke ground in June 2012 and will span three blocks just west of Brickell Avenue to the south of the Miami River. The 5-million-square-foot mega-project by developer Swire Properties will include a department store, luxury shops, restaurants, a hotel, office towers and condominiums. It is expected to be connected with bridges and covered walkways and to cement downtown Miami’s emerging image as a trendy place to work, live and play. In Brickell alone, three new condominium projects already are under construction: Jorge Perez’s Related Group is building Millecento, a 42-story tower with 382 units, and MyBrickell, a smaller project with 28 stories and 192 units shoehorned onto a 0.4-acre site. Newgard Development Group is building BrickellHouse, a 46-story, 374-unit project. More building, much more, is coming. “We’re going to see a lot of cranes popping up in the first and second quarter, and a year from now, we’re going to see cranes all over the skyline,” said Tom Murphy Jr., chairman and CEO of Coastal Construction, a large Miami builder that is involved in various projects, from hotels to condominiums. “I believe we as a community — South Florida, especially Miami — will build more in the next 10 years than we did in the last 15.” Among a long roster of projects, Coastal was tapped by developer DACRA for a major renovation project in the Design District, which in 2012 marked the arrival of luxury fashion retailers such as Cartier, Hermes, Louis Vuitton, Celine, Christian Dior and Prada, adding a new dimension to an area already known for home furnishings and restaurants. DACRA president and CEO Craig Robins has a broader plan to bring in 40 to 50 luxury brands to the Design District by 2014. The area will have a pedestrian promenade, rooftop gardens and public plazas, in keeping with Miami’s emerging urban scene. The focus on commercial development in Miami’s urban core, is all about providing more services to cater to the new residents who want everything within walking distance. Spanish developer Espacio USA will break ground in 2013 on the first phase of a $412 million mixed-use project at 1400 Biscayne Boulevard. Starting with one 103,000-square foot office tower, the project will eventually include retail shops and residential units. “It’s becoming much more of a New York lifestyle, and we’ll continue to see that,” said Ron Shuffield, president of Esslinger-Wooten-Maxwell Realtors in Coral Gables. Construction starts in Miami-Dade County posted strong gains in 2012, rising 62 percent through November to $3.16 billion from the same period of 2011, according to McGraw-Hill Construction. The recovery in 2012 followed six consecutive years of dramatic declines from the 2005 peak when construction starts hit $7.94 billion in Miami-Dade. Robert A. Murray, vice president of economic affairs for McGraw-Hill Construction, said because construction starts lead the pace of construction spending by about a year, “The substantial increase for construction starts in 2012 for Miami-Dade county means that construction spending in 2013 will increase, and along with it, construction employment.” Brickell CityCentre, for example, has about 100 people working, but their ranks will swell to 300 in the next six months and eventually reach up to 3,500 workers, according to Chris Gandolfo, senior vice president of development for Swire. There will be 11 cranes on site this year. “I would expect 2013 to see a significant increase in construction employment,” said Brad Meltzer, president of Plaza Construction, which has lined up apartment, condo, hotel and shopping-center work around Miami-Dade and has been staffing up. “We’re cautiously optimistic,” Meltzer said. “We have a significant amout of work under contract currently, but you never know if that is going to stay — like last time.” When the financial crisis hit, many projects were abruptly shelved or canceled. Meltzer said investments in Miami by prominent national real estate investment firms like LeFrak, LNR and Simon Properties bode well for the area: “It’s great to see big strong clients in South Florida.” Leading the surge in new development: nearly 100 condominium projects have been proposed in South Florida since the downturn, according to Bal Harbour-based Condo Vultures, which tracks the market. Most experts predict only a fraction of those will come to fruition. A key driver will be the availability of financing. Lenders, still leery in the wake of the real estate crash, are balking at backing new condos. So far, nearly all the new condominium projects are being financed by the unit buyers, who typically put up 50 percent to 80 percent of the purchase price over various stages of construction. That financing model — which essentially amounts to an unsecured loan to the developer — has attracted almost exclusively foreign buyers, primarily Latin Americans drawn to Miami as an investment safehaven. Political uncertainty in countries like Argentina and Venezuela fuel the trend. Even so, many people doubt that foreign demand for fancy condos will be sufficient to sustain the many projects that are being talked about. “Are there going to be enough people to fund the construction of those units? I’d be surprised,” said Jack McCabe, founder and CEO of McCabe Research and Consulting. “I think 25 percent to 33 percent of the projects announced actually will get built.” Many of the proposed projects are ultra-luxury towers along the ocean, from South Beach to Sunny Isles and Aventura with amenities such as wrap-around terraces, private pools and individual elevators. Coconut Grove is also a magnet for luxury development, albeit at lower density. “There isn’t a square inch of the Grove that isn’t being looked at,” Alicia Cervera Lamadrid, managing partner of Cervera Real Estate, which markets new condominiums for developers, said at a real-estate roundtable in November. The new condominium projects are rising in a sort of parallel universe even as the suburbs remain burdened by thousands of distressed homes. Miami-Dade Circuit Court has a backlog of 53,000 foreclosure cases, and new filings have been rising since a settlement last spring between big banks and 49 state attorneys general over lenders’ practices provided clearer ground rules. As more foreclosures and short sales are processed, they are sure to constrain housing prices, which have been rebounding off recession lows. While lenders are generally skeptical of condominium projects, they are readily lending for the construction of new rental apartments, an area expected to grow solidly. Rents are rising; occupancy is strong. For many people, buying a home isn’t financially feasible. Others simply prefer to rent. At the same time, the supply of rental apartments in Miami-Dade was gutted during the boom when many were converted to condominiums. Miami developer Armando Codina, who previously focused on commercial projects and industrial parks, and Miami-based Adler Group, a major commercial developer, both are pursuing rental apartment projects in Miami-Dade to capitalize on the robust demand. Institutional lenders — insurance companies, real estate investment trusts and pension funds — drawn to the steady income from rental projects, have been eager to invest long term, making banks comfortable with financing construction. Industrial construction has also picked up. With industrial real estate sale prices in Miami-Dade County hitting record levels and vacancy rates dropping, last year marked the beginning of a mini building boom under way in the warehouse district west of Miami International Airport. After several years when industrial warehouse construction ground to a halt in Miami-Dade, there is now nearly one million square feet of warehouse space under construction, plus another two million square feet planned. Much of the space is being built without tenants because the owners are so confident in the market’s future. “Institutions with a lot of capital tend to go in areas that have the highest potential for growth,” said Steve Medwin, managing director of South Florida for Jones Lang LaSalle. “Miami is really the shopping cart for Latin America. The growth of international trade is giving us a leg up on the recovery compared to the rest of the country.”

Home prices rise in August

 

Home prices in the nation's largest cities rose from July to August, according to a closely watched index, adding to a turnaround in housing this year.
The Standard & Poor's/Case-Shiller index of 20 American cities, a key measure that is closely watched by economists, rose 0.9% from July to August and 2.0% from August 2011.
Nineteen of the 20 cities posted positive monthly gains in August.
“Home prices continued climbing across the country in August,” David Blitzer, chairman of the S&P index committee, said in a release announcing the new data Tuesday.
The Phoenix metro area isleading the home price recovery, with home prices there up 18.8% from August 2011. Los Angeles was up 2.1%, San Diego 1.9% and San Francisco 5.3%.
Atlanta continued to lag the recovery down 6.1% year-over-year. Chicago was down 1.6% and New York 2.3%.
Housing sales figures Florida:
These figures for August 2012 reflect increases from August 2011:
Condo sales in Broward: up 2.4%; Total number of sales: 1,419
Condo sales in Miami-Dade: up 8% to 1,492
House sales in Broward: up 15% to 1,369
House sales in Miami-Dade: up 5% to 1,059
SOURCE: Miami Association of Realtors

U.S Goverment sues Bank of America for $1 billion over mortgage losses

The U.S. government has sued Bank of America for more than $1 billion, charging it sold risky mortgages to Fannie Mae and Freddie Mac, defrauding taxpayers in the process.

The civil suit, filed in a U.S. district court Wednesday, charges that the bank, as well as a company it acquired in 2008, originated home loans under a program called "The Hustle," aimed at making loans as fast as possible while forgoing checks on their quality. Those risky loans were then guaranteed by Fannie Mae and Freddie Mac, and when they defaulted, it cost taxpayers more than $1 billion.

The suit alleges that Countrywide Financial began the activity in 2007. When the home loan lender was purchased by Bank of America in 2008, the practice continued through 2009.

"The fraudulent conduct alleged in today’s complaint was spectacularly brazen in scope. As alleged, through a program aptly named ‘the Hustle,’ Countrywide and Bank of America made disastrously bad loans and stuck taxpayers with the bill," said U.S. Attorney Preet Bharara. "These toxic products were then sold to the government sponsored enterprises as good loans.

"This lawsuit should send another clear message that reckless lending practices will not be tolerated,”.

 

Fannie and Freddie were originally created as independent government-sponsored private enterprises, but were taken over fully by the federal government in September 2008 as they teetered on the brink of collapse. Through the end of 2011, the government had pumped $183 billion into the two entities to keep them afloat, and the Obama administration has called for the entities to eventually be wound down and replaced with a new housing finance system.

Countrywide recently attracted scrutiny on Capitol Hill after it was revealed that several former and current members received favorable mortgage terms under a VIP program organized by the lender's former CEO, Angelo Mozilo. The lawmakers receiving the loans have maintained they did not know they were receiving favorable terms, and Mozilo has since been barred from heading public companies, and is paying a $22.5 million penalty to settle charges he misled investors while heading Countrywide.

The suit marks the second of its kind filed by Bharara this month. Earlier in October, the U.S. filed a civil suit against Wells Fargo, similarly alleging the bank wrongfully certified risky mortgages as high quality before selling them to the Federal Housing Administration, which was stuck with hundreds of millions of dollars in losses when they defaulted.

And in September, New York Attorney General Eric Schneiderman filed a suit against JPMorgan Chase, charging it with widespread fraud in the marketing and selling of risky mortgage-backed securities in the lead-up to the financial crisis that caused billions of dollars in losses for investors. Schneiderman is also the head of President Obama's task force charged with sniffing out mortgage fraud. The banks facing those suits have vowed to fight the charges, and Bank of America did not respond to an immediate request for comment.

Florida Markets Top Ten Turnaround Report

Though the past four years have seen many cities suffering from large numbers of foreclosures and a loss in home values, ten of these real estate markets are now leading the nation towards a general recovery and stability of the housing sector.
Realtor.com’s Top 10 Turnaround Town Report, based on third quarter 2011 data, includes six Florida markets: Miami, Orlando, Fort Myers-Cape Coral, Fort Lauderdale, Sarasota-Bradenton, and Lakeland-Winter Haven.
Each of these markets has experienced positive year-over-year median price appreciation, reductions in year-over-year median age of inventory and inventory counts, while also experiencing lower unemployment rates on a year-over-year basis. Florida’s success can also be tied to foreign buyers; the number of foreign buyers purchasing homes there increased from 10 percent in 2007 to 31 percent in 2011.
Let’s take a closer look:
Miami, FL: The number one town on the report, Miami has gone from being one of the first victims of the subprime crash to having a healthy inventory that is only half the size from a year ago. Today, Miami is only reporting one foreclosure for every 407 homes, compared to the national rate of one per every 213. And, condo sales have increased 79 percent in the first five months of this year, largely due to an influx of foreign investors.
Orlando, FL: Ranked second on the report, Orlando leads the nation in the ratio of Realtor.com searches to listings. Inventory has also obtained a balance with demand. Foreclosures hurt the market in 2007-08, but foreclosures in Orlando were down 58 percent in September, compared to last year.
Fort Myers-Cape Coral, FL: Median prices in Fort Myers-Cape Coral have increased almost 33% year-over-year, according to Realtor.com’s October 2011 Real Estate Trend Data. In addition, foreclosures are down–only one in 313 homes in September–while inventory has been reduced and foreign buyers have been attracted to the area’s real estate prices. The metro ranked third on the turnaround report.
Fort Lauderdale: FL: A decrease in inventory coupled with an uptick in prices earns Fort Lauderdale the number five spot on the report. Inventory decreased almost 38 percent year-over-year, according to Realtor.com’s October data report. Prices have fallen about 46 percent since 2006, but are now going up.
Sarasota-Bradenton, FL: A total of 11 percent of all foreign buyers in Florida are in Sarasota-Bradenton specifically. Number six on the turnaround report, the market has seen a list prices increase of more than 17 percent year-0ver-year and a decrease of inventory of 32 percent according to the Realtor.com October data. The market still has a long way to go, after losing more than 55 percent of home values from 2006 to the second quarter of 2011 due to foreclosures.
Lakeland-Winter Haven, FL: A year ago, Lakeland-Winter Haven topped national foreclosure filing lists, but now the area’s distressed sale market share has decreased 46 percent. The area–ranked 7th on the turnaround list–has seen total listings decreased more than 36 percent year-over-year and median age of inventory decrease more than 17 percent, according to Realtor.com’s October data. Prices are also up 12 percent compared to last October.
Realtor.com’s Top Ten Turnaround Town Report is compiled using a formula based on price appreciation, changes in inventory, median age of inventory, searches by Realtor.com visitors, and unemployment data.

Home prices up, hitting 2004 levels

 

Home prices rise, says FHFA

According to the Federal Housing Finance Agency’s (FHFA’s) monthly House Price Index (HPI), home prices rose 0.8 percent between March and April, on a seasonally adjusted basis. Previously, the FHFA had reported a 1.8 percent price increase in March, which has been revised to a 1.6 percent increase. Over the last year, home prices have risen 3.0 percent, the Agency reports.
The results were better than what was forecasted, as economists surveyed by Dow Jones Newswires had only expected a 0.4 percent monthly increase.

Prices, sales, and inventory levels

The U.S. index is down 17.6 percent from its April 2007 peak and is now roughly the same as the April 2004 index level. Today, the National Association of Realtors reported that in May, home prices rose, and sales are slowed slightly by tight supply levels.
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage declined to a record low 3.80 percent in May from 3.91 percent in April; the rate was 4.64 percent in May 2011; recordkeeping began in 1971.
Meanwhile, banks are looking to alternatives to foreclosures that continue to punish home values, as seen in the reduced number of seizures, falling 18 percent between May 2011 and May 2012, according to RealtyTrac.

Call it a comeback?

Speaking to May’s data (one month ahead of FHFA data), the National Association of Realtors’ Chief Economist, Dr. Lawrence Yun said, “The recovery is occurring despite excessively tight credit conditions and higher downpayment requirements, which are negating the impact of record high affordability conditions.”
The FHFA monthly index is calculated using purchase prices of houses backing mortgages that have been sold to or guaranteed by Fannie Mae or Freddie Mac. For the nine census divisions, seasonally adjusted monthly price changes from March to April ranged from -1.2 percent in the New England division to +2.2 percent in the Pacific division.

Home Values See Highest Monthly Increase Since 2006

Zillow issued a released Friday reporting that both national home values and rents rose in the month of April.

According to the April Zillow Real Estate Market Reports, national home values rose 0.7 percent in April to a Zillow Home Value Index of $147,300. This is the largest monthly increase in home values since January 2006, and it makes April the second month in a row in which home values climbed up.

Zillow also reported that rents rose from March to April, increasing by 1.6 percent, according to the Zillow Rent Index. Of the 178 markets covered by Zillow, 78 percent experienced a rise in rents.
The Miami-Fort Lauderdale and Phoenix metro areas saw the biggest increases in home values, rising 1.6 and 1.9 percent, respectively. Values continued to decrease in hard-hit markets like Atlanta, where home values fell 0.7 percent.
“The housing market continues to show positive signs, with home values increasing significantly in April,” said Dr. Stan Humphries, chief economist at Zillow. “The recovery is moving in the right direction, but we caution that negative equity will cast a long shadow over the housing market. With almost one-third of homeowners with mortgages underwater and unable to sell their homes, inventory is having a hard time keeping up with increasing demand in many areas. We’ll continue to watch this signal as increasing home values turn from a blip into a trend.”
Foreclosures also continued to decline in April, with 6.8 out of every 10,000 homes being foreclosed across the U.S. That figure was down from 8 out of every 10,000 in March.