The Forster Team invites you to attend our Open Houses on August 12th! See the flyer below for details..
The Forster Team invites you to attend our Open Houses on August 12th! See the flyer below for details..
We’re holding great properties open this Sunday, July 15th, and you’re invited to stop by and preview them! See you there! View flyer for more information:
For a private showing, please contact the Forster Team.
JO-ANN FORSTER 305.778.5555
BRIAN FORSTER SHAPIRO 305.978.8655
EWM REALTY INTERNATIONAL
By Alejandro Lazo, Los Angeles Times
June 10, 2012
Would-be buyers are packing open houses and scrambling to make offers on properties before they are even listed. Bidding wars are erupting. And real estate agents are vying fiercely to represent the few sellers that do exist.
Housing inventory has sunk to levels not seen since the bubble years. The number of American homes with a “for sale” sign hit 2.5 million in April, the lowest number for an April since 2006, according to the National Assn. of Realtors.
David Dennick, who lives in Echo Park and works as a television editor, has been searching for a home with his wife, Denise, for about two months. The couple have already bid on three properties. They are hoping to find a home for less than $525,000, which is $25,000 more than they originally had hoped to spend.
“It is much more competitive than we thought,” said Dennick, standing in the entrance of an Eagle Rock open house on a recent Sunday. “It is just frustrating because we thought we would really be able to buy a house; we are a middle-class family.”
The sharp drop in inventory along with rock-bottom interest rates have helped stabilize even some of the hardest-hit markets, including the Southland, Las Vegas, Phoenix and Miami. Some real estate professionals are concerned that the lack of inventory might turnoff potential buyers, stifling the recent recovery in home sales.
The much-predicted foreclosure wave that was expected to dump more homes onto the market has not materialized. Fewer borrowers are entering default, and banks are better managing the properties they do have on their books.
In addition, professional investors bankrolled by private equity firms and hedge funds are pouncing on bank-owned homes, often turning them into rentals.
A dearth of new construction also is constraining supply. In April — the most recent month for which figures are available — the number of completed new single-family homes available for sale stood at 46,000, the lowest level since the Census Bureau began keeping track in 1973. Some 70,000 were under construction, also near historic lows.
The inventory problem has been exacerbated by the plunge in home prices since the go-go years. Many people who bought at the top of the cycle are so deeply underwater, they can’t get the price they need to sell and are therefore not bothering to put their homes on the market.
“We know negative equity holds back home sales, but it also holds back the listing of sales,” said Sam Khater, an economist with CoreLogic, a company that tracks the mortgage market. “Today it is holding the market back.”
The lack of available homes is maddening for those consumers who thought 2012 would be the year to buy.
In Southern California, inventories have plunged over the last year. The number of homes listed for sale in April fell 35% in Los Angeles County and was down 42% in Orange, 39% in San Bernardino, 42% in Riverside, 53% in Ventura and 43% in San Diego counties, according to online brokerage Redfin.
The number of days a home sits on the market has also decreased, meaning properties are selling faster. For the entire six-county Southern California region, the median number of days a home sat on the market fell to 33 last April from 43 the same month a year earlier.
Eddie David and his wife, Tiana Rezac, have felt the unexpected shortage firsthand. The two were sure they would buy a house this year until they tripped into the perplexing new housing reality. After being outbid on three different properties in neighborhoods from the Westside to Atwater Village, they shelved the search.
“With the downturn, it seems like there are a lot of people who have been waiting in the wings to pounce, and because the rates are low, there is just a lot more competition,” David said. “There were multiple offers. We tried to get in on a couple other homes, and even though it had been just a week or two weeks, it was just too late.”
Alex Gruenberg and his wife, Kristina, both 27, lost out on a home that ended up going for $30,000 more than they offered. The recently married couple have new jobs in the area and are looking for a pedestrian-friendly neighborhood with decent dining options.
They are now trying to find homes before they are listed.
“We are really learning that there is sort of an inside element to that,” Gruenberg said. “Things are going in days.”
Glenn Kelman, chief executive of Redfin, said the recovery remains tentative but the market has grown competitive because sellers feel they have time on their side, while buyers feel a sense of urgency given low interest rates and relatively cheap prices compared with the bubble years.
“It is a precarious situation, but the real issue is that nobody wants to sell a house right now,” Kelman said. “So now we have classes for our real estate agents on how to win a bidding war.”
Kelman suggests trying to tour the home when the seller is present and working with a local lender who might know the listing agent personally.
Also important is having enough cash to make up the difference between the negotiated price and whatever the appraised value of the home turns out to be, he said. (Lenders won’t provide a mortgage for more than a home’s appraised value.) Many deals these days are falling apart because appraisals are coming in low, given how many recent comparable sales have been foreclosures or other distressed properties.
“The appraisal is blowing up the deal half the time,” he said.
Mike Glickman, a Los Angeles real estate agent, has a strategy to win clients. He offers sellers a choice: He’ll give them a $1,000 gift certificate to any store of their choosing simply for listing a property with him or he will cut his commission to 0.5% instead of the more typical 6%.
“There is an incredible shortage of houses on the market right now, and I haven’t seen a fever like this for houses in like maybe 10 years,” Glickman said. “If anything priced within reason comes on the market, there are six or seven or 10 offers.”
Frank Casarez, an agent with Coldwell Banker, said he is experiencing a crush of buyers for the foreclosed homes that he lists for banks.
“There is such a high buyer demand,” Casarez said. “Even with the economy the way that it is, with job losses, there are quite a few people who thrive on this setting, who have been saving for a long time and have been saving to get a deal on the property.”
In fact, real estate agents are so eager for more homes on the market that they are enlisting members of Congress to push back against a federal plan to auction off huge pools of government-owned properties to be converted into rentals.
Phil Jones, a member of the California Assn. of Realtors’ Distressed Property Task Force, said that bankers who meet with the group “have a very systematic plan to distribute these homes on the market.”
The market for bank-owned homes — known as real estate owned — has gotten so competitive that longtime foreclosure king Leo Nordine has decided to try selling regular homes now, declaring: “REO is kind of over.”
He recently opened a new office in Watts.
“There are some properties that are getting foreclosed, but there are some big funds that are coming over … and they are literally just bidding them all up,” Nordine said. “There is a lack of inventory, even in South L.A.”
This article was written by Alejandro Lazo from the Los Angeles Times on June 10, 2012. A copy of the article can be found by visiting this link: http://www.latimes.com/business/la-fi-inventory-20120610,0,1032613,print.story
There was a great article on the from of the Miami Herald today. It read:
A lot of other people simply prefer to rent.
The two groups are spawning a fundamental shift in housing and a fledgling boom in the construction of new apartments for the first time in years. It is a national trend that is crystallizing in South Florida with rental apartment projects in the works in cities ranging from Plantation and Davie to Doral and Coral Gables.
“Rentals will be in demand for a while. The pendulum has swung,” said Mahesh Pattabhiraman, chief lending officer for Miami-based Apollo Bank, which this month made a land-acquisition loan to Miami’s Adler Group, a major commercial developer that plans to build two 20-story rental apartment towers near the west end of 79th Street Causeway in a joint venture with ECI Group of Atlanta.
“A lot of people with bad credit won’t qualify to buy a home. And because of the crisis, some people are not convinced it’s the right time to buy,” added Pattabhiraman.
Like Adler, other major South Florida developers with specialties in areas such as luxury condominiums and industrial parks are refocusing on rental apartments to capitalize on the strong demand and the availability of financing.
“Everybody is jumping on the bandwagon,” said Armando Codina, a prominent Miami developer of industrial parks and commercial projects who has turned his attention in a big way to rental apartments, with projects in various stages from Doral to Davie. “The fundamentals are right. This is not a trendy thing,” said Codina.
On Wednesday, Codina announced his Coral Gables-based CC Residential has formed a partnership with AREA Property Partners, a New York real estate investment giant, to develop rental apartment projects in South Florida. The alliance includes two projects in which Codina has already broken ground: a 352-unit project renamed The Signature at Doral, at Doral Boulevard (NW 41st Street) and the Homestead Extension of Florida’s Turnpike, and a 350-apartment project on Davie Road between SW 29th Street and SW 31st Street, renamed The Signature at Davie.
AREA’s CEO for North America, Richard Mack, said his firm’s recent success in acquiring a troubled condo project and turning it into an apartment complex on the Miami River called Terrazas River Park Village reinforced his view that the time is right for multifamily rental development. “It led us to conclude that rents are going to continue to rise and demand is going to continue to rise in a way to sustain new development,” Mack said.
Fueling the demand is the dearth of professionally managed apartment buildings in the wake of the condo-conversion mania of the last decade. Many multifamily rental apartments in the region were snapped up by developers, converted into condos and sold for quick profits.
Aside from a handful of rental apartment projects built during the boom, much of the rental availability in South Florida is in condominiums where investors bought units and are leasing them out.
Rental rates are marching steadily higher. Rents jumped 11 percent in downtown Miami from the first quarter of 2011 to the first quarter of 2012, according to Craig A. Werley, president and CEO of Focus Real Estate Advisors LLC. Rents are rising in other neighborhoods as well, though typically more modestly.
Focus Real Estate is getting peppered with requests for market analyses by developers and investors interested in sizing up Miami.
“There is a feeding frenzy by rental apartment management companies, the big REITs,” said Werley, who believes the pendulum has shifted long term away from homeownership since the meltdown. “It went beyond rational. It got completely out of hand,” he said of the subprime lending fiasco, where banks were hawking loans to poorly suited borrowers.
With strong competition for rental apartments, Paul Riemer, a 23-year-old insurance account executive, said he felt “lucky’’ when he landed a one-bedroom rental unit in ICON Brickell owned by a Swiss investor last October. Other renters had beaten him to the punch on a couple of others in which he had interest. “People came in and outbid me,” he said.
One Broadway, at 1451 South Miami Ave. in the Brickell area, which was one of the rare professionally managed rental apartment towers built in Miami during the last boom, enjoys consistent occupancy above 95 percent, drawing heavily on young professionals like Nastassia Luisis, a marketing manager who loves the urban vibe.
While the American Dream of homeownership hasn’t disappeared, more people are seeing renting as the best option for where they are in life now.
The 18th-floor, two-bedroom condo that Benjamin Wilson rents at ICON Brickell has 1,500 square feet overlooking a gleaming pool with amenities including a spa and fitness center. But the clincher that keeps the 35-year-old real estate attorney as a renter and not a home-buyer out in the suburbs is the minutes it takes to commute to his law office at Shutts & Bowen.
“I go ahead and choose to rent,’’ said Wilson, who moved to Miami from Kentucky. “The kind of home I’d want to buy would be at an astronomical price. And if I was in Pinecrest or Kendall or even Coral Gables, then I’d have to deal with the traffic as an attorney working a lot of hours.”
Wilson ticked off other advantages such as lifestyle flexibility, freedom from property taxes and condominium fees, and not having to ante up a huge down payment. And the condo has no objection to his 65-pound English bulldog, Rodney.
“This craze society went through — that at the earliest age if you can buy a house you have to buy a house — really wasn’t good economics,” said Michael M. Adler, CEO of Adler Group . “It’s much healthier for a community to have a balance between ownership and rentals.”
The bullish market dynamics have big institutional investors like insurance companies, real estate investment trusts and pension funds champing at the bit to invest as long-term owners of apartment buildings for the steady stream of revenue. That demand is making banks comfortable with financing construction of apartments even as they routinely snub new condominium deals.
Indeed, among the handful of condominium projects going up since the collapse, most are financed by getting foreign buyers to plunk down cash in advance to buy units in the building.
“You cannot get construction loans for condos — but you can for rental towers,” said Peter Zalewski, a principal with Bal Harbour-based Condo Vultures Realty, who predicts some of the new rental construction will end up getting converted to condominiums as soon as the market improves.
But for now, apartments are the hot play for developers.
Jorge Perez’s Related Group, which was one of Florida’s largest and flashiest luxury condominium developers during the boom, has dived into new apartment construction to seize the opportunity. Its Related Development arm is touting plans for a “pipeline” of nearly 4,000 units stretching from Tampa to Miami in various stages of planning and execution.
In Plantation, Related’s six-story Veranda project is under construction at 599 NW 82nd Avenue with 197 units planned for leasing in the summer of 2013.
Related said it expects to break ground soon on the first of two 360-unit complexes at Doral View, a three-story, garden-style project. It also plans a 24-story tower with 249 units, Allied Marine, in downtown Fort Lauderdale.
Steve Patterson, president of Related Development, which is focusing on apartment construction, said the stars have aligned for apartment living to take off.
“Home ownership has dropped significantly. Look at the problems people are having with credit: It’s still hard to get a mortgage,” he said. “And baby boomers don’t want to deal with the headaches of a broken pipe.”
Added Matthew J. Allen, chief operating officer of Related Group: “There is a big uncertainty in buying a home and whether it will hold its value. That is contributing to people wanting to rent.”
It’s National Open House Weekend and the Forster Team is celebrating by holding six properties open for the public. You’re invited to stop by and enjoy the opportunity to preview some truly amazing deals! For information please feel free to contact Jo-Ann Forster, 305.778.555 or Brian Forster Shapiro, 305.978.8655.
The Miami Herald has been consistently publishing information on South Florida’s real estate market, and rightly so, because the entire nation is fixated upon what is happening here. Throughout the series of recessions we’ve had throughout the century Miami has always been on the radar as an indicator market. This means that the rest of the country looks at markets like Miami to judge the overall health of the nation’s economy as a whole, giving future insight into whether a recession is on the horizon, or recovery is just within reach.
According the the article, several indices were referenced and all showed that Miami, FL and Phoenix, AZ were showing steady and consistent signs of recovery. The statistics revealed that in April of 2011 the market reached its lowest dip and has been slowly rising ever since. Previous rises in the past decade or so of this recession never caught the attention of analysts due to drops in values occurring very shortly after and not lasting for a consistent period of time, indicating a non-existent or weak recovery at best.
The source of these figures were Stan Humphries, Cheif Economist of Zillow and Maureen Maitland of S&P/Case-Shiller. Although Zillow’s reports showed a promising sign of recovery and a positive outlook, S&P/Case-Shiller were not ready to make any definitive calls just yet. According to Maureen Maitland, they are “not ready to say that Miami has turned the corner yet.” Her reason? It still hasn’t been long enough. We need to wait a little more time to see if the trend can maintain this rise.
Stan Humphries expects to see a 5.6 percent rise in value over the next year, which is faster than the normal rate of about 2% a year in a healthy market. His main reason for increased momentum…affordability. Interest rates have never been this low and prices have never been this great, even though the are rising. Another promising statistic is that the amount of homes that have sold that have negative equity situations decreased by 41.8%.
Although some of the news is hopeful, some financial advisors still warn that a wealth of shadow inventory from banks still remains and will undoubtedly affect the market when released. Apart from Miami, other cities in the United States have reached record lows in housing prices such as Atlanta, Tampa, New Your, Seattle, and others. If Miami continues to show a consistent and healthy rate of increase, it may just be the best place to invest and get great returns.
If you or anyone you know is interested in taking advantage of this rise and looking to build some positive equity please have them contact the Forster Team. Our knowledge of the local market is unrivaled. Call us today!
JO-ANN FORSTER – 305.778.5555
BRIAN FORSTER SHAPIRO – 305.978.8655
EWM REALTY INTERNATIONAL