South Florida’s condo industry is reaching an almost giddy level of optimism in anticipation of the January session of the Florida legislature, when state leaders are expected to consider — and possibly adopt — language that would permit Las Vegas-style casinos in the economic struggling counties of Miami-Dade and Broward.

Real estate developers, sales agents, and units owners alike are preoccupied with visions of how casinos could provide further stimulus for the improving — but still wobbling — South Florida condo market that crashed in 2007 under the weight of an oversupply of new projects.

Consider that since the second quarter of 2011, when Malaysian-based Genting Group purchased the Miami Herald headquarters and surrounding land for a possible casino, at least 16 new condo towers with more than 3,500 new units have been proposed in Miami-Dade and Broward counties.

The new condo towers are being proposed despite more than 3,700 new units near the coast remaining unsold in Miami-Dade and Broward counties as of Sept. 30.

At the current sales pace, the new condos could be sold out by 2013, which does not factor in bulk buyers who are looking to resell units acquired during the scariest times of the South Florida real estate crash.

It is not to say all of the newly proposed projects — three of which have already begun construction — will be cancelled if the casino legislation fails next month, but it is curious to see how many projects have been announced since the Genting Group announced its plans for a 10-million-square-foot complex in downtown Miami.

Part of the South Florida optimism is rooted in a sudden surge in condo transactions in 2011 by cash buyers from abroad with strong foreign currencies who have been picking up units in bunches.

All the while qualified domestic users with healthy down payments have for the most part failed to acquire their own condo units due, in part, to lender apprehension about providing financing for South Florida condos.

Under the proposed casino legislation, three licenses — two in Miami-Dade and one in Broward — would be available to chosen groups that commit to spend at least $2 billion for new development, which should spur jobs and future tax revenue.

In recent months, representatives from what seems like every major casino operator in the world -—Caesars Entertainment Corp. to Las Vegas Sands Corp., Wynn Resorts Ltd. to MGM Resorts International — have reportedly visited South Florida to explore the prospects of pursuing one of the potential gambling licenses.

The optimism brewing for the prospect of casinos has many in the real estate industry hoping that the possible approval of gambling in Miami-Dade and Broward counties could jumpstart South Florida’s condo market, which has suffered financial pain and hardship since the peak in 2006.

The bullishness, however, may be overly optimistic for most existing South Florida condo projects where association bylaws regulate the period of time that units can be rented out annually.

Much like in the Las Vegas condo market, only those condo units that can be rented out by the day or week are likely to realize any direct boost in leasing activity, which in turn could translate into stronger pricing rather than the emergence of casinos.

For the majority of South Florida condo projects, leasing is limited to three-, six-, or 12-month increments annually. As a result, any boost in pricing would likely occur as part of an overall improvement in the South Florida market.

Condo-hotels, however, are the best positioned to directly benefit from a surge in visitors to South Florida.
Think of condo-hotel units as a partnership of sorts between individual owners and the property’s flag operator.

Some of the best-known South Florida condo-hotels include the newly opened St. Regis Bal Harbour Resort, the W South Beach in Miami Beach, the Q Club Resort & Residences in Fort Lauderdale, and the ICON Brickell Viceroy Hotel in Downtown Miami.

Many owners of condo-hotel units opt to include their properties into the flag operator’s inventory in hopes their units will be rented when visitors make a reservation or walk into a property seeking accommodations. Typically, a flag operator will split the overnight fee with the condo-hotel unit owner.

The condo-hotel owners are responsible for the unit’s property taxes, monthly maintenance fees, daily cleaning fees and the cost of maintaining the interior and furniture of the units based on the guidelines established by the flag operator.

For many investors, the condo-hotel concept allows buyers to purchase a unit that is entrusted to the flag operator to rent out and manage on a quarterly or annual basis. Any proceeds owed to the owners are typically used to cover the unit’s monthly expenses including the maintenance fee and property taxes.

Despite the convenience, many investors consider condo-hotel units to be unpredictable. Tourism trends, natural disasters and changes in flag operators can play a key factor in the project’s success.

Still, condo-hotels have enjoyed a resurgence in popularity in Miami-Dade and Broward counties even prior to the South Florida casino discussion.

In the first 11 months of 2011, buyers have acquired an average of 32 transactions per month at a median price of $292 per square foot in Miami-Dade and Broward counties, according to the Miami Association of Realtors.

In previous years, buyers purchased an average of 17 units per month at a median price of $277 per square foot in 2010 and an average of nine units per month at a median price of $291 per square foot in 2009.

As of Dec. 18, 2011, there are 375 condo-hotel units on the resale market in Miami-Dade and Broward counties at a median price of more than $450 per square foot.

An additional 70 condo-hotel units are under contract waiting to transact. The median asking price for the pending deals is $276 per square foot, according to the data.

As the Florida legislature prepares to decide the fate of full-fledged gambling in South Florida, it is essential for the real estate industry to control its enthusiasm and closer examine what direct impact Las Vegas-style casinos could realistically have on the region’s volatile condominium market.

Read more here: http://www.miamiherald.com/2011/12/25/2559817_p2/casinos-could-be-jackpot-for-condo.html#storylink=cpy

Source: http://www.miamiherald.com/2011/12/25/2559817/casinos-could-be-jackpot-for-condo.html#storylink=cpy

Existing home sales increased 4 percent in November, according to a report released today by the National Association of Realtors, which also revised four years worth of data the organization previously announced was errant.

NAR downwardly revised existing home sales statistics dating back to 2007 by more than 14 percent. The association said the bad data stemmed from a previously unnoticed increase in the number of people that use brokers, and therefore an unaccounted for change in the market share that the multiple listing services throughout the country capture. Since 2000 the number of sellers that use brokers increased to 91 percent from 84 percent, according to NAR. The association said their data revisions should have a “minor impact” on revisions to Gross Domestic Product reports.

As for November’s report, the NAR reported a seasonally adjusted annual rate of 4.42 million home sales, a 4 percent gain from October and 12.2 percent above November 2010′s rate. Sales reached their highest mark in 10 months and are 34 percent above the valley reached in mid-2010.

NAR chief economist Lawrence Yun attributed the positive report to the record-low mortgage rates and bargain housing prices. Though financing does remain a problem, NAR President Moe Veissi said the association’s affordability index shows that “a median-income family can easily afford a median-priced home.”

The median home price in November was down 3.5 percent from a year ago to $164,200. Consistent with recent levels, investors purchased 19 percent of homes in November and first-time buyers accounted for 35 percent of transactions.

The Northeast posted the largest regional month-over-month sales gain, at 9.8 percent, followed by the Midwest, at 4.3 percent, the West, at 3.6 percent, and the South, at 2.4 percent. Year-over-year, however, the Midwest posted the biggest gain, followed by the South, West and then Northeast.

There are now more than 19 million residents in Florida, according to estimates from the U.S. Census Bureau. Florida, whose population grew by 1.36 percent from April 2010 to July 2011, has the fourth-most residents of any state in America. New York grew 0.45 percent in the same period, and continues to have the third-most-populous state. The U.S. population grew by 2.8 million in the 15-month period.

Hotel prices in Miami Beach are often as much as twice as high as similar properties in Las Vegas, according to an analysis by Strategic Advisory Group. The study was done on behalf of the city of Miami Beach. It comes in light of a recent vote against a potential casino resort in the city, and amid growing concerns over the impact of the addition of thousands of potential hotel rooms in downtown Miami. “If you put 5,000 hotel rooms in downtown they will suck out everything surrounding them,” said Stuart Blumberg, the former head of the Greater Miami and the Beaches Hotel Association. “It will take 19 years for the current hotels to break even. They’re going to destroy the market inventory.”

After a long lull, South Florida foreclosure filings are beginning to pick up, despite another decrease last month.

The improvement is not readily apparent in the numbers, but upon closer examination, the rate of decline slowed considerably last month, according to data from RealtyTrac.

While the number of properties with foreclosure filings in South Florida fell 27 percent last month compared to November 2010, the November 2011 figure is a drastic reduction from a nearly 60 percent average drop each month since the summer, and 41 percent in October.

“I would say that’s a significant shift,” said RealtyTrac spokesperson Daren Blomquist. “We had a 14 percent nationwide year-over-year decrease in activity, and that was the lowest year-over-year decrease we’ve seen this year.”

Statewide, Florida saw a 7 percent increase in initial default notices compared to November 2010, the first time in 20 months that the state had an increase in that number.

“That is another sign to me that the lenders are ramping up and processing some of those delayed foreclosures,” Blomquist said.

The foreclosure slowdown came in large part due to the freeze imposed by banks following the robo-signing and fraudulent document scandal of a year ago. 

There were a total of 9,157 properties with some form of foreclosure filing in South Florida last month, led by 4,044 properties in Miami-Dade County.

Broward County had 3,196 properties with foreclosure filings, and there were a total of 1,917 in Palm Beach.

The Wall Street Journal’s Craig Karmin describes what he called a “very unusual move,” by Morgan Stanley in cutting a deal to return $700 million to investors in one of its real estate funds, in the video above. The Journal outlines the options for the investment fund, which has a total of $4.7 billion to spend and a June deadline to invest in commercial real estate. Karmin said it could spell the end of private equity real estate investment at Morgan Stanley, a “last man standing” in commercial real estate investment among huge banks, as other players have sold off their business or announced they are contemplating doing so in recent months.

U.S. Realty Advisors acquired the ground lease interest on Marriott Harbor Beach Resort & Spa for $48.6 million, according to the South Florida Business Journal.

The 16.5-acre oceanfront parcel is located at 3030 Holiday Drive in Fort Lauderdale and contains the 15-story, 650-room hotel. The hotel is controlled by Host Hotels and Resorts, which has more than 93 years remaining on the leased fee interest. The ground lease previously belonged to Northwestern Mutual which tapped Holliday Fenoglio Fowler to market the property.

The hotel has direct beach access, three restaurants, a 22,000-square-foot spa and a 100,000-square-foot function space.

A 10-bedroom home at 3 Indian Creek Drive in Miami Beach has been listed for $60 million, according to Miami Today. The home, which was designed by architect Rene Gonzalez, has 30,000 square feet and a 100-foot pool. The home is located on Indian Creek Island, which has its own private police force and golf club.

To view the property please call 786-276-2451

Home prices in the tri-county area fell 0.7 percent in September compared to August, and 4 percent compared to the same period in 2010, according to the Standard & Poor’s/Case-Shiller Home Price Index, released yesterday. “The plunging collapse of prices seen in 2007-2009 seems to be behind us,” said David Blitzer, chairman of S&P’s index committee, in a statement. “Any chance for a sustained recovery will probably need a stronger economy.”

Source: http://therealdeal.com/miami/articles/south-florida-home-prices-fall-slightly