The sales of single-family homes and condominiums in Miami-Dade County rose by 51 percent in the third quarter, according to a report from the Miami Association of Realtors. It was the 13th consecutive quarter of increasing sales in Miami. The average sales price of single-family homes also rose, jumping 19 percent, and the average sales price of condos jumped by 21 percent. “Strong demand from international buyers is fueling robust sales activity in Miami despite low consumer confidence and high unemployment,” said Jack Levine, chairman of the board of the Miami Association of Realtors. “Local sales are expected to set a record this year that should exceed the height of the boom in 2005.” Total housing inventory in Miami-Dade County fell 38 percent from the same period in 2010, with a 65 percent total drop since August 2008. — Alexander Britell
Home remodeling is big these days, even in a sour economy. Or maybe because of it.
The BuildFax Remodeling Index released this week showed that August had the highest amount of remodeling since the index started in 2004, and it was the 22nd consecutive month with an increase.
BuildFax estimates that more than 3.3 million home remodeling projects in the U.S. will be completed this year. The company, based in Texas, says it tracks construction records on millions of properties from cities and counties nationwide.
“As mortgage rates hit record lows, it is apparent that millions of Americans are refinancing their homes and using some of their new monthly savings to reinvest in their homes with remodeling projects,” Joe Emison, a vice president at BuildFax, said in a statement.
Presumably, remodeling also is popular in places such as South Florida where people can’t sell their homes because their mortgages are “underwater.”
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South Florida home sales bounced upward in August, with the Miami-Dade condo market seeing the largest year-over-year gains, according to a report released Wednesday by the Florida Association of Realtors. There were 1,311 existing condo sales in Miami-Dade in August, up 51 percent from the same month last year and up 18 percent from July. Sales surged in the single-family market as well, as 951 homes traded hands, up 49 percent from last year and up 9 percent from July. In Broward, year-over-year condo sales rose 21 percent to 1,398 and single-family sales were up 19 percent to 1,185. Median prices also showed positive signs. Prices for Miami-Dade condos jumped 13 percent to $118,800, while single-family prices dipped 1 percent to $180,900. In Broward, median prices rose 6 percent to $79,500 for condos, and were up 5 percent to $191,800 for single-family homes.
What if the 30-year mortgage rate fell below 4% and few people cared?
We may not have to wonder much longer. The average 30-year mortgage dropped to 3.94% for the week ending Wednesday, according to Freddie Mac’s weekly rate survey released on Thursday.
Reflecting both tight credit standards and anemic demand, applications for mortgages actually fell last week, according to a separate report from the Mortgage Bankers Association on Wednesday. The MBA said overall mortgage application volume was down by a seasonally adjusted 4.3% from the prior week.
Many borrowers can’t refinance today because they don’t have enough equity or they can’t qualify under lending standards that are far tougher than when they initially obtained their mortgages.
Rates also haven’t fallen as much as might be expected, given recent drops in banks’ borrowing costs, because banks are short-staffed. To manage volumes, they’ll sometimes raise the spreads between their borrowing costs and the rates that are offered to consumers.
Refinance applications were down by 5.2% from the prior week, while home-purchase apps were down by 0.8%, according to the MBA.
More troubling for the housing market is the fact that home-purchase applications were down 12% from one year ago—a signal that worries about the economy and potential home price declines are keeping borrowers on the fence, even though mortgage rates have probably never been this low.
Freddie Mac says the rates are the lowest since its survey began in 1971, and academic research suggests that rates for 30-year mortgages were as low as 4%—but not any lower—under a loan program for war veterans in the mid-1940s. Eric Rosengren, president of the Federal Reserve Bank of Boston, spoke to the problem facing policy makers’ inability to help consumers benefit from low rates in a speech last week in Sweden. Falling home prices “have disrupted the transmission of monetary policy,” he said, resulting in “a situation where the availability of credit is more important in many cases than the cost of credit.”
Low rates could give more urgency to a recent push by the White House to fix an administration effort that allows homeowners to refinance their mortgages if they owe more than their loans are worth. The program is open to borrowers with loans backed by Fannie Mae and Freddie Mac.
“Clearly getting more money into the hands of homeowners who would spend it could help to fuel GDP growth,” said Mr. Rosengren.
Miami’s first new condo high-rise since the housing bust is set to begin construction next spring, developer Newgard Development Group announced Monday.
Called Brickell House, the $170 million project is part of a new wave of condo towers planned for downtown Miami, which saw development grind to a halt after the building frenzy that lasted from 2003 to 2008.
“Almost all of the [outstanding] inventory that we had has been absorbed in the last 18 months,” said Harvey Hernandez, managing partner and chairman of Newgard Group. “It could not be a better moment for us to launch a project.”
The 46-story tower is slated to have 374 residences, ranging from one bedrooms to penthouses. Specs include a rooftop sky deck, pool on the 46th floor and an automated robotic parking garage.
Buyers in large part will be charged with paying for the construction of the glossy tower under a financing model that will require purchasers to pay 70 percent of the asking price before construction is completed. That financing model — which is also being used for new condos recently pitched by Related Group — is more common in Latin America, where Brickell House will be heavily marketed. Prices start around $200,000.
“Let’s be realistic. The majority of buyers in Miami come from outside of the country,” Hernandez said. “Our buyers here, nobody has 70 percent. Nobody can afford that.”
Hernandez said he believes the housing market will have substantially rebounded by the time the project opens, with strong international demand and a more vibrant downtown.
Peter Zalewski, of Bal Harbour-based CondoVultures, said he’s not so sure. He said sales of new downtown condos have begun to slow down, and supply is set to increase dramatically as a slew of new projects begins to come online.
“There are too many [projects] that are suddenly all popping up at the same time,” he said. “At least from a promotional perspective, it’s starting to look like 2005 and 2006 again.”
Additionally, a condo tower called Villa Magna is approved to open on a nearby plot with more direct water views than the land-locked Brickell House site, potentially providing stiff competition.
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The Chophouse Miami Bisro & Lounge will go under the knife, after being purchased by chef Jacques Van Staden. The project, which will involve the addition of a sushi bar and a cigar-friendly outdoor patio, is slated for completion by Thanksgiving. “When the opportunity arose for me to take it over and remake it as my own, I couldn’t resist,” he said. The restaurant is located at 300 South Biscayne Boulevard in downtown Miami.
Construction will begin on a $170 million, 46-story, 374-unit condominium in Miami come next spring, the Miami Herald reported, marking the first new high-rise condo since the housing bust.
Developed by Newgard Development Group at 1300 Brickell Bay Drive, the tower, called Brickell House, is slated to include a rooftop sky deck, a pool on the 46th floor and an automated parking garage. Newgard said it’s a good time to begin construction as much of the firm’s inventory has been absorbed over the last 18 months.
Newgard will depend on prospective buyers to finance construction. Purchasers will need to pay 70 percent of the asking price before construction is completed. It’s a model that is typical of Latin American construction, which is appropriate for the development that Newgard plans to market to foreign buers.
“Let’s be realistic. The majority of buyers in Miami come from outside of the country,” said Newgard Chairman Harvey Hernandez. “Our buyers here, nobody has 70 percent. Nobody can afford that.”
Unfortunately, due to a power outage affecting the Vanderbilt Mansion, the Garwood Lounge and City View Cafe in Fisher Island will be CLOSED tonight. FPL crews are currently working to restore power, but the work is expected to take several hours.
If you wish to dine on the island, La Trattoria will be serving all of your favorite dishes until 10:30pm tonight.
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