Multi Family Properties Leading Miami's Rental Market

Multi Family Properties Leading Miami's Rental Market


Recently, the strength of the Miami rentals market has become apparent based on several indicators. Many people have taken the opportunity to purchase distressed properties in order to provide housing for Miami’s permanent residents and its visitors. Miami has all types of properties, but it appears that the multi-family developmet is more popular than most.

An investigation by the CBRE has shown that the numbers of rental properties have increased by 3.4 percent. This means that rents have been rising and are currently higher than they were in the years 2006 and 2008. The good news is that the CBRE is convinced that rents will continue to rise as the year progresses.

Why is the demand for rental properties rising in Miami?

Miami rentals have become much more popular lately because the economy has been in a recession. Because of this, several homeowners needed to find other living accommodations because they lost their homes to either a short sale or bank foreclosure. The short sale and foreclosure caused a lot of people’s credit scores to go down, so they cannot qualify for a new mortgage to purchase new houses. These people found the solution to be renting.

The fact that Miami is a highly popular tourist destination is another reason that Miami luxury apartments are in such high demand. Both United States citizens and people from abroad make plans to visit Miami and the surrounding areas throughout every year, and they are in constant need of the area’s rentals. These tourists seek all types of rentals including those that can accommodate a large family in a multi-family developmet. Other visitors are in search of Miami luxury apartments that overlook the ocean.

The fact that multi-family properties are engendering more and more interest has not escaped the notice of developers. The Miami-Dade area presents extraordinary opportunities for rental properties of this kind as the area’s rental properties are largely fully occupied. A total of 62 properties are being developed in this area, and this means that buyers or renters will have 18,000 more units to choose from in the near future. As there are currently only 62 of these properties in development, popular wisdom believes that the numbers of these developments will continue to grow.

U.S. citizens seeking residential property to invest in as well as people outside of the country will be seeking real estate ventures in the months to come. The present time is excellent for this as the supply is increasing but the time will come when the demand will exceed the existing numbers of these properties.


Florida’s existing home, condo sales up in November 2011.


Florida real estate market continues to enjoy an upward swing in sales of existing homes and existing condos currently on the market for November's report according to Florida Realtors. Home sales within the market saw an increase of 11 percent last month within the last month. Statewide, 12, 993 homes sold in November, up from 11,664 homes in November of 2010. The increase in sales demonstrates the beginning of a strong sales year for Miami real estate and the start of recovery from the recession.

Florida Realtors chief economist, Dr. John Tuccillo, says that the increase in sales signals two vital points that reflect the market is rebounding. The first factor Dr. Tuccillo cites as having an impact on Florida real estate is that sales are experiencing an upward trend. The second factor he says the data shows is a stabilization within the market, making it possible for sales to continue the trend upward for the foreseeable future. He stresses that the news does not mean that prices have turned around, but only that the early signs of stabilization are apparent within the numbers. The equation for the statistical data also includes a decrease in percentage rates that allow more people to buy homes and to pay less interest than at this time last year. Last year, home buyers could expect to pay 4.9 percent in interest. This year's interest rates are at 3.99 percent, offering home owners a chance to pay less interest.

Of course, the fact that sales are increasing is the most important part of the equation, but banks and lenders are also playing a part in the stabilization process by becoming more educated on how to handle distressed properties faster and more effectively. All of these factors together are helping Miami real estate recover.

Miami real estate reported seventeen metropolitan statistical areas having higher existing home sales within the month of Novembers. For condos, ten metropolitan statistical areas reported higher sales. This shows a definite increase in sales per year and is a sign that the recession is losing its hold on real estate within the Florida region.

Remaining relatively flat, the median price statewide for existing homes hovered at $130,100, down from 2010 when median sales for existing homes were at $130,600. According to the National Association of Realtors, this is not surprising data when analysis shows that the rather disappointing median price range continues to be distorted by distressed and foreclosed properties as these properties sell at a discounted price when compared to homes that are not foreclosed or distressed.

The median price is the average price of homes. Some Miami homes sold for more and some for less. The national median price for existing single family homes was $161,600 in October, which is down 5.8 percent from one year ago. Geographical location also plays a part in median pricing with California experiencing a resell price of $278,060 in October. Massachusetts saw resell values set at the median of $275,000. The resell median price in Maryland was $221,765. New York saw resell prices in the median range of $215,900. With the numbers firmly in place, it does not necessarily mean that median sale prices remain flat lined as the market recovers from the economical recession that has plagued the nation. All sales rates are measured by closed sales, and the numbers reflect only those homes and properties that have closed.

In a year to year comparison for Florida, statewide sales did see promising numbers as 5,590 Miami condos units sold, a two percent gain over sales the previous year with an increase of 4 percent per unit cost in price. This upswing is driving the real estate market as well as other markets as jobs in the area also increased.


Miami Real Estate Market: Buyers vs. Sellers on home prices



The year 2012 could be the year that the housing market within South Florida real estate finds its footing and reaches stabilization. Currently, economic and real estate data are pointing that the trend for higher sales on Miami condos and Miami homes on the existing market are seeing upswings in sales that will continue to stabilize as the market grows stronger.This trend is causing some buyers and sellers to be at odds. Buyers feel that the market is primed for buying while many sellers are balking and trying to wait out the economic slump, hoping to snag a better offer for their home.

 Currently, prices reflected on many homes within the real estate market are not as high as they would be in a more stable economic market. This creates differing sides of the fence for home buyers and home sellers. Sellers feel their homes should be worth more than the current market value and are balking at selling the homes at lower rates for a variety of reasons, one of which is the possibility of taking a loss on the sale if the home is sold too far below actual value. Actual value and current market values may be different during the economic structure, but the gap will close with the resurgence of a stronger economy.

It will be at least five quarters before the gap between buyers and sellers begins to close, according to the MBA report. In the years between 1992 and 2005, seller positions remained high, about 40 to 60 percent. Since 2005, though, Miami real estate sellers have decreased to 7.6 percent. Despite unemployment rates and an unstable economy, buyers have remained in high spirits. 80 percent of American households believe that now is the prime time to purchase new real estate, a drastic contrast to seller enthusiasm.One reason buyers find the market so favorable is the fact that many homes are currently valued at lower pricing options due to the recent recession in the economy.

In the last few years as home values plummeted, many Miami real estate sellers refused to take lower offers on their homes in an effort to wait out the slump. Many cite being underwater, or owing more on their homes than the current market value is worth. For this reason, waiting for the market to stabilize or to refuse lower offers on their homes may be a tactic to breaking even or turning a profit once South Florida real estate stabilizes completely. Signs that a more stable economy is on the way are already apparent in statistical data.

According to Gary Englehardt, a Syracuse economics professor, many sellers realize there is a benefit to holding onto property and waiting for the numbers to increase rather than to sell now when prices are lower. He believes that this strategy could hold prices high enough to drive a substantial wedge between buyers and sellers. Add to that the sluggish job market, and we could see some more distance between buyers and sellers in South Florida real estate market for a bit longer.


Federal Reserve Governor Urges Bold Moves to Revive the Housing Market.


The Wall Street Journal reported that Elizabeth Duke urged bold moves for real estate meant to revive the housing market. Elizabeth Duke is a high ranking official with the Federal Reserve. In her speech last Thursday Duke stated "Clearly the real estate market is not functioning as it should.” The speech was in recognition of a national real estate market slump due to the economical recession that has hit nearly every part of the American dream.

While the market in Miami has felt the recession, the real estate market in Miami has been relatively steady with stabilization occurring in many areas. There has been renewed interest in property purchases. And while much of the country has struggled in the real estate market, South Florida has seen the rise of new development projects within the Miami real estate market.

Basic economics suggests that low interest rates entice consumers to initiate major purchases, such as buying a house. While interest rates are not at the lowest they've ever been, currently interest rates are near the all-time low. Although the interest rates are historically connected to a booming housing market, the current statistical data does not supports correlation. In many parts of the nation, the number of people buying a new home is still very low compared to the interest rate data.

Financial experts suggest that one cause for real estate troubles can be found within the credit market, although it is by far the only cause for the recession within the industry. Fewer banks are offering favorable credit terms; and it is become more difficult for consumers to gain mortgage approval without a nearly spotless credit record. Another cause for real estate difficulties is the number of foreclosures flooding the market. In fact, Miami foreclosure properties continue to come into the market at a steady pace.

In an attempt to stimulate the housing market, new ideas are being evaluated the policymakers. Leaders such as Duke are beginning to creative with ideas for the real estate market in Miami and nationwide. This is in addition to the government supported mortgage firms Freddie Mac and Fannie Mae. These 2 institutions offer refinancing opportunities for homeowners which are owned and operated by the government.

Duke proposed one solution for foreclosure properties in particular. She suggests that the Miami foreclosure properties be used as Miami rental properties. Her suggestion is sound as it will provide individuals and families who could not otherwise afford a single-family property to lease a space large enough for their needs, offering an alternative to condo and apartment living. Dukes suggestions won't completely eradicate the real estate market slump, but the innovative and creative approach offer some success to lessen the strain the market is experiencing currently.

As conversation swirls around the state of the national real estate market, many South Floridians wonder what the changes will do their market in particular. Loosening the grip on mortgage approvals will give rise to opportunity for potential buyers, individuals, families, investors to capitalize on the available properties currently on the market, many of which are priced below market value.

For investors seeking real estate market in Miami rental properties, reduced interest rates are equivalent to greater monthly rental income spread. In short, property owners can expect a higher yield on their investment.


Miami Florida - The Demand For Foreclosures on the Rise


In the southern portion of the state of Florida, Auction.com-a leading auctioneer site specializing in real estate. The foreclosure properties in Miami Florida listed as sold in its final hours proved the site's credibility rating as 269 properties out of 369 properties found new owners in the foreclosure market in Miami Florida. In percentage terms, that's nearly 73% of foreclosure properties in Miami Florida.

Auction.com is not the only site specializing in foreclosures However, the site leads in sales volume with a whopping $157 million spent on a total of 2,450 properties. Roughly, that's around $64,082 per home.

Miami real estate has seen an increase in demand on foreclosed properties. In national foreclosure rates, Florida ranks at the top of the scale according to Realty Trac. One in every 461 properties filed foreclosure proceedings during May of 2011. Since there is a steady rate of foreclosure properties in Miami Florida, the trend of buying foreclosed properties is expected to remain high during the 3rd and 4th quarters.

Of the buyers purchasing foreclosure properties in Miami Florida, foreign buyers are leading the pack. Some properties in the foreclosure market in Miami Florida are, of course, being bought by single families. According to the National Association of Realtors, though, up to one third of the properties purchased were bought by the foreign investors and buyers. While there is diversity among the countries purchasing within the foreclosure market in Miami Florida, the Representatives from Global Real Estate Advisors are from Europe and Turkey, with other countries coming in within a small percentage of new home owners in the area.

Many of the Miami real estate purchased within the Miami foreclosure market will converted to rental properties with foreign landlords. South Florida real estate will see a rise not only in vacation homes, but in properties for profit, or Miami rentals. Since Miami rentals are purchased by investors looking to make a profit over the next few years, it is reasonable to assume Miami real estate will boom again in a few year. When Miami real estate booms, the foreign investors will begin to sell off the properties bought within the Miami foreclosure market. This should make the profit margin high as the investor will benefit from Miami rentals income and a hefty return during the selling of Miami foreclosure property at a later date.

Capitalizing on the current Miami rentals market is a necessity for sellers. South Florida real estate is booming with foreign investors, a rare opportunity for those in the market to sell properties. Being behind in payments and other financial obligations, relocating for employment purposes, or who wish to trade up with a new home within South Florida real estate are no longer obstacles. Due to an inventory decrease of 60% within the last six months, properties with water access, unique features or rental potential will be sought first as they are the coveted prime gems of South Florida real estate.

Despite Miami foreclosure markets appearing to be grim, experts agree that the foreclosure market in Miami Florida is a positive thing and not to be feared. This is because foreclosures drive new buyers which stabilize real estate prices. For investors and other buyers, this means a higher return when the cycle of real estate booms turns around again in the next few years.


No Recession! Miami Beach Tourism is Up.

In 2010, Miami-Dade County reported astronomical figures in every area of tourism. According to the visitors Bureau and the Greater Miami Convention, these impressive numbers showed no evidence of a recession. Instead, a record 12.6 million visitors invaded the beaches and Miami metropolis practically overnight. Those tourists spent a whopping $18.8 billion by crowding the shopping and food venues. Not to mention the lodging, entertainment and transportation areas that tourists frequent near the South Beach condos.

In totality, these visitors actually accumulated $127 million in taxes as they relate to tourists. In fact, 29% of the state sales taxes of that year were paid by the tourist community. Miami Beach was both rejuvenated and renewed with its tourism boom in 2010. A restoration of sorts was created that gave the Miami economy a boost that has become record-breaking!

As a result of this boom, an admirable number of jobs have been created in the community where the tourism industry tops them all. As quoted by Rolando Aedo, executive vice-president of the visitors bureau, "...job creation is one of our top priorities." He also gave recognition to the generous aid provided by the BP oil spill. The gift of $1.25 million from BP proved a timely resource for advertising the oil-free pristine beaches of theMiami Beach shores.

Since the inception of the new airline service that provides transportation to the Miami International Airport, an increase in tourism has been evident. The new flights from Brazil, Russia and Amsterdam are huge contributors to the abundant Miami tourism industry. They also give way to potential buyers of the South Beach homes for sale. Many international visitors find the sunny Florida climate to be the perfect dwelling place during the colder seasons in their countries.

Bal Harbour luxury condos are situated near the airport where new air routes are opening every day. These opulent living spaces are attractive to Brazilians who have come to Miami and spent $1.1 billion, thus creating the area's first billion market with more than 500,000 visitors. These numbers also speak volumes to the Miami housing market where tremendous growth has been experienced.

Contributors to the tourism boost are the popular special events that are held annually in Miami Beach. The South Beach Wine and Food Festival is attractive to wine connoisseurs and foodies from everywhere. The Art Basel exhibition has become increasingly popular over the years for its uniqueness. The Art Deco Weekend is designed to bring out that artsy side of you by offering its creative impressions. Miami fashion Week is also all the rave for fashionistas and the style-conscious man.

Miami Beach economy.


Getting the Best Deals In Miami’s Real Estate Market

Savvy seekers of prime real estate are well aware of the generous opportunities found in the Miami home buyers' market. Since a fair amount of homes are in foreclosure, the time is ripe for benefiting from the best deals. Essentially, your realtor should exercise maximum due diligence in finding the property that suits your style and personality as well as show you value over time.

Realtors and Their Access
The expert real estate agent must have enough foreclosure information available for you to acquire a property at the ideal price and with the least amount of difficulty. A good agent has the ability to locate a property, show it and make suggestions that help you notice its positive attributes. It is beneficial for you to know about the foreclosure process as well.

Your real estate agent should also understand the Miami housing market. When a home is foreclosed in a Miami neighborhood can affect the property values of the other homes in that area. Your realtor would know from this scenario that a better purchasing opportunity is available.

Miami Short Sale Condos: Are they Good Deals?
Miami condos that are offered as a short sale present several issues for homebuyers. Since these properties were not seized by the bank, there are apparent delays in closing the sale. Banks are much more open to selling the properties they own. It would be the responsibility of the realtor and the seller to actually get their short sale property sold.

Delays in selling a short sale property stem from the competitive bidding process that lasts for as much as a year to get completed. Even though distressed properties may render the best deal, you must be willing to accept that there are other bidders working against you to acquire the same property.

The Right Bid
When bidding on a short sale property, your realtor would be wise to suggest that you submit a bid that is lower than the asking price, but intriguing enough for the bank to consider. Your aim is to get the maximum amount of value out of the purchase.

Prime Areas
Much lower bids may be considered by areas that suffered tremendously during the housing crisis. The condos on Marcos Islands are an example of such properties. Consult your realtor for guidance in placing a bid on any property.

Closing Costs
A bank may cover your closing costs at the behest of your proficient real estate agent. The bank is responsible for costs incurred for the properties that it owns. Therefore, the bank may agree to pay your closing costs just to remove the property from their records. Working with an experienced realtor makes a wealth of difference when it comes to making the investment of a lifetime.

Financing / Credit Score
Pre-approval for your financing is recommended. This will assure the purchase and show the bank your eagerness to close on your desired property.
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