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Popularity of Supercar Branded Condos

Many of the various condominiums in the Miami area have branding deals, which help to give them more flavor and appeal, along with style and often a substantial amount of financial backing. There have been many different types of branding associated with top architectural designers, such as 1000 Museum by Zaha Hadid, Jade Beach and Jade Ocean by Carlos Ott, as well as new luxury condominiums associated with top designers, including Georgio Armani and Fendi. Over the course of the last several years, some of the most impressive buildings with interesting features have been those branded after supercars.
A very popular example of this is Porsche Design Tower, which features its own car elevator, a patented addition that has proven to be quite useful not only for the residents of the tower. When Hurricane Irma was threatening Florida, Porsche Design Tower offered to keep safe some of the supercars that are in Miami. There are other towers in the Miami area that have similar themes with supercar branding, and this trend really started to take off around 2015.

The Supercar Condo Boom

An Italian firm called Pininfarina was hired in 2015 to work on 1100 Millecento in the Brickell area. This was a 42-story luxury complex, and the developers had wanted it to have a feeling of being sports car friendly. Since Pininfarina had worked to create designs for some of the biggest names in the sports car field including the likes of Maserati and Ferrari, they were the perfect choice. The company added large photos featuring supercars in the public spaces of the building, and they even had elevator lobbies that were decked out in the famous Ferrari red.

The most recent building with supercar branding to grace the Miami skyline is Aston Martin Residences. The units in this building are truly luxurious, and the starting price for a condo in the building is $700,000. The units can go all the way up to $50 million. The design and the style of the building does reflect the Aston Martin style quite well, too. Rather than having some of the more common materials, such as wood, used for elements of the building and units, they have made use of leather and even carbon fiber.

The buildings that have been branded after supercars tend to be quite popular, as well. Not only do they have the added interest of being associated with a popular car brand and style, but they also tend to be true luxury buildings. They have a range of features and amenities that help to make them true standouts among all of the other buildings available in the Miami area.

Why Branded Condominiums Can Work Well

Supercars are a very popular option when it comes to hotel branding, but as mentioned earlier, they are not the only option. The other branded properties also tend to be very popular, and it is often for the same reasons. They are luxury condominiums with excellent design choices and features. Because of their high-end features, it typically means that the units are going to retain their value and there should always be potential buyers who want to live there.

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Increased Lender Competition Good News for Buyers

Those who are looking for a home mortgage might find that it is a good time to buy right now. Even though the interest rates have risen slightly with the latest bump from the Federal Reserve, it turns out that now could still be a good time to buy a home. Many mortgage companies have been having a rather rough go of it over the past year, and particularly with the first half of 2018.

The originations of new loans have started to diminish somewhat with the aforementioned rise in the interest rates, and the refinancing market is shrinking, as well. Lenders are having more trouble finding people who are looking to get a loan, and some of the lenders have found that they did not make a profit in the first quarter of 2018. In fact, loan originations were lower than they have been for the last three years.

Competition Among the Lenders

Because things are starting to get tougher for lenders, it means that the competition between those lenders is heating up. The lenders are becoming more competitive with one another because they want to be the business that gets the borrowers to go through them. Banks and mortgage companies are trying to get business, and they are putting more offers on the table for those who are shopping for homes.

This means that if you are currently looking to buy a piece of property, there is a good chance that you will have more offers than you might have a couple of years ago. This allows you to shop around for a loan that is going to work well for your needs. Lenders are starting to expand their number of loans, and some are relaxing their credit standards somewhat in order to do this. The goal, of course, is to pull in as many potential borrowers as possible.

There have been some lenders who are looking for different ways that they can help to make their deals appear more attractive to borrowers. For example, some have done more than just reduce the credit score requirements. Some have also reduced the down payment requirements, and other underwriting terms. They have been trying to make mortgages more favorable for consumers in an effort to help them get more borrowers. Some of the lenders seem to be willing to take on more risk.

What Should Consumers Do?

If you are looking to borrow and get a mortgage, now could be a fantastic time to do that thanks to the increased competitiveness between the lenders. You can shop around, check out the competing offers, and figure out which one is going to work the best for your needs.
However, you will want to still be cautious. With the relaxed requirements from some lenders, it could mean that certain homeowners are getting approved for a home that they might not truly be able to afford. Make sure that you will be able to pay for the mortgage and all of the other costs that come from owning a home.

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Are We Due For A Recession in 2019?

Is a recession looming? It’s an important question because the U.S. economy has been experiencing one of its longest expansions ever. There were two recessions in the 1970s, two in the 1980s, one in the 1990s and two in the 2000s. Since 2010, there have been none.

Is there A Trigger?

Every recession has a trigger. In the 1970s it was energy price shocks. Could that happen today? Probably not, because the U.S. is now the world’s biggest oil producer. one potential trigger could be an unsustainable rise in borrowing. But the fact is consumer debt has risen only about 5 percent annually for the last few years. Although that’s fast, it’s not catastrophic. Past recessions were preceded by debt increases of 10 percept or more. More importnat, the largest part of household debt is home mortgages and those loan balances total about $10 trillion today, about the sme as 10 years ago even though housing values in the aggregate have climbed from $18 trillion to $28 trillion.

Another trigger could just be psychological. Pessimism leads consumers to spend less. That leads businesses to scale back, reduce investment, and not build that additional factory or office. But consumer confidence this year is at an index level of 127, the highest reading in more that 20 years!

Finally it could be policy error. Turkey is an example of how a decision – lowering interest rates in the face of rampant inflation – can lead to a crisis.

Although it’s not clear what could trigger the next recession, it’s a good bet it won’t have anything to do with our industry. The housing market still has room to grow. A total of 6.1 million existing homes plus newly constructed homes will be sold this year. That’s the same level as in 2000, when the market was considered well balanced. Homebuilders are at last responding to pent-up demand by increasing housing starts and creating jobs. For these reasons, the odds of a recession in 2019 are slight. And if we do see a drop in GDP, it will likely be mild – nowhere near the intensity of the recession a decade ago.

Concerns about a housing slowdown NOT supported by the data. However, the pace of existing home sales is expected to decline slightly by the end 2018, despite population and economic growth, lower unemployment, and modest wage gains. Declining affordability is the issue.

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Interest Rates Rise Again

Interest Rates

In August, the Federal Reserve announced that there would be another raise in the interest rates by a quarter of a percentage point. The vote to raise the rates was unanimous, with all eight of the participants in agreement. They also signaled that there could be an additional two raises over the course of the remaining year, and potentially even more raises than that. This means that the officials at the Federal Reserve are expecting and on track for there to be four increases in the rate this year, which is up from the earlier prediction of three.

The Rates Could Rise Even More During the Remainder of 2018

Most of the experts believe that there will be at least three raises in 2019 and another three in 2020, which could end up putting the rates between 3.25% and 3.5% by the end of the year in 2020. The Federal Reserve later released a statement that the labor market was strong and that the economic activity had been rising solidly. The officials have projected that the gross domestic product will be increasing 2.8% in 2018, which is up by 0.1% from the earlier projection.

Additionally, they believe that the unemployment rate is on track to fall further than the projected amount this year, as well. The early projections were that unemployment would be at 3.8%, while the current projection is that it will be down to 3.6%.

With the new insight into what’s happening with the interest rates, it appears that even after raising the rates and having them reach what is called a “neutral level”, they will continue to raise the short term rates. The neutral level is a term that means the rates are at a point where they are not going to either slow the economy now stimulate it.

The overall economic outlook for the country does seem to be positive, at least according to the U.S. central bank. The bank has upgraded the outlook due to several different factors including rise in global growth, tax cuts that have been approved by congress, and an increase in the amount of federal spending.

What Does This Means for Those Who Want to Buy a Home?

While a rise in the rates might indicate that the overall economy is performing better, those who are considering buying a property will want to think about how the rise in the interest rates are going to affect them. When the Fed raises the rates, it means that the lenders are going to raise their rates accordingly. When this happens, the mortgage rates are going to increases, as you would expect. This will then make it more expensive to buy homes.

However, it does not mean that the homes are going to be come prohibitively expensive, of course. Those who have good credit can still get some very good rates when they get their mortgage, which helps to keep the homes in line with the market and what people are willing and able to pay.

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Florida Attracts Wall Street Hedge Fund Managers and More

Florida has a lot to offer those who are looking to invest in commercial properties or luxury oceanfront real estate. In addition to having some great beaches, a diverse economy, and wonderful cities such as Miami, those who invest will also find that it also has some favorable tax laws. With some of the recent tax changes that have come to New York and Connecticut, things are looking quite sunny for Wall Street players.

Tax Changes Brings a Change of Thought

The federal tax overhaul put caps on the amount of state and local deductions that individuals can take. Those who are in New York and Connecticut and who want to find ways of avoiding some of the financial fallout have fond that Florida could be a good option. In the past, many of those same individuals would simply write off their state and local taxes when they filed their federal returns. The change to the laws made it far more difficult for them. In fact, currently, they are only able to deduct a maximum of $10,000. This is simply not enough for the hedge fund managers and many of the other wealthy elite in the Northeast.

In Florida, there is no income tax, and the property taxes are low. Those in the Northeast always knew about this, but they had always been able to rely on simply increasing the deduction in the past. The property taxes in the Northeast are some of the highest in the United States. In addition, the cap includes properties in the Northeast. So, purchasing real estate there would not make as much financial sense as in Florida. Now, they are starting to take a renewed interest in the Sunshine State thanks to their taxes. There are some nice advantages to this.

Could NY Firms Be Moving Too?

While most of the attention is on buyers from New York and Connecticut buying and investing in property to help shelter their money and to make the best of the new tax situation in their own state, other changes could be coming, as well. In fact, the change in the taxes could cause some firms from the north to decide to take some of their operations south to Florida. Already, there have been an additional 14,700 jobs created in Florida in the financial sector over the course of the last year. During that same timeframe, Connecticut lost more than 500 jobs.

There are some companies and firms that are looking into moving to Florida very seriously. They have not made a full move yet, but some of the companies are starting out small with some satellite offices to see how things go. Florida could see a nice economic boom that is somewhat unexpected if these changes continue, and if more firms do decide to make the change to Florida.

The advantageous tax situation in Florida is not only helpful for hedge fund managers, of course. Anyone who is looking to buy property, whether it is purely for investment or for a new home will find that the tax situation in Florida can work out in their favor.

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Who Is Interested in Real Estate in South Florida?

Miami real estate

South Florida has long held the interest of people who are looking to make quality investments in homes, as well as in businesses. While there is interest from some people who are living in and who are citizens of the United States, such as the many potential investors in New York, most of the investors today are coming from other countries.

The Biggest Investors

You will find that there are buyers from many disparate countries that have a real interest in the properties in South Florida whether they are residential or commercial. People see these as good investments. Two of biggest foreign investors in the area are those who are from Argentina and Venezuela. In fact, citizens of Argentina accounted for 15% of home purchases in the area, followed closely by Venezuela with 11.5%.

Those two countries alone made up more than a quarter of the sales in the area in 2017, but they were certainly not the only countries with a large number of interested foreign buyers. Colombia accounted for 9% of home sales in South Florida, and Canada accounted for another 9% of sales.

The other countries that round out the top ten for foreign investors include Brazil (4.9%), India (4.7%), Peru (3.5%), Philippines (3.2%), Mexico (2.7%), and the Dominican Republic (2.6%). Overall, foreign investment is more than 66% of the total sales in the South Florida area.

Miami is the top market for foreign investors, but there are other parts of the country that hold interest for foreign buyers, as well. Some of the popular locations that follow Miami include Los Angeles, Bellingham, WA, and New York.

Why Is South Florida So Popular?

Of course, when you see just how many foreign investors are interested in the area, it causes people to wonder what it is about the area that makes it so appealing. A number of factors play into this. For many, the conditions are currently favorable when it comes to buying property in the US, and there is great potential still in this market. The economy is strong, and it is likely to continue getting stronger. The property taxes tend to be quite a bit lower, as well, making it even more appealing.

Additionally, there are quite a few options when it comes to homes and the types of properties that are available (check out prices for Miami real estate here). Whether a buyer is interested in a one or two-bedroom condo, a mansion, or a penthouse, there are generally plentiful choices available in and around the Miami area.

What Does This Mean for Brokers?

Given the number of foreign investors who are interested in buying properties that are located in the South Florida area, it makes sense of the brokers to start learning how to cater to and find those buyers. For example, find out what types of properties tend to interest buyers from those nations. Learn more about their culture, and even learn a little bit of Spanish, Portuguese, and Tagalog.

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Lennar Acquisition of CalAtlantic

For more than two decades, Stuart Miller has been the CEO of Lennar, one of the largest homebuilders in the nation. Miller had been with the company through good times and bad, and he was there when the country went through the housing collapse that followed 2007, arguably one of the worst that the nation has ever faced. He has faced down those who tried to defraud the company and was able to increase the revenue of Lennar to nearly $12 billion.

A New Acquisition

In 2017, Miller was looking for more ways that he could help to grow his company. Even though the need for more homes was evident, and it still is, there were some issues. For one, there were labor shortages, which was making it more difficult to get the workers that they needed in order to build their homes. In addition, the price of supplies and materials was rising. Solving those problems was not going to be easy, but Miller had an idea.

He believed that by bringing in another big homebuilder and acquiring them, it could help to increase the number of employees and subcontractors, allow them to have more land, and ultimately, provide the company with more negotiating power. While this proved to be a good option, it was one that did not immediately present any contenders. The companies that were large enough for Lennar and Miller to want to acquire tended to be owned by people who did not want to give up control of their company. Other companies were too small and would not provide the results that they wanted.

However, they did eventually find the CalAtlantic Group, which is based out of Virginia. At the time they considered acquiring the company, CalAtlantic was the fourth largest homebuilder in the United States. They were created when Ryland Homes and Pacific Homes merged in 2015, and Lennar thought that they would be a perfect choice for the acquisition. Lennar did not jump the gun too early though. They studied the company for about six months and finally came to a deal in October of 2017.

They bought the company for $9.3 billion, and they took on the debt from CalAtlantic, which was $3.6 billion. However, this was still a good deal for them. It made them the largest homebuilder in the country, moving D.R. Horton into second place. In addition, they believe that they are going to be able to save about $50 million in construction costs in 2018.

A New Path for Miller

This was one of the last large moves by Miller as the CEO. In April of 2018, he announced that he was going to be moving into the role of executive chairman. The new CEO would be Rick Beckwitt. This would mark the first time in nearly have a century that a Millar was not in the CEO spot at the company.

It will be interesting to watch and see what happens over the course of the rest of 2018 and the years that follow with the new largest homebuilder in the country.

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Real Estate News: What Happens When Supply Keeps Falling

Sunny Isles Condos for sale

July was a solid month for Miami real estate, where the median price slightly increased than a year ago. However, on the sales front, we have started seeing an improvement with the luxury properties and even a slight price increase. This pattern will hopefully propel our home sales which have been steadily going downward for the last four months.

Economists note that sales may have been down because of lower inventory. In fact, the last time there was any substantial increase regarding housing inventory was back when Donald Trump was a mere Republican candidate for president, one among a field of 11.

On a national level, homes for sale have dropped over 12%, which is the most substantial year-over-year decline since back in 2013. In January 2018, there was a 3.1-month supply of homes. Anything less than a six-month supply has not been seen since the beginning of 2012, which makes this rather significant.

West Coast Real Estate

West Coast markets have been the largest recipients of this low-inventory situation. San Jose’s metro area has seen the most significant inventory drop year-over-year. This has also led to the most significant price increase, as is expected. When it comes to the number of houses available on the market, there are less than half as many this October than there were a short year ago. This has pumped prices up over 19% with a median price falling at about $1.05 million. Despite the costs, the lack of inventory has led to homes finding a buyer very quickly, sometimes in just few weeks.

Homeowner Uncertainty

With the House of Representatives and Senate still hacking away at tax reform strategies through the month, many homeowners have chosen to step back from the market until more information is known. This is based on the potential for reduction of local and state property and income tax deductions, along with the possibility of changes to the mortgage interest deduction.

However, others have acknowledged that the implementation of these changes is unknown, so others have been open to buying despite the current uncertainty. Experts believe that once a tax bill goes through, it is likely that homebuyer demand will drop in high-tax states, especially where homes are more expensive. This likely would happen slowly over time.

Competitive Markets

Looking at metro areas, Seattle, Washington leads the pack when it comes to homes finding a buyer. In 2016, it took about 13 days, but in 2017 it is down to only 10. Other markets of note are San Jose with 12 median days on the market and Boston with 14 days. Oakland and San Francisco are just below those with houses on the market an average of 15 days.

Estimates

For off-market homes, the median value was just over $250,000, which is up a little over half a percent from September. Much like 2017, just under half of the houses for sale been priced higher than estimates based on a home’s measured value and predictions about final sales price. This led to houses for sale at just a bit above expert forecasts after analysis.

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Could the World Cup Increase Real Estate Sales in South Florida?

Currently, there is certainly quite a bit of attention on the World Cup, and this excitement over the sport has helped real estate brokers and developers to capitalize on the event. Many have started to find ways that they can increase the visibility of the projects they are working on and trying to sell while using FIFA as a way to connect with potential buyers out there. In fact, soccer has played an important role in a number of different projects in South Florida.

The Excitement of Soccer in Real Estate

At the Paramount Miami Worldcenter, the sales office staff have been watching the World Cup on a video display that measures a whopping 750 square feet. You can also look at the design of this tower to get a better understanding of just how important soccer is to it. Paramount Miami Worldcenter happens to be the only condo that has a soccer field. When the construction is complete for this building, the soccer field will be located on the 9th floor, which is where the amenity deck will be. It turns out that the field was a good idea to help them get some soccer lovers from all over the planet. It was supposedly one of the main draws to people who have bought in the building. In fact, there are several professional soccer players who bought residences at the building because of the field. Already, this building has sold about 70% of the units. The developers credit the international appeal of soccer with the success of their building, as only 12% of the buyers at Paramount Miami Worldcenter are from the United States.

There are other developers and buildings that have taken to celebrating the World Cup, as well. Developer Vlad Doronin offered a four-day trip to Moscow with tickets to the World Cup for the best salesperson from March to June. Doronin is the developer of Missoni Baia, another luxury tower in the Midtown Miami area.

In Brickell, you can even see a massive 10,000 square foot mural of Neymar da Silva Santos Junior on the side of a building at 90 Southwest Eighth Street. Other areas and buildings held kickoff events and viewing parties for brokers and at sales galleries. There is a lot of excitement with the World Cup right now, and it is smart of the brokers and developers to do everything that they can to get more and more potential buyers through their doors. It shows that this is a friendly, multicultural city and that soccer is important here as it is in other parts of the world. Getting people into a good mood with the games and talking about soccer can also be a good tactic in getting them to be more agreeable and want to buy.

It is still too early to tell just how successful this tactic is going to be, but thus far, it does seem to show quite a bit of promise.

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Sunny Isles Beach Condos Supply

Sunny Isles Beach Real Estate

It is not surprising to anyone that South Florida offers most luxurious, as well as some of the most expensive condominium prices in the world. Because of this, it’s also not terribly astonishing that condo developers are happy to snatch up every last plot of land in order to develop more of these luxury dwellings. What has happened because of this is developers kept competing against one another to develop ever more and more expensive condos to attract even bigger buyers, even when they may have no assurance that buyers will kept on coming.

Sunny Isles Beach Neighborhood

It looks like that moment has come, when there are so many condos for sale that there’s simply no easy way to find a buyer for all of them. A study by real estate expert Leon Bell of Sunny Realty from earlier this year gives his own thoughts, largely warning that the Sunny Isles Beach area, located just north of Miami Beach and in the same place where you can find the Trump International Beach Resort, has thousands of condos up for sale.

In addition to Trump’s illustrious properties, other high-profile buildings exist in the area. Probably the most notable is the Porsche Design Tower, which was opened in May with a performance by musician Alicia Keys.

In fact, the sheer number of condos on the market is enough to satisfy the average that would be sold in two entire years. However, buildings are still being erected and with so much supply, it could lead to rapidly tanking prices in an area that isn’t set up for that sort of system.

Price Points for Condos

An average asking price for an oceanfront Sunny Isles Beach condo is right around $1.5 million. However, the time that it takes to sell that unit can be over 200 days, or 2/3 of a year. Leon Bell had analyzed only condos listed for sale in Sunny Isles Beach on the MLS (multiple listing system). This report doesn’t take into consideration almost 50,000 new pre-construction units that are being developed east of Interstate 95 in the South Florida area.

Looking Forward

It’s expected that by the year 2020, the Miami-Dade area will have a huge number of properties to sell and many of them will be listed for a long time. This strikes some as unsatisfying as those areas could have been used as more affordable housing, public parks, community centers, healthcare facilities, etc. However, this all comes down to local government and public planning.

It isn’t only Leon Bell who states things may be going slower for luxury condo sales. Jorge Perez, real estate mogul in Miami, has also stated he believes many developers have no idea of the area’s market and how it’s being over-saturated by homes that may be not easy to sell.

Miami’s legislators have largely ignored the situation and said there is no way to force developers to build more affordable housing. However, Leon Bell’s study shows that things are changing nowadays.

Leon Bell notes that a balanced market will typically have about a six months supply of properties, while Miami is far beyond that number. This can lead to an advantage for buyers, rather than sellers. It can also lead to price deterioration for luxury oceanfront condos.