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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.

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Massive Growth Seen in Fort Lauderdale Rent

It comes as no surprise that rent in Miami can be extremely high, but the same is not expected when it comes to the more northern city of Fort Lauderdale. That may be about to change though, according to the May report from RentCafe. Fort Lauderdale is officially up and coming.

In fact, the average price of rent for an apartment in Fort Lauderdale has gone up a massive 6.6 percent year over year. This is the most substantial annual increase to be seen in Florida in this year’s annual rental growth. Because of this tremendous growth rate, those who are interested in renting an apartment in Fort Lauderdale can expect to pay an average of $1,820 a month.

Cause of the Growth

This jump in rent prices is not out of nowhere, however. Fort Lauderdale has gone under a serious makeover as of late. The beaches and downtown of the city have been transformed from another Florida city into an international destination. Both mid-rise and high-rise residential development has taken off, which has led to a whole new influx of residents.

Major Constructions & Renovations

The Related Group started construction on the Icon Las Olas, a 45-story tower, in 2015. This was more than a decade after it was first announced. Related secured financing for the impressive tower from SunTrust Bank and the project broke ground back in February. The condos at Icon Las Olas now have a monthly rent at a cool $2,500 all the way up to $7,000.

In the same year, Fort Partners first announced the plans to build a Four Season Private Residence in Fort Lauderdale which would be built on nearly two acres and include a full city block with a beautiful ocean view.

Many other well-known developers have followed suit, developing and redeveloping properties found on the prime beachfront land of Fort Lauderdale. Invesco and Gencom purchased the Ritz-Carlton Fort Lauderdale hotel and condo for a little over $65 million and have since renovated the building’s restaurant, spa, lobby, and other public areas.

Commercial Growth

It is not just rent that is thriving in Fort Lauderdale, however. Dozens of major retailers are interested in Las Olas Boulevard as a space to provide their services and products. The office market is also rising with higher rental rates and more new construction coming week after week.

Growth in Other Cities

Fort Lauderdale is not the only Florida city experiencing rent hikes over the last year. In Hialeah, rent has climbed 4 percent to $1,263 a month; in Pompano Beach rents are up 4.7 percent at $1,334, and in West Palm Beach averages are at $1,340 or up 5.5 percent.

When considering the country as a whole, the cities that reported the highest rents for November include Boston at $3,262, San Francisco at $3,432, and Manhattan at $4,089. As for the most exceptional rate in average rent across the United States, Odessa rose an impressive 33.2 percent to $1,111, and Midland increased over 25 percent to $1,274.

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Unexpected Benefits of the Federal Reserve Interest Rate Hike

The Federal Reserve has done a final interest rate hike in 2018. This follows the rate hike in 2015, one that was implemented in 2016, and two rate hikes that occurred in 2017. This final rate hike was voted on by Federal officials and passed with a 7 to 2 vote. The announcement about the hike was made after a two-day meeting by the Fed officials. The rate will increase by a quarter percent in order to hit a target range that lies between 1.25 percent and 1.5 percent.

This does mean that borrowing is going to get more expensive, but it doesn’t mean that all effects will be negative. For one thing, everyone will have the benefit of acquiring better rates when dealing with high-yield certificates of deposit. This is only one example of the gains that are to come. We’ll look at the others throughout this article so you understand how to best take advantage of them.

1. Savers can expect higher returns. When it comes to savings, interest rates have been low for so long that they seem almost negligible. Most people are happy to see any kind of increase being implemented. One group will especially benefit from this is senior Americans who are on fixed incomes, along with those who use interest income as a coverage for living expenses.

2. Inflation will continue to be tamed. Most recent price measurements show that inflation has been a non-factor in the last several years. While the central bank has a 2 percent target for inflation, it has continuously been running short of that. Even with the new upcoming hike, inflation will remain manageable. However, any amount of positive inflation may lead to lower prices for imported goods, which benefits many Americans.

3. Expect to see more lending. With higher interest rates, banks are more likely to loan reserves at higher rates. This additional credit can help to boost economic growth. This is great news as lending has been abysmal since the financial crisis of 2008. Low rate lending will still be available, but it may be more scarce following the rate hike.

4. Retirees will see more interest income. Seniors who have put money into CDs and savings accounts can expect to see larger returns courtesy of the new rate boost. This will be an excellent thing for those living off of retirement savings.

5. Stronger dollar means easier traveling. When there is a strong U.S. dollar, it provides savings to citizens who head abroad. They will have more buying power as the Fed rate boost could lead to a newly strengthened currency.

6. Stocks will see less variation. The Federal Reserve seeks to achieve normalization, which means stock prices will start to make more sense. The focus will turn to market fundamentals, rather than being endlessly based on every Fed statement that hits the news.

7. Potential homebuyers may move forward. As a result of higher rates, you can expect to see higher mortgages. This may push those who are on the fence toward buying a home. Demand will be increased, prices will be increased, and home equity will also increase in one fell swoop.

Based on all of these potential benefits from the upcoming rate hike, not all is lost. Borrowing may cost more, but the many new changes coming in other areas will likely make up for this. No matter your opinion on the final rate hike, there is a lot to think about. Things are certainly changing.

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Mansions in Fort Lauderdale Florida

Fort Lauderdale waterfront homes (also known as Venice of the Americas) – CLICK HERE TO VIEW THE SITE is a luxurious neighborhood that is located between Fort Lauderdale Beach and Colee Hammock areas. Some of the most expensive of Fort Lauderdale real estate is located right in this neighborhood with listing prices that can exceed $30 million. One such listing is currently on the market for a whopping $39 million – http://www.sunnyrealty.com/House-Sale-Isla_Bahia-mls-A10386629-in-Fort-Lauderdale.htm.

The neighborhood of Bahia Mar is situated on the small islands and offers boater’s paradise as well as very easy commute to just about everything – from private schools to golf courses, fine dining, art museums, and galleries. Some mansions in this area have sold in excess of $40 million and are truly massive in size. One such mansion recently sold for $25 million and offered six bedrooms and boasts almost 16,000 square feet. Original pricing placed a price tag of $2,500 per square foot but it ended up selling for roughly $1,500 a square foot. Looking closer at the deal, we find that over $14 million was spent on features of this home which is sitting on a lot which is a bit over 1.25 acres. Incidentally, this home was sold back in 2005 for nearly $10 million.

The estate was built in 2015 and designed by the well-known Robert A.M. Stern. It provides a two-story guest house, over 600 feet of waterfront, and a spacious six-car garage. The home also includes features like an office library, five fireplaces, personal massage room, fitness center, home theater, and a chart room appointed for a yacht captain. Back in 2016, this listing at $40 million was the second most expensive in all of Broward County, with only the Le Palais Royal estate in Hillsboro Beach beating it out. That property was listed at $159 million at the time.

Luxury condominiums are also very common in this area, along with oceanfront mega-structures as well as smaller or boutique condo buildings across the street from the ocean. However, it is the multi-million-dollar single home dwellings along the water that make this area some of the most sought after in the entire South Florida.

Even with the slowdown in the luxury segment of real estate in South Florida, several areas are holding up the prices very well. Some of the areas in Fort Lauderdale are Las Olas Isles, Lauderdale Beach, Rio Vista and Harbour Heights are some of the most popular and expensive areas in South Florida which keeps attracting buyers for luxury waterfront abodes.

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Are Russians Buying U.S. Homes Once Again?

It seems that Russian buyers are turning their heads toward United States real estate, likely because of recent ruble fall and because they believe in Donald Trump! A surge in Russian inquiries has been registered by global real estate consultants when compared to a year ago. Reports show that requests have increased 35% compared to 2017 numbers.

New Interest in the U.S.

However, it is not just investment properties that are seeing a jump in Russian inquiries. It is also commercial real estate and even vacation homes. About 30% of Russian buyers seem to be interested in getting in on commercial real estate. Experts have noted that some customers are interested in buying property that stands as development property of Donald Trump. Many United States developers have noted being more than willing to cooperate with this horde of Russian investors.

Most of the inquiries noted by agencies working with Russian investors are in the budget range of $500,000 up to $5 million with New York City and Miami being the most significant hot-spots of attention by these investors.

A Reuters review has shown that 63 or more individuals with Russian addresses or passports have purchased at least $98.4 worth of property in Trump-branded towers in Southern Florida, according to various public interviews, corporate records, and documents. Buyers include politically connected former executives, businesses, bank founders, and more.

Many of the buyers seem to have done well in the United States. A local politician, Vadim Valeryevich Gataullin, bought a condo for $3.5 through VVG Real Estate Investments LLC. He later sold that apartment for $4.1 million. He then purchased a second apartment in the same building for $920,000 and sold it for $1.1 million down the line.

Past Russian Interest

Of course, this is not the first time that Russian investors have shown interested in development, vacation homes, and commercial real estate. Back in 2011, the most expensive apartment in Manhattan was purchased for $88 million by the daughter of tycoon Dmitry Rybolovlev, Ekaterina Rybolovlev. Dmitry Rybolovlev also bought an estate in Palm Beach, Florida for $85 million in 2008. It was purchased from none other than Donald Trump.

As of 2014, Russian purchases had jumped as far as international sales of United States property. However, those numbers dropped sharply following the United States sanctions on Moscow and its annexation of Crimea.

Russian Interest Abroad

In addition to interest in United States real estate, Russians also continue to be a considerable market for residential real estate in Europe. Many Russian oligarchs own homes in London, including Andrey Yakunin, Roman Abramovich, and Leonard Blavatnik. During 2013, more than £500 million was spent on London luxury houses.

However, declines in oil prices, instability in currency markets and global finance, and tensions between the EU and Russia have dropped the transactions occurring in the sector of real estate. The number of £5-10 million transactions have fallen by 50%. The potential prohibition of anonymous purchases of property may lead to even further sliding.

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New Major Car Brand Condos in Miami For Sale

For those looking to fulfill a desire to live out a beautiful fantasy, the new Aston Martin Residences – (CLICK HERE TO VIEW THE SITE) are due to be completed and ready for the market by 2021 at the latest. Aston Martin, known for their British luxury sports cars, is expanding the brand to bring their very first project in real estate to Miami.

The design team at Aston Martin is going to be working with G & G Business Developments for this unique new project. They are expected to be incorporating elements from their sports cars into the buildings themselves, with colors and materials from the vehicles in items like residence number plates, door handles, and carbon fiber furniture.

The building used for this project is located at 300 Biscayne Boulevard and is built on one of the last few piece of downtown Miami waterfront. The building itself is shaped like a sail and built of glass and steel. It was designed by Bodas Maini Anger and Revuelta Architecture.

The tower, which will be a cloud chasing 66-stories, is under construction and is expected to offer 391 units that will be priced from the upper hundred thousands all the way up to $50 million. This might seem as if it is a broad range of prices, but that is because the condo sizes range between 698 square feet all the way up to nearly 20,000 square feet. This building will also include a triplex penthouse and seven traditional penthouses.

Each of these magnificent condominiums will have windows from floor to ceiling, along with white marble floors and glass balconies. Four of the 66 stories will be used for special amenities for the residents.

Level 55 includes everything from an infinity pool, sky bar, and salon to a catering kitchen, chef’s kitchen and private dining room.
The level just below offers two movie theaters, along with a virtual golf course, and a fitness center.
Level 53 offers more fitness, a spa lounge, spinning room, boxing room, spa, sauna, meditation room, barber station, and beauty salon.
The final level for amenities, level 52, will offer vending, game room, teen center, kids playroom, business center, conference room, and a curated art gallery for residents.

In addition, there are many other amenities available to the lucky owners of a condo at Aston Martin Residences. There are 10 high speed elevators, storage areas, electric car charging stations, a 24-hour valet, marina for yachts, and concierge and hospitality services.

As for the condo units, everything from a studio at 698 square feet to an upper penthouse with over 18,000 square feet will be available. Rooms will feature European cabinetry, sliding glass doors, 10 to 12-foot ceilings, and a beautiful view of the Miami skyline, the ocean, and Biscayne Bay.

This isn’t the first opening of a major tower by a brand synonymous with cars as the opening of the Porsche Design Tower in March goes to show. However, those who did not get in on the ground floor with that property may be well-suited to the Aston Martin option under development now.

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Rosen Buys Unit 909 at Surf Club Four Seasons

If you have been paying attention to Andrew Rosen, co-founder and CEO of fashion retailer Theory, you might already know that he sold off his luxurious Miami Beach penthouse at Setai Miami Beach last year for a cool $8.5 million. We can now report that Rosen has officially chosen a new base with his recent purchase of an apartment located in the Four Seasons Residences at the Surf Club in Miami, Florida.

Based on insider information and property records, the fashion guru has paid $5.15 million for unit 909 in the south tower of the Four Seasons Residence. This property serves as a luxury condo and hotel based on a nine-acre area and found at 9191 Collins Avenue in Surfside. Rosen also owns a four-bedroom apartment in Manhattan, along with a residence in Southampton.

About Andrew Rosen

For those who are not familiar with Andrew Rosen, he founded the brand Theory back in 1997 with fashion designer Elie Tahari. In 2003, he sold the majority of his shares but retains 11% and continues to run the brand. He continues to have a strong relationship with Theory’s owner, Tadashi Yanai, who also owns J Brand and Uniqlo.

Rosen has since gone on to invest $10 million in emerging designers who include Rag & Bone, Proenza Schouler, and Alice + Olivia. He also has stakes in Gryphon, Aiko, and Kiki de Montparnasse.
Rosen’s Neighbors

In addition to Rosen, Surf Club Four Seasons has recently seen a purchase from another fashion Icon, Albert “Aldo” Bensadoun. Bensadoun is the founder of footwear company Aldo. He paid $10.25 million for his south tower unit 501.

Surf Club Four Seasons

The Surf Club is hardly new, even if its latest iteration is. Back in 1959, an advertisement for the club read “Spectacular is the word for The Surf Club.” The Surf Club opened back in 1930, founded by tire tycoon Harvey Firestone. It was a place for celebrity and excitement, a place where prohibition was might as well not have existed.

Moreover, that could have been the end until earlier this year, when the Surf Club opened again as a hotel, private club, and condominiums.

The Surf Club development has numerous amenities which include two restaurants, a private club, a gym, four swimming pools, numerous cabanas, a spa, adult quiet pool, water sports, and oceanside gardens. The property was designed by Pritzker Prize winner Richard Meier, and Kobi Karp.

Fort Partners development includes two residential towers, each 12 stories high. A 77-room hotel is also on the property. The price of units at Surf Club range from $3.7 million all the way up to $31 million with sizes ranging from 1,800 square feet all the way up to a spacious 7,000 square feet.

No specifics are known about Rosen’s particular unit, but marketing materials show that the condos come in blue, white, and moss green and include custom work by French interior designer, Joseph Dirand.

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Ex-Husband of Ex-Wife of Phil Collins Puts Sunset Islands Mansion on the Market

A luxurious waterfront mansion in Sunset Islands that has been in the middle of a genuinely messy divorce was just placed for sale at a cool $20 million. The divorce proceedings took place between Phil Collin’s ex-wife, Orianne Collins Mejjati Alami, and her ex-husband, Charles Fouad Mejjati Alami.

Messy Divorce Proceedings

Charles Fouad Mejjati Alami was the listed owner of this expansive home with almost 10,000 square feet of space. The mansion is located at 1525 West 24th Street in Miami Beach with a current asking price that averages out to a little over $2,000 a square foot.

It has been reported that Orianne Collins Mejjati Alami is now back together with Phil Collins. She filed for divorce from Charles Fouad Mejjati Alami back in early 2016 with a claim that she owned the home. She further explained that Charles Fouad Mejjati Alami was transferred the title of the beautiful home “through deceit and fraud upon the wife,” according to public court records. The divorced was initially completed in spring of 2017, with an amended final judgment in September.

Most of the court documents related to the messy proceedings are now sealed, but it was reported back in February that Orianne Collins Mejjati Alami was looking to nullify an older settlement agreement made out of court which placed the title for the Sunset Islands home with Charles Fouad Mejjati Alami, to begin with. She explained at the time that she had no memory of signing the property as she was on painkillers prescribed for a painful back operation.

Original Purchase of the Sunset Islands Home

A look at property records shows that in 2014, the mansion’s title was passed over to Charles Fouad Mejjati Alami. He and Orianne Collins Mejjati Alami purchased the property in 2012 for an estimated $8.4 million.

The extraordinary dwelling features seven bedrooms, eight full baths, and two half baths. It was built in 2005 and includes a two-level foyer with double grand staircase, fireplace, gourmet kitchen, formal dining room, breakfast room, maid’s quarters, and family room complete with wet bar. The master bedroom has two full baths along with his and hers closets with a full-length balcony that overlooks the water nearby.

On the nearly 10,000 square feet, there is also a rooftop terrace, two two-car garages, interior courtyard, private gym, home theater, elevator, clubroom, pool, and an exclusive boat dock. Many one of a kind features abounds in and on the property with custom Fendi design and amenities that discerning buyers will appreciate.

Phil Collin’s Property

As for ex-husband Phil Collins, he owns and lives in a property nearby. It is located at 5800 North Bay Road and is the former home of musician Jennifer Lopez. Collins bought the home in June of 2015 for about $33 million. The mansion includes seven bedrooms, eight full baths, three half baths, pool, jacuzzi, and more.