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Special Issue: The Miami Beaches Market Pulse – March 2016 & 1st Quarter Analysis

Christopher J. Lazaro, MBA Licensed Real Estate Broker & REALTOR® Christopher J. Lazaro, MBA, Licensed Real Estate Broker & REALTOR®, 1-800-798-9192 ext. 333, License #: BK3252123, Metro International Investments, MLS: http://REBroker.Miami
Miami Beach

Miami Beach

Hello everyone and thank you for visiting my blog!  I am in the process of catching the blog up (3 months of data collected so I will be making several posts this week and next to bring the blog current).  My focus over the past few months has been largely dedicated to servicing my customers, clients and, especially, my agents in achieving their goals.  We recently hit an in-house brokerage record of 85 listings on the MLS!  Go Team!  Today, I finally resolved to make some time to get back to one of my passions; reporting on the real estate markets of the Miami Beaches.

As we closed the first quarter there was a noticeable shift (largely negative) in the media’s coverage regarding the Miami Beaches and Downtown Miami Real Estate Markets.  Despite the optimism we (my firm) were feeling after a largely successful quarter, what appears to be a spike in distressed real estate activity signaled, to me, the coming to fruition of a prediction I made in late 2013 and going into 2014; a bearish real estate market driven by an appreciation in the US Dollar relative to virtually every other currency in the world.  While I am not inclined to believe there will be another “crash” per se (unless we have a currency crisis or some other major event like the mortgage crisis of 2008), macroeconomic activity over the past 24 months has shifted us from a Seller’s Market into what is now clearly a Buyer’s Market.  In my prior article (the February Edition of the Miami Beaches Market Pulse), I referenced several reasons we have seen an ongoing correction, as well as potential threats to the real estate market. I firmly believe a correction in numerous markets is firmly in place and will not finish correcting until listing prices drop sufficiently for sales volume to increase in a manner that will bring the overall market back into equilibrium.  The Miami Beaches, as a whole, may be at or near an inflection point as I am seeing year-over-year data that is far less horrible than the prior year’s year-over-year data.

Fortunately, the Miami Beaches, the City of Miami, and Miami-Dade County as a whole possess a larger & longer-term story than just the short-term ups and downs of the real estate markets.   Numerous areas of the County are growing by leaps and bounds, and the imbalances in the Downtown Miami & Miami Beaches real estate markets will, ultimately resolve.  What imbalances you might ask?  Well, others have written about this (specifically regarding the Downtown Miami market) with data they have gathered so I will not go into a dissertation, however, I will say that it really does seem like half the buildings are empty year round!  A good article that goes into this subject can be found here:  http://www.huffingtonpost.com/jj-colagrande/panama-papers-reveal-miam_b_10030094.html.

As the article points out, this has led to numerous restaurants and businesses closing, all because the anticipated cash flow from having reasonably occupied neighborhoods never happened (this is usually the problem of making projections based on assumptions rather than actual knowledge).  As a result, businesses that opened over the past few years faced a stark reality of having opened in, albeit a brand new, mostly abandoned neighborhood which continues to suffer from a ludicrous level of traffic resulting from all the ongoing construction.  The Miami Beaches, also populated with substantially vacant towers, does not suffer nearly as much because the beaches are a vacation destination and therefore the local businesses benefit from a continuous inflow of cash from vacationers as well as locals; more so than the Downtown Miami (and other) areas of the County.

With that said, I want to refute the negativity I have been seeing regarding the “Doom & Gloom” articles circulating in many papers & trade journals; at least as far as the Miami Beaches are concerned. For the past year I have been discussing a correction in the market and this by no means should be construed as “The sky is falling”.  Corrections are healthy for a market!  In our most recent “blip” (when compared to 20 years), we had and still have a number of factors impacting MLS related sales such as:

  1.  A global currency meltdown relative to the value of the Dollar. (It cannot be understated how much the Miami Beaches benefited from Foreign Direct Investment)
  2. Massive amounts of pre-construction & new construction sales.  This absolutely punishes the sales of existing homes and the related data leading Buyers into thinking they can “catch the bottom of the market”, so they wait and eventually miss the opportunity all together.
  3. Finally!  An uptick in interest rates!  With any luck they will keep rising!  There are still far too many overvalued assets / unrealistic Sellers.  If that were not true, there would not be such a massive (and growing) glut of luxury real estate, both For Rent & For Sale, pouring onto the market.
  4. Regular debate, even still, over how our government intends to screw up or even completely abolish a good thing (Mortgage Interest Tax Deductions).
  5. Tight/Tighter credit despite low interest rates (done by the government to artificially re-inflate home prices)
  6. A trickle of foreclosures (REOs) and a painfully slow short sale process (another government induced strategy to inflate & maintain home prices).  Much of this should have been long resolved by now but rather than let the Free Market takeover, all they have succeeded in doing is prolonging the pain and creating other imbalances in the market with consequences still yet to come.

In this article I am going to demonstrate that the real estate market (so far as the Miami Beaches are concerned) are actually more robust, from a Sales Volume Perspective, now than they were prior to the mortgage crisis.  Pundits will of course argue that the numbers are overinflated by speculative overbuilding and a corresponding demand from overseas shell corporations (a term now synonymous with “Panama Papers”) to hide/park money; but I know from living & working here for the past 14 years that Miami is quickly emerging as a cultural & business epicenter of the world.  So long as that fact & corresponding trend remains true, even if the overseas holding companies have to dump or otherwise liquidate the thousands of vacant units darkening our towers, prices will only correct to a point where real, living, breathing & working people will fill those vacant apartments because they want to live here, work here, start businesses here and raise a family here.  Naturally, there would be the inevitable next wave(s) of speculation as well, both on the way down and on the way back up.

Typically, I only publish the MLS Data in these Market Pulse Reports.  This month, I wanted to educate everyone’s perspective on the subject of Sales Volume (and build upon where I was going in the above paragraph).  In this report I provide the total sales for 1st Quarter of each year since 2000 for all 5 zip codes.  Additional reports like this, with even greater detail & metrics, will follow over the coming year.

Reports by Zip Code

33139 – South Beach

March 2016 versus March 2015 – MLS Data Only

Median Est. Home Value $391K Down –0.3% | Median Est. Listing Price $279K Up 1.5% | Median Days in RPR 119 Down –7% | Sales Volume 126 Down –11.3%

33139 – March 2016 Market Activity Report  –  Of Note:  Overall Sales Volume is down 11.3% from March of last year.  Average listing requires 3.75 months to sell.

33139 – Neighborhood Report -(based on 6 months of data) Of Note:  Listing Volume is at a 3 year high at just over 3000 listings on the market!  Greater than 70% of homes sold ranged from $200-$600 per square foot.

All (total) Real Estate Sales Data per Miami-Dade County Tax Records

1st Quarter 2000 Sales Volume: 93

1st Quarter 2001 Sales Volume: 104

1st Quarter 2002 Sales Volume: 129

1st Quarter 2003 Sales Volume: 191

1st Quarter 2004 Sales Volume: 230

1st Quarter 2005 Sales Volume: 410 (the 2005 real estate market is often equated to the 1999 stock market)

1st Quarter 2006 Sales Volume: 280

1st Quarter 2007 Sales Volume: 235

1st Quarter 2008 Sales Volume: 273

1st Quarter 2009 Sales Volume: 206

1st Quarter 2010 Sales Volume: 295

1st Quarter 2011 Sales Volume: 373

1st Quarter 2012 Sales Volume: 463

1st Quarter 2013 Sales Volume: 567

1st Quarter 2014 Sales Volume: 648

1st Quarter 2015 Sales Volume: 743

1st Quarter 2016 Sales Volume: 662  – Sales Volume, although off by approximately 10% from the same period last year, is still approximately 50% higher than it was at the height of the market in 2005.  We are still pretty far from the sky falling!

33140 – North Beach

March 2016 versus March 2015 – MLS Data Only

Median Est. Home Value: $489K, Up 7% | Median Est. Listing Price: $458K, Up 22% | Median Days in RPR: 117, Down –14.6% | Sales Volume: 69, Up 38%

33140 – Market Activity Report – Of Note:  Strong year over year bounce in existing sales and listed new construction.  Nearly a 15% drop time on the market.  Median Home Value up a solid 7%.  Median Listing Prices are up over 20%!

33140 – Neighborhood Report -(based on 6 months of data) Of Note:  Listing Volume at a 3 year high, just under 1500 listings across the zip code.  Roughly 50% of all homes sold were under $400,000 USD.  Roughly 70% of all homes sold for between $200-$500.00 per square foot.  At least 50% of all homes sold were under 1400 square feet.  Just under 50% of all homes sold were between 40 & 50 years old.

All Sales Data per Miami-Dade County Tax Records

1st Quarter 2000 Sales Volume: 88

1st Quarter 2001 Sales Volume: 95

1st Quarter 2002 Sales Volume: 116

1st Quarter 2003 Sales Volume: 103

1st Quarter 2004 Sales Volume: 128

1st Quarter 2005 Sales Volume: 237 (the 2005 real estate market is often equated to the 1999 stock market)

1st Quarter 2006 Sales Volume: 139

1st Quarter 2007 Sales Volume: 121

1st Quarter 2008 Sales Volume: 183

1st Quarter 2009 Sales Volume: 113

1st Quarter 2010 Sales Volume: 183

1st Quarter 2011 Sales Volume: 207

1st Quarter 2012 Sales Volume: 255

1st Quarter 2013 Sales Volume: 283

1st Quarter 2014 Sales Volume: 271

1st Quarter 2015 Sales Volume: 365

1st Quarter 2016 Sales Volume: 328 – Sales Volume, although off an approximate of 10% from the same period last year, is still approximately 40-50% higher than it was at the height of the market in 2005.  We are still pretty far from the sky falling!

33141 – North Bay Village

March 2016 versus March 2015 – MLS Data Only

Median Est. Home Value: $271K, Up 9.3% | Median Est. Listing Price: $253K, Up 7.7% | Median Days in RPR: 106, Down –11.7% | Sales Volume 72, Down –10%

33141 – Market Activity Report – Of Note: Median Estimated Home Values up nearly 10% year-over-year!  Listing Prices are trending higher.  Average time on the market is 3 1/2 months.  Sales volume continues to trend lower but is starting to flatten.

33141 – Neighborhood Report -(based on 6 months of data) Of Note:  Listing Volume at 3 year high at just over 1500 listings.  Over 50% of all listings sold for under $300,000 USD; while 25% of all homes sold closed at over $600,000 USD.  Two-Thirds of all homes sold were priced at under $300.00 per square foot (I continue to think 33141 is the BEST deal on the beaches going!) with more than half of those under 200.00 per square foot!  Approximately 75% of all homes sold were under 1400 square feet.  363 of the 400+ homes sold were more than 20 years old with 140 of them being greater than 60 years old!

All Sales Data per Miami-Dade County Tax Records

1st Quarter 2000 Sales Volume: 43

1st Quarter 2001 Sales Volume: 67

1st Quarter 2002 Sales Volume: 84

1st Quarter 2003 Sales Volume: 62

1st Quarter 2004 Sales Volume: 124

1st Quarter 2005 Sales Volume: 222 (the 2005 real estate market is often equated to the 1999 stock market)

1st Quarter 2006 Sales Volume: 135

1st Quarter 2007 Sales Volume: 113

1st Quarter 2008 Sales Volume: 115

1st Quarter 2009 Sales Volume: 126

1st Quarter 2010 Sales Volume: 158

1st Quarter 2011 Sales Volume: 210

1st Quarter 2012 Sales Volume: 264

1st Quarter 2013 Sales Volume: 342

1st Quarter 2014 Sales Volume: 335

1st Quarter 2015 Sales Volume: 373

1st Quarter 2016 Sales Volume: 415  – Sales Volume is a a record high for the zip code for Q1 compared over any year in the last 17 years!  One reason for this is venture capitalists are teaming up with brokers to buy up the, largely, 50-90 year old homes and apartment buildings in the area with the intent to demolish and build anew.  This represents a substantial shift in the future of North Bay Village and 33141 in general.  If there was EVER a time to buy there, it would be right now!

33154 – Bal Harbour

March 2016 versus March 2015 – MLS Data Only

Median Est. Home Value: $684K. Up 23.2% | Median Est. Listing Price: $499K, Up 8.5% | Median Days in RPR: 118, Down –8.5% | Sales Volume: 33, Down –43.1%

33154 – Market Activity Report – Of Note:  Median Estimated Home Values are up a whopping 23% and Listing Prices are on the rise while the average time on the market is trending lower.  Sales Volume, however, is off by more than 40% over the same period last year.

33154 – Neighborhood Report – (based on 6 months of data)  Of Note:  Listing Volume is at a 3 year high! There are extremes in the price ranges of homes sold with more than a third of the homes selling for less than $500K, roughly a third selling between $500K-$1M and the remainder selling for over $1M.  Price per square foot metrics are nicely distributed across all price ranges.  The bulk of homes sold are over 30 years old

All Sales Data per Miami-Dade County Tax Records

1st Quarter 2000 Sales Volume: 54

1st Quarter 2001 Sales Volume: 47

1st Quarter 2002 Sales Volume: 68

1st Quarter 2003 Sales Volume: 69

1st Quarter 2004 Sales Volume: 75

1st Quarter 2005 Sales Volume: 83

1st Quarter 2006 Sales Volume: 71

1st Quarter 2007 Sales Volume: 54

1st Quarter 2008 Sales Volume: 104

1st Quarter 2009 Sales Volume: 69

1st Quarter 2010 Sales Volume: 111

1st Quarter 2011 Sales Volume: 122

1st Quarter 2012 Sales Volume: 404  (bulk real estate & strategic purchases by well capitalized groups account for this major boost)

1st Quarter 2013 Sales Volume: 198

1st Quarter 2014 Sales Volume: 171

1st Quarter 2015 Sales Volume: 271

1st Quarter 2016 Sales Volume: 207

33160 – Sunny Isles Beach

March 2016 versus March 2015 – MLS Data Only

Median Est. Home Value: $352K, Up 2% | Median Est. Listing Price: $300K, Up 11.7% | Median Days in RPR: 111, Down –12.6% |

Sales Volume: 123,  Down –8.9%

33160 – Market Activity Report –  Of Note:  Given how drastic I have seen the numbers in Sunny Isles Beach bounce around for the past few years, I consider this to be a fairly flat/stabilized comparison.  For the better part of last year this particular zip code read a lot like a Stock Market Crash Horror Story (see the May and October 2015 reports)

33160 – Neighborhood Report (based on 6 months of data) – approximately 50% of all sales were under $400K with another 25% selling for over $1M.  Listing Volume is at a 3 year high.  Median Listing Values have risen to their highest level in 3 years.

All Sales Data per Miami-Dade County Tax Records

1st Quarter 2000 Sales Volume: 117

1st Quarter 2001 Sales Volume: 168

1st Quarter 2002 Sales Volume: 156

1st Quarter 2003 Sales Volume: 233

1st Quarter 2004 Sales Volume: 273

1st Quarter 2005 Sales Volume: 363

1st Quarter 2006 Sales Volume: 245

1st Quarter 2007 Sales Volume: 253

1st Quarter 2008 Sales Volume: 280

1st Quarter 2009 Sales Volume: 270

1st Quarter 2010 Sales Volume: 384

1st Quarter 2011 Sales Volume: 479

1st Quarter 2012 Sales Volume: 534

1st Quarter 2013 Sales Volume: 597

1st Quarter 2014 Sales Volume: 595

1st Quarter 2015 Sales Volume: 625

1st Quarter 2016 Sales Volume: 733 (Freshly at a 17 year high overall)

Commentary

As you can readily see, over the past 17 years the total number of sales (Sales Volume) has steadily increased because of the economic development & growth on the beaches.  The same data, when looked at more granularly, can even tell you who to buy next door too 😉

Granted, we are comparing simply the 1st quarter of each of these years, and that at the very least, the early 2000s were “seasonal” on the Miami Beaches.  However, those of you who also live, work & drive here know there is no such thing as an “off season” anymore; and we can all agree there are a great deal more residences on the beaches as well.

While I am perceiving a Buyer’s Market in the luxury arena (more than anywhere else), it should also be noted that the Miami Beaches are a faster moving market than many, if not most.  Fluctuations in the currency markets directly impact the perceived value(s) of Miami Beach Real Estate, and while the real estate market moves slowly, the currency markets can turn on a dime.  For example, I would wager that if the Federal Reserve does not continue its hawkish stance (continue to raise interest rates), the Dollar will tank and overseas currencies will once again pour in like a tsunami over Southeast Florida.  Vice versa, continuing on the current path of rising interest rates will ultimately lead to lower home prices (because mortgages become more expensive).

It would be interesting to see Sales Volume as a function of overall available capacity of salable real estate.  That would, amongst other things, just how much of a “correction” there has actually been relative to other time periods.  Another thing to put on my “to do list” for future publications….but I digress…

More to come over these next couple of weeks!  I will be more brief in my next couple of Market Pulse Editions…I have been thinking I should stick to quarterly BIG articles, and limit the others.  Let me know if you have any feedback 🙂

Cheers,

Christopher J. Lazaro, MBA

Licensed Real Estate Broker

 

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About Christopher J. Lazaro (51 Articles)
I am a Licensed Real Estate Broker specializing in Residential Real Estate transactions from Downtown Miami, through the Miami Beaches and into Fort Lauderdale along the US1 Corridor and East. Whether you are a First Time Home Buyer, an Institutional Buyer, or Private Investor, I will be happy to provide you a consultation to evaluate your real estate investment goals. I can be reached at 1-800-798-9192 ext. 333. My MLS Website can be found at http://REBroker.Miami. I am a Qualifying Broker for and partner in, Metro International Investments.

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  1. The Miami Beaches Market Pulse – April 2016 vs. April 2015 – Christopher J. Lazaro, MBA & REALTOR®

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