In January of 2003, I co-founded Metro International Investments with Mark J. Moldoff, a 4-decade veteran of the real estate development & brokerage industries. For the past 5 years, I have benefited from his experience and his mentorship and I finally got him to start writing his own column on our company website, http://mii.miami. He was nice enough to publish this while I was just beginning my recovery from spinal surgery, and unfortunately, I was unable to do much of anything, so I had to publish it a bit late.
It is my hope that others can benefit from his perspective, and I am sure as time goes on that he will publish many more articles covering best practices, education, and the real estate industry at large. Mark’s specialization is Off Market Commercial Real Estate.
Please visit and explore the site and let us know what you think! We welcome all feedback and encourage agents who enjoy blogging on the subject of real estate to join our brokerage or engage us for some cross-content sharing.
Welcome to the October 2016 Edition of the Miami Beaches Market Pulse! Amidst the tremendous windup towards the Presidential Election and the Jewish Holidays, people still found the time to make real estate investments in the Miami Beaches. After the abysmal sales month I reported in the Miami Beaches Market Pulse – September 2016, it was encouraging to see mid-high double-digit closed sales numbers as opposed to the single-digit sales of the prior month. Sales Volume, year-over-year and year-over-year-over-year are still down considerably and continuing to decline. Listing Volume continues to climb and/or hover at 3-5 year highs. In basic economics, low demand & higher supply generally indicates lower prices ahead. Combine that thought with the idea of a future of higher interest rates, AND a current trend where higher capitalization rates are now being demanded by investors purchasing leased (or to-be-leased) residential & commercial assets, it is no surprise to be seeing and expecting, lower final sales prices across most, if not all, asset classes throughout the country in the absence of demand to the contrary. The real estate market has effectively peaked and I expect prices to continue to decline as more supply continues to enter the market. Each asset class must be examined within its own market however. In some cases on the Miami Beaches, there are assets that are quite probably as low as they will ever get; while at the same time there are others where it would serve the savvy buyer to wait a bit longer for a substantial savings.
What concerns me most of all, however, is the current state of the bond market. I am going to go into extensive detail this coming month on our economic status, as a nation, and what I foresee as the possible permutations of outcomes are going forward. Bond yields are pushing higher, which means bond prices are dropping. Bond prices drop when there is a greater amount of selling than buying. If the current trends continue, especially if interest rates rise…even slightly, the ramifications to the credit markets going forward could be dire. This will absolutely adversely effect asset prices negatively should the trend continue; and I would argue IT HAS TO. Interest rates have been artificially low for far too long, and the market distortions this has created have not yet truly begun to be felt.
Market Activity & Neighborhood Reports by Zip Code for the Miami Beaches
33139 – South Beach
Median Est. Home Value: $395K, Down -0.7%; Median Est. Listing Price: $260K, Up 2.0%; Median Days in RPR: 135 Up 2%; Sales Volume: 89, Down –20.5%
MLS Sales Volume is at a 3 year low. Listing Volume is at a 3 year high.
The first few pages of the Market Activity & Neighborhood & Real Estate Market Report says it all, very clearly, in both numbers and charts. Click it and check out the PDF.
Navigating the real estate investment markets can seem overwhelming to the non-professional and can be detrimental to enter into without the proper guidance based on fundamental analysis of the markets. Give me a call and let me service your real estate investment needs. Whether you are a first time home buyer, or a savvy commercial real estate investor, myself and my team of agents can empower you to achieve your investment goals in the real estate market both here in Southeast Florida, as well as throughout the State of Florida.
It has certainly been an interesting 20 days in the world of business! After my last post, our brokerage absorbed nearly 70 short sale listings from an agent who rejoined my firm after a two year stint going it alone and making it on her own (I am very proud of her!). In the midst of this activity, and in addition to the usual order & chaos of my own residential & commercial real estate brokerage endeavors, I took a trip to NYC over the coldest weekend on record (-24 degrees F on the night of Saturday the 13th, Feb 2016!!!) to meet with new and existing business associates in the commercial real estate arena.
It is important, I think, to recognize the importance of meeting people in-person. I have found the Internet has made it difficult, at best, to differentiate a real business player from a fraud; and not not mention there is a big difference from being nothing more than words in an email and/or a voice on the phone than being (to another person) a living, breathing, in-the-flesh businessman who has gone out of his way (leaving the warmth of Miami for the cold of NY; not to mention the expense of NY lol) to meet you, shake your hand and sit down with you over a meal to discuss not just business, but life, liberty and the pursuit of happiness.
I am happy to say that my business trip was quite an extraordinary experience, and with some people perhaps long overdue. It pleases me to have had the good fortune to have been able to take the trip and establish what I believe will be long term friendships and business relationships.
In tandem with my business trip, work continued on our official brokerage website for Metro International Investments, http://MII.Miami. My graphic designer, Lorena, created and finalized a fantastic logo (both a square and a rectangle), that I am happy to share with my readers today. The website itself is up, but still subject to more customizations as we diligently work towards having it clearly convey our message to our target market; the Commercial Real Estate Investor.
The residential real estate aspect of the business is handled mainly by myself and my team of agents. Our residential real estate MLS website can be found at http://REBroker.Miami. I am putting my agent’s profiles together now and the site, like most healthy websites, continue to be works-in-progress. Any and all feedback from customers and industry professionals is welcome!
Additional blog entries can be found (and will be found) on each of these sites as both time and subject matter permits. I am a strong believer in educating my customers and sharing my experiences so as to empower them to make the best possible decisions for their unique set of needs, wants and goals.
I publish market analysis and other information of interest, mainly regarding the Miami Beaches, at http://BeachBroker.Miami(special thanks to Lorena for the new BeachBroker.Miami logo as well!). This too is a growing work-in-progress and at some point I believe I will be enlisting the aid of some motivated and talented writers with similar goals to mine. Until then I remain the sole author of this informational blog and enjoy writing articles for it. Following the publication of this article will be the next edition of The Miami Beaches Market Pulse – January 2016 versus January 2015; and The Most Expensive Listings of February 2016 on the Miami Beaches. In fact, I already have an initial draft of February 2016 versus February 2015 in draft and expect to have it out by mid-month. Beyond the planned publications, I have plans to make accessible other resources to the Miami Beaches that are invaluable. I will announce each of them as I deploy them.
Well, it is time to complete my latest edition of the Market Pulse; and so I will conclude here and endeavor to get my latest market update published for the coming business week.
Thank you for your readership! Please contact me with any suggestions, commentary or questions you may have!
January 1st 2015 – September 4th 2015 (October 2015 Update)
As the summer in Miami Beach came to a close I ran these reports on the five zip codes constituting the Miami Beaches ahead of the Labor Day Weekend. My last report was published shortly before the end the Spring and just ahead of the Memorial Day Weekend; and it was quite was alarming. Using data from Realtor’s Property Resource, an authoritative database for all transactions listed via the Multiple Listing Service, when compared to the same time period in 2014, transaction volume on the Miami Beaches had plummeted by 30-50% and listing volume was up sharply.
Since then, the stock markets, worldwide, have roiled over the uncertainty surrounding the future of interest rates, let alone the world’s reserve currency, the US Dollar; which, albeit stronger in the last couple of years, remains fixed in a 30+ year long downtrend.
The recent upswing in the Dollar resulted in properties being more expensive to foreign nationals, and for this reason, amongst others (i.e new construction), I believe is the root cause of what is currently happening along the Miami Beaches. Please note that the data below DOES NOT include pre-construction or new construction purchases; but also keep in mind that there is virtually nothing, of consequence to the numbers, in the new construction category within the Miami Beaches that is priced under one million US Dollars.
As you can see, Home Values continue to rise despite market weakness, however, I expect a shift in this as Median Listing Prices are down substantially and homes are on the market longer. In addition, the chart goes back as far as 2012, where there were circa 1500 homes listed in the South Beach Market. Listing Volume has more than doubled in the last 3 years having passed more than 3200 listed homes currently on the market! Naturally, Median Listing Prices have been declining over the same time period as Sellers wake up and realize their home is not worth nearly as much as they imagined.
The 33140 area lies immediately to the north of South Beach, 33139 and is, with respect to home ownership and other demographics a stark contrast to South Beach. North Beach is more of a full-time resident neighborhood and has far less tourist traffic than 33139. However, it is also not immune to the market correction we have been seeing. Again, Home Values continue to increase, while Listing Volume also continues increase, having nearly doubled in the last 3 years. More owners than renters exist in this market, and in my opinion, it is a more family friendly zip code to live in. Median List Prices are relatively flat year over year, and I expect this sideways trend to dip lower as listing volume increases. When looking at the the Price Range of Homes Sold, it should be noted that nearly 1/3 of all sales were over $1,100,000 USD.
Following the greater trend, Home Values continue to rise but the Median Listing Price has fallen off a cliff, now down 32%. I sold a couple of homes in this area in the past quarter and noticed that the recent Market Correction has brought in Ready, Willing and Able American Buyers (both were soon-to-be Retiree Couples). The Average Days on the Market also fell substantially as Buyers looking for a deal are snatching up properties in this area. I think that for a second home, investment property, or wanting to simply live in the area of Miami Beach, the best values can be found in this particular neighborhood right now. It is absolutely a Buyer’s Market with Sales Volume down more than 50% and Listing Volume having more than doubled in the past 3 years. This is a weaker market than the North Beach (to the south) and the Bal Harbour (to the north) Markets, and in my view, it has led the market correction on the beaches as a result. I expect the other markets, to a degree, to follow suit prior to the Spring of 2016 (although from May 2015 to September, Bal Harbour has taken quite a beating. It was “leading” the markets (in terms of resilience at least) in May.)
Bal Harbour is one of the wealthiest communities in the United States, home to one of the most exclusive malls in the world (The Bal Harbour Mall), and is an absolutely beautiful place to behold. However, it has not been able to hold up against the market correction as well as it was doing back in May when I published my last report. While, once again, Home Values continue to rise (and substantially here, +16%), Median Listing Prices are down by nearly 25% and Sales Volume is off by a whopping 62.7% (I am glad I am not an agent only specializing in Bal Harbour!).
Listing Volume is at a 3 year high and is currently double what it was in January 2012. Median Listing Prices have broken through a support range of 375K and are continuing to fall. One third of all listings sold were under 400K and another third of all homes sold were over 900K. Therefore this recent market correction has obviously spared no one. I expect market turnover to continue until Listing Volume begins to decline.
I have lived in Sunny Isles Beach for the last 7 years and I know this town well. In fact, I am pretty sure the data has improved in this zip code substantially in the past month due to the sheer volume of Buyers who have called me interested in taking advantage of the recent market correction here. While Home Values Improved, the Median Listing Price dropped substantially, at one point was off by nearly 30%. Listing Volume has climbed steadily however, and is currently sitting at a nearly 4 year high. In September, the trailing 12 months of Sales Volume was off nearly 40%, but a recent spate of closings I believe has reduced this to less than 5%. Keep in mind that a very substantial demographic change is currently underway in Sunny Isles Beach. With the construction of numerous beach front condominiums, a breed of extraordinarily high net worth people have been scooping up pre-constructions prices STARTING at $1400 per square foot! In turn, I have seen a number of beach condominium owners, also wealthy, but, not as wealthy as the newer beachfront apartment buyer, put their condominiums up for sale and inquire about making a purchase on the intracoastal side of the barrier island, an area of older, smaller, less expensive homes and apartments. This bodes well for home values and tax receipts to the City of Sunny Isles in the future as the demographic of this city becomes, on average, even wealthier. With few exceptions, I do not see prices declining much further here, however, I do see rents continuing to skyrocket as a result of this shift.
Despite the market correction on the beaches, Miami continues to be a top international destination, and barring an apocalyptic event, I do not see that trend softening, let alone reversing, any time soon. For the last 5 years inbound traffic and hotel stays have set records year after year, room rates continue to rise, and tax revenue from tourism continues to increase substantially. In tandem, massive non-residential commercial investment continues to pour into Miami-Dade County, and Southeast Florida as a whole. While the vast majority of the United States, I expect in the coming 1-2 years, will take an economic beating as a result of our Country’s ludicrous fiscal and monetary policies, The Miami Beaches and the City of Miami, I believe, will weather whatever the coming economic storm may bring for numerous reasons. First of all, the Baby Boomer Generation is retiring at a rate of 10,000 people per day (or 1 person every 8 seconds); and many of them have their eyes set on the warm Sun, sandy beaches and green palm trees of the South Florida subtropical climate. In addition, even if the Dollar takes a hammering, in an array of ways, that will boost foreign direct investment as wealthy foreign nationals seek to escape from harsh taxation & regulations in their home countries (and our policies are no picnic!). With that in mind, it should be noted that we are looking at a Buyer’s market here on the beaches and this is an opportunity that prospective buyers should, at the very least, look at closely with a knowledgable & reputable real estate broker.
Lastly, I would like to apologize to my readers for having not published another market update report sooner. I am extremely busy servicing my own customers & clients (who get the benefit of my analysis and insights on request) in both a residential & commercial real estate capacity; and therefore my time has been constrained with respect to Publishing & Marketing. As my firm grows, I expect to be able to publish on a more regular basis.