About Real Estate of Miami (Updated May 2015)

I updated the About Real Estate of Miami Page.  Please click the link below to see the new page.  This blog is a constantly changing work in progress with the intentions of:

  1. Educating the Real Estate Buyer, Seller or Investor
  2. Maintaining Transparency with the General Public for all matters involving my Brokerage Affiliation(s) and License Status
  3. Providing / Disseminating Data via Reports and other Media originating from authoritative sources to the General Public.
  4. Providing Direction towards Real Estate Resources and other Information Resources relevant to the Real Estate Industry, specifically Southeast Florida, but not limited to this region.

About Real Estate of Miami.

 

Cheers,

Miami Realtor, Miami Real Estate Professional
Christopher Lazaro, MBA – International Realtor of Miami
Advertisements

Are Prices too High? Miami Beach Real Estate Transaction Volume Plummets!

Miami Beaches Market Activity Summary for  January 2015 through May 2015

While working with my residential customers over the past few months, I noticed something quite alarming about the real estate market on Miami Beach.  Transaction volume (the number of homes sales closed), when compared to last year, is down by as much as  50% when looking at Market Reports for each of the Miami Beach zip codes.

Starting from the legendary South Beach and working north to Sunny Isles and Golden Beach, the data is as follows:

33139 – South Beach – Median Est. Home Value $390K Up 13%; Median Est. Listing Price $217K Down –17%; Median Days in RPR 97 Down –7.6% Sales Volume 109 Down –46.8%  !!!!

Market-Activity-Report_Miami-Beach-FL-33139_2015-05-12-20-29-24

Given that transaction volume is off by nearly 50%, local Realtors in 33139 must be hurting.  My firm alone closed 4 (soon 5) of those 109 transactions so far this year.

33140 – North Beach – Median Est. Home Value $473K Up 5.1%; Median Est. Listing Price $345K Down –6.8%; Median Days in RPR 106 Up 1%; Sales Volume 60 Down –29.4%

Market-Activity-Report_Miami-Beach-FL-33140_2015-05-12-20-30-25

33141 – Surfside & Bay Harbor Islands – Median Est. Home Value $261K Up 6.7% Median Est. Listing Price $175K Down –23.7% Median Days in RPR 87 Down –13.9% Sales Volume 80 Down –37.5%

Market-Activity-Report_Miami-Beach-FL-33141_2015-05-12-20-29-49

33154 – Bal Harbour – Median Est. Home Value $580K Up 9.2% Median Est. Listing Price $395K Down –2.5% Median Days in RPR 102 Down –20.3% Sales Volume 43 Down –36.8%

Market-Activity-Report_Miami-Beach-FL-33154_2015-05-12-20-29-38

33160 – Sunny Isles Beach & Golden Beach – Median Est. Home Value $349K Up 9.9% Median Est. Listing Price $225K Down –10% Median Days in RPR 98 Down –11.7% Sales Volume 98 Down –49%

Market-Activity-Report_North-Miami-Beach-FL-33160_2015-05-12-20-29-07

In every case, we have home values going up while listing prices are coming down and transaction volume is off by as much as 50% year over year!  This makes me beg the question, have prices gone too far, too fast?  Are we finally at a tipping point where Sellers will begin to come back to Earth with more realistic ideas of their home’s value?  I hope so.

I believe there are a number of factors in play that have led to this tragic decline in sales volume:

1)  The Russian Ruble has lost more than a third of it’s value over the past 12 months and Putin has put capital flight controls into place making it very difficult for Russian Citizens to transfer money out of country.  Further, what money can be transferred out, is now worth significantly less against the dollar.  This is greatly dampened investment out of Russia over the past 6 months as well as the spirits of an innumerable number of Realtors.

RUB to USD Chart
RUB to USD Chart

2)  The world is sliding back into a global recession; some argue that we never actually got out of it in the first place.  Whatever the case, governments in Europe and South America have been making it either more difficult, if not impossible, for their citizenry to take their money overseas.  To make matters worse, our own government levies taxes on Foreign Direct Investment and given that at least 5-10% of all jobs in South Florida are created by foreign businesses opening their doors here, one would question the sanity of our politicians in not making it easier and less expensive to invest here!

3)   With all the new construction is not unimaginable that at least some number of prospective Buyers have decided to buy pre-construction & new construction deals.  These numbers would not flow into the reports as these properties were never listed.

4)  “Prices have genuinely gone too far” seems to be the most logical conclusion!  Limited supply of great location real estate and large demand originating from the “steals” of 2009 to 2012 (mortgage crisis) drove prices for the past several years.  As prices have gone up, however, the pool of available Buyers has shrunk; and those who would have been in the market for a Miami Beach property have either given up, or have turned their eyes to the north such as Hollywood Beach, Fort Lauderdale, Pompano Beach and Deerfield Beach.

For the sake of brevity, I have concluded here.  There are other factors for sure, but I believe I captured the majority of the macroeconomic factors.  I am very interested in any reasonable, rational comments, contributions, & critiques.

Cheers,

Miami Realtor, Realtor of Miami, Miami Real Estate
Christopher J. Lazaro, Miami Beach Real Estate Broker & REALTOR®

T: 1-800-798-9192 x333

Back to Blogging!

Welcome to my Blog Reborn… Real-Estate-of-Miami.com!

It has been over a year since I posted here but I was finally able to secure an old domain name of mine that had unfortunately expired; and I let RealtorOfMiami.com go 😦 due to an apparent trademark infringement according to the National Association of Realtors; no hard feelings.  Given the gap in my posts, however, I have quite a lot of catching up to do.  Over the next few weeks I will be going through my emails over the same time period and posting various articles based on consulting advice I gave to customers and my to own agents.  In addition, I have several ideas on how to go about reporting on the Miami Real Estate Market and I believe that my reporting will prove useful to many a real estate professional, investor or first time home buyer in the tri-county area (Miami-Dade County, Broward County and Palm Beach County).

To those who have been following me here and elsewhere, I am now a Licensed Real Estate Broker!  In addition, I have been officially added as a partner to Metro International Realty, PLLC (our DBA is Metro International Investments) by Mark J. Moldoff.  It has been a privilege to work with this great man & 45+ year veteran of the real estate development & brokerage industry.  I am very fortunate to have him as a partner and look forward to many more successes with him in the future!

My information is as follows:

Christopher J. Lazaro, MBA

Licensed Real Estate Broker, REALTOR®

Business Manager

Metro International Realty, PLLC

Toll Free: 1-800-798-9192 ext. 333

International: 1-305-517-3086

Fax: 305-521-8995

Email: Christopher.Lazaro@MetroInternationalRealty.com

License Number: BK3252123

Http://www.MetroInternationalRealty.com (currently under construction…new site forthcoming!) UPDATE – Go to: http://www.MII.MIAMI for our Commercial Real Estate Website.  At the moment it is a little rough, but it is fully functional and is connected to the MLS/IDX Data Feed for listings throughout Southeast Florida

Open Office Spaces – An Emerging Trend in Commercial Real Estate

The December 2013 Article in Realtor® Magazine had a great article this month identifying a emerging trend in commercial real estate.  The article is entitled The Walls Come Down – More companies are shifting to open-plan offices, adding amenities while reducing square footage.

Properly identifying the beginning of the trend as being Tech/Dot-Com related (I worked for a number of IT Companies that implemented this plan between 1998 to 2011 when I was a full time IT Professional), the article goes on to explain why companies are moving towards an open-floor plan model and the benefits they are receiving as a result.  A cost savings, of course, is virtually always the first and foremost reason.  In addition, however, it has been found that a number of synergies are to be had by employees having greater access to each other, without the barriers walls and doors create in between them.  While I certainly believe an open-floor plan provides a more comfortable space to work in, I do not see private offices going the way of extinction any time soon and neither do the contributors to the article.

For example, in my own small brokerage, we have quickly realized that sitting a team at the same table with the Brokers (Mark & Myself), to be enormously productive & educational for the team as a whole.  We are quickly able to share ideas and act upon those ideas directly from our laptops and cell phones.  Team morale is often much higher after a group powwow than at any other time; especially when agents are working remotely (from home).  However, there is always a need to be able to take calls privately (for confidentiality reasons at the very least; obviously some calls are personal as well).

In American Express and IBM, I noted the existence of, and often used, micro offices (or cubby holes as they were called).  A Cubby Hole is an office with a single desk or chair and only about as large as a telephone booth (remember those? 😉 ). These were also sound proofed.  They were distinctly available for those who needed privacy – for however long – (confidentiality was always a very high priority at these organizations) and for visiting consultants/employees who needed to be on site.  I made use of them often when I was on site, as I was dealing with, or leading, confidential projects all of the time.  I also have a voice that carries, and the folks of more than one cubicle set in my career, would politely request I take my business to a sound proof room.

While there was a notable drop in space-per-worker (225 sqft tp 213 sqft), the authors and contributors do not see the number ever dropping to below 150 sqft.  They also cite existing leases as a reason why this trend will continue to only trickle towards a smaller number rather than occur in a sudden fashion.

Miami Realtor, Realtor of Miami, Miami Real Estate
Christopher J. Lazaro, Miami Beach Real Estate Broker & REALTOR®

Status of RealtorOfMiami

Well, it has been a crazy couple of months! Deal flow has spiked significantly, much the same as it did in March/April of this year, but it appears that closings will actually happen this time (rather than a lot of paperwork & talk).
Personally, I have been challenged. ALL of October and well into November I knocked my back out and could not sit in a chair for greater than 5 minutes…getting up would be agonizing pain. So between that, deal flow, my other business ( OroLatina® – Fine 14K Gold Jewelry) trying to put out both a new mobile and desktop website with thousands of new gold jewelry products, AND a member of NAR telling me that I may be in violation of REALTOR® Association trademarks with my domain name; I have had a lot to do, and a lot on my mind. I am avoiding publishing & broadcasting any new posts until I resolve the REALTOR® question; I probably will change the domain name however, just to avoid any potential issues. I am going to call their counsel and get it handled ahead of the holidays…so more to come!
All, please have a happy & healthy Thanksgiving Holiday. My next post will be in December when I have more clarity, time and something to truly discuss and get to the heart of.
PS: We need a Statesman in Office; not a Politician (and I use a capital letter here, loosely). Bring on another Ronald Reagan! America needs Him/Her!!!!
Best Regards,
Chris

Social Media Usage & Broker’s Liability (Updated May 2015)

In the September/October Issue of REALTOR® Magazine, G.M Filisko published and interesting article entitled Online Oversight – Adopting and enforcing clear digital use policies reduces your brokerage’s potential liability.

While I am from the IT Background and take much of this information for granted, I believe it is imperative for the Broker/Business Owner to evaluate their business model and begin assessing what, if any, threats exist to their organization from the, often undisciplined, online activities of their Sales Associates.  The fact of the matter is that the Sales Associate, regardless of whether they are an independent contractor or not, is continuously representing their Broker in all of their real estate dealings, whether they are online or offline.

The following courses of action, in my opinion, are absolutely necessary:

1)  Create a Social Media Usage Policy – (for fear that the link will eventually become invalid, I have saved it as a PDF and uploaded it to this blog for viewing).  This policy, once drafted, should be presented to a new Sales Associate along with the Office Procedures Manual, a Cold Calling/Telephone Procedures Manual, and another other business policy manual you may already have in place.  Be sure they read & understand it, and they should (if they worked at any of the organizations I have in the past) sign a form indicating that they have read, accept and will abide by the rules of each of your policies.

2) NAR recommends BANNING: Pornography, SPAM, Chain Mail, Malicious Email, Business Unrelated to the Brokerage, All Illegal Usages.  This is common sense, however, when people use the same account for both business & personal reason, accidents can occur.  See bullet #3 for my recommendation.

3) I recommend an additional step to for any Broker to consider enforcing upon their agents:  Have your Sales Associates create a separate account on their own computer for their real estate sales endeavors!  While it is impossible to effectively control a computer that is, usually, a private asset of the Sales Associate, it is NOT too much to request that they use one user account on their system for business, and one or more for their own personal affairs.  This alone should be sufficient in removing the possibility of either a deliberate, or accidental, blending of the Sales Associates private/public online practices and the Business’s practices.

4)  Whenever possible, keep system resources, such as email, telephone numbers etc, IN HOUSE!  I try to never allow my associates to use private email addresses for business activities.  Furthermore, EVERY ONE of my Sales Associates gets a 1-800 number and International Number Extension from my business.  As part of any policy the Sales Associate must sign should be a Privacy Waiver indicating that All Company Owned Assets, including email and application services provided by the Brokerage, and all information stored in those accounts or databases, are the property of the Brokerage and the Brokerage may, at any time, review any and all information stored in any account or database to which it is the provider.  My brokerage uses Google Apps and Phone.com for our basic email, application & phone services.

I provide consulting for Real Estate Brokers who are looking to either begin, expand or evaluate their Social Media endeavors and online presence.  Prior to becoming a real estate broker, I was a systems engineer and systems architect for IBM at JP Morgan Chase Bank and American Express.  I am fully aware of the policies, processes & procedures that these organizations use to protect their image online, as well as their intellectual property.  Please call me if you require a consult.

 

Miami Realtor, Miami Real Estate Professional
Christopher Lazaro, MBA – International Broker & Realtor® of Miami

 

The REAL Estate Market – September Review

Well, it looks like I waited until the very last day to post my September article, but better late than never.  After all, unlike in Information Technology, there is no such thing as a Real Estate Emergency.

This month we experienced a bit of a slowdown, mainly attributed to the many Jewish Holidays that are in September.  Now that the holidays have come and gone, I expect an exciting end-of-the-year run towards closings to begin and run up until  Thanksgiving/Hanukkah, which coincide this year.  Despite the slowdown, a number of events this month are demonstrating, in my opinion, that we are at the top of a market and significant change is forthcoming in the next 6-8 months.

For example, we (Metro International Realty, PLLC) saw a major deal we were working fall apart for an unexpected reason.  Back in June, a major name in the South Florida real estate market was exploring the possibility of selling a 400+ unit multi family property in Miami-Dade County with us.  The original ask was 45 Million USD.  Within 48 hours we brought in an offer at 43 Million, direct from a senior VP at a major real estate corporation.  Our seller (and this is one of the pain points of “Off Market”), not being under any obligation, immediately raised his price to 50 million USD.  Our Buyer, flew down from the midwest, met with the Owner/Seller to negotiate, not once; but twice.  47 Million (which placed that asset at a 5.25 CAP on a Class B/B+ property requiring 15K per unit in upgrades/renovation) was tentatively agreed upon and the original thought was the Owner/Seller would take the deal back to his accounting team and see just how much money they wanted/needed right now, and how much they would want to carry as a note.  Our Buyer was willing to construct the deal in ANY fashion they wanted.  [The apparent “Greed” of the Seller (and others we have been working with who are countering offers at higher than their original ask price and NOT getting it), is one thing that is telling me that we are due for a turn in the RE Market.]   Last week, we received an email from the Owner/Seller that the tax implications of selling the property were far too great for them to move ahead with the deal.  Considering that we happen to know that this Owner/Seller could really use the extra cash right now, this was a very surprising outcome to what appeared to be, in virtually every way to even the most skeptical of businessmen, a “slam dunk”.  The fact that “Taxation” is creating an obstacle for deal flow just goes to show how screwed up the thinking is in Washington.

Which brings us to the next development of the month, the so called “Government Shutdown”.  Every year it seems we have a budget battle between the President and Congress.  I find this kind of funny given that the President has not actually proposed a real budget since he took office 6 years ago.  However, he has issued more “Executive Orders” during his tenure as President than all other Presidents before him combined (Dictatorship?)  Further, I was watching his address to the nation, today, and he specifically states “One House, of one branch of government, should not be permitted to…” essentially get in the way of his Left Wing Agenda.  My answer to that is a question:  Is this not a Democracy?  And, is it not the very “House” that, arguably, most closely resembles the voice of The People, ie: The House of Representatives, that is getting in the way?  The President even suggesting that the Legislative Branch’s powers/checks/balances be (or should be) more limited should be of grave concern and raise the question of just how “American” is this President?  But I digress…..

Another supporting factor to my thesis is that interest rates are up, and will be going higher.  California Beach Pundit wrote an article, early in the month, suggesting that interest rates were rising because the economy was stronger.  What I found most compelling about his article, was not the article, because most of his stats are based on Government Massaged Numbers, but the responses to his article by Stanley J G Crouch; who writes:

Absolute nonsense completely unsupported by the facts.

Interest rates are up because the Chinese and Japanese are huge net sellers of Treasuries and have completely swamped “QE Now”. The Fed would do well to double “QE Now” just to stay even.

“Loan demand” is poor for mortgages, corporates, muni bonds and U.S. treasury ‘supply’ is much lower due to sequestration and higher collections through the tax increases. So, higher rates are not “demand driven” at all.

The real reason is the BRICs trading away from the $ as sole reserve currency in increasing ways. Hardly bullish, and in fact, the pre-cursor to quite a ‘risk asset’ collapse.”

and by William McKibbin who responded:

“I agree that the macroeconomic data indicates the US economy is edging upwards, albeit at a glacial pace — however, when I consider fundamentals in the US, a am not so sure — for example, Sears, JC Penney, and Barnes & Noble stores are essentially insolvent — moreover, the city of Detroit is lost in a municipal bankruptcy of unprecedented scale — the US is still engaged in lost military expeditions overseas that are costing hundreds of billions of dollars — finally, we simply cannot ignore long-term declines in real working wages, real home values, and the employment to population ratio — thus, while I agree that the macroeconomic indicators are showing an “uptick” of sorts, the fundamental indicators are dire — said more specifically, the technical indicators do not reconcile with the fundamental indicators in the US — folks, that’s troubling — in fact, very troubling…”

I do appreciate the charts and commentary of Scott Grannis (AKA California Beach Pundit); however, we can agree to disagree on the hows & whys Scott!

With interest rates going up, regardless of the reasons, asset values must come down.  I have a residential customer, newly engaged as of yesterday (congrats Vanessa & Kevin!), who are in the market for a home.  They want to put 10% down, and finance the rest.  My customer has an 840 credit score (I swear…they DO exist it seems!).  I gave them the following advice given the budget requirements they gave to me.  I recommended we look at distressed assets through the Fannie Mae program via HomePath.com.  Given their credit, and the incentives Fannie Mae has for Buyers/First Time Buyers and the special Renovation Mortgage option/possibility with some properties, I could put them into a near ideal home (in terms of price), but it will be a Fixer Upper (something they actually would like to do).  I also explained to them that if they were ALL CASH, I would recommend they hold off on a purchase unless it was their intention to secure a low, loan-to-value loan against the home.  This is because asset values WILL drop as interest rates go higher, and CAP rates on both residential rentals and commercial assets will have to go higher as a result.

Lastly, if you are a Seller, do a quick, objective check of your mindset and finances.  Now is absolutely the time to start considering selling some assets and taking profits.  If your “mental state check” comes back as even being remotely Greedy, then you should probably call a Broker and have them QUIETLY assess/value your assets for possible sale and give you a professional opinion rooted in logic, reason, facts & fundamentals.  If you are unable to check your greed and/or ego now, you might be kicking yourself this time next year.

This coming month I expect to see quite a bit more activity, both on the big commercial scale, such as the forthcoming Hilton IPO, as well as at the small, residential level.  During October I will make several posts with some useful information pertaining to the Miami Market and hope you find it interesting.

On to Q4!

Cheers,

Christopher Lazaro

I can be reached at: