The month of May 2011 saw a slight uptick in the seasonally adjusted Case Shiller home price index from April. The index went up from 139.47 to 140.1, however that is down from 147.88 in May last year. The index takes into account homes across Miami and I believe if they were to focus on condos in central areas such as Brickell or Midtown they would find that prices have increased slightly more. The following is a graph illustrating the drop since January 2007: Continue reading →
Wynwood has been picking up steam lately in its process of rejuvination. In the past two months it picked up two hip coffee houses, Panther Coffee, located at 2390 NW second ave, and Lester’s, located at 2519 NW 2nd Ave. Most people from Midtown or Edgewater can check them out during the highly popular Wynwood Art Walks but it will likely take some time before business is booming at these locations but eventually it will if the owners have the patience. Continue reading →
In June, An Asian Casino company, Genting, purchased approximately 14 acres of waterfront land which was owned by the Miami Herald. Genting paid $236 million in an all cash deal for the property. The land is located just East and North East of the Performing Arts Center along Biscayne Bay. The development will be a mixed use project with a hotel, residences, retail and possibly even a casino which the developers are pushing for. The project is massive and the developers expect to spend between $2 billion and $5 billion constructing it. Genting has not specified a completion date in part because the Miami Herald, which sits on part of the property has up to two years to find a new location.
The city commisioners have approved development plans for a three tower complex to be located at 1700 Biscayne Blvd which is facing the Omni Complex. It will include 672 residential apartments, 181,000 retail/commercial space, 505 hotel rooms. The apartments are expected to sell for $400k. The buildings will be massive up to 55 stories. The project is expected to be completed by 2015 and to cost $726 million. This is part of a whole host of developments that are taking place in the area immediately north of the Performing Arts Center which is now clearly the most rapidly transforming district of Miami.
Downtown Miami is about to initiate the largest private works project in the United States this year. It will be approximately 4,000,000 square feet of retail. That is almost 3 times the size of Dolphin Mall and much bigger than Sawgrass Mills Mall. It will be called Brickell CitiCentre and will be a powerful engine of growth in the area. Click the following link to learn more about the project and see a video about Brickell CitiCentre.
According to a recent market report from Condovultures.com the average price per square foot of downtown Miami condos rose by approximately 14% on a year over year basis, from $306 to $348 during the first quarter of 2011.
This figure did surprise me a little because recent months have shown some more weakness in overall prices, although nothing too dramatic. It does show that demand is still quite strong in Downtown and central areas in the Miami metro market. Continue reading →
Despite the enormous luxury high rises that dominate the landscape along the stretch along Biscayne Blvd. known as Biscayne Wall from 1st to 11th street, Bayside Marketplace, and Bicentenial Park, which are situated across the street, remain unattractive even given their prime waterfront location. Continue reading →
The historic Shelborne hotel, located on 18th and Collins Avenue, is scheduled to have its renovation completed in the fall of 2011. The hotel is next to the Raleigh and the Shore Club. Another hotel nearby, the Royal Palm is also undergoing renovation. It seems the row of hotels on this stretch of Collins continue to up the ante making this one of the top hotel destinations in the world. To read more about this project follow this link.
Believe it or not, the figures speak for themselves. The Investors Business Daily just ran an article commenting on the strength of the Miami condo market in comparison to other large cities in the United States. This is exactly what I had predicted would happen in previous posts prior to moving back to Miami: that the hardest hit markets would lead the recovery and that many other factors would especially favor Miami in this recovery.
“Of the top eight U.S. metro areas, Miami was the only one in 2010 to show volume gains in attached-home closings, mainly condos, according to data gathered by Hanley Wood Market Intelligence.
The other seven fell 5% to 37% as Miami rose 8%. New York dropped 13%, Los Angeles 20% and San Francisco 37%. Unit sales totaled 4,120 in Miami — above L.A.’s 3,935 — but that still pales vs. pre-crash years 2005-07, when 20,000 to 30,000 units sold each year.
The Miami metro figures cited by Hanley Wood include Miami-Dade, Broward and Palm Beach counties. Miami-Dade is almost 70% of the total, at 2,842 closings.”
According to the recent data released for the S&P Case Shiller Home Price Indices for the month of December 2011, Miami home prices fell slightly in comparison to the previous month and the previous year. In comparison to the previous month of November, prices fell by 0.5% (annualized rate of 6%). When compared to the previous year they fell by 4%. The decline was relatively mild considering how much inventory the market was able to absorb during that period. From these figures one might conclude that the rate of decline is accelerating however, I would caution holding too much sway in one month’s figures especially given that the difference is so small and the fact that it could be simply a sign of the resumption of the foreclosure sales that were halted a couple of months ago due to the controversies surrounding the ‘robo-signers’. Prices may not rise or at least I don’t expect them to rise rapidly in 2011. However, this does not mean that the market or conditions are not improving because supply is continuously being worked off with almost nothing new being added except for the shadow inventory of foreclosures. That too will eventually dry up at which point we likely will see prices rise.
After years in limbo, the 600,000sf, 40-story, class A office building, which was located at 600 Brickell and formerly known as Brickell Financial Center, will get get built it seems. The developers were trying to secure construction financing which had been unobtainable following the financial crisis; however, it seems they have finally succeeded in getting a $130 million loan from Canyon Capital Realty Advisors. This appears to be a solid sign that the commercial market is making its way back to normalcy seeing as construction loans are generally perceived as the most risky despite the fact that this location and project are first class. To read more details of this story visit GlobeSt.com.
According to the Miami Association of Realtors and data collected from the Southeast Florida Multiple Listing Service, sales of existing homes in Miami rose by 18% in December compared to the same period in 2009. This is also approximately 70% greater than the same period two years ago. The increases are much stronger than both the national and statewide figures, reflecting a more pronounced rebound in Miami. The increase in condominium sales rose the most, jumping 43% from the same period last year and 114% from 2008 levels. Pricing is still being kept low as distressed sales from foreclosures and short sales continue make up a majority of transactions. So while prices have not risen, the increasing volume of sales has reduced the total inventory of homes by over 7.5 percent from January 2010 according to the Southeast Florida Multiple Listing Service. If this pace of sales continues or we at least see continued drops in inventory, then prices will begin to rise although that rise will be tempered until the majority of distressed sales are able to work through the system.
In the United States, the sales of previously owned homes in December rose much more than forecast. They increased by 12%. It seems that after a rough patch in sales due to the expiration of the home tax credit, the market has normalized and is continuing to work off the inventory through attractive lower prices. Helping the matter are low mortgage interest rates for qualified buyers. Since December, we have seen long term rates begin to rise, so it will be interesting to see how January and February figures may be affected by this. Nevertheless, it is encouraging to see a healthy level of activity in the national housing market.
In order to promote the sales of Mint, one of Miami’s last remaining vacant condo buildings in downtown, the owners of the building reduced prices by over 30%. Mint is part of three buildings that make up a gated community in Downtown. Despite being in Downtown, it is in a somewhat awkward location because by separating itself in an enclave, it makes it much less pedestrian friendly promoting more driving, something that downtown does not need more of. The average price paid was approximately $325 per square foot for a total of over $375 million dollars. The building was previously bought by ST Residential from the now failed Corus Bank. The original pricing of the units at preconstruction were generally over $500 per square foot. It will be nice to have residents bring this building to life over the course of 2011.
In Reddick Florida this past December, the defendants won a non-jury trial in a case where they defaulted on a home mortgage back in 2008. The Judge ruled that Chase Home Finance, LLC, the previous lender and plantiff, failed to meet the burden of proof of re-establishing the mortgage note or that it was the owner of the note at the time of trial. Whereas before, Judges where seemingly favoring the plaintiffs by granting title to the banks at a rapid pace at times with missing documents; this marks evidence of a possible shift in behavior and in my opinion can become a dangerous catalyst that could not only could delay the housing recovery but further clog the court system and potentially increase systemic risk by encouraging more homeowners to “strategically” default. If we begin to see more cases ruled in this matter, then it will be a strong factor instigating the possibility of a significant double dip in the housing market.
Miami based Lennar Corp, the third largest U.S. homebuilder reported a better than expected net income of $32 million for the three months ending on Nov 30th. The fact that homebuilders are able to make money in an environment where they have to compete with so many distressed sales of previously owned homes is encouraging. Lennar shares rallied to an eight month high after the news.
Leave it to the Goldmans to come up with another tantalizing ingredient to help organically grow and attract attention to the Wynwood Arts District, which Goldman Properties has a significant stake in. Their latest addition, Wynwood Kitchen and Bar, on the corner of NW 2nd Ave and 26th ST is obviously part of a master plan to compliment Wynwood Walls and Joey’s Restaurant to create an bonafide anchor to NW 2nd Ave’s row of galleries and other retail. Wynwood Kitchen and Bar is not just a restaurant, it is going to be a spectacle as it showcases its own impressive art and murals and is attached to and has outdoor seating within the now well known Wynwood Walls. It will make the restaurant truly unique and sure to get people buzzing. Judging by Goldmans other restaurants, I am sure the food will but well above par also. The restaurant is planned to open up on November 26th, so we will not have to wait long to find out. This will be one to watch as I expect it to be one coolest new restaurants of 2011.
Colliers International South Q3 2010 Commercial Real Estate Overview points to signs that the commercial real estate market in Miami is no longer declining and begining to find its footing. Vacancy rates for office are still a touch above 15% and lease rates are about $30 per square foot but have stayed in this new norm for about the last 18 months, neither improving nor deteriorating. According to the report, industrial vacancy is currently at 9.5% and retail vacancy is only 6%, which is the lowest in the state. While there may be some competition among landlords leading to some softness in rents, there does not seem to be the desperation or fear that prevailed in the marketplace a year ago. As long as there are no exogenous shocks to the national economy, we are likely at the bottom plateau of this cycle and a relative equilibrium where things are able to improve from here.
Chris Lafakis, an economist at Moody’s Analytics, predicts that there will be substantial growth in the Florida economy and specifically Miami due to a rebound in population growth as well as increased vacations and travel to desirable Florida cities. He says, “The story of pent-up demand is true in no place more so than Florida.” These views are consistent with my belief that while Florida was the leading indicator going into the recession it will ultimately also lead the economy out of the recession.
Since May 2010 there have been 17 recorded sales in Two Midtown Condominium with an average price per square foot of $175 with a range between $230 and $142. The biggest sale was a 3 bedroom apartment for $270,000.
Since March 2010 there have been 10 recorded sales in Blue Condominium with an average price per square foot of $172 with range of $146 to $187. The largest sale was a spacious two bedroom apartment for $263,500 that sold in August.
Red Dot Miami has has set up the massive tents and begun preparing for the art fairs to take place by Midtown Miami in the Wynwood Arts District during the week of Art Basel from December 1st to the 5th. There will be over 30 exhibitors and collections on display from all over the country in Red Dot alone. The fair will be open to the public from 11am-7pm on Wed, then extending an hour to 8pm on Thurs, Friday, and Saturday. It will close earlier on Sunday at 6pm. The fair attracts people from all over. Guests who were here last year are bound to be impressed by how Midtown Miami has improved in just a year.
This is a video of what part of the exhibition looked like last year:
New York based, Rockwood Capital has won at a foreclosure auction what is likely to be the last major bulk condo deal for a while in Miami. The auction was for a the first mortgage construction loan made by Bank of America on the 49 story Everglades on the Bay Condominium in the entertainment district of downtown Miami. There appears to be some bitterness about the sale and could spell for future lawsuits. In any case, the mortgage was purchased for approximately $142 million which came out to $191 per square foot. It doesn’t seem like the investors got too much of a wholesale discount for such a large deal and also potential legal costs and hassles, which goes to show the amount of interest and confidence that Rockwood has. This appears to be leveling the playing field between the retail investors and the big players in that really deep pockets don’t necessarily get much better deals in this environment now that the bulk deals are drying up.