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The increased percentage of real estate construction loans in delinquency is another sign of bad news not just for commercial real estate but also for the banking sector.

Many argue that commercial real estate prices – which so far have suffered relatively little downward pressure – are heading for a substantial correction in the months to come. And by the way, the banking sector – one that has enjoyed a substantial 6 month rally in its stock prices in expectations of much better times ahead – could very well experienced a second act in troubled loans in the months ahead, specifically in commercial real estate loans.

WHAT IT MEANS FOR HOUSING INVENTORY

In short, get in before is to late.

With sales increasing, the current levels of inventory will eventually be a thing of the past by 2010.

And with limited financing for developers, don’t expect new building projects for several years ahead.

As of last September 2nd 2009, Miami-Dade county had 27,692 properties for sale. That represents a drop of 36% or 15,496 properties for sale in a period of 15 months. Don’t forget that the number of properties for sale in Miami-Dade county peaked at 43,188 properties for sale in June 2008. The drop in the number of properties for sale is expected to continue well into 2010.

Don’t miss on the buying opportunities available today. Prices are stabilizing and before you notice, prices will start to climb again.

Give us a call!

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Source:
Construction Loans Falter, a Bad Omen for Banks
FLOYD NORRIS
NYT, September 4, 2009

http://www.nytimes.com/2009/09/05/business/economy/05charts.html

See also:
For Commercial Real Estate, Hard Times Have Just Begun
TERRY PRISTIN
NYT, September 1, 2009

http://www.nytimes.com/2009/09/02/business/economy/02office.html

Have you asked yourself what is the best deal out there. Is it on:

a) Bank Owned Property (REO’s)

b) Short-Sale (SSL’s)

c) none of the above

Most BUYERS have focused on REO’s and SSL’s, and failed to recognize that SELLERS of Non-REO’s and Non-SSL’s have increasingly become very competitive in their pricing and/or willingness to negotiate offers.

After all, if SELLERS do otherwise, they will not be able to sell until the inventory of REO’s and SSL’s is reduced substantially from the current levels. The following chart summarizes the current market.

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

If you are considering buying/selling a home or if you are an investor looking into expanding your real estate asset allocation, look no further that the following presentation; miami-real-estate-31aug09.

This presentation provides you with a general summary of Miami’s real estate market conditions as of 31 August 2009. It covers;

• Inventory
• Historical Prices/SqFt
• Trends in Closed Sales and Pending Sales
• Areas of Opportunities.

Miami’s supply of Condos for sale continues to drop as indicated by statistics published by “Facts & Trends” Trendgraphics.com

CONDO INVENTORY

At of the end of May 2009, Miami-Dade County had 19,923 Condos listed for sale. This represents the lowest number of Condos for sale since the inventory peaked at 24,905 in May 2008. The May number of 19,923 also represents a drop of 5.5% from April 2009.

Lower inventory levels is good news for Sellers and Developers and a strong warning to undecided Buyers who seem to be waiting for X price before they decide to buy.

CONDO SALES

As of the end of May 2009, Miami-Dade County recorded 757 sales of Condos which represents a 99.7% increase in sales from the lowest monthly sales number recorded which was December 2007.

This is another welcome sign for Sellers and Developers who are unloading inventory at fire-sale prices.

AVERAGE PRICE PER SQ FT

Average Price per square foot (SF)  is a better indicator of the state of Miami’s real estate market.

As of the end of May 2009, Miami-Dade County recorded an average price of $205/SF. Although this number is 15.8% higher than the April 2009 number, it is still 44.7% lower than the highest number recorded on May 2007.

SUMMARY

The above Inventory and Sales figures, combined with the attractive average price/sf numbers – certainly an improved picture from several months ago – continues to attract buyers to the unique deals available today.

And although some argue that an increased number of foreclosures could temporarily derailed this recovery – a possibility more evident in properties valued under $300,000.00 – the real estate sales outlook for the remainder of 2009 and into 2010 still favors a Buyers market.

Finally, smart money continues to chase investment opportunities with Developers, its Lenders and their respective unsold Condo inventory.

Don’t miss out on 2009 buying opportunities!

If you have any questions or comments, please send me an e-mail to: michael@miamiflorida.com or call me at my mobile 305.450.0036

Miami parece ser el centro del universo en lo que se refiere a las oportunidades de inversión disponibles hoy día en bienes raíces, al menos para aquellos que residen en el Caribe, Centro y Sur América.

Si usted ha estado siguiendo las noticias de la caída de los precios de las propiedades en Miami y se inclina a invertir en el mercado residencial de Miami, pero por una razón u otra todavía no se decide, le sugiero que lea detenidamente nuestro breve y mas reciente estudio titulado “Oportunidades de Compra en el Mercado Residencial de Miami“. Los datos están actualizados al 31 de marzo del 2009.

Si usted esta interesado en identificar que oportunidades existen de acuerdo a sus intereses particulares, envienos un e-mail a: michael@miamiflorida.com y/o ana@miamiflorida.com

También nos puede llamar al 305.450.0036 cel de Michael P. Schnabel o al 786.210.6578 cel de Ana M. Schnabel (Margare Báez).

Investors looking for buying opportunities in the Brickell Area Condo Market, can look no further than the the following report; click on this link => “Miami Brickell Condos – Buying Opportunities on 0/1 and 1/1 as of 30oct08″ . This first report covers studios and one bedrooms in buildings built since 1990 in the Brickell area. A separate upcoming report will focus on 2 bedrooms and another one on 3 plus bedrooms. 

From a total of 71 units for sale (of which 37 are foreclosures), 55 are one bedrooms (of which 31 are foreclosures) and 16 are studios (of which 6 are foreclosures) 

One (1) bedroom prices per SqFt range from $171 at The Club to $317 at The Sail.

Studio prices per SqFt range from $220 at The Club to $443 at Latitude on the River.

Notice on line 10 of the report, to the extreme right, the numbers 90% (assumes a 90% occupancy rate), 90% (assumes the unit is purchased at 90% of the asking price) and 4% (assumes a 4% annual expenses between property taxes and association fees).

Clearly, Cash Buyers have the advantage. 

Please note that the net returns do not take into account financing cost, price appreciation and/or taxes when sold.

The buildings covered in this report and sorted by the year they were built:

YEAR
BUILT    BUILDING NAME
2007     Latitude on the River on 7th St., west of Brickell Ave.
2006     Neo Vertika on 7th St., off Brickell. west of Brickell Ave.
2006     Emerald on 14th St. east of Brickell Ave.
2006     Sail on 14 St. east of Brickell Ave.
2006     Solaris on 12 Te. east of Brickell Ave.
2005     The Club on Brickell Bay Dr., east of Brickell Ave.
2004     Skyline on Brickell Ave.
2004     The Vue on South Miami Ave., west of Brickell Ave.
2001     The Mark on Brickell Bay Dr., east of Brickell Ave.
1998     Fortune House on 14 Te., east of Brickell Ave.
1991     Brickell Key II on Brickell Key, east of Brickell
1990     Isola on Brickell Key, east of Brickell

If you have any questions or comments, please send me an e-mail to: michael.schnabel@mac.com or call me at 305.450.0036

Unlike the Stock Market which clearly fluctuates – 20% or more, up or down in a single week – in a manner not acceptable to those with heart problems, Real Estate markets have traditionally experienced much less fluctuation in prices with few time period exceptions such as the 2001 to 2008 years.

With every market that creates a pricing bubble and consequently crashes, prices usually tend to correct well beyond the most negative expectations. And Real Estate prices today have clearly dropped well beyond anyones expectations.

That is why today we see excellent value in real estate properties. A reason why more and more investors turn their investment eye to opportunities not seen in years in the real estate markets.

And for those of you who have concluded that the Stock Markets are far to risky and volatile for your own stage in life, consider starting or adding exposure to Real Estate assets.

Real Estate as an investment is fast recapturing the traditional safe heaven spot it has been for decades.

Today we are looking at discounts from 10% to 50% or more in some extreme cases.

If you prefer to invest your hard earned funds in a stable asset class as compared to volatile and risky stock markets, look no further than Real Estate.

If you have any questions or comments, please send me an e-mail to: michael.schnabel@mac.com or call me at 305.450.0036

FINANCIAL MARKETS

I never write about anything but themes related to Real Estate, however, having spent my first 25 years of my professional career in the Financial Services industry, the last 18 of which I worked as a Financial Advisor, I do keep track – like many of you – of current events in banking and investments.

Recently, a real estate client and friend raised the following concern; At the current rate of -500 to -600 points per day, the DOW JONES would reach zero in two weeks or so.

Although his comments are quite pathetic, it motivated me to take a fresh look at market fundamentals and everything that is going on with and around the economic crisis.

REAL ESTATE MARKETS

Unlike the crisis we have experienced this year in the financial markets, the Real Estate markets have been experiencing an ongoing crisis for three years.

Earlier in 2008, many of us argue this year was going to be the beginning of a two year bottoming process for real estate prices. Inventory was giving early signs of stabilizing and buyers started to snap bargains at a faster pace.

While that continues to happen today, the buying pace has slowed down recently given the current economic crisis. Buyers with Cash and/or with High Credit Scores are the ones benefitting the most from the buying opportunities available in todays crisis.

LOOK AHEAD, DON’T LOOK BACK

When we discuss the current economic crisis, we could look back and point fingers to Wall Street and to politicians on both sides, regulators and so on. 

But I am an optimist by nature and as such I prefer to look at opportunities that are developing today in Real Estate. I agreed that the government has taken many steps to stabilize this crisis and whoever is elected will likely expand government intervention and regulation.

I also sense that we are living in extraordinary times and as such, its takes bold action to benefit from the incredible opportunities available today!

WERE TO INVEST

Confidence on the financial system will gradually be restored. Make no mistake.

But before the dust disappears, investors are already asking themselves how to reposition their investments? How to balance their portfolios? How to take advantage of things to come? Was this a lesson in volatility? and so on…..

Let’s keep our investment options simple! 

Cash – Not considering the “under the mattress” alternative, cash is normally saved at a banking institution and after this banking crisis, it will be a while before regulators step in to better protect consumer funds held with banks. However it is in times like this that many say “Cash is King”. 

Stock Markets – Considered as a long term investment for many, todays economic crisis clearly reminds us that there are no guaranties that your investment will meet the sophisticated projections your were sold on.

Commodity Markets – Gold and Silver are part of a portfolio and traditionally have served as a hedge in bad times. Clearly have lived to their reputation.

Real Estate Markets - This one asset class needs no introduction. It is the most traditional of all asset classes in addition to simple cash. We all know that it is also subject to economic cycles, but we also know that in the long run, it will be there for you. You can count on it.

ONLY YOU CAN DECIDE WHAT RISK TO TAKE.

I HOPE YOU ARE AS OPTIMISTIC AS WE ARE.

If you have any questions or comments, please send me an e-mail to: michael.schnabel@mac.com or call me at 305.450.0036

According to a recent report published by the National Association of Realtors “The 2008 NAR Profile of International Home Buying Activity”, FLORIDA is the number one destination for foreign buyers. California came in second, Arizona was third and Texas was in fourth place.

But where do Buyers come from? 

Source:  “The 2008 NAR Profile of International Home Buying Activity”

The Miami-Ft. Lauderdale area is the number one choice for foreign buyers. One in five purchase a property in this area followed by one in ten in others areas of the state such as Orlando, Tampa, Naples, etc.

The number one reason for selecting FLORIDA is that it is viewed by a majority of foreign buyers (72 percent) as a desirable location.

In summary, South Florida’s economy is driven mainly by Tourism and Trade. Combined this with a weak US currency and a glut of inventory available at prices not seen since in years, Miami clearly remains the number one destination for foreign buyers.

If you have any questions or comments, please send me an e-mail to: michael.schnabel@mac.com or call me at 305.450.0036