Recently, there has been flurry of articles in the newsmedia about a pronounced increase in home sales, which has also led to a stock market rally in the runup to the Thanksgiving Holiday. I’d like to take this opportunity to put a bit of local perspective on this latest sales trend:

75% of the homes sold between August through October in Miami-Dade County were priced under $300,000 and 23% of these sales were for homes listed under $100,000.

Price trends at the lower end of the market have been positive, however moving into the higher price ranges, those are areas that we are still seeing weakness.  Typically, when the supply of homes for sale stands at a year or more, prices tend to fall. With a six- to nine-month supply, prices remain flat. When the supply drops below six months, sales activity begins to spur price appreciation, as it has for recent home sold and priced under $100,000.

Below is sampling of the supply of houses listed for sale in Miami-Dade in October, according to the MLS:

• Under $100,000: four-month supply
• Under $300,000: eight-month supply
• $300,000 to $1 million: 21-month supply
• Over $1 million: four-year supply

Miami Beach’s luxury housing market falls into the upper end category, however, the supply is much more restricted due to the natural barrier (island community) limiting further supply.  Also, virtually no new construction is currently taking place, so we’re experiencing a decline in inventory levels for Miami Beach’s 33139 and 33140 zip codes:

• $300,000 to $500,000: less than six month supply
• $500,000 to $1 million: 14 month supply
• $1 million to $2 million: 18 month supply
• Over $2 million: 23 month supply

The conclusion from the above referenced data – there is no room in the Miami Beach housing market for overpriced listings. The strongest demand is for turnkey (completely remodeled) homes, where the new owners do not have to make an additional investment into the property.

To view latest Miami Beach sales data, visit our Miami Beach Real Estate website

* Data Sources: MLS & Miami-Dade Public Records

I’d like to give a quick market update as well as some commentary on the latest sales that my team and I have been involved with:

Condos

Murano Grande #1906- $1,350,000 3 beds / 3baths ($667/S.F.)

Waterfront Single Family Home

Palm Island – 298 S. Coconut Lane $3,150,000 5 beds / 4 baths ($787/S.F.)

Once again, the market has shown that it rewards sellers who price their properties correctly, and (in a bit of shameless but true self-promtion!) when the marketing is handled by an experienced, knowledgeable, detail-oriented, and top producing real estate salesperson. Thanks to an aggressive AND creative targeted Marketing Campaign (we had an offer come in from St. Petersburg, Russia). My advice to any seller today is to be working with an agent at the top of their field, and who will be a straight talker, positive but realistic, and follow-up with any and all potential buyers.

I recently took two of my more motivated & loyal buyers to see waterfront and non-waterfront homes on Miami Beach that were being unprofessionally represented. I was left standing in front of three (of six confirmed appointments) homes where the agents failed to show up. In two of these cases, the agents called me THE NEXT DAY wanting to reschedule the showings! Needless to say, all six of these properties remain unsold (and are great deals!).

This is my first blog post of the year, so I would like to wish everyone reading this a healthy and prosperous 2008! During my first full week back to work, I’d like to take a few moments to reflect on some of the different seller scenarios that I have most recently encountered:

Scenario #1: SHOULD HAVE SOLD LAST YEAR (Late on mortgage/tax payments, cannot continue with the fixed expenses, probably purchased property after 2003). Often characterized as a short sale with sale terms controlled by the lender. However, often times, the owner still gets to pick the Realtor/brokerage firm.

It is critical to be priced correctly from the start, and that the marketing be handled by an experienced, knowledgeable, detail-oriented, and top producing real estate salesperson/team. This should be someone that will be aggressive AND creative in the marketing of the property (be it a home, condo, or land). It is crucial to be working with a company/agent at the top of their field, and who will be a straight talker, positive but realistic, and gives the seller a good feeling that they will follow up with any and all potential buyers. I have recently seen several of these properties in Miami Beach, that are being poorly marketed. The owners (and banks) do not realize what this is potentially costing them.

Scenario #2: NEED TO SELL (Possible health reasons, relocating, retiring, some financial pressure, misc. life circumstances).

It is critical to price the property correctly from the start. I am writing this on January 10, 2008, and have personally spoken to over twenty potential buyers over the past week (and made two offers thus far within 10% of the asking price). Looking at recently closed sales (within three months), properties that are priced to sell usually receive lots of activity and sometimes multiple offers. These also are properties that are on the market for no more than 45 days. Obviously, the marketing needs to be handled by an experienced, knowledgeable, detail-oriented, and top producing real estate salesperson/team. Shockingly, I’ve seen several properties in South Beach that fall under this category, that are being poorly represented (no return phone calls/emails, disconnected phone numbers, agents that seem to have other jobs and don’t really care anymore, as well as poor pictures and text descriptions).

Scenario #3: CASHING OUT (Opportunity for greater returns from owning something else, owner of many years, general desire to move on).

We are certainly not at the top of the market, however, certain properties still receive strong buyer interest. Examples are certain PH-type units with unique locations/views/floorplans, and waterfront turnkey showcase homes in unique locations with strong curb appeal). Yesterday, I had the opportunity to see a comparison of SE Florida property prices versus major European/Caribbean and South American markets. Property in the greater Miami area is still relatively inexpensive, and the weak dollar is attracting a large percentage of European (especially Russian), Canadian, and some South American buyers. I am finding particularly strong buyer interest in Miami Beach and especially South Beach. Island waterfront homes, and South of Fifth Street (South Beach) premium location condo buildings are especially sought after by European buyers.

Recently, I received in the mail a very comprehensive market snapshot from a local brokerage firm with a variety of confusing statistics gathered from the MLS comparing 2006 and 2007 Q2 sales for the more prominent buildings South of Fifth Street in Miami Beach. I’m astounded that in today’s real estate market, sales professionals are still sending out confusing statistical reports in an effort to sign up listings. Below is my common sense interpretation of the data.

I’ve compiled the following from the MLS to clearly communicate what is happening with the luxury condo market South of Fifth Street for the following luxury waterfront buildings:

Murano at Portofino

There are 20 units for sale, which makes it the lowest inventory building in the entire area. The average asking price is $2,475,000 at $1,107/S.F. The median sales asking price is $1,660,000 at just over $1,000/S.F. YTD 2007 a total of 3 units have sold, at an average sales price of $1,523,000 at $1,126/S.F.

Although on paper prices do not seem to have been affected thus far, only THREE units have sold for the entire year! Also of note, there are only two â¬S01⬝ or â¬SA⬝ units (which I consider to be among the best floorplans and views in all of SE Florida and Greater Miami) and they are still hard to come by- with only two units on the active market starting at $4,900,000 or $1,456/ S.F. The last two closed sales that have taken place for the â¬S01⬝ units were in March of 2006 for an average of $3,947,000 at $1,172/S.F.

Murano Grande

There are 53 condominium units for sale in this building, obviously an oversupply of sellers (with at least two units in foreclosure/pre-foreclosure). The average asking price is $1,897,000 at $840/S.F. The median asking price is $1,470,000 at just over $838/S.F. For the second half of 2007 (since June 1) a total of 6 units have sold (vs 13 sales for same period last year), at an average sales price of $1,406,000 at $847/S.F. This represents a closed sales slowdown of 53% during the summer/fall months of 2007 vs summer/fall of 2006.

Icon South Beach

There are 43 condominium units actively for sale, with at least four units in foreclosure/pre-foreclosure. The average asking price is $1,860,000 at $895/S.F. The median asking price is $1,600,000 at just over $876/S.F. For the second half of 2007 (since June 1) a total of 6 units have sold (vs 16 sales for same period last year), at an average sales price of $2,676,000 at $931/S.F. This represents a closed sales slowdown of 63% during the summer/fall months of 2007 vs summer/fall of 2006.

Continuum South Beach (South Tower)

There are 50 condominium units actively on the market for sale. The average asking price is $2,983,000 at $1,263/S.F. The median asking price is $2,372,000 at just over $1,225/S.F. For the second half of 2007 (since June 1) a total of 7 units have sold (vs 10 sales for same period last year), at an average sales price of $1,566,000 at $869/S.F. This represents a closed sales slowdown of 30% during the summer/fall months of 2007 vs summer/fall of 2006.

Portofino Tower

There are 37 condominium units actively on the market for sale. The average asking price is $1,955,000 at $881/S.F. The median asking price is $1,699,000 at just under $800/S.F. For the second half of 2007 (since July 1) a total of 3 units have sold (vs 6 sales for same period last year), at an average sales price of $2,983,000 at $972/S.F. The most significant difference over the past year, are that the number of active condominiums for sale has increased, but the ones selling are the premier waterfront Penthouses and â¬S01⬝ high floor lines with unobstructed views (see below)

Apogee

Closings will be commencing in the next few weeks, the 01 and 04 lines are by far the most desireable. For example, one of the better re-sale units is #901 and can be purchased for $4,790,000 at $1,155/S.F. This may seem like a high price, the 01 line and 04 lines at Apogee have been thus far priced in the $7M and $8M range. I believe that these units are most competitive with Murano at Portofino â¬S01⬝ or â¬SA⬝ units. Note that the last two closed sales that have taken place for the â¬S01⬝ units at Murano for an average of $3,947,000 at $1,172/S.F. See comparisons of units â¬SA⬝ from both buildings below:

Vs.