Nov 2011

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November 2011 Newsle/er Sean G reco – R ealtor®, CIPS, CDPE, CLHMS, G REEN CerBﬁed, T RC, R EOS DesignaBons and CerBﬁcaBons are explained at the end of the newsle/er Buy the B each R ealty, Cell 786-‐877-‐9220, buybeach.com Gree$ngs from Snowless South Florida, Please bookmark this page as it will be very helpful in analyzing actual data from the very speciﬁc Real Estate market in which I prac$ce. You will be ﬁnding yourself looking forward to comparing this month’s data with last month’s data to spot trends and decide for yourself the status of the local Real Estate market, of which I work within 24/7. Please go to st this bookmarked page on the 1 day of each month in order to get the most up to date informa$on immediately, or any$me throughout the month when you have the $me. From month to month it will contain data that will help you to analyze market condi$ons. In addi$on, it is an unobtrusive way to stay in touch with you regarding my Real Estate Consul$ng Services. The ﬁrst por$on of this newsleMer is hand selected data that I track every month, in the very speciﬁc market in which I prac$ce. This data is for Miami Beach (South Beach, Mid Beach and North Beach), Fisher Island, Bal Harbour, Surfside and Bay Harbor Islands. The trend of percentage of acBve inventory selling over percentage of acBve inventory expiring th conBnues for the 8 month in a row for condos and 7th month in a row for single family homes – clearly, the percentage gap between the 2 has come oﬀ its highs, but it seems this trend has become the ‘norm’ for the Bme being -‐ and simply put, shows more inventory is selling than expiring unsold. The below chart is data from the past 90 days for C ondominiums, ending 10/31/11. The data is taken from South East Florida’s Mul$ple Lis$ng Service (MLS) for the ci$es and townships of Miami Beach (South Beach, Mid Beach, & North Beach), Surfside, Bal Harbour, Bay Harbor Islands, and Fisher Island. The paragraph below the data will explain in more detail what is included in this analysis. Please don’t hesitate to pose any ques$ons you may have, or simply give me a call or send me an email to discuss Real Estate in general. This data will help to analyze market condi$ons from month to month. CONDO D ATA As you can see, I have broken the data into price ranges, and then you can see the amount of A cBve condos for sale, how many Real Buyers C losed on a condo for sale, how many of those lis$ng agreements Expired unsold, then further calculated what percent of the Ac$ve condos for sale Expired and Sold. Then I calculated the Average Days on Market (Avg D OM), which is the amount of days it took the condos that sold to obtain a Real Buyer. Then I show the A verage Discount, which is the percentage the Listed Price was discounted to the Actual Sale Price for all Closed Sales. The last column is for Closed Sales that were newer construcBon, which I considered to be anything built aZer 1995, versus older buildings built before 1995. I track this data for Condominiums and Single Family Homes separately due to their diﬀerences. I also track the data for the more luxurious buildings of South Beach, please feel free to email or call for that data. The next set of data below is the same informa$on for Single Family Homes. The one diﬀerence is that the last column is the A verage A ge of the homes Sold. HOME D ATA

If you are worried about the pi^alls of distressed property, but s$ll consider yourself a bargain hunter looking for such, please contact me so that I may setup an automa$c short sale or foreclosure search no$ﬁca$on for you. I have found that the best deals usually go the quickest, and to be proac$ve in your distressed property search is the best way to go about ﬁnding a bargain. Please understand that this service I provide adds signiﬁcant value to the process, and only contact me if you are serious about buying and planning to be loyal. Please don’t hesitate to contact me directly for any such informa$on. RENTS RISE A S OVERSEAS BUYERS I NVEST: By choice or by force, more and more people in South Florida’s foreclosure-‐ridden housing market are ren$ng, rather than owning, their homes. In an ironic twist on economics, that dynamic is actually helping the resale market. According to sales reports released Thursday, South Florida is on track to set a new sales record this year. The reason: investors. The majority of today’s homebuyers are not ﬁrst-‐$me owners or growing families, but opportunis$c investors. Interna$onal buyers and locals with cash are making money in the region’s distressed market by buying up foreclosed homes and turning them into rentals. Homeowners who have been foreclosed upon, and those who either can’t or won’t buy in this economy, are ﬂooding the rental market with unprecedented demand. “I talk to a couple investors all over South America and they tell me they buy these condos and it takes them about a week to rent them,” said Craig Studnicky, principal of Miami real estate ﬁrm RelatedISG. “Each and every month, the rents are going up.” Spurred by investor ac$vity, South Florida homes sales rose again in September, according to new data by the Miami Associa$on of Realtors. All-‐cash buyers, mostly investors, accounted for 63 percent of all sales. Those investors are gravita$ng towards distressed proper$es, which make up about 60 percent of home sales and trade at deep discounts. Occupancy rates in South Florida are now above 95 percent, and rent prices have risen between 3 and 7 percent this year, according to research by Texas-‐based MPF Research. In addi$on to the rising rental market, interna$onal investors are drawn to South Florida real estate because the U.S. oﬀers greater legal protec$on for foreign land owners than many other countries, and because some homeownership can make it easier to obtain a U.S. visa. Growing investor appe$te is driving sales of condos and single-‐family homes back to the boom $me levels of 2005 and 2006. In Miami-‐Dade County, for example, total sales are expected to reach 29,000 this year, more than 2005’s total. -‐Source: The Miami Herald 10/21/11, MAR, MPF Research ENERGY C ONSORTIUM EYES G REEN P ROJECT: It’s no secret that owners of homes and businesses can save money on electricity by installing new windows, more eﬃcient air condi$oners, and other household improvements. The trouble is coming up with the cash. But a new partnership between a na$onal consor$um of ﬁve private businesses and six South Florida ci$es promises to oﬀer low-‐ interest ﬁnancing to help property owners make these upgrades, provided that the improvements will pay for themselves in reduced power bills. The consor$um, setup by Bri$sh music and airline tycoon Sir Richard Branson, will invest $550 million in South Florida, which will be the ﬁrst of two U.S. markets for the venture. The consor$um says its investment will cut energy bills and produce thousands of jobs, as workers will be needed to install the upgrades. The ci$es – Cutler Bay, PalmeMo Bay, Pinecrest, South Miami, Coral Gables and Miami – are star$ng to sign deals with the consor$um now, and the ﬁrst upgrade projects could start in early 2012. The ﬁve companies include Barclays, the largest bank in the United Kingdom; defense and technology conglomerate Lockheed Mar$n; energy ﬁnance start-‐up ﬁrm Ygrene; Energi Insurance Services; and Germany’s Hannover Re, which is also the third largest reinsurance ﬁrm in the world. Carbon War Room, a nonproﬁt group started by Branson, who is best known for founding Virgin Records and Virgin Airways, came up with the idea and brought the other players to the table. Here’s how the program will work: First, at the request of a property owner, Ygrene sends a specialist to perform an ‘energy audit’ for the property, evalua$ng what improvements are needed and how much money could be saved if these upgrades are made. If the cost of the upgrades up to a 20-‐year period is less than the energy savings, then the property is eligible for the program. Next, the customer agrees to the ﬁnancing arrangement, whereby they will repay the money each year as a surcharge on their local tax bill.

Then, local contractors will install the upgrades. Lockheed Mar$n will compete to be the contractor in some of the larger commercial projects. Finally, Ygrene pays the contractor and the property owner begins repaying the debt. The companies bring their ﬁnancial resources and exper$se while the ci$es ensure the debts are repaid by collec$ng them as a surcharge on the property owner’s tax bill rather than an ordinary loan payment. If the property is sold, the lien stays with the property and is passed on to the next owner. Miami-‐Dade is the big start-‐up area for the Carbon War Room’s project. The project relies on some novel arrangements between the companies and ci$es, which are made possible under a 2010 state law called the Property Assessed Clean Energy Act, or PACE. It allows local municipali$es to ﬁnance energy upgrades through property assessments. The ci$es will sign agreements with one another and form the Green Corridor District, a separate legal en$ty that, under the PACE law, allows them to work together to ﬁnance these energy-‐eﬃcient projects. Each city will have one representa$ve sit on the Green Corridor board, and would act as a check on the consor$um to ensure that Ygrene is administra$ng the program eﬀec$vely. One of the reasons the consor$um is star$ng its work in Florida, is because the state has strong PACE laws, which say that property owners only have to no$fy their lenders, not get approval, if they want to ﬁnance through PACE. Controversy aside, environmental groups and advocates have lauded the consor$um as a game-‐changer that would alleviate a reliance on federal dollars for expensive energy eﬃcient projects and would bring much needed jobs to the area. Susan Glickman, a consultant for the Natural Resources Defense Council, said that renewable energy creates more jobs than any other source of energy. For every $4 million in PACE spending, $10 million dollars ﬂows through the economy and 60 new jobs are created, according to an April 2011 study by ECO-‐Northwest. Based on these projec$ons, Branson’s consor$um would pump more than $1 billion into the economy and create more than 8,000 jobs. Ygrene Energy will also open an energy center in Miami-‐Dade that would operate the Green Corridor program. The building would be equipped with an educa$onal center where people can host events, talk and learn about renewable energy. As the consor$um expands, Ygrene hopes to open addi$onal centers. -‐Source: The Miami Herald 10/9/11 MIDTOWN M IAMI C ONDOS A CQUIRED BY G OLD K ROWN: Miami-‐based Gold Krown Financial has bought 538 condominium units at Midtown Miami, taking ownership of the last chunk of unsold residen$al inventory at the three-‐tower project, the company announced this week. Gold Krown purchased the project from a group of lenders represented by HSBC, which earlier this year took the units back from an investor in exchange for a release from mortgage debt. The company plans to con$nue ren$ng out the units for at least a year before conver$ng the project back into owner-‐condos, Krongold said. “I think that everything’s going the right way,” Krongold said, tou$ng Miami’s condo market. “It’s a great des$na$on for everybody from Central and South America and Europe.” According to Mission Capital Advisors, which helped arrange ﬁnancing for the deal, the units could be valued at over $200 million by the $me they are put up for sale. “We had a very short fuse during which to arrange the capital for this transac$on,” said Jordan Ray, of Mission Capital Advisors, in a statement. “S&P downgrades, Greek defaults and Belgian bank takeovers could not stop our team of lenders and investors from delivering the capital because the asset is fabulous. We see this group of units posi$oned to be valued over $200,000,000 in the future.” Currently, the rental units are more than 90 percent occupied, Krongold said. Krongold said he had been looking at the project for years, and saw this as a good opportunity to purchase a strong project at a good price. “South Florida has a way of being the ﬁrst one when there’s a recession – we’re the ﬁrst to get in and we’re the ﬁrst to come out,” Krongold said. “I think that’s what is going to happen again.” -‐Source: The Miami Herald 10/2011 FREE-‐TRADE A GREEMENTS: Long-‐delayed free-‐trade agreements with Colombia, Panama and South Korea passed in Congress, aZer spending the day deba$ng the agreements, which will eliminate tariﬀs on trade between the U.S. and the three countries. Florida is among the states with the most to gain from passage of the free trade pacts. The Florida Chamber of Commerce says the agreements will create more than 20,000 new jobs and generate more than $1.5 billion in interna$onal trade

opportuni$es. Not only will Florida products, such as citrus and beef, become more compe$$ve but the state will certainly beneﬁt from an increase in the billions of dollars worth of imports and exports that move to the three markets through Florida ports and airports. Here’s what the three agreements will do: • Colombia: More than 80 percent of U.S. consumer goods and industrial exports, excluding petroleum, will gain duty-‐free access to the Colombian market when the trade pact is implemented. Almost 70 percent of U.S. agricultural exports will be able to enter duty-‐free on implementa$on and du$es on the remainder will be phased out over $me. th • Panama: Panama, South Florida’s 16 most important trading partner, will immediately eliminate tariﬀs on more than 87 percent of U.S. consumer goods and industrial exports and on more than half of U.S. Agriculture exports. In this case, the United States has far more to gain than Panama because most imports from the Central American country already enter the U.S. duty-‐free under the Caribbean Basin Ini$a$ve. • South Korea: The pact eliminates tariﬀs on more than 95 percent of U.S. exports of industrial and consumer goods, allows immediate duty-‐free entry of about two-‐thirds of current U.S. agriculture exports and gives American service providers greater access to South Korea’s $50 billion services market. -‐Source: The Miami Herald 10/13/11 QUICK H EADLINES: • Retail sales rose a seasonally adjusted 1.1 percent last month, the Commerce Department said. Economists surveyed by MarketWatch expected an increase of 0.8 percent. Consumer spending accounts for as much as 70 percent of economic growth. –Source: The Miami Herald 10/2011, MarketWatch • Design superstars are rolling into Miami Beach, and guess what: They’ll have plenty of places to park, Starchitects. –Source: The Miami Herald 10/2/11 • The Traymore Hotel, a shuMered Art Deco building in Miami Beach, is up for sale following foreclosure proceedings. It was under renova$on to become a luxury hotel when the economy tanked. –Source: The Miami Herald 10/2011 • Marketers and adver$sers are increasingly seeing La$n America as a crea$ve hub with a huge poten$al for media growth as well as viewing it as a new fron$er for social media. That poten$al has brought hundreds of media, Internet, marke$ng, and adver$sing execu$ves to Miami Beach this week for The Fes$val of Media LatAm. The event, which is being held at the Loews Miami Beach Hotel through Friday, even has its own TwiMer hash tag, #fom1all. Among the factors piquing interest are La$n America’s popula$on and economic growth, the burgeoning middle class, rising disposable income, increasing mobile-‐phone penetra$on, and La$n America’s penchant for social media. Not only do La$n Americans spend more $me on social media than most of their peers around the world, but the region has one of the highest social-‐media penetra$on rates. Five of the top 10 markets in the world in terms of Facebook reach are in La$n America. –Source: The Miami Herald 10/14/11 • American Traders bright spot was La$n America, according to the trade conﬁdence survey. 27 percent said it represented the best opportunity for business growth in the next 6 months. That placed it just ahead of China (26 percent) as the best prospect. The forecast said “the spotlight will be on Egypt, India, China, Indonesia and Brazil to drive worldwide growth during this period.” –Source: The Miami Herald 10/12/11, HSBC Trade Conﬁdence Survey • South Beach hotel, the Sagamore ﬁles for Chapter 11. LNR Property, special servicer of the hotel’s debt, launched foreclosure proceedings last year aZer owners were more than 90 days late paying the mortgage. The owners said their goal is to reinstate the mortgage, apply $3.5 million currently being held by the servicing agent and get new revenue sources approved. –Source: The Miami Herald 10/7/11 • The average rate on a 30-‐year ﬁxed mortgage has fallen below 4 percent for the ﬁrst Bme in history, hifng an all Bme low. –Source: The M iami Herald 10/7/11 • When scoring Florida’s largest local economies, Wells Fargo gave Miami-‐Dade high marks on the hiring front, where employment is up about 1.5 percent compared to 2010. Not only does Miami-‐Dade employ about 15,000 more people than a year ago, it also has seen payrolls expand on a monthly basis this year. Only Tampa has a

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hiring market that’s expanding as quickly and with as much momentum, according to a Wells Fargo analysis of statewide employment numbers. –Source: The Miami Herald 10/11/11, Wells Fargo Florida made the top 10 states for solar jobs this year. –Source: The Miami Herald 10/20/11, Solar Founda$on South Florida home prices fell slightly in August, aZer three consecu$ve months of increases, according to S&P’s Case-‐Shiller 20-‐city housing index. Prices fell 0.3 percent between July and August. The region includes Miami-‐ Dade, Broward and Palm Beach coun$es. –Source: The Miami Herald 10/26/11, Standard & Poor’s Case-‐Shiller Miami Interna$onal Airport is adding passengers and airlines – and geung aMen$on for both. For the period between January and August, the airport grew by 7 percent. That’s more than any other U.S. airport, according to a report from avia$on consultancy LeighFisher. MIA saw con$nued growth in September, with nearly 2.8 million passengers, a 9.6 percent increase over 2010. The airport was also recognized for being the U.S. airport with the most new airlines in 2011 by industry website anna.aero, or Airline Network News and Analysis. – Source: The Miami Herald 10/27/11 In Broward, September pending sales rose 0.7 percent to 3,135, according to data released by Miami Associa$on of Realtors. In Miami-‐Dade, September pending sales rose 8 percent to 3,609. Compared to September 2010, pending sales were up 26 percent in Miami-‐Dade County and up 13 percent in Broward. –Source: The Miami Herald 10/2011, MAR

Here is an interesBng arBcle on a dynamic visionary for South Florida real estate – C raig Robins And here is some new construcBon slated for the M iami condo market, yes, you read that right – 6 new projects And a quick scenario on the quesBon, ‘ What are buyers waiBng for?’ MARK Y OUR C ALENDAR, A RT BASEL I S RETURNING TO M IAMI BEACH F OR I TS 10 TH 4 – F OR M ORE I NFO C LICK H ERE.

TH

ST EDITION, D ECEMBER 1 –

With the strong fundamentals of an underlying economy poised with con6nued growth in the Interna6onal World, opportuni6es will con6nue to present themselves. Investors enjoy the safety of the United States, and Florida has a lot of posi6ve aspects with incredibly depressed prices that make this a great place to develop a real estate inves6ng business plan and reap the proﬁts when done correctly. P lease contact me should you want to seriously discuss in more detail distressed sales of units. This market presents various unique opportuni6es that very well may never be seen again in one’s life6me. P lease let me help you take advantage of this situa6on. I have many strategic rela6onships with the decision makers regarding distressed proper6es, and the resources to carry out the objec6ve, right down to the day to day opera6ons. In the course of con$nually researching and familiarizing myself with the inventory of the very localized market in which I prac$ce, along with the banking rela$onships I have cul$vated, I have been able to do a lot of the research and legwork recognizing the best poten$al values in my target markets, or in some instances in other speciﬁc buildings or loca$ons where there is excellent value for the product. Please don’t hesitate to contact me directly for any such informa$on. Many are in distressed situa$ons (foreclosures and short sales), and I am very knowledgeable of how best to nego$ate these types of scenarios in your best interest, please contact me so we can discuss important factors in more detail and how I can help you proﬁt from these. Brazil is quickly becoming one of the fastest growing and most lucraBve economies in the world and M iami has a mutually beneﬁcial relaBonship with this country that will only get stronger. So much so that a supplement in the Miami Herald will run monthly and this publicaBon is dedicated exclusively to business, travel and bilateral trade with Brazil. The online version can be found H ERE:

LEGISLATION, P ROPERTY TAXES & I NSURANCE: As a property owner or poten$al property owner, I urge you to keep up to date on the various progress, legisla$on, and proposed legisla$on in order to help you beMer understand how these important issues aﬀect you; please see the below link that will take you to the Florida Associa$on of Realtors Legisla$ve Center, which will help to explain the numerous moving parts concerning these issues: hMp://www.ﬂoridarealtors.org/ Legisla$veCenter/TopIni$a$ves/index.cfm INTEREST RATES & RELATED NEWS: It is important to note that diﬀerent types of loans are ‘pegged’ to diﬀerent rates, so please make sure to stay in touch with your mortgage broker or banker to keep up to date on interest rates, as this can directly aﬀect many Real Estate related decisions. In addi$on to the lowered rate when securing a mortgage to buy property, another common ques$on you will see with rates near historic lows is whether or not it is a good idea to reﬁnance. This discussion might be a good one to have with a reputable mortgage broker or your banker and see if this would make sense ﬁnancially. Or feel free to visit the following mortgage sec$on on our website, hMp://buybeach.com/ access/mort.htm . This is the website to the Federal Reserve’s Monetary Policy sec$on: hMp://federalreserve.gov/monetarypolicy/ default.htm Exchange rates play a vital role in Real Estate related decisions for foreign buyers or sellers, a good source to track currency exchange rates is: hMp://www.xe.com/ucc/ Also, the use of a currency exchange service could save you addi$onal funds; feel free to call me for more details about this. I hope this email ﬁnds you well and looking forward to comparing this month’s data with last month’s data to spot trends and decide for yourself the status of the local Real Estate market, of which I work within 24/7. You are receiving this because we have been in touch about Real Estate here in the South Florida area, most likely property at the Beach. As you read the newsleMer from month to month it will contain data that will help you to analyze market condi$ons. In addi$on, it is an unobtrusive way to stay in touch with you regarding my Real Estate Consul$ng Services. That is all for this month’s newsleMer and I welcome sugges$ons, feedback, and of course I am here if you or anyone you know is thinking of buying or selling property here in South Florida. If you wish to further discuss any of the above issues in more detail, or any other Real Estate related topics, please don’t hesitate to call or email. I would like to leave you with the 4 following quotes: “Don’t think, just do.” – H orace “It doesn't ma;er which side of the fence you get oﬀ on someAmes. W hat ma;ers most is geCng oﬀ. You cannot make progress without making decisions.” – J im Rohn “I hooked up my accelerator pedal in my car to my brake lights. I hit the gas, people behind me stop, and I’m gone.” – Steven W right “Keep your face always towards the sunshine – and shadows will fall behind you.” – W alt W hitman

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