Friday, July 29, 2016

Shocked! Shocked, I Say!

A crack-down by the U.S. Treasury Department on money laundering in the lucrative South Florida real estate market has been expanded to include Broward and Palm Beach.

In January of 2016 the Financial Crimes Enforcement Network enacted a “geographic targeting order” which requires title insurance firms to require names of owners of offshore shell companies that pay cash to purchase high-end property in Manhattan and Miami. That policy has now been expanded to include Broward and Palm Beach Counties, as well as other luxury real estate markets in New York, California and Texas.

According to “FinCen” roughly a quarter of reported transactions in Miami and Manhattan involved people who were separately the subject of suspicious activity reports by banks and other financial institutions, indicating possible criminal activity.

The Miami Herald published an interesting article last April (which you can read by clicking this link ) discussing the possibility that much of this funny money might have fueled the city’s luxury condo boom and inflate property prices.

One reported instance concerned a corrupt South American government official who was accused to stealing millions from his country, who set up a shell corporation in the Cayman Islands and then purchased high-end property in Miami.

On the surface, this might not seem so out of the ordinary. For starters, name one story out of Miami that does NOT included a corrupt South American government official, let alone stolen millions and shell corporations in the Caymans.

We still find it shocking, however, to think some people might be laundering money through our real estate market.

This is South Florida. I thought we only laundered drug money here.

As Omar Little once said: “Man’s got to have a code.”

Friday, August 14, 2015

No More Sperm Whales in Fort Lauderdale

As home construction picks up around the nation, it remains at a low level around Fort Lauderdale.
According to the U.S. Commerce Department housing starts increased 26.6% in June (2015) year over year, and Building Permits were up 30% through that same period.
Around Fort Lauderdale and Broward County, Florida, however, home building is hovering around an all-time low. From 1992 through 2006 the South Florida reporting area – which encompasses Miami-Dade, Broward and Palm Beach Counties – typically averaged between 20,000 and 30,000 housing starts per year.
Now, those counties average around 7,000 housing starts per year, with Broward accounting for the fewest – only a projected 1,200 for 2015.
There’s a very good reason for this – we simply don’t have any more land.
In all Broward County there is only 471 miles of developable dry land and at this point it is essentially all developed.
Saw an article last year where a developer was bemoaning this fact, explaining wistfully: “There aren’t any more open green fields.”
That’s like whaling boat captains complaining it’s getting harder to find sperm whales.
Well, pal, maybe if you weren’t out there, you know – shooting them with HARPOONS – there might be a few more of them around.
Ponce de Leon landed in Florida in 1513. Developers discovered it in the Sixties. The U.S. Census in 1960 reported the population for Broward County at 60,000. Ten years later in 1970 the population was 600,000. Through the 70s and 80s, aside from tourism and serving alcohol the only industry in South Florida was construction. People moved to Fort Lauderdale and got jobs building houses for the next bunch of people who showed up. Developers drained swamps, bulldozed scrub forest, built miles of tract homes. Eventually they reached the edge of the Everglades, were not allowed to go any further, since it would be cutting off our water supply.
As a result Fort Lauderdale is now a perfect example of that old real estate adage – they’re not making any more of it.
Broward County, Florida
Broward County is fully developed, but people keep moving here from those sub-arctic urban crapholes up north. Late night comedians might crack jokes about Florida, but you don’t have to shovel sunshine out of your driveway. After two brutal winters folks up north are now bracing for what is predicted to be a “Godzilla” El Nino, so the exodus to the South is not likely to slacken. Our population stands currently around 1.75 million and some projections expect this number to climb to 2.3 Million by the early 2020s. That’s an increase of 30% within the next 5-6 years.
The effect this shall have on our property values should be truly profound.
The Fort Lauderdale area is quite simply the best part of Florida. It is not a Third-World urban city like Miami, nor the tractless waste which is Palm Beach. Broward County is not large, only 1,323 square miles. The western portion of the county, however, over 60% of it, is wetlands – the Everglades – which is the water supply for all South Florida, and therefore cannot be developed. Boil it all down that leaves only 471 square miles of developable dry land, which as we’ve pointed out is fully developed.
Talk about a No Brainer, this would seem to be a simple matter of connecting the dots, what this should mean for property values in Fort Lauderdale and throughout Broward County. 1) We don't have much land. 2) Population is growing. 3) Demand is increasing. And 4) Prime property will outperform the overall average.
Add these factors up significant appreciation in property values seems relatively inevitable. In addition, whatever rate of appreciation you might wish to forecast for the overall county-wide average, it should be markedly greater in prime real estate such as waterfont homes, oceanfront condos, houses and townhomes in better neighborhoods along the coast.
In my professional opinion we are looking at a pretty good stretch into the foreseeable future in South Florida – barring Acts of God, asteroid impacts and/or the total collapse of Western Civilization. Bouncing off the bottom real estate values have already come up sharply, then consolidated. Better locations throughout Fort Lauderdale and Broward County are up almost 30% in recent years. Don't listen to skeptics who act like this is somehow a bad thing. You are not going to get 20% a year on your investment. That is simply unsustainable. Still, property appreciation might average 8-10% over the next four to five years. If that's not good enough for you, good luck and God bless.
In 2010 I started telling customers to start buying. The housing market in Fort Lauderdale had stabilized, had started inching upward. I told people as soon as real estate investors noticed prices heading up in South Florida we’d have a mini land rush. Well, I was right. Customers who listened have already seen nice appreciation.
Others, however, started citing stuff they were reading on the Internet about the “Shadow Inventory” – this mythical tidal wave of impending foreclosures that was going to swamp our market like a tsunami. Well, according to the Internet I win the Nigerian Lottery three times a week. Again, I tried to explain with Florida being a judicial foreclosure state there was simply no way the banks could ever release waves of REO properties again, especially once they got caught in that whole “Robo-Signing” scandal. Meanwhile, statistics released by leading real estate data sources such as CoreLogic and RealtyTrac showed foreclosures dropping by double digits month after month. The latest stats (the CoreLogic Foreclosure Report for June, 2015) shows the foreclosure inventory in Florida dropped 54% year over year, and completed foreclosures declined 17% in that same people.
So now those people are sitting in a little rubber raft on the beach in rain slickers and floppy hats, waiting for the big wave, while customers who listened lounge on the balcony of their luxury oceanfront residence, sipping champagne and laughing at those crackpots in the rubber rafts.
For an in-depth analysis of how the projected increase in the population of Fort Lauderdale and Broward County should effect our home values, check out the “Investor Central” page of my website at Fort Lauderdale Beach Property (dot com).

Wednesday, July 15, 2015

Great Affordable Family Pool Home

Around South Florida reasonably priced family homes between $200-300,000 are in high demand.
Well, we just got a great Listing for an affordable family pool home in a great family neighborhood, just in time for some lucky family to settle into before school starts in September.
This home is in absolute tip-top condition. These are the owners you want to buy a house from.
Located between University and Pine Island, just south of Commercial, this 3 Bedroom, 2 Bath home features many upgrades, went through a major remodel just over a year ago. It features: an Atrium in the middle of the home; high ceilings; hardwood floors; a gourmet kitchen with custom solid wood cabinetry, granite counters and backsplash; double hurricane-glass front doors; an updated master bath; newer appliances, window treatments, and aluminum garage door.
The swimming pool is in a screened porch, heated, with a spa, and the backyard is very private, surrounded by lush tropical landscaping.
To see more details, watch an exclusive Video Tour, go to the “Great Deals” page of our website at Fort Lauderdale Beach Property (dot com)

Wednesday, February 11, 2015

The Highest Return on Your Real Estate Investment

Obviously, serious investors care about which location will reap the highest returns on their real estate investments.

When it comes to great returns Fort Lauderdale real estate is not much of a secret. Our market is legendary; fortunes are made here. Just look at the S&P / Case-Shiller Home Price Index. Going back to the 70s South Florida consistently out-performs the rest of the United States.
S&P / Case-Shiller Home Price Index for South Florida (Blue) vs. U.S. Average (Green) as of January 2015

When the Florida Association of Realtors released their annual year end statistics for 2014 in late January it supported what I have been saying for years – Fort Lauderdale and Broward County is the absolute best part of the fabled Sunshine State.

Just look at the numbers.
Statewide, the Median Price for a Single Family Home increased 5.3%. Values for Condos and Townhomes went up 9.8%.

In the South Florida reporting area encompassing Miami-Dade, Broward and Palm Beach Counties, however, Median Price for Single Family Homes grew 6.0%, while Condos increased 12.4%.
Drill a little deeper you will see how Broward County out-performs the South Florida reporting area. Single Family showed an increase of 6.2%, Condominiums, Townhomes and Villas 16.8%

Now 6.2% appreciation in Single Family Home Values may not seem too sexy, but our market was consolidating through the second half of 2014 after soaring 24.5% in 2013 and 11.9% in 2012. Some began to worry about another housing bubble, so seeing this cool down was actually a very good sign, indicating sustainable, long term growth. Even with that consolidation Median Price has increased 30% in the last two years and 42% in the last three.
Is this an anomaly or a historical trend? And does the same hold true through boom years?

Let's take a look at the year end numbers from 2013.
According to the annual year end statistics for 2013 compiled by the Florida Association of Realtors, the Median Price for a Single Family Home increased 16.6% statewide. In the South Florida reporting area that number was 23.8%, and in Broward County the Median Price for Single Family went up 24.5%.

A similar story in Condominiums. The Median Price for Condos, Villas and Townhomes went up 19.6% statewide, 25.2% in South Florida, and 25.9% in Broward.
In addition another crucial factor which makes Fort Lauderdale the best place to invest is the liquidity. We have a very active and highly shopped market. So when it comes time to sell, you will have plenty of buyers.

So buy now, or forever hold your piece – of Cleveland, Newark or Detroit.
Meantime, if you'd like to see the Market Reports from the Florida Association of Realtors to which I am alluding Click on this Link.

Monday, November 17, 2014

Zombies Declines 19% in Fort Lauderdale

Zombie Foreclosures dropped 19% in Fort Lauderdale and Broward County over the past year. 35% in Palm Beach County, according to a report from RealtyTrac covering the Third Quarter of 2014.

“Zombies” is the term used to describe empty homes in the foreclosure process which have been abandoned by their owners.
According to the 3Q 2014 Zombie Foreclosure Report from Realty Trac, Broward County had 3,437 owner vacated properties at some stage in the foreclosure process, which shows a decline of 19 percent from the third quarter of 2013.
Palm Beach County had 2,749 so-called Zombie Foreclosures in the same period, down 35 percent.
Abandoned homes supposedly impact the real estate market negatively because they are not being maintained, and as a result can drag down home values in the neighborhood.
Nationally, Zombie Foreclosures declined almost 23% as the distressed property crisis continues working through the inventory of toxic mortgages issued through the housing bubble which lead to the real estate crash and economic recession. Across the United States RealtyTrac reports 117,298 abandoned homes in the third quarter of this year, which is down from 152,033.
Among metros, the reporting area of Miami, Fort Lauderdale and Pompano Beach ranked second in the nation with a total of 9,869 Zombies. Only the New York area, encompassing Northern New Jersey and Long Island, reported more, with 13,366 abandoned homes.
Florida led all states with 35,913 Zombies waiting to be repossessed, with 5 metro reporting areas in the national Top 10. Not only was Miami-Fort Lauderdale 2nd, but Tampa-St. Petersburg was 3rd, Orlando-Kissimmee was 6th, followed by Jacksonville 7th and Palm Bay, Melbourne and Titusville 10th.
In spite of the impressive sounding numbers, however, we do not expect to see a tidal wave of foreclosure properties hitting the market. Florida is a judicial foreclosure state, which means the banks must go through the courts. Frankly, the lenders and the courts are simply too backed up to process these foreclosures quickly.
With this many distressed properties out there we will obviously see a steady stream of REOs coming onto the market into the foreseeable future, but every month as new reports are issued foreclosure filings have decreased double digits over the previous annum. Following the housing crash Lenders tightened their standards (you THINK?), so there are no more toxic mortgages and we are now seeing the light at the end of the tunnel.
In addition, with home values rising steadily, fewer and fewer home owners are underwater.
Unfortunately, nobody is tracking statistics of how much money people have failed to make listening to all those fairy tales about the fabled “shadow inventory.”
When our market stabilized in 2010 I advised my clients to start buying. Some listened, made nice profits. Others started telling me about stories on the Internet about the Shadow Inventory – the number of homes in some stage of foreclosure. This was basically anybody who was one payment late on their mortgage. So called experts claimed it was a looming tidal wave of REO properties which would swamp the market, send prices plummeting once again. I tried explaining about Florida being a judicial state, that the courts could never process foreclosures fast enough for that to happen, but unsophisticated “investors” did not listen.
As a result they missed a market move of 20-something percent.
Going forward we still have considerable upside in Fort Lauderdale Real Estate. Though we have come up significantly from out bottom, we remain well below our market highs.
For a comprehensive in-depth analysis of the prospects for appreciation in South Florida housing you should check out the “InvestorCentral” page of my website at Fort Lauderdale Beach Property (dot com).

Wednesday, August 27, 2014

Bubble? What Bubble?

Some interesting numbers coming out lately.
First the U.S. Commerce Dept. released a report new homes sales fell 2.4% in July. Then the Standard & Poor’s / Case-Shiller Home Price Index for June decreased 13.2% from May and 14.7% from April.
Well, those were the headlines. But don’t lash yourself to the mast quite yet.
Delving a little deeper into the stats, it turns out according Commerce new home sales are actually up 12% in the past year, and the S&P / Case-Shiller HPI shows an annual increase of 8.1% nationwide.
You gotta love the way the media tries to make this sound like this is somehow bad news. Only a few short years ago people were praying for the market to turn around. Now an 8% increase is a disappointment.
Of course, 6-7 months ago, when property values were increasing over 20% year-over-year, the media was screaming about a new housing bubble.
So thank your lucky stars. Twice. This is good news on a couple fronts. As I’ve said before, we were bouncing off a very low bottom. It only made sense to see a sharp uptick. Now you see the rate of appreciation moderating, it shows common sense, that we are avoiding another housing bubble.
Even so, many people who are not sophisticated real estate investors continue to fall for this baloney. In 2010, when the housing market in Fort Lauderdale had stabilized and was just starting to inch up I told clients to start buying. Some did, have made a lot of money. But others starting quoting stories off the internet about the fabled “Shadow Inventory” – this looming wave of impending foreclosures which were going to swamp the market once again.
For the record, we’re still waiting for that wave.
Even more important in these new numbers – home values across South Florida increased 11.5% in the past year. Please note that is still significantly higher than the national average, which was 8.1%.
If anyone's counting (like me, for instance) that's 41% higher than the national average.
Meantime, I do not understand how anybody can be sneering at an 11.5% return on an investment secured by real property. With savings accounts paying less than 1% interest, I don't understand why you are not dialing my cell number right now.

Tuesday, July 22, 2014

2 Good Deals on Single Family Homes Around Fort Lauderdale

As a Fort Lauderdale Real Estate Agent people are always telling me: “If you ever see a good deal, let me know.”
Okay. Here are two interesting properties I have come across in my many travels.
First is a Pool Home East of Federal Highway in the highly regarded Cove Neighborhood of Deerfield Beach. This is NOT a Short Sale or Foreclosure, so you will be dealing with an actual real live human being (always a plus these days). It is Listed for just under $300,000, and you should be able to buy this property in the high $200s.
Click Here to See More
 A spacious 1,432 square feet, this 2 Bed / 2 Bath is situated on a very large lot (9,000 square feet), features a free-form swimming pool (which seems to be in pretty good shape) and a one car garage.
This home has a lot of potential, a lot of upside. What I like is the wide open layout, You walk in the front door and you have a large living room. Beyond that is a Florida Room which was obviously a screened-in porch at some point in the past which has now been enclosed.
Click Here to See More
The Kitchen probably needs to be upgraded if you plan on living in it, however, if you were buying it as an investment to rent out it would not take a whole bunch of money to whip it into rentable shape.
If you are looking to purchase a single family home to rent out, you can give me a call or shoot me an email and I can go over how the numbers break down, but houses in that neighborhood rent annually between $2,000 and $2,400 per month
The Cove neighborhood of Deerfield Beach is located between the Intracoastal Waterway and Federal Highway south of Hillsboro Boulevard. This home's location is convenient to the beach, to shopping and restaurants. It is five minutes up US-1 to Boca Raton, and 10-15 minutes down to Fort Lauderdale.
The second property is a Waterfront Home East of the Intracoastal in Hillsboro Shores, which is one of the premier beachfront neighborhoods in South Florida. One canal has been cut into this neighborhood. People who live in homes on this waterway are literally minutes from the open ocean. From this home you are less than a mile by water from the open ocean.
Click Here to See More

With 80 feet of waterfront the house itself is large (2,300 square feet) with a wide open layout. You are not going to find anything in this price range and this kind of location which does not need updating, and this property is no exception, however the upside to this home is huge. Plus, as long as you have the space, there is plenty you can do with it.
Hillsboro Shores is a wonderful community located directly below the Hillsboro Inlet. There is a voluntary H.O.A. which you can join for a small annual fee and you get a key to the gated private beach access.
Click Here to See More

I have been watching this property, for it’s been on the market for a while. The Seller stuck to his price for a while, then lowered it $50,000 in May. The home still hasn’t sold, so the Seller has lowered his price once again. This is what I call a capitulation. He is apparently quite motivated at this point, and often in these cases the first Buyer who submits a serious written offer can come away with quite a deal.
I do not expect the home to last long on the market at its current Listed price.
If you are interested in pursuing the acquisition of either of these fine homes, contact me immediately.