Home Buying in 33139>Question Details

st_joseph1969, Home Buyer in Miami Beach, FL

Hello with all the record condo sales in South Beach, we are on an upward blimp only to have the condo market fall again. What are your thoughts?

Asked by st_joseph1969, Miami Beach, FL Sat Jan 19, 2013

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This is a good question. As a seasoned agent of 13 years in the Miami Beach market, there are a couple interesting observations of the South Beach real estate market today:

First, the buyers have much better intentions now. In the mid 2000's during the pre-construction boom, most of the buyers were investors with unrealistic expectations trying to buy a lot with little down. Now, we are seeing more stable buyers, end users. Either first, second or third home owners who are looking to purchase properties in Miami Beach, not only as a 'more realistic investment' but also to use their homes and most of these buyers are paying cash.

Secondly, you must put the South Beach market in perspective. South Beach is roughly a 20 block by 10 block neighborhood. There is a limited number of homes in this area but the demand is enormous. Miami Beach, South Beach more particularly, is well known throughout three continents: North America, South America and Europe. There only needs to be a modest demand in these markets to exhaust the supply of available homes in South Beach.

In this Realtor's humble opinion, the South Beach real estate market is here to stay.
2 votes Thank Flag Link Mon Mar 18, 2013
Hi SJ.

You're partially right and partially wrong, here's why: Condo sales and all sales in Sobe are up because the area is SMALL and so in-demand. But you have NONE of the monkey business going on with mortgages now like you did in the past 10 years. No 'stated income' loans, 'no income' loans etc. No cleaning ladies buying 6 units to flip for spec, etc. Much of the money coming into the RE market everywhere today is cash. Cash is still king and it makes for a healthy RE market.

We are at the bottom of the first inning for RE in all of Miami Beach. There will be lots of building this decade, but as long as the Fed keeps the banks in line and buyers MUST come with substantial amounts of ca$h to buy, we'll be okay.

It sounds scary and could become very, very scary if banks loosen their rules of lending. This would be a disaster.

GOOD LUCK.

Scott Miller
Realty Associates
Boca Raton-Miami Beach, FL
1 vote Thank Flag Link Sun Jan 20, 2013
Thank you for your reply, just worried that some of the better Condos in South beach are selling for $1500 to $2500 a square foot. At what point will it reach before people realize its just not worth it. Every market has its up and downs.
Flag Sun Jan 20, 2013
Very good question, all of my colleges observations are valuable. I want to simply add my two cents based on my experience. Real estate is cyclical in nature, cycles vary in US between 5- 10 yrs. It is proven and if you look at the data since 1945 you will be able to see the pattern along with the upward trend. So the key to answering your concerns lays in your planing horizon along with your holding power being defined by your financing strategy along with your time horizon. I will be very happy to answer your questions and look at your case to help you determine the best strategy
0 votes Thank Flag Link Fri Mar 1, 2013
Hi, Both Scott and Mikeba are correct. The lenders are going thru mortgage applications with a fine tooth comb, also the appraisals are very conservative in addition many of these condo are being bought with cash.

Ainsley Daux
Tampa bay
Realtor
0 votes Thank Flag Link Sun Jan 20, 2013
Hi St_Joseph, As difficult as it is to get a loan these days, what makes you think the market will fail again?
0 votes Thank Flag Link Sun Jan 20, 2013
Hello Miekeba, thank you for answering my question. I did not mean that there will be a collapse, I just meant do real estate agents think that the re sale will not be as hot as it is right now. I am looking at the Continuum and the portofino and went thru the sales history on each building. Like every real estae market the prices are driven up by price and demand and then every5 to 7 years they seem to cool off again. One thing I did see is that alot of the stock in those buildings have been listed for 9 months without any offers. Some have actually been withdrawn and then re entered on the market slightly lower.
Flag Sun Jan 20, 2013
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