Miami Is the Least Affordable City in America For the Middle-Class, Study Finds

By Tim Elfrink

They can be truly hard to find in Miami, always lost between the film crews chasing Kardashian sisters to their next luxury club, the Russian oligarchs loudly racing Brazilian expats in souped up Lotuses, and the parade of art-collecting billionaires snapping up property in Fisher Island.

But Miami does have a middle class! They just don't have an easy time of it. In fact, between housing and transportation costs, Miami is the single toughest place in all the nation to be a middle-class resident, according to a new study.

"Increased demand for rental housing combined with insufficient new production has raised rents," says Jeffrey Lubell, executive director of the Center for Housing Policy, "while households with blemished credit and existing homeowners with underwater mortgages have been unable to take advantage of lower home prices."

Lubell's study looked at the combined costs of housing and transportation for the 25 biggest metro areas in the country and found that in general, both had risen by 44 percent since 2000 without a corresponding bump in income.

That trend tends to squeeze the middle class hardest of all, the center says. And nowhere has that been more true than in Miami.

Middle-class households in Dade spend a staggering 72 percent of their income on transportation and housing costs, the study found.

That's the highest share of income in the nation, followed by Riverside, California (69 percent) and Tampa (66 percent.)

What's more, in Miami those costs have jumped by 47 percent since 2000, while incomes have risen only 21 percent.

It doesn't help that Miami not only has an expensive housing and rental market, but that it's tough for most residents to get around without a car, necessitating ever more cash for gas, car payments and repairs.

"Both housing and transportation costs need to be made more affordable," the center's President and Co-Founder Scott Bernstein writes.

The most affordable towns for average income families include D.C., Minneapolis and Boston.

Don't worry, though, Miami families. All you need to do is become famous via an Internet sex tape, star in an endless series of reality television shows, make billions of dollars and -- viola! -- Miami becomes a very easy place to live indeed.

JPMorgan, Gov't Set Terms for $4 Billion Piece of $13 Billion Deal

by Reuters  Nov 19th 2013 6:05AMUpdated Nov 19th 2013 6:14AM

dapd/AP

NEW YORK -- JPMorgan Chase and U.S. government officials have agreed on terms of a $4 billion consumer relief package that is to be part of a $13 billion deal to settle the bank's liability to government agencies over mortgage securities, according to a person familiar with the matter.

The $4 billion portion of the deal would pay for write-downs of mortgage loans, demolition in blighted areas and lower monthly payments for homeowners, the person said Monday.

Shaun Donovan, secretary of the U.S. Department of Housing and Urban Development, was involved with the negotiations which have come under the umbrella of a broader settlement between the bank and the U.S. Department of Justice, the person said.

Of the $4 billion, about $1.5 billion is to be earmarked for write-downs of loans that exceed the property value and as much as $500 million more would go for restructuring loans to lower monthly payments. 

The remaining $2 billion would go for assorted measures, including new loans for low- and moderate-income borrowers in areas that have been hard-hit by the housing crisis and demolition of abandoned homes, the person said.
The agreement is to require JPMorgan (JPM) to spend the money by the end of 2016 under the watch of a independent monitor, the person said.

The final $13 billion deal is likely to be announced Tuesday, the person said. Another source familiar with the matter said earlier in the day that that announcement could be in the next day or two. Neither sources was authorized to speak on the record about the matter.

The total deal is also to include a $2 billion penalty and at least $4 billion for federal housing 

finance agencies under a previously announced agreement.

The fact that the $13 billion deal would include $4 billion for some form of "consumer relief" has 

been known for weeks. The details of how the $4 billion would be spent were released on 

Monday.  As per Michael Kitchen, the plan involves adding $2.5 billion to J.P. Morgan's reserves for 

paying litigation costs, with the other $1.5 billion going to the risk and compliance efforts, including a 

30% increase in related staffing, the report said. The bank is currently operating under four regulatory 

enforcement actions and faces at least seven separate investigations by the Justice Department, the 

report said. Shares of J.P. Morgan finished Thursday with a 1.9% loss but added 0.1% in after-hours 

trading.

Willy Chirino's Miami House Looks Strangely Like A Ski Lodge

Cuba-born singer Willy Chirino, whose 2006 “Son del Alma” won a Grammy for Best Salsa/Merengue Album, is selling hisMiami mansion for $5.75 million.

And although the listing describes the Bay Point home as a "residence with Tahitian design," all its stone and woodwork make it look more like a ski lodge than an island villa.

Chirino bought the 6-bed, 5.5-bath house for $795,000 in 1992, according to county records.

It features mahogany floors, polished marble, lots of stone walls, cathedral ceilings throughout, and carved wood.

Situated on Biscayne Bay, the home has an in-home recording studio, a casita by the pool, and a hot tub.

Click below for a look inside Chirino's ski lodge-esque Miami home: 

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Willy Chirino's Miami 'Ski Lodge'

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Mortgage Banker's Association (MBA): Miami's Foreclosure Inventory 34%

by Peter Ricci November 11, 2013

The health of Miami’s housing market continued to improve, according to the latest market research by the Mortgage Bankers Association.

Foreclosure inventory in the Miami fell a hefty 34 percent year-over-year in the third quarter, according to the latest National Delinquency Survey from the Mortgage Bankers Association (MBA).

In addition, the foreclosure start rate for the area plummeted 53 percent, as the housing market continued to inch back to its pre-housing bubble levels. In a media-only conference call, Jay Brinkmann, the MBA’s chief economist and senior vice president of research and education, specifically highlighted the “tremendous improvement” in Miami’s housing market in the last year.

National Delinquency Survey – All Good Signs

Brinkmann also said the MBA saw “major drops across the board” on a national scale with its third quarter National Delinquency Survey:

• Delinquencies were down for every loan type in the third quarter, and at 6.41 percent, the overall past due rate for all loans was at its lowers mark since the second quarter of 2008.
• FHA loans, in a very positive development, saw a drop in their delinquency rate by almost a full percentage point, falling to their lowest mark since 2001; VA loans, meanwhile, hit their lowest mark since 1980.
• Finally, older loans continue to make up the lion’s share of delinquencies; in the third quarter, loans from 2007 or earlier made up 77 percent of all delinquencies, while loans made in 2010, 2011 and 2012 or later made up just 4, 2 and 1 percent, respectively.

Trulia: Miami Asking Prices Jump 12.4% in November

by Peter Ricci November 8, 2013

Asking prices seem to be slowing down nationwide, but is that the case here in Miami?

October was a very positive month for Miami’s asking prices, with the metro area posting strong yearly returns in Trulia’s latest Price Monitor.

According to Trulia’s analysis, asking prices in Miami rose 12.4 percent year-over-year in October, though prices were only up 0.1 percent from the second quarter; Also, rents in the city remain among the most competitive in the nation, rising 7.6 percent from last year; at $2,200 a month, the median rent on a two-bedroom apartment in Miami is now the fifth highest in the nation.

Evan Goldman, a Realtor with RE/MAX Advance Realty in Pinecrest, said that with inventory remaining low in his markets, he sees prices remaining competitive, unless there’s a dramatic change in the marketplace.

“I still see so little inventory and so many buyers that I think it’s going to take a really big jump for it to drastically change the market in the short term,” he said. “Now eventually, over the next couple of years, you should see somewhat of a slowdown; I think the question is how much of a slowdown.”

Trulia Price Monitor – Asking Prices Slowing Down?

Nationwide, asking prices were up a bit less impressive, though the gains were all still quite positive. Prices were up 11.7 percent year-over-year and 3.1 percent quarter-over-quarter.

Jed Kolko, Trulia’s chief economist, said that though prices were up just 0.6 percent from September, there are still pronounced market reactions to the quarterly and yearly price increases.

“Although October’s asking home prices rose at the second-slowest pace in seven months, prices are still rising unsustainably fast,” said Jed Kolko, Trulia’s Chief Economist. “Even though the market is far from bubble territory, we still see the effects of fast-rising prices, including investors flipping homes and would-be sellers waiting longer to put their homes on the market.”

Miami has gained a 12.4% increase in asking prices over the year. Blame it on the low inventory? Should the repercussions be higher rents? Report unfair practices and seek a realtor or legal guidance when searching for properties. - LLD

SoFla banks with Latin ties ramp up lending

November 05, 2013 04:00PM

By 

From left: Mercantil’s Steven Mayer and Jaime Gilinski Bacal of JGB Bank

By Mark Maurer

Some of the largest Latin banks in South Florida increased lending during the third quarter. Ten of top 25 upped their loans by $5 million or more over that period, the South Florida Business Journal reported.

Miami-based City National Bank of Florida, owned by Bankia in Spain; and Miami-based Sabadell United Bank, owned by Banco de Sabadell in Spain, grew their loans by a significant amount — $64 million and $96 million. These banks are either arms of Latin American or Iberian Peninsula operations or run by Hispanic shareholders.

Coral Gables-based Mercantil Commercebank, a $6.9 billion subsidiary of Mercantil Servicios Financieros in Venezuela, saw its asset quality strengthen, but its loan portfolio was much stronger in Houston than in South Florida.

Some banks, however, dialed back their loans. The Colombian banker Jaime Gilinski Bacal-owned JGB Bank in Doral decreased its loan portfolio by $22 million, the report said. [South Florida Business Journal] 

Enrique Iglesias Moves Into $26 Million Mansion In Ritzy Miami Neighborhood

Enrique Iglesias visits "The Elvis Duran Z100 Morning Show" at Z100 Studio on July 18, 2013 in New York City. (GETTY IMAGES)

Spanish pop star Enrique Iglesias made a $26 million splurge on a beautiful mansion in the ritzy Miami neighborhood known as Millionaire's Row, according to gossip site TMZ.

He is not moving so far – just two doors down from his old place at Bay Point – which he sold for $6.7 million. He bought the old place as a vacant lot in 1998 for $640,000, according to the celeb site GossipExtra.

The popular singer, 38, had the house built a year after buying the land, the South Florida Web site said.

"This is a home defined by privacy and exclusivity, conveniently situated near South Beach and downtown Miami," said Esther Percal, the real estate agent in charge of the sale.

GossipExtra said it doesn't know who is buying the Iglesias place, nor will it know until the transaction is registered with Miami-Dade County.

Millionaire's Row is home to some of the very famous, including Latino pop star Ricky Martin, superstar Cher, actor Matt Damon and Iglesias' own father, Julio.

According to TMZ, the new house is about 20,000 square-feet and it has a lap pool, a dock, and a tennis court — maybe for longtime girlfriend Anna Kournikova.

Enrique Iglesias Sells Longtime Bay Point House For $6.7M

Native Miamian and latin heartthrob lover boy Enrique Iglesias' Bay Point house, at 4411 Sabal Palm Road, has sold for $6.7225 million, according to a press release from the realtor. Iglesias bought the bayfront property way back in 1996 for $640,000, built the house in 1998, and recorded this 'Cribs' style tour of the place for the Diary MTV series in 2002. The 6,400 square foot house is on 100 feet of bay frontage, and features five bedrooms and six baths. Although, the Miami-Dade Property Appraiser shows the house was transferred to Northern Trust Bank for $0 in 2009, Iglesias must have hung on to the place, eventually selling it for ten times what he bought it for, almost two decades later.

Braman nabs $37.5M loan for Miami showroom

Miami auto mogul and activist Norman Braman is poised to expand his headquarters in the city after getting $37.5 million in financing.

Braman Motors received the Bank of America loan on Oct. 28, according to Miami-Dade County records. The mortgage is secured by the 2060 Biscayne Boulevard site of Braman’s headquarters. Loan documents note a separate “hedge agreement” between Braman and the bank that reduces the company’s exposure to interest rate fluctuations.

Miami’s zoning board in April approved an exemption to allow Braman’s proposed seven-story, 100,000-square-foot showroom and parking garage. The site’s previous zoning limited new construction to a maximum of 55,000 square feet. – Eric Kalis

NAR: Existing-Home Sales Dip Slightly in September

by Peter Ricci October 22, 2013

Existing-home sales declined a bit from August to September, though housing inventory continued to show promising signs.

After hitting their highest level in nearly four years, existing-home sales came back down to earth in September, declining 1.9 percent to a seasonally adjusted annual rate of 5.29 million, according to the latest report from the National Association of Realtors.

That’s down from 5.39 million in August, though sales are still 10.7 percent above the 4.78 million recorded in September 2012; sales have now remained above their yearly marks for 27 straight months.

Existing-Homes Sales in September – a Slowing Market?

Something we should be clear on – the data we’re referring to is for September‘s housing market, meaning that the government shutdown, which took place in October, did not impact the data.

Other important stats in NAR’s report included:

• Median existing-home price for all housing types was $199,200, up 11.7 percent from September 2012; that’s the 10th straight month of double-digit yearly increases for median price.
• Distressed homes, meanwhile, accounted for just 14 percent of September sales, up from 12 percent in August but down from 24 percent in September 2012; 9 percent of sales were foreclosures, 5 percent short sales.
• In a very encouraging sign, housing inventory increased slightly from August to September, rising from a 4.9-months supply to a 5.0-months supply; inventory is only 7 percent below its 2012 level.
• Median time on market was 50 days, up from 43 in August but down from 70 in September 2012.
• And finally, data differed markedly by region: in the Northeast, sales were down 2.8 percent monthly but up 15.0 percent yearly; in the Midwest, the 5.3 percent monthly decline was matched by a 9.0 percent yearly increase; in the South, sales were down just 1.4 percent monthly, and up 9.9 percent yearly; and in the West, sales were up 1.6 percent monthly and 7.8 percent yearly.

Hillary Hertzberg, an agent with The Jills Group in Miami, said many of her housing markets remain quite busy, with Miami Beach particularly so with its quality inventory of homes and terrific schools.

“You have a great school system, you’re close to the ocean and restaurants – prices have been going up dramatically in Miami Beach,” Hertzberg said. “And as more and more people are interested, demand increases and prices continue to go up.”

An Expected Decline in Housing Activity

Lawrence Yun, NAR’s chief economist, said that September’s decline was expected.

“Affordability has fallen to a five-year low as home price increases easily outpaced income growth,” he said. “Expected rising mortgage interest rates will further lower affordability in upcoming months.”

And Gary Thomas, NAR’s current president, said the government shutdown could impact NAR’s next report.

“Just one impact of the recent government shutdown – delays in tax transcripts needed for approval of mortgage loans – put a monkey wrench in the transaction process and could negatively impact sales closings in next month’s report,” he said.

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Brazil’s turmoil boosts Miami’s real estate

Brazilian homebuyers continue to invest, simply changing their strategy

By Emily Schmall

Brazil’s reversal of fortune has been a boon for South Florida as cash-rich investors put more money into Miami-area bricks and mortar, brokers and real estate observers tell The Real Deal.

Brazil’s stock market has plunged 23 percent this year, rising inflation has further battered the value of the real to a four-year low and a wave of protests have crippled major cities. Miami leads the U.S. in total investment by international home buyers, and its overseas success exposes its thriving real estate market to changing economic realities abroad.

Government rates of up to 16 percent on money taken out of Brazil – meant to stem capital flight – simply mean Brazilian investors are changing their strategy, favoring real estate they can pay for incrementally, such as pre-construction projects, or that pays for itself, like rental properties.

Douglas Elliman’s top producing Miami broker Chad Carroll said Brazilians investors are “signing contracts left and right,” especially for rental properties, which are yielding ever higher returns.

Carroll recently showed clients, a Brazilian couple, a $2 million, four-bedroom condo finished and ready for immediate move in. The couple chose instead to buy two pre-construction units and combine them for roughly the same price. “The payment structure was more feasible, with the increments of deposits due over two years,” Carroll said.

Mayi de la Vega, the founder of One Sotheby’s International Realty, and another of Miami’s top brokers, said that if anything, Brazil’s loss has been Miami’s gain.

“I think directly proportional to this loss of wealth and declines in the stock market, it’s strengthened our real estate locally,” Mayi de la Vega, the founder of One Sotheby’s International Realty, told TRD.

Brazil is the top country of origin for Miami’s international home buyers, who constituted about 6 out of 10 sales last year.

While South Florida has drawn wealthy buyers from around the world, including all of the BRICs – Sunny Isles Beach goes by the moniker “Little Russia” – the Miami Association of Realtors claims Brazilians accounted for the largest share of Miami’s international sales in 2011 and 2012.

However, even if Brazilian sales were to taper off, Miami is well-positioned to benefit from foreign investors elsewhere, de la Vega said.

“I always find that when one country’s weak, another one’s strong. French buyers are desperately trying to take money out of there,” she said.

L.J. Rodriguez, the director of sales at Midtown, a massive residential and retail development in Miami, said that the turmoil of Brazil has fueled a spate of sales, with investors looking for fixed revenue from rents.

“Any potential downturn, we actually see as a positive because they’re going to find ways to hedge against their own economy,” Rodriguez said.

Most Brazilians – 78 percent in 2012 – paid for properties all cash, the association’s statistics show. Nearly half of buyers in 2011 said their intended use of the condo or house was as a vacation home for family and friends. A smaller share, 41.9 percent, gave that answer last year, with more buyers – 6.45 percent from 4 percent – saying they “don’t know.”

Increase in Sales and Boom in New Property Listings Driving Miami's Soaring Housing Market

 Sep 11, 2013

Miami's booming housing market in July was driven by robust growth in the sales of homes, condos and town houses valued $200,000 to $399,000 and the over $600,000 range along with a significant increase in the new listings of properties over $400,000, according to the 30,000-member MIAMI Association of REALTORS® and the local Multiple Listing Service (MLS) system.

"The double-digit growth in the sales of mid-range single-family homes, condos and town houses is driving Miami's robust real estate market," said 2013 Chairman of the Board of the MIAMI Association of REALTORS® Natascha Tello. "The fact that we are seeing such strong growth in the listings of both mid-range and high-end real estate is further evidence that there has never been a better time to invest in Miami. We are a vibrant community and our soaring housing market will be the backbone of Miami's continued economic prosperity and success."

Growth in Miami Single-Family, Condo & Townhouse Sales
Sales of Miami single-family homes valued between $250,000 and $299,999 drove July's historic housing rally with 131 closed sales, an increase of 138.2 percent from the previous year. Moreover, there were 128 sales of $300,000 - $399,999 homes in Miami, an increase of 88.2 percent from July 2012.

Meanwhile, 154 condos and townhouses ranging from $200,000 to $249,999 were sold, up 60.4 percent from 2012. The 100 luxury condos and townhouses sold at $600,000 to under a $1,000,000 represented the largest sales increase with a surge of 63.9 percent compared with July 2012 figures.

"We continue to see great demand for Miami properties in all price ranges, but a decline in available listings in the lower prices ranges is limiting sales under $100,000," said 2013 MIAMI Association of REALTORS® Residential President Fernando I. Martinez. "The lack of low-end supply is due to rising prices, which have steadily seen double-digit increases over the last two years. The rise in sales of mid-range properties is a result of pent-up demand."

Strong Growth in New Listings in the $400-599k Range
The Miami market has experienced robust sales activity for nearly three years, yielding double-digit appreciation consistently during the last two years. As a result, sellers who were waiting to recover equity have recognized that now is a great time to sell. Despite the uptick in new listings, supply remains insufficient to satisfy demand, particularly in the lower price points.

Condo and town houses make up 59 percent of all Miami property listings. Of the 2,838 condos and townhouses listed last month, the 344 valued between $400,000 and $599,999 increased 82 percent compared to July 2012. The second fastest growing group of newly listed townhouses and condos were the 338 valued $150,000 to $199,999, which saw a 63.3 percent growth from the previous year.

Of the 1,948 single family homes listed last month, there were 232 whose asking price ranged from $400,000 to $599,999, an increase of 81.3 percent from 2012. Notably, there were 169 new listings for single family homes over $1,000,000, up 53.6 percent from last July's 110.

July 2013 Single Family Homes and Townhouses/Condos Miami-Dade County Monthly Market Detail Reports

SoFla near bottom on list of U.S. housing affordability

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Fisher Island, one of Miami’s more affluent areas

Although the cost of living isn’t quite as steep as Los Angeles, New York, San Diego and San Francisco, South Florida is one of the least affordable areas for housing in the U.S., the South Florida Business Journal reported, citing a study from North Palm Beach-based Interest.com.

Miami and the surrounding South Florida market took 21st place for housing affordability among the 25 biggest metro areas, with Atlanta and Minneapolis topping the list. The median household income there is 25 percent below the level needed to buy a house at present interest rates. South Florida’s rank on the list plummeted from 14th last year, amid rising housing prices and mortgage rates.

Last October, the Center for Housing Policy releasing a study calling Miami the least affordable city in the U.S. Housing and transportation costs eat 72 percent of a moderate income household’s wages, compared to the 59 percent national average among the top 25 U.S. cities, the study had said. [South Florida Business Journal] — Mark Maurer