Fixed Mortgage Rates in U.S. Remain Flat This Week

 Michael Gerrity 

Frank Nothaft

Based on Freddie Mac's latest Primary Mortgage Market Survey (PMMS), average fixed mortgage rates changing little for the second consecutive week amid mixed consumer confidence and housing data. Fixed mortgage rates remain near their 60-year lows.

Freddie Mac's chief economist Frank Nothaft tells the World Property Channel, "Fixed mortgage rates followed other long-term interest rates and showed little change, on average, from the prior week. The latest monthly housing market indicators were mixed, with consumer confidence soft, house prices largely flat, and new home sales up from very low levels. Consumer confidence fell below the market consensus forecast in October to the lowest reading since March 2009, according to The Conference Board. The FHFA Purchase-Only House Price Index for the U.S. declined 0.1 percent in August on a seasonally adjusted basis, while the S&P/Case-Shiller 20-city Composite home price index rose 0.2 percent (not seasonally adjusted) between July and August, with one-half of the cities registering a dip in values. Finally, new home sales increased 5.7 percent in September to the strongest pace since April."

The 30-year fixed-rate mortgage (FRM) averaged 4.10 percent with an average 0.8 point for the week ending October 27, 2011, down from last week when it averaged 4.11 percent. Last year at this time, the 30-year FRM averaged 4.23 percent.

15-year FRM this week averaged 3.38 percent with an average 0.7 point, the same as last week when it averaged 3.38 percent. A year ago at this time, the 15-year FRM averaged 3.66 percent.

The 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.08 percent this week, with an average 0.5 point, up from last week when it also averaged 3.01 percent. A year ago, the 5-year ARM averaged 3.41 percent.

1-year Treasury-indexed ARM averaged 2.90 percent this week with an average 0.6 point, down from last week when it averaged 2.94 percent. At this time last year, the 1-year ARM averaged 3.30 percent. 


 

2nd Miami casino site looking for suitors

With a new investor, the 20 acres of downtown land known as the Miami World Center is attracting attention from Steve Wynn and other Vegas players.

BY DOUGLAS HANKS

DHANKS@MIAMIHERALD.COM

Miami’s other potential casino site wants to keep its options open.

Known as the Miami World Center property, the 20 acres near AmericanAirlines Arena now has a new financial backer to help assemble the final pieces of the site and jumpstart development. A source close to the project said Las Vegas casino mogul Steve Wynn walked the site as recently as last month.

“He’s excited about Miami,’’ said the source, who asked to speak anonymously given the sensitivity of the talks between developers and potential casino partners.

A Wynn visit would make sense: the Vegas mogul has publicly expressed his enthusiasm about building a casino in Miami, but he has not yet been linked to a potential location. His Sin City rival, Las Vegas Sands, already has signaled its interest in building a casino on the World Center site.

The land owned by Boca Raton builder Art Falcone and partners is bounded by North Miami Avenue and Northeast Second Avenue and Northeast 11th Street and Northeast Sixth Street.

Both Sands and Wynn ramped up their Florida efforts after Genting Group, Southeast Asia’s largest casino operator, purchased The Miami Herald’s downtown headquarters. Shortly after the deal closed in May, Genting unveiled plans for a nearly $4 billion resort there. The move energized efforts to expand gambling in Florida, and lawmakers now are considering a bill that could bring three massive casino resorts to South Florida.

On Tuesday, World Center developers announced one of the most active real estate buyers in the country, CIM Group in Los Angeles, purchased an undisclosed stake in the venture. The influx of capital should help World Center finish up repurchasing the nearby lots lost to foreclosure during the real estate crash, as well as resolve litigation over past deals. CIM recently caused a stir in Manhattan with plans to build the city’s tallest residential tower — a 1,300-foot high-rise on Park Avenue. CIM is also building a casino hotel in Las Vegas on the site of the former Lady Luck.

News of a possible Wynn visit comes as World Center executives privately try to play down the site’s Sands connection. A press release issued by the developers Tuesday notes only that the land “could easily accommodate a gaming component” if Florida allows it.

While Sands is in talks about opening a massive casino resort there if Florida loosens its gambling laws, other Vegas players also have inspected the World Center land, the source said. Privately, Sands representatives say they’re looking at other South Florida sites as well.

A Wynn spokesman did not respond to a request for comment Tuesday. The mogul whose name sits atop one of his two 4,700-room Vegas hotels recently told analysts that Miami could generate $3 billion in gambling revenues a year, and become one of “one of two or three greatest destination resort cities in the world.”

His competitor, Sands CEO Sheldon Adelson, argues Miami has less potential for casino resorts. In public statements and in meetings with local elected officials, Adelson said Sands would only pursue a Miami location if it held the only casino license in the area. Genting and Wynn endorse multiple resorts for South Florida.

Adelson wants to build a hotel complex large enough to accommodate massive conventions that typically go to Las Vegas or Orlando, and a Sands Miami complex would include about 1.5 million square feet of exhibition space, people briefed on the Sands plan said.

Adelson met with Miami Mayor Tomas Regalado and Miami-Dade Mayor Carlos Gimenez during a recent trip to Miami, using office space secured by World Center executives, people familiar with the talks said. The office overlooks the World Center site and one source who was there said Adelson talked about World Center’s potential as a Sands casino.

Regalado said Adelson never discussed the site, though there is no other spot downtown that could accommodate Adelson’s plan.

“He did not specifically say the Miami World Center,” Regalado said. “But that’s the only place you can build.”

Florida Governor, Industry Leaders Create Further Ties to Brazil's Emerging Economy

By Michael Gerrity 

Despite global economic fears and uncertainty, Brazil is one of the few global bright spots that now has become the primary target market of choice for many Florida government officials, business owners and major industry sectors such as tourism, trade, manufacturing and real estate.

Representing the interests of the state's real estate industry, a Florida Realtors delegation headed by 2011 President Patricia Fitzgerald was in Brazil this past week to discuss real estate investment opportunities for Brazilians living, vacationing or investing in Florida.

The group is part of Governor Rick Scott's Enterprise Florida Business Expo & Trade Mission to São Paulo Brazil this past week.

Patricia Fitzgerald

"Brazilians love owning a home in Florida for a variety of reasons," said Patricia Fitzgerald, President of Florida Realtors and a key member of the trade delegation. "Everything from home prices to shopping and even traveling to Florida is very affordable for Brazilians today. Brazilians see the entire state, from Key West to the Panhandle, as not just the place to be but the place to buy."

Brazilians made up 8 percent of Florida foreign homebuyers in 2010-2011, up from 3 percent a few years ago, according to the 2011 Profile of International Homebuyers in Florida report. As Brazil continues to prosper and people look for places to invest, the percentage of Brazilians calling Florida their first or second home is expected to keep increasing, said John Sebree, Florida Realtors Vice President of Public Policy.

John Sebree

"Many companies in Brazil cite the state's favorable business climate, and its commitment to cut taxes and grow jobs, as strong incentives," said Sebree.

Sebree concluded, "We know that Brazilians account for eight percent of all of our international buyers but I expect that percentage to increase.  The cost of buying in Brazil is quite expensive at the moment and they are finding Florida to be an incredible value.  One issue of mutual concern is the requirement between the USA and Brazil that visitors apply for a visa.  There was considerable talk with trade mission delegates, US Embassy staff and Brazilians we met with regarding a waiver of the visa program."

"Brazil is the world's seventh-largest economy, and the most dynamic and prosperous economy in Latin America," said Carlos Fuentes, Chair of Florida Realtors Global Business Committee. "Florida is well positioned to capitalize on Brazil's market opportunities."

Icon Brickell, Miami

Part of what is driving Brazil's strong real estate investment trend in Florida is the favorable exchange rates their currency (Brazilian Real) enjoys against the U.S. dollar.

Laerte Jose Tadeu Temple, president of SECOVI, which is the State of Sao Paulo's real estate industry association told the World Property Channel in an exclusive interview in Brazil, "Brazilians not only love buying real estate in Florida because it is a good investment, it is also considered a big status symbol in Brazil to own a vacation home or condo in Florida."

Temple further commented, "Brazilians love Florida! They love the shopping and the beaches of Miami, and they love taking their kids to Walt Disney World in Orlando. It's their two favorite activities in once in Florida."

Brazil by the Numbers:

• Population of 200 million people.


• 1 in 3 foreign real estate investments made in entire U.S. in 2011 occurs in Florida ($82 billion all U.S. / $30 billion in Florida).


• 1 in 3 of foreign real estate investments in Florida occur in Miami.


• Brazilian buyers represent 8% of all property purchases in Miami in 2011. Orlando also enjoying Brazilian sales.


• 85% of all Brazilian buyers pay cash, and tend to buy at upper-end.


• Brazil is now Florida's top tourism feeder market, overtaking Canada.


• Brazil is Florida's largest trading partner.


• Florida will be main beneficiary of Brazil's economic rise over next 5 years through 2016 Olympic Games.

It's not just real estate investment in Florida

Florida's trade, tourism and manufacturing industries are also benefiting from Brazil's economic rise.

Brazil's economy has gone from the size of Spain eight years ago, to surpassing Germany's economy today. By 2017, Brazil is projected to move up another 3 notches to become the fourth largest economy globally, only behind the U.S., China and India in terms of annual GDP.

Brazil's GDP growth in 2010 was 7.5 percent and is estimated at 4.1 percent in 2011. The total trade between Brazil and the Miami Customs District in 2010 was valued at $13.3 billion, and accounts for 22 percent of all U.S. trade with Brazil, making it the top customs district for Brazilian trade. In August, The Beacon Council released a strategy report for increased business opportunities between Miami-Dade and Brazil, which is a key target market.

Frank Nero

"Brazil has a dynamic and growing economy and has become an economic powerhouse globally," said Frank R. Nero, President and CEO of The Beacon Council. "Miami-Dade County's established relations with Brazil provide us with a significant advantage over most other countries and definitely over other areas of the United States. The mission provides an opportunity for us to meet with companies, whether in a group or privately, and increase our presence in Brazil."

"Expanding trade with Brazil is one of our top priorities," said Bill Johnson, Director of the Port of Miami.  "Brazil represents a huge opportunity for the Port of Miami--for both inbound and outbound products."  Johnson noted that the recent trip with Governor Scott was his third trip to Brazil over past12 months.

Bill Johnson

"Brazil boasts one of the largest and fastest growing economies in the world. The mission will provide a great opportunity for Florida companies to enter or expand their market share in the Brazilian market," said Manny Mencía, Enterprise Florida's Senior Vice President of International Trade & Business Development.  "Participants will be able to network with high level business and government leaders, meet one on one with local companies interested in their products and identify distributors and joint venture partners."

In announcing the trade mission, his third so far, Gov. Scott said Brazil was a logical choice. Brazil is Florida's top export market. In 2010, exports from Florida to Brazil surpassed $13.7 billion, according to Enterprise Florida, a public-private partnership devoted to statewide economic development.

Gov. Rick Scott & Paulo Skaf, President of Federation of Industries of the State of São Paulo

While the trade mission emphasizes leisure travel to Florida, Scott said he hopes to attract companies willing to do business in the state. In São Paulo, the governor wants to play matchmaker, linking Brazil and Florida companies that can help each other grow.

Upon returning to Florida this past weekend, Florida Governor Rick Scott told the World Property Channel, "We had a great trip. I spent a day and a half in Rio focused on tourism. And then we had 187 people go with me to São Paulo representing 115 companies from The Sunshine State. So far we know of more than $60 million dollars in contracts that were signed with Florida businesses, and we expect a lot more to come because of the relationships we're building there. It was a very successful trip."

The 4% mortgage – good luck getting one

NEW YORK (CNNMoney) — A 4% mortgage sounds too good to be true — and for more than 90% of borrowers, it is.

The average rate for a 30-year mortgage dropped below 4% earlier this month for the first time, hitting 3.94%, Freddie Mac reported.

But at the same time, LendingTree  reported that the average rate offered to borrowers by its network of lenders was about 4.32%.

Only about 9% of LendingTree borrowers got loans below 4%. About a third got loans between 4.5% and 5%.

Those rates are still low, but a half point rate difference adds about $700 a year to the payments on a $200,000 mortgage.

There are a couple of reasons why so few borrowers get the best deals. One is that Freddie Mac surveys lenders, and the rates they quote apply to borrowers with flawless credit, ones with high credit scores and who put down 20% or more. The LendingTree numbers reflect actual loans that borrowers got.

There’s another factor in play, too. The low rates draw in a flood of current homeowners looking to refinance. Nearly 80% of all mortgage applications lately have been to refinance existing loans. The rush of applicants can drive up rates.

 ”Lenders quickly become flooded with volume and can adjust rates to slow their pipelines,” said Doug Lebda, CEO of LendingTree.

The industry can handle less volume than in the past. After the housing bust, many lenders closed their doors and large numbers of loan officers and other workers left the industry. Many lenders are understaffed and can be easily overwhelmed with applicants.

When that happens, according to David Adamo, CEO of Luxury Mortgage, the banks discourage borrowers.”They expand their margins and that sends rates up,” he said. 

Stalled projects leave Miami with high-rise skeletons

 

Stalled construction projects have languished for years on Miami’s skyline as relics of the last housing boom.

BY TOLUSE OLORUNNIPA

TOLORUNNIPA@MIAMIHERALD.COM

A few of the ghosts of Miami’s real estate boom still linger above the city as grayed, abandoned towers, frozen in mid-development poses.

These concrete skeletons are mired in lengthy legal battles, abandoned by vanished developers or simply waiting out the market so that they can be relaunched or repurposed in better times.

The buildings have languished for years as relics of a real estate downturn that caught builders unaware and are seen as eyesores that drag down already declining property values in the surrounding neighborhoods.

As a new crop of downtown developers seeks to begin the next wave of condo building, the ashen buildings stand as reminders of the dangers of unchecked ambition and unregulated development, said Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach.

“In most of these cases, the developers had very little of their own money in the construction financing,” said McCabe, who forecast the housing bust and coined terms like “ghost towers in the sky” five years ago. “The developers did not have much skin in the game. It’s very similar to why people are walking away and allowing their homes to go in foreclosure.”

Five years ago, these towers were advertised to residents and city commissioners as pillars of development that would revitalize neglected communities. Now they’re home to squatters and rodents and, with little pressure from city officials, most show no signs of progressing anytime soon.

Here are a few of the stalled projects:

BRICKELL SUNVIEW/ALOFT HOTEL

Miami developer Pedro Villar started building an 88-unit residential complex at 1001 SW Second Avenue, a couple of blocks from Mary Brickell Village, back in 2007. Halfway through construction, the market began to slide, and it became clear that the Brickell Sunview project would not be able to succeed as a residential project. Villar’s Sunview Companies halted construction and began to seek an exit strategy.

Despite being sold for $11.5 million in 2010 and repurposed by a top-tier hotelier earlier this year, the project has been stuck in shell-mode for more than two years.

The piles of trash and graffiti scrawled on the walls have become a drag on a neighborhood hoping to benefit from Brickell’s revival, said Robert Lechter, who represents the owner of Brickell Station Lofts, an apartment complex across the street from the construction site.

“There should be some kind of a law against that,” he said. “We purchased Brickell Station Lofts two years ago and that building was exactly the same way it is now.”

In January, Starwood Hotels announced that it would be building a 160-unit Aloft hotel on the site, complete with an indoor pool, a swanky bar and meeting spaces. It was supposed to open in December, but the company has pushed the launch date back at least twice. Its website has updated the opening date to July 2012, but that date seems unlikely. The project is expected to need about eight months to complete construction, and there are no active cranes or machinery on the site.

Starwood hotels did not return calls seeking comment.

“I can’t believe that someone would invest that kind of money and just leave it like that,” said Lechter. “It does have an impact on the area because a third of Brickell Station Lofts looks out on that building. That’s not fun.”

LOGIK I

Only about four of Logik I’s 30 stories were built before the construction crane lowered its neck and drove away nearly four years ago.

Supported by Miami’s city commission, the Logik project at 530 NW First Court was supposed to be a glass-encased economic beacon on the eastern edge of Overtown, bringing jobs and new businesses to the area.

The proposed office condo was planned for about 350,000 square feet of offices for small companies and retail space that could host a restaurant or boutique.

In the months before the real estate bubble burst, developer Jorge Arevalo of Miami-based Urbana Development rushed to gain city approvals and kickstart construction, announcing that sales were so strong that he was planning to build a second 30-story tower for the site.

Not long after, the real estate downturn hit, and the project tanked.

“We got it approved and what happened is the real estate opportunities went away and the market went away,” said Lucia Dougherty, an attorney who represented Urbana Development. Dougherty said she lost touch with the developer after the project stalled. Arevalo could not be reached for comment.

The project was sidelined by legal and financial troubles, with the developer filing a $90 million lawsuit against Bank of America in 2008, alleging the bank refused to provide $39.5 million in promised financing. As financing dried up, several subcontractors placed millions of dollars worth of liens on the property for unpaid wages.

Hallandale-based Mustang Electronics bought the shell building last year out of foreclosure and has not done much to the squalid site since then. It is hoping to sell the land under the building for a profit. There are a few “For Sale” signs hanging on a forlorn fence, and debris litters the site.

Mustang Electronics declined to comment about the site.

FILLING STATION LOFTS

The legal battle over Filling Station Lofts, 1650 NE Miami Ct., has dragged on for three years while the half-built condo project and the neighborhood surrounding it have deteriorated.

The original developer, Daniel Holtz, had planned a 17-story, 100-unit luxury condo building back in 2006. Part of Miami’s building frenzy, it was pitched as a building that would revitalize the sleepy area between downtown and Wynwood. The project’s renderings show a shiny tower rising above a well-lit, walkable neighborhood with coffee shops and boutiques. Its motto: “Never forget the street. Give it life.”

Now, three years after construction financing dried up, the graffiti-stained structure and the weeds sprouting around it are having the opposite effect. The building is flanked by shuttered storefronts and barren land, as few businesses have been willing to open next to the dilapidated 17-story shell. Its owner owes more than $30,000 in overdue property taxes, according to county records.

“A lot of these projects become shelter for the homeless or squatters because they have sat without any maintenance now for three to five years,” said McCabe. “In some cases, they have been open to the elements, and there has been deterioration of the properties.”

The project could face years of litigation as several subcontractors allege the developer conspired with an investor group to stiff them of more than $3.5 million in wages. There are several lawsuits pending.

“They hurried us along, made us finish, then told us there was no money left,” Ronald Laing, president of Biscayne Roofing and Waterproofing Systems, said in an interview with The Miami Herald earlier this year. He said his company put the roof on the condo building, completing $225,000 worth of work in 2008 without being paid.

An attorney for Holtz did not return calls seeking comment.

Read more: http://www.miamiherald.com/2011/10/31/v-fullstory/2481124/stalled-projects-leave-miami-with.html#ixzz1cVJ8gizi

South Florida residential inventory

November 01, 2011 12:45PM

Compiled by Condo Vultures Realty using the South Florida Shared Multiple Listing Service. Active listings are properties where no current sale contract exists; pending sales are properties in which a contract for sale has been executed, but not yet closed. Listing brokers control the status of a property listing. -- Alexander Britell

South Florida short sales take 501 days

November 01, 2011 12:00PM

Short sales in South Florida take an average of 501 days, according to data from RealtyTrac, the Sun Sentinel reported. "Most buyers are looking to buy within a six-month period," said RealtyTrac spokesperson Daren Blomquist. "If you see some places where it takes over a year, it's not an ideal situation for most buyers." There were a total of 5,940 short sales in the tri-county area in the second quarter, a 15 percent increase month-over-month. The only area in Florida that was in the top ten best short sales markets was Fort Myers. Los Angeles is the best market, according to the report, with a total of 9,145 in the second quarter.