How The Rental Property Market is Changing

How The Rental Property Market is Changing: "SAN FRANCISCO–New data show that increasingly private investors are taking advantage of low mortgage rates and rent growth by investing in rental properties, which is affecting the supply of homes and, as a result, prices on both homes and rental rates.

According to data released by Zillow, the share of single-family homes being used as rental properties is at a 30-year high, and the number of starter homes on the market is down more than 44% from 2012.

The real estate analysis firm Ten-X reported that prior to 2009 before institutional investors moved into housing, more than 95% of rental homes were owned by investors who owned five or fewer properties. With investment firms now slowing their pace of acquisitions, individual investors are back in the market, the firm said."



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5 tips to bounce back after a foreclosure or short sale | Miami Herald

5 tips to bounce back after a foreclosure or short sale | Miami Herald: "Philip and Denise Powell lost their home in 2011 after Philip's hours as a pastor were cut in half and Denise was sidelined by a surgery. But they were determined to become homeowners again, so they rolled up their sleeves and got to work.

The Highland, California, couple got financial counseling. They took control of their credit reports, tackled high-interest debts and cut spending. In 2015, they bought another home.

"We thought we'd never recover," Philip Powell says, recalling the devastation they felt after losing their home. "No one in California was ready for the crash; it hit us hard."

Their story is typical of the more than 9.3 million homeowners who lost a home through a distressed property sale from 2006 through 2014, according to the National Association of Realtors."



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South Florida condo boards rip off consumers with high application fees | Miami Herald

South Florida condo boards rip off consumers with high application fees | Miami Herald: "State law says condo associations shouldn’t charge fees greater than $100 per applicant

But nearly 50 percent of Miami-Dade condo listings ask more

That’s making a tough housing market even tougher for the poor and middle class"



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Canadian buyers not enough to repel bust

"The South Florida real estate market has exhibited remarkable sensitivity to global trends over the past few years, due in no small part to an unremitting dependence on foreign capital to prop up the sector. A recent dearth of overseas investors might upend the current situation, however—and this is not a contingency that even active Canadian buyers can help with, observers said.

Foreign buyers in Miami have traditionally consisted of South Americans, Europeans, Russians, and Canadians, but new figures from Integra Realty Resources showed that activity from Brazil and Argentina has slowed down lately due to a 42 per cent and 40 per cent (respectively) decline in both countries’ purchasing power since 2014.

Integra officials said that a weakening in the South American segment might trigger a crisis in Miami’s condo market, as this slice represents the lion’s share of foreign real estate investment in the city.

“The depth of the Chinese market, or the European or Canadian market, is not enough to make up for the South American buyer,” Integra senior managing director Anthony Graziano told the Wall Street Journal.

According to research conducted by Miller Smauel Inc., the last quarter of 2015 saw a significant 20 per cent drop in Miami condo transactions on a year-over-year basis. This accompanied a 6.6 per cent decline in average sale price, as well as a 33.3 per cent increase in inventory.

Along with numerous cancellations of pending projects by multiple developers, these recent changes have led several experts to warn that the city’s condo sector is now running headlong into a watershed.

 “The condo market has peaked. Sales velocity has slowed down considerably,” Miami-based real estate development lawyer Neisden Kasdin said."



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Miami's Condo Real-Estate Bubble Is Bursting | Miami New Times

 "For more than a year, signs have been pointing toward a sharp downturn in Miami's condo market, and developers are positioning themselves for the bubble to burst.

Carlos Rosso, president of condominium development at Related Group, tells the Wall Street Journal that this time last year, his company was selling an astonishing 100 units a week in Miami. This year, it's averaging about 20 per week. Condo transactions in Miami Beach were down about 20 percent in the last quarter of 2015 compared to 2014.

Though the median sale price of condos in Miami-Dade has continued to rise slowly, developers don't expect the trend to continue. More than 7,300 new units are in the pipeline, and developers tell WSJ they're preparing to lower prices and offer more perks to move them. "

Read More at: www.miaminewtimes.com/news/miamis-condos-shift-to-a-buyers-market-but-dont-expect-another-2008-bloodbath-8355802 



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Will the Miami Housing Market Flatline in 2016?

January 14, 2016 | By Brandon Cornet

Home prices in South Florida have risen steadily over the last couple of years, with new construction ramping up across the area. Now, some are worried the Miami housing market could be headed for another crash. The dreaded ‘B’ word — bubble — is being tossed around again, as well.

Some economists have forecast that home prices in the area will remain mostly flat in 2016, after many months of steady growth. Here are some notable real estate trends and predictions for the Miami real estate market in 2016.

Miami Real Estate Market to Crash in ‘Next Few Years’

In an interview with The Washington Post, Miami real estate expert Jack McCabe said that the South Florida housing market could be headed toward another bubble-and-bust cycle,

Read more: http://www.homebuyinginstitute.com/news/forecast-will-miami-housing-market-flatline-714/#ixzz3xJUtURJi

Trying to Launder Money through Luxury Real Estate? The Government's Onto You

The U.S. government is cracking down on money laundering in luxury real estate, thanks in part to the investigative prowess of the New York Times.

The Treasury Department's Financial Crimes Enforcement Network (FinCEN) announced Wednesday it had issued "geographic targeting orders" for Manhattan and Miami-Dade County, Florida, that would compel title insurance companies to report on clients who pay for big real estate purchases — think $3 million for Manhattan and $1 million for Miami — in cash. The new measures will take effect on March 1 and remain in place until Aug. 27; if they unveil as much illicit activity as the Times turned up in its 2015 "Towers of Secrecy" series, the government will beef up nationwide tracking efforts.

"We are seeking to understand the risk that corrupt foreign officials, or transnational criminals, may be using premium U.S. real estate to secretly invest millions in dirty money," FinCEN Director Jennifer Shasky Calvery said in the announcement. "These GTOs will produce valuable data that will assist law enforcement and inform our broader efforts to combat money laundering in the real estate sector."

The main target of the fed's effort? The so-called shell company, which is exactly what it sounds like: a legal business, but in name only; a kind of corporate facade that has no operational activity but is used to shuffle money around.

Not every shell company is a front for illegal activity; many start-ups, for example, find it useful to set up a shell before operations are in full swing. For people looking to stash some of their wealth in an untaxable asset like a building or apartment, however, the establishment of a shell corporation is an attractive option — the investor's name won't appear on the bill of sale, but the corporation's will. Shell companies provide a veil of anonymity; the Times reported that backers can build shell companies on top of shell companies to create a big, confusing onion-like disguise. Little surprise, then, that the Economist has called them "the vehicle of choice for money launderers, bribe givers and takers, sanctions busters, tax evaders and financiers of terrorism."

FinCEN says that title insurance companies are implicated in most every real estate sale closed, meaning they're full of information the government would love to know. When a shell company attempts to make an all-cash purchase, the title insurance company will be obligated to dig up and report the name of that shell's owner to FinCEN, which will then log it in a database — a key resource for law enforcement investigating money launderers. 

According to the Times, almost half of all homes purchased across the U.S. valued at $5 million or more were made through transactions with shell corporations. In its "Towers of Secrecy" series, the newspaper profiled a number of shady characters funneling money into U.S. real estate, all of whom occupied one of the most prominent luxury buildings in the New York real estate landscape: the Time Warner building. 

There was the "Mysterious Malaysian Financier," the hard-partying Jho Low, whose shell company financed the purchase and rapid resale of a few multi-million dollar homes to the stepson of Malaysia's Prime Minister, Najib Razak. The Times reported that Low conducted many of his business transactions on behalf of his "friends," and it was his friendly connection to the Malaysian ruling family that looked particularly suspicious, as if he might be involved in laundering the money of a corrupt head of state through the sale and resale of a few pricey New York City and Los Angeles properties.

There were "the Russian Minister and Friends," the "Mexican Power Brokers" and the "Besieged Indian Builder," all with similar stories. Over the course of its investigation, the Times found 200 shell companies with stakes in the Time Warner Center over the past 10 years, and 16 apartment owners who had been investigated by governments the world over, all of whom used shell companies to mask astronomical real estate purchases without anyone batting an eyelash. 

Why? Because money flowing into U.S. markets is good. "We like the money," Raymond Baker, president of the Washington-based nonprofit Global Financial Integrity, told the Times. "It's that simple. We like the money that comes into our accounts, and we are not nearly as judgmental about it as we should be."

What does Global Financial Integrity do? According to the Times, it "tracks the illicit flow of money." 

Which is why the newspaper's investigation was so important: It blew the lid off of staggering sums siphoned into the U.S. by a litany of unsavory characters and drew public attention to the practice in a way the government couldn't ignore. 

Claire Lampen January 13, 2016