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Tags:  Miami Beach Real Estate

Headlines about the overall national real estate market reaching a “housing bottom” are starting to become more common. What does this mean in practical terms if you are potential seller (or buyer)?

The housing market is based on local conditions. In Greater Miami, and most specifically in Miami Beach, it’s no secret that it’s a genuine buyer’s market. Asking prices for class “A” waterfront properties in prime locations are down as much as 50% off 2006 market highs. Buyers have many choices today, for both single family homes and condos, and mortgage rates are near historic lows. Also, due to the large number of construction projects initiated between 2002-2007, buyers of luxury properties today can choose from a variety of neighborhoods, building sizes, amenities, and styles.

As of this writing, August 5, 2009, we are coming out of one of the most severe economic recessions in a generation. However, the financial news channels keep telling us lately that there IS light at the end of the tunnel. We are beginning to sense that the bottom of prices has been reached in Miami Beach because properties are SELLING.

Miami Beach single family homes (especially waterfront luxury properties) are in finite supply. You cannot grow or build another island or waterfront lot. Also, the City of Miami Beach has had a strong anti-development stance for years, so those wishing to tear down, renovate, or build a larger single family home face legal, administrative, and construction headaches. There are virtually no new homes and condos being built, or even in the planning stages, for almost all of Miami Beach and most especially in South Beach’s Art Deco district.

If you are a potential seller of waterfront real estate in Miami Beach & cannot hold on to your property because of negative cash flow (probably if your housing expenses total more than 31% of your gross income), then my advice is to price it to sell today. Working with a knowledgeable, honest, and experienced sales agent is the key here, and the price needs to be based on the last three to six months of closed sales. My team and I have experienced that Miami Beach properties- whether they are single family homes or condos which are priced RIGHT end up with multiple offers and sell quickly.

If you’re a potential buyer interested in purchasing, now is the time to pull the trigger if you qualify for a mortgage (count on putting 30% cash down of appraised value). My advice is that under no circumstances should buyers be seeking to potentially “flip” or plan on making a profit on their property for AT LEAST five years. As I previously outlined in many previous blog posts, there are many reasons why we can expect to see an initially FLAT and then GRADUAL price appreciation for Miami Beach’s real estate market for several years. Times have indeed changed, but the opportunity to purchase a discounted PRIME waterfront property is now!

 

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