August 29, 2016

It’s Not An Unrealistic Bubble

A report from Florida Today. “The median sale price for an existing home in Brevard County hit a high point for the year in July, coming in at $196,000. That’s 22 percent higher than it was the same time a year ago and more than 3 percent jump from June’s median price of $189,925 Is there anything to be made of the escalating home prices? Should we be worried about a housing bubble? ‘It’s a small bubble, but it’s not an unrealistic bubble,’ said Cyndi Jones, a manager at National Realty of Brevard Inc. ‘With rates the way they are and the quality that you can get, we’ll still keep the prices up there.’”

The Sun Sentinel. “Palm Beach County had 1,530 existing, single-family homes trade hands last month, down 15 percent from July 2015, according to the Realtors Association of the Palm Beaches. It was the sixth month in a row that home sales fell on an annual basis. Broward had 1,499 sales, off 11 percent, the Greater Fort Lauderdale Realtors said. It was the first sales decline for Broward in the past year. Single-family sales in Miami-Dade County, meanwhile, declined for the 10th straight month, falling 16 percent to 1,128, according to the Miami Association of Realtors.”

“Although the housing market remains relatively stable, a sustained slowdown in sales is bound to affect prices eventually, said Chip Rowand, an agent for Keller Williams Legacy in Weston. He pointed out that prices have increased across the tricounty region for the past four years, while salaries have not kept pace. ‘It’s not the economy; it’s the cycle,’ Rowand said of the sluggish July sales reports. ‘Wages have not gone up to support these prices.’”

“Homes listed for $300,000 and less are still in demand, but properties in higher price ranges tend to sit on the market, agents say. Housing observers say too many homes in South Florida are overpriced. Rowand said overconfident sellers aren’t being realistic and wind up having to cut their asking prices and changing real estate agents. ‘It’s best to be the first son, the second wife and the third realtor,’ he said.”

From Mansion Global. “Figures out of Miami this week showed residential sales are down almost 21% from the same time last year. But as bad as this double-digit decline may seem, it pales in comparison to what’s happening at the high end of the market. A close look at transactions for properties of $1 million or more in July shows just 73 single-family home sales, representing an annual decline of 31.8%, according to a new report by the Miami Association of Realtors. In the case of condos in the same price range, the number of closed sales fell by an even wider margin: 44.4%, to 45 transactions.”

“The Miami housing market, and its luxury segment in particular, has been softening for the past year with high-end condos sitting on the market for twice as long as they did a year ago and sellers offering bigger discounts amid an increased supply. Additionally, sellers of high-end condos will continue to face stiff competition. Inventory is up 47.8% from last year, with 2,482 units worth $1 million or more waiting to change hands.”

“Real estate appraiser and data expert Jonathan Miller said that Miami is behaving like most of the rest of the U.S. housing market, which is in fairly good shape overall ‘but soft at the top.’ In the case of Miami, like in other coastal markets such as New York and Los Angeles, the housing boom was heavily boosted by foreign buyers, who have scaled back their purchases due to the strong dollar. ‘The international component is not as intense,’ Mr. Miller said.”

The Real Deal. “The man Forbes once listed under ‘Ten Nigerian multi-millionaires you’ve never heard of’ is grabbing a lot of international headlines lately. Olajide Omokore, a Nigerian oil magnate, was recently arrested for money laundering and corruption in his home country. And now a company linked to the high-flying energy executive has offloaded a trove of lavish Sunny Isles Beach condos.”

“County records show Energy Property Development, led by Omokore, just turned over 12 units in the St. Tropez on the Bay condominium to an affiliate of the complex’s developer, J Milton & Associates, in lieu of foreclosure. Omokore’s shell company had picked up the 12 units and five more when the St. Tropez opened in 2009.”

“To support his real estate shopping spree, Omokore took out financing from an affiliate of J Milton & Associates, Beach Developers, for as high as $1 million apiece for each condo, totaling roughly $20 million. With his new units in-hand, Omokore began renting them. Trouble began for Omokore in 2011 when the developer’s affiliate sued to foreclose on a batch of the condo loans, according to county records.”

“Robert Frankel, an attorney for the developer’s affiliate, told The Real Deal that Omokore’s company had not been making mortgage payments, but the two parties eventually reached a settlement. ‘They brought all the payments current, and they continued to make the payments,’ Frankel said. ‘The principal of Energy Property found that there was not that much equity left in the units and decided to transfer them back.’”

The PanAm Post. “Mexico’s First Lady Angélica Rivera allegedly made use of the services of two law firms to pay taxes on her apartment in Miami, Florida over the course of four years — a claim that would debunk the story that she needed the financial help of Ricardo Pierdant. According to an investigation by Univision, Rivera asked Pierdant to pay her taxes on the property as ‘a favor between friends.’”

“An information request to the Miami-Dade County Tax Office revealed the actress actually hired two law firms to cover those taxes, including during the years of 2011, 2012, 2014 and 2015. Earlier this month, The Guardian reported that Pierdant paid the taxes on the apartment with an electronic check. In addition, the investigation revealed Pierdant bought an apartment through a cash payment for more than US $2 million despite facing an embargo for more than US $1 million because of his failure to pay the mortgage of another apartment in Miami.”