Home values in South Florida predicted to grow 6 percent through next year….

Home values across South Florida increased more than 6 percent in the second quarter and are expected to keep appreciating by approximately the same amount into 2013, according to a Zillow.com report released today and cited by the Sun Sentinel. … Continue reading

America’s suburbs are becoming increasingly diverse, study finds

The number of racially diverse suburbs in America jumped 37 percent in the last decade, a new study from the Institute on Metropolitan Opportunity at the University of Minnesota Law School shows.

However, the study, cited in a New York Times blog post, noted that the growth in diversity is a tenuous one. With mortgage lending discrimination, a lack of affordable housing and real estate agents showing off homes with an area’s demographics in mind, diverse populations can become more homogeneous. The study also found that when neighborhoods lose their racial diversity, they tend to stay that way.

Oak Park, Ill., outside of Chicago, was found to be a suburb making good in its effort to keep its diversity. [NYT] — Zachary Kussin

Broward multi-family market gains steam

The multi-family sector in Broward County has seen steady declines in vacancy over the past two years, but the market still has room to grow, according to a report from Marcus & Millichap. While the area’s vacancy rate fell by 130 basis points last year, the firm projects vacancy to fall to 4.3 percent in 2012, a drop of 100 basis points. Rents are also expected to increase, with a 2.8 percent projected rise in asking rents to $1,111 per month, accelerating from a 1.2 percent growth rate in 2011. Coinciding with the strong rental demand and growth is renewed “vigor” in the investment market, according to the report. — Alexander Britell

Vacation-home buyers pounce on short sales, foreclosures

ORLANDO, Fla. – July 10, 2012 – The vacation-home market, hit particularly hard by walk-away owners during the real-estate downturn, appears to be making a comeback, with sales growth in recent years exceeding that of primary residences.

Central Florida’s second-home market has been thriving, thanks to a seemingly irresistible combination of record-low prices and record-high numbers of tourists. The Orlando metropolitan area was recently listed, for instance, as one of the country’s “10 hot spots for foreign buyers” by Inman News, an online real-estate news service.

Second-home sales nationally through last year have grown 15 percent since 2008, while sales of regular homes have fallen 13 percent during that time, according to a recent report by the National Association of Realtors. Local agents say that national trend also holds true for the Orlando area, largely because of the area’s cheap real-estate prices and an increasing supply of prospective buyers in the form of vacationers and other visitors, particularly Canadians and South Americans.

“Six months ago through the Easter rush, buyers wanted something for under $150,000, and you could find 40 to 60 listings,” said Joe Rogers, property manager for Florida Scandinavian Vacation Homes and Management in Kissimmee. “Now it’s more like five to 10 listings. The market is evaporating, and the inventory is being sucked up in a vacuum.”

Even though such vacation-home sales aren’t tracked locally, Rogers estimated that prices for those properties have increased as much as 20 percent in the past six months. Financing for second-home mortgages, nonexistent just a few years ago, is now available with downpayments of 30 percent, he noted.

Despite the reported price increases of recent months, area properties are still so deeply discounted from the 2007-08 housing bubble that buyers can still find deals.

In Osceola County’s Reunion Resort community, which allows short-term rentals, vacation-home broker Scott James recently secured a $535,000 contract on a home that had been valued at $1.5 million at the market’s peak. Many of these sales, he said, are in the Davenport area of Polk and Osceola.

“A lot more investors are circling those areas and buying up a lot of the properties, especially the foreclosures,” said James, owner of Luxury Lifestyle Vacation Homes, which is based in Davenport.

The area’s resort-home market was troubled during the bubble by unscrupulous property-management companies that pocketed rental income without maintaining the properties. But many of those overseas operations went out of business during the real-estate downturn, according to James.

On a national level, the vacation-rental website HomeAway Inc. recently estimated that 39 percent of vacation-home buyers in the U.S. have purchased distressed properties. Resort-home owners had abandoned their properties at higher rates than regular homeowners had in recent years, pushing a larger share of vacation houses into foreclosure and further driving down second-home prices.

Prices in the second-home market plunged by more than a third in the past five years as prices for primary residences fell by a quarter, according to the National Association of Realtors’ latest Investment and Vacation Home Buyers Survey.

“A lot of people who walked away from properties walked away from vacation properties because it doesn’t really affect their property overseas,” said Rogers, the Kissimmee property manager. In other words, foreign buyers were able to maintain their credit ratings back home even after their U.S. investment properties slumped in value and they stopped paying their mortgages, triggering foreclosures and repossessions.

Looking ahead, the second-home market is likely to heat up further, said Lawrence Yun, chief economist for the national Realtors group.

In the association’s latest survey, eight of every 10 people who responded indicated that they considered this to be a particularly good time to buy a vacation home – and one-third of the second-home owners said they were likely to consider purchasing yet another vacation home within two years.

“Given that the number of people who are in their 40s is somewhat larger than the 50-somethings, the long-term demographic demand for purchasing vacation homes is favorable,” Yun said, “because these younger households are likely to enter the market as their desire for these kinds of properties grows and individual circumstances allow.”

© 2012 The Orlando Sentinel (Orlando, Fla.), Mary Shanklin, The Orlando Sentinel, Fla. Distributed by MCT Information Services.

Call center may bring 300 jobs to downtown Ocala


Staff writer
Published: Monday, July 9, 2012 at 7:40 p.m.
Last Modified: Monday, July 9, 2012 at 7:40 p.m.


If the Ocala City Council gives the go-ahead Tuesday to begin negotiations, and if the city staff can provide needed parking, Ansafone Contact Centers LLC could bring 300 new full-time jobs with annual wages ranging from $21,800 to $45,000 to Ocala’s downtown within three years.

The company, owned by Randy Harmat, would occupy the building at 101 NE Second St., the former offices of Maslow Insurance, which was a wholly-owned subsidiary of the former Taylor Bean & Whitaker Mortgage Corp. The facility will be used as a call center that offers in-bound and outbound customer services.

“The city will provide a parking solution,” said Melanie Gaboardi, the city’s senior manager for economic development. “They have 30 on-site spaces. They are looking for an additional 70 permanent spaces.”

In addition to the those 100 spaces, the company also would like to have another 140 spaces available within three blocks of its facility.

The 30 on-site spaces are not sufficient for the building’s capacity.

Marc Mondell, the city’s executive director of municipal development, said the solution for the parking is still being hammered out and, if council gives approval tonight to begin negotiations, the solution will be presented to council July 17. He said refiguring the Concord parking lot north of the Concord Building on Silver Springs Boulevard might be a portion of the solution.

“We want as much flexibility as to how we can achieve that as possible,” Mondell said.

The estimated cost of providing the requested parking is $550,000, which would come from the city’s Economic Incentive Program. Without the city’s commitment, Ansafone will not buy the building or bring the jobs to Ocala.

Miami Beach development decision delayed after complaints ….

Miami Beach’s interim city manager pulled a vote on pricey proposals to redevelop public parking lots off Lincoln Road after one bidder alleged Sunshine Law violations.




A major Miami Beach redevelopment project has been thrown into limbo because a losing bidder said city officials illegally held a closed door meeting to evaluate competing teams’ proposals to lease and develop city-owned land near Lincoln Road.

The City Commission was expected to vote this month on whether to partner with one or more teams to build shops, apartments, restaurants and cultural venues on three city parking lots.

But interim City Manager Kathie Brooks yanked the vote off the commission’s July 18 agenda after Lincoln Road Development LLC, which was ranked fourth of four, said Miami Beach’s selection committee should have discussed the competing offers in a public meeting.

City lawyers says they’re not convinced the city violated Florida’s Sunshine Law as alleged, but it may be better to play it safe and hold a do-over meeting or re-start the bidding process.

“If we’re going to err, we’re gong to err on the side of Sunshine,” said City Attorney Jose Smith.

Brooks pulled the vote off the table on July 5 after the city received letters from attorney Rafael Andrade, a lobbyist for Lincoln Road Development, in which he raised concerns about the city committee that evaluated and ranked proposals on May 11.

Andrade said the city should have publicly noticed the meeting and opened committee deliberations to the public. He also said the committee failed to consider the benefits of a hotelier on Lincoln Road Development’s team, and that the committee’s chairwoman failed to “disclose her association” with the leading bidder.

“It would be in the city’s best interest for the administration to declare the evaluation committee’s recommendation null and void,” Andrade wrote on July 3.

Smith said Brooks, who declined to comment, is now weighing her options, out of caution.

What that means for the teams of bidders is unclear.

For now, as the committee’s recommendations still stand, developer Robert Wennett’s team √No11i remains the frontrunner to partner with the city on a $59 million project to build apartments, restaurants and shops on the two city lots on either side of Lenox Avenue. Terranova Corp.’s second-ranked team proposed a $131 million project. The third-ranked Tri-Star projected its development costs at $100 million. Lincoln Road Development’s costs were estimated at $40.5 million.

Wennett referred questions to a member of his staff, who didn’t return calls for comment.

Attempts to reach Terranova and Tri-Star representatives through their attorneys were unsuccessful.

Evaluation committee chairwoman Elsie Howard, however, said Andrade’s criticisms of her “association” with Wennett, as well as her husband’s, are off-base.

Andrade said Howard should have disclosed that she is associated with several companies that, according to Florida records, have their principal place of business at Wennett’s 1111 Lincoln Road. Howard said she leases an office in that building, but “I’m not sure he [Wennett] even knows my name.”

“I’m insulted by the insinuation,” she added.

As for the alleged Sunshine Law violation, Smith said the issue Andrade raised stems over “a difference of opinion as to whether the deliberations of the committee have to be in the Sunshine.”

The law that regulates meetings in which contractors reveal information about a sealed bid or negotiate with representatives of a government says “any portion of a meeting at which a negotiation with a vendor is conducted pursuant to a competitive solicitation, at which a vendor makes an oral presentation as part of a competitive solicitation, or at which a vendor answers questions as part of a competitive solicitation is exempt from” the Sunshine Law.

Miami Beach interpreted that law, which was changed last year, to mean that the entire meeting must be recorded but closed to the public.

Other governments, however, have closed only portions of the meeting. For instance, the city of Miami recently allowed the public to view portions of a committee tasked with evaluating proposals for new development at the Scotty’s Landing site in Coconut Grove.

“There aren’t yet any Attorney General (or other) opinions, or case law, on point to provide guidance, so this is, in many ways, a new issue for local governments,” Raul Aguila, Chief Deputy City Attorney and the current head of the city’s purchasing department, wrote in an email.

That issue could have broader implications for the city, which also closed its $1 billion convention center redevelopment evaluation committee to the public.

“Nobody has asserted a challenge to the convention center process,” said Smith. “But it’s probably a matter of time before somebody does.”


House of the Day’ in Gables Estates sells for $10.5 million

This gallery contains 2 photos.

South Florida Business Journal by Eileen Cukier, Associate Editor Date: Friday, July 13, 2012, 12:48pm EDT Built by Armando Codina, perched on a quiet lagoon, surrounded by hardwoods, palms and fruit trees, the home at 650 Casuarina Concourse in Gables … Continue reading

Short sale site gets flipped for triple the price, stinging Great Florida Bank

South Florida Business Journal by Brian Bandell, Senior Reporter

Date: Friday, July 13, 2012, 10:55am EDT

ust three weeks after Great Florida Bank   allowed a vacant Coconut Creek site to move in a short sale, the new owner flipped it for triple the price to an apartment developer.

The deal shows how banks can sometimes miss out on rebounding property values in South Florida and take unnecessary losses on distressed asset dispositions.

The Miami Lakes-based bank filed a foreclosure lawsuit in 2010 against St. Lucie Industrial Properties, managed by Delray Beach developer Anthony Pugliese, over a $3.35 million mortgage on the 13.6-acre site at 5401 Wiles Road in Coral Springs. He planned to build 198 garden apartment units there, but no construction took place.

On June 20, Great Florida Bank allowed Pugliese’s company to sell the property to Lake Worth-based C.S.S. Building & Design for $2.175 million – or 35 percent below its mortgage value.

The new owner did not hold onto the property for long.

On July 12, C.S.S. and President Melvin Urban sold the property for $6.5 million to Altis at Coconut Creek, an affiliate of Boca Raton-based Altman Development Corp.

If Great Florida Bank and Pugliese’s company had sold it to Altis at Coconut Creek for that price, it would have been enough to fully repay the mortgage and earn a profit for Pugliese.

Altis at Coconut Creek obtained a $30.6 million mortgage from PNC Bank (NYSE: PNC) to build an apartment complex.



Miami sales prices up 17.7 percent, but gains reflect a complex picture

Distressed inventory made up 40 percent of all sales

July 12, 2012 12:01AM 
By Alexander Britell


The median sales price of Miami’s coastal residential properties rose 20.9 percent in the second quarter of 2012, compared to the same period in 2011, according to a report from Douglas Elliman Florida. Miami’s average sales price also jumped 17.7 percent in the same period.

But while Miami prices have been trending upwards for some time, these recent gains reflect a more complicated picture.

There were two major reasons for the price jump, according to Jonathan Miller, whose firm, Miller Samuel, prepared the report: reduced inventory and a decrease in distressed inventory coming to market.

“The sharp drop in inventory is one of the reasons why I would characterize the market as stable or better than stable,” said Jonathan Miller, whose firm, Miller Samuel, prepared the report.

Through the second quarter, distressed inventory represented around 40 percent of all sales — a significant turnaround from a year and a half ago, Miller said, when distressed inventory represented a market share of almost 60 percent.

And it was that shift that contributed in part to the price increase, said Douglas Elliman Florida CEO Vanessa Grout. “For now, it’s pushing pricing up — there is a direct correlation to that,” she told The Real Deal. “Because if you simply look at non-distressed market prices, prices are up modestly — so it is sort of an artificial gain.”

But part of that price jump was caused by the recent penthouse boom in South Beach, which led to a few mega-sales partially distorting the data.

“We’ve had some real anomalies, especially this year,” she said, pointing to the $25 million purchase of a Continuum condo in May. “There were some really crazy sales happening recently, and that’s going to skew the averages.”

There are some fundamentals supporting Miami’s gains, however.

“It’s relatively positive,” Grout said. “We have less inventory on the market, and the number of closed sales is up majorly.”

Miami’s residential inventory has fallen 28.2 percent in the last year, while closed sales have decreased, both signs of a tightening market, Miller said.

Miller and Grout warned that prices could take a hit as more distressed inventory comes onto market, particularly with lenders ramping up their foreclosure processing activity in recent months.

The robo-signing scandal of late 2010, which led to a large-scale freeze on foreclosure processing activity by lenders, may have contributed in part to the drastic shift in distressed market share, Miller said, inventory that still looms over Miami’s residential sector.

“The catch is that we may start to see more distressed inventory appear on the market in the next few months,” Grout said.

30-year mortgage rate drops to record 3.56%

WASHINGTON – July 13, 2012 – Average U.S. rates on fixed mortgages fell again to record lows, giving would-be buyers more incentive to brave the housing market.

Mortgage buyer Freddie Mac says the average rate on the 30-year loan fell to 3.56 percent. That’s down from 3.62 percent last week and the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year mortgage, a popular refinancing option, dipped to 2.86 percent, below last week’s previous record of 2.89 percent.

The rate on the 30-year loan has fallen to or matched record low levels in 11 of the past 12 weeks.

Cheaper mortgages have contributed to a modest housing recovery this year. Home sales were up in May from the same month last year. Home prices are rising in most markets. And homebuilders are starting more projects and spending at a faster pace.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger downpayments required by banks.

And the sluggish job market could deter some from making a purchase this year.

U.S. employers added only 80,000 jobs in June, a third straight month of weak hiring. The unemployment rate was unchanged at 8.2 percent, the government reported last week.

Slower job creation has caused consumers to pull back on spending.

Mortgage rates have been dropping because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.7 point, down from 0.8 point last week. The fee for 15-year loans also was 0.7 point, unchanged from the previous week.

The average rate on one-year adjustable rate mortgages rose to 2.69 percent from 2.68 percent last week. The fee for one-year adjustable rate loans slipped to 0.4 point, down from 0.5 point.

The average rate on five-year adjustable rate mortgages dropped to 2.74 percent from 2.79 percent last week. The fee was unchanged at 0.6 point.
Copyright © 2012 The Associated Press, Marcy Gordon, AP business writer. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.