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Miami Real Estate Law Blog

Real estate dispute persists over preservation of older homes

A battle is going on concerning the preservation of a mansion sitting on Miami Beach's Star Island.  The home was built in 1925 and designed by the first registered architect in Florida.  The mansion is now scheduled for demolition.

Developers are hoping to tear the home down in order to create a 20,000-square-foot estate at or near the same location.  However, while reexamining whether historic homes like this can be saved, there is a push going on to save the mansion.  Miami Beach officials have now held a number of meetings looking for ways to update preservation laws that would protect these mansions from being torn down and preventing certain kinds of structures from being erected.

Core commercial real estate luring in investors

Investors have become more cautious since the real estate market debacle in 2008.  A great many high-risk property fund managers that relied heavily on debt financing ended up in collapse during this period.

One response has been for investors to take a greater interest in core real estate.  Though the increased demand for "core" buildings has resulted in lesser returns, many investors are looking at core real estate due to inflationary concerns.  JP Morgan Chase & Co. has in place a $21 billion core fund.  Blackstone Group LP has also been moving into the core business.

Possible real estate scheme leads to Florida taking legal action

One Boca Raton-based land trust company was named in a judgment involving hundreds of homes across Florida. The company acquired close to 100 homes in Palm Beach County and was said to have owned more than 250 properties statewide. However, the state shut the company down in September 2012 over what the Florida attorney general stated was a foreclosure-rescue scheme.

A judgment against the firm rescinded deeds that were signed over to the firm in Palm Beach County. A suit brought by the attorney general's office in Broward County continues, however.

Investor strategies may artificially drive up home prices

Since the end of the economic recession, home prices have been on the rise.  Home prices rose across Florida last year by 20 percent or more.  Not everyone is pleased as middle-class buyers have still not always had a place to turn.

Many real estate investors have been moving into the residential market and buying distressed properties in bulk.  These investors are aiming at properties that are subject to short sales or foreclosures.  Investors have been spending billions on these properties and then often placing the homes back on the market as rentals.

Financing still tight in South Florida real estate market

While the commercial real estate market in South Florida appears to be improving, lenders are still hesitant to finance a number of real estate transactions. A number of critics feel that federal regulators and lenders are in fact slowing down recovery by turning away borrowers that are creditworthy.

The tighter restrictions came about in part due to the loose lending standards that in part led to the housing bubble. However, there is now concern that restrictions are too tight. One Florida County reportedly had 65 percent of commercial transactions involve "all cash." "That really narrows the pool of buyers, which means it narrows the speed of the recovery," stated one real estate broker.

Miami foreclosure rate fell but is still above national average

The foreclosure rate in the Miami-Miami Beach-Kendall area had fallen to 8.72 percent in December.  While this is down significantly from the 14.38 percent rate we saw one year earlier, it is still much too high.  The national foreclosure rate is at 2.09 percent.  The foreclosure rate across Florida was listed at 6.67 percent in December as compared to the 10.27 percent rate in December 2013.

The mortgage delinquency rate had also improved in the Miami area.  While it was listed at 14.99 percent rate in December, a year earlier it was at 20.79 percent.  Again, compared to the national rate of 5.03 percent in December, the Miami rate of delinquencies is also significantly high.

Florida real estate dispute goes back to eminent domain action

A proposed Florida development has been delayed by officials who say they need more time to look over project information.  The information contained in the proposal was delivered by an attorney and concerns a legal dispute, property ownership and storm-water drainage.

The Main Street Redevelopment Board had three board members abstaining on any vote to go ahead with the proposed Daytona Boardwalk building due to possible conflicts of interest.  Other members of the board decided to put off discussion on the matter until the next meeting scheduled for March 12.

Commercial real estate refinanced to have more time to sell

One South Florida property owner has refinanced in order to be provided more time to sell the land. The loan has been negotiated by a Miami-based firm for $36.5 million and involves vacant tracts in Hillsboro Beach and Boynton Beach. The commercial real estate lender has provided the loan over a period of 24 months.

The parcels in question are said to allow buyers the ability to develop "very unique projects." Some of the tracts are zoned for condominiums or luxury homes. One site has been approved for a shopping mall. And for one other piece of property, an application for a zoning change has been made in hopes that a resort hotel could be built there. The lender is confident that the real estate will increase in value over time.

Home prices rose significantly during 2013

According to a home price index, home prices including distressed sales increased nationwide by 11 percent from December 2012 until December 2013.  During that same period (and excluding distressed sales), Florida home prices increased by 11.5 percent, which was the fifth highest in the nation.

The 11 percent increase was the highest rate seen since 2005.  These increases were seen in almost every statistical area.  It's important to note that these increases were at an all-time high for 10 separate states.  While this will likely unlock a pent-up supply due to the attraction of sellers, prices are likely to moderate during 2014.  

Number of investors buying real estate in Florida goes up in 2013

Despite rising home prices, the Florida real estate market appears to remain strong. While nine percent of home purchases in Florida were made by institutional investors in 2012, this number rose to 12 percent in 2013. On a national scale, seven percent of purchases in 2013 involved investor sales. There were 5.8 percent of sales made up by investors on a national scale in 2012.

Local investors appear concerned many large out-of-state investors are overpaying on homes and thus driving up prices. This would include Wall Street investors such as Blackrock that owns Invitation Homes. "It's what I call the corporatization of residential America," said the chief executive of a research and consulting business. This individual feels that homes in many communities are being purchased in large percentages by corporations. However, the long-term consequences for that community are not being discussed.