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Tags:  Miami Beach Real Estate, National Association of Realtors, Real Estate Market, NAR

The real estate market has not experienced favorable circumstances the last three years. Many markets have seen rampant foreclosure and a lack of demand bringing their property values down over thirty percent. But sources in the National Association of Realtors and recent news suggest that the real estate market may be on an upswing.

Lawrence Yun, lead economist for the National Association of Realtors, believe the same domino effect of price dropping that brought the U.S. into their current housing crisis, will reverse and become a domino effect of increased sales. Yun believe the real estate market began its recovery in California several months ago and has set a chain reaction to other states like Colorado, Kansas, Minnesota, Missouri and Rhode Island, who have all seen a steady increase in sales last month.

The President of the National Association of Realtors, Richard F. Gaylord, is also optimistic that the real estate market is seeing a steady comeback. Gaylord believes that affordability of homes is what’s bringing buyers back to the market. Over the last three years homes have dropped over thirty percent in their value in many cities. For example a Miami Beach real estate that cost $350,000 dollars in 2005 could now be selling for $245,000 dollars. Though Yun’s California’s increase in sales effect has not hit Florida yet, the increasingly affordable real estate will likely attract demand back to the market.

While recent positive findings in the real estate market are certainly something to be optimistic about, Lawrence Yun warns real estate enthusiasts that the recover of the real estate market may be subject to “market disruptions”. The credit industries’ woes often negatively impact the real estate market and Yun believes it will cause fluctuations on the real estate markets road to recovery.


Tags:  Miami Beach Real Estate, National Association of Realtors, Real Estate Market, NAR


I hear the same line of question from clients and Real Estate agents. The one that catches my attention the most is "Should I buy now or wait until the prices drop more?"

The answer is simple, if you find a great property with the right location and price and you have the means to buy it, go ahead and start enjoying it now. Exclusive and unique properties in prime oceanfront areas are limited. Such a rare commodity that is available today might not be available tomorrow. Of course you may argue that there may be other properties in the future, but if you find "the right one" and the price is within your budgeted purchase price, then why wait?

There may not be so many properties you will fall in love with. But, if you have spent time and effort to find the perfect property for you and your family, my advice is to act now. I will help you with the negotiation process and guide you all the way to closing as seamlessly as possible.

If you decide to wait for the "better deal", the market could suddenly turn around. It's a simple law of supply and demand, such as the price of gasoline and its roller coaster ride we have just witnessed!

Real Estate is highly fragmented. I cannot speak for every area. But I firmly believe that the prices of luxury oceanfront properties in South Florida have bottomed-out.

This is my area of expertise. I am constantly analyzing and visiting properties, getting input from numerous clients and real estate professionals on current market conditions. This gives me the edge on local knowledge - more so than your Attorney, your Accountant, your Banker, or your friends around the water cooler. Some people are waiting for a subliminal sign or an official New York Times announcement that the Florida market "has bottomed-out".

In the meantime, shrewd investors and knowledgeable buyers are picking up the best properties available. There are excellent opportunities to be had right now!

I invite you to contact me now for the best opportunities in prime South Florida's oceanfront locations. As always I am available 24/7 by email at or by cell 786-512-5555. This month I launched my new Mega-Site which is filled with all the information, listings. comparables you will need to acquaint yourself with the area. Please visit at

Serge Kay.


Tags:  Miami Beach Real Estate, National Association of Realtors, Real Estate Market, NAR

Miami & Miami Beach Condo Trends - October 2008

Below, you will find the Miami-Dade County condo inventory and months of supply figures for October 2008. The first box to the left reveals the total number of condos that are currently available for sale on the MLS throughout Miami-Dade County. The second box discloses the total number of closed sales that occurred in the month of September 2008. The third and fourth boxes show the months and years of condo supply in Miami-Dade County. As you can see, the figures are also subdivided into various price ranges to reveal which part of the condo market has been most affected. The % change box will show you how the inventory levels have changed since my last update in May 2008.

The overall supply of condos listed in the MLS in Miami-Dade County has dropped from 25,461 to 24,788 since May 2008. On the flip side, the number of closed sales in the previous month has gone up from 474 to 527 creating a 12.51 percent drop in the years of inventory in Miami-Dade County since the last update. It’s once again surprising that inventory levels have dropped despite the thousands of new condos that have been completed and delivered in 2008.

The following statistics encompass only those condos located throughout Miami (not other areas of Dade County such as Miami Beach, Aventura, Sunny Isles Beach, etc.):

The supply of condos in the MLS in Miami has dropped from 10,281 to 9,903 since May 2008. The number of closed sales in the previous month has gone up from 161 to 192 creating a 19.21 percent drop in years of inventory in Miami since the last update. As you can see, a large portion of these closed sales occurred in the $0-$249,999 price range. The inventory levels of the $500,000+ categories, however, have increased.

The following statistics encompass only those condos located throughout Miami Beach:

The supply of condos in the MLS in Miami Beach has dropped from 4,109 to 3,949 since May 2008. However, the number of closed sales in the previous month has also dropped from 113 to 98 creating a 10.82 percent increase in years of inventory in Miami Beach since the last update. In fact, with the exception of the $500,000-$999,999 price range, the years of inventory has risen for each category.


Tags:  Miami Beach Real Estate, National Association of Realtors, Real Estate Market, NAR


Indefatigable billionaire Jorge Pérez is angling to profit in part from the condominium woes of indefatigable billionaire Jorge Pérez.

Mr. Pérez is chairman and chief executive of Related Group, the biggest condo developer in south Florida, and perhaps the greatest optimist in brazenly overbuilt Miami. Having borrowed more than $1 billion to erect soaring towers in downtown Miami, he is scrambling to sell thousands of condos amid the deepest market swoon in decades.

Building and Buying in Miami

See details on some of Related's condos in Miami.

Yet the 59-year-old entrepreneur -- a fast talker whose marketing flair evokes comparisons to Donald Trump -- also has emerged as one of the most aggressive buyers of condos on the cheap, starting with units in one of his own buildings.

An investment fund formed by Related and Philadelphia private-equity firm Lubert-Adler Partners LP recently snapped up $100 million of Florida condos in five projects. More than one-third of that money has gone into 50 Biscayne, a stylish Miami building that Related developed with a different partner. The plan is to rent the units until they can be sold.

Mr. Pérez has plenty more condos to market. Within blocks of each other on Miami's prestigious Brickell Avenue, Related this year has opened two projects totaling some 1,600 condos. Its landmark three-tower, 1,800-unit complex, Icon Brickell, is soon to start taking residents. Mr. Pérez has other large projects in the works outside of Miami, and the rate at which buyers are walking away from deposits is higher than expected. "I may end up having to hold 1,000 units," he says.

Mr. Pérez's gambit is both to protect his investments and position himself for an eventual resurgence in Miami's property market. There are risks because it isn't clear how long it will take Miami prices, down some 30% from their peak, to bottom out and recover. And, it is potentially rife with conflicts of interest in deals where Mr. Pérez sits on both sides of the negotiating table.

[Jorge Perez] Reuters

Real-estate developer Jorgé Perez on his penchant for buying in Miami, its skyline shown below. 'I don't think there is any better investment than the properties I know best.'

Bloomberg News/Landov

Mr. Pérez shrugs off any suggestion of a conflict, saying his roles are fully disclosed. And he says a big reason why he is buying his own condos is that he likes them. "I don't think there is any better investment than the properties I know best," he says.

Dean Adler, chief executive of Lubert-Adler, also doesn't see a conflict, but notes that the purchase of Related condos was the exception, not the rule. "That is not the intention of the partnership," he says. "Every deal that we're looking at now is unrelated to Related."

When closely held Related and Lubert-Adler unveiled in February a fund to buy $1 billion of distressed property, they said that the venture was "created to purchase mortgages and property solely from other developers, lenders and property owners." By last spring, Mr. Pérez was hedging, saying that the fund's primary goal wasn't to buy Related-developed condos, though he didn't rule it out.

Real-estate experts and rival developers are watching to see if Mr. Pérez will be savvy enough to emerge whole from a challenging predicament. "Miami is so flooded with product that even at 50 cents on the dollar, most of it doesn't work as rental," says Lewis Goodkin, a Miami consultant who represents investors and developers. "If anybody can do it, Jorge can."

Born in Argentina to Cuban parents, Mr. Pérez studied urban planning in the U.S. and is widely credited with helping to invigorate Miami neighborhoods by developing multifamily housing for low-income families. In 1979, he and Stephen Ross, chairman and chief executive of New York's Related Cos., co-founded Related Group of Florida, when both developers focused on low-income housing. The two men have shifted to high-end projects and separated their companies. Mr. Ross still owns about 20% of the Florida firm, Mr. Pérez says, and Mr. Pérez holds stakes in various projects led by Mr. Ross.

While he has ventured nationally, not always with success, Mr. Pérez dominates his home turf of Miami where he pioneered downtown condos and built a strong sales force with a deep and loyal customer base in Latin America and Europe. Even as he acknowledges contributing to overbuilding, Mr. Pérez exudes confidence and he sees his properties as key to making Miami a world-class city.

So, he's doubling down with the help of outside investors. The first purchases by the Related-Lubert-Adler fund were at 50 Biscayne, a 54-story, 528-unit downtown Miami condo tower that Related co-developed with Cousins Properties Inc. A company called 50 Biscayne Suites LLC bought 20 units there for $6.1 million in May, and months later, Mr. Pérez confirmed that Related and Lubert-Adler were the buyers under the Biscayne Suites name. In August, Cousins announced that it and Related had sold the final 120 residential condos in the building to the Related-Lubert-Adler fund for $30.3 million.

A Miami-area consulting company , says the fund picked up the 144 units at a combined rate of $246 a square foot, well below previous sales prices. A broker who runs a Web site that analyzes the Miami condo market, calls the deal a "bargain for Jorge." That is, Mr. Pérez as the buyer.

Matt Gove, senior vice president at Cousins, declined to discuss pricing beyond saying that the Atlanta real-estate investment trust has earned a pretax profit, before minority interest, of about $18 million on the project.

[A condominium building built by Jorge P[eacute]rez in Miami.] Reuters

A condominium building built by Jorge Pérez in Miami.

"Cousins felt like the partnership received a fair price," Mr. Gove says. "Especially given the market, we think 50 Biscayne was a success." Mr. Adler says the price was fair.

Other Related-Lubert-Adler fund deals include a $30 million purchase of 239 condos in Broward County and most of the condos in a 117-unit Fort Lauderdale building that is in bankruptcy-court proceedings. Mr. Pérez says he is close to sealing five more purchases, including condos in a Brickell Avenue building. "Not one of mine," he says. The fund has financed each deal with about 65% debt.

"Every project we're buying is at a discount to replacement cost," Mr. Pérez says. The discount for 50 Biscayne was lower than the others, he notes. "It's my product. It's also the best product there is."

He maintains that his purchases don't have to be limited to the Lubert-Adler partnership. He believes Related is nimble enough to avoid the busts that ruined pioneering developers in Miami Beach and Coral Gables. This year, he expects Related to turn a $200 million profit on $2 billion in sales. Next year won't be as good, he says.

But it will feature the debut of his massive legacy project, Icon Brickell, which features Philippe Starck design flourishes, a two-acre terrace and a 300-foot-long pool. He says his team is "working like crazy, calling every buyer" to close sales.

Mr. Pérez, meanwhile, will stay in the hunt for bargain buys. "There is no question in my mind that within some time -- I don't know if that's two, three or four years -- people are going to look back and say: 'These units were bought for how little!'" he says emphatically. "Some of these are really a gimme. And we think the future of Miami is very strong."

Write to Jonathan Karp at


Tags:  Miami Beach Real Estate, National Association of Realtors, Real Estate Market, NAR

My good friends:
A propos of Halloween being just around the corner, our financial markets have become this season’s scariest goblin. Watching investments evaporate into thin air is a frightening prospect; wondering if they will ever re-capture more than a fraction of their original value an even more troublesome prospect. But that’s the risk associated with certain paper assets. In their worse-case scenario as an investment risk they have the potential of being worth scarcely more than the paper they’re printed on.
Not so with hard assets, such as gold, silver and real estate. While the value of these precious commodities is certainly given to market fluctuations, it’s impossible for their tangible touch-and-feel qualities to simply vanish overnight.
As challenging as the real estate market has been over the past few years, your home remains an asset that can never be made worthless by callous acts of corporate greed or blind mismanagement. Regardless of its up-or-down value on any given day you have the inestimable pleasure of enjoying it through good markets and bad. To borrow from an oft-quoted ad campaign that has worked its way into the pantheon of pop culture: What you pay for a home is one thing, what you eventually sell it for another; the joy and comfort you derive from it along the way….priceless.

We would love to hear your comments and suggestions as to what you would like to read in the weeks and months ahead. Please email them to me - c/o


Tags:  Miami Beach Real Estate, National Association of Realtors, Real Estate Market, NAR

Buyers from Foreign Sellers of U.S. Real Property Beware
IRS Warns that Disregarded Entities Cannot Certify Domestic Transferor Status
for the Purpose of Withholding under FIRPTA

The Internal Revenue Service (“IRS”) recently issued Chief Counsel Advice 200836029 which reiterated existing policy that an entity which has made an election to be disregarded may not certify that it is the transferor of a United States real property interest for purposes of FIRPTA (an acronym standing for “Foreign Investment in Real Property Tax Act” contained in Internal Revenue Code (“IRC”) Sections 897 and 1445).

The IRS has been made aware that some buyers of United States real property are not withholding the required 10% of the sales price when purchasing from domestic entities which have made an election to be treated as disregarded by their foreign owners. A disregarded entity may not certify that it is the transferor of a United States real property interest for the purpose of avoiding this withholding. The owner of the disregarded entity is treated as the transferor for United States income tax purposes, and as such must provide the certificate of non-foreign status to avoid the withholding.

If the owner of the disregarded entity is an individual United States tax payer, he or she must provide the certificate of non-foreign status to avoid withholding under IRC Section 1445. If the owner of the disregarded entity is another entity, the Treasury Regulations provide a model form for the entity to use, which includes a certification that the owner of the disregarded entity is not a foreign corporation, a foreign partnership, a foreign trust or a foreign estate as well as a certification that the entity is not also a disregarded entity under United States tax law.

If the owner of the disregarded entity cannot or does not certify its non-foreign status and that it is not itself a disregarded entity, the buyer must withhold 10% of the purchase price. As a practical matter, since purchasers of real property may ultimately be responsible for withholding, interest and penalties, the purchaser should obtain a non-foreign certificate which includes representations that the entity is not a disregarded entity for United States income tax purposes when purchasing real property from any domestic entity.


Tags:  Miami Foreclosures

I was watching Channel 7 News last week when a special segment about real estate foreclosures in South Florida aired. I felt badly for the people in this story that are losing their homes but there are two messages in the video segment below which I feel may be beneficial to some.

It is my feeling that foreclosures in general ARE NOT the best buys for one reason: the majority of the foreclosures that are available were originally purchased at or near the “peak” of the market—and the banks have lent too much money on these properties. Since the banks are owed so much money on a typical foreclosed property, they don’t have the ability to sell it at today’s market price. From WSVN’s Foreclosure Forced Out

Auctioneer: “Welcome to the mortgage foreclosure sale.”

Each week, hundreds of properties in foreclosure are auctioned off.

Auctioneer: ”Home Equity Mortgage Corp. vs. Butler.”

On this day, for the first time in 21 years, not a single property sold, the banks had to keep them all.

Luis Valdeon: “The banks lent too much money. They did first mortgage and second mortgages, and they’re completely off of what the price really are, and that’s why everything is so high; you can’t sell them.”

And the foreclosed properties are piling up.

Why The Miami Beach Real Estate Market Isn’t That Bad


This is a five year history for the South Beach condo market for area code 33139. The dark green bar represents condo sales and the light green bar represents condo units on the market.

I know that some of the numbers are a bit hard to read but they really don’t matter anyway. What matters is the incredible amout of inventory (light green bar) that started to accumulate in May 2005. The number of sales are off from the peak, but nothing alarming. The real story here is the amount of inventory on the market. People have not stopped buying here and Miami Beach real estate continues to sell if it is priced right. If you need to sell your Miami Beach condo, PRICE IT RIGHT. If you don’t need to sell your condo, now is NOT the time to sell and you should take it off the market until some of the inventory gets absorbed. More from Foreclosure Forced Out

Barry Habib: “There’s no simple solution.”

Barry Habib is a nationally known mortgage expert. His advice? Get out before you get in trouble.

Barry Habib: “If they have equity in it, they’ve got to find a way to protect that equity. Put the house up for sale. Don’t be greedy. Don’t try and put it up at an unrealistic number. Homes sell, and they sell very quickly if they’re priced right in every market.”

Miami Beach real estate, South Beach real estate, South Beach condos, Foreclosures


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