Financial Information

BEST TOOL TO TRACK DEALS AFTER THE COVID-19 CRISIS

Crises come with investment opportunities, and the COVID-19 brought a large list of real estate deals that you need to know about! That's why this month we invite you to check out our Condo Sharkâ„¢ tool, and find the best deals in Miami.

With this interesting feature, you'll be able to track properties that have drastically reduced their price over the past few months, in other words, it is a fishing net to find motivated sellers in this down market.

The best way to understand this tool is with an example. So imagine you are looking to purchase a condo in Miami Beach, but you know that this is an extremely time-consuming task and even more when trying to find the best deals out there. So you get into our Condo Sharkâ„¢ website and you'll notice that unit #105 at the Harbour condo has decreased its price by 24% since it was first listed, leaving a current price of $990,000. It definitely shows the seller is uncommonly motivated and might accept a lower offer.

This page offers MUST-KNOW information after all this COVID-19 crisis. So go check it out !



WILL AIRBNB HOSTS SURVIVE TO COVID-19?

Airbnb has created a boom in the short-term rental market. People decided to start new businesses mainly focused on the Airbnb rentals, and with the Covid-19 situation, the market has dropped and has created uncertainty on what are these owners going to do to cover mortgage payments and maintenance fees.

The Mortgage Bankers Association (MBA) has estimated that the number of forbearances (program to suspend or reduce payments for borrowers) has drastically increased by 7% (3.5 million U.S. citizens) on March 2nd, compared to 0.25% last year. Note that the forbearance is only a delay on the payments, but it would have to be paid in the future.

After the Cares Act was effective, federally-backed mortgages are eligible to request forbearance of up to 180 days, extendable an extra 180 days. The main problem with this solution is that interest rates keep rising during that period. All this to say, that Airbnb hosts depend on the daily income gained from the platform in order to cover the everyday expenses of the property, and the fact of paying a lump sum after the forbearance period ends, won't be easy.

For all these affected hosts, the horizon looks a little dark as they might be forced to sell their properties for less than the market value, as the inventory in some vacation areas will most likely increase, creating a buyer's market. This will be the perfect opportunity for younger buyers to invest in real estate as prices will drop and it will become more affordable to purchase a home.

Airbnb has created a $250 million fund to reimburse 25% of guests cancellations to "Superhosts", which are the ones with higher ratings. For the rest which is the high majority of the community, there is the possibility of applying to grants set by the CAREs Act fund for small businesses.



MORTGAGES DEMAND IS RISING AROUND THE U.S.

According to the Mortgage Bankers Association (MBA), after various states started to reopen after the COVID-19 shutdown, home mortgages application rose 9% in Mid-May compared to the same period last year. However, it is not only the number of loans that increased but also the loans value, as it is at the highest level since mid-March.

People keep buying and the market shows an unexpectedly fast recovery. As the supply of existing homes keeps falling, the market that is benefiting the most from is the newly built homes industry, which was projected to decrease by 22% and instead increased by 1%. The properties pushing this increase are mostly suburban homes that offer extra space, with green areas and extra room to do home office or homeschooling for the kids. Some Miami neighborhoods taking advantage of this growth are Miami Shores, Coral Gables, and Coconut Grove.

Even if the demand was high on the first trimester of the year, it peaked down when the pandemic hit the U.S., and has strongly recovered. If supply keeps being down, the prices shouldn't be affected. Buyers keep profiting for the historic low mortgage rates. The average contract interest rate increased from 3.41% to 3.42%. Mortgage rates are projected to stay low in the next few months.

In contrast, the refinance market application fell 0.2% in the second week of May, compared to the first one, but increased 176% compared to last year. Government refinances decreased by 7%, but conventional refinancing went up by 2%.



LUXURY CONDO PRICES DROPPED IN DOWNTOWN MIAMI

As previously stated, COVID-19 has affected Miami Real Estate in various layers. In Downtown Miami (including Brickell, Downtown, Edgewater, and Art& Entertainment District), the luxury condo market (condos over $1 million) has shown a price drop caused by the Coronavirus crisis.

After comparing the closed sale prices in the first 3 months of 2020, and the listing prices in mid-May, there were some surprising results. The average luxury condo price in the first quarter of 2020 was $3.3 million and in May there was an asking price of a little over $2 million, which shows a drop by 36%.

The industry has shown to be facing a buyer's market, with plenty of investment opportunities. There are 85 months of supply and fewer listing on the market. Luxury condo sellers are removing their units from the market and waiting to see how the situation develops.



WHICH RESTAURANTS ARE SAFE ?

Miami-Dade starts to slowly reopen the city after the COVID-19 shutdown, and restaurants are finally able to serve on-site after 2 difficult months.

Miami-Dade County was approved by Gov. De Santis to reopen restaurants on May 18th at 50% capacity, which is 25% more than the rest of the state. Miami Beach has informed that only till May 27th, it'll be allowed for restaurants to reopen.

Some restaurants are proposing interesting alternatives to protect both, clients and staff. Here are some examples of restaurants I have tried and I can put my approval stamp on:

Pubbelly Sushi in Aventura, Brickell and Miami Beach: By offering partitions for every table, this restaurant is offering semi-private pods for social distancing.

Call Me Gaby in South of Fifth: This restaurant offered already 90% outdoor service before COVID-19, and now they have added some extra tables on the sidewalk.

Smith and Wollensky in South of Fifth: Smith and Wollensky put the tables further apart and opened the rooftop terrace in order to offer more outdoor seating

Amare ristorante in Miami Beach: This restaurant reopens with a new brunch and lunch menu. The new branding has more affordable prices and a more easygoing ambiance.



DEAL OF THE MONTH: YACHT CLUB #1606

Price: $579,000

Completely remodeled

Direct Bay views

1 bed / 1 bath

780 sqft

$742/sqft

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