Condo Buying Tips

What's next for real estate after COVID-19?



WHAT'S NEXT FOR REAL ESTATE?

Nobody has a crystal ball but I am very bullish on the outcome of residential real estate after this pandemic.

Everyone is going to rethink the where and how of their living arrangements. Your house is going to be a very important focus in life.

Miami has all the attributes to attract buyers from the Northern States and from the crowded cities. Buyers are going to rethink their geographical location but also their need for space. Instead of a 3-bed house they will consider a 4-bed house since they need a room for their office. Instead of a small condo in the heart of the city, they’ll consider living on an oceanfront condo with an expansive terrace.

Developers will have to reinvent condo living as well. Limited space “in-house” movie theater, pool areas with private gardens, business centers with huge screens to do your Zoom meetings, enlarged balconies will be on the top of the amenities list. I’ve even heard UV light going thru the AC duct to improve air quality.

Regarding office buildings and retail, my outlook is somehow more negative. Online platforms had already chopped off some of the retail markets but now this health crisis has accelerated the trend. The same thing for offices since people realized they do not need to commute to their office, they’ve got used to webinar training and virtual meetings.



WILL WE FACE ANOTHER HOUSING CRASH?

The COVID-19 situation is bringing a lot of uncertainty about what is going to happen when the country starts to reopen after the quarentine. Some might think, this will lead to a financial crisis like the one from 2008, which will cause a drop in the housing market.

Nobody could deny there has been a drop in the financial market, but the housing market won't suffer as much as it did in the 2008 crash. Here are the 5 biggest differences from the current circumstances compared to 2008:

The home price appreciation the 6 years before the housing crash was remarkably higher than in the last 6 years. As you can see in the chart above, the highest annual level of home price appreciation in the past 6 years hasn't been as high as the lowest appreciation level before the 2008 housing crisis.

Mortgage loans aren't as easy to get as in 2008. The level of difficulty to secure a loan in June 2006 was 82% lower than nowadays.

The housing supply in 2008 had over 11 months of inventory, which meant it was a buyer's market. Nowadays, there is an over demand and we have less than 6 months of inventory, which shows a seller's market.

In the 3 years before the financial crash, consumers were cashing out their home equity through refinancing a total of $824 billion. Nowadays, people are more cautious and there is a total of $232 billion.

53.8% of homeowners have at least 50% equity. People are less likely to walk away from their homes. In 2008 people walked away as soon as their properties worth less than what they owed.

To resume, the housing market nowadays has very different circumstances, is stronger and has better tools to face the COVID-19 health issue.



5 BEST CONDOS TO INVEST IN?

Here are the TOP-5 buildings with the best deals and best value compared to their peers to invest in now.

1. Murano Grande Condo: Located in South of Fifth, this condo has shown an interesting price cycle. After the 2008 crisis, the price dropped to $512/sqft than after some years came back up to $1,172/sqft in 2015. This year it has come back down again to $781/sqft, which might show a good investment opportunity. It has 33 units for sale, a 20-month inventory, and a $2.9 M average listing price.

2. Porsche Design Tower: With a desirable location in Sunny Isles, this condo has shown to have sellers whom are really flexible when comparing the asking price and the actual sold price. There is an average 12% discount in the closed deals at the Porsche Tower. There are 37 units for sale and the price range goes from $3.5 M to $16 M. Last year there was a peak in the closed sales, but in this first quarter, there has only been 1 closing, which might mean sellers will be even more open to negotiation.

3. One Paraiso Condo: Located in Edgewater, this condo has a listing price of $837/sqft and a sold price of $632/sqft, which shows a remarkable discount of 24%. In 2018 the average listing price was $700/sqft, which shows the resale prices have been exposed to several price drops. The real deals can be found in the bigger units that are being listed for almost $1 M less than the acquisition price.

4. Capri Condo: Built-in 2008 in South Beach on the bay,Next to Lincoln road, this condo has its own Marina and has a boutique concept. Prices have been decreasing since 2015 when there was an average listing price of $1000/sqft, which has drastically dropped to $868/sqft this year.

5. Four Seasons Condo: Being one of the most luxurious condos in Brickell, this tower has shown a slowdown in the sales rate. With an average listing price of $1,000/sqft, it has increased compared to 2017 when it was $900/sqft, however, there are only a handful of sales per year, which has increase the inventory to 54 months and most likely has created motivated sellers willing to negotiate.



FISHER ISLAND NOW TESTING COVID-19 TO ALL ITS RESIDENTS

We've all been hearing how select and hard-to-find are the COVID-19 tests, but not for the Fisher Island residents and employees that are now being tested to see if they have developed protective antibodies against the Coronavirus.

Building after building, each person is getting tested and given their results almost immediately in the exclusive Fisher Island neighborhood. The test developed by the University of Miami (UM) clinic, doesn't say if the person tested has an active COVID-19 exposure, but it shows if the person has been exposed to the virus and might have developed some kind of immunity to it.

However, the question that some are asking, is till what point is it moral that the tests are given to those who can pay for it, instead of those who need it?

The UM representatives affirm when they received the request to purchase over 1,800 tests, they took into consideration not only the ability to pay, but also that more than half of the population on the island is over age 60, and that a remarkable amount of residents are moving to the island from the Northeast, where there are a high number of Coronavirus cases.



DEAL OF THE MONTH: 1101 Sunset Rd, CORAL GABLES

Price: $1,790,000

Located in the heart of Coral Gables

Recently remodeled in 2017

5 beds / 4 baths

3,960 sqft of living area

$452/sqft

13,128 sqft lot 2-space parking garage