Home sales drop, prices rise in South Florida prior to Hurricane Irma’s landfall

Hurricane Irma over South Florida (Credit: NASA)

Prior to the arrival of Hurricane Irma, South Florida’s residential markets continued posting declines in home sales and price increases, according to August figures from the Florida Realtors.


In Miami-Dade County, residential sales fell by 9.7 percent to 2,158 from 2,389 the year before. Single-family homes fared even worse, with a 13.4 percent drop in sales to 1,085 from 1,150, according to the Miami Association of Realtors. Existing condo sales, which excludes the preconstruction market, saw a 5.7 percent annual drop to 1,085 from 1,150 closings.

But home prices continued rising, now for nearly six years. The median price of a single-family home in Miami-Dade was $337,500 in August, up 12.5 percent from $300,000 a year ago. For condos, the median price rose to $225,000 from $215,000, up 4.7 percent from the previous year.


Broward County’s housing market sang a similar tune as Miami’s last month. Residential sales declined 9.3 percent to 2,884 from 3,180 in August 2016, according to the Realtors of the Palm Beaches and Greater Fort Lauderdale. Single-family home sales fell 8.1 percent to 1,524 from 1,658; while condo and townhouse sales dropped 10.6 percent annually to 1,360 from 1,522.

The median prices of homes, condos and townhomes also rose. For single-family homes, prices increased 7.7 percent to $350,000 from $325,000. The median price of a condo or townhouse jumped 7.8 percent to $156,000 from $144,755 a year ago.

Palm Beach

Palm Beach also sold fewer residential properties in August, although the declines were less dramatic than in Miami-Dade and Broward.

Residential sales fell by 2.9 percent to 2,715 from 2,796 the year before. Sales of single-family houses dropped 7.9 percent to 1,550 from 1,683, while condo and townhouse sales increased 4.7 percent to 1,165 from 1,113, according to the Florida Realtors.

The median price of a single-family home increased by 7.9 percent to $340,000, while it rose 9.4 percent to $174,000 for condos and townhouses.

Source: real deal miami

Hurricane Irma has already resulted in 20k flood insurance claims — and it’s still early

Homes flooded by Hurricane Irma on Big Pine Key, Florida (Credit: Getty Images)

Hurricane Irma has already resulted in about 20,000 federal flood insurance claims in Florida, according to a top FEMA official.

Roy E. Wright, head of the National Flood Insurance Program, said flood damage claims in Florida could total “several billion dollars,” adding that Hurricane Irma could generate more than the $11 billion in flood damage claims that resulted from Hurricane Harvey, according to the Miami Herald.

“It’s a little too early to know the full impact of this storm,” Wright told the Miami Herald. “We usually see the numbers accelerate in weeks two and three. We’re coming into that now as people get back into their homes.” He estimated that the number of Florida claims could reach 100,000.

Wright said that the Florida Keys have contributed 20 percent of the claims to date, and 50 percent of the claims have come from Miami-Dade, Broward, Collier, Lee, and Duval counties, each of which filed 10 percent of flood insurance claims in the state.

“The Keys’ number is going to grow faster because the people in the Lower Keys just started returning to their homes,” Wright told the Herald. Households with federal flood insurance policies can claim up to $100,000 for personal property in addition to $250,000 for their property.

About 25 percent of homes in the Florida Keys were destroyed after Hurricane Irma barreled through the islands, according to estimates by the Federal Emergency Management Agency.

CoreLogic on Tuesday estimated that property damage from Hurricane Irma could reach between $42.5 billion and $65 billion. Flooded homes are estimated at $25 billion to $38 billion in losses. That includes storm surge, inland and flash flooding in Florida, Alabama, Georgia, North Carolina and South Carolina. CoreLogic estimated the loss for homes with flood insurance at $5 billion to $8 billion and homes not covered by flood insurance could account for $30 billion worth of damage.

Hurricane Irma property insurance claims filed in Florida already total $2 billion in estimated losses, according to Florida’s Office of Insurance Regulation. A total of 335,347 claims were filed through Sunday, including 243,473 claims from homeowners, as well as 19,283 from mobile homeowners.

Only 1.7 million homes in Florida are covered by federal flood insurance policies. [Miami Herald]  Grace Guarnieri

Source: real deal miami

Fed to start selling bonds, keeps interest rates steady

Janet Yellen (Credit: Getty Images)

From TRD New York: The Federal Reserve said Wednesday it will start shrinking its bond portfolio in October following a unanimous vote, but low interest rates could still be here to stay.

The Fed acquired the bonds in the wake of the 2008 financial crisis under a policy of so-called quantitative easing, which was designed to keep financing cheap and instill confidence in financial markets. The decision to start selling was widely expected.

Meanwhile, 12 out of 16 Fed officials said they expect one more raise in short-term interest rates this year, the Wall Street Journal reported. The Federal Funds Rate, a benchmark rate for overnight bank loans, had been close to zero for years but had risen to 1.0 to 1.25 percent in June.

The median official projection of the long-run rate was 2.75 percent, down from 3 percent in June, as low inflation makes further rate hikes less likely.

“It’s premature to conclude that the underlying inflation trend is falling well short of 2%,” Fed chair Janet Yellen said in June. “Policy is not something that’s set in stone, and if our evaluation changes with respect to inflation, that will make a difference.”

The Fed’s interest rate policy can have an impact on mortgage rates and cap rates, and by extension property prices. [WSJ] Konrad Putzier

Source: real deal miami

Brazilian health care CEO drops $11M on Fendi Château condo

Claudio Lottenberg and Fendi Château Residences (Credit: Arquitectonica, Twitter)

The president of UnitedHealthcare in Brazil just closed on a beachfront condo in Surfside.

Property records show Mansion in the Sky Florida Inc., a company controlled by Claudio Lottenberg and his wife, Ida Sztamfater, paid $10.7 million for unit 206 at Fendi Château Residences.

Lottenberg became president of the healthcare company in December, according to published reports. He also created Lotten Eyes, a chain of São Paulo eye clinics, and sold it to UnitedHealth in October for about $200 million.

Lottenberg and Sztamfater paid more than $1,600 per square foot for their 6,641-square-foot unit. It has four bedrooms and an 1,814-square-foot terrace, according to BuzzBuzzHome.

The Château Group, which launched sales for the 12-story, 58-unit building at 9349 Collins Avenue in mid-2014, completed the project in September. The beachfront development was designed by Arquitectonica and includes pools, a Jacuzzi, 12 private cabanas, a restaurant and bar, a fitness center and spa, kids’ club, private theater, a private dining room, wine cellar and Shabbat elevators.

Owners include Spanish millionaire Felix Revuelta, Brazilian software firm executives Laércio José De Lucena Cosentino and Marcelo Eduardo Sant’anna Cosentino; and Neville Proa, the owner of a major Brazilian drink manufacturer.

Source: real deal miami

South Florida by the numbers: Hurricane Irma impact

“South Florida by the numbers” is a web feature that catalogs the most notable, quirky and surprising real estate statistics.

Hurricane Irma’s impact on South Florida is the only story that matters this month, but there are many sides to the story: how lucky much of the region was to avoid a direct hit, the loss of life and property despite the “reduced” impact, rebuilding efforts for the Keys and other areas of Florida, and long-term concerns in the face of bigger and more deadly storms.

For Miami’s real estate community, the results are complicated. While damage to the greater metropolitan area was not devastating, images of broken construction cranes and flooded downtown streets dominated news coverage and may linger in the minds of buyers and investors. Did you hunker down and brave Irma, or did you join the millions who fled to parts north and west? Whatever your decision, we hope this edition of South Florida by the numbers finds you safe, well…and prepared for a hurricane season that does not officially end until Nov. 30.

$6.41 billion: Amount of commercial mortgage-backed security (CMBS) debt that was exposed to Hurricane Irma in Miami, according to Morningstar Credit Ratings. Statewide, the figure is just under $40 billion. [TheRealDeal]

37: Number of Florida counties included in FEMA’s Disaster Declaration (including Miami-Dade, Broward and Monroe), in which the state of Florida has suspended certain regulations to allow for easier and direct hiring of roofing contractors. [Miami Herald]

$100 million: Amount the city of Miami will ask its voters to approve in November to fund new pumps and an upgraded storm water system. Even if approved, this measure is considered to be just the beginning of much-needed, large-scale public efforts to address rising waters and overdevelopment throughout the state of Florida. [NYT]

17: Percentage of wind increase in the upper floors of condominiums, according to a local broker who experienced the “sway effect” from Irma. The storm caused flooding on Brickell Avenue and Coral Way in Miami, but the city’s natural aquifer allowed for relatively quick drainage. [Inman]

1 percent: As of Tuesday morning, percentage of homes and businesses in Miami-Dade and Broward counties that were without power, according to FPL. In Miami, that number represents about 16,940 homes; in Broward, roughly 3,600 homes. FPL achieved this restoration in ten days. [Miami Herald]

This column is produced by the Master Brokers Forum, a network of South Florida’s elite real estate professionals where membership is by invitation only and based on outstanding production, as well as ethical and professional behavior.

Source: real deal miami

Sparks fly as Coral Gables-FPL power struggle lights up

Coral Way in Coral Gables following Hurricane Irma (Credit: Getty Images)

The blame game between the city of Coral Gables and Florida Power & Light is heating up.

After Hurricane Irma hit South Florida and knocked out power to millions of customers, one municipality has been especially vocal. Coral Gables, which threatened to sue FPL for failing to turn the lights back on for all of its residents by the previously promised deadline of Sunday night, issued the power company a citation.

FPL fired back, saying in a statement that it will not bow to pressure created by “frivolous lawsuits and ludicrous code violations” to provide “preferential treatment” to the city of Coral Gables, according to Local 10.

In South Florida, 4.4 million customers were impacted by the storm.

“The fact is the city of Coral Gables has for many years resisted FPL’s well-documented efforts to trim trees and harden our electric system. Unfortunately for our customers in that area, they are now paying the price in terms of extended outages due to hundreds of trees that have fallen into our lines,” the statement reads.

The city’s “extreme approach to trees is the cause of the problem,” FPL said.

As of Tuesday afternoon, power crews were going street by street in Pinecrest, South Miami and the Gables to restore the final 2 percent of residents without electricity, according to an NBC Miami reporter.

A class-action lawsuit was filed on Monday against FPL, on behalf of two individuals and Florida residents who are or were without power due to Hurricane Irma. But FPL said the suit was filed by a law firm tied to Coral Gables Commissioner Frank Quesada.

The village of Pinecrest also threatened FPL with litigation, according to the Miami Herald. [Local 10] – Katherine Kallergis

Source: real deal miami

Miami commission overturns mayor’s veto related to Flagstone Island Gardens

Rendering of Island Gardens. Inset: Mehmet Bayraktar

As the city of Miami battles Flagstone Island Gardens in Miami-Dade Circuit Court over the developer’s ouster from a megayacht marina and resort project on Watson Island, the city commission and Mayor Tomas Regalado are in tense disagreement over legal strategy.

Shortly after Flagstone Property Group — led by Turkish businessman Mehmet Bayraktar — sued the city in June for roughly $122 million in damages because it was kicked out of Watson Island, Miami commissioners authorized the hiring of Becker & Poliakoff to represent city administrators that dealt with the development company.

But in late July, Commissioner Ken Russell sought to curtail the firm’s legal work on the case because Becker & Poliakoff attorney Jon Polenberg drafted a motion to intervene in the lawsuit on behalf of Miami staffers who had advised city commissioners two months prior against finding Flagstone in default of its contract. The commission voted unanimously to cut ties with the developer after a long series of delays and other problems, such as operating a restaurant on Watson Island without permits.

The motion would have pitted the city administration against the city commission in the Flagstone lawsuit, giving the developer leverage to win its case, according to Russell. “That attorney acted completely out of the work scope,” Russell said. “It was absolutely necessary to get our ducks in a row in regards to the city’s representation.”

A Becker & Poliakoff spokesman declined comment.

Russell convinced his colleagues to approve a resolution that limited Becker & Poliakoff’s services to only provide advice to staff during to staff during depositions and testimony. However, Regalado — who has rarely exercised his power to veto commission decisions — struck down the resolution by claiming it interfered with the administration’s right to having attorney-client privilege.

In his veto memo, Regalado wrote that “to allow this resolution to proceed unchecked would set a poor precedent about the authority the City of Miami may exercise over the professional judgment and advice outside conflict counsel may provide the client.”

On Tuesday morning, city commissioners voted unanimously to override Regalado’s veto.

“It was the right thing to do,” said Commissioner Ken Russell, who championed the fight to oust Flagstone. “It is very rare that we have a full consensus on the city commission, but in this case we were unanimous. The city has to hold the line and we have to act as one if we are going to win.”

Source: real deal miami

Keyes grows Wellington market share with latest acquisition

Mike Pappas and David Lopez

The Keyes Company is continuing its acquisition spending spree.

The brokerage just closed on the purchase of Realty Elite The Palm Beaches in Wellington, following a string of deals over the past two years. Realty Elite, founded by David Lopez in 2007, closed on $92 million in sales volume in 2016, according to a press release. It adds 64 agents to Keyes.

In recent months, Keyes has closed on the acquisition of Jupiter-based Bluffs Real Estate and Investment Properties, and two South Florida offices of Greenwood Village, Colorado-based Shorewood Real Estate. Illustrated Properties Real Estate merged with Keyes last year, propelling Keyes to the top in Palm Beach County.

Realty Elite’s agents will work of out Keyes’ Wellington office at 13920 Wellington Trace, eliminating overhead costs associated with operating an additional Wellington office.

As of mid-August, Keyes had 3,300 agents and 58 offices in Florida, a spokesperson said. Steve Reibel, senior vice president, attributed the growth to tightening profit margins in the residential brokerage industry. Firms like One Sotheby’s International Realty have also been purchasing firms. Last month, One Sotheby’s closed on the acquisition of Coastal Sotheby’s International Realty, which added 65 agents and three offices in Palm Beach Gardens, Jupiter and Stuart.

Source: real deal miami

FIU closes Biscayne Bay dorm due to water damage left by Hurricane Irma

Bayview at Florida International University’s Biscayne Bay Campus

Students at Florida International University returned to their classes this week along with public school students in Miami-Dade, Broward and Palm Beach counties, but some didn’t make it to their dormitory.

FIU closed its Bayview dorm at the university’s Biscayne Bay Campus for repairs after Hurricane Irma’s gusts blew water in through some of its windows, according to NBC Miami.

On Monday, more than 380 students were displaced from the nine-story building at 3000 Northeast 151st Street in North Miami. Students were given the option to either stay at a shelter on campus or bunker down with family or friends.

The building meets or exceeds all the current building codes, FIU representatives said. Work crews have reportedly been on site removing baseboards and using wetvacs and fans to try to prevent mold from growing.

Bayview sits adjacent to the bay, making it more susceptible to storm damage. It features 410 rooms with refrigerators, stoves and internet and cable access, according to its website.

The university said it will not be letting students back inside Bayview until moisture meters confirm the building is all dry, according to NBC Miami. It’s aiming to open the building by the end of the week.  [NBC Miami]Amanda Rabines 

Source: real deal miami

Here’s how agents do showings safely

Jack Nicholson in “The Shining”

From TRD New York: Lorei Velazco knew she wasn’t supposed to be the first one to enter a building when meeting new potential clients. In 2011, however, when she was looking to list a unit in downtown New Rochelle, the seller insisted she check out the apartment with him.

”We went back and forth a few times, and finally I said, ‘Fine, I’ll just go on up,’” Velazco, an agent at J. Phillip Real Estate, recalled.

As they were walking up the stairs, the man, according to Velazco, said: “When I get you to my empty unit, I want to bite you and tie you up.”

“I turned around and looked at him like, is he serious?” she recalled. “And I could tell in his eyes that he was.”

On the way up, Velazco started knocking on other apartment doors until a woman answered one and pulled her in. She waited to make sure the man was no longer outside and ran out of the building.

Meeting strangers and being alone with them is central to working as a real estate agent. While threats and attacks against realtors are rare, they do happen, and agents told The Real Deal that personal safety is a major factor in how they conduct business. Safety has become a far greater industry-wide priority since the 2014 murder of Arkansas agent Beverly Carter, who was kidnapped and killed by a couple masquerading as buyers. Agents often carry weapons for self-defense, use safety apps on smartphones, and meet clients only in neutral locations to mitigate dangers, industry experts said.

The National Association of Realtors has also stepped up its efforts on safety awareness. It named September agent safety month and is working to gather solid data on the types of dangers that brokers face.

”People used to think that crimes committed against real estate agents were crimes of opportunity, but in fact, they’re predatory crimes,” said Dave Legaz, a former New York Police Department sergeant who is now a broker with Keller Williams. Legaz, who teaches agent safety classes, believes that agents are often reluctant to report crimes out of embarrassment.

“Agents don’t want to come forward and say that they were sexually assaulted or brushed up against in a weird, awkward way or something like that,” he said.

Gut check

NAR’s most recent survey, which was released late last month and included more than 3,200 agents, found that while just 4 percent reported actually being the victims of a crime, 38 percent of respondents said they felt unsafe in the last year.

“I tell [newer agents] to do all their showings before dark.”

It often comes down to instinct. “There are multiple times where you are standing there and someone is intimidating,” said Justine Bray, a broker with Brown Harris Stevens, who said she meets her clients in the lobby of a building and always keeps the door open when doing an apartment showing.

“Waiting in the lobby, you can get the impression if that person might be unsafe,” she said, “so you can say you can’t find a key, or the landlord has canceled the showing.”

Bray, who once felt so uncomfortable showing an apartment on East 72nd Street that she requested the building’s super send someone to the unit until the man left, said she will sometimes check the phone numbers people leave on sign-in sheets to make sure they are legitimate.

Joan Kagan, a sales manager at Triplemint, said “there is a perception that real estate agents have tons of money.”

“That makes us more vulnerable,” she added. “I’ve instructed my agents that there is no deal that is worth sacrificing their own safety.”

However, agents still have to strike a balance between protecting themselves but not being too nervous to chase down a lead. Early-career agents are more likely to push aside misgivings while they are trying to get ahead, brokers said.

“I tell [newer agents] to do all their showings before dark,” said Citi Habitats’ Ronnie Shumake.

And while brokers told TRD safety is a concern for both sexes, it’s something female agents need to especially consider. While just 25 percent of male agents in the NAR survey reported feeling unsafe, the number was at 44 percent for female agents.

”You just always, always, have to have eyes in the back of your head….being a woman going into a house as well, especially at night on a vacant property,” said Laura Copersino, a Douglas Elliman broker who focuses on Queens.

Others said they have strict rules about meeting strangers. “We meet [clients] in the office first — that’s been a practice for me since day one,” said Citi Habitats’ Natalia Padilla, who said if she really feels comfortable enough with someone she will meet them in a public place like a coffee shop rather than the office. “I am a girl and I’m only 5’2” … they prey on women more, obviously.”

“You really have to screen — don’t just take anyone out,” said Michelle Sedlitz, also of Citi Habitats. Sedlitz recalled being approached by a man outside her office early on in her career. The man first flirted with her and then set up an appointment with her to look at homes.

“It was a little uncomfortable,” she said. “I think his interest was me, more than an apartment.”

Getting practical

Several agents and companies said they’ve developed their own ways of handling safety concerns. According to the NAR survey, 44 percent of real estate offices have standard procedures for agent safety, while 52 percent of men and 57 percent of women carry self-defense weapons ranging from pepper spray to Tasers to noisemakers.

The president of the Real Estate Board of New York, John Banks, said he urges brokers to remain aware of their surroundings, and to take “precautionary measures such as actively communicating their whereabouts to their colleagues and any building staff when showing homes, and establishing procedures for emergency situations.”

Greg Harden, co-founder of Oxford Property Group, said his company will do virtual open house tours with Facebook Live and virtual apartment showings on YouTube to avoid having agents constantly open up the homes. At high-end apartments where security is a particularly strong concern, multiple agents will show up for an open house.

“The more eyes you have in the room at the same time, the better,” he said.

Sierra Residential’s Adam Frisch said his company has a broker in the lobby and apartment during showings and said it is important to do open houses by appointment only. He also stressed the importance of screening buyers or tenants before they come to the property. “This will weed out many potentially shady individuals,” he said. BHS recommends against agents holding open houses alone; Triplemint managers have access to all brokers’ calendars; and Mirador Real Estate said it plans to start running safety courses.

At Legaz’s safety classes, he instructs agents to try making the homes themselves safer by removing prescription drugs from the medicine cabinet and removing knives from the kitchen.

“The most dangerous spot in the house during a family dispute is in the kitchen,” he said, “because of those knives.”

Vincent Ferrante of Keller Williams NYC Bronx emphasized the need for agents to understand when someone is just angry versus when they are actually a threat.

“The business is emotional anyway, even if you’re not talking about, like, criminal acts,” he said. “You’re selling someone’s house. Sometimes people are going through divorces, so you’ve got to let people vent sometimes while understanding it’s not personal.”

Source: real deal miami