Foreign buyers are buying Miami condos again

Miami Condos are popular again
and investors are snatching up distressed ocean front condos in Miami like never before. Here is The Miami Herald article by Mimi Whitefield:

Nearly 800 Canadians will jam a hotel ballroom near the Toronto airport Sunday to hear the gospel of Florida real estate.
High-end Brazilian buyers prefer to be wooed more intimately — perhaps at a cocktail party or a small private dinner — but they are just as pumped.

Lured by rock-bottom prices, international buyers are now flocking to buy Florida properties. It’s especially true in countries where the currency is strong against the dollar.

“We’re telling Canadians this is a once-in-a-lifetime opportunity — the perfect storm,” said Brian Ellis, who heads Toronto-based Florida Home Finders of Canada.” The prices are just incredible and the Canadian dollar has been so strong.”

At least three of five buyers in the Greater Downtown Miami condo market are coming from abroad, estimates Jenny Huertas, international sales director for Condo Vultures, a real estate advisory and research firm.

The stampede from overseas is “kind of like a foreign subsidy helping us resolve our real estate problems,” said Peter Zalewski, a Condo Vultures principal. “This time the assistance isn’t coming from Washington. It’s coming from Caracas, London, Milan, Bogotá.”

The buying frenzy was set off by developers lowering prices on new units to below what it cost to build in today’s market, Huertas said.

“There were many people on the sidelines watching for the floor. In the last three or four months there’s the perception that we’re there,” said developer Edgardo Defortuna, president and chief executive of Fortune International and the developer of some of the most sought after ocean front condominiums in Miami like Jade Ocean Sunny Isles and Jade Beach Sunny Isles.

CASH CUSTOMERS

Most of the foreigners are cash buyers like Leroy Jean Francois, who has snapped up 47 properties since January for the two real estate firms he works for in France and Switzerland. The plan, he said, is to buy, fix up if necessary, rent out for the next five years, then sell — for a profit.

The Frenchman has already made a paper profit on a unit he closed on in January at Marquis Residences, a 67-story luxury tower in downtown Miami where prices for a one-bedroom apartment start at $375,000. His unit cost $317 per square foot — “a great price, incredible,” he said.

A recent plunge in the euro — it’s now worth $1.23, down from its high of more than $1.60 in 2008 — could cool things off a little. To buy a $1 million condo, it now takes around 814,000 euros compared to 625,000 euros under the old exchange rate.

Meantime, prices for brand new condos on the ocean in Miami also have came down to around $400 per square foot.

But even the declining euro has barely given Francois pause.

“I think the euro will weaken more. But even if the exchange rate is $1 to 1 euro, Miami real estate is still a great bargain for us,” said Francois, who is president of The Bridge, a real estate fund consultancy.

AVERAGE JOES

Luxury Miami condos
are once again popular among Latin America buyers who purchase them as investments but also as a home base while their children attend school here, they attend to business interests or escape strife at home.

But for his Canadian buyers, Ellis scours South Florida for condo units at around the $150,000 price point. “We’re basically the Wal-Mart. We’re for the average Joe.”

And these days average Joe Canadian can afford much more. For decades the U.S. dollar was worth more than the Canadian dollar and buying in the U.S. was always more expensive for Canadians. But in September 2007, the Canadian dollar reached parity with the greenback for the first time in 31 years. It fell back again, but now the Canadian loonie, which takes its name from the loon pictured on the one-dollar coin, is near parity at around 95 cents.

So Ellis has been offering his Florida real estate seminars to packed houses in Ontario and is thinking about taking the show on the road to Montreal. There was so much interest in the latest seminar that he had to schedule two sessions for 400 people each this Sunday.

Most of his Canadian buyers are what Ellis calls “end-vestors,” meaning they plan on renting a unit out for now with an eye toward using it themselves down the road.

Since Home Finders is licensed as a brokerage only in Canada, it works with Florida brokers who complete the sales and pay the Canadian firm referral fees. By year’s end, Ellis said he expects to have facilitated 500 Florida closings.

Setai PH sells for $ 15 Million - Luxury Real Estate Sales are Back

This is a good indication of the return of luxury buying and that the market is coming back. The Setai's PH-B closed this week for $15,000,000, just over $2,400/sq ft. This now tops the highest condo sales in Miami Beach in the past 5 years. Other recent Luxury Penthouses sales are the Fontainebleau Penthouse at $9,000,000 and One Bal Harbour Penthouse at $ 8,700.000, both closed in May 2010.

Read the article in the Wall Street Journal:

Luxury Sales Bounce Back
http://online.wsj.com/article/SB10001424052748704717004575268573660359734.html

The Wall Street Journal released last week the results of a study by MDA DataQuick, a real-estate provider, suggesting that the Luxury real estate market is aggressively rebounding. Markets such as San Francisco, Manhattan, The Hamptons, Menlo Park and Beverly Hills are seeing numbers reminiscent of 2005. The report also lists Las Vegas and Miami as showing great promise.