Miami Condo, Home Sales Continue to Rise in 2018

According to the Miami Association of Realtors, Miami existing condominium and total luxury home sales increased in February 2018.

Miami-Dade County existing condominium sales--which are competing with one of the most robust new construction markets in the country -- rose for the fourth consecutive month in February. Miami luxury $1-million-and-up sales jumped 31 percent, from 116 in February 2017 to 152 in February 2018.

"Miami $1-million-and-up home sales have surged in four of the last five months, a sign of the robust pent-up demand for Miami luxury properties," said George Jalil, a Miami broker and the 2018 MIAMI chairman of the board. "In regards to Miami existing condos, a spike in condo transactions in the $200,000 to $300,000 range fueled another strong month for the sector."

Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.

Condo Sales Rise for Fourth Consecutive Month

Miami existing condo sales increased for the fourth consecutive month, rising 3 percent to 983 from 954. The increase was fueled in a surge in entry-level home sales. Existing condo home sales in the $200,000 to $300,000 price range jumped 21.4 percent, from 220 in February 2017 to 267 in February 2018.

Single-family home sales decreased 6.9 percent, from 881 to 820. Lack of single-family home supply in mid-price ranges is negatively impacting sales despite strong demand.

Total existing Miami-Dade County residential sales decreased 1.7 percent year-over-year from 1,835 to 1,803.

Total sales volume for all properties accounted for $864 million last month, up 3.6 percent from $834.1 million a year ago. Sales don't include Miami's multi-billion dollar new construction condo market.

Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.

Miami Luxury Sales Surge in February

Total Miami luxury $1-million-and-up sales jumped 31 percent, from 116 in February 2017 to 152 in February 2018.

Miami condo luxury sales jumped 30.9 percent, from 55 to 72, in February 2018. Miami condo luxury sales have risen in four out of the last five months (Feb. 2018, Jan. 2018, Dec. 2017 and Oct. 2017).

Miami single-family luxury home sales rose 31.1 percent, from 61 to 80. Miami single-family luxury sales have risen in four out of the last five months (Feb. 2018, Jan. 2018, Dec. 2017 and Oct. 2017).

More than Six Consecutive Years of Price Appreciation in Miami

Miami-Dade County single-family home prices increased 3.6 percent in February 2018, increasing from $321,000 to $332,500. Miami single-family home prices have risen for 75 consecutive months, a streak spanning more than six years. Existing condo prices rose 4.5 percent, from $220,000 to $230,000 in February. Condo prices have increased in 78 of the last 81 months.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage moved higher for the fifth straight month to 4.33 percent in February (highest since 4.34 percent in April 2014) from 4.03 percent in January. The average commitment rate for all of 2017 was 3.99 percent.

Miami Distressed Sales Continue to Drop

Only 7.6 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 13.3 percent in February 2017. In 2009, distressed sales comprised 70 percent of Miami sales.

Total Miami distressed sales declined 43.9 percent year-over-year, from 244 to 137 last month.

Short sales and REOs accounted for 1.7 and 5.9 percent, respectively, of total Miami sales in February 2018. Short sale transactions dropped 41.2 percent year-over-year while REOs fell 44.6 percent.

Nationally, distressed sales accounted for 4 percent of sales, down from 7 percent a year ago.

Miami Real Estate Selling Close to List Price

The median number of days between listing and contract dates for Miami single-family home sales was 46 days, a 24.6 percent decrease from 61 days last year. The median number of days between the listing date and closing date for single-family properties was 94 days, a 16.1 percent decrease from 112 days.

The median time to contract for condos stayed even year over year at 83 days. The median number of days between listing date and closing date decreased 3.1 percent to 123 days.

The median percent of original list price received for single-family homes was 95.4 percent. The median percent of original list price received for existing condominiums was 93.8 percent.

National and State Statistics

Nationally, total existing-home sales grew 3.0 percent to a seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January. After last month's increase, sales are now 1.1 percent above a year ago.

Statewide closed sales of existing single-family homes totaled 18,620 last month, up 3.3 percent compared to February 2017, according to Florida Realtors. Statewide closed condo sales totaled 8,457 last month, up 6.4 percent compared to February 2017.

The national median existing-home price for all housing types in February was $241,700, up 5.9 percent from February 2017 ($228,200). February's price increase marks the 72ndstraight month of year-over-year gains.

The statewide median sales price for single-family existing homes last month was $246,500, up 9.6 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in February was $179,500, up 7.2 percent over the year-ago figure.

Miami's Cash Buyers Represent almost Double the National Figure

Miami cash transactions comprised 42.8 percent of February 2018 total closed sales, compared to 47.4 percent last year. Miami cash transactions are almost double the national figure (24 percent).

Miami's high percentage of cash sales reflects South Florida's ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash. Miami has a higher percent of cash sales for condos due to lack of financing approvals for buildings.

Condominiums comprise a large portion of Miami's cash purchases as 54.2 percent of condo closings were made in cash in January compared to 29.0 percent of single-family home sales.

Seller's Market for Single-Family Homes, Buyer's Market for Condos

Inventory of single-family homes decreased 2.3 percent in February from 6,489 active listings last year to 6,342 last month. Condominium inventory increased 4.0 percent to 15,902 from 15,289 listings during the same period in 2017.

Monthly supply of inventory for single-family homes increased 1.7 percent to 6.0 months, which indicates a seller's market. Existing condominiums have a 14.4-month supply, which indicates a buyer's market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.

Total active listings at the end of February increased 2.1 percent year-over-year, from 21,778 to 22.244. Active listings remain about 60 percent below 2008 levels when sales bottomed.

New listings of Miami single-family homes increased 11.3 percent to 2,814 from 2,950. New listings of condominiums increased 7.3 percent, from 2,414 to 2,590.

Nationally, total housing inventory at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but is still 8.1 percent lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.8 months a year ago).
http://www.worldpropertyjournal.com/real-estate-news/united-states/miami-real-estate-news/miami-association-of-realtors-miami-existing-condominium-sales-2018-miami-luxury-home-sales-february-2018-miami-condo-prices-in-2018-10808.php).
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How To Win A Real Estate Bidding War!

How to win a real estate bidding war in today’s home buying market is a fine art. From Los Angeles to San Francisco to Boston offering a home’s asking price is just the starting point in negotiations.

In Long Beach, California, Breanna LePante of Nook Real Estate recently got her client’s offer for a 1,000 square foot condominium to stand out from 21 competing offers. How did she do it? I always have my buyers write a nice letter to the seller telling them how much they want the house. I continually communicate with the listing agent. I also make sure my buyers have pre-loan approval with proof of funds. LePante confides. Her buyer got the property for $375,000 against an asking price of $349,000.

Ron Shuffield, President of EWM Realty International with offices in Miami and Fort Lauderdale has three decades of industry experience.

Everyone wants a deal and everybody has the same information today. Your real estate agent should know about offers. Be prepared to go above the asking price initially, Shuffield explains. If you can make your deal as clean as possible without financing contingencies, that is a big deal to a seller. In multiple offer situations you don’t get a second chance to bid, he adds.


Bidding wars are fast, furious and nerve racking. Know the actual market value for a property. Decide what price you are comfortable paying and will feel good about when moving day arrives.

Listen to Paul, Habibi, Continuing Lecturer of Finance and Real Estate at UCLA Anderson School of Management. Have a plan in place where you know you what your number is before you even make your offer. Buying a personal residence that others want causes people to make irrational judgements based on emotions. They have a skewed view of the property’s fair market value. Make sure your offer is as strong as it can be. Contingency periods and length of escrows do make a difference to eager sellers, Habibi advises.


Shutterstock: "Many Los Angeles buyers can expect to automatically be in a multiple offer situation,"notes real Ben Belack, Director Residential Estates at The Agency

Ben Belack, Director Residential Estates at the luxury real estate brokerage firm, The Agency in Beverly Hills teaches seminars to real estate agents on the topic. Properties are priced low to create maximum awareness and excitement. However that doesn't mean a buyer is over-paying. In the Los Angeles market today, buyers looking at properties up to $1.8 million can expect to automatically be in a multiple offer situations. According to Zillow there are more than a dozen single family homes listed in desirable West Los Angeles, with the lowest at an auction price of $1.57 million. The list price has become more of a sales and advertising tool and less of a metric of value. Belack adds.

In San Francisco according to Zillow the median home value is a staggering $1,285,000. Bidding wars there are as common as the City’s infamous fog. Nina Hatvany, Luxury Property Specialist at Pacific Union and the top residential sales agent in San Francisco from 2008-2015 and 2017 shares her on-the-ground experience.

Clients who don’t get a property tell me after, they would have bid higher. In this type of market, you must come out of the gate with your best offer. Having strong relationships with listing agents and communicating your buyer’s enthusiasm makes a difference. A 1,650 square foot home with full ocean view in San Francisco’s Sunset District listed at $1,250,000. It recently sold to Hatvany’s happy buyer for $1.6 million.


Shutterstock: Bidding Wars Are Common In Boston

Boston’s David Bates, a long-time Broker Associate at William Ravis Real Estate has years of bidding war experience.

One of the first things I learned as an agent was to prepare my clients to be in a bidding war. If my clients didn’t know that was a possibility or in today’s market maybe a certainty, they wouldn’t feel comfortable doing all the other things that it takes to win a bidding war. Sometimes the agent starts asking them to do these wicked aggressive things, the buyers feel pushed and just won’t do what it takes.

William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami provides some stats.

If you look at 2% to 4% of sales nationally there have been some type of bidding component involved. Today it has jumped to around 10% to 11% mainly in urban areas with younger buyers and increasing incomes.

Mark Hughes, President of Nook Real Estate has worked in residential real estate sales and management for years. Hughes sums it up well.

From my experience the loser in a multiple offer situation always ends up thinking, I should have gone higher. It takes a few times to not get that house you want so much to be able to offer what it takes to win.

Do work with a real estate professional who has a solid track record and strong relationships with other agents to give them the insider info needed to make the deal.

(https://www.forbes.com/sites/ellenparis/2018/03/21/how-to-win-a-real-estate-bidding-war-advice-from-the-pros/#5df8da135463).

Florida CRE industry has 12-figure annual impact

Florida's commercial real estate industry contributed $189.4 billion to the state's economy in 2017, the third most of any state in the nation, according to an annual economic impact study.

Only California and Texas generated more, the survey from a George Mason University professor in Virginia funded by the National Association of Industrial and Office Parks found.

The Sunshine State also ranked third of the 50 states in direct spending -- including labor, materials and management — on commercial real estate, with $99.8 billion last year. Again, only Texas and California were bigger spenders.

Florida came in fifth in total economic impact in 2017, with a total output of $19.3 billion, behind only California, Texas, New York and Pennsylvania.

“Construction spending has increased each year since 2011, gaining 54.6 percent between 2011 and October 2017,” Stephen Fuller wrote in NAIOP's Economic Impacts of Commercial Real Estate 2018 Edition.

“Nonresidential building construction spending has increased 37% between 2013 through October 2017, reflecting an increase of $126.7 billion in construction spending over this period.”

Not surprisingly, Florida's retail and entertainment and warehouse sectors outperformed much of the nation last year.

The state's $66.3 billion in total output in the retail and entertainment sector was topped only by Texas, the NAIOP survey concluded, the result of higher than normal levels of spending on hard costs like construction, site development and soft costs such as legal fees, architectural designs and engineering work.

The nation's third most populous state also ranked third for spending on warehouse development and construction last year, as well, with a total output of $6.54 billion, behind only Texas and California.

And while Fuller contends the U.S. economy will continue to exhibit positive growth through 2020, the NAIOP study cautions that rising interest rates, labor shortages, energy prices and the 2017 federal tax law could have significant repercussions that could ripple through the economy and impact recovery.

Things to Check When Viewing a House

It's easy to get emotional and forget to look at everything when you've found a beautiful home that matches your wish list. When buying a home, an inspection by a certified Home Inspector is a must. Knowing in advance some of the items the inspector will be looking at will enable you to screen potential homes more easily during viewings.

Home Inspection Pointers
A home inspection performed by a registered inspector is strongly recommended before completing any home purchase. Once you have purchased a home, should a problem be found and you litigate, in general only latent defects (those hidden from a visual home inspection) will be considered because homes are generally sold 'as is'. There are some checks that you can do during viewings which will help you decide if a home should make it onto your short list. Mechanical and electrical system checks and other items need to be performed by professionals, but some problems which are costly to repair can also be seen by a lay person.

Condition of Roof Shingles/Shakes
Knowing the age of the home and the expected life of the type of roof material, you can estimate the remaining life of the roof. Roof shingle replacement can cost $10-15/sq. ft. so this is a major expense. Look for signs of any moss, discoloration, thinning or missing wood shakes. Check whether asphalt shingles are flat, as they should be, or lifting along the edges. The roof should be clean, without any signs of deteriorating roof material or plant material. Inquire from the seller as to whether the roof has been replaced, when it was done and if they have the paperwork. If the house is around 25 years old and has an original wood shake or asphalt shingle roof, you should plan to replace the roof in the near future, assuming there is no damage that requires immediate attention.

Condition of Foundation
Foundation problems can be cosmetic, such as cracked parging (the decorative mortar applied over concrete) or major if cracks in the actual concrete foundation are present. Parging can be repaired by the homeowner using material sold at home improvement stores. If you undertake this, realize that it is a messy procedure and experiment to match the appearance of the existing parging. Cracks in foundation walls have the potential to be very costly to repair and will likely involve water ingress into the basement and possible mold and odor issues. If you see foundation cracks, bowing of the walls, uneven floors, cracks in tiled floors or cracks in walls (often at window frames) you may want to move on, or at least ask a professional for a repair estimate if you are still interested in the property.

Condition of Basement Floor Slab
A cracked basement floor slab is another cause for concern as it can suggest poor quality of workmanship and/or poor concrete. Deep cracks in the floor slab can also allow water to penetrate and allow radon gas to enter the home to the extent that it exceeds allowable limits. If the basement is developed and the floor is covered, a musty smell could indicate that water has leaked in from cracks in the floor slab and mold is growing under the carpet.

Condition of Windows
Windows are expensive items to replace. Look for condensation in sealed double panes which show that the seal has deteriorated. Check wood frames for signs of rot. Check whether the windows operate easily and seal well, as poor window seals will lead to higher heating and cooling bills.

Condition of Exterior Wood Fence and Deck
Replacement of wood decking and fencing is another expense that can be seen during a house viewing. Look for rotten boards that have been painted over and peeling paint.

(https://realtytimes.com/advicefromagents/item/1015992-things-to-check-when-viewing-a-house?rtmpage=).

Miami’s building boom: New construction trends to watch

A growing and dynamic city like Miami needs a diversified and ample housing market to keep up with demand. The city’s existing housing market is uneven: there’s tremendous inventory in certain sectors, while in others — like modestly priced single-family homes — there’s not nearly enough. The imbalance has not dampened new construction in South Florida, however, as aggressive and creative developers are working to give Miami residents the housing that is needed and wanted. Those developers are finding that, even in a competitive market, smart projects can become huge successes.

Consider that, in some luxury condo markets in Miami, there’s as much as five years’ supply. But — as Miami residents were reminded during Hurricane Irma — there are still two dozen construction cranes dotting the city skyline. Developers of those projects seek to differentiate themselves by offering unique products that speak to the new Miami resident — someone who wants an urban setting with walkability and convenience. Successful projects in some of Miami’s most in-demand areas require nimble and creative developers, but there are plenty that are up to the challenge.

“You’re starting to see more Miami-based development more than what you would have found on the beach in the past,” says Taylor Collins, partner at Two Roads Development. “The buyers are starting to gravitate to Miami today. They’re starting to see the quality of tower has really gone to the next level. You’re starting to see some interesting things pop up in downtown Miami. There’s a lot of new developers who like us are trying to bring a level of quality that normally wasn’t found in the market like in years past.”

Meeting a need
One of the areas Two Roads Development is betting on is Edgewater, and so far it looks to have been a good gamble. In 2017, the developers delivered the Biscayne Beach, a 391-unit tower with units ranging from $400,000 to $9 million that was 99 percent sold at the time of its completion. Sales were strong, but the company noticed something about its customers: they favored the larger units.

So while working on a second project in Edgewater, the Elysee, Collins said his team added more units in the 2,200-square-foot range and up. The Elysee will be a 57-story tower seven blocks away from the Biscayne Beach tower and will start going vertical in 45 days.

“You’re always kind of tweaking your business as you go. As sales continue you start to see the market demand might be a little different,” Collins says. “There is a lot of product in a certain sector of the condo market in Miami. If you’re looking for a three-bedroom unit, that’s where we’re starting to find that the guys who have a family and that they’re looking for larger units, where they still have that lifestyle that you would get in a single-family residence.”

The demand in Edgewater is indicative of a larger trend in the area: residents want amenity-rich housing in walking distance of restaurants, cultural institutions and schools.

“We’re starting to see people want accessibility to that lifestyle,” Collins says. “Edgewater has the shopping, the nightlife, the restaurants. Schools are starting to come into the area. A lot of these people like walking through the design district and going to a beautiful restaurant and get the beautiful lifestyle of Miami. And that’s what Miami has taken to. For years, Miami was a place where as a tourist you enjoy the beach and the nightlife. Miami is now a place where people came to live and enjoy life and get what South Florida is really all about.”

The walkability trend has also reached Coral Gables, where Giralda Place Residences is building a large-scale multi-use development in the downtown area. Called Giralda Place, the building will have 33 luxury condos and 100,000 square feet of commercial space, said Cristo Brown, head of development. The units will be fairly large, and they are attracting those seeking an accessible location.

“Mixed use projects in urban areas have a lot to give people,” Brown says. “Residents are seeking urban environments that offer different experiences. Walkability is super important. I think people in general are moving away from cars, with the rise of Lyft and Uber. Coral Gables has done a great job with a public trolley, and people are really utilizing it.”

How did Giralda Place Residences deliver such a home run of a project? It sought an area where it would be the lone player in the new condo market and delivered a product desired by a large contingent of the homebuying population. “People are nervous about the condo market, but that’s if they’re not comfortable with their product,” Brown says.

And if a developer can’t be the first to an area — which is a rarity in Miami — then the product better be top-notch, developers and real estate professionals say. When there’s an abundance of inventory to sift through, buyers will take their time to get the best product at the best price.

“If there’s a lot of choice out there, they’re very picky,” says Kathrin Rein, luxury ambassador for Keller Williams and one Coral Gable’s top-producing agents. “They expect the best finishes and upgrades, and they won’t go with anything mediocre in new construction. Prices have increased, so people wait longer to get a deal.”

Collins agreed, saying customers now want more luxury. “We get a lot of questions like, ‘What is your smart technology?,’ ‘What are your finishes in the second bathroom?’ ‘What kind of flooring can we get?’ ‘What does your amenity set look like?’ We’re not a developer that builds 10 buildings at a time. We want to make sure that quality and that product is something we want to put our name on.”

New construction challenges
Providing that level of luxury at reasonable prices is becoming increasingly hard. “We are dealing with builders who are not locked in,” Brown says. “You’re seeing definite price increases from subcontractors. There definitely is rising costs for construction, and I imagine for a lot of developers that’s slowed the process for breaking ground.”

With such competition among new condos, developers have to ensure that the finished project meets their goals and visions. “The biggest challenge is locking down pricing and getting [subcontractors] you’re comfortable with reliving the product you promised,” Collins says. “It’s really having the right team in place. Construction processes are our biggest thing.”

And then there’s the oversupply, which has caused some to say Miami’s condo market is distressed. According to Rein, there were 2,767 luxury condos — prices at $3 million or more — for sale last year and just 681 sold. That translates to about four years of inventory remaining on the market. However, she says that’s “completely normal,” as it takes time for the market to absorb inventory.

Some might say that would make selling new construction a difficult prospect, but there are tricks to the trade.

Tips for selling
There’s a lot of development going on, and real estate agents need to stay abreast of as many of them as possible, Rein says. It’s the best way to give honest advice to clients.

“You need to be familiar with all the products out there, even the bad ones,” she says. “Some time people see a brochure on the internet and don’t really know what’s going on, so you want to know the developer and how to advise your clients. You want to make sure the project is being built. You want to know if they’re taking out a construction loan. You need to know the finishes — the finishes are very important. You even need to know what kind of quartz it is.”

Getting to know the developers in question doesn’t hurt either, she says. “You need to take tours of projects with the developers,” Rein says. “When you’re successful in pre-construction sales, the developers invite you to those projects before they even launch.”

The task might seem daunting to some, but it can allow agents to use their imagination.

“You have to have a good imagination because you want to paint a picture for the customer on a blind canvas,” Rein says. “It’s your job to tell them about the area, what’s going on and the market around the product they are buying. Some people don’t like to buy without seeing the product. So you really have to be creative. Show them a similar project the developer already built. You have to listen to the client and find out what they really want.”

(https://miamiagentmagazine.com/2018/03/05/miamis-building-boom-new-construction-trends-watch/).

Home Flipping in U.S. Hits 11-Year High in 2017

Over 200,000 U.S. Homes Flipped in 2017

According to ATTOM Data Solution's Q4 and Year-End 2017 U.S. Home Flipping Report, 207,088 U.S. single family homes and condos were flipped in 2017, up 1 percent from the 204,167 home flips in 2016 to the highest level since 2006 -- an 11-year high.

The 207,088 homes flipped in 2017 represented 5.9 percent of all single family home and condo sales during the year, up from 5.7 percent of all sales in 2016 to the highest level since 2013.

A total of 138,410 entities (individuals and institutions) flipped homes in 2017, up 4 percent from the 133,407 entities that flipped in 2016 to the highest level since 2007 -- a 10-year high.

"The surge in home flipping in the last three years is built on a more fundamentally sound foundation than the flipping frenzy that we witnessed a little more than a decade ago," said Daren Blomquist, senior vice president at ATTOM Data Solutions. "Flippers are behaving more rationally, as evidenced by average gross flipping returns of 50 percent over the last three years compared to average gross flipping returns of just 31 percent between 2004 and 2006 -- the last time we saw more than 200,000 home flips in consecutive years. And while financing for flippers has become more readily available in recent years, 65 percent of flippers still used cash to buy homes flipped in 2017, nearly the reverse of 2004 to 2006, when 63 percent of flippers were leveraging financing to buy."

Home flip lending volume up 27 percent to 10-year high

The total dollar volume of financed home flip purchases was $16.1 billion for homes flipped in 2017, up 27 percent from $12.7 billion in 2016 to the highest level since 2007 -- a 10-year high.

"We aren't surprised that the dollar volume and share of financed flips are hitting new highs," said Matt Humphrey, co-founder and CEO of LendingHome, which saw a nearly 70 percent increase in its dollar volume of loans on home flips completed in 2017 compared to 2016, according to an ATTOM analysis of loan data. "Online lenders like us exist because banks and large lenders don't play in this space, and they aren't using technology to be efficient, nimble and fast. Now that investors have digital-native lenders catering to them, financing becomes an attractive alternative to cash. We predict this trend will continue because 2018 is already off to an incredible start for us."

Flipped homes originally purchased by the investor with financing represented 34.8 percent of homes flipped in 2017, up from 31.6 percent in 2016 to the highest level since 2008 -- a nine-year high.

"Institutional demand in this space has grown substantially over the last several years. Fix-and-flip has become an asset class of its own that is well-financed by banks and highly sought by institutional buyers," said Maksim Stavinksy, co-founder and COO at Roc, a nationwide originator which saw close to double the dollar volume of loans on home flips completed in 2017 compared to 2016, according to an ATTOM analysis of loan data.

Among 52 metropolitan statistical areas analyzed in the report with at least 1 million people, those with the highest percentage of 2017 completed flips purchased with financing were Denver, Colorado (55.4 percent); Boston, Massachusetts (52.8 percent); Providence, Rhode Island (49.4 percent); San Diego, California (48.5 percent); and Seattle, Washington (48.0 percent).

"Across Southern California, the flipping of investment properties continues to be a challenge, due to low available housing inventory, which is in turn driving up pricing and downsizing profitability for investors," said Michael Mahon, president at First Team Real Estate, covering Southern California. "To best position cash available for investment, we are experiencing more investors looking to utilize loan financing as leverage, as opposed to all-cash purchases, in an effort to capture greater numbers of investment opportunities, as opposed to maximizing individual profitability on investment projects."

Share of flips sold to FHA buyers at a three-year low

Of the homes flipped in 2017, 17.6 percent were sold to FHA borrowers -- likely first-time homebuyers -- down from 19.4 percent in 2016 to a three-year low.

Among 52 metro areas analyzed in the report with at least 1 million people, those with the smallest share of completed flips sold to FHA buyers in 2017 Richmond, Virginia (3.7 percent); New York, New York (4.3 percent); Minneapolis-St. Paul (4.9 percent); St. Louis, Missouri (6.4 percent); and San Diego, California (10.0 percent).

"We are seeing an entirely new category of sellers on Roofstock made up of investors choosing to buy/fix/lease/sell with a tenant in place versus buy/fix/flip vacant via the MLS," said Gary Beasley, CEO and co-founder at Roofstock, an online marketplace for investment properties. "This allows home flippers to reduce their selling costs, earn income during their hold period rather than having carrying costs, and potentially turn their capital faster. The availability of data on where single-family rentals are trading on a cap rate basis allows value-add investors to back into the prices they can pay based upon their targeted profit margins and estimates of renovation costs and market rents, allowing them to take advantage of robust investor demand for cash-flowing properties."

Among the 52 metro areas analyzed in the report with at least 1 million people, those with the highest share of completed flips sold to all-cash buyers -- often other real estate investors -- in 2017 were Providence, Rhode Island (43.1 percent); Birmingham, Alabama (42.8 percent); Oklahoma City, Oklahoma (41.0 percent); Orlando, Florida (40.4 percent); and San Antonio, Texas (38.0 percent).

Average home flipping returns pull back from all-time high

Completed home flips in 2017 yielded an average gross profit of $68,143 (difference between median purchase price and median flipped sale price), up 5 percent from an average gross flipping profit of $64,900 in 2016 to a new all-time high for as far back as data is available (2000).

The average gross flipping profit of $68,143 in 2017 represented an average 49.8 percent return on investment (percentage of original purchase price), down from an all-time high average gross flipping ROI of 51.9 percent in 2016 but still the second highest average gross flipping ROI of any year as far back as any data is available (2000).

"I think it is starting to feel a little like 2007 again, only with one major difference: the people buying investment properties are not 'sub-primers', but investors with more sophisticated deal sourcing methods," said Brad McDaniel, co-founder and CEO with Likely.AI, a company that applies artificial intelligence and machine learning to predict which homes are likely to be good deals for investors. "One of our clients, in the wholesale business, made a strategic move to become more data-driven in all aspects of their business. I believe this trend, the adoption of big data, and AI by residential real estate investors, is in its infancy. It's been said that real estate is a laggard when it comes to technology adoption; that is changing because of AI."

Among 174 metro areas with a population of at least 200,000 and at least 100 home flips in 2017, those with the highest average gross flipping ROI were Scranton, Pennsylvania (168.2 percent); Pittsburgh, Pennsylvania (145.5 percent); Baton Rouge, Louisiana (122.9 percent); Philadelphia, Pennsylvania (115.7 percent); and Erie, Pennsylvania (114.1 percent).

Along with Pittsburgh and Philadelphia, other major metro areas with at least 1 million people and gross flipping ROI of at least 80 percent were Cleveland (113.3 percent); Baltimore (97.7 percent); New Orleans (92.9 percent); Cincinnati (85.0 percent); and Buffalo (82.2 percent).

Highest home flipping rates in Memphis, Las Vegas, Tampa, Birmingham, Phoenix

Among 52 metro areas analyzed in the report with at least 1 million people, those with the highest home flipping rate in 2017 were Memphis, Tennessee (12.8 percent); Las Vegas, Nevada (9.1 percent); Tampa-St. Petersburg, Florida (9.0 percent); Birmingham, Alabama (8.6 percent); and Phoenix, Arizona (8.5 percent).

Other major markets in the top 10 for highest 2017 home flipping rate were Baltimore, Maryland; Virginia Beach, Virginia; St. Louis, Missouri; Miami, Florida; and Orlando, Florida.

Among 5,998 zip codes with at least 10 home flips completed in 2017, the highest home flipping rate was in 38116 in Memphis where home flips represented 31.5 percent of all home sales for the year. Other zip codes in the top 20 for highest 2017 home flipping rate included zip codes in Baton Rouge, Louisiana; Penitas, Texas; Los Angeles, California; Opa Locka, Florida; Jamaica, New York; Washington, D.C; Philadelphia, Pennsylvania; Farmersville, California; Houston, Texas; Miami, Florida; and Saint Louis, Missouri.

Biggest increase in home flipping rates in Buffalo, New York, Dallas, Louisville, Birmingham

Among metro areas with at least 1 million people, those with the biggest increase in home flipping rate in 2017 were Buffalo, New York (up 34 percent); New York-Northern New Jersey (up 29 percent); Dallas-Fort Worth (up 23 percent); Louisville, Kentucky (up 22 percent); and Birmingham, Alabama (up 17 percent). Other major markets in the top 10 for biggest increase in home flipping rate in 2017 were Grand Rapids, Michigan; Rochester, New York; Indianapolis, Indiana; Cleveland, Ohio; and Houston, Texas.

Counter to the national trend, the home flipping rate decreased in 2017 in 19 of the 52 metro areas analyzed in the report with at least 1 million people, including Los Angeles, California (down 2 percent); Miami, Florida (down 14 percent); Boston, Massachusetts (down 7 percent); San Francisco, California (down 3 percent); Riverside-San Bernardino, California (down 1 percent); and Seattle, Washington (down 2 percent).

"I believe the drop in Seattle home flipping can be attributed to the large number of buyers that home flippers are competing against in the market," said Matthew Gardner, chief economist with Windermere Real Estate in Seattle. "As a result, they're being forced to pay more which cuts deeply into potential profits -- also down from last year. I anticipate that supply limitations, in concert with rising home prices, will continue to put downward pressure on the number of flips in the Seattle market in 2018."

Average time to flip unchanged from 2016

Homes flipped in 2017 took an average of 182 days to complete the flip, tied with 2016 for the highest average days to flip since 2006 -- an 11-year high.

Among 174 metro areas with a population of at least 200,000 and at least 100 home flips in 2017, those with the longest average time to flip were Lansing, Michigan (226 days); Ogden, Utah (221 days); Albuquerque, New Mexico (217 days); San Luis Obispo, California (216 days); Naples, Florida (215 days).

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(http://www.worldpropertyjournal.com/real-estate-news/united-states/irvine/attom-data-solutions-q4-and-year-end-2017-us-home-flipping-report-home-flipping-report-2018-daren-blomquist-residential-homes-investing-report-2018-10788.php).

Commercial Investment Activity in U.S. to Continue to Thrive in 2018

According to CBRE's newly released Americas Investor Intentions Survey 2018, a prolonged period of U.S. economic growth, as well as tax cuts and favorable regulatory changes, means that commercial real estate investors are more positive going into 2018 than they were at the start of last year.

The 2018 survey results reveal that the largest share (45%) of investors plan to increase their level of acquisitions in the Americas compared with last year. This pick-up in investor appetite marks a reversal from the downward or flat trend recorded in the prior two surveys. In total, 88% of investors plan to either maintain or increase spending in 2018--up from 83% in 2017. Just 12% of investors plan to reduce their purchases in 2018, lower than the 17% in 2017.

Investors see a "global economic shock" that undermines occupier demand (30%) as the greatest potential threat in 2018, slightly more than last year (22%). In contrast, investors are less worried about interest rates rising more quickly than expected this year (16% in 2018 vs. 21% in 2017).

"Despite the possibility of escalating interest rates, the vast majority of investors intend to acquire assets in the Americas in 2018. Risk tolerance is expected to remain unchanged, but investors' search for yield and asset diversification is pushing them toward value-add assets, secondary markets and "alternatives" in 2018," said Brian McAuliffe, President, Institutional Properties, Capital Markets, CBRE.

"Investors anticipate that the occupier trends with the greatest impact on real estate investments are last-mile logistics, flexible space, and less reliance on traditional office and retail. Investors are assessing the risk of high proportions of coworking space within a property on its long-term liquidity and residual value. Sustainability continues to factor into decision-making but is not a top priority for investors," added Mr. McAuliffe.

U.S. gateway cities continue to command considerable interest. Los Angeles/Southern California is the top-ranked metro for property purchases, followed by Dallas/Ft. Worth and New York. As investors maintain their pursuit of good secondary assets, large upward shifts brought Nashville, Portland, and Tampa/St. Petersburg into the top 10.

Among the five different asset strategies--core, good secondary, value-add, opportunistic and distressed--value-add remains the preferred strategy (34%), but is down from 2017's level (41%). Investor appetite for good secondary assets increased for the fourth consecutive year, as the supply of core assets diminishes and investors broaden their search for yield. Institutional investors--comprising sovereign wealth funds, insurance companies, and pension funds--are more interested in core assets than are other types of investors, with 33% indicating core as their preferred strategy vs. 20% of overall investors.

"Given the declining return environment, it is no surprise that investors are racing to find the next Seattle by increasing their focus on the higher-yield potential of high-growth secondary markets. Investors are also moving further out on the risk spectrum to look for more opportunistic equity deals. Markets like Tampa Bay, Nashville, Montreal and Portland all rose substantially in investor interest this year, not only because of superior current yields than the majors, but for the single most important factor of all: higher projected office-using job growth. Investing in markets with the fastest job growth can lead to greater NOI growth and additional cap rate compression even in a rising interest rate environment," said Spencer Levy, Head of Research, Americas, CBRE.

Industrial is increasingly the preferred property type, cited by 50% of investors as the most attractive for investment in 2018, up from 38% in 2017. Multifamily (20%) and office (14%) are the next attractive property types, though their shares decreased from last year. Despite competition from e-commerce, the retail sector improved modestly from last year, attracting 10% of investors compared to 8% in 2017.

Investor interest in "alternatives" strengthened across most sectors. Real estate debt (37%) is the number one alternative currently held by most investors and will be targeted most actively this year. Student housing, senior housing, and healthcare are the next most common alternatives, each held by roughly 20% of investors.

The breakdown of anticipated capital deployment amounts is roughly comparable to 2017, although expectations for larger purchases in the $2 to 5 billion range are noticeably higher (14% in 2018 vs. 9% in 2017). Institutional investors have different expectations than the average investor, with half intending to deploy more than $1 billion of capital this year, and one-third intending to deploy more than $2 billion (compared to 28% and 18%, respectively, for other investor types).

(http://www.worldpropertyjournal.com/real-estate-news/united-states/...)

Brickell Bay Drive plan would add 700 apartments, hotel

A plan for Brickell Bay Drive bayfront would amass more than 700 apartments and nearly 260 hotel rooms along with new retail.

The property at 1111 Brickell Bay Drive already houses the 32-story Yacht Club at Brickell apartments, which would be redeveloped, adding a 61-story apartment tower and garage.

The project was the last on the Nov. 16 agenda of Miami’s Urban Development Review Board. The meeting was running long and when the case was called, developers’ attorney Iris Escarra asked for a deferral to Dec. 21, saying it will give the developer more time for community outreach “to work with our neighbors.”

The site is across the street from Florida East Coast Realty’s Panorama Tower, an 83-story mixed-use project now rising at 1101 Brickell Ave.

Amico Yacht Club at Brickell LLC proposes the mixed-use project for the 2.4 acres, calling it “a mixed-use luxury retail, hotel and apartment residences development.”

Plans call for redeveloping the current apartment building into hotel, residential, commercial and retail (258 hotel rooms, 178 residences), a new 961-space garage, new residential liner units along Biscayne Bay, a new 61-story apartment building and retail.

Plans from Stantec Architecture Inc. show 15,486 square feet of commercial and retail and 34,669 square feet of offices.

Zoning permits 48 stories, reaching a total of 80 stories through use of the Public Benefits Program bonuses, the developer says.

The 61-story tower is to rise 690 feet 2 inches and have 560 residences.

The developer would demolish the existing garage and build an 11-story garage. Plans include a new pedestrian garden walk to and along the bay; new arrival area, resident lobby and pool deck; and floor-to-ceiling windows, glass balconies and updated interior paint and finishes on the existing building.

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