Morris Massre's Blog

Thoughts on South Florida Realty and the Planet in General

Housing’s Perfect Storm Erupts in Florida

South Florida's Perfect Real Estate Storm

South Florida’s Perfect Real Estate Storm

Housing Perfect Storm is Upon us

Housing Perfect Storm is Upon us

Welcome to Florida; The Hurricane State

Welcome to Florida; The Hurricane State

Some thought Hurricane Wilma of 2006 fame was the perfect storm that started the housing meltdown in South Florida.  Well, if you coupled that with mortgage fraud, rising home prices that were out of control, and unscrupulous realtors, mortgage brokers, and appraisers, then maybe it was.  I believe that it was simply the beginning of the end.

Today we have a perfect storm of other sorts.  I like to think of it as the perfect storm for our housing recovery.  Whether or not you like it makes no difference.  Housing is the single factor in the US economy that dictates whether or not we fail or succeed economically as a country.  Not Wall Street, not the auto industry, and not banking.  This is why everyone should be paying close attention to the market, especially here in your own backyard.  Housing’s success or failure has a domino affect on America’s economy.  Choosing to ignore it is simply not the right attitude. 

Sometimes I wonder if the Native Americans had it right all along because they had no concept of ownership of any kind, including their own country.  This is why they never had to worry about defaulting on a loan.  They shared in everything willingly.   And that is why it was so easily manipulated away from them though.  On the one hand they never had to worry about a mortgage payment, insurance, HOA dues, or even cutting the grass.  On the other hand, this type of cultural mentality led to their loss of land.  One could argue that there simply were not enough Indians to stop the influx of White immigrants flowing into the country and that it was bound to happen anyway, but if there were some kind of national government in place perhaps a deal could have been arranged to avoid the takeover. There is no going back now and we have to live with the current economic conditions.   

But Indians did not use money at the time, so an economic collapse due to housing would have been impossible.  But it sure would be nice to not have to think about money or bills for a while.  Today’s society has no concept of sharing because we are all out for ourselves when it comes to home ownership and getting the best deal possible.  Nobody cares about whether or not the sale of their over-priced home will have impact on the rest of the community as long as they get what they want.  Hopefully, we have learned from our mistakes and will be more conscience of  our actions in the future. 

What South Florida is experiencing now is not unlike pre-meltdown housing numbers, but make no mistake about it, everything has changed in the way we conduct business.  The perfect housing storm arises first from rising seller prices.  Although not enough to bring a lot of homeowners from the abyss, it is still enough to rescue many others.  Another factor that has been taking hold are buyers who are coming to the US to invest for various reasons, although mostly political.  All of the political and economic unrest in various parts of the world have led to foreign investment in US housing.  These buyers are coming in droves too, and this has led to a shortage of inventory, thus driving up demand and prices.  In particular, Canada, Venezuela, Argentina, Brazil, and China are the biggest movers and shakers in the home buying business. 

American buyers, on the other hand, are driven more by simple economics like interest rates.  Foreigners do not have to worry about that because they buy with cash, but with Americans who finance it is the single biggest factor in the purchase of a home.  Give out zero percent interest rates like the auto industry and the run on housing would be so great that we would surely run out of homes to sell in record time. 

So, given the fact that we have a great deal of buyers for homes, low interest rates, higher home values, and a shortage of inventory all point to a housing perfect storm.  This time, however, it is all for the better. 

 

 

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South Florida Shadow Inventories Leave More Questions than Answers

The debate as to whether or not South Florida’s struggling housing market is back on track or not is still up in the air as far as I am concerned.  If you asked one hundred agents here you would get a different answer from them all, but most would hinge on either a big time yes or a slowly but surely approach.

The problem with getting an accurate account of the recovery is simply tied into the shadow inventories, or the foreclosed homes that the banks are holding back on so as to not flood the market.  By doing so, the real estate market is left with a smaller inventory of homes, which generates multiple offers and higher demand.  Personally, as more of a listing agent than a buyer’s agent, I like the idea.  However, I do not like the false hope that it provides my customers.  Let’s face it, getting a loan today is like pulling teeth, so continuing to lower interest rates can only go so far.  So that pretty much leaves sellers with a whole lot of investment buyers, most of whom are foreigners.  On the other hand, if the market were to be saturated with thousands of foreclosed homes that would be a disaster as well.  Buyers would indeed come out of the woodwork like roaches, but their offers would be lower than usual, thus leaving the traditional sellers on the outside looking in because they are not the better deal.  This would probably also kill short sales since they close so much faster. 

I remember in 2006 and prior to when all the media could talk about was when the bubble was going to burst on the housing market.  Nobody paid attention to the warnings.  It was as if they wanted it to happen so that they would have something to talk about.  But now all they can talk about is the so called recovery.  What will the media talk about when that happens?  Make no bones about it – this is indeed an investor driven real estate market and without investors as buyers the South Florida market would look like Detroit.  It will lead to another bubble, however, that of the rental market because the area is being flooded with rentals now and landlords are gouging like tomorrow will be the end of the world.  It is sad at how people take advantage of others in their most time of need.  John Steinbeck’s, “The Grapes of Wrath” is a classic example of how the market collapsed during the depression and how those with took advantage of those without. 

So, as far as I am concerned the real estate recovery has to be divided into different parts of the country.  Some are better off than others, but Florida has a long way to go because it was probably the most greedy during the heyday.  The deeper you go into a real estate tragedy in terms of pricing and inventory, the longer you have to climb out.  Only time will tell how Floridians will bounce back from the deepest depths of the real estate abyss.  No media giant can ascertain that.

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Israel Is For Investors

From the mind of Richard Meier comes his latest project in Tel Aviv. Named after it’s designer, Meier, this new construction condo scheduled for completion in three years is a 32 floor masterpiece with panoramic views of the city and the mediterranean.

According to the current plan, the residential tower will be 32 stories high, or 150 meters, with a five stories lobby incorporating seating and hosting areas.
A total of 20,300 sq m will be reserved for residential use, including all technical services, lobby, lounge and other residential facilities.

Each 785 sq m flat can either be a single apartment or be divided into two, four or five apartments, on the first 10 floors. The condo also
offers penthouse plans as duplex and triplex.

The design and technology of the tower will be based on innovative systems to incorporate environmentally friendly living.

This photo gives you an idea of the breathtaking views from Meier.  It’s just a short walk to the beach too. 

Forget about what you have heard in the media.  Israel is as peaceful a country as one will ever see and extremely friendly towards it’s visitors, especially Americans as they are the country’s closest ally.  Tel Aviv is Israel’s largest city and you could literally see the rest of the country in a week by car. 

Contact me for more information at 954-214-6014 for more detailed information and pricing or visit my website at http://www.myfloridarealty.net/

Thanks for visiting.

Filed under: Israel, Real Estate, ,

New Construction in Israel

I know what you are thinking. And no, what you see happening on CNN, Fox, etc. is truly NOT the face of Israel. As a matter of fact, the real estate business there is booming and there is no bubble because banks lend little, if any, money for residential sales. In fact, most of the buyers of the new projects on the Mediterranean are foreigners. Citizens of the country have to actually win the lottery just to buy a home.

Do not let threats from Iran or any of the other wacky Arab countries deter you from investing in Israel. I have been there four times and have never felt threatened. I actually find it to be quite a lovely and relaxing country that is incredibly friendly towards Americans especially. Getting around is a snap as everyone speaks English and all signage is in four languages. The security at all levels there is unmatched anywhere in the world. Why? Because there are no politically offensive or incorrect messages or policies that the federal government cares about using. Security is paramount and if you do not like the steps taken to ensure that, you can leave. We as a country can learn from that.

This brings me to my real estate point. If you like Miami Beach or Brickell, this is for you. The architecture is very similar with the art deco look,  and the amenities spectacular. But the best part of this project, Aviv, are the views of the Mediterranean. Underground parking abounds as well. This is about a two year project and deposit are being taken here with me at Fortune International Realty.  All contracts are assignable as well. 

Tel Aviv New

This building in particular is six floors with retail on the ground level and a garden area on the roof with shared “safe rooms” for everyone.  I liken these rooms to those of Americans in the 1950’s who had a bomb shelter in their back yard.  You can never be too safe in the government’s eyes.  Parking is underground and the beach is a ten minute walk.  Contact me at 954-214-6014 for additional detailed information.

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Understanding Florida’s Landlord/Tenant Act

This nifty little disclosure has literally gone from two pages to eleven overnight.  What once was used simply to protect the tenant from losing his or her security deposit has now gone to protecting both sides.  Afterall, landlords seemed to be getting the short end of the stick on this one time and again, espcially with all of the tenants refusing to pay rent in the event of foreclosure, short sale, or even a simple modification. 

I have since come to find out that a rental agreement between a landlord and tenant and an agreement between landlord and bank are two different things and should be treated as such.  Just because a landlord may not be making his or her mortgage payments does not relieve you of your duty to pay rent as stated in your lease.  It is your duty or your agent’s to check on the property’s status beforehand.  Why get yourself into something that is already in trouble?

But it gets better.  Included in the Act are both sides obligation to maintain the unit, the landlord’s access to the unit, termination of an agreement, holding over, prohibited practices, and my favorite, choice of remedies upon breach or early termination by tenant.  This last one has been ignored forever, but now a landlord can charge for liquidated damages for either in the amount of two month’s rent. 

Is that fair?  Absolutely.  My advice to all tenants now is to read every page of this act before signing a lease in the state.  It is so much more detailed and goes beyond the scope of a simple security deposit.  That is provided your agent gives you one.  Be sure and always ask for the landlord/tenant act before signing a lease in Florida, whether it’s from an agent or a by owner.

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If it’s too good to be true, don’t do it

Homeowners facing foreclosure are prime targets for scam artists. The U.S. Federal Trade Commission identified 71 companies running suspicious foreclosure rescue ads, and the Better Business Bureau counts foreclosure rescue rip-offs among its top 10 scams. Understanding how these scams work can help you avoid becoming a victim.

The variations are seemingly endless, but one popular foreclosure scam involves a representative of a so-called foreclosure rescue company promising to negotiate a deal with your lender. The rep, vowing to take care of everything, will instruct you not to contact your lender, lawyer, or credit counselor during the supposed negotiations. The more brazen ones will even tell you to pay your mortgage directly to them.

Once you pay an upfront fee or hand over a few months’ worth of mortgage payments, the scam artist will disappear. You’ll be left with an emptier wallet and a mortgage that’s in even deeper trouble because no deal was cut and no payments were made on your behalf. According to John Riggins, chief executive of the Fort Worth, Texas, office of the Better Business Bureau, upfront fees can range from $500 to $5,000.

Rip-offs come in many forms

A bankruptcy foreclosure scam can involve a promise to fend off foreclosure in exchange for an upfront fee. Instead of getting you legitimate relief, the fraudster will pocket the fee and secretly file a bankruptcy case in your name. The scam may seem to work initially, because a bankruptcy filing will stop foreclosure proceedings temporarily, but they’ll resume. Compounding your problems, a bankruptcy can mar your credit report for 10 years.

Another common scam, called the bait-and-switch, results in a scam artist taking ownership of your home. You sign documents supposedly for a new loan that will make your mortgage current. What’s really happening is you’re signing over the deed of your house. In this scenario you would still owe on your mortgage but no longer own the home.

In a rent-to-own scheme, you’re told to surrender a home’s deed as part of a deal that lets you stay put as a renter. The scam artist, perhaps claiming to be able to refinance at a better rate with you off the title, promises to sell the house back to you in the future. However, terms of the deal may make it all but impossible for you to repurchase the home, or the scammer may get you evicted by raising the rent beyond your means. Either way, you end up losing the home while remaining on the hook for the unpaid mortgage.

Look out for red flags

Being aware of the warnings signs can protect you from foreclosure rescue scams. Red flags (http://www.loanscamalert.org/things-you-should-know.aspx) include:

·Demands for high upfront fees.

·Guarantees to stop a foreclosure.

·Instructions to make mortgage payments to someone other than your lender.

•Pressure to sign over a deed.

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Landlord/Tenant Responsibilities

Anyone out there acting as a realtor or those practicing leasing on their own should know this;  tenants will always try to get away with as much as possible on a lease agreement simply because they either do not trust the landlord or just want control.  One of my favorites is when a tenant will want a clause written in a lease where they have the ability to repair anything that breaks down and bill it to the landlord. 

This is taboo as far as I am concerned.  It pretty much leads to the tenant simply calling anyone they wish to in the phonebook without a care as to how much it’s going to cost.  Most landlords, at least the experienced ones, always have someone that they work with that won’t rape and pillage them for a repair.  That is why this should never be allowed by a tenant. 

On the other hand, if you have a deadbeat landlord that never repairs anything, that’s another story.  But how is one to know that?  That is where your agent comes in.  If I had a landlord that I knew was a deadbeat I would do everything in my power to give the tenant the authority to make the repairs responsibly.  Other than that, your next best bet would be to hire a property manager.  As one myself, I have a handful of vendors that I specifically use for these purposes and because of my constant stream of business I get preferential treatment and prices.  Always look for  these types of clauses in the lease or agreement.

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This Realtor Likes Velma Hart

I was astonished today when I turned on the news and watched this woman finally stand up to the President in disgust.  Her comments were clear, well thought out, and to the point.  How refreshing.  Finally, instead of praising and kissing his behind someone has the guts to confront the President and ask him point blank what he is doing about the current state of the economy.  What surprised me even more was the way in which she delivered her questioning and lecturing.  Not a hint of disrespect, but more like a parent expressing her disappoint in her child.  She did not fumble her words in the least.  Nothing could be more disconcerting to a man in this position of power.  How humbling it must have been.  Maybe now he’ll get the message.  If you haen’t seen my new hero yet, take a minute to view this Youtube vido link.

http://www.youtube.com/watch?v=BnMMo8lVG5M

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Short Sale Madness

I think so. These days just about everyone is processing a short sale for little to no money at all. But, like my Grandpa always said, cheap is expensive. And that applies in this case too. Even if you have to shell out a few dollars to get a short sale started, is it not worth the peace of mind knowing that you are protected by an informed and licensed individual, rather than someone simply setting up shop? I only say this because I recently lost a listing when my competition offered the attorney side for free through their title company. It just seems to me that when you jump in this pile with the others you eventually end up at the bottom of the short sale stack, which eventually leads to no closing at all. When it comes to protecting the integrity of your credit and property I always recommend hiring a qualified real estate attorney. He/she will take all the harassing calls, slow down the foreclosure process, negotiate the best deal for you, and work in all of the closing costs so that you have no out of pocket expenses. My competition also stated that she knew someone at the bank whom she had an “in” with. That was probably going way too far because I don’t believe anyone has an “in.” What makes you so special that the bank is going to give you priority over the millions of others who are in mortgage trouble? Nothing. As I always say in situations like this, take a ticket and stand in line. The moral of this story? Be careful who you hire to list and represent you in a short sale transaction. Not everyone is built for doing it and there are a lot of agents and processors who will simply tell you everything you want to hear. Check them out thorougly and even go so far as to check references from prior or current customers. If an agent or lawyer is not willing to give these to you they probably are not for real. In this case in particular, I would have asked to speak to the “friend” at the bank personally.

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Florida real estate service at a premium

When your real estate services are free..

it’s very easy for a buyer to take your efforts as a realtor for granted & not value your time or efforts.  But I guarantee you that if the industry started charging by the hour for their services if a buyer abandoned ship attitudes would change drastically.  In this day and age with all of the internet shopping it’s easy for someone to drop you if something interesting comes along.  So, how do you keep those you are working with loyal?  Not as easy as it used to be for certain, but I have found that if you provide them with good, caring service & stay communicative at all times you have a better shot.

I am feeling the pinch as much as anyone else when it comes to this, but four years plus into this recession and I’m still in the office plugging away and on the street conducting open houses.  You cannot lose interest or the will to move on to new things.  The industry has changed so much since I entered in 1997 that whatever methods I was using just five years ago are now out the window.  The world of real estate has become very impersonal and almost soley reliant on the web that buyers have come to the conclusion that maybe they don’t need us any more.  Why not use the social media to your advantage by embracing the new era of social media and topping it off with a heaping tablespoon of first class service?

I like to tell my customers that you can always go to Home Depot for a special screw that might fit your hurricane shutters because it is supposedly cheaper, but in the end you spend an hour looking for it , finding a parking space, waiting in line to pay for it, and probably coming back because you got the wrong one.  Or, you can go to the local Ace hardware store, pay a little more, but get out of there from park to finish in minutes because a helpful and informative salesman guided you from the instant you walked through the door.  I am the Ace guy and that is what you all have to be.  Volume sales worked in the heydey.  Who cared if the customer came back or not.  There was always another waiting around the corner.  If that is your attitude today you are in for a rude awakening.  Gain your customer loyalty by being a caring friend and going the extra mile and your chances of keeping them will improve, sending them an email with a listing attached and your’re probably going to lose them.

Filed under: Real Estate,

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