Miami Mayor Carlos Alvarez’s Mortgage Fraud Task Force met Wednesday to discuss their progress on the war against real estate fraud in South Florida. (more…)

Federal prosecutors charge that mortgage brokers, appraisers, title agents, and loan officers took more than $50 million in fraudulent home loans to buy luxury condos in South Beach and homes in Southwest Ranches. (more…)

Maysville, the developer of the new Platinum condominium in Miami’s edgewater neighborhood, auctioned off 20 of the unsold condo units in Thursday in the hopes of moving some of its inventory. (more…)

A weak South Florida real estate market may prove a boon to rum rummers in Islamorada, the Miami Herald noted yesterday.

The owners of Holiday Isle announced Monday they were scrapping plans to finance a new luxury resort there with condo sales and will seek a traditional commercial mortgage loan to build the project instead.

(more…)

As CEO of South Florida’s largest health organization, Brian Keeley never dreamed he’d be contemplating fabric swatches and paint samples. Then again, he never thought he’d be jumping into the housing business.

But faced with the prospect of opening a sixth hospital without the 800 employees needed to staff it, Baptist Health South Florida plans to build and/or buy affordable housing to attract nurses and other workers.

“No deposit. No owner lease. Just move right in. We’ll even decorate it for you,” Keeley said. “The sole condition is you have to work for us.”

Baptist Health is not alone. The second largest employer in Miami-Dade County, the University of Miami, and the much tinier Keys Federal Credit Union have plunged into the South Florida housing market, signaling the emergence of a trend that, experts say, will spread across the state.

“Employer-assisted housing is the new buzz, the coming thing,” said Jaimie Ross, president of the Florida Housing Coalition. “South Florida will see it first because that’s where housing prices are highest, but it will work its way up.”

Indeed, it may have started at the very bottom - in Monroe County, where the average price of a single-family home is more than $700,000.

With Florida mortgage costs there so much higher than most families could afford, Keys credit union added an employee rental apartment on top of a branch office eight years ago, and is planning a dozen more.

“If we don’t help our employees, we can’t serve our members,” said president John Dolan-Heitlinger.

While few employers can build housing on their own, there is now growing interest in establishing Florida mortgage loan, rental or down-payment assistance programs as employee enticements, Ross said.

The reason is as simple as the solutions are complex.

Even with the housing market cooling off, the gap between housing costs and what employees earn is too wide. Generally, experts say, the price of a Florida home mortgage should not exceed three times the annual salary of the buyer, an impossible benchmark for many Floridians.

In January, the statewide median price of a single-family home slipped by 2 percent over the previous year to $239,300, but according to a 2005 Census estimate, the median household income in Florida hovers near $42,000, leaving the debt-to-income ratio at almost 6-1.

Nowhere is the mismatch greater than in South Florida, where the median price of a single-family house averages more than $380,000.

That’s seven times higher than the median household income in Broward and Palm Beach County, and eight times more than in Miami-Dade.

“Before the market exploded in 2004, the ratio of home value to median household income was about 4-1, a gap that could reasonably be filled by various government programs,” Murray said.

“But when we get to a 7-1 or 8-1 ratio, all government programs fail. I think that’s bringing employers to the forefront.”

Baptist’s CEO said many employees, giddy over escalating home values but fed up with rising property taxes and homeowner’s insurance, are cashing in on their houses and moving to the “new Florida” - the Carolinas, Tennessee and Georgia.

That trend leaves employers wondering how to cope with Florida mortgages so costly that vital employees are fleeing the area.

Continue reading in the Fort Lauderdale Sun-Sentinel …

The latest version of a proposed law that would require real estate developers to build affordable housing for middle-income buyers will be debated at a hearing, the Miami Herald reports.

The controversial plan has drawn a new group of critics — homeowners and community councils throughout Miami-Dade County, concerned that all zoning decisions would be taken out of their hands, jeopardizing neighborhoods and property values they’ve worked tirelessly to improve.

The “workforce housing” ordinance will have its first public hearing today in front of a county commission committee that deals with land-use issues. The law would require developers of most projects built in unincorporated Miami-Dade County to set aside a percentage of units to be sold below market rate so that workers making 65-140 percent of the area’s median income could afford them.

Miami-Dade County’s median income is $46,350. That amount makes it nearly impossible for many to afford the Florida mortgage needed to buy even a small condo unit.

The law would be one strategy to address the South Florida housing market crunch, one not only being felt by the poorest of the poor, but that has crept into the middle class.

THE RISING COST OF HOUSING

The cost of housing is increasingly viewed as a key obstacle to economic development in South Florida. Elsewhere in the country — Montgomery County, Md., for example — inclusionary zoning has proved effective at providing housing for middle-income workers. Tallahassee passed a similar law last year. But it has not been tried in South Florida.

Under the county’s proposal, the number of homes sold at the discounted price would be either 5 percent of the project’s total or 12.5 percent, depending on whether the builder takes a “density bonus” that would allow more affordable housing units to be built on the property than zoning rules would normally permit.

A study by Florida International University’s Research Institute on Social and Economic Policy warned that developers would have no incentive or requirement to build more affordable housing for those at the lower end of the scale.

The report recommended more specific, tiered income targets, calling for a certain percentage of units for different levels of salary ranges.

For instance, developers could be required to provide housing within a project for those making 65-80 percent of median income, for those making between 80-110 percent and for those making between 110-140 percent of median income.

TIERING POLICY SUGGESTED

However, neither this proposal — nor a different version that went before the committee earlier this year — addressed the tiering suggestion raised in the FIU report.

Among the key changes in the revised proposal is a provision that has added another layer of opposition, drawing the anger of community councils and neighborhood groups: the creation of a workforce housing zoning appeal board.

Under the proposal, the “workforce board,” would consist of three council members — possibly appointed by councils — and developers, Florida home mortgage and banking industry professionals, and affordable housing advocates appointed by the County Commission.

Many community council members across Miami-Dade County feel threatened by a loss of power. Homeowners fear unchecked development, the situation for which community councils were created in 1996 to remedy.

“The whole idea was to make the zoning more accessible, more efficient, more responsible to the needs of the citizens and this would do the exact opposite,” said Mary Williams, a concerned East Kendall homeowner.

Echoing the analysis of nationwide experts, the Sun-Sentinel reports that the South Florida real estate market remained soft in April, giving buyers more options — and sellers more grief.

The Broward County housing market took a dive last month, with single-family home and condominium sales plummeting, while prices leveled off from the record highs reached last fall, the Florida Association of Realtors said.

THE REALIZATION: After five years of bidding wars and astounding price appreciations, the market has shifted. With more than three times the number of homes on the market compared with last year at this time, prospective buyers are becoming selective — and less willing to make an offer on a house for the full list price.

“Buyers are a commodity right now,” said Joanie Villanti, a real estate agent in Broward and Palm Beach counties.

Almost 700 single-family homes changed hands in Broward last month, a 37 percent drop from April 2005. The median price of an existing single-family home, meanwhile, inched up 5 percent to $360,600, compared to last April. While it’s still an increase, it’s nowhere close to the 25-30 percent appreciation that became commonplace in the past five years.

Broward condo sales also dropped 37 percent, as the median price rose 17 percent over last April to $214,200. Although median prices continue to increase year over year, the numbers are misleading, said David Levin, a Delray Beach real estate consultant.

Rapid appreciations during the past five years have put homes out of reach for many consumers, as evidenced by lower sales totals — meaning it’s the wealthy that are buying expensive properties, which skews the median price upward.

The median price of a single-family home has dropped 3 percent since the beginning of 2006 and may continue to fall as Florida home loans become more expensive. A 30-year fixed rate home loan in April averaged 6.51 percent, up from 5.86 percent last April.

“Regionally, we have issues to deal with,” Levin said.

The market was destined to slip as local wages and salaries couldn’t keep up with the enormous price hikes. Broward’s median price has more than doubled in the past five years, with a typical home costing $167,200 in 2001. Elsewhere in the South Florida housing market, similar signs of cooling prevailed.

• In Palm Beach County, single-family home sales fell 43 percent in April, while the median price of $386,500 rose 4 percent.
• Miami-Dade County sales declined 31 percent, as the median price increased 12 percent to $374,500.

Across Florida, most markets were off as sales slipped 31 percent, while the median price rose 13 percent to $249,700. Nationally, sales of homes, townhomes, condos and co-ops fell nearly 6 percent in April compared to April 2005, the National Association of Realtors said Thursday.

More than 20,300 homes and condos were for sale in Broward last month, an increase of 321 percent over April 2005, the Realtor Association of Greater Fort Lauderdale reports. Yet despite the slowdown, some South Florida real estate agents remain optimistic.

“We had record, steroid-type numbers last year,” said Mike Pappas, president of Miami-based Keyes Co. Realtors. “But even at 75 percent, these are very strong numbers.”

Sellers, though, are struggling to stay positive. Bruce Sherter finally found a buyer this week for his $599,999, five-bedroom Parkland home.

It took six months and five price reductions. The 43-year-old financial analyst and his listing agent, Debbie Anderson of Prudential Florida WCI Realty, say sellers have to be serious from the start.

“If you want the home to sell, you have to be aggressive with the price,” Sherter said.

You’ve heard a lot about South Florida residents migrating north in search of smaller crowds and lower prices, but you probably aren’t aware of what a logistical problem it has been for many of them. Some real estate agents in St. Lucie and Martin Counties (map), north of Palm Beach County, are trying to make it easier for migrants to find a home — which, in the end, benefits the local sellers.

“Almost 50 percent of the buyers of homes in Martin and St. Lucie are from down south, yet the Realtors down there have difficulty helping their customers buy homes up here,” said Jim Weix, president of The Real Estate Company-Treasure Coast, based in Palm City, Fla.

Weix’s firm recently purchased the access rights to the Multiple Listing Services (MLS) of the realtor associations of both Greater Fort Lauderdale and Miami-Dade County, meaning his company will directly market its existing stock of Martin and St. Lucie homes to South Florida agents. Weix had been fielding many calls from Broward, Palm Beach and Miami-Dade agents without access to local listings, and who are subsequently out of the loop with homes that come on the Florida housing market.

“They were basically going to Realtor.com and getting the same information the public could get. Bottom line is, a big part of our market is people from there moving up here and I come to find out that access to our homes for sale is really minimal,” Weix said.

There are several different MLS vendors, with the board of directors of each association choosing which to employ. The Realtors Association of Martin County now utilizes one that provides Martin-only listings and shares data with another that features St. Lucie and Palm Beach homes. Overall, South Florida agents agree there has been a surge of interest in the Treasure Coast market, and believe cooperation is key to generating Florida home sales.

“It seems like Miami is very interested in not only personally moving up there, but also investing in the area,” Helen Jeanne Nicastri, honorary chairman of the Master Brokers Forum, said. “Even if you had access to all the listings, though, you would still have to work with a good broker up there because you’d be doing your customers a disservice if you’re not familiar with the marketplace.”

Nicastri said Master Brokers recently opened chapters in Broward and Palm Beach and said the Treasure Coast’s popularity could fuel the opening of another. Clearly, from the perspective of real estate agencies, sharing information is the key to generating sales. Even as the Florida home loan market gets pricier, there will be no shortage of interested buyers in South Florida. Be sure you make the best use of the information available to you if you’re shopping for a Florida home loan (and a house)!

As investors - or those seeking an eventual return on their Florida home loan - consider investing options, they may be in for a surprise. The houses around the nation that have shown the most significant appreciation over the last two years can be found is less affluent cities than you might expect.

According to a Forbes.com ZIP code analysis, the California city averaging the LEAST amount of appreciation was the posh neighborhood of Holmby Hills. Conversely, Watts - an area known for poverty - showed rising home prices of 91.9% between 2003 and 2005.

A pattern of home loan appreciation

This is a pattern that held true in several of the largest cities in the U.S. over the past couple years. Many neighborhoods with lower median incomes, neglected housing stock and low home prices, or areas that were dominated by office or industrial space, have surged forward.

For example, consider Miami’s Little Havana. Prices increased more than 150% over the last two years. Similarly, there’s the tough Northern Liberties section of Philadelphia, which enjoyed appreciation of more than 70%.

“In the past, you would expect that neighborhoods with higher median incomes would have stronger demand for homes,” says David Lereah, senior vice president and chief economist for the NAR. “Lower-income neighborhoods will have more renters. Higher-income areas will have more demand from people wanting to climb the ladder. It means that some things have changed.”

Fall out from home price increases

As prices have increased, some of the most desirable neighborhoods - which have always been more expensive - have topped out, becoming unaffordable for many home buyers. So instead of buying charming but overpriced stone homes in the leafy Baltimore neighborhood of Guilford, for instance, young families turned to blue-collar areas near the water, rehabbing old row houses that seemed cheap in comparison.

Jonas Lee, a founder and managing partner of Redbrick Partners in Manhattan, a private investment fund that puts money into single-family homes, is not surprised. His company targets just such urban areas for investment.

“It takes people a while to figure it out, but there’s a very large arbitrage between these neighborhoods and some of the nicer neighborhoods,” Lee says. “Once that price differential is large enough, people start to recognize the opportunities, and then there’s a sort of a herd mentality. It’s leading to the revitalization of neighborhoods that had not seen a lot of investment for a long period off time.”

What does all this mean? Perhaps you should be looking toward Miami for your next Florida home loan. The best real estate investing advice we can give you at the moment is to focus on areas that are reflective of booming price appreciation.

Double-digit percentage drops in Miami-Dade and Broward County existing-home sales show that the South Florida real estate market has officially shifted from go-go to so-so, according to today’s Miami Herald.

Real estate agents sold 36 percent fewer Broward County houses than they did a year ago at this time, while Miami-Dade sales sagged by 28 percent on a year-over-year basis, the Florida Association of Realtors reports. The housing market also continued its month-to-month slide, with Broward sales down a surprising 17 percent from December and Miami-Dade sales falling 13 percent.

”Nothing lasts forever. Overall, the activity is still there. It’s just a market coming back into reality,” said Bob Tenace, of Century 21 brokerage in Coral Springs.

The bad news for prospective first-time buyers is that prices have not yet reflected the lull in sales. Housing costs still show steep gains over 2005, with the median January sales price increasing almost 30 percent in the past 12 months. But house prices have flattened since December. The median price dropped slightly, from $377,700 to $376,300 in Miami-Dade County; and is up just barely, from $369,000 to $370,500, in Broward.

COMING BACK DOWN TO EARTH

This latest evidence of a fundamental shift in the South Florida real estate landscape has drawn a number of viewpoints, from those warning of a bigger decline to those who think the boom is simply leveling off into a more reasonable, sustainable pace.

”Basically, the markets are stabilizing. If you’re buying a home, buy it because you need it. Not because you’re banking on rapid appreciation,” David Dabby, a real estate consultant in Coral Gables, told the Herald.

Low Florida home loan rates fueled much of the buying frenzy in recent years throughout South Florida. Freddie Mac reports that the average interest rate on a standard, 30-year fixed-rate mortgage is currently 6.34 percent, up from 5.69 percent a year ago. While low historically, 6.34 percent is enough of a jump from last year’s levels to quell demand considerably.

CONDO SALES PLUMMETING

Most Florida real estate industry professionals agree that condominiums are the most volatile sector of the real estate market, with many preconstruction investments and projects fueling amazing price surges in the region. The Florida Realtors group released condo sales along with its house report in January, and though they declined, the dropoff wasn’t as steep as many predicted.

• Realtors sold 21 percent fewer condos in Broward than in January 2005, with the median price soaring 31 percent to $211,500 over that span.
• In Miami-Dade, meanwhile, condo sales dropped 13 percent, and the median condo price increased only 11 percent to $259,900.

The numbers follow a string of weak months that some real estate salespeople blame on the hurricanes that hit the region last fall. But Miami real estate and vicinity are mirroring national trends, with overall existing home sales falling by 2.8 percent across the country in January. Real estate agents say they’re adjusting.

”It’s no longer [that] you throw a piece of property on the market today and it’s sold before you get it in the listings,” said Andy Weiser, a Coldwell Banker agent in Fort Lauderdale. But he is not worried about a major decline in values. ”Am I saying anyone is going to lose money? Of course not. There are still more people who want to be down here than we have homes for.”

THE PROPERTY GLUT

Condos outsold single-family homes in both counties in January, but demand isn’t keeping up with owners looking to sell. In January, 11,646 condominiums were up sale in Broward County, and only 984 sold, according to an analysis by Esslinger Wooten Maxwell Realtors. A year ago, 3,710 condos were on the market and 1,399 sold.

In Miami-Dade, the numbers are quite similar. Nearly 12,000 condos on the market in January, with only 790 sold, while a year ago, 5,670 condos were on the market and 1,004 sold. The influx of properties has forced people like Jeff Kaiser, who had hoped to have sold his Coconut Grove condo by now, to do what would have been unthinkable a year or two ago: drop the price and hire a real estate agent.

The 34-year-old contractor put his four-bedroom townhouse on the market four weeks ago at $489,000, but has gotten no offers.

”I’m not going to sit on it too much longer,” he said. “The market is definitely changing. Six months ago, I think it would have been gone.”

Buyers can only hope that the overwhelming number of properties on the market result in price reductions and more opportunities to find a bargain. For sellers, on the other hand, the hope is that the market is correcting and will not get worse. As the Florida home loan landscape shifts, normalcy will set in. A home is a great investment down the line… while the days of flipping and double-digit annual appreciation may be over.