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  • Profile photo of British BuyerBritish Buyer
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    @british-buyer
    Join Date: 2010
    Post Count: 149

    TO MICHELLE

    Nice to hear from someone "on the ground", especially someone in the real estate industry.

    I find it most interesting to hear that, in your experience, up to 50% of sales in the better Miami areas are to foreigners.  It serves to remind us, when trying to predict the future of Miami's property market, that a short Atlantic flight away are hundreds of millions of Europeans stuck with awful Christmas weather, just when Miami enjoys its best weather:  mild sunny winters.

    But Miami doesn't need to rely on Europeans and Canadians to drive it's property market.  Once the US economy recovers, all those unfortunate Americans stuck in freezing northern climes will once again also be looking to buy southern coastal holiday homes.

    That's looking at the top-end of the market only.  Millions of Americans will continue their immigration to the sunbelt to escape harsh northern weather, and they'll all need to either rent or buy.

    Profile photo of British BuyerBritish Buyer
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    TO DICK YORK (AND JAMES AGAIN)

    Nice to hear that both of you are as interested in Miami as I am. 

    Dick, I will be sending you an e-mail. 

    James, feel free to e-mail me (via this site) once I've got further down the Miami road.  I'm not looking to profit in any way from other investors, and therefore my findings will be your knowledge.  I will happily share all information I gain re. bank accounts, LLC's, estate agents, accountants, taxes, and most importantly, what I perceive the market mood to be like when I'm there.

    I should add that I'm not going over to throw all my eggs into one basket, but instead to sniff around and get my foot in the door.

    Let me re-iterate my Miami plan:
    I will fly around the end of this month
    I will be in Miami for about a month (on this first trip)
    I will open the necessary accounts, LLC etc.
    I will purchase at least one property
    I will do my utmost to find current lending, or future lending

    If I find the market to be very favorable (eg. it's possible to get REO's at much lower than the market price) or if I judge that the market is finally bottoming, I shall buy an expensive single-family home or condo (on the water).
     
    If I fail to find great deals, or I think the market is still falling, I will just buy a cheap condo (ie. no water views) or single-family home, and I will use this property as my base for future forays.

    I intend to live in Miami for several months of next year, so am happy to have a house/condo that is for personal use (ie. when I purchase it I won't  necessarily be considering it's rental returns).

    Profile photo of British BuyerBritish Buyer
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    reinvestor wrote:
    Hey all check this out:

    http://finance.yahoo.com/real-estate/article/110907/which-cities-face-biggest-housing-risks?mod=realestate-buy

    This might help out your decision about Miami.

    Cheers

    TO REINVESTOR

    Thanks for your post, and for the warning.  The article was very interesting, pointing out that more than 57% of all households in Miami are spending more than 30% of monthly income on servicing their mortgages.  The warning is that a large percentage of these households will go into foreclosure as a result of having to spend too much of their income paying off their mortgages.

    Although the article was written recently, it covers 2009 data, and therefore explains clearly why so many foreclosed properties hit the market this year, and will continue to do so.

    However, I see such information not so much as a warning than as an invitation to buy.

    If Miami were not suffering so many foreclosures, and if the economy was in a much healthier shape (as it is in Texas and Kansas) then I woudn't be considering going there.  I'm not even considering Los Angeles (despite high foreclosure rates) simply because the property prices there are already creeping up.

    I want to choose a city that is in very dire straits, and will continue to be for at least another year, since that's how long it'll take me to get my portfolio going.

    Also, my tactic is not to choose a city that's doing well, or already in recovery.  More important (I believe) is to find a city that was booming before, and is out for the count now.  If it boomed before, it should do so again.

    Here is an interesting graph showing Miami's unemployment rate for the past 20 years:
    http://www.deptofnumbers.com/unemployment/florida/miami/

    You can see that before the recession, Miami's unemployment was 3%, a lot below the current 12.8%!

    Compare this graph to that of Detroit's:
    http://www.deptofnumbers.com/unemployment/michigan/detroit/

    Detroit's unemployment before the Global F. C. was about 8%.

    Profile photo of costa79costa79
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    Hi guys,

    I’m from Australia and have had my eye on buying an investment property in the US for a while now and even more keen since the AUD is at record highs.

    I’m researching Miami and Tampa, Las Vegas, and Austin. I’m looking for the best trade-off between good capital growth and rental income. I’m most interested in Florida at the moment and more so Tampa over Miami. (Tampa because of the apparently lower crime rate/gang activity).

    I have no experience in purchasing property overseas, however I have very good contacts (property developers) in Australia that have good contacts and resources in the states. I am traveling to the US later this month or sometime in November.

    I suppose I want to learn as much as I can from the members of this forum, as well as post my experiences and what not.

    Profile photo of British BuyerBritish Buyer
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    TO COSTA

    I also looked extensively into the Tampa market, for 2 reasons: firstly because Tampa statistics are included in the Case-Shiller top 20 cities monthly reports, and secondly because I lived in Tampa back in 1988 as an 18 year old undergraduate student of the University of South Florida.

    Tampa is certainly a viable option.  It's difficult to say exactly why my roving eye moved on from there, and finally settled on Miami (basically, I spent about a week researching Detroit on Trulia.com, then got worried about the future of that city, and spent the following week looking at Tampa, but then finally decided on Miami). 

    I think the reason for settling on Miami was because that city is more famous, is the state capital, has more tourism potential, and also because it has more natural beauty than Tampa. 

    Tampa, however, has cheaper property, similarly high foreclosure rates, and as you mentioned, less crime. 

    Let me know what areas you're looking at, and I'll tell you if I ever visited there (I used to live in Temple Terrace, which is a very beautiful suburb, but foreclosures might be hard to find there).

    Profile photo of gibbo1gibbo1
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    Hi all,

    I’m another thinking of taking the plunge with the US market. I have been thinking of traveling to the states for awhile. Now with the USD and my thoughts of purchasing property there, now may be the best time to do it. I will follow this thread closely. Sounds like there are quite a few Aussies out there with some good contacts.

    Profile photo of SissaNoelSissaNoel
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    Hi Steve,
    Have been following your posts with great interest – hope all is well after the flooding.  I've been looking closely at investing in the US at the moment, and am also inclined towards Miami at this point.  Your posts have been extremely useful in this regard – you are obviously well-researched and experienced, and I'm sure everyone following is most grateful for your willingness to share this hard-earned knowledge! 
    My aim is to buy at least one property in the near future, but I'm also interested in your views for the next few years re: the Miami, possibly wider Florida, market.  Are you anticipating any form of 'double dip' in real estate prices there, but still consider going in now is worth it anyway?
    I've been reading Harry S Dent Jnr's book 'The Great Depression Ahead – How to Prosper in the Debt Crisis of 2010-2012' , which is giving me a deeper understanding of the points you've been making above.  He and his team believe the US is in the 'eye of the storm' and will go through another dip within the next few years (although notes Florida is a great opportunity).
    I'm interested to hear your views on this and how it may have factored into your decision to buy now.  I see from above that you're intending to buy at least one property shortly (which is also my intention), so will be interested to hear how you get on when you're over there, and how everything looks 'on the ground'. 
    Regards and many thanks,
    Melissa
    (Canberra, Australia)

    Profile photo of James2118James2118
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    @james2118
    Join Date: 2010
    Post Count: 27

    One little warning I found when I was doing some research into investing in USA, because I initially did not see it myself and did not realise how much an impact it can make.

    Property Tax is vastly different to what we have as an equivalent in Australia in rates I suppose. Because the property tax is the major supplier for funding for public schools in the area, they are generally alot higher than land rates in Australia. It is slightly complicated as it varies from state to state but for the purpose of this board I tried to find out exactly how Florida works.

    Below is a quick example of how their tax system works.

    "Example: Assume Homestead A has a market value of $400,000, an accumulated $100,000 in Save Our Homes protections, a Homestead Exemption of $50,000, and the millage is 5 mills:
    • $400,000 – $100,000 = $300,000
    • $300,000 – $50,000 = $250,000
    • $250,000 X .005 = $1,250 (Total Property Taxes)"

    Unfortunately for investors, alot of these exemptions are not applicable to us as a lot of them are for owner occupied houses. So, typically in the above example, you may end up paying tax without any of the exemptions, obviously it is important to get an accountant in the US who knows all about this, but it seems you would end up paying tax on the whole $400,000 and at the millage of 5 mills, $2,000.

    Another thing to be careful for is that they determine as the Assessed Value, it can be very different to what is the market value of the house.  The link below has some information and an example table how the assessed value can work well if property prices rise as the assessed value is capped at market value, and then capped in growth by 3% or the CPI, whichever is the lower

    http://www.brevardpropertyappraiser.com/mainhtml/howis.asp#exampletable

    The millage rate varies county by county as well across the State. The link below has millage rates by county over the past 6 years (although not current to 2010). Again I am not an expert but I assume you add the millages together to get the total millage that you have to pay. And I believe Miami is in the Dade county (correct me if I am wrong) so overall for 2009 there was a millage of about 7.8 mills.

    http://www.scribd.com/doc/19471833/Florida-County-by-County-Millage-Rates-20042009

    Overall it seems that property tax is not too bad in Florida, I have not looked into it myself but I have heard that in some states in USA property tax can reach up to 3% of assessed property value, which as you can imagine can be a very significant chunk of your profits.

    But I must stress that again it is best to talk to an accountant who knows alot more about this than I do.

    Profile photo of British BuyerBritish Buyer
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    gibbo1 wrote:
    Hi all, I'm another thinking of taking the plunge with the US market. I have been thinking of traveling to the states for awhile. Now with the USD and my thoughts of purchasing property there, now may be the best time to do it. I will follow this thread closely. Sounds like there are quite a few Aussies out there with some good contacts.

    TO GIBBO

    I'm not an Aussie, but sure wish I was one, since your currency and economy are powering along.

    I'm using Chinese RMB to buy property, which is an undervalued currency (by about 40%), and is linked to the US$.  So when the dollar goes down, our already undervalued RMB goes down as well.  Very annoying.

    If I were to leave all my RMB in China, I'll definitely earn at least 40% return over the coming 10 years as the currency rises.  However, I believe that 40% return isn't anything like what I could get in the US property market.

    Here's an example of what US$100K would do if left in China invested in the already very expensive property market:

    $100K buys $300K of property (33% downpayment), which might increase 20% over the next 5 years = $360K
    Your monthly mortgage payments will be $1,300 but you'll only get $570 in rent, so you'll lose $730 every month
    Which is a total loss of $44,000 over 5 years
    If you sell for $360K, then pay back the $200K you borrowed, minus the $44K you lost, you're left with $116K
    That's only a 16% return.
    But if the RMB increases 20% (which is probably the maximum the government will allow) you'll have $139K
    Ie. a total return of 39% in 5 years (not bad, but not stellar)

    The same $100K invested in the US for 5 years would also buy you $300K of property (33% downpayment)
    Which I believe will at least double in price in 5 years (I believe US property prices will more more than double in the next 10years, but anyone who buys discounted REO houses can definitely see a doubling of price in just 5 years)
    So the $300K will increase to $600K
    Your rental return will pay your mortgage, HEO fees and property taxes, and you might even have a bit of profit left over.
    If you sell for $600K, then pay back the $200K you borrowed, you're left with $400K
    That's a 400% return on your investment.

    I KNOW ANYONE READING THIS IS THINKING THE ABOVE IS ALL JUST HYPOTHETICAL

    And it may well be.
    Anything could happen.  Al-Qaeda might take over Washington DC and impose Sharia Law.  The Chinese might invade and install a puppet communist government and outlaw private property ownership.  Global warming might cause sea levels to rise so high that Florida disappears.

    But I'm banking on the status quo, that America pulls itself together and returns to the path that made it the richest country on the planet for the past century.

    Also, I'd like to mention that the profit predictions I calculated above are exactly the same I made here in China 6 years ago when I saw my Shanghai apartment price begin to rise.

    Unlike all my neighbours, who suddenly felt much richer and started taking more overseas vacations, I sold my apartment (just 8 months after buying it) and bought 2 more, and so on and so on and so on…

    Profile photo of British BuyerBritish Buyer
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    SissaNoel wrote:
    Hi Steve,
    Have been following your posts with great interest – hope all is well after the flooding.  I've been looking closely at investing in the US at the moment, and am also inclined towards Miami at this point.  

    Are you anticipating any form of 'double dip' in real estate prices there, but still consider going in now is worth it anyway?
    I've been reading Harry S Dent Jnr's book 'The Great Depression Ahead – How to Prosper in the Debt Crisis of 2010-2012' , which is giving me a deeper understanding of the points you've been making above.  He and his team believe the US is in the 'eye of the storm' and will go through another dip within the next few years (although notes Florida is a great opportunity).
    I'm interested to hear your views on this
    Regards and many thanks,
    Melissa
    (Canberra, Australia)

    TO MELISSA

    Thanks for your post, and your concern.  The floods have receded, and the tropical skies of Hainan are blue again.  Although the floods brought much personal tragedy to people living in houses (as opposed to highrises) I was lucky to escape with only a flooded car engine.

    I wish I could get my hands on the book you mentioned, but alas there aren't any English bookstores in Hainan.

    I'm following the US economic news closely (my favorite website is http://www.bloomberg.com) and don't see any silver linings in the storm cloud hanging over Florida.  Unemployment seems to be worsening, and this whole fiasco with banks forging papers to speed up foreclosure filings is very worrying.  I think I'll make a separate post about this issue below.

    Therefore, it is very important that one maintains an open-mind, and doesn't act on emotion but on instinct.  Many investors like to believe that the Trend is your Friend, and although I have always been the kind of person who hates following the pack, joining the herd can certainly make people rich. 

    But we, as overseas investors, don't have the luxury to wait for the US herd to break free from the swamp into greener pastures.  Metaphors aside, if US property prices were already beginning to rise and you went over to start buying, you'll be too late to make serious money.  I say this because we need to have earned US credit history by the time prices start going up.

    The only way to make big money in property is by leveraging.  If you can't leverage, don't buy property.  Go for stocks instead.

    Profile photo of British BuyerBritish Buyer
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    James2118 wrote:
    One little warning I found when I was doing some research into investing in USA,
    Property Tax is vastly different to what we have as an equivalent in Australia in rates I suppose. Because the property tax is the major supplier for funding for public schools in the area, they are generally alot higher than land rates in Australia. It is slightly complicated as it varies from state to state but for the purpose of this board I tried to find out exactly how Florida works.

    Overall it seems that property tax is not too bad in Florida, I have not looked into it myself but I have heard that in some states in USA property tax can reach up to 3% of assessed property value, which as you can imagine can be a very significant chunk of your profits.

    But I must stress that again it is best to talk to an accountant who knows alot more about this than I do.

    TO JAMES

    Thanks for bringing up this worrying issue of property taxes.  I also find US property taxes to be extortionate, especially considering that here in China there are NO property taxes and NO rates!

    But I doubt that property taxes will ultimately affect the upward potential of property prices, simply because everybody is equally subjected to them.  It's a bit like HOA fees for condos and townhouses.  People don't shun these kinds of properties just because of HOA fees.

    One way that property taxes might affect home prices is if one region or city is taxing more highly than others.  I found this to be the case in Detroit, and that's why I stopped considering buying property there.

    I think one needs to always keep property prices in mind when buying.  For example, my instinct tells me to buy older, badly cared for properties that are in nice areas.  The lower purchasing price should mean lower property taxes.  Then fix up the property, rent it out, and when it eventually sells for a high price the buyer will be the one paying high property taxes.

    Profile photo of British BuyerBritish Buyer
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    Hi all

    Last night I paid for my ticket to Miami, departing 27 October, returning to China 26th November.

    There's no turning back now.  I'm firmly committed to the Miami route whether it be the best option in the US or not, so I was most happy to read the following article on this morning's Bloomberg News:
    http://www.bloomberg.com/news/2010-10-08/buying-beats-renting-as-foreclosures-cut-home-prices-in-texas-california.html

    Here's an excerpt:

    Buying Beats Renting as Foreclosures Cut Home Prices in Texas, California

    Arlington, Texas, topped the list of the cities in which buying was a better value than renting, followed by Fresno, California; Miami; Mesa, Arizona; and Phoenix. Trulia compared the average rent on two-bedroom apartments and other rentals in its database with total homeownership costs, including mortgage payments, taxes and insurance, in the 50 largest U.S. cities.

    Although Miami comes in third on that list of the 50 largest cities, only Miami and Phoenix are state capitals, Miami is definitely the largest and most famous, and only Miami has a thriving national and international  tourist industry. 

    Note the absence of other large cities, or those cities with notably low property prices (eg. Detroit, Atlanta).

    Here's another quote from the same article:

    Florida, Arizona and California had the highest U.S. foreclosure rates after Nevada in August. One in every 155 Florida houses received a foreclosure notice, 2 1/2 times the national average, according to RealtyTrac. In Arizona, one in 165 homes got a filing, and in California one in 194 did.

    And if you want to know which cities have the most unaffordable house-prices, read on:

    New York topped Trulia’s list of cities in which renting was more affordable than buying. It was followed by Seattle; Fort Worth, Texas; Omaha, Nebraska; and Sacramento, California.

    I was not surprised to find New York topping that list, but was surprised that the state capital of California is in the top 5 most unaffordable cities, especially considering the high rate of foreclosures in California. 

    Profile photo of James2118James2118
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    Very exciting to hear Steve, I cannot wait to hear about how it all goes for you and also I want to say thank you for being so open and willing to help others as well, it is very refreshing to see such honest and genuinely nice people .

    On an unrelated note, does anyone know of a way you can upload a spreadsheet to show people and get their opinions and possible suggested improvements? I have been working on one the last couple weeks about property investment and curious if it is accurate, useful and if people would find it interesting perhaps.

    Profile photo of British BuyerBritish Buyer
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    Hi James

    About your spreadsheet project, are you able to convert it to an image (eg. a jpg or bmp file)?  If so, you can upload it onto any of your posts on this website by using the Insert/Edit Image (the tree) you see on the header when you're writing a new post.

    If not, you may be able to google-search for a free site that allows you to upload spreadsheets for general viewing, and then provide a link to it.

    Thanks for your kind words, but I'm not always a "genuinely nice" person.  I always try to be fair and honest, but when I want something (in business) I always but my own interests first.  The reason I'm writing on this forum is because I enjoy sharing information with others so long as it isn't in my interests to withhold information. 

    I'm the kind of guy whom, if you met me in a Traveler's Hostel on your first day in Madagascar, and I was just leaving after touring the country for a month, would spend hours poring over maps while giving you advice and ideas.

    I'm currently working on trying to secure financing (in the form of pre-approval) and will let you know how that turns out.

    Ciao
    Steven

    Profile photo of dhillon2dhillon2
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    Hi all,

    Thank you so much for all your entries. My husband and I are going to invest in property in Miami – and as you can imagine, we have had all sorts of arguments against the decision from our friends (and ourselves). Its so encouraging to see that what we’re planning to do isn’t completely absurd and that there are others who hold similar worldviews.

    Abit about us – we started investing in property almost 5 years ago. Last year, we became financially independent. Our next goal is to create some serious wealth!

    I agree that ultimately, after all the due diligence research (and a sprinkle of speculation), picking the exact state and county to invest in the US will be boiled down to gut-feel. There’s so many pros and cons, so it really depends on what you want?

    We’re planning our next US trip in early 2011, as we are still in the process of tying up lose ends and setting up our finances here.

    The plan is to purchase property outright with cash, build up our credit rating in the US for 1 year, then re-finance the properties after 1 year to borrow more money and leverage. The other option some foreign investors are doing is vendor financing (more complicated, but at least some form of leverage – if you can’t get a conventional US home loan).

    Looking forward to future posts by Steve (British Buyer).

    Profile photo of James2118James2118
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    http://www.wiziq.com/emailverification.aspx?RCIorOiOf%2bAbJx%2fMh1zU%2bQiqkOnEUUwp6UQDRAbeHdbmLXoMzyMusMGjMBSxpahFRnr2%2f4og0iGuW5WiME6buldVOiG58ixXD4XgxaINgoj%2fR4%2f77X0hDrDjQeSeN8gj

    The link above is meant to take you to download the spreadsheet I was talking about earlier, unfortunately I am not sure if that link works or not. I could not find a good place to upload spreadsheets where people could access them easily, and I could not be bothered making my own website either.

    http://www.wiziq.com/james-hutchinson935561 – That is the link to my profile on the site, I just made it and I am not sure how the site works, the spreadsheet should be uploaded in my content, but I am not sure how you can find that on peoples profiles.

    I guess if you were really keen you could give me your details in a personal message and I could send you an email with the spreadsheet. That would not be much of a problem. Hopefully the links above would work though.

    Profile photo of dhillon2dhillon2
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    Hi James,

    Your first link worked beautifully! I’m using Google Chrome. The downloaded attachment opens directly into MS Excel.

    Thanks for sharing the resource!

    Profile photo of ricky7ricky7
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    Hi All,

    I was just reading something on 'Money Morning' called the "Mortgagegate" crisis, it may be relevant to investors who
    want to buy foreclosure property in the US.
    Written on the 15th Oct. 2010 the article touchs on "robo-signing" of foreclosure documents and (MERS) Mortgage Electronic Registration Systems.

    Good Luck,
    Ricky

    Profile photo of British BuyerBritish Buyer
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    Hi, hope your all having/have had a great weekend

    I'm exhausted after surfing today.  Hainan is getting the weirdest weather.  If you've followed my previous posts you'll know we suffered the worst floods in 50 years about 2 weeks ago.  Now it's HAPPENING AGAIN!  Hopefully we won't lose power/internet and get cut off from the outside world like last time.  The only upside is the swell is huge, coming in from the northeast like steam trains.  I'm seriously beginning to wonder if the earth's weather isn't changing due to global warming.

    It was nice to get out of the house today, and away from my computer screen.  I've been putting in way too many hours applying for mortgages in Miami, and following (and trying to decipher the consequences of) the Foreclosure Fiasco (otherwise known as the Foreclosure Moratorium).

    If you haven't been following the Foreclosure Fiasco, it is simply that all the big banks have been caught rushing through the paperwork on foreclosures for the past few years, in a process now referred to as robo-signing.

    Actually, when I first started looking into the US market about 3 months ago I was already reading random reports of lawyers claiming that some or other bank had no right to kick some or other  homeowner out of his house because actually THE BANK TRYING TO KICK THEM OUT DIDN'T EVEN OWN THE MORTGAGE, even though that was the bank that the homeowner applied for his mortgage through.

    What happened at the height of the bubble in 2004/2005 was this: banks lent so much money to buyers at such a high speed that they would have had no more money to lend out if they didn't come up with a plan.  And that plan came knocking on their doors in the form of Wall Street, which promised to buy their mortgages off them.  Wall Street then sliced the mortgages up into little slivers and glued these slivers together (called re-packaging) and sold these toxic securities to unsuspecting investors (including the government of Iceland, which is why that country went bankrupt in 2008).  The banks then took the money they got from Wall Street and lent it to new homebuyers, and then sold these new mortgages on Wall Street etc. etc.

    5 years down the road, the result is that the bank who gave Mr X his mortgage isn't actually the owner of that mortgage anymore.  The problem is, the bank doesn't even know who now owns the mortgage, since little slivers of Mr X's mortgage were sold to different people/institutions/governments.  The banks have been "banking" on the fact that all the Mr Xs don't realise this fact, and have been kicking all the Mr Xs out of their homes by faking signatures of the people who supposedly own the mortgages.

    Unfortunately for the banks, some savvy lawyers started seeing through the trick a while back, and have been successfully suing banks for fraud on behalf of their clients (the homeowners who haven't been paying their mortgages).   This has been happening for months in a happy equilibrium, because the homeowners tend to win the case and keep their homes because the banks just want to settle quickly and quietly, happy to just pay off one Mr X so long as the other million Mr X's don't cotton on to the fraud being committed by the banks.

    But inevitably, the problem started to snowball about a month ago, as the stories being told by these savvy lenders started being covered more and more by the media.  Now the problem has got so big that all the big banks have stopped foreclosing on homes, and have stopped trying to sell homes that have already gone through the foreclosure courts.  The banks are too scared to sell these homes for fear of being sued by all the Mr X's who're now watching CNN and phoning their lawyers to see if there isn't a quick buck to be made by suing the bank that foreclosed on them.

    I must post this now because my 2 year old son needs attention.

    Profile photo of British BuyerBritish Buyer
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    So what does this Foreclosure Fiasco mean for property prices in Miami?

    That's the million dollar question.  I've posted this question on the Trulia.com forum, and a number of Miami agents have answered it.

    Here's a summary of their answers:

    1. there are currently very few foreclosed (REO) homes on the market at present.  All the big banks have taken them off "temporarily" while they "review the related documents to make sure there aren't any irregularities".

    2. buyers are curently having to purchase Short Sales, or by-the-owner sales, both of which sell at prices much closer to the market value (Realtytrac claims it's stats show that REO's usually sell for more than 30% below market value).  Therefore, according to most agents, prices will rise in the short term.

    3. prices will decrease further in the longer term because:

    A. there will suddenly be a glut of foreclosed homes when all the "paperwork" has been cleaned up and banks release several months' backlog of homes all at once (some agents are saying this will happen in the 1st quarter of 2011)

    B. many buyers of foreclosed homes will be scared away from the market altogether, due to the fear of buying a home that later goes into litigation

    A number of articles have appeared on Bloomberg and Reuters stating that the Foreclosure Fiasco is definitely going to hurt prices "next year".  Even Obama is scared, and he is promising to speed the review process up so as to get business back to normal ASAP, for fear that this new scandal pushes the US back into recession.

    Last week, US bank stocks all took a beating.  For example, Bank of America stocks lost 9%, showing just how seriously investors are taking this new crisis.

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