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2007 (3)
Monday, June 11, 2007

High-rises, high hopes

High-rises, high hopes

BY ANDRES VIGLUCCI AND MATTHEW HAGGMAN

aviglucci@herald.com

 

COURTESY OF THE TERRA GROUP

BIG PLANS: In 2005, this rendering of the condo tower was envisioned for the area behind the historic Freedom Tower.

In downtown, from Brickell Avenue north to the Edgewater neighborhood, up the Miami River and down historic Coral Way, great chunks of Old Miami are fast disappearing in a cloud of dust. In its place, the New Miami -- a dense, steel-and-glass forest of condo towers -- is rising from the rubble.

 

The scope, scale and speed of the transformation are breathtaking. More than 114 major projects, most of them high-rise condos, are under construction or in the planning stages in the urban core along Biscayne Bay.

 

Citywide, developers are proposing more than 61,000 new condominium units -- eight times the number built during the past decade.

 

The projects encompass the tallest skyscraper in Florida, a 74-story spire higher than any residential building south of Manhattan, almost four million square feet of new retail space (nearly as much as two Aventura Malls) and parking for more than 100,000 cars.

 

''You have a wave of development underway here in Miami that is unprecedented, bigger than anything, bigger than Hong Kong in the boom years of development,'' said former Portland, Ore., councilman Charles Hales, a transportation consultant working on a plan for a Miami streetcar line.

 

Not since the post-World War II housing boom that multiplied Miami-Dade County's population fivefold, to more than one million people, has the region experienced anything comparable. But that took almost 20 years.

 

''We are building an instant city; what should take 15 years will take three,'' said Michael Cannon, a Miami real-estate analyst. The boom struck suddenly, unexpectedly, first a trickle of projects, then a torrent. Cash has poured in from Latin America, New York and, increasingly, Europe, the result of converging market forces -- slashed interest rates, a cheap dollar -- and a worldwide infatuation with Miami among the chic and moneyed.

 

It all amounts to a multibillion-dollar gamble, outdoing in risk and bravado the 1920s boom that made Miami a modern city: That given waterfront location, a sunny climate and a hip, international culture, intensive downtown residential development can catapult Miami into the first rank of world cities.

 

Elected officials, in particular Miami Mayor Manny Diaz and Miami Commissioner Johnny Winton, are counting on the boom to reverse downtown's long decline, to turn its seedy blocks and outlying neighborhoods into a scintillating, working urban hub with a vibrant street life.

 

''Just five years ago we were broke; we had zero development,'' Winton said. ``I'm going to bet you that when we're done -- I don't know when that will be -- historians will identify this as the most significant and rapid transformation of an American city.''

 

What precisely will the boom deliver? It's too soon to tell, experts say.

 

But this convulsion of development is already remaking not just Miami's skyline, but its streets and neighborhoods and likely its population, too.

 

If it stays on track, the boom promises a fundamentally different Miami -- more urban and congested, but also more cosmopolitan and, given the high prices the condos command, probably wealthier.

 

It also raises serious concerns. In the absence of a ready plan, how will the city cope with thousands of expected new residents and the traffic they will generate, given antiquated infrastructure, limited public transit and a shortage of parks and open space? Will Miami residents, among the nation's poorest urban dwellers, be displaced or priced out of new housing?

 

That is, if the planned condos actually get built, sold and occupied.

 

As the boom takes on the feel of a gold rush, real estate analysts, bankers and even some developers fear it's a mirage, a bubble fueled by speculators looking to resell condo units for a quick profit, and not by true buyer demand.

 

If developers build too much, and speculators can't find buyers for resale, the boom could bust, leaving Miami littered with vacant and bankrupted buildings or, worse, unfinished towers and bare lots.

 

SIGNS OF FUROR

 

For now, though, signs of the furor are everywhere.

 

Sales centers for multimillion-dollar condos that tout the merits of high-rise living sprout up across the city. Brokers push Miami condos in farflung locales, from Caracas and Bogotá to New York and France's Cte d'Azur. Lavish condo parties are thrown by developers several times a week, and advertisements for the high-rises fill the pages of local magazines and newspapers, including The Herald.

 

Downtown Miami is a thicket of construction cranes. Much of the landward side of Biscayne Boulevard has been razed, and the footings and columns of what will soon be a wall of six colossal condos, each more than 50 stories, are becoming visible.

 

''Where else are you near the water, 10 minutes from Miami Beach, 15 minutes from the airport and have access to public transportation?'' said Daniel Kodsi, chief executive of Boca Raton-based Royal Palm Communities, which plans a high-rise condo called Paramount Park across from AmericanAirlines Arena.

 

There is so much building that developers are struggling to find qualified contractors and subcontractors.

 

Sales and resales in the mid-six figures, and well beyond, have become commonplace. Towers of 300 units sell out in a day, with buyers coming in the main not from Miami, but from other parts of the country and the world.

 

''Miami, New York and Los Angeles have become the three cities in the U.S. where people want to be,'' said Joe Cayre, chairman of Midtown Group, which is building eight condo towers on the site of the old Florida East Coast Railroad yards in Wynwood.

 

They are people like Sal Loduca, who plans to leave Manhattan and his family's Long Island food business to open a brick-oven pizzeria at Cayre's Midtown Miami.

 

''Everyone's making the move to Miami. How could you not? It's a great opportunity. Miami's full of life,'' Loduca said.

 

`CRITICAL COMBUSTION'

 

Real estate broker Philip Spiegelman calls the confluence of factors propelling this boom a ``critical combustion.''

 

Among them:

 

• Across the country, young people and so-called ''empty-nesters'' have been returning to urban centers, in part because of long, wearing commutes from outlying suburbs. At the same time, a dwindling supply of easily developable land in western Miami-Dade and Broward counties has prompted developers to look eastward.

 

• A shortage of waterfront property elsewhere led developers to Miami's acres and acres of vacant bayfront land.

 

• Low interest rates have fueled record home-buying, while aging baby boomers are increasingly seeking second homes in sunny or exotic places.

 

• A cleaner local government has made Miami attractive to lenders and investors who once thought the city too risky, unsafe or corrupt.

 

• The weak dollar has made Miami an alluring bargain for Europeans and Latin Americans. And compared to other urban centers like New York City, Miami remains cheap.

 

Then there is the other factor, anecdotal and unquantifiable: the speculator.

 

''As much as 85 percent of all condominium sales in [downtown Miami] are accounted for by investors and speculators,'' housing analysts at investment firm Raymond James warned in a March report.

 

Banks have started to back off lending on condo projects, or have instituted new rules to avoid giving mortgages to investors.

 

Spiegelman sold the condo units in the Marina Blue condo going up on Biscayne Boulevard.

 

''One hundred percent of the buyers were investors and speculators,'' he said. ``Anyone who tells you their projects are different are deluding themselves.''

 

ZONING-CODE OVERHAUL

 

The pace of development is so furious that it has overtaken the city's planning efforts.

 

Only now is the city getting around to a long-promised overhaul of its outdated zoning code, a complete rewrite meant to ensure that new development produces lively, pedestrian-friendly streetscapes and respects open spaces and established neighborhoods, while weaving it all together into a cogent urban fabric. The rewrite, dubbed Miami 21, will be phased in over two years.

 

Yet more than 100 large-scale projects, most of them in and around downtown, have already been approved or are under construction.

 

Public-transit improvements like Metrorail extensions, a light-rail line to Miami Beach and the contemplated city streetcar are years away, raising fears of gridlock.

 

Quipped Cannon, the real estate analyst: ``Maybe we need to give every buyer of a condo in the urban core a Segway.''

 

There are other worries.

 

Some skeptics, noting the high condo prices and the out-of-town provenance of buyers, fear that instead of the diverse, working 24-hour downtown that city leaders envision, the boom will instead create a seasonal playground for the rich, a Monte Carlo on Biscayne Bay.

 

''I bet those buildings are going to be empty a lot of the time,'' said Joel Kotkin, an urban historian and consultant who has written about the rise of what he calls ''ephemeral cities'' -- places like San Francisco, Berlin and parts of New York that increasingly cater to the rich, the childless young and tourists.

 

''Maybe this is Miami's karma, to be this kind of place, a temporary, hip, cool, nomadic population serviced by a poor population,'' said Kotkin, author of The City: A Global History. But, he added: ``History shows a city has to maintain some sense of a middle-class character if it wants to thrive.''

 

`MISSING LINK'

 

Yet there's relatively little in the new downtown priced for working families. ''The missing link here is in creating housing that the middle class can afford,'' said Rafael Kapustin, a longtime downtown property owner who pioneered the conversion of old downtown offices and hotels into modestly priced condos and apartments.

 

In partnership with a big developer, the Related Group, Kapustin developed two affordable loft condos, with units averaging around $150,000, now under construction in the inner core of downtown. But their Loft II project may be the last of its kind because of the surging cost of land and construction, he said.

 

City leaders are sanguine. They say it will take years for all the planned condos to be built and occupied, allowing time to absorb new residents, build public amenities and improve transit.

 

While few city residents can afford waterfront condos, thousands of moderately priced condos and rental apartments are being built by private developers in adjacent Overtown and neighborhoods like Little Havana and Allapattah, many with direct city subsidies, according to a recent report from Miami Mayor Diaz.

 

`SELF-REINFORCING CYCLE'

 

And gradually, as new residents move into downtown, businesses, shops, restaurants, neighborhood retailers and services will follow, said Neisen Kasdin, a land-use lawyer and former Miami Beach mayor.

 

''It becomes a self-reinforcing cycle,'' Kasdin said. ``Yes, there will be a large segment of temporary residents, but as the city continues to grow as an international business city, it leads to the continued growth of a permanent community.''

 

Meanwhile, the city has instituted measures that strengthen the planners' hand in shaping an attractive, livable downtown: hiding parking garages inside buildings; lining sidewalks with shops, offices, dwellings and restaurants; and keeping garage and service entrances off Biscayne Boulevard and other main arteries.

 

'We used to sit here and say, `Someday,' '' said Miami Planning Director Ana Gelabert-Sánchez, alluding to the city's long-frustrated hopes for a downtown revival. ``Well, someday is here.''

 

Herald staff writer Larry Lebowitz contributed to this report. 

 
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Updated: Sunday, January 23, 2022


Can You Get a Mortgage with Bad Credit?

The real estate market remains hot right now, despite economic headwinds. Many people want to jump in and buy a home or upgrade their current home to a new one for good reason. Interest rates are incredibly low, so now could still be a buying opportunity, despite limited inventory and high prices in some locations.

If your credit isnt perfect, you may wonder if anyone will approve you for a mortgage. The short answer is maybe.

You arent alone if you dont have great credit. Around 15 of Americans have a credit score from 500 to 599, which is considered poor. Around 10 of people have credit in the range of 600 to 649, which is considered fair.

When youre applying for a mortgage, youre most likely to be approved with a score of at least 650, although even anywhere in the 600s can make it challenging. If your score is below 500, youre almost certainly not going to be approved for a mortgage, and beyond that, the following are key things to know.

Conventional Mortgages

Conventional mortgages tend to have the strictest requirements as far as your credit score. Freddie Mac and Fannie Mae are two companies offering conventional mortgages. Freddie Macs minimum credit score requirement is 660, with a down payment of 3. Fannie Maes minimum score for a 3 down payment is 620. If you make a down payment of at least 25, you may be eligible for a Freddie Mac conventional mortgage with a credit score as low as 620.

The majority of lenders follow similar requirements, because usually after your loan is closed, the lender will sell it to Freddie Mac or Fannie Mae.

You should be aware that in the eyes of your lender, theres a difference between having a low score because you dont have much credit history and having a low score because of bad credit history. Youre likely to be viewed more favorably with limited credit than with bad credit.

If youre close to the lending cut-off, you should be able to show that you have a debt-to-income ratio of no more than 36. You will probably also need to show that you have at least two months of cash reserves on hand.

What About an FHA Loan?

An FHA loan may be an option for someone with a very low credit score. You can be approved for these loans with a score as low as 500, but youll have to plan to put at least 10 down.

If you have a higher score, you may be able to put as little as 3.5 down.

Aside from VA loans, FHA loans have the least stringent approval guidelines.

As such, FHA loans are often used by people after a foreclosure or bankruptcy.

FHA lenders dont have to follow the above credit score requirements. They can require that your credit score is higher for approval. Many FHA borrowers have a score somewhere between 650 and 699.

VA Loans

For a VA loan, there is no minimum credit score, but you can only get this type of home loan if youre an eligible service member in the military, a veteran, or the surviving spouse of a veteran. While theres no set minimum score, individual lenders can create their own guidelines.

Should You Focus on Improving Your Score?

If you have less-than-perfect credit right now, you might want to focus on building your score. It can take several months, but its very unlikely interest rates will go up anytime soon based on what the Fed has said so far. The Fed says they expect rates will stay around zero through 2021 and maybe 2022, although theres no guarantee.

If you can make even modest improvements in your credit score, not only are you likely to be approved, but you may also get better terms. Focus on paying down your high-balance credit cards, cleaning up any errors, and in the meantime, also try to save for a down payment. If you have at least 10 for a down payment, a lender will see you as less risky.


> Full Story

Seven Steps to Take to Prepare Your House to Sell in the New Year

The holidays are a wrap, and with the coming of the new year, many people are starting to make their new years resolutions. If selling your home is one of those resolutions, its beneficial to take steps now to prepare your house to sell in the new year. Getting a jump start on this preparation can help your home be ready for the spring/summer homebuying season, an annual tradition that typically sees an increase in buyer demand.

Preparing a house for sale in the new year involves more than taking down the holiday decorations. Some of the key steps to take before putting your home on the market in the new year include:

1. Decide on a listing date

One of the first steps is to decide when you want to put your house on the market and create a timeline for all the tasks that need to be completed before this happens. Work backward from the listing date to establish deadlines for each task. Establishing these deadlines can be a great motivator for getting all of the to dos done in order to showcase your house to its best advantage.

2. Hire a REALTOR

A REALTOR will guide you through the selling process and provide a plan for attracting potential buyers to get your house sold for the best possible price. REALTORS have reams of data and calculators at their fingertips to help you make the most strategic choices when selling your house.nbsp;

3. Give the house a deep clean

Deep cleaning goes beyond vacuuming and dusting. Giving your home a deep clean means getting carpets steam cleaned, mopping floors, cleaning windows inside and out, washing walls to remove stains and scrubbing bathrooms. Consider using professional carpet cleaning and maid services to really make your house sparkle and shine.

4. Get rid of all the clutter

De-cluttering will make your house seem more spacious and make it easier for potential buyers to envision themselves in the house. Start the de-cluttering process by cleaning out closets, cabinets, and garages. Donate clothing and other items of use and throw out items that are broken or cannot be used.

5. Make needed repairs and updates

Leaky faucets, chipped paint, running toilets, and squeaky doors may seem minor but really signal to potential buyers that your home has not been well maintained. To help attract buyers and get top dollar for your home, take the time to make needed minor repairs and consider updates such as repainting rooms with neutral paint colors, replacing worn carpeting, and modernizing bathroom and lighting fixtures.nbsp;

6. Spruce up curb appeal

Sprucing up the curb appeal of your home is an important step to take before putting it on the market. In fact, among REALTORS, 94 have suggested sellers improve their curb appeal before listing a home for sale. This recommendation is so common simply because the outside of your home is the first thing buyers see when they pull up to the curb and as the saying goes - you never get a second chance to make a first impression. Painting or replacing the front door, keeping the lawn mowed and weeded, trimming overgrown shrubs and trees, and repairing cracked walkways are just a few things that can go a long way to sprucing up the curb appeal of your home.

7. Stage it to sell

Staging your home can show it in its best light. The National Association of REALTORS Profile of Home Staging found that 40 of buyers agents cited that home staging had an effect on most buyers view of the home, and 83 of buyers agents said staging a home made it easier for a buyer to visualize the property as a future home. Staging a house can involve things like adjusting furniture layouts to make rooms appear larger, repainting rooms, opening curtains and blinds to let light in and adding extras like fresh flowers in vases, a bowl of fruit in the kitchen and folded towels in the bathrooms.

If selling your house is on your list of New Years resolutions, make sure to take the steps outlined above to get it ready to sell. This preparation can help your house stand out among the millions of homes nationwide projected to sell in the new year.


Jeffrey M. Fagannbsp;is the 2019 president of the Orlando Regional REALTOR Association and is regional vicenbsp;president of Watson Realty Corp.


> Full Story

The Biggest Challenges House Flippers Face

There tends to be a glamorization of house flipping, likely brought about by watching home improvement and real estate shows. The reality is that house flipping can be a difficult and often disappointing undertaking. Thats not to say some house flippers dont find great success, but there are also so many challenges that can come along too.

If youre considering wading into the flipping world, when youre realistic about the challenges, youre already putting yourself in a better position to deal with them.

The following are some of the most significant challenges you might face along the way if you flip a property.

Finding the Right Property

Many homes are not a good investment in terms of flipping. You have to find neighborhoods that will appeal to buyers, but you need properties that are going to be priced below market value in that area. Your goal with flipping isnt to let the property appreciate slowlyits to sell quickly.

Some of the ways you can gain leads for properties well-suited to flipping include looking for probate properties, going to auctions or keeping up with foreclosure lists. Tax lien properties, wholesale properties, and short sales are other options.

You need to do the math before bidding on a property to know the highest price you can pay and still make a profit.

With each home you buy you have to think about the propertys actual value, current conditions of the market, comparable home prices, and how much you think itll cost you to make repairs and upgrades. These considerations have to be weighed against the possible listing price.

Funding

Some flippers can pay cash for properties, but if you cant, it can automatically put you at a disadvantage. That doesnt mean you cant work around this, but its something to be mindful of. For real estate investors, its not uncommon for mortgage lenders to want a significant down payment of 25 or more.

Youll also have to come up with the cash to do the work on the property, pay contractors, maintain the utility bills, and cover closing costs.

Along with planning for everything above, youre going to need a contingency to tap into if things dont go according to plan, which is almost inevitable.

You may be able to use equity from a rental property you already own or get an investor for private funding. Otherwise, your two primary options are a traditional lender or using your own cash, both of which have risks.

Delays

When youre an investor, and you experience delays on a project, it can be incredibly frustrating. Your contractors may have other jobs theyre working on, materials might not arrive on time, or machines and equipment might break down.

Once theres one delay, it often creates a ripple effect.

To avoid some of the impacts of delays, you shouldnt >

Unforeseen Expenses

Above, we mentioned the importance of having a contingency cushion built into your budget, and the chances are very high youre going to tap into it when youre flipping a house.

You might not have known there was mold behind a wall, or a pipe in the wall could burst unexpectedly. Weather and delays can also contribute to expenses you didnt initially account for.

The best you can do to plan for the unexpected is to try to budget for them ahead of time.

Not Understanding the Market

Finally, when youre a house flipper, you absolutely have to understand the market, and its not easy. It takes time, experience and research to grasp whats happening in the market at any given time. Many new flippers just dont get it but they jump in any way.

Its not always the prime time to start a new project. For example, demand might be down, or mortgage rates could be high. There can also be external issues in the local area where you are.

You cant just consider the trends when youre already entrenched in them. A good flipper is ahead of the trends, and you can time your purchases and flips accordingly. Factors to understand include local house inventory levels, trends in mortgage rates, and property values.

If youre lucky, youll find an experienced local realtor who can help you a lot as far as understanding local housing conditions.


> Full Story



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