MARKET HITS BOTTOM

The front page of the Miami Herald announces that the Real Estate Market as truly reached its bottom and the buyers have begun a FEEDING FRENZY of purchases.

As a Realtor, I can tell you.. that is the case. I closed escrow yesterday on an incredibly beautiful Ocean Front residence in Sunny Isles Beach, The Riviera of America. It had a bank value on it in 2007 for 1.25 million. It sold with THREE back up offers,, ALL CASH for $650,000 WOW. THAT is a bargain.. And those types of bargains are being snatched up by the savy investors. They realize that the market forces in play right now are stabilizing real estate in South Florida. The very best deals will be gone within 9 to 12 months and less desirable properties will be what is left. A deal for sure, but NOT the incredible properties that are being sold at 2002-3 levels right now.

The inventory is shrinking quickly. DONT COMPLAIN that you missed the bubble if you dont do what is necessary to get in right now. MONEY IS MADE on the DOWN CYCLE friends,, NOT on the up cycle. UNDERSTAND that and get it in your head. If you jump on a band wagon.. you will be playing second fiddle......always.....

Smart investors LEAD the pack both in selling and in buying. If you are running with the mob, you have already lost the best opportunities.

IMPORTANT LEGISLATION MOVES FOWARD

VERY IMPORTANT legislation is making its way through the US Senate with support in the US House. This bill would establish a non-profit agency to promote tourism in the US.,

Many international governments aggresively help tourism in their countries subsidizing promotional campaigns and programs. The United States leaves that work up to travel agencies, individual hotels, resorts and attractions as well as some State governments.

" This is SO important to us," says William Talbert III, president of the Greater Miami Convention and Visitors Bureau. It has taken 7 years for South Florida to see international tourism to rebound to pre- 9-11 terrorist attack numbers. Why is this important? Miami is the ONLY major tourist destination in the United States that relies on foreigners for over half of its overnight visitors. Miami is truly one of the worlds top International destinations. Numerous studies have been done that support the economic reasoning behind this funding. Independent audits show that an additional 1.6 million visitors would result from this program. The average expenditure of a foreign visitor to the US is $4,500. That is about 800 million additional dollars into the economy annually. In addition, for South Florida, we find that a number of visitors return year after year and over 40% of foreign buyers of our real estate first came here as a tourist. The top four tourist destination cities in the nation are New York City, Miami, San Francsico and Los Angeles.

SO WHERE IS THIS GOING? UP OR DOWN!?

There seems to be conflicting data out there regarding just where real estate IS going in this current financial climate. First, the seemingly BAD NEWS..... New foreclosure filings rose 18 percent in Miami-Dade County and 14 percent in Broward between July and August, according to data released by RealtyTrac, a foreclosure tracking firm. Compared to a year ago, new filings were up by 11 percent in Miami-Dade and 19% in Broward.

In August, roughly one of every 109 homes in Miami-Dade and one in every 79 in Broward were in some stage of foreclosure process in August, up 19 percent and 24 percent from July respectively. Those figures include homes that have received a notice of default, have been scheduled for auction sale and were repossessed by lenders.

Banks took back 699 properties in Miami-Dade and 1,414 in Broward in August.

Now for the BIG PICTURE and the BRIGHTENING PICTURE.

1) These figures are a slight up tick in foreclosures which is typical in summer months. Especially in South Florida, real estate sales dip in summer as well as economic activity. High season and job creation take place in the winter with our number one trade, tourism.

2) Absorption of inventory and the average price of a home are the true gage of property and future values. These two indexes are linked. Its simple supply and demand.. The more units available, the lower the price. If absorption is brisk and inventory shrinking, then prices stabilize. Absorption and sale rates have been on double digit rises both in Miami-Dade and Broward for the last 7 months in a row. Inventory of Condo units in Miami Dade have shrunk from a high of about 16,700 last October to just over 11,000. That is a brisk absorption rate.

Median prices of condos and homes in Miami Dade have stabilized over the last 4 four months which is an encouraging sign. Since this stabilization is taking place in the summer months, that is a very good sign. 74% of sales have been of foreclosures, Short Sales or REO's. There have been many overseas investors with all cash deals snapping up the best properties.

I have one property that is in escrow that was appraised by the bank at 1.3 million in 2007. It is in escrow for $650,000 and is a Class A beach front 2,100 sqft condo in Sunny Isles Beach.

Truly, the deals are at their best. The market is beginning the turn... Every broker I have spoken with sees this. There are many buyers back in the market but they are picky, shopping for the best deals and usually have a heavy cash investment. What I AM seeing in the last several months is multiple offers on properties as the very best deals dry up. And yes, I have even seen buyers BIDDING against each other, driving the price up.

Interest rates are at their lowest levels in MANY years, Property values are almost at replacement values for land and materials. And of course, like all business cycles, this will not last. Inflation is already on the horizon with all the government spending. The dollar has been weakening for weeks. Watch the price of OIL and you will see where we are headed. OIL is traded and pegged to the US dollar. As the value of our currency erodes, the price of oil will go up as will REAL ESTATE and INTEREST RATES. NOW IS THE TIME! You heard it here first.

DO THESE ABC's

(A) If you are in a mortgage at more than
7% or in an ARM loan. REFI NOW!

(B) IF you are looking for a new property, get on the 8 ball NOW. It will take you months to close and if you are financing, you are running the risk of a higher interest rate on your mortgage.

(C) GET RID of all revolving debt on cards etc. Whatever you have to do to acheive this.. DO IT. Those rates are headed UP and they also affect your credit rating AS those rates go up and may hinder you in getting a home loan.

Walking over Adversity

Adversity, whether the financial times, co-workers, the boss, or the simple stress of the work load can rob a business person of time, attention and emotional strength.

To overcome these and a host of other hurdles, the REAL LEADER in the business world will step up to the challenges with a CHANGE OF MIND! Having the right mind set is critical to success in business regardless of the business climate. Keep in mind that during the depths of the depression, still 80% of the nation was employed and fortunes were still made. You have a choice.. Give in to adversity or simply walk over, or around it.

1) Think What is Possible, NOT what CANT be done

Victims make themselves so. They come at problems with a " there is nothing I can do about it" attitude. Well that is true in one sense.. If you DO nothing.. you will GET nothing. There is always something you CAN do and NOT give up, or give in. NEVER accept NO as the final answer.....EVER.

2) Stay Positive

Be a person who, and even if necessary forcing yourself to do so, says......" The glass is half FULL, not the glass is half empty." Some people, many people, are raised with a half glass mentality. Successfull people shake off that old thinking and always look for the opportunity in the pile of mess or adversity. Even in the basement barrel of life, there is always a gem waiting to be plucked. If you just assume there is nothing of value to learn or to be gained from a situation, you will never find the gem hidden in the garbage.. SOMEONE ELSE with the right attitude will steal your opportunity.

3) Learn

Knowledge IS power. Never ever stop learning. Dont get lazy at what you do and run on the automatic cycle. You will be quickly eclipsed by others that take the initiative to get smarter at what they are doing. When business is bad, take the time to learn more about what you do... how to do it better and come up with innovative ways to do what you do, cheaper, smarter and more effectively. There is always another way of trying something. It doesnt hurt to try.

4) Set a Target

When you go on a trip to some place you have never been, do you just get in the car and start driving? How stupid is that?! You pull out a map.. or if you are smarter, you go on Mapquest and get directions and ALSO what the traffic conditions are so you avoid time delay and ADVERSITY. No one really achieves a goal without setting the goal first. Can you imagine a race where the finish line is...well....... ambiguous? The runners would be wandering all over the track. That might be entertaining and a good laugh, but I dont think the breakfast of champions would ever want the contestants on the front of a Wheaties box. Set definable goals.. Even if for just ONE DAY and stick to it. Check off the progress and make yourself succeed by determined choice.

5) Take Responsibility

I love this one. A real Leader never passes the buck up or down. Passing UP the buck means blaming bosses or managers for your own failure or lack of success. Remember the victim thing? STOP IT. GROW UP! Passing it Down means blaming those below you for your failure.. "if only they had done it the way I told them....." So why didnt they? Its still YOUR repsonsibility. Be a better mentor and get it right. OR Stay and DO IT right no matter how long it takes. You are only helping yourself by, without complaint, doing things the right way. When you do that, the job gets done and those watching learn from your success. Its as simple as walking through your office parking lot and picking up the trash on the way in instead of waiting for "THEM" to do it. I never actually met "THEM" Im sure they are the Mother Theresa of trash removal. But they have never shown up at my office yet. If my staff sees ME picking up other peoples CRAP in the parking lot every day ( and this includes thier crap) they will get the idea that this is the CULTURE of our business to be the best and look the best at all times. If they dont catch on...then there you go...you are flying with Turkeys. Either they morph into Eagles by your example or be stuffed for Thanksgiving.

Attitude; RIGHT attitude will always eclipse Adversity.