You can still find deals on the MLS, but it’s very challenging. Prices are pretty stable. We’re still seeing some appreciation, but it’s nothing like two years ago when we saw 20 to 30 percent appreciation. It’s very normal appreciation.
GABRIEL GARCIA
available, Broward County is essentially built out; although, Palm Beach County has land available in its Western region. “You have a lot of people moving into the Southeast Florida market because it is desirable, there’s no state income tax, the weather is a draw and it has a growing economy. People moving into this county have a big housing problem. They’ll trade housing where they are for weather out here.” As for Garcia, he is doing some buy and hold but mostly wholesaling at this point, estimating that he will do somewhere around 110 wholesale deals this year. From an investor’s perspective, he looks for invest- ment-grade properties off-market through his direct mail and on-line advertising efforts, taking them down and flipping them. According to ATTOM, flips accounted for 7.2 percent of total home sales in the Miami metro area during the first quarter of 2019, a four percent increase from the same quarter last year. Median purchase price for a flipped property in the quarter was $173,550 while flipped prop- erties sold for $250,000 for a gross return on investment of 44.1 percent. The average flip reported for the quarter took 189 days.“You can still find deals on the MLS, but it’s very challenging. Prices are pretty stable. We’re still seeing some appreciation, but it’s nothing like two years ago when we saw 20 to 30 percent appreciation. It’s very normal appreciation,” he said. Foreclosures, which were a staple for investors in the metro’s real estate market during the recession, have reduced dramatically. For 2018, the metro area reported a total 19,272 properties with foreclosure filings, a freefall from the 171,704 properties with foreclosure filings reported in 2010, and the metro area with the 18th highest foreclosure rate in the nation, according to ATTOM.
Miami, FL
With the majority of its population employed in the service sector – largely tourism – the metro’s second largest employment is in the import/export sector, so it’s not surprising that Miami-Dade County is the home to the nation’s eighth largest port, according to Jack Winston, principal at Goodkin Real Estate Consulting. “We’re one of only two ports on the Eastern Seaboard capable of taking the super container ships that go through the recently reconstructed Panama Canal. Plus, we have the largest air cargo airport in the country. All of that makes Miami-Dade County the largest import/ export center in the Southeast,” he said. “It also has the reputation of being the gateway to Latin America.” Despite population and job growth, however, and de- mand for housing, the metro does face a housing crisis due in large part to unaffordability. “We have the second highest rental market in the U.S., so that’s a very severe crisis. And we don’t have a big supply to meet the demand for market-grade
housing. Renters are spending 40 to 50 percent of their income on rent,” he said. In Miami-Dade County, rent for a three-bedroom home so far in 2019 is running $2,072, while in Broward County the rent for a similar home is $2,224 and in Palm Beach County it is $2,109 a month. As a result, Winston said even with the demand for housing under $300,000 there is no resale inventory to be had. So market availability starts at the $400,000 price point and goes up from there. “The bulk of the market is primarily first-time home- buyers and there’s little being done to respond to that demand,” he noted. “The market for foreclosures and for Wall Street companies that are trying to buy dis- counted properties has pretty much dried up. You can’t find many resales under $300,000, and that favors the Wall Street group because they pay all cash.” Another big problem is availability of land. As for Miami-Dade County there is no more large scale land
MIAMI: FACING AN AFFORDABILITY CRISIS With a population of six million and an unemployment rate that dropped to 3.1 percent in May 2019, the Miami metro area continues to see an influx of migration, es- pecially from Latin America and South America, particu- larly in Broward County, according to real estate investor Gabriel Garcia with Florida Cash Home Buyers LLC. “The market has gotten better. The high-end market and condo markets are still not as good, but the single family first-time homebuyer market is cranking along right now,” Garcia said. “Things got slow in the fourth quarter last year and people were panicking. Right now things are humming along.” The largest of the three counties that comprise the metro area, and accounting for nearly half of its pop- ulation, the economy of Miami-Dade County remains strong, according to the most recent report published by The Washington Economics Group, Inc.
22 think realty housing news report
september 2019 23
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