Miami Beach real estate has slowly and steadily lost a substantial amount of its value in the past few years. Most homes are selling at 2003 prices, with a few exceptions, and the bottom is yet to be seen. Foreclosures on Miami Beach were almost unheard of a few years ago, but not so anymore. On Wednesday June 3rd, 2009, another luxury home is scheduled for auction at the Courthouse in downtown Miami.
The property, located at 5005 Lakeview Drive in Miami Beach, consists of a charming Mediterranean house with 6,000 square feet of interior living space, that is situated on a lot measuring 47,540 square feet, with 200 linear feet of frontage on the intracoastal waterway. The large family home was purchased in March of 2004 for $3,100,000, according to the Dade County Property Records, and is presently being offered as a short sale for $3,000,000.
The estate has been on the market for sale since September 2007, when it was listed for $6,500,000. Five subsequent price reductions brought the price down to the $3,000,000 being asked today. The property is unlikely to be sold at auction, because most luxury home buyers are still sitting on the sidelines waiting to see how the real estate market plays out. Literally hundreds of luxury homes are presently for sale on Miami Beach, and the buyers are few.
Home owners who really want to sell are going to have to come to grips with a very different reality, the one that exists today, not the one that existed yesterday. Prices of luxury homes on Miami Beach are still inflated, and sellers are reluctant to admit that they may have to accept 30% to 50% less for their property than they originally anticipated. For those who doubt, there are some interesting statistics that appeared on Friday in the Miami Herald.
According to figures released by the Mortgage Bankers Association, in the first 3 months of this year, Florida ranked first in the country in foreclosures, with 11% of of its mortgage loans in foreclosure. In addition, one of four borrowers in Florida were either late on their mortgage payments or in foreclosure during the first quarter of 2009. A report just released by Zillow.com, a web based real estate service, states that approximately 71% of home owners who purchased a home or condo in Miami in the past 5 years, are “underwater”, meaning that the amount they owe on their mortgage exceeds the present value of their home.
For home buyers, luxury or otherwise, all of this is good news, because a buyer can practically have his/her choice. “Low-ball” offers which were once frowned upon by both sellers and realtors, have become commonplace in today’s market. As Donald Trump recently said on Larry King Live, “There has never been a better time to buy”.