MIAMI (ad)VICE

Hi everyone who's kept this thread alive during my absence from the site.  I'm now back in Miami, staying in a small rented apartment near Miami Beach.  I have my wife and two babies with me, which is quite a handful.

If any of you've followed my posts from the last time I was in Miami, you'll recall I became obsessed with a water front property (facing the intercoastal waterway, but just a few blocks from Miami Beach).   It came on the market at the end of October 2010, and it was a hot REO, attracting so many bids that the bank closed the bidding after about a week.  Even though I put in a bid 25% higher than the asking price, I didn't get it.  Someone must have bid much higher than me. 

It turns out that the person who won the bidding pulled out of the purchase during the inspection period (that's a period the banks give you to decide whether to go ahead with the purchase: if you pull out during this phase you get your full deposit back).  I don't know why the buyer pulled out (either he couldn't come up with the amount he'd bid, or he just didn't like what he found out about the property during the full inspection).  So the property came back on the market earlier this month.  This time I bid nearly 50% above the asking price, and it seems like I have won the bidding.  I say "seems like" because this bank is notoriously slow: it took them 2 weeks after they closed the bidding to let me know I'd won, and now it's been a week since I signed the final contract (and paid the deposit directly to them) and I still haven't received the signed contract back from them.  The estate agent (who is the REO listing agent, as I made sure I tracked her down before putting in my bid) assures me they're always this sloppy, but I'm not getting my hopes up until I've bagged the property. 

I know some readers will think I'm crazy to bid 50% above the asking price, and to be offering enough to buy at least 3 nice single family homes in Miami.  But if you took a look at the neighbouring waterfront properties, all worth well over $1,000,000 even in this depressed market, you'll see why I want this property very badly.

I'm not sure how things will pan out over the following 3 months that I'm here.  By this I mean that I don't know if prices have bottomed, or will fall further, and as a result I don't know if I'll make any more purchases. 

The Case Shiller stats that came out last Tuesday (reflecting property prices in the September to November months of last year) show that prices in the US are still falling, and rather quickly at that.  However, Miami only dropped 0.2% month on month, much less than most other big cities. 

Many of you are probably wondering what my personal experience of the market it here "on the ground".  Actually, I haven't been to see a single REO so far, partly because I've been so busy settling in, but also because very few REO's have come out in the last 3 months.  If you ask me, the foreclosure moratorium is far from behind us.  REO's are still just trickling onto the market, and those that come our are either in bad areas, or overpriced.

There is surely an enormous hidden inventory still sitting on all those banks' books, but I reckon they're not ready to release them yet.  They're probably still going through their paperwork to make sure they're not going to be sued for selling houses that were foreclosed by robo-signers.

If you're thinking of coming to the US soon, perhaps delay a little longer until
A. the REOs are being released faster, and
B. the Case Shiller stats show a real bottoming in the market

And if you're thinking of going to Detroit or Atlanta, you really need to see the most recent Case Shiller graphs for those cities.  They seem to be in free-fall….

Hi All

Am a bit irritated that the long comment I just wrote didn't go up when I pressed POST.

Must remember to CTRL C everything next time.

I'm still in the process of buying my Dream Waterfront Home.  Have opened my HSBC premier account, and applied for the mortgage.  Must pay 30% down, and the interest rate is 5.2% now, much higher than last November's 4.6%.

I'm setting up an LLC using a local legal firm: only $154!

My family and I are loving Miami Beach (the long island that stretches from South Beach to Bal Harbour in the north).  There's a wonderful holiday atmosphere here, great partying on the south end (where all the hostels and bars are) and great for young families on the north end.  The beaches are great for the entire stretch of the island. 

Now that I've got my kids with me, I'm meeting many families, all of whom love Miami, and particularly Miami Beach.  None are Americans.  They're all immigrants who're very happy to have landed in such a beautiful, safe, clean place.  We're all amazed at the fantastic (and FREE) parks and public pools, which are great for kids.

Most people I meet are renting, some have bought.  One young Serbian family, who have a son my son's age, bought an apartment last year when they discovered that it would only cost them $800 per month in mortgage payments, compared to the $1,200 a month they were paying in rent (for a 2-bedroom apartment that they've now bought for $95,000).

I haven't been looking at properties myself, since I want to get the Waterfront one finalized first.

I'm gonna post this before I lose it.

Steve