APRIL 2010 | www.opp.org.uk
FLORIDA
Foreign buyers fuel Florida ‘mini-boom’
International buyers are helping to drive a surge in distressed property sales in Florida, according to agents in the state. Foreign buyers are now thought
to account for as much as 70% of transactions on the Miami distressed market, which has been flooded with foreclosures and discounted new developments over the last 18 months. “They are creating a mini-boom,”
said Jenny Huertas, international sales director of distressed broker Condo Vultures. “Our buyers are mostly from Latin American countries such as Venezuela, Argentina and Colombia. “Thanks to the weak dollar and 60%
price falls, they can sometimes buy property cheaper than in their home countries. But we also have a lot of Italians and Canadians buying.”
Canadian investment
The Canadian buyer market has seen a particular increase in activity, said Carla Rayman, international business development director, Prudential Palms Realty. “The Canadian dollar is almost one-to-one with the US dollar and their domestic market hasn’t suffered.” Asian investors from China and Singapore, as well as Canada-based
TRAINING
RE/MAX launches online distressed training
International franchise RE/MAX has launched an online distressed training programme at its 2010 International Convention. The company’s exisiting training
scheme, RE/MAX University, will become a broadcast-quality streaming network with HD capabilities, available around the world on the internet, individual TV sets, and mobile devices.
Through the worst
RE/MAX chairman and co-founder Dave Liniger (pictured) said the high number of distressed properties likely to be on the market in 2010 had created a need for more further education among agents.
Dave Liniger | “We’re through the worst of this downturn but it’s not over yet.”
“It looks like we’re through the
worst of this downturn, and 2010 should produce better results than 2009,” he said. “But it’s not over yet, so real estate professionals need to keep
doing what they’ve been doing; seek out the best education, use up-to- date technology and don’t forget good old-fashioned customer service.” The service, created by digital
media company Mediafly, will provide RE/MAX agents with access to more than 1,200 training videos, and has the capability to create customized channels for different regions and offices. The conference was made
available online to tens of thousands of international “virtual attendees” through social media, including live video feeds from Argentina, Austria, Germany and Italy.
Fuelling the market | Foreign buyers account for up to 70% of Miami distressed sales
Asians, are also in the market making bulk purchases, she said. “They’re coming from strong property markets where they can sell at the top of the market and invest at dirt cheap prices in Florida.” While European buyers from the UK,
Germany and Scandinavia are mostly looking for holiday homes, Latin Americans are buying for investment. “Their strategy is to hold the properties for three to five years until the market stabilises, and this is actually happening quicker than we thought it would,” said Huertas.
Foreclosures continue
Florida has become one of the biggest distressed markets in the US and globally, and the glut of property
available looks set to continue. Data from foreclosure portal RealtyTrac shows the number of foreclosures in the state in February increased by almost 15% compared to the previous month and by over 16% compared to February 2008. “Most of the $300,000 and under
stock has been cleared off the market but there’s lots of activity in the $300,000 to $1.1 million range,” said Rayman. While foreclosure rates are up, new
properties may not appear on the market for several months, she added. “It will probably be in the second half of the year because last year the banks waited until after their half-year reports before releasing the repossessed stock.”
BMV Investor focus | 39
NEWS IN BRIEF
Foreclosure supply increases
The number of foreclosed homes held by banks and mortgage investors in the US is rising again after gradually falling throughout 2009, according to Barclays Capital. Mortgage analysts estimated that banks held a total of 645,800 foreclosed homes in January, up 4.6% from 617,286 a month earlier. The supply of forclosures had been falling since its peak of around 845,000 in November 2008. The number of homes being repossessed by the banks slowed last year because of the time it took to assess how many people qualified for programmes that would allow them to avert foreclosure by reducing monthly payments. Now, however, the banks have determined that many homeowners don’t qualify for loan modifications and are repossessing more properties. Barclays predicts that the number of bank-held properties will rise to 733,000 in April, then begin to decline again gradually. Foreclosure and short sale properties accounted for 38% of transactions in the US in January, up from 32% in December 2009, according to research by the NAR.
Commercial distress growing
The number of distressed commerical properties in most of the world’s largest economies is continuing to rise, according to research by the Royal Chartered Institute of Surveyors. Eighteen of the 25 countries surveyed by RICS saw further increases in distressed property in the fourth quarter of 2009 compared to the previous three months. However, only respondents in Spain, Japan, Ireland and Scandinavia reported a growth in the number of properties coming to market. Brazil, Hong Kong, Australia and India saw a decline in the total amount of distressed stock. The US and Japan are expected to see the biggest rise over the first quarter of 2010, followed by China, Germany and the UAE.
UK repos begin to decline
The number of homes in the UK being repossessed by the banks has fallen to its lowest level since 2008. Around 11,800 homes were repossessed during the final three months of 2009, according to the Financial Services Authority, 15% fewer than during the previous quarter. The Council of Mortgage Lenders produced a lower figure of 10,200 repossessions for the quarter, down 13% on the third quarter. FSA figures are higher because they include second-chance mortgages and loans from non-CML lenders. However, the CML data shows that for the whole of 2009, repossessions were at their highest level since 1995, reaching a total of 46,000. Sales of repo property stabilised at 13,500 for the quarter - fewer than the peak of 14,300 in the second quarter but more than the number of homes taken into bank ownership.
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