It doesn’t take a rocket scientist to realize that Miami is going through some massive changes at this precise moment! Even amidst all of the climate change cries, Miami proves to stand strong in the real estate market as investors continue to take the risk of helping Miami expand. Not only has the Miami real estate boom been fueling the economy, but it’s also been the cause for new Miami projects to spring up out of the woodwork!
The surge in real estate has caused some of the most exciting new Miami projects to emerge in 2014 alone; however, most of them will not be completed for quite some time. Fisher Island showed some of the most recent new Miami projects with the first apartments springing up on the exclusive island for the first time since 2007. Backed by the demand for real estate, the new apartments appeal to homebuyers who are looking to join the luxurious island. This new real estate addition, however, is the smallest of the exciting Miami projects that are to be launched within the coming years.
One of the most speculated Miami projects is the upcoming Miami World Center. Although the initial proposal came with much opposition, the project promises to be transformative to the overall image of Miami, with over 1 million square feet of retail space, 1,800 rooms dedicated to the Marriott Marquis hotel. Reports suggest that the project is the largest development project that is currently taking place in the United States, generating approximately $1 billion in economic growth for the region. Not to mention, the project will be connecting to another new Miami project!
The new Miami World Center project would be connected to the Miami Central Station. The new project titled MiamiCentral would be a massive change to the downtown Miami scene. Not only would the station boast remarkable architectural design, but further drive the economic growth of the city. More excitingly however, the new project would be the flagship icon of the All Aboard Florida project that promises to connect major destinations of South Florida via train.
These are simply a few among the new Miami projects that will be springing up within the next coming years. Some of which, we’ll see sooner than others. However, one thing is for certain, the new projects will promise to revolutionize the way Miami is viewed as a destination city. Even more so, the combination of the financial growth and real estate success will only continue to amaze Miami natives by cultivating future growth! And we can’t wait!
Image Credit: ExMiami
Miami’s expanding skyline could easily be attributed to a number of possible contributors. One might think that it is due to a population growth or a stabilizing economy, and therefore, real estate market. Both answers are correct. But what if we told you that it was primarily due to foreign investment, which has helped Miami a tremendous amount in terms of it’s real estate growth, and well, skyline development. Initially, the Miami downtown area had very slow, stable growth, but within the past years has quite literally skyrocketed. This doesn’t simply just happen everywhere, in fact, many cities have been pushing for foreign investment, but have fallen flat. So why Miami?
Miami is a major tourist destination, the city attracts dozens in pursuit of beauty, luxury, and of course…beaches. But this barely scratches the surface as to why it has witnessed such rapid growth because of foreign investors. The main reason– because it is considered to be the “Capital of Latin America” by many. Studies by the Miami Downtown Development Authority suggest that 90% of new condo demand in the downtown area is primarily from foreign buyers.
The large influx of foreign attention can be traced back to several distinct variables that make Miami the prime destination for them to place their investment money for safekeeping. From a financial standpoint, Miami offers low prices and low interest rates as opposed to Latin American destinations. However, from an aesthetic perspective, the potential of investing in Miami is absolutely boundless. Not only does Miami promise a beautiful permanent or vacation home, but the prospect of the United States and the opportunity for a better lifestyle are major perks, as well. Not to mention the biggest drawing factor of Latin American suitors, the culture which is a vibrant infusion of both Latin and American!
Essentially, this has a huge trickle down effect on both Miami Real Estate and the quality of living within the area. A combination of demand from both domestic and foreign buyers have allowed for the real estate market to reach record levels of sales in 2014. Not to mention the city growth itself like the recent approval of SkyRise Miami which is calling for foreign investors to back the project by granting them an EB-5 visa, a green card for foreigners who invest $500,000 to $1 million in the United States. At this rate the growth caused by foreign investors shows no signs of slowing down anytime soon and will ultimately contribute.
A recent study from Realtor.com lists Miami as the second most popular real estate market for foreign homebuyers. Of the top three cities, Miami offers investors some of the lowest prices and interest rates. Another key factor in attracting attention from the international scene is the large number of premium, beachfront properties available, catching the eyes of rich buyers looking to invest in the Miami lifestyle or cash in on the recovering housing market.
International clients bought $68.2 billion worth of properties in the U.S. in 2013, and foreign homebuyers are at their second highest level in recent years. As interest in purchasing vacation homes in the U.S. continues to grow, Miami is quickly becoming the premiere destination. The Sterling Luxury Group has experienced a substantial rise in foreign buyers interested specifically in Miami for its natural beauty, richly diverse culture, and tropical climate. With their established Dubai presence, Sterling Luxury Group is a highly sought after authority on high-end real estate in Miami and has been assisting an increasing number of Dubai foreign nationals with locating luxury properties for vacation homes and for investment purposes.
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These 10 mortgage tips can help you with your mortgage decisions in 2014.
1.Document your finances: Lenders will be extra diligent when underwriting home loans in 2014, as new mortgage regulations go into effect in January. The rules put pressure on lenders to verify that borrowers have the ability to repay their loans.
2.Lock a rate as soon as you can: Rates will likely climb in 2014 as the Federal Reserve is expected to reduce the pace of the economic stimulus program that has long helped keep rates low.
3.Refinance now — if you still can: Many homeowners lost the opportunity to refinance at a lower rate when rates jumped in 2013. But those who are still paying more than 5 percent interest on their home loans might still have an opportunity.
4.Buyers, use your bargaining power: As mortgage rates climbed, lenders lost a big chunk of their refinance business. In 2014, they will turn their attention to homebuyers and will fiercely compete for their business. Buyers should take advantage of bargaining power they gain with that increased competition.
5.Learn your rights as a borrower: Mortgage borrowers will get many new rights as consumers this year when new mortgage rules created by the Consumer Financial Protection Bureau go into effect in 2014.
6.Take good care of your credit: It’s nearly impossible to get a mortgage without decent credit these days. That will continue to be the case in 2014. If you are planning to get a mortgage, monitor your credit history and score until your loan closes. The best mortgage rates usually go to borrowers with credit scores of 720 or higher. You may still get a mortgage with a score of 680, but lower scores will mean higher rates or higher closing costs.
7.Don’t overspend: Lenders don’t want to give out loans to borrowers who will have little money left each month after they pay their mortgages and other debt obligations such as credit cards and student loans.
8.Consider alternative mortgage options such as ARMs: A homeowner planning to keep a house for seven to 10 years could take advantage of lower mortgage rates by choosing a seven- or 10-year ARM instead of the 30-year traditional fixed-rate mortgage. Rates on adjustable-rate mortgages can be as much as one percentage point lower than on fixed-rate loans.
9.Considering an FHA loan? Reconsider: Mortgage insurance premiums on FHA loans are likely to continue to rise in 2014, and after recent changes, the borrower is now required to pay for mortgage insurance for the life of the loan. Try to qualify for a conventional loan before you apply for an FHA mortgage.
10.Don’t panic:Yes, mortgage rates will likely climb in 2014. But don’t panic, thinking you have to buy a home now to grab a low rate. If you are shopping for a home, do your best to move quickly, but remember that this is one of the biggest financial decisions of your life. Get your mortgage and buy your home when you feel ready.
As the housing market heats up again following the slowdown of the past few years, many consumers will try to buy a home for the first time or upgrade a home with a mortgage that had previously been underwater. If you fall into either group, you should know that a new set of rules passed as part of the Dodd-Frank Act – enacted in response to the financial crisis of the late 2000s – will go into effect Jan. 10, 2014. The rules will require lenders of qualified mortgages to conduct more thorough analyses of mortgage applicants’ financial information to ensure applicants can afford to repay the loan.
According to the Consumer Financial Protection Bureau, under the Ability-to-Repay rule, the lender generally must consider eight factors. These include your current income or assets, current employment status, credit history, the monthly payment for the mortgage and your monthly debt payments compared to your monthly pre-tax income, which is your debt-to-income ratio.
Under the new rules, you’ll generally need a debt-to-income ratio of less than 43 percent to obtain a qualified mortgage that’s underwritten based on standards considered safe for consumers. Federal rules state that the term of the loan cannot exceed 30 years, and the points and fees paid by the borrower cannot exceed 3 percent of the total loan. Under the new rules, qualified mortgages also cannot have risky features such as an interest-only period, when the borrower pays only interest without paying down the principal.
A number of new requirements regarding home loans issued through the Federal Housing Authority (FHA) went into effect, requirements that have mortgage brokers and real estate agents shaking their heads in disappointment. This is because it will be much more difficult to obtain an FHA loan.
Historically, FHA home loans have offered favorable terms to borrowers with less-than-perfect credit and little money to put down. For many first-time homeowners, an FHA loan was their ticket onto the real estate ladder. However, according to Yahoo! Finance some of those potential borrowers may be shut out by the new FHA guidelines.
Changes to FHA lending standards include:
- Collections and judgments against borrowers must now be counted as debts when calculating the borrower’s debt-to-income ratio
- Judgments must be repaid in order to obtain an FHA loan
- Beginning in January 2014, a borrower’s debt-to-income ration cannot exceed 43%; previously, a debt-to-income ratio of as high as 55% was acceptable
All of this adds up to significantly tighter lending standards for those wishing to obtain FHA loans. Certainly, mortgage brokers and real estate agents are nervous that these new requirements will have a negative impact on their customer base. But consumer protection supporters are praising the new guidelines as important steps towards preventing those who can’t afford to buy homes from obtaining loans that will get them into trouble.
For those interested in acquiring an FHA loan in the wake of these new requirements, the best thing to do is review your credit report carefully and get current with any outstanding debts. Not only will this improve your overall credit score, thereby making you more attractive to lenders, it will also allow you to more easily qualify for an FHA mortgage.
According to the article, this has spurred a boom in the construction of apartment rental buildings. For instance, One Broadway, located at 1451 South Miami Ave in Brickell was one of the “rare professionally managed rental apartment tours built in Miami during the last boom.” It now maintains a consistent occupancy of over 95%, according to the Herald.
Read the whole article at miamiherald.com.
If you’re a developer or investor interested in getting in on Miami’s apartment rental market, Home Financing Center offers a variety commercial loan options that may be right for you.