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321-239-2781NMLS # 1922428
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Hello Friends and Colleagues:

As we reach the end of 2019, I gathered some thoughts as to what 2020 might bring.

By no means am I an economist, but being a native Miamian, I’ve witnessed first-hand a few market cycles.

Will the U.S. economy go into a recession? My thought is no.

Will there be a war with Iran? Again, my thought is no.

Zooming the lens in, here’s what I see for Florida in terms of real estate and lending trends:

South Florida real estate

According to the MIAMI Association of Realtors, single-family home prices in Miami are a bargain compared to other global cities such as New York, Los Angeles, and Hong Kong.  

It’s also a buyers’ market for condominiums.  Sales are starting to show signs of life. According to the MIAMI Association of Realtors, there’s a 13.2 month supply of condos.  To put that in perspective, a balanced market is between 6-8 months.

Lending trends 

National and community banks have been tightening up on their lending guidelines.  Few clients can meet these stringent requirements.

To meet these gaps in demand, more and more lenders are offering creative loan products and programs.

“Bank buster” terms and rates will become more available to consumers on the wholesale side. This means that consumers can close a loan quicker with less bank overlays and without the need to start a bank depository relationship.

Indeed, whatever tough situation you can think of, there is a lender out there willing to extend a loan, where a traditional bank would not:

  • Of the 9,307 condo buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans.  Creative lenders have stepped in to offer loans for non-warrantable condominiums.
  • When it comes to short-term rental properties, condo-hotels, and Airbnb, VBRO & HomeAway properties, traditional banks shy away.  However, other lenders recognize that demand for these properties will gain strength. These lenders are offering as high as 75% loan-to-value for this type of collateral, even for properties less than 500 square feet.  
  • For borrowers falling behind on their mortgage payments, foreclosure does not have to be the end result.  Instead, with the right alternative lender, borrowers can find a product to help them out of their current situation, alleviating the need for a grueling workout with the current bank service provider.  As such, distressed sales in markets like Miami will hopefully remain low.  

Trends outside Florida and the U.S.

Argentina has been through economic upheaval, and the Chilean peso is sitting at the highest levels since early November.  Is vulnerability in Mexico next due to rising violence and a stalled economy? Meanwhile, Brazil should start a stronger 2020. 

This past year, I’ve closed loans for several foreign national borrowers.  For some of these clients, I was able to offer domestic pricing and terms, including non-recourse loans.

In 2019, there was a lot of buzz regarding New Yorkers investing in sunny south Florida to evade rising taxes.  Likewise, investors from Latin America and elsewhere across the globe will continue to come to sunny South Florida, seeking both rental income and also a place to stay when they are in town.

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In short, I welcome 2020 and look forward to connecting or reconnecting with many of you to continue to assist our clients to the best of our abilities.

If you have any questions or scenarios you would like to discuss, I am happy to help out a client in need.

Have a safe and happy new year!