South Florida real estate is impacted by the coronavirus (Credit: iStock)
The owner of a multimillion-dollar condo in Miami Beach had his real estate agent cancel a showing last week. The reason? The prospective buyer, who was flying in from New York, was feeling under the weather.
“My client said he’s not permitted to enter the property,” said Douglas Elliman agent Bill Hernandez. “He said, ‘I’m very particular about who enters my property and where they’re coming from.’”
Hernandez, part of the Bill & Bryan Team, said that’s the first time he’s had that happen in his 16-year career. It happened about a week ago, before COVID-19, or coronavirus, was declared a pandemic. “I was a bit shell-shocked to be honest with you,” he said.
Across South Florida, residential, as well as commercial agents say they are concerned about how coronavirus will affect the market and ongoing deals.
Hernandez declined to identify his client or the unit, but said the prospective buyer was planning to tour other units in the building and neighborhood, which means his seller, a prominent New Yorker, may have lost the opportunity to sell to that buyer.
“Sellers are very concerned about who’s coming to their property. At the end of the day we’re talking about strangers,” he added.
Yet, Hernandez said that the coronavirus scare could also benefit sellers, if residents of densely populated areas like New York City accelerate their search for a home in the Miami market.
Gary Pohrer, an Elliman agent in Palm Beach, is listing a condo at One Watermark Place in West Palm Beach that has its own elevator, “so you’re not sharing it with a bunch of people.”
Generally, though, his clients are waiting to see what happens. Pohrer had a buyer coming to town, looking to purchase a house in the $7 million to $10 million range on the north end of the island, but he decided to pause his search for a month or two.
Another client was being cautious with their offer, and planned to use coronavirus to get a better deal. Pohrer, who canceled his trip to the Ellies in Uncasville, Connecticut in early March, said his clients are more concerned about their financial portfolios than about contracting the illness.
Coronavirus is impacting all facets of the industry, including the industrial market. Its effects on the financial markets, manufacturing and more, coupled with the fact that it’s an election year, may not bode well for sellers, some experts say.
Miami events, such as Ultra and Winter Music Festival, and eMerge Americas, have been postponed. The hotel market in the U.S. is taking a plunge due to booking and event cancellations. In the Miami/Hialeah market, occupancy fell by 9 percent, according to data from hotel research firm STR.
“It is literally the perfect storm for real estate that is not good for the market,” Hernandez said.
Danny Zelonker, commercial broker and owner of Z Miami Commercial RE Inc., is worried about institutional players taking a step back from the Miami market. “We’re in the 11th year of an up economy. Everything that goes up must come down,” Zelonker said.
He has two deals – a warehouse lease in Allapattah, and the sale of a warehouse in the east airport submarket – where the tenant and buyer are waiting to see what happens with coronavirus.
Commercial broker Lyle Chariff said he’s adding a state of emergency clause to all of his contracts, extending agreements if the president, governor or mayor declare a state of emergency.
Yet some real estate players say it is business as usual. Top luxury residential broker Jill Hertzberg, of Coldwell Banker, said her deals have not been affected. Hertzberg, part of The Jills Zeder Group, has a Sunset Island home under contract for nearly $14 million.
“In general I think people are cautious and careful right now. People are always concerned when the stock market hits a dip like it is, they want to be assured that they’re safe,” she said. “It’s going to take a couple of months to see where this goes.”
Co-working operator Büro, which has six locations in South Florida, hasn’t felt a financial impact from coronavirus, according to owner Michael Feinstein.
He said on Tuesday that new management deals in the works have not been impacted. Büro members are “still coming to the office” and Büro has enhanced its cleaning practices of common areas and bathrooms and installed Purell dispensers.
Similar to property management companies, landlords and most offices in markets impacted by coronavirus, Büro sent out an email to its members on Monday informing them of the measures.
Feinstein expects buyers across all asset classes to be cautious. “When there’s uncertainty in the market,” he said, “people are less likely to pull the trigger.”
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
