Condo Buying Tips

WHAT IF MORTGAGES RATES STAY HIGH?

In December, the Fed hinted at potential interest rate cuts, expecting lower inflation. However, due to persistent high inflation, rate cuts have been paused for six consecutive meetings. This leaves homebuyers navigating a market with high rates and elevated home prices.

So what can happen if mortgage rates stay high?

1. Prices may Rise: Home prices could continue to increase due to low inventory and strong demand from millennials and immigrants.

2. Prices Stabilize: Many experts, believe that while some markets might see slight declines, most areas will experience stable prices due to ongoing demand and limited supply. I don't think Miami is included in that option.

Nevertheless, there was a hiring slowdown in April, which calms down the fears of an overheating economy so the FED is more likely to reduce the rates as planned around September 2024. Let's hope they do !

AFFORDABLE HOUSING CRISIS IN MIAMI

Miami-Dade County faces a critical shortage of affordable housing, with over 90,000 units needed for households earning below 80% of the area median income, around $75,000 annually. Despite Mayor Daniella Levine Cava’s declaration of an affordable housing crisis two years ago, rents remain high, pushing the workforce out of the county. The median price of single-family homes rose 14% to $650,000, and condos increased by 11% to $445,000, exacerbating the issue.

Levine Cava had proposed a $2.5 billion bond for affordable housing, but it was postponed due to opposition. She now advocates for an even larger bond. Highlighting her administration’s achievements, Levine Cava noted that 68 multifamily developments, comprising 8,700 units, received county funding this quarter, with 1,300 more than halfway completed.

While Florida’s Live Local Act provides tax and zoning incentives for workforce housing, Levine Cava stressed the importance of not relying solely on government funding. She urged developers and construction companies to address the community's needs, warning that the current 1.4% unemployment rate indicates a shrinking workforce, unhealthy for the economy.

LOOKING TO BUY A HOUSE ABROAD?

Buying a house overseas can be an exciting yet complex process. According to a recent Coldwell Banker Global Luxury Trend Report, nearly 40% of U.S. millionaires plan to purchase a home abroad within the next 12 months. I've done it so here are my tips:

Financial Considerations:

Financing options and currency exchange can complicate the purchase. Mortgage structures overseas often differ from the U.S., typically offering variable rates or short-term fixed-rate loans. Plus consider that if you are a US tax resident, foreign banks are very skeptical on opening banks accounts for you.

Legal and Tax Implications

Before buying, ensure you understand the tax responsibilities in both the foreign country and the U.S. This can vary based on your intended use of the property, such as for personal use or rental income.

Here are the steps I would advise you to follow:

1. **Conduct Thorough Research**

Spend time in the area you're interested in, getting to know the community and local amenities. Renting before buying can provide valuable insight into daily life and help you avoid making a decision based on a vacation experience.

2. **Define Your Needs**

Clarify your purpose for buying the property. Are you investing, planning to retire, or considering it for rental income? Understanding your needs will help navigate zoning laws and potential rental regulations.

3. **Seek Local Expertise**

Engage local real estate experts, legal advisors, and expat communities. Their insights on ownership rights, tax issues, and market conditions are invaluable. Connecting with an expat community can offer practical advice and support from those who have gone through similar experiences.