Off-Market Transactions Steadily Increasing Since 2019

In New York especially, off market transactions have been increasing over the past 3 years. Those with the right cash and the right connections are purchasing real estate before it even goes on the market. While these types of transactions are not generally new, they provide a great deal of benefit in the current market of low inventory and outsized demand. Some realtors believe that it is an unethical practice. 

The amount of off-market transactions has increased 67% since 2019 with 20.6% of the homes sold in New York City  in the third quarter of 2021 being “pocket listings” , another name for off-market homes for sale. “Whisper listings have always been desirable”, says Kathy Franklin, a New York City real estate agent. “It allows a purchaser to have a first look before there’s a larger audience.” In California, these listings are in a legal gray-area. The National Association of Realtors introduced a policy to try to limit these types of transactions. However, these policies do not apply to those who are not part of the NAR. “Although pocket listings remain a common practice; they can exacerbate segregation and wealth inequality because only certain people see these listings”, stated mortgage advisor Arnell Brady.

Housing is shining a bright light in New York City in the post-pandemic era, however with no inventory, increased prices and increased competition, wealthy buyers are circumventing the tough market with off-market listings. Although they are driving the real estate growth, they are also contributing to the problem of low inventory and higher prices. 

Spring Has Sprung! Bayside Predictions for the Spring Real Estate Season

The consensus originally was that the spring real estate market would be a bit tamer than the last 6-12 months. After all, it couldn’t get much worse… could it? Unfortunately, ours as well as other industry professionals have shifted our position to the opposite side. Bidding wars are beginning to pick up again and this is beginning to look like it could be the hottest real estate spring in history.

How did this all happen? When we entered into the pandemic, real estate experts agreed that the housing market would enter a slump. With increasing fear of leaving your home, people would be opposed to selling and would take the time to actually spend money on their current home. They would not be going out anymore and would build up their savings accounts working from home and spending time with the family. However, mid way into 2020, we saw an intense real estate boom with millennials wanting to make the step forward and purchase, especially with mortgage rates reaching all time lows. Inventory then dried up and buyers had no choice but to offer over the asking price and offer more cash than ever before.

We had hoped that heading into 2022 inventory would rise, that more elderly people who were afraid to leave or sell their homes would become vaccinated and sell. Those exiting the government’s forbearance program were also expected to sell entering 2022. Inventory levels began to rise in the fall, however by November inventory began to sink again. Zillow tracks some 300+ housing markets and 254 out of the total had inventory’s that were down by at least 30%. Zillow predicted that at the start of the new year, home prices would go down by about 11%. However, we all know now that it is quite the opposite, with the average home going up 16.4% in January of 2022. With mortgage rates rising, that was supposed to cool off the housing market a bit. However, instead, it is making new homebuyers nervous and sending them right back into buy mode before the rates head further up.

With all of this in mind, many buyers are being pushed out of the market due to the rising rates as well as rising home values. As we mentioned in our last post, in order to qualify for a loan of the average value in Miami, the household must be making almost $100k / year. This is worrying due to the average median household income being much, much less.

New Homes Sales Falling and Falling Fast!

New home sales fell 4.5% in January to a low of 801k units. A decline was expected, however not as steep as it was. In the market today, there is a 5.6 months supply still available. However, those in the industry as well as consumers shopping currently already know that there is no way that there is this much of a supply left. The answer here is due to homes that are still in construction being counted in this statistic. Although these homes are technically in the pipeline, for a record number of them they are still in the pre-construction phase.

Some interesting statistics about regional home sales:

• 10.7% lower in the Northeast

• 3.7% lower in the Midwest

• 7.4% lower in the South

• 1.2% higher in the West

Is Micro Housing the Answer to the Lack of Affordable Housing in Miami?

In order to tackle the lack of affordable housing, micro housing units are popping up all over South Florida. Rent officially rose 50% YTD in Brickell, Coconut Grove and Miami Beach just this week. With this trend and Miami becoming the most unaffordable living space in the US, cheaper 300-400 SQ FT units and studio apartments are becoming more popular. Real Estate developer The Estate Companies is turning the Ramada Inn Hotel in Hialeah into “the One”, a multi-family unit apartment complex with units that are all micro. With future tenants already lining up, their results are better than they originally anticipated. 

Wynwood is another location that the company is targeting due to its scalability, walkability and the recent migrations of renters to the area. The fashion company “Diesel” announced the launch of a Diesel condominium in Wynwood. It is expected to have 159 units, 65 of which are micro-sized with some units as small as 300 SQ FT. They have added large balconies to even the micro units to give it a larger feel. “Wynwood is probably the perfect match when you’re thinking about the Diesel brand, and it is the first Diesel building” stated CMO Patrick Pires.

Miami is Now the Least Affordable Housing Market in the US

Miami has now surpassed New York as the most expensive housing market in the country. During the pandemic, home prices skyrocketed in the Miami area, a market that became even hotter due to out of state buyers and renters.

The median home price in Miami is now $589,000, meaning that a household would have to attribute almost 80% of its monthly income to its mortgage payment. This is based on the projected median household income of $43,401. With that percentage of the household income going to its mortgage, a family producing the median household income would not qualify for a purchase of the median price. 

Not only has Miami surpassed New York as the least affordable housing market in the US, but wages in Miami have not gone up. We are still seeing a low median household income of $43,401, while in states like New York and California, the median household income is just under $69,000. The out of state buyers and renters often bring in more money than locals, causing prices to inflate and locals to be at odds. A Florida Realtors Report found that home health care and personal care aides, which earn the least out of the 17 occupations studied, would need to earn over three times their median annual salary to purchase a home, and almost double their salary to rent a one-bedroom unit.

Florida Home is Awaiting Auction as an NFT

7,000 Bidders Itching to Purchase…

Two hot topics, Real Estate and Crypto, are merging together this week in what could be the first home auctioned off as an NFT. The property is located in Gulfport, Florida and is being brokered by Propy and Heckler Realty. What happens when somebody wins the bid? They receive an NFT, or Non-Fungible Token, a digital token that will record the winner’s proof of ownership on an online ledger. The winner will receive ownership of the LLC that currently holds one single asset, the property up for sale. Anyone seeking to bid on the property must have proof of $650,000 in Ether in their cryptocurrency wallet.

Gulfport, FL Residence Listed as an NFT Auction

Amy Heckler, the broker for the property and founder of Heckler Realty Group, has stated that more than 7,000 people have signed up to bid on the residence. The home’s seller is Leslie Alessandra, founder of a Tampa-based blockchain company. She not only wants to sell because it is a great time in the market, but more importantly to prove the technology’s value. She approached Heckler, who was reluctant at first, but decided this could be a great opportunity. Propy sold Tech entrepreneur Michael Arrington’s apartment in Ukraine for 96 Ether last year.

NFTs have been making moves for a while now, impacting large markets like art, with some NFT artworks selling for as much as almost $70mm USD. People spent $44bil buying and selling NFTs in 2021 according to Chainanalysis, who speculates even more transactions will be done in 2022.

NFTs could have a huge impact on the Real Estate market. Enthusiasts of the combination of the two say it could reduce closing costs as well as speed up transactions, as the method of title transferring and up to 3 months time needed to close could become obsolete. However, cryptocurrencies are extremely volatile and are sometimes subject to high transaction fees.

Housing Sentiment Hits an All-Time Low

Pessimism Increases Among Young Homebuyers

The National Housing Survey along with a few other opinions knocked Fannie Mae’s Home Purchase Sentiment Index down almost 3 points from December and over 5 points in its reading YTD. 

Most people believe that now is not the time to purchase a home, and who can blame them? Home Sentiment fell to an all-time low with 70% of able homebuyers voting that now is not a good time to buy a home. Inventory is at an all time low, home values are skyrocketing and rates are steadily increasing over 10 bps every day meaning that home affordability is at an all time low, especially among younger households. Younger generations are usually the most optimistic about their overall finances, but their pessimism is slowly turning the tide. Experts say this is all driven by young aspiring homeowners having to delay their dream of home ownership until affordable supply comes back. Realtors are seeing multiple offers on each property, occasionally as many as 20, and clients are beaten out by all cash deals, sometimes even from an investment bank or private fund buying up all of the property that they can.

Optimism towards interest rates has declined as well. The net percentage of consumers who expect mortgage rates to decline was unchanged at 4%, however those who expect rates to dip went down 2% to a negative 54%. 

America’s national debt topped $30trillion, per figures from the Treasury Department early this week. Combine America’s debt with climbing rent prices, affordable housing stock at an all-time low, elevated healthcare, an ever-aging population, and a tax system that cannot cover its spending. Ignore these factors at your own risk!

Average Mortgage Rates on Their Way to 4%, Furthest Jump Since Late 2019

Here We Go…

It is obvious, rates ARE rising. They have been rising since November with a couple jumps due to the Fed's announcement of cutting back on bond purchasing. January was one of the toughest months for mortgage rates in the past decade, with the average 30 year rate jumping from a 3.21% to a 3.73% in just over 30 days. 

Just as it seemed that the damage was over and the rates were leveling off, the monthly jobs report was released. Going into the days before the jobs report, analysts did not see it having much of an impact. They expected a weaker number due to Omicron's impact and were not worried about it, as the Fed is much more concerned with inflation as opposed to the labor market. However, the report was released and the jobs number was higher than expected, at almost 470,000 jobs. In response, the Fed rate hike and bond yields increased to their highest levels in more than 2 years. In effect, mortgage rates increased 40 basis points from market close on Thursday, taking the average 30 year conforming mortgage rate to a 3.87%.

Initially, the consensus for rate spikes was that there were going to be 4 spikes in 2022. However, many top investment banks are now revising their original prediction with a more aggressive approach. Some, such as Bank of America, are predicting as many as seven 25 bps spikes in total for 2022, one for each remaining Federal Open Market Committee(FOMC) meetings. At last week’s meeting, Fed Chairman Jerome Powell gave the notion that the central bank will wind up its bond purchases and will move to raise rates as much as are needed to tame inflation. This makes a compelling case to a potential slip-up from the Fed in regards to keeping rates low in the second half of last year. Ethan Harris, global economist at Bank of America stated “The striking thing about chair Powell’s press release was that in effect he made a compelling case that the Fed should have already spiked rates in the second half of last year. The only thing missing from the narrative was, ‘and so, we are behind the curve and are hiking today.’”

Low Inventory, High Prices in Miami

Look at That Line!

Get In Line to Make an Offer

Last weekend, the Bayside team hit some open houses to network and speak to realtors about their experience in this crazy market. 

All of the responses were the same, this is the hottest real estate market that they have ever seen in their careers, even those who have been in the business for 20+ years. 5+ offers, homes being sold within 24 hours and all cash deals are becoming the norm with inventory down 56% YTD. Most buyers now are coming in over asking, even as much as 10% to secure the property. Sellers are taking their time with offers and are holding out to receive terms that are satisfactory, like waived inspections and 0 contingencies.

Our first stop on Sunday, January 23rd was in Coral Gables. The showing was scheduled for 12 noon and we drove up at 11:55am and there was a line with more than 10 people outside eager to get in and view the property. (Pics below) This was a first time experience for us even though we have been going to open houses for the last 6 months. Our second stop was at another property in Coral Gables. The property was listed for $985,000 and had been listed for 3 days. There were already 14 offers…

Low Inventory, High Prices May Be New Normal

This type of market is becoming the new norm and it will be interesting, to say the least, on what happens in the near future. Economists at Zillow and Redfin expect inventory to stay scarce, prices to remain high and interest rates to remain low. This does not mean the expect interest rates to remain at all-time lows, as they have been steadily increasing day over day, however anywhere from 4%-5% is still extremely low.

With all of these factors, this gives sellers the upper hand and homebuyers, especially young buyers, the disadvantage. Young buyers who are ready to purchase will be at a disadvantage not only due to homes being more expensive, but also because people are now staying in their homes longer than anticipated.

If you are looking to put an offer down on a home, make sure to visit the home as soon as it is on the market, and be ready to put an offer down almost immediately. Yes, prices are up. However, that does not mean you must over pay. It will take diligence as well as working with an experienced realtor to navigate this challenging market, but it can be done accurately and efficiently.

Week of January 17th Market Update and Record Breaking Sale

Remember Those 2% Rates? They're Closer to 4% Now!

One of the few positives from the stay-at-home order was the all-time low mortgage rates. At one point you could see top tier 30 Year Fixed pricing in the 2% range. There was a small attempt at increasing in early 2021, however rates were still at worst in the low 3% range for even a B-paper borrower. At any other time, a low 3% rate on a 30-year fixed would have been an all-time low. It seemed as though rates were never coming back, until late September!

On 9/22 the Feds announced their plan to continue to dial back on bond spending and would seek to slow down rate-friendly policies. Rates remained constant and held around the low 3% range for the months leading up to the New Year.

It appears that almost overnight, the rates changed. Fed speakers began making implications that they would tighten their policy quicker than expected and we are seeing the results this week. Bonds hit their weakest levels yesterday, January 18th sending the average lender to a 3.75% Interest Rate after beginning the day at a 3.625%

Today, January 19th mortgage prices improved by around 21 bps from market close yesterday. This is an interesting improvement, showing some resilience similar to that of September, 2021. While we still see some days in the green, all indicators are pointing to a continued rise.

$75mm sale breaks miami record

A property sold on December 22nd, 2021 sets the Miami record for the most expensive home sold YTD. Located on star island, one of Miami’s most prestigious and exclusive neighborhoods hosting the likes of icon P Diddy, the property sold for a whopping $75mm. With 9 bedrooms and 11 bathrooms spanned over 15,000 SQFT, the price begins to make sense… begins. Although initially listed at $80mm, the deal closed at $75mm, still beating the recent record of $65mm for a single property. The seller was listed as Lourdes Sanjenis, who has owned the property since 2013. Although this is an astonishing sale, home values in Miami have been skyrocketing this year and we don’t expect this to be the top sale for much longer!

Low Housing Inventory Means Cash Out Refinances Will Increase in 2022

Low Inventory Means Borrower’s Must Renovate / Improve vs Buy Up

With inventories low, mortgage activity will increasingly focus on those purchases in the market that can be made on existing structures and ground up construction / land purchases.

With little available inventory for new buyers or those looking to upgrade their space there will be an increased demand for CASH OUT refinances so that those looking to upgrade but unable to buy will improve / renovate their current homes instead, see here for more information (Low Housing Inventory in December Influenced Decline in Home Sales, Redfin Report Shows).

This presents a fantastic opportunity to earn cash out refinance business as we enter 2022 and a rising rate environment if low available inventory persits.

Barriers to Getting a Mortgage in 2022

When purchasing a new primary residence or investment property, a survey done by the National Association of Realtors identified that six out of ten Americans think that getting a mortgage would be hard for them. According to senior economists at Lending Tree, the biggest barrier to getting a mortgage is the cost. Not the cost on the mortgage per say, but due to home prices skyrocketing, borrowers now have to borrower more money, aka take out a larger loan. When looking for large loans, lenders will require borrowers to have higher incomes or put down larger down payments. As a result, some are finding that they no longer can get pre-approved!

Another barrier presents itself to those who are looking for low value mortgages. There may be low value homes on the market, especially in urban, suburban, and rural areas, however these borrowers are finding that fewer lenders are offering small dollar mortgages. Thankfully, most brokers today work with many lenders offering small AND large dollar amount mortgages.

Due to the pandemic, many had income disruptions for more than a few months, making it harder to get their income to qualify. Even if your income is returning, those who have dings on their credit are still finding it hard to qualify. For these borrowers, a NON-QM or NIV loan (No-income verification), might be your best bet.

The past 2 years have been especially rough on self-employed borrowers. The Bayside team worked in retail during the early pandemic and the direct lender we were employed at would not accept self-employed borrowers! Your business could have skyrocketed during the pandemic, and we still would not even look at your loan. A huge reason we transitioned into brokering was to be able to work with many types of borrowers and we happily accept self-employed applicants. However, there is much added scrutiny to self-employed borrowers. Lenders will checkout everything in the company from business and personal tax returns to your website, to your bank statements and Profit & Loss for the last 3 months, YTD and two years! Some lenders are tougher on self-employed, while some take ease with their qualification. If you are a self-employed applicant, we highly recommend shopping around with a broker to ensure you find the best deal.

Mortgage Market Updates Going into 2022

New Loan Limits

We all know how crazy this last year was with home values skyrocketing especially in the areas of Miami-Dade County. This not only effected borrowers, cash-buyers and real estate agents, but also loan limits.

1). Conventional Loan Limits. The new Conventional loan limit for a Single-Family Residence is $647,200. This goes all the way up to $1,244,850 for a multi-family property. Last year, the SFR loan limit was $548,250, so this is a substantial increase of almost $100,000. This means that somebody applying for conventional, QM financing, with a loan amount of $647,200 or less, will receive top tier pricing and be considered in the QM range. Anything over that is considered a high balance or Jumbo loan and pricing will be different as such.

Loan limits depend on the county and every county in Florida has the above loan limits, except Monroe County with the loan limit of $710,700 for a SFR up to $1,366,750 for a multi-family property. Below is the map of the continental US showing which counties have higher loam limits by state.

2). FHA Loan Limits. The New FHA loan limit for a Single-Family Residence is $460,000. This goes all the way up to $884,600 for a multi-family property. FHA loans are government loans that are allowed on 1 to 4 living-unit properties. These can be used if the owner occupies the unit, or in the case of a multi-family, they must occupy one of the units.

Mortgage Rates Rising due to fed announcement

Although nobody truly knows how mortgage rates will change in the future, there are certain events that occur that give us a good approximation. 

The fed suggested that there were multiple rate hikes coming in 2022. They are looking to fight inflation, which rose to its highest level since 1982, and signaled that beginning in January, it will cut its monthly buys of MBS, or Mortgage-Backed Securities (Mortgage Bonds), by half. It is predicted that the average 30-year fixed rate will be around a 3.200% with the 15-year fixed rates to average 2.500%. Today, January 4th, the average 30-year rate is a 3.290% and the 15-year is 2.640%, so it seems as though these predications are on track. Higher inflation erodes the return that an investor on a bond or loan is holding over time, making the bond values go down and yields rise.

Ask A Mortgage Professional

Why does pricing sometimes change from what I was quoted over the phone?

When a broker or banker quotes you over the phone, they are giving you an estimate of what the pricing is at that exact moment. What many people don’t know is that the mortgage market moves just like the stock market moves.

Every day, every hour, every minute the mortgage pricing engines are adjusting themselves to what is happening in the live market. Not only does the market move, but until pricing is locked in… it is only an estimate. For most lenders, to lock in pricing they need your income documents (W2, pay stubs, Tax returns etc.), your approval to run credit AND receive signed e-disclosures. These are especially important because without income documents, there is no verification of employment or income. Without running credit, which takes your SSN and DOB, there is no guarantee that you will qualify for the loan requested and this is a great way to verify your identity. Your e-disclosures are giving the lender permission to work on your loan and to lock your pricing. 

The longer it takes for the client to get the needed information over to their mortgage professional, the longer your pricing is floating(not locked), therefore constantly changing. If you are quoted on a Wednesday, but lock in pricing on a Friday, most likely it will be for different pricing than what you originally reviewed with your mortgage professional.

Even after locking my pricing, although the interest rate does not change, why do some costs change from what I was quoted on the phone?

         When a mortgage professional is going over what your costs will be, they are estimating your county, government and tax fees, your escrow collection costs and your origination fees. Mortgage professionals are not title agents, they are not processors, and they are not tax experts. Most have tools like we do at Bayside Funding to calculate most accurately what those will be, however until a processor reaches out to the state and county, they will be only an estimate.

The collection of your escrow account, which is generally 3 months of taxes and 3 months of insurance, is estimated by your mortgage professional based on what you are currently paying in taxes and insurance, however we all know that taxes tend to go up. A processor will reach out to your county to check on a tax amount change and if your taxes have gone up, then so will your escrow collection.

If you have any questions, do not hesitate to reach out!

Regards,

Dominic Leoni
President

1000 BRICKELL AVE, STE 715, MIAMI, FL 33131
CORPORATE NMLS: 2221998

MLO NMLS: 1991943
305.204.0526
dominic@baysidefunding.com

www.baysidefunding.com
www.nmlsconsumeraccess.org

Sign up, complete, & upload your application and required documents through our secure web portal, CLICK HERE.

Compass x Art Basel event

On Thursday, December 2nd 2021 I had the pleasure of going to Charles Celesia’s networking event for Art Basel in partnership with Compass. I was extremely excited for this event to not only meet Charles,a founding agent for Compass’s Florida office, but to again experience a Compass event. I have attended a few other Compass events and Open houses that are sponsored by the brokerage and I am always blown away by the professionalism and grandeur of the property, the people and the entertainment. 

The property was the stunning PH4907 in the Vizcayne South Tower off Biscayne Boulevard overlooking the intercoastal waterway, venetian islands and Bayfront Park. Right when I walked in I was blown away by the floor to ceiling windows, decked-out kitchen, living and dining room with TV’s and plenty of space for entertaining. The second floor master bedroom was spectacular. It had a large bathroom, breathtaking views and a walk-in closet large enough to please any fashion collector. Right down the hall was one of the guest bedrooms and a cozy lounge big enough for more than a few guests.On the third floor (Yeah, 3 floors) there was another lounge area and a private, outdoor rooftop for any occasion.

Just as I expected, the event was spicy. I was greeted by Charles and we chatted in the kitchen, trying not to get distracted by the views of the water and the city. The spread was amazing with small bites, champagne and beer. Stella Artois was sponsoring the event and provided their own glass engraver for party guests looking to take home a souvenir. There were so many interesting people there from investment bankers, other realtors, tech entrepreneurs and buyers from across the world. This made for a great opportunity to network and have interesting and diverse conversations. At one point I was having a conversation with an entrepreneur from Eastern Europe, a Real Estate Investor from South America and a tech mogul from Canada, with the 4 of us covering 3 continents! Once we spent time downstairs eating food and mingling, we all made our way to the third floor entertainment space where DJ EFX was spinning and famous Miami artist Atomik was creating his renowned orange character style for event guests to buy. All proceeds went towards the care of disabled adults and kids and they raised $2,200 by the end of the night! 

Cheers to you and your team, Charles. The spread was delicious, the people were classy and raising money for charity is the cherry on top! . It was an amazing experience with interesting and fun people, and I am looking forward to attending the next. All listing information below!

Tips for Navigating your Home Loan

First Time Home Buyer’s Guide to Mortgages

Although purchasing a home can sound like a daunting task, it is easier than you think. First-time homebuyers can enjoy some special advantages that encourage investing in real estate. As a first-time home buyer, you have access to tax breaks, state programs and federally backed loans should you want to put the least amount down.

How do you get qualified to be a first-time home buyer? According to the U.S. Department of Housing and Urban Development (HUD), there are a few ways to be qualified. A first-time buyer could be an individual who has not owned a principal residence for three years. Even if you have owned, but your spouse has not and you are buying together, you can purchase a home together as first-time homebuyers. A single parent who has only owned a home with a former spouse while married is also qualified, along with an individual who has only owned a principal residence not permanently affixed to a permanent foundation, also known as a mobile home.

What loan program would be best for you? Although it is best to consult with your mortgage professional, popular loan programs for first-time home buyers include FHA and Conventional loans. These programs differ based on amount of money down, minimum credit score, mortgage insurance requirements and property standards.

An FHA loan is government-backed and require as little as 3.5% down for most buyers. For some lenders, the credit minimum for an FHA loan is 580, allowing for more flexibility with credit. Even if you have a credit score of 500 to 579, you may be eligible for an FHA loan with a 10% down payment! FHA loans required mortgage insurance always, no matter the loan to value and have stricter appraisal and property standards. Not only is the property’s value assessed, but it is also thoroughly vetted for safety, soundness of construction and adherence to local code restrictions. The only way to get out of the mortgage insurance on an FHA loan is to refinance into a conventional one

A Conventional loan has a minimum of 5% down and a credit minimum of 620. The credit minimum will depend on the lender, as some only go down to 640, however you will not receive a conventional loan with less than a 620 median credit score. Conventional loans require mortgage insurance until you reach 80% Loan-to-value, and it can be removed. In terms of the appraisal and property inspection, the appraiser is looking more for the property’s value and less on the structural soundness and code restrictions.

Refinancing? - Stop Worrying About the Interest Rate!

When many people think about refinancing they have just one thing on their mind - what’s the rate? I am not sure who started this trend of only asking about the interest rate. Perhaps it is just human nature to try to understand complex topics by oversimplifying, but if you’re only concerned about your interest rate, you’re probably leaving money on the table. 

Like all financial plans, a mortgage refinance requires the right strategy and requires a holistic approach to diagnosing your money issues and how we can leverage this new loan to achieve your goals.

Buying Discount Points - When do they make the most sense?

For example, most people have a completely backward understanding of Mortgage Points, or Discount Points. They wrongly believe this is just a “cost” paid to the lender, without realizing that this “cost” actually secures you a below market interest rate that will ultimately save you more money in interest over the life of the loan vs the higher rate with less points.

Now, there is some nuance to the issue of points that requires a borrower to also analyze their goals across time. Will you live in this house forever or will you sell it in a few years? If you are looking to sell your home within the next few years - then buying points likely does not make the most sense - as you will add to your balance and not hold the loan long enough to see the benefit from the purchased lower interest rate. 

On the other hand, if you intend to hold this property for the full loan term and your goal is to pay the least amount, then buying points is almost ALWAYS the smartest option. Let me say that again, if you are looking to save the most money in total payments - that is your new loan balance + your new interest balance* - then buying points down to the lowest available interest rate is the smartest move. 

 *(most people forget, you do not just owe your loan balance, you ALSO owe an “invisible” interest balance - which is of course calculated from your current interest rate, your current loan balance, and the remaining years of your loan.)

Other Reasons to Refinance

Other reasons a refinance can be the right strategy include being able to take cash out of the equity in your home to consolidate higher interest debt payments. Instead of paying credit cards, a car loan, your mortgage, and student debt (all with varying interest rates) - a cash out consolidation refinance can help you reduce all those monthly payments into a single monthly payment of your mortgage, often at much lower interest rates too!

With interest rates so low, many people simply want to lower their monthly payment or shorten their loan term. Shortening your loan term means you will pay less in interest over the life of the loan, saving you money.

Things to take into account when considering a refinance - Make sure you, and your co borrower, take an honest and in-depth inventory of the following when considering a refinance:

• Your Credit Score

• Your current monthly mortgage payment

• The approximate market value of your home

• An idea about your debt-to-income ratio

NFT BZL At Art Basel 2021

NFT BZL 2021 AT THE FTX ARENA IN MIAMI, FLORIDA

NFT BZL in Miami, Florida for Art Basel 2021 was a success for its inaugural year. The Gift Shop Gallery was fortunate enough to be given VIP access backstage to this groundbreaking event.

We were introduced to Nansen and their incredible technology for sorting, aggregating, and analyzing NFTs from across the blockchain. Nansen can show you specific wallets and how to judge when to get in, and when to get out, on the next Bored Ape Yacht Club or CryptoPunks assets. It is an amazing NFT market intelligence product.

There was also an interesting panel discussion with Cathy Hackl, widely regarded as the “Godmother of the Metaverse”. This panel talked about brands like Adidas buying property in the Metaverse, the benefits of royalties for charity through NFT sales, ex. Some $41 million was donated to charity through one of the panelists' companies. 

Polygon was also on stage talking about lowering gas fees for NFT transactions and how their blockchain solution helps solve the current traffic optimization issues with many of the major cryptocurrency networks. It was an in-depth discussion on building the Metaverse, creating gamified economies, followings on Discord, and Web 3.0. 

Art Basel 2021 & Ivy FON

IVY FAMILY OFFICE EVENT - ART BASEL - Miami, FL

Ivy Family Office Network had a successful dinner for its exclusive investor & business network. Always a fantastic group of professionals put together by Marty Secada and his team. 

The evening was headlined by Salvatore M. Buscemi discussing his latest book, Investing Legacy, How The .001% Invest. Have you ever wondered what the difference is between a $300 million family and a $30 billion one? 

It was an intriguing look into the way the world's top art collectors and richest families allocate their time and assets. Surprisingly, most top .001% families lose the bulk of their wealth by the 3rd generation without proper custodianship. 

We were able to meet some great businesses in biotechnology, cryptocurrency, and real estate in attendance. We had many significant conversations with companies that present a number of potentially profitable investment opportunities with stellar credentials. 

Art Basel Miami always brings together a notable group of collectors, influencers, and artists from across the globe. We are looking forward to a fun week at Art Basel 2021, see you at Virgil Abloh’s final Louis Vuitton fashion show.

Millennials' Housing Market Outlook 2022

What Will the Housing Market Look Like for Millennials?

This year, we have seen just how hard a seller’s market can be to navigate. We continue to see a market characterized with contingency waivers, upwards of 60 offers on a single property, price escalation clauses and record prices. Not only did we see the highest rise in Real Estate prices over more than a decade, but also record low mortgage rates and the lowest inventory since 1970.

Although there are concerns involving affordability with most house values going above and beyond where they were just 6 months ago, the strengthening job market and savings increase are keeping homeownership accessible to many buyers, including millennials.

Look no further than the eleven (E11EVEN) Residences being built in Miami. Only a millennial brand - that began as a strip club - could branch out to top shelf residential and commercial real estate.

With many millennials reaching their 2 years of work history, they are expected to drive a residential housing boom in 2022. The housing market is also starting to slowly cool off per Zillow’s regularly scheduled report in August with more properties on the market. This is slowing down competition and adding more opportunities to purchase. In 2022, we are expecting to find a somewhat more normal market, although it will still be busier than previous years. While the volume will increase in the market, we should still find mortgage rates favorable to those purchasing. These two factors together will build a stronger buyer’s market, keyword “stronger”, because it will still remain in the seller’s favor.

While we expect inventory to rise and mortgage rates to stay generally low, we do not expect home prices to drop significantly. We are predicting a 3-5% increase in home values Year-over-year in August 2022. Zillow’s Nicole Bachaud predicts as much as a 12% rise year over year in July 2022. However, it is predicted that they will rise slower than this year. We saw growth in the double digits month over month and that is not predicted to happen in 2022.

One of the largest factors with the housing market frenzy has been the record low mortgage rates. While we do not predict rates to skyrocket like the housing market, we do not expect them to stay as low as they are now. We have seen them slowly rising by about 5-10 basis points, 5%-10% of 1%, each day and they could be as high as 3.75-4% again by the end of the year. This is important for those in the market next year as they will be looking at higher monthly payments. We see the best ratio of home value to mortgage rate being over the next 2 months before the start of the new year.

In conclusion, we expect a friendlier buyer’s market with less competition due to a higher volume of homes on the market. Inventory has been steadily increasing, taking the pressure off of buyers and easing prices just a bit. This will bring back a cooled-down offer process and will hopefully not see more than a couple offers on a single property. Mortgage rates continue to steadily rise, most likely hitting the high 3%’s to low 4%’s by the new year. However, we do not see prices dropping very much or housing affordability to increase. While we see home value increases slowing down month over month, we do not see them falling fast or falling at all, but the increase in properties on the market will help ease the pain just a bit.

Rapid increase in rents continues

Primary and owner-equivalent rent rose by .5% in the month of September alone.This increase is worrying economists everywhere as this was the same statistic seen in 2006, just two years before the market collapse of 2008. September was the end of the eviction moratorium, which is likely to have put unwanted pressure on rents.

Another potential explanation could be due to city housing bouncing back after the mass exodus out of cities and close-quarter living. The cost of construction is extremely high at the moment due to low inventory, due to supply chain problems, and high costs for labor and materials.

Mortgage Rates continue to Rise

On Wednesday October 27th, mortgage rates rose to an 8-month high. The average price for a conforming loan went above 3.25%, a rate higher YTD by 30 basis points. Refinance demand fell almost 3% week over week. Purchase applications rose 4% for the week, but were still lower YTD.

If you are looking to refinance, make sure to work with a loan officer who can shop around for the lowest interest rate, as different lenders specialize in different products.

We also work with Hard Money, Private Lending, DSCR loans, Bridge Financing, Commercial and Investment Financing, Multi-Family, Single Family, Cash-Out, Refinance, Mezzanine Financing Solutions, Construction, Short & Long-term Financing available.

Exciting Miami Real Estate Projects

Waldorf Astoria Hotel and Residences

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300 biscayne blvd Miami, FL 33131- developers PMG and Gerybrook Realty- 100 story- 306 condos, 205 hotel rooms- $650k for Junior Suite up to 4.9 million for 4-bedroom residence

Set to be the tallest building in Florida, the Waldorf Astoria’s cube-stacked tower will not disappoint. The building was conceptualized by Burj Khalifa architect Carlos Ott and designed in association with Sieger Suarez, an extremely reputable architecture company boasting over 42 years of experience. The residences will feature touches by BAMO, the San-Francisco based design team. Residents will have access to a resort-style pool deck with cabanas, restaurant, the Waldorf Astoria’s famous Peacock Alley lounge, a signature spa and a kid’s club. All residences will also feature smart-home tech with custom mobile app access and much more.If you would like to purchase one of these fabulous units, contact Bayside Funding Corporation to get with a local agent!

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Elysee

Edgewater, Miami- 70NE 23rd St Miami, FL 33137- Designed by Jean-Louis Deniot - 57 story - 100 units - Residences starting at $3.2 million

With closings finishing up at Elysee and its Temporary Cerfiticateof Occupancy (TCO) being cleared, residents have began moving into this 3-tiered tower designed by Arquitectonica. The Elysee is now the tallest building in Edgewater and with only two or fewer units per floor, this 57-story tower is the area’s first luxury boutique building. All units come equipped with chef-ready kitchens and bay and city views with two terraces per unit. Amenities include a bayfront pool, poolside bar, resort-sized lap pool, yoga studio, children’s room and grand salon with 360 degree views. Resale prices are expected to be around $1,000/square foot. If you would like to purchase one of these fabulous units, contact Bayside Funding Corporation to get with a local agent!

Five Park- South Beach, Miami- 500 Alton Rd Miami Beach, FL 33139- Developers Russell galbut and David Martin- 48 story- 98 condos and 180 Park residences- 519 foot tower, tallest in South Beach- Residences starting at $2.5 million

Scheduled for completion in 2023, the mega development will feature 98 condos and 180 “park residences” inside its 519-foot tower making it the tallest in South Beach. Interiors will be designed by Gabellini Sheppard, whose projects include the Knickerbocker Hotel in New York, New York and the Istanbul Edition in Istanbul, Turkey. Five Park’s massive amenities (40,000 sqft) include a 5th-floor pool deck, 26th floor clubhouse, two fitness centers, a restaurant, grand lobby with a cafe, library and co-working spaces. Prices start at $2.5 million and offer choices of anywhere from two- to five- bedroom residences.If you would like to purchase one of these fabulous units, contact Bayside Funding Corporation to get with a local agent!

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Baccarat Residences

444 Brickell ave Miami, FL 33131- Developers Arquitectonica- three towers- 1400 residences, 250 room 5 start hotel, class A office space and retail- Prices start at $1.1 million with a choice of 1-4 bedroom residence

This is the group’s most luxurious project to date and plans are in place for an early 2022 groundbreaking with a 2025 completion, in spite of rare archeological findings at the demolition site in the spring of 2021. With 3 huge towers, this will be one of the major developments of the decade and another sign that brickell and Miami in general are on the rise with US residents and businesses flooding in every month. The first tower complex is designed to resemble undulating waves and will feature reflective crystals managed by French Crystal-maker Baccarat. Meyer Davis Studio Interiors are envisioned as a mix of 18th century French architecture with the 30’s Art Deco Style as well. Amenities include a restaurant, Marina with luxury yacht dock space, spa, barber shop and beauty salon, swimming pool, gamer room, children’s playroom, wine cellar and a business center. There will by 1,400 residences, 250 5-star hotel rooms, Class A office space and retail as well. Prices start at $1.1 million per unit with a choice of 1-4 bedroom residences.If you would like to purchase one of these fabulous units, contact Bayside Funding Corporation to get with a local agent!

We also work with Hard Money, Private Lending, DSCR loans, Bridge Financing, Commercial and Investment Financing, Multi-Family, Single Family, Cash-Out, Refinance, Mezzanine Financing Solutions, Construction, Short & Long-term Financing available.

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