Janet Ben Zvi is a luxury real estate advisor with Douglas Elliman working in Miami Beach.
Every week, we ask a Miami real estate professional for their thoughts on the top three stories from the week before. This week, we spoke with Janet Ben Zvi, a luxury real estate advisor with Douglas Elliman.
Miami Agent (MA): A recent report from Quicken Loans found that Miami sellers tend to undervalue their homes. Have you noticed this trend, and if so, what do you think is behind it?
Janet Ben Zvi (JBZ): I personally have not experienced this trend. I actually believe with the current market inflation that owners are overvaluing their homes. I believe sellers these days are more educated on market conditions and comparable sales in surrounding neighborhoods, and tend to price their properties around 15-20 percent above market value.
MA: What is one of the major challenges in securing financing for a major development, and how do you overcome those difficulties?
JBZ: The major challenges in financing any project can come from a variety of factors. Banks are still very shy to lend to many projects due to market challenges of the past decade. Moreover, only the strongest borrowers, placing at minimum 25-30 percent collateral, will be taken seriously. Projects must be presented to the bank complete as complex business deals, offering the bank a very clear picture of who will be the equity partners; who will be building the project; how the project will be marketed; and what may occur should the project not be sold out.
Developers have to present contingency plans and offer the bank real security, via personal guarantees or other strong collateral to make larger deals happen. As a developer, one of the most important factors in getting any deal done is your track record and business plan. There has to be a clear path to success and plan on how to repay and carry the debt requested.
MA: Drawing from your experience, what do you think is Miami’s next big luxury market and why?
JBZ: I believe Edgewater is definitely the new luxury market. Property values are exploding and skyscrapers are rising in Edgewater. Developers have been snapping up parcels and keying up high-rise projects in the Bayfront neighborhood. Land prices are soaring. Quoted by Jaret Turkell, a director with HFF: “Edgewater has become one of the hippest, most chic places to live, driven by its proximity to the Design District and Midtown. It’s a place people want to be.”