Comparison of factors set off dissimilar reactions that are but colorful examples of the current opinions and sentiments describing “The Florida Real Estate Market”.
Sellers, Buyers, Realtors, Mortgage Brokers are reminded by the constant changing set of game rules which keeps them challenged and confused with day to day reports. How to buy or sell real estate? Asking themselves is this the right time to buy? Sell? Even asking themselves can one survive and make a decent living with a career in real estate? Eager first time buyers are they turned off as they are swept to the side with cash buyers and the difficult qualification process? Should they keep renting to avoid unwanted frustrations?
There are no right or wrong answers! The person who risks nothing, does nothing, has nothing, is nothing, and becomes nothing. He may avoid suffering and sorrow, but he simply cannot learn and feel and change and grow and love and live. (Leo Buscaglia 1924 – 1998) Driving the market shift is a sharp contraction in the inventory of homes for sale in South Florida. The inventories of single-family homes and condos for sale in Miami-Dade and Broward counties have hit their lowest levels in more than six years.
The inventory of single-family homes on the Multiple Listings in Miami-Dade plummeted to 4,836 in April, down 72 percent from 17,070 in July 2008, when the selection peaked. In April, Broward’s singlefamily inventory similarly had dwindled 69 percent to 4,438 homes listed from 14,489 in April 2008.
With some South Florida home prices sliced in half from their peak, there are a lot more people who think it’s a smart time to buy than those who think it’s a smart time to sell.
One factor is the shortage: The region has one of the highest rates of homes under water — meaning owners owe more than they could get for them. There is certainly no incentive for those folks to rush to sell when the market appears to be turning up.
Many signs suggest the South Florida market has stabilized after the wrenching upheaval of recent years. Home prices rose 2.5 percent in metropolitan Miami between March 2011 and March 2012, accord ing to S&P’s Case-Shiller Home Price Indices, even as U.S prices overall fell 1.9 percent year over year.
Preliminary data released this month show the taxable value of Miami-Dade real estate — including residential, commercial, industrial and agricultural — rose 1.48 percent between 2011 and 2012, marking the first increase in value since 2007. Broward County’s taxable value rose 1.24 percent this year.
With many investors from South America, Canada, Russia and Europe plunking down cash, buyers looking to take out a mortgage are at a distinct disadvantage. Honestly, most agents have not done a deal for some time where there’s bank financing, Put a 10 to 15 percent premium on the purchase price if you’re financing, because sellers don’t want to take it off the market for 30 to 60 days, Cash is still really driving and moving the market.
LOW-END APPRAISALS
A big problem for those financing to buy:
Appraisals are coming in below the agreed-upon prices. That’s because they rely on historical data and trail the market.
The lower appraisals mean buyers have to ante up larger down payments, because banks won’t lend as much.
Many houses are selling above the appraisals.
Many buyers are learning that if they balk, they lose the house because others are willing to make up the difference out of their own pockets.
STILL PROBLEMS
While sales are hot amid slim pickings, the South Florida market is far from healthy in the broader economic sense. Property values plunged more sharply in Miami-Dade and Broward than nearly anywhere in the nation. South Florida in particular has among the highest percentages of homeowners under water.
The foreclosure rates in the region are among the highest in the country — and more are coming.
Now banks have clearer guidelines on acceptable practices in carrying out foreclosures, Many were artificially depressed last year when banks held back because of consumer-protection litigation by various state attorneys general — are expected to continue to rise. Many are expected to be resolved as short sales or sold for less than is owed to the lender.
Strong demand for distressed properties in South Florida likely means that they will be absorbed over the coming year or so, holding down prices but not causing major tremors.
Florida’s allure to outside buyers is providing a resilience that many other places hit hard by the real estate downturn don’t have.
Foreign investors continue to pile into the market to make investments, as do New Yorkers and others from the Northeast, many of whom regard Miami as a second home.
Still, the lack of super deals is turning off some bottom fishers.
A typical example is Canadians who wanted a 2/2 condo in Broward for $130,000 or less, they came down last month and perused a half-dozen properties in Pompano Beach, Hallandale Beach and Hollywood They left empty-handed and disappointed, not sure whether to adjust their limits to a single-family house or forget about the purchase.“There wasn’t anything that was a nice place, according to another Canadian who lives in Ontario a “Some of the lower-priced ones that we saw were really junky and needed a lot of work — nothing like what we wanted.”
