State of the South Florida Market.

Its hard to believe 2013 is half over already.

If you've been following the news this year, South Florida has undergone a complete transformation real estate wise.

Whereas just 24 months ago the market was sluggish, today prices are up and homes are selling within hours or days of listing, for over asking price, and the winning offer is usually 1 of several placed on the property.

It feels like 2006 all over again.

Many have wondered if we are in another bubble. And many erudite articles by people with lots of credentials after their names have weighed in.

There is no doubt that the artificially low interest rates, fixed by the FED’s policy, are partly driving the current boom. As long as money is relatively cheap, and qualified borrowers can still get a mortgage, there will be lots of buyers.

Further, credit requirements have relaxed some, and more and more people are now qualifying for a loan.

But the key principle driving this boom is still simple Supply and Demand Economics. 

Demand remains high. People continue to want to live in South Florida. That hasn't changed for 100 years. Further, rents have gone up consistently for the last 2 years, and a recent study determined that the average renter would break even in under 2 years if they purchased instead of staying a renter. This makes buying very attractive to those that qualify. So as long as interest rates remain close to where they are, there will be plenty of buyers. Add to this the continued influx of cash buyers from other countries and I see no change in this trend over the short term (12-24 months). In a nutshell, demand is up, and is staying so.

With regard to supply the picture is a bit more in flux. By all accounts inventory is still at all time lows, driving the multiple offer/bidding wars we now see every day on the ground.  Banks have been slowly putting their foreclosures on the market, but there is no clear picture on how much “shadow inventory” still exists. There are however some indicators that the supply dearth is easing. This will inevitably stabilize pricing and ease some of the frenzy that currently surrounds buyer bidding.

I’ve learned the hard way not to make any long term predictions in our housing market, but by all the data I can see, we are still looking at 12-24 months of solid growth and then a leveling off.

Barring some cataclysm in the market, or in interest rate policy, I believe housing will remain strong in the near future.

Is Now the Time to Buy: Part VII

This article in the Miami Herald yesterday says it all and I highly urge you to read it. We are in another housing boom and it won't be long before many will be priced out of the market, again.

2013: The Year of the Housing Recovery

As 2012 comes to a close its time to prepare for the coming year. A lot has happened this year in the housing market, and I hope my Blog has helped you navigate those waters.

I'm optimistic for the coming year, and based on the data I've been collecting I think 2013 may be the first real "housing recovery" year since the crash of 08'.

Here are 3 more recent articles all pointing toward a continued recovery.

Home prices rise in Oct. by most in 6 years

Multiple offers empower South Florida home sellers

Top economists: Fla.’s housing market growing stronger, U.S. on same trend

Is Now the Time to Buy: Part VI (Why the end of the year is the best time to buy)

Over the last decade I've sold a fair amount of property in the last quarter of the year, particularly in December/January. So I thought I would put together a quick post highlighting the benefits of buying (either putting under contract or closing) before the end of the year.

1. Banks want to close loans by the end of the year. There is always a mad push to close loans before December 31st.

2. Banks want to sell off as much REO inventory by the end of the year and there are deals to be had. This is a very important point as Special Assets are closing their books for the year and will try and move as much inventory as possible in the month of December.

3. Sellers want to close by the end of the year and start the new year fresh.

4. Some Sellers have capital gains issues and thus want to close before the end of the year. Further, the current political establishment is hell bent on raising taxes and capital gains is one area they have been eyeing  So any seller with a capital gains issue wants to close and get paid BEFORE the rates on capital gains goes up

5. Most people are not seriously looking during the "holidays" (most of December) so its an excellent time to go after a property. Particularly in an aggressive "sellers market" like we have currently here in Miami. There are far fewer buyers vying for the same properties in December thus the multiple offer scenarios we've all become accustomed to tapers off some.

I've done many deals in December simply because my clients took advantage of the "slow period" in Real Estate.

Many buyers fall into the "its the holidays so I'll start looking again after the New Year" viewpoint. This is normal, its that time of year.

But my experience has told me that this is the BEST time to go looking for property. There's less competition  and most sellers (banks included) are more motivated to sell/do a deal.

Fla.’s housing market continues positive trends in Oct. 2012

ORLANDO, Fla – Nov. 19, 2012 – Pending sales, closed sales and median prices rose, while the inventory of homes and condos for sale dropped in Florida’s housing market in October, according to the latest housing data released by Florida Realtors®.

“With Thanksgiving just around the corner, we have a lot to be thankful for here in Florida,” said 2012 Florida Realtors President Summer Greene, regional manager of Better Homes and Gardens Real Estate Florida 1st in Fort Lauderdale. “The state’s latest unemployment rate fell to 8.5 percent, the lowest in nearly four years – and combined with the momentum of the housing market, it clearly shows that Florida is on a positive path and has been for months. Pending sales, closed sales and prices are trending up.”

Statewide closed sales of existing single-family homes totaled 17,779 in October, up 25.3 percent compared to the year-ago figure, according to data from Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. Closed sales typically occur 30 to 90 days after sales contracts are written.

Meanwhile, pending sales – contracts that are signed by not yet completed or closed – of existing single-family homes last month rose 56.7 percent over the previous October. The statewide median sales price for single-family existing homes in October was $145,000, up 9 percent from a year ago.

According to the National Association of Realtors® (NAR), the national median sales price for existing single-family homes in September 2012 was $184,300, up 11.4 percent from the previous year. In California, the statewide median sales price for single-family existing homes in September was $345,000; in Massachusetts, it was $294,900; in Maryland, it was $244,357; and in New York, it was $225,000.

The median is the midpoint; half the homes sold for more, half for less. Housing industry analysts note that sales of foreclosures and other distressed properties continue to downwardly distort the median price because they generally sell at a discount relative to traditional homes.

Looking at Florida’s year-to-year comparison for sales of townhomes-condos, a total of 8,252 units sold statewide last month, up 16.4 percent compared to October 2011. Meanwhile, pending sales for townhome-condos in October increased 47.1 percent compared to the year-ago figure. The statewide median for townhome-condo properties was $107,000, up 20.2 percent over the previous year. NAR reported that the national median existing condo price in September 2012 was $181,000.

The inventory for single-family homes stood at a 5.2-months’ supply in October; inventory for townhome-condo properties was also at a 5.2-months’ supply, according to Florida Realtors. Industry analysts note that a 5.5-months’ supply symbolically represents a market balanced between buyers and sellers.

“Once again, everything that should be going up in the market is going up, and everything that should be going down is going down,” said Florida Realtors Chief Economist Dr. John Tuccillo. “As impressive as the year-over-year gains for October are, far more impressive are year-to-date gains of 2012 over 2011. They indicate the depth and resilience of this recovery.”

The interest rate for a 30-year fixed-rate mortgage averaged 3.38 percent in October 2012, down from the 4.07 percent averaged during the same month a year earlier, according to Freddie Mac.

To see the full statewide housing activity report, go to Florida Realtors website and click on the Research page; then look under Latest Housing Data, Statewide Residential Activity and get the October report. Or go to Florida Realtors Media Center and download the October 2012 data report PDF under Market Data.

© 2012 Florida Realtors®

Is Now the Time to Buy: Part V

Over this past week a slew of new indicators have come out all pointing to a vigorous rebound in South Florida housing. Over the past year I have been running this series in the hope to help my clients keep up with the voluminous data about the housing market.

It seems all the indicators continue to indicate strengthening: with prices up, foreclosures down, construction way up, and housing starts way up; further strengthen my position that if your in the market to buy (or are thinking about it) now is the time to do it.

Home vacancy rate falls to pre-housing bubble levels

Foreclosure rates and mortgage delinquency down in August

Contracts for future construction jump 66% through September

South Florida housing starts jump 41% in Q3

Home prices rise in August

If you have any questions please contact me. I'm hear to help you take advantage of the new housing "boom"

Homes are selling faster (reprinted from floridarealtors.org)

WASHINGTON – Oct. 23, 2012 – Inventories of for-sale homes aren’t the only thing dropping. The amount of time homes stay on the market is growing shorter as well – down 11 percent in the last year – according to the latest Realtor.com data.

Homes were listed on average 95 days, according to September housing data. That is down from 107 days a year earlier.

Homes sell fastest in Oakland, Calif., where the median age of the inventory averages 21 days – 57 percent below one year ago. Denver, Colo., boasts a median age inventory of only 38 days, followed by fast-selling markets of Stockton-Lodi, Calif., with 43 days, and San Francisco with 44 days.

As the median age of the inventory is falling, inventories of for-sale homes continue to hover at record lows too, dropping 18 percent last month compared to a year ago.

“There’s a recovery,” Curt Beardsley, vice president of Realtor.com, told BusinessWeek. “Our market times are low and there’s actually a compression of inventory.”

Homebuyer demand is increasing, with housing affordability still high and ultra low mortgage rates that have pushed homebuyers’ purchasing power higher. The rise in demand has caused asking prices to also rise. Last month, the median asking price was $191,500, up 0.8 percent compared to a year earlier, Realtor.com reports.

Source: “Listings of Homes for Sale Drop as U.S. Housing Recovers,” BusinessWeek (Oct. 15, 2012) and REALTOR® Magazine Daily News

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