The latest Forbes real estate article, America’s New Housing Crisis Capitals, lists metropolitan areas were prices are still dropping with continued declines expected. Thankfully, none were in Miami-Dade, Broward, Palm Beach or Monroe counties!
Category: Buying
Tips to make your real estate buying experience a smooth one
Although nationally existing home sales fell in December, sales of single family homes in Miami were up 37% over November. With the median price of both single family and condos down significantly and the expiration of the first First Time Homebuyers Tax Credit coming up in April, sales are expected to continue rising in the first quarter.
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Miami Real Estate – 48 SW 48 Ct
Great price for this 3 bedroom 2 bath home on double lot near Coral Gables, Miami International Airport, Downtown Miami. Wood floors add warmth to this 1948 charmer.
The 2010 real estate market has started out all over the place, both nationally and locally. On a national level, the lousy weather has had a negative effect on the new home segment, with construction on new homes and apartments falling 4% overall in December (construction rose in the South by over 3%). Applications for new building permits, however, increased by 11%.
Locally, the market has been moving a lot, keeping buyers, sellers, renters, and Realtors, on their toes. There are constant price adjustments on properties already listed, both upward and downward; properties priced well are going under contract (last week the EWM office in Coral Gables that I work out of had $21,000,000 worth of transactions) and renters are snapping up deals as downward pressure on rents, especially in condos, has given tenants more negotiating room.
Many economists are predicting a significant hike in home prices over the next 5 years, so if you are a renter who has been debating on whether or not now is the right time to buy, you may want to take a close look at the numbers. In her article, Ten Cities To Go From Renting To Buying, Francesca Levy states that although renting isn’t always cheaper than buying in the ten cities mentioned in the article, home buyers are likely to get a good return on their investment.
According to Altos Research, a firm that tracks the movement of single family homes in 27 real estate markets, the asking price for single family homes has increased over the last three months. This finding is especially interesting since it was reported in a Forbes article titled, Cities With The Fastest-Falling Home Prices. Miami was the only market out of the 27 to post an increase. The findings also show that single family homes in Miami sit on the market the longest, approximately 8 months.
The good news is that sales on existing homes, both single family and condos, continue to increase and inventories are decreasing in Miami-Dade county.
The bad news is in the foreclosure numbers for 2009. The numbers include all properties that are in some stage of the foreclosure process.
- Palm Beach County – 30,870
- Broward County – 69,633
- Miami-Dade County – 72,391
- Monroe County – 1,275
Since the unemployment rate is so high in Florida, foreclosures are expected to continue to add to inventories on the market in 2010. Miami-Dade’s new on-line foreclosure program and the government’s Home Affordable Refinance Program should help keep the foreclosure rate lower than 2009’s.
I came across a great article that explains the effect of interest rates on your purchasing power so well, that I have to blog about it. Now that inventories are decreasing and we are running into an April 30, 2010 deadline for tax credits, you have to read it if you have been on the fence about whether or not now is the right time to buy real estate.
The article, If You Don’t Buy a House Now, You’re Stupid or Broke may have an offensive title, but the graphs that it contains illustrate historic interest rates and increasing trends and the explanation on how an increase in rates affect what you will pay in principal in interest are easy to understand. In a nutshell:
- For 30+ years interest rates ranged from a low of 7% to a high of 18% (my husband and I were paying over 16% interest when we purchased our first home in the 1980’s)
- Current interest rates are the lowest they have been in 40 years
- For every quarter-point change in interest rates you will pay an additional $6,000 for every $100,000 borrowed over the life of a 30-year fixed rate mortgage.
Okay, you have been hearing that now is the time to buy a home, but maybe you are still unsure of why, when there is so much inventory on the market and so much insecurity in the economy. Here are 7 specific reasons:
- Home Buyer Tax Credits – The Government is paying first-time home buyers and move-up buyers money to purchase a home. It can be a single family home or a condo, it just has to be your primary residence.
- Interest rates are still at historic lows, currently around 5.25% for a 30-year fixed rate mortgage.
- Lenders are moving their inventories of foreclosures and are becoming more likely to agree to short sales.
- Interest rates will increase due to the huge amount of government debt.
- The median price of a single family home is currently $185,000, down from a median price of $400,000 at the peak of the real estate boom.
- There is currently a 10 month supply of single family homes in Miami-Dade County, down from a 24 month supply at the end of 2008. A stable market has an inventory of 6-9 months.
- There has been a 29% increase in sales since last year.
- Whether single family or condo, under $300,000 or over $1,000,000, the market trend has been a steady decrease in inventory since at least October of 2008.
Now, you may be a naysayer and agree with someone who stated that the price of real estate is going to go down another 33%, but those of us that are active in the market are not seeing it. We are seeing inventories decreasing, foreigners and investors coming back into the market that they had shied away from during the boom years and buyers getting some very good buys. Miami is on sale and many properties are selling for less than what it would cost to build the exact same structure on the same lot. Are you going to be someone who says, “Shoulda, woulda, coulda” or someone who feels lucky that they got into the market when they could?
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Miami Foreclosures Now On-line
In an attempt to work through the more than 110,000 open foreclosures and the 7,000 new ones that are filed each month, Miami-Dade County has put them on-line. Registration is free and allows you access to the county’s foreclosures. If you want to bid, you will be required to put down a refundable 5% deposit.