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South Florida Real Estate
Archive for the 'Investment Real Estate' Category
Is Miami Real Estate Undervalued?
According to an article in today’s South Florida Business Journal, a report by IHS Global Insight suggests that in grossly overvalued markets, prices dropped an average of 37% from 2005 until the fourth quarter of 2009. In Miami, prices have fallen 35.8% in that time frame. The report suggests that for the country as a whole, the real estate market is now slightly undervalued.
Home Buyers Tax Credit Ends April 30
If you are planning on using the Home Buyers Tax Credit to purchase your home, time is running out.
Sales of High Priced Multifamily and Hospitality Properties Increase
Why Current Mortgage Market is Like the Diamond Trade
The main reason the current mortgage market is like the diamond trade is because the Fed’s current policy has been to create the market for mortgage backed securities. The Fed agreed to spend $ 1.25 trillion through the first quarter of 2010 to purchase mortgage bonds, thereby keeping interest rates low and stimulating the housing market.
The video below, How Interest Rates Move, does a great job of explaining interest rates in general and how the Fed’s policy has affected the housing market the up until now.
Miami Real Estate – Lots Of Movement In All Directions
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.
Foreign Investors Looking At U.S Real Estate
Now that the residential real estate market appears to have stabilized, investors are starting to look at U.S properties as potential investments. According to Kevin Brass of the Wall Street Journal, groups of investors from Mainland China are still touring properties in the U.S.
With the decrease in real estate prices and the drop in the dollar in relation to other currencies, foreign investors are taking advantage. Shouldn’t you be?
Commercial Property Sales In Miami Down 70% In 3rd Quarter
Third quarter commercial sales decreased 70% across the board from last year’s third quarter sales. The price per square foot fell
- 12% for office
- 14% for multi-family
- 23% for industrial and
- 9% for retail.
South Florida Real Estate – Third Quarter Summary
According to the National Association of Realtors third quarter report, sales are up throughout most of the country. The biggest increase in sales was in Florida at 36.8%. This is no surprise considering that we are also the state with the highest number (9 out of the top 15) of metro area price decreases in the double digits. Miami-Fort Lauderdale-Miami Beach metro area had a price decrease of 24.6 percent. What this means to you depends on whether you are a:
- Seller – Pricing is everything in this market. Although sales are up, the high unemployment rate and continued high inventories mean that prices will not be going up any time soon.
- Buyer – If you are waiting for the bottom of the market, you probably missed it, but high inventory levels, low interest rates and the extension and expansion of the First Time Homebuyers Tax Credit, still equal a great time to buy.
- Investor – There are and will continue to be good buys but the high unemployment rate and inventory levels will continue to put downward pressure on rental and vacancy rates across the commercial/investment sector.-
More detailed information regarding specific real estate markets in Miami-Dade County can be found in Miami Real Estate – Single Family Homes Market Summary
South Florida Real Estate Market: What is Going On?
The following were all topics in the news last week and all of them have an effect on our real estate market:
South Florida home sales surge, prices plunge, mortgage rates fall to lowest levels since May, Florida’s unemployment rate is up, Florida foreclosures are up and may be increasing, another condo developer files for bankruptcy, developers selling in downtown Miami for $200 per square foot, the first-time buyer credit is expiring, school starts Monday, Miami-Ft. Lauderdale real estate market is ready for a rebound, pending sales in Miami-Dade County up over 96% in July over same time last year, Florida loses population for the first time since World War II.
So just what is going on? In short, there have been a lot of positive signs that our real estate market is at or near its pricing bottom, but that doesn’t mean we are going to see appreciation any time soon. Closed sales are up and pending sales are up even further. The fact that housing prices in Miami-Dade are at their most affordable levels in years, coupled with the government’s first-time homebuyer tax credit, has helped move a lot of the lower priced inventory. The high unemployment rate will result in more foreclosures and our tourism and real estate dependent economy will take longer to recover from the recession than states with more diverse economies. All this means is that the real estate market will go through up and down spurts from month to month, similar to what the stock market is doing, and that prices will stagnate for a while instead of appreciating. Some months are going to see more sales than others. Certain areas are going to continue to see decreasing inventories. I suspect that with the start of school and the end of the first-time homebuyer credit at the end of November, the rate of sales is going to taper off a bit. If you are buying, there are going to continue to be deals and you will still be in the driver’s seat. If you are selling, pricing will be the most important factor.
Don’t Underestimate the Value of Curb Appeal
In the current real estate market, a lot of attention has been given to staging a home to help it sell. I am a big fan of staging, but think curb appeal is even more important. After all, it doesn’t matter how nice your home looks on the inside if buyers drive up, take a look at the outside and drive on. Here are some simple ideas to create curb appeal for your home:
- Make sure the outside looks clean and fresh. Remove cob webs and brush off dirt and bugs from outside walls.
- Pressure clean walk-ways, pool patios, fences.
- Paint any exterior that looks drab or dirty.
- Remove weeds and dead leaves from plant beds. Fill in bare spots with new plants and lay down a fresh layer of mulch.
- Re-asphalt driveway
- Paint or stain front door.
- Thoroughly clean all outdoor light fixtures and make sure the bulbs are working.
Even if you are not selling your home, these small fixes can make your home inviting to your friends and make you fall in love with it all over again! If you are a buyer or investor, look at homes that don’t have curb appeal. Most likely they have been on the market longer than homes in the neighborhood that do and you can get them for less than you would a house that has a pleasing exterior. Once the house is yours, you can add curb appeal and reap the benefits. Your cost to create appeal should be minimal compared to the savings you got on the purchase.
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