ILoveSoFla.com
South Florida Real Estate
Buying Real Estate Needs to Make Sense
Two sentences in today’s Wall Street Journal article by Brett Arends sums up all of the often conflicting real estate news these days. “A real-estate purchase needs to make sense on its own terms. And measure it on cash flow today, not the hope for capital gains tomorrow.” This advice makes sense in any real estate market and, if followed, should make real estate a great long-term investment, whether it is your primary residence, or an investment property.
Buying Real Estate is a Long-Term Investment
“Long term Miami will outperform the rest of the country. In 10,20, 30 years, prices will be rising faster in Miami than in the rest of the country,” states Lawrence Yun, Chief Economist of the National Association of Realtors. The important item in this quote is the time frame. 
Miami Home Prices Continue to Decline, Presenting Buying Opportunities
Although today’s S&P/Case Schiller Price Home Index showed a slight 0.5% increase in home prices between April and May, Miami had a 0.8% decrease. Nationally, this was the first month to month increase in three years and has many people claiming that the real estate market appears to be stabilizing as price decreases level off.
Overall, this is great news as any stabilization in the housing market will help ease a lot of the economic problems that resulted in the market’s severe free fall. This does not mean that prices will be going up any time soon, especially in hard hit areas like Miami, but rather that the decreases should not be as significant as they have been. Home prices in Miami are down 25.2% over last year’s prices and the market in Florida still has a long way to go before we can say we have recovered. Some facts that will keep our market trudging along slowly:
- Florida’s real estate market still has a lot of inventory to work through;
- Spring and early Summer normally have higher sales as families purchase and settle in before a new school year;
- $8000 first time buyer credit expires at the end of November. If you are a buyer that qualifies for this credit, hurry;
- Interest rates, while still low, have started to move up slightly;
- There are probably many sellers sitting on the sidelines waiting for the inventory to decrease a bit before listing their property
- The majority of sales and listings are still short sales and foreclosures.
This is not doom and gloom news. Just a reality check. There are great deals out there if you are a buyer or investor. If you are a seller, be realistic with your sales price and your property will sell.
Miami FL – Commercial Real Estate is the Next Buyers Market
An Associated Press article last week highlights opportunities in commerical real estate. Whereas many economists are
predicting that the housing market is at or close to bottom, the commercial sector is just starting to see massive defaults. A skyscraper in New York that was purchased for approximately $50o million in 2006 just sold for $100,000! The commercial real estate market is the worst in decades and there are billions worth of distressed properties in every market. This creates an amazing opportunity for long term real estate investors.
Although Miami does not have the commercial density of New York or Chicago, it did go through a commercial building boom, and there will be many opportunities in all commercial sectors over the next year.
Buying a Home? Know What You are Looking For
I know it sounds obvious, but knowing what you are looking for isn’t always as simple as it sounds. Once you are pre-approved for a mortgage, decide what your ideal neighborhood and home would be. Are schools important or is it more important that you be close to work? Determine what the “must haves” are. These are the specifics of the property or neighborhood that you are not willing to give up but would be willing to sacrifice a “nice, but not necessary” for. This could be an extra bedroom, pool, specific school district, waterfront criteria etc. Knowing what you are looking for both in a neighborhood and home is extremely important as it will help keep you focused. Once you narrow down your wants, you will realize you don’t have to look at everything on the market, only those specific properties that meet your criteria.
Buying a Home? Get Pre-Approved For a Mortgage
The first and most important step in buying a home is to get pre-approved by a lender for a mortgage. This can be directly from a bank or credit union you do business with or through a mortgage broker. Getting pre-approved will let you know how much house you can afford or, better yet, how much of a house you feel comfortable with. The lender or mortgage broker will give you an idea of what your monthly costs will be and will give you a Good Faith Estimate of closing costs to let you know how much money you will need to bring to the closing table to finalize your purchase.
Find Me On…
