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$8000 Homebuyer Tax Credit Set to Expire Soon
The government’s first-time homebuyer tax credit is set to expire on December 1, 2009. That gives buyers a little over 3 months to:
- qualify for a mortgage
- find their home
- negotiate a contract
- have inspections done
- get an appraisal
- get a financing commitment
- and close on the house by November 30.
Any one of the bullet points above can derail your closing and put you back at the starting gate. So, how do you maximize the time that is left? If you are a buyer, make sure you are qualified for a mortgage before you start looking at houses. If you are a seller, make sure you take advantage of this time by pricing your home appropriately for sale. In this market, pricing is everything. Buyers know that prices have come down significantly and aren’t going to over-pay for a house. They may be willing to pay a little more than market if your home is in superb condition compared to comparable closed sales in your neighborhood, but you will still need your home to appraise.
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 Real Estate Market May Be Turning
Could it be? While it is too early to say for sure, there are definitely signs that real estate market in Miami-Dade County may be turning. As I have said before, this recovery is going to be location and building specific, meaning some are going to recover faster and with less overall price decreases than others.
On a county-wide level, there are a number of positive signs, including:
- Inventory is starting to move. For single family homes it has decreased 30% over same time last year and for condos it is down 18%
- Median prices are significantly lower. Single family homes have plunged from their peak of $381,000 in July, 2007 to $177,000 at the end of April, 2009. Condos are down from their peak of $269,000 in April of 2008 to $139,000 in April of 2009.
- Sales are up. Single family sales increased 77% and condo sales increased 60% over same time last year.
Related articles:
Pinecrest, FL Real Estate – Market Trends First Quarter 2009
Miami Real Estate – Quarterly Update For Miami-Dade County
Wow, EWM’s Coral Gables office alone had over $24,000,000 worth of transactions this week! Does this mean the market has finally reached bottom? Not necessarily, but if we are not there yet in terms of prices, I think we are in terms of the decrease in sales. Put in perspective, the lowest level of inventory for all single homes in Miami-Dade County listed on the MLS was in April of 2005: 2,973. Based on the number of sales for the first quarter of 2009, our inventory peaked in July of 2008 with 17,070 single family homes. The inventory at the end of April stands at 11,936. As you can see the from the graph below, inventory is starting to move. Summer is the peak of purchasing season, especially for single family homes, so we should see significantly more movement over the n
ext several months.
Miami Real Estate, Its All in the Numbers
Unlike the television show, Numb3rs, I am not going to get into any fancy or complicated formulas. I am just going to state the real estate numbers for Miami-Dade County as of the end of the first quarter of 2009. You can use them to make your purchasing or selling decisions, to get a glimpse of what is going on in our market, or to fill in awkward silences at cocktail parties.
Overall Numbers
- 35% of all listings on the MLS are either short sales or REO
- 59% of all sales on the MLS are either short sales or REO
- 82% of all residential sales are under $300,000
Single Family Home Numbers
- 20% of single family home sales are under $100,000 (yes there are homes under $100k in Miami but hurry, they are only 6% of the inventory and going fast!)
- 3% of single family home sales and 14% of the inventory are over $1,000,000. Inventory in this price range is at 83 months, up from 55 months this time last year
- 17 month supply of single family homes down from a 42 months supply 1 year ago (Wow, that was fast!)
Condo Numbers
- 36% of all condo sales are under $100,000 and they make up 15% of the inventory
- 3% of condo sales and 9% of inventory are over $1,000,000. Inventory in this price range is at 88 months up from 41 months last year.
- 24,835 condos at peak of inventory July 2008. 21,134 condos as of April 2009 (many more available that aren’t on the MLS)
Stay tuned for future episodes!
Other articles by the numbers:
Miami Real Estate – Quarterly Update for Miami-Dade County
Pinecrest, FL Real Estate – Market Trends First Quarter 2009
Key Biscayne, Florida Real Estate Update January 2009
Miami Beach, Florida Real Estate Update January 2009
Free High-Efficiency Shower Heads and Rebates to Conserve Water and Save $$
Water conservation is extremely important in Florida. Even though we are surrounded by water, we are in the middle 
of a several-year drought and we all need to do our part to save water. In addition to complying with current watering restrictions, there are steps you can take around your home to cut down water use.
Miami-Dade County has a program to exchange your old shower head and get a free, high-efficiency shower head. They also offer rebates to homeowners who replace an old toilet with a high-efficiency one.
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.
Key Biscayne, Florida Real Estate Update January 2009
Single Family Homes
- Total single family sales in January 2009: 0
Pending Sales: 3 total, none of which are water front
Active: 140 of which 27 are water front
Price Range for Active: Non-Water: $5,450,000 – $950,000 Water front: $19,900,000 – $2,925,000
Condos – Closed Sales
- Total condos sales in January 2009: 7
- Highest Sales Price: $1,835,000 for a 3,120 square foot unit in Casa del Mar
- Lowest Sales Price: $460,000 for a 1,600 square foot unit in Key Colony
- 5 of the sales were in water front buildings
Pending Sales: 16 total, 12 of which are in water front buildings.
Active: 378 of which 261 are in water front buildings
Price Range for Active: Non-Water: $2,900,000 – $90,000 (to be sold at auction) Water front: $7,800,000 – $245,000
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