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Do The Pictures of Your Home Do It Justice?
The two pictures below are for a house listed for $400,000. If a picture is worth a thousand words, what do these say about the house?
These two are for a house listed at $2,300,000.
Coconut Grove, FL Real Estate – Market Summary
Market information from the Multiple Listing Service for single family homes for the month of January are as follows:
- Closed sales: 8. None were short sales, 7 were REOs. 5 were cash sales.
- Price range of closed sales: $565,000 – $48,000
- Pending sales: 12. 2 short sales, 1 REO
- Price range of pending sales: $2.39 million – $57,900
- Active listings: 176. 18 short sales, 5 REOs
- Price range of active listings: $16.9 million – $49,900 (no, I didn’t forget a zero!)
Distressed sales made up less of the sales going to contract in January, but made up the majority of closed sales. the actual closings for the month are of regular sales. Based on the number of active listings, distressed sales make up 13% of the market.
What does this mean if you are a buyer? Based on the number of active listings to closed sales, there is still a lot of inventory to work through, so it is still a buyers market. Once you narrow down your price range and specifications however, there won’t be as much to choose from, so use the statistics and market information to negotiate your price. If the house you like is a regular sale and it is priced right, you won’t have as much room to negotiate as you will on one that is overpriced. Cash was king in the distressed sales for January, so if you are going in with financing, make sure you have a very tight offer, including your pre-approval letter for a mortgage, a realistic deposit, and good timing for inspections and other due diligence.
What does this mean if you are a seller? You have a lot of competition so price really does matter, especially in the higher price ranges (84 of the current active listings are over $1,000,000, but the highest closed sale for January was under $600,000). Look at the active sales that most closely match your home in terms of size, location, updates, lot size, amenities. Consider pricing it 10-15% below your closest competition, make sure it has great curb appeal, and de-clutter and freshen up the inside with some elbow grease and a fresh coat of neutral paint. The good news is that if your house is priced right compared to your competition, it will sell.
Waiting Until After The Super Bowl To List Your Home?
Common belief in the residential real estate industry is that nothing happens until after Super Bowl Sunday
, which this year happens to be February 6. Many sellers hold off on listing their home until after then. That may be a mistake. Sales are currently up. In Miami-Dade County, 893 single family homes and 1,397 condos or townhomes have gone under contract since January 1. Buyers are out there and you will have a lot more competition after Super Bowl Sunday.
Miami Real Estate – Shadow Inventory
Shadow inventory is basically the number of properties that are projected to hit the market due to distressed owners, those who are behind 90 days or more on their mortgage, or because they will be or already have been taken back by the bank. There has been a lot of speculation lately about how this background inventory will affect the housing recovery, with many experts saying it will significantly delay it.
A CNNMoney.com article on Shadow Inventory states: “Of the 20 separate markets S&P analyzed, Miami was the only market of the 20 that S&P analyzed where shadow inventory did not did expand during the first three quarters of 2010.”
What does this mean for buyers? Record high affordability and a wide selection of properties to choose from.
For sellers, it means a continued suppression of prices, with prices either dropping further or bouncing along the bottom for a while. If you were thinking of selling your home within the next year or two, you may want to put it on the market now. Or, if you have equity in your home and have entertained the idea of owning investment property, turn it into a rental and buy your move-up, downsizing, or retirement home at the lowest prices we have seen in a long time.
Housing Reports Expected Next Week
While the local real estate news has been giving us a snapshot of what has been happening in Miami’s real estate housing market, several housing reports are due out next week, which will give us a national picture of how the housing recovery is fairing.
- Tuesday - S&P Case Shiller home price index: this index tracks changes in the value of residential real estate at both a national level as well as in 20 metropolitan regions (Miami is one them). Although it is calculated monthly and is released on the last Tuesday of every month, it is published with a two month lag. Tuesday’s report will include values through December 2010.
- Wednesday – new home sales : this report is based on a survey conducted by the U.S. Census Bureau that starts with the number of building permits authorized for single family homes .
- Thursday – pending home sales : this index is prepared by the National Association of Realtors (NAR). Because this report looks a homes that are currently under contract, it gives a good picture of where the housing market is headed in the next couple of months. Although many of the pending sales fall through due to a variety of reasons (buyer’s don’t qualify or they get impatient waiting for a bank to approve a short sale are the main reasons in today’s market), many of the sales will close thereby absorbing inventory.
As of today, pending home sales in Coral Gables currently stand at 72 (24 since 1/1/11) versus an inventory of 410 active listings (45 new listings since 1/1/11).
Pinecrest pending home sales are 30 (7 since 1/1/11) and active homes for sale are 196 (17 added since 1/1/11).
Miami Real Estate – New Year Update
The inventory for single family homes in Miami-Dade County has inched up in the first few weeks of 2011. There were 971 single family homes that closed in the month of December, but 723 new listings have increased our inventory from 7591 at the end of December to 8314 as of today.
This increase is not unexpected as foreclosures were put on hold while being investigated, and many homeowners don’t want to deal with showing their home during the holidays.
Commercial Real Estate – Why the Big Secret?
It is amazing to me that so many commercial real estate agents like to keep their listings a secret. Instead of posting their listings on the MLS, or having their own commercial MLS if they want to keep it separate from residential real estate, they post their listings on their own sites. If they do post them on a site, they post them under the “private” or “premium” listing, which requires a monthly membership in order to view.
In this age of information, when everything is on the internet and the majority of people searching for anything start their search there, wouldn’t you want your commercial listing to get the most eyes possible? The more eyes, the more likely you will get an offer.
I applaud the commercial realtors who use the most media possible to market their listings. I post my listings everywhere, blog about them, put up signs, put them on Facebook and do everything else possible to get the most people to look at my listings.
Foreclosures in South Florida Are Here For A While
According to RealtyTrac, foreclosure activity in South Florida will continue at high levels through 2010 and there will be a glut of inventory through 2013.
In the current market, 60% of active buyers interested in distressed propertys and 40-50% of sales involve a foreclosure or shortsale.
When is the Best Time to Sell Your Home?
I read a blog today that seems to defy the thought that Fall is not a great time to list your home for sale. Conventional wisdom says that once a new school year starts, the sale of single family homes slows significantly. Students are settled into school, parents into their work schedules, and holidays are right around the corner. As such, most sellers wait until Spring to list their homes for sale.
Since the time a house sits on the market affects its sale, timing the market right is extremely important and is probably second only to price. The fact that inventories decrease in the Fall and Winter, is one of the reasons the KCM blog recommends listing your home now. It also suggests that buyers are more serious now and, that with interest rates at historic lows, more motivated.
What do you think? Would you be more likely to sell or buy in the Fall or late Spring/early Summer?
When Looking At Comparables, Make Sure You Are Comparing Apples to Apples
Compare Apples to Apples Not Apples to Oranges
I received a list of comparables from an agent that was making an offer on one of my commercial listings. The comps resulted in a significantly lower price than what the sellers were looking for and my knowledge of the market told me something was wrong with his research. I went through the table he had prepared and compared his square footage to the square footage in the tax rolls and realized that the program that he was using did not always have the same square footage as that in the tax rolls. Since the discrepancy between the square footage of the subject property between one program and the tax rolls was almost 12,000 square feet, I recalculated the average price per square foot, which he was using to come up with his price, based on the tax rolls. The average was $30 per square foot higher than the one he had used, which resulted in a $400,000 difference in price in the sellers favor.
Now the tax rolls don’t always have the correct square footage, but if square footage is being used to arrive at a price, make sure all of the square footages come from the same source. If he had used his original average price per square foot but multiplied it by the subject property’s square footage from the program that had the higher square footage, the price difference would have been $700,000 in the seller’s favor. That is why it is important to compare apples to apples.
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