I have had several long-time customers ask me what I think is going to happen to the Miami real estate market come January. Although I don’t have a crystal ball, and the real estate market in Miami in general has been doing well with inventories down and prices up, with bidding wars happening as multiple offers come in, I decided to use a building that I am currently working on to throw a bit of a reality check into the current market euphoria.
In October of 2011, one bedroom units in this building were selling for between $45,000-$50,000. The last sale this year was for $90,000 and there are multiple offers on a foreclosure listed for $99,900. According to property tax rolls, nine out of the 39 total units in the building are in some stage of foreclosure. Whether or not any or all of them will go into foreclosure, short sale, or have a loan modification worked out, is yet to be seen, but if you look at the iMapp, Inc. snapshot of what is going on around this building, I have to believe that there are still going to be buying opportunities out there next year and that prices could go down. All of those little hammers are properties that are in the foreclosure process. Since the process takes over a year, where these all are in that process and how fast they come on the market will all come into play in the supply and demand cycle of 2013.
Not all markets look like this. Brickell has a lot less hammers. If you are a buyer, find out what the foreclosure map in the area you are considering purchasing looks like. Don’t be discouraged, just be realistic in your offer and your expectations as to where the market really is. If you are a seller, you also need to look at the map in your area. The map, along with relevant sales in your area, will help you set your list price in a range where your property will sell. Whether you are looking short term or long term, your perspective on where the real estate market is headed in 2013 depends on whether you are a glass half full or half empty person. Oh, and then there is the fiscal cliff…. Where do you think Miami’s real estate market is headed?