Find out the real estate trends in your area
Over the last several months I have written about different signs, see blog links below, that the real estate market is changing. Today’s Miami Herald article, Rents rise as overseas buyers invest, talks about some of the reasons why.
As I drive around town, I am seeing a lot more new construction. This new single family home is going up in north Gables. I have seen other ones being built in South Miami and Pinecrest as well.
In addition to the new construction I have been seeing many remodeling projects. Significant additions are being added on to many existing homes.
All of this bodes well for the overall market. Are you remodeling or adding on to your house?
If this week’s sales vs listings in just one of EWM’s offices is any indication, the market is changing. Our Coral Gables office had 37 residential sales versus 10 new listings and 27 leases vs 8 new rentals. Our total for this week, which include the sale of a commercial property was almost $35,000,000. This market change doesn’t mean that prices are going up yet, but it does mean we are clearing our inventory. We are seeing an increase in rental rates, however, as more people decide to rent and the inventory decreases.
If you need to sell, now is the time to do it since inventory is decreasing and there is demand. Remember to price it right, however, since pricing is everything in this market. If you don’t need to sell, but want to take advantage of the current market, use it to move up, downsize, while you rent out your current home. Alternatively, stay in your home and buy a rental property.
If you are planning to buy, now is definitely the time to buy due to a combination of low interest rates and low prices. If you don’t buy soon, you may find yourself priced out of the market or with even more limited choices.
New single family homes listed since July 1.
How does the housing market look in Pinecrest half way through 2011? Below are the numbers for single family homes. Note that all of these are going to change a little due to status changes that happen at the end of the month, but are not updated in the MLS until the following month. As of 6/30/2011:
What does this mean if you are a seller? If you want to sell your home during the end of the summer buying season, drop your price now. Homes are selling and people are still looking to buy in Pinecrest because of the quality of the public and private schools, parks, and good size lots. If your home needs a lot of work, you are going to have to drop the price even further. Buyers are looking for homes that need minimal updates. If you don’t drop your price now, you are going to have to drop it even further come the beginning of the school year.
If you are a buyer, the numbers mean there aren’t as many “deals” in terms of short sales and foreclosures. Those that are on the market, are priced well, and in reasonably good shape are going to have multiple offers, because there are fewer of them. If you are financing your purchase, you are better off using the numbers to make an offer on a well priced, non-distressed listing.
We are half way through the year and the market has been moving. Sales are up, mostly due to lower prices. As of June 30, the single family home market in Miami Beach for the year so far is as follows:
Closed sales: 94. Low of $190,000 to a high of $25,500,000. 9 of the closed sales were foreclosures, 6 were short sales. Only 16% were distressed sales. 49 closed in the second quarter.
What does this mean if you are a seller? The good news is that the majority of the closed sales are not distressed sales. If you are priced right for a buyer’s market, you have a closing window of opportunity to sell at a higher price than you will get later this year. I think prices of active listings are going to come down as we come closer to the end of the summer buying season.
What does this mean if you are a buyer? Many buyers are still looking for a “deal” without realizing that they are already looking at one. Just because a property is not a foreclosure or a short sale, does not mean it is not a good deal. A lot of sellers have come down significantly in their pricing, in large part due to the pressure of distressed properties on the market. As the distressed properties listed for sale decrease, they become less of a factor on the overall market. If you are financing your property and only looking at distressed sales, you are going to have even more frustration as you are competing with cash buyers.
Note: These numbers are going to change a bit due to fluctuations at the end of the month when a lot of properties status changes, but those changes don’t get recorded in the MLS until the following month.
Market information from the Multiple Listing Service for single family homes for the month of January are as follows:
Distressed sales are still making up the larger part of the market in terms of listings going to contract. Based on the number of active listings, distressed sales make up about 8% of the market, but half of the closed sales.
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. If you are going to make an offer on a short sale bring patience and realize that when the bank finally does answer, they may ask for more than what you offered, even if what you offered was the full asking price.
What does this mean if you are a seller? You have a lot of competition so price really does matter. 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.
Two articles in today’s Business Monday add more evidence that South Florida is starting to pull out of the recession and, though we fell farther and therefore have further to go to actually feel that the recession is over, there are positive signs in South Florida’s economy.
The first article, Brazilian buyers put the luxe in real estate, describes the influence that wealthy Brazilians are having on high end real estate as well as on design and furniture stores.
Dophin Mall has gone from bust to boom, the second article, describes how this mall has turned its sales performance around 180 degrees by catering to the luxury consumer and recognizing the importance of the tourist.
These articles emphasize the importance of the wealthy tourist to South Florida’s economy. These tourists are going to help excel our recovery by spending large amounts of money, which will eventually trickle down throughout the economy. The only problem I see with this is that it is the start of another boom cycle that, unless we find industries in addition to real estate and tourism, will eventually bust in Florida’s typical fashion.