South Florida Real Estate Information: November 2013

South Florida Real Estate Newsletter: Thanksgivukah Edition!

Happy Thanksgiving! Happy Chanukah! Happy Thanksgivukah! Mark your calendars, watch your email - the next Thanksgivukah edition of this newsletter is scheduled for Thursday, November 28, 79811.

If you’re receiving this newsletter, I have either served as your real estate agent or have answered your request with research or advice when you have inquired about buying or selling property in South Florida. I’m here to serve you and glad to help.

I hope you find this newsletter to be interesting and helpful. I welcome your comments and questions. You’re always welcome to contact me by email, on my website, my Facebook Realtor page (likes and follows will be greatly appreciated), my blog, by text, or the old fashioned way, just give me a call at 561-573-1828. If you would like to suggest an article topic or would like more information one on one, please let me know.

Why Thanksgivukah?

Courtesy: https://thanksgivukah.com/

Thanksgiving and Hanukkah are both about family and being grateful. I’m grateful for the opportunity to serve you, and I thought it was the perfect time to stay in touch, and maybe I’m feeling a little guilt about waiting so long to do this newsletter…

Business Insider has an interesting article about this unusual convergence of holidays: http://www.businessinsider.com/hanukkah-and-thanksgiving-the-same-day-2013-10

In case you’re looking for a menorah that will last until next Thanksgivukah, here’s a link to a nice handmade item and some interesting history as well: http://beekman1802.com/thanksgivukah/

If you’re looking for a Menurkey (menorah shaped like a turkey), the original designed by a 9 year old can be found here: http://www.moderntribe.com/judaica/jewish_holidays/hanukkah/menurkey_menorah_p

Market Update: South Florida

South Florida real estate sales are up, property prices are up, and inventory is down. For single family homes sales in the third quarter of 2013, closed sales were up by 16.2% over 2012, cash purchases were up by 19.1%, and the average sale price was up by 13.8%. Homes sold 32% faster, with a median of only 38 days on market, at an average of 95.4% of asking price.

Inventory shrinkage appears to be leveling off, with Q3 2013 active listings down 2.1% from Q2 2012. Because the pace of sales has picked up, the months supply of inventory has dropped 15.1%.

Courtesy: Florida Association of Realtors

Distressed Property is a Smaller Portion of the Market

While still a significant share of the market, short sales and foreclosures are no longer the driving force. Lenders are selling these properties at market value and they are not dragging the market down. Foreclosures are often priced below market with the expectation of multiple offers, often above full list price.

Median prices for both single family home short sales and foreclosures are up the same as for traditional sales, with an increase in Q3 2013 of 15% over Q3 2012.

Single family home distressed sales as a percent of total single family home sales were down 24.86% in Q3 2013 with 3,537 total short sales and foreclosure sales, from the Q3 2012 total of 4050. Q3 2013 foreclosures were down by 4.5% and short sales were down by 18.3% from Q3 2012 levels.

The charts below illustrate the current real estate market statistics discussed above, courtesy of the Florida Association of Realtors.

I have access to very specific data and will be happy to provide additional market information upon request. Just ask.

Courtesy: Florida Association of Realtors

For Sellers

If you’re considering selling a property in South Florida, the current market is inviting. Inventories are down and prices are up. For seller clients, I have listed and sold several properties recently that sold very quickly at or very near to full asking price, often to cash buyers.

Please don’t hesitate to ask if you would like me to do research for you and provide you with a detailed market analysis for your property. If you want to do a quick search for yourself, you can check home values for homes like yours here: http://floridahomeluxury.com/home_sales.shtml?

Short sales

If you’re considering selling your property as a short sale, now is a good time. There are fewer properties on the market, and you’re more likely to get a solid offer from an investor or a determined buyer who has the patience to see the sale through. Lenders appear to be more motivated to work with short sellers and clean up their books. Many lenders are forgiving deficiencies on mortgage balances with short sale approvals.

Luxury

Luxury properties are selling again and bringing higher prices. I recently represented a buyer at an exciting auction for an exquisite luxury property in Boca Raton that (unfortunately for my buyer) went to a higher bidder offering full market value.

For Buyers

It’s still a good time to buy, with interest rates hovering near historic lows and prices still well below peak levels. For most properties in the current South Florida real estate market, monthly housing expense is clearly lower for an owner than a renter.

Tax breaks for homeowners, depreciation and expense deductions for investors, and wealth building through equity accumulation are additional considerations that make ownership even more attractive for qualified buyers.

Please don’t hesitate to ask if you would like me to build a custom search on the MLS for you for properties that most closely match your specific preferences and price range.

Over the years, I’ve featured several of the most popular MLS searches on my real estate blog. I’ve put them all on one master page . You’re welcome to look at the MLS listing results for any of them here: http://floridahomeluxury.com/custom8.shtml.

Financing

I could get on a soapbox about the housing crisis that we are finally recovering from, and all the greed, loose financing rules, and lax regulation enforcement that led to a predictable crash…. Don’t get me started!

Anyway, our financial system and overall economy are much healthier now than they were in 2008. Banks are making loans to qualified buyers, and mortgage loan rates are still near historic lows.

Nothing lasts forever, and rates will go up once the Fed decides we’re healthy enough. Lending rules and documentation requirements are going to be a little tougher next year, with more disclosure on costs to the borrower. Here’s a link to a good article covering the changes: http://money.cnn.com/2013/01/10/real_estate/qualified-mortgages-cfpb/index.html

Over the past decade, I have had the opportunity to work with some outstanding mortgage brokers and loan officers. I will be happy to make recommendations upon request.

Luxury and Country Club Homes

There are some fantastic properties available right now that were hard to find when the market was at its peak. Examples include: Luxury homes with amazing views of the ocean and/or Intracoastal Waterway, luxury oceanfront condos, country club homes with long golf course views, homes with long docks on deep water ocean access canals with no fixed bridges.

Homes in country clubs with mandatory membership are still selling at great prices, so if you’re interested in living in an exclusive community with a private golf course, there may not be a better time to buy. These clubs offer great golf, tennis, fine dining, entertainment, and reciprocation with other clubs.

Please don’t hesitate to ask if you would like me to search for your ideal property.

Commercial Real Estate in South Florida

It is still a buyer’s market in commercial real estate, but there is a lot of competition among investors. Institutional investors have driven cap rates down by half of where they were a few years ago. They are often buying bundles of notes and properties before they ever hit the market. Foreign investors are also placing a lot of capital in US real estate.

It is also still a tenant’s market, with many available commercial properties for lease, and commercial landlords willing to make concessions and provide tenant improvements. There are also opportunities to buy existing businesses and properties well suited to business owner occupants.

I have the privilege of serving on the board of the Realtors Commercial Alliance. I enjoy the friendship of several of the top commercial agents and brokers in South Florida, leading commercial property financing experts and SBA lenders. If you would like to buy, sell or lease commercial or investment property, I will get you useful information. Just ask.

Residential Investment Property

Among the areas I serve, I have observed rents to have risen by as much as 20 - 30% in communities zoned for highly rated schools in Boca Raton, Wellington, Parkland, Coral Springs, and Boynton Beach. Over the next few years, I expect many of these renters will again qualify for mortgages and will become buyers.

Investors of all stripes, from large institutions to individuals, have been actively competing in this market and many are making cash offers. Institutional investors have been competing in the market for individual single family and condo properties, in contrast to prior preferences for large properties with many units.

Properties are selling at rates of return on investment that are half what was expected a few years ago. (Cap rates in the 5% range are common now, down from 10% in the trough.) My sense is that many of the large investors may have satisfied their appetites for a while and that current yields are less attractive to them. This leaves some room for buyers wishing to acquire a property for personal investment.

There are still some opportunities to purchase properties for rental income or flips, but short term returns have shrunk considerably. There is a great deal of competition among investors, particularly in the lower price range. Properties that are highly suitable for rentals that are priced to market are being snapped up with cash offers, often the same day they are listed.

The competition thins a little with properties priced above $250k and with properties in rough condition.

If you would like to discuss investing in property in South Florida, give me a call.

Scott’s Crystal Ball – The Case for Long-Term Growth in South Florida

First, my crystal ball is as cloudy as everyone else’s. I am sharing perspective from the trenches of selling real estate in South Florida every day, and from interacting daily with many of the busiest and best real estate agents.

As a young man visiting Florida from Michigan, I was awestruck by the beauty of our winters and the vibrancy of our economy. The beaches and the fishing were big bonuses. I set a goal of living here someday. It took a while, but I have never regretted the move. In fairness to Michigan, I hope to spend more time in the summer with family there when and if I ever slow down.

With more coastline than any state, some of the mildest weather and best beaches, Florida also draws people from all over the United States and other countries. South Florida is particularly appealing to international investors and second home buyers. I have personally sold properties to many foreign nationals, and also to people choosing Florida over other warm states like Arizona, Texas and California.

There are a lot of would-be buyers who are currently restricted to renting. They don’t qualify for mortgage loans under today’s tougher lending requirements due to credit damage or loss of income from the recession. This is pushing up rents, especially in high demand areas. Many of these current renters are improving their economic situation and their credit, with plans to become buyers over the next few years. This will be another boost in demand for the housing market.

I see good reasons for long-term growth in the South Florida real estate market. We are a destination market, as evidenced by the level of speculation focused here during the housing boom. Speaking of booms….

The Baby Boomers are Coming.

Around 79 million Americans were born from the end of WWII to 1964. That means the early Baby Boomers are now late middle age and entering senior years. Many of them are now retiring and looking for warmer winters.

People from the Northeast and the Midwest who don’t like cold weather tend to migrate to Florida. Since those regions hold approximately 40% of the US population, it doesn’t take a swami to predict that many more retirees are headed our way.

This growth in population will bring increased demand for housing, healthcare, consumer demand, and jobs. It is quite likely that Florida’s population and economy will grow over the next few decades.

Challenges to Growth

Nothing is perfect, including South Florida, although I can’t think of anywhere I would rather live. As evidenced by Hurricane Sandy and many other natural disasters across the country, Florida is not the only state exposed to risk. Still, the threat of hurricanes and the flooding and wind damage they cause are creating challenges for insurance companies, their policy holders, regulators, and legislators in Florida and the US Congress. Like many other states, we also have environmental challenges including the rehabilitation of the Everglades, and fresh water management issues.

Thanks for the Opportunity to Serve You!

I’m always honored to earn my clients’ loyalty and confidence. After over a decade in this business, I have broad and deep experience in helping buyers and sellers successfully achieve their South Florida real estate goals.

I am deeply grateful to my repeat customers and thanks for your referrals and repeat customers. You know who you are! This year, I served a referral from a referral from a referral.

I’m here for you whenever the timing is right for your sale or purchase, and I’m still here for you after the sale is completed.

Special thanks to several of my past customers who have taken time to post testimonials on my profile at Stik.com, my Zillow.com page, and my profile onTrulia.com.

The End

Whew! That’s it for this edition.

Please share your comments and questions, and don’t hesitate to ask if there is anything that I can do for you.

Stay in touch and keep me in mind if you or anyone you care about needs help with South Florida real estate.

With Warm Wishes to You and Yours,

Scott