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?
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…
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/
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.
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.
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.
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
Scott A
Field, MBA
Investment
Specialist, Certified Distressed Property Expert
Realty
Associates/Boca Raton
9174 Glades
Road
Boca Raton, FL 33434
