July home sales in Miami – a reflection of the economy at large

Some say our economy will not recover until this or that is changed. Some feel housing must recover in order for everything else to recover. Others blame the low dollar, the amount of money that is printed, Europe, earthquakes and climate change.

I still feel that the key to a recovery is JOBS. Without jobs, folks’ confidence and ability to spend and qualify to buy homes, will remain low – hec…non-existent.

With unemployment stubbornly high above 9% (well over 18% according to experts if one includes the under-employed and all those who just…quit looking), it is no wonder housing can’t seem to recover.

In spite of Miami’s ability to appeal to the affluence of non-residents and investors (and THANK GOD for that), Miami’s home resale market looms.

One great aspect is that Miami’s available real estate inventory for sale has been rapidly dropping from a high of 24,368 units in Sept., 2010 to our July, 2011 low of 15,578 units available for sale. A 63.9% drop in inventory, 4.3% lower than June, 2011’s inventory of 16,272 units, 35% lower than the 23,976 units in July, 2010 and almost 32% lower than at the end of the same quarter in 2010. The drop of New listings has also helped inventory levels continue to drop.

By all accounts, less inventory is great. This generally means that buyers have less inventory to choose from and that prices should begin to pick up. Supply and demand. Yet, low supply continues to be coupled to low demand as reflected by the meek Pending sales number between June and July, 2011 (2.2% lower) and the much weaker Sold (Closed) units which dropped 21% between June and July, 2011.

Thankfully, Pending Sales (an indicator of future closed sales), had been quite strong in July, 2011 as compared to July, 2010 (up 19.4%) and as reflected by the Pending Sales number between the end of Q1-2011 as compared to Q1-2010 (up 21.1%).

Will these numbers improve? Again – I say, not until JOBS recover.

Comparing sectors of our market, sales in properties valued at different price ranges appear to be mimicking the market at large, including market segments under $500,000 and between $500,000 and just under $2M as shown in the two charts below

Under $500,000

Between $500,000 to just under $2M

Between $2M and just under $5M, we begin to see some changes, though Pending Sales – the so important forward looking indicator of future closed sales has completely stalled.

Above, are the numbers for properties valued at between $2M and $5M

However, by the time we get to homes valued at $5M and above, the difference is stark.

Above, properties in our highest market segment – above $5M

As you can see, properties valued at $5M and above are among the only market segment displaying improvement on all accounts. Between June and July, 2011, between July, 2011 and July, 2010 and between Q1-2011 and Q1-2010. Most impressive are the improvements between July, 2010 and July, 2011. I mean, 10 properties Sold and 12 under contract may not seem like much until you are reminded that these are at least $5,000,000 a pop and financing…well…this is not their bag.

So, the $5M and above market segment is where most affluent buyers are doing their bidding. After all this is Miami!

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5 Buyer tips for Distressed Properties

Miami Beach, Fla. – Jan. 24, 2011 – Wenceslao Fernandez, Jr, a Florida real estate agent with Keller Williams Realty who specializes in Downtown Miami and Miami Beach properties, has come up with five tips to help distressed property buyers. These tips should work in virtually any U.S. market.

Wenceslao says that, “even seasoned investors don’t always follow or understand these practical tips”.

1. Work with a full-time Realtor(c). After the bust, many agents left the business so, not all real estate agents are in the business full time or even Realtors(c) any more. The term Realtor(c) can only be used by members of the National Association of Realtors (NAR), who adhere to their strict Code of Ethics. When it comes to distressed properties, a specialist is your best bet. Look for a Realtor(c) who is also a Certified Distressed Property Expert (www.CDPE.com), and who’s able to guide you with the right strategy for making offers on Short Sales or REOs. Many buyers assume that all agents have the knowledge to help them with these two distinct types of distressed property sellers. Like with hiring any professional (doctor, attorney, plumber, CPA), hiring the right agent to help you through this process, is key.

2. REO properties have the advantage of faster closings. Their disadvantage is that, more than 90% of the time, they only sell for cash and there may be multiple, competing offers on the table. On the other hand, although you can also pick up a Short Sale at a bargain price, there is nothing “short” about the amount of time they take to even be accepted. Some lenders negotiate quickly, others still drag their feet. It is not unusual to wait two or three months or longer, just to hear whether your offer was accepted by the seller’s lender – then the actual sales and closing process begins. Their advantage is that often, they are in better condition, especially if they are still being lived-in by the owner(s), and your offer may be the only offer the lender is considering for approval – minimizing the bidding wars of multiple offers often seen with REO sales.

3. Bargaining for less than the asking price will be a function of many factors. Many REO’s are listed well below market and attract a lot of attention. Making sure you offers wins the “bid”, may require a full-price offer and often, even a slightly more aggressive offer. Short sales may allow you a little more flexibility – as long as the offer is within reason for the property condition and local (building or area), market condition. Sellers of REO don’t typically want to hold these too long and are usually motivated. Lenders who have been going through a long, pre-foreclosure process are also motivated but may only be “servicing” the loan and the bulk of the decision, may be dependent on the investors behind the loan and/or mortgage insurance folk.

4. Avoid complicated offers. REO sellers typically prefer clean offers. The less contingencies you attach to your offer, the cleaner the transaction flow is expected, the better the chances are that they’ll agree with your offer. Lenders looking to approve a short sale may agree to some concessions. The worst that can happen is that they say no. In either case, sometimes lenders are quite accommodating – even REO lenders who already have possession of the property are known to give concessions if inspections reveal certain problems not previously known or problems which were not readily visible. Otherwise, most of these purchases are “as-is, where-is” and you should know what you are getting into. Being “handy” may not qualify you to throughly inspect and understand what you are about to buy.

5. Get the right pre-approval from the right lender. Regardless of which type of property you intend to buy (whether distressed or not), having this approval letter ahead of time will ensure you move forward. Most offers to be considered, must be accompanied by this letter. REO properties are typically sold for cash. However, properties now held by Fannie Mae, Freddie Mac or HUD, will often consider financing offers during the first 15 days a property is listed, as long as the buyer is an owner-occupant. Even if the REO or Short Sale property needs repairs, there are loans that allow the buyer to borrow additional funds for repairs. Make sure you lender understands FHA-203k, Home Steps and Home Path loans and that they have a thorough understanding of any other government program you may qualify for.

Want to know more? Contact Wenceslao Fernandez Jr HERE.

Existing Home/Condo Sales Improve in August

Florida’s existing home, condo sales up in August

Existing-home sales move up in August, says NAR

ORLANDO, Fla. – Sept. 23, 2010 – Sales of existing homes in Florida rose 1 percent in August, with a total of 13,997 homes sold statewide compared to 13,908 homes sold in August 2009, according to the latest housing data released by Florida Realtors®. Statewide existing home sales in August increased 3 percent over statewide sales activity in July.

Ten of Florida’s metropolitan statistical areas (MSAs) reported higher existing home sales last month, while 13 MSAs posted increased existing condo sales. Florida’s median sales price for existing homes last month was $134,000; a year ago, it was $146,500 for a decrease of 9 percent. The median is the midpoint; half the homes sold for more, half for less.

The national median sales price for existing single-family homes in July 2010 was $183,400, up 0.9 percent from a year earlier, according to the National Association of Realtors® (NAR). In Massachusetts, the statewide median resales price was $333,000 in May; in California, it was $314,850; in Maryland, it was $267,489; and in New York, it was $227,000.

In Florida’s year-to-year comparison for condos, 5,706 units sold statewide last month compared to 4,662 units in August 2009 for an increase of 22 percent. Statewide existing condo sales last month increased almost 2.7 percent over July’s condo sales. The statewide existing condo median sales price in August was $81,600; in August 2009 it was $107,200 for a 24 percent decrease. The national median existing condo price was $176,800 in July, according to NAR.

The housing sector faces a long recovery process, due in part to slow job growth and the still-fragile economy, according to NAR’s latest industry outlook. “Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery,” said NAR Chief Economist Lawrence Yun. The pace of sales has slowed since May, following the expiration of the federal homebuyer tax credit, Yun said, who predicted this “pause period” likely will last through September.

“However, given rock-bottom mortgage interest rates and historically high housing affordability conditions, the pace of a sales recovery could pick up quickly, provided the economy consistently adds jobs,” he said.

The interest rate for a 30-year fixed-rate mortgage averaged 4.43 percent in August, down from the 5.19 percent averaged in August 2009, according to Freddie Mac. Florida Realtors’ sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Reprinted by Permission: © 2010 Florida Realtors®

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In Miami-Dade County specifically, we have also seen improvement in segments of the market. Overall, the county has experienced a slight increase in inventory of 1.2%, although inventory levels dropped 10.4% year-over-year as depicted in the graph below.

1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	23976	24271	1.2%	27083	24271	-10.4%
New Listing	5465	5391	-1.4%	4098	5391	31.6%
Sold	1957	1832	-6.4%	1761	1832	4%
Pended	2874	3327	15.8%	2618	3327	27.1%

The opposite was true with new inventory levels where a 1.4% drop in the month of August was reported, as compared to July, 2010. In contrast, notice the amazing increase in inventory levels year-over-year of 31.6%, signaling that possibly, we are seeing new foreclosure units come to market as compared to 2009.

The following charts depict non-distressed  vs distressed property activity in Miami-Dade county. These charts demonstrate the state of affairs in the county and easily proves where the market activity is.

Non-Distressed activity:

1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	13754	13773	0.1%	17674	13773	-22.1%
New Listing	2317	2190	-5.5%	2477	2190	-11.6%
Sold	686	633	-7.7%	820	633	-22.8%
Pended	719	754	4.9%	1238	754	-39.1%

Distressed (Short Sales & REOs) activity:

1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	10215	10491	2.7%	9409	10491	11.5%
New Listing	3148	3201	1.7%	1621	3201	97.5%
Sold	1271	1199	-5.7%	941	1199	27.4%
Pended	2155	2573	19.4%	1380	2573	86.4%

To further brake it down, below is the chart depicting REO activity in Miami-Dade county, Florida:

1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	2111	2298	8.9%	1029	2298	123.3%
New Listing	1548	1613	4.2%	696	1613	131.8%
Sold	767	779	1.6%	779	779	0%
Pended	1021	1425	39.6%	766	1425	86%

While the following chart depicts Short Sale activity in Miami-Dade county, Florida:

1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	8104	8193	1.1%	8386	8193	-2.3%
New Listing	1600	1588	-0.7%	925	1588	71.7%
Sold	504	420	-16.7%	162	420	159.3%
Pended	1134	1148	1.2%	614	1148	87%

Clearly, the Short Sale market seems to be the most active, showing a 159% increase in activity from last year from 162 units sold in August 2009 to 420 units sold in August, 2010. However, it also suffered the largest month-to-month decline in closed sales between July, 2010 and August, 2010 for a 16.7% drop from 504 units sold in 7/10 to 420 units sold in 8/10.

In the Coastal, Eastern Miami-Dade county areas I serve (Zip Codes: 33109, 33129, 33130, 33131, 33132, 33139,  33140, & 33141), the overal acticity chart follows:

Overal Market Activity for Miami Beach, Downtown-Biscayne and Brickell areas are as follows:

	1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	5601	5625	0.4%	6168	5625	-8.8%
New Listing	982	951	-3.2%	778	951	22.2%
Sold	300	274	-8.7%	230	274	19.1%
Pended	433	452	4.4%	367	452	23.2%

Note again that, although new listings and sold units in August were down as compared to July, they’re both robustly up as compared to last year. Just the same,

Pending sales (a forward indicator), continues to show (except for non-distressed sellers), that the following months show promising results as those properties under contract close.

With 40-unit Onyx on the Bay near Downtown Miami going up for Bankruptcy auction on October 5, 2010, including 56 parking spaces and some storage units, it is easy to see that though we may be reaching a recovery point, we are also still on a long road to full recovery and reversal of current market conditions.

However, conditions are ripe for buyers to capitalize long-term on great deals. Only those who take action will benefit though.

1 month			1 year
	Jul 10	Aug 10	% Change	Aug 09	Aug 10	% Change
For Sale	23976	24271	1.2%	27083	24271	-10.4%
Sold	1957	1832	-6.4%	1761	1832	4%
Pended	2874	3327	15.8%	2618	3327	27.1%