Real Estate — Have we hit bottom yet?
Categories: Buying Real Estate, Real Estate News, South Florida Market Stats
hiMany national experts give opinions about the real estate market from a national perspective and often people base their local decisions on those opinions. These experts are often as accurate about the local markets as a shuttle astronaut who tries to pick a red, sweet, juicy apple from space. With today’s technology he may be able to see the trees - he may even see the apples. But only someone on the ground can go to the tree pick a red apple; smell it; take a bite and determine if it is juicy and sweet.
Real estate is the same, yet many buyers base their local decisions on generalized national trends. Those of us who deal in real estate on a daily basis have the pulse of the market… but not the whole market — we know our local market. In South Florida and particularly Miami-Dade County we may be bottoming out in the single family market. We are also seeing more activity by foreign buyers who appear to be focusing on waterfront single family properties and waterfront luxury condos.
We are seeing an increase in overall activity including actual transactions. There are more international buyers from Spain, France, England, Germany, Mexico, Brazil, Argentina, Canada and other nationalities who seem to be looking with the intent of buying. With the US Dollar at an all time low against other currencies and real estate values down, makes our properties great buys for foreigners. Not only that but with rumblings that the Euro may be overdue for an adjustment, it makes it a good time for Europeans to invest in South Florida.
We are also seeing more buyers from other states who are also coming into our area. We recently passed a State law (Amendment 1) that allowed buyers to take their tax savings (portability) from one property to another. It was widely believed that this law would create a wave of down-sizing and up-sizing transactions re-energizing the real market — but that never materialized.
At this point we are in the midst of the first wave of foreclosures. Banks are quickly disposing of their inventories and some buyers are taking advantage of those properties. A majority of these properties require a good amount of work, but many are being offered literally “dirt cheap”. They are good deals for those who want to fix them, because in many cases they are being sold for land value or below. Every so often you may find a property that needs little or no work, but those go very fast. There are also the auctions that many you read about — those auctions usually sell off the remainder of hard to sell properties after more conventional methods have failed.
In conclusion, it really doesn’t matter if the market is at the bottom, midpoint or event higher. If you have plans of owning a property, this is the time to buy. If you are a marginal buyer at any level, this is your time to buy. Let’s say that you want a single family home and your affordability limit is $250,000 — right now we have inventory in that price range - I even saw a foreclosed 3/2 single family house in Coral Gables offered at $299,000-that’s 2002 prices. So if you’ve been dreaming of owning a single family home in Miami-Dade County this is your window of opportunity.
Let’s say that you always wanted to live on the water with access to the ocean and your limit is $1,000,000, your dream could be fulfilled right now. For that price you can get a nice house mostly in the northern part of the County with ocean access. There are some waterfront properties in the Southern part of the County just over $1M with limited ocean access (that means less than 10 ft clearance). There are even some properties on canals that feed into the Miami River and have ocean access under $550,000 - this is not going to last forever.
Those who wait to hear the experts say that the real estate market has bottomed out, will probably find themselves months late and many dollars short. If you have been planning to buy and don’t expect to sell for five years or more, this is your window opportunity to buy — for you the market has already hit bottom.
Astute comments. I’d also add that the renovation loans being offered by Wells Fargo allow buyers to wrap up the cost of repairs/upgrades in a first mortgage. This helps fix those properties in need of work. Also, declining prices have put more properties into the FHA financing range.
Robert thank you for pointing out FHA.
FHA loans can help buyers to put their goals within reach.
FHA financing is great for buyers that have minor credit challenges but can substantiate their ability to repay the loan. This program provides safe financing options with flexible credit and income qualifying criteria.
For borrowers with basically no savings but with steady proven income, this program is the best. Buyers can negotiate cost reductions by having the sellers contribute with 6% towards closing costs and prepaids. Borrowers can still put a down payment as low as 3% with no cash reserves requirements and gift funds are accepted.
The FHA program also allows non-occupying co-borrowers such as parents to help their kids qualify for their new home.
To get more details on specific answers on how FHA financing could work for you please do no hesitate to leave a comment on this blog.