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Update: South Florida Sun-Sentinel reported on June 4 2006 that though 400 people a day are moving out of Florida to other states, 1000 a day are still moving here. The net increase in population in Florida will continue to cause Fort Lauderdale real estate values to rise.

Real Estate Market Dynamics will Benefit Buyers in 2006

Andy Weiser, Realtor
June 2006

South Florida's housing market continued to slow in May, and many buyers are holding off on buying Ft Lauderdale homes for sale, for fear that the bargains aren't big enough. This is not good strategy for buying Fort Lauderdale Homes for sale, because increases in interest rates could wipe out any savings one might see from prices lower than they are today.

If you are a buyer thinking:`Maybe it's just as well that I wait a few more months and see how good the deals get', I say don't wait.

This is not good strategy for buying Fort Lauderdale Homes for sale, because increases in interest rates could wipe out any savings one might see from prices lower than they are today. Thirty year mortgage rates are rising to near 7 percent, potentially offsetting any savings buyers might realize by waiting to buy a house, he said.

Sales in Palm Beach County fell 26 percent compared with last May, while sales in Broward County dropped 19 percent. It was Broward's 23rd consecutive month of year-over-year sales declines. Palm Beach County sales have been down in each of the past six months, according to the Sun-Sentinel, June 28, 2006.

Broward's median price of $379,800 on homes for sale rose 3 percent over last May. The median is the level at which half the homes in an area sold for more, half for less.

Meanwhile, prices of existing condominiums in Broward, increased 9 percent to $212,300.

It's now a buyer's market. Get out and look at Ft Lauderdale homes for sale. Name your price. If you've been waiting, this is the time to get back out there."

Buy now before interest rates go up and cancel the benefit of today's prices.

May 2006

The housing market in Fort Lauderdale is slowing down. There are more Fort Lauderdale homes for sale and though supply is up and prices have leveled off, prices will not drop, they are increasing far less dramatically than in the past five years.

That is certainly good news for buyers.

Why has this occurred?

Lewis Goodkin, a real estate industry consultant from Miami was quoted in the Sun-Sentinel (February 11, 2006) saying the market is basically a victim of its own success.

House and condominium building and buying, some of it speculative, has exploded in the past five years in South Florida, driving housing prices up at the unsustainable pace of 25% to 30% a year.

Will Fort Lauderdale Home prices fall?

No, definitely not. Demand for South Florida real estate will continue to expand as Baby-Boomers move toward retirement and move to Florida. And there is pent-up demand right here at home that will keep the market active. Demand for homes and condominiums in Ft Lauderdale and South Florida has been building during the period of escalating prices while very few homes were offered for sale.

Prices of Fort Lauderdale houses and condominiums will continue to increase in 2006 and beyond, but at slow and steady rates of appreciation in real estate values that are healthier for the market and more sustainable.

This is comparable to what is happening in other markets like Las Vegas which have seen dramatic growth in recent years. "We're really coming back to a more normal market," Goodkin said.

Prices of homes, and especially condominiums will slide in Miami and West Palm Beach, where experts say the condominium market is being overbuilt and new buildings will open just in time for this market slow-down. Fort Lauderdale prices are safe because it has not been overbuilt. Conscientious city government has made sure of that.

Why will this help home buyers?

More homes are on the market. It's a fact. Far more homes are on the market in all categories and classes. More private homes, condominiums, and townhomes in every price range are on the market today than six months or a year ago.

Some real estate speculators who bought homes and condos during the period of rapid price appreciation are ready to take their profits and go on to something else, especially as the payments on their adjustable-rate mortgages get higher with interest rates increasing.

With more homes on the market and remaining on the market longer, sellers will become more eager and buyers will have more to choose from. It is not the seller's market that it has been and buyers are in better bargaining positions than before.

Sales have slowed. That's a fact. The volume of closed sales dropped appreciably in recent months. Some buyers have been deterred by recent hurricanes. The damage from Hurricane Wilma in particular is still evident in many areas and plays a subtle role in discouraging buyers who see some street signs missing and roofs here and there still covered with blue tarps while owners wait for insurance money or for the right shingles to become available to match the existing roof.

Prices have stabilized. More homes on the market and fewer buyers cannot help but have the effect of flattening prices. Sellers are now actually competing against each other. Home price increases in the last six months of 2005 were not near as dramatic as they have been in recent years.

The Sun Sentinel quoted Coral Gables real estate analyst David Dabby saying "A stabilization in prices has occurred. That doesn't mean that appreciation has stopped in all areas. It hasn't. You're just going to see more modest increases, at best."

All of this is good news for home buyers in Fort Lauderdale. If you have been waiting for the market to slow down and for the selection of homes to expand, this is your opportunity to buy.

Use my Home Finder to tell me exactly what you want in a Fort Lauderdale home, condo or townhouse and I will get back to you right away with a selection of properties for you to consider.

Rise in Residential Real Estate Prices
Andy Weiser
12/09/05

An extended rise in residential real estate prices in almost every region of the country has invited an unprecedented transfer of investment capital out of the stock market and into the housing market.

Though many analysts foresee a cooling of the housing boom, and though higher home mortgage interest rates might appear to support that prediction, the situation in Fort Lauderdale and South Florida is different. The trend toward population growth in Broward County and South Florida will continue to fuel the expanding market, and in my opinion that will not change in the next 15 years, maybe longer.

Residential real estate buyers and sellers in South Florida and elsewhere are looking for ways to time the market, and the ones with professional experience are doing it by the numbers with smart market timing, not the emotions.

Interest rates for home mortgages and other real estate loans are closely related to the overall performance of the residential real estate market, because those rates control the purse strings of the funds used to purchase property.

Historically, any rates below 10 percent are reason to celebrate. But this comes sad news to younger investors and first time home buyers especially in a real estate market like South Florida's. These buyers have never seen double digit rates, and consider them a sign of the end of the world as they know it. They have enjoyed rates half that expensive for most of their adult lives, and as a result, have become accustomed to stratospheric housing prices that have doubled the average price of a single family home.

And because we live in a time when telecommunications tools have created a faster and more volatile global marketplace, the old rules of the lending game may no longer apply. What was once “historically” true may now be outmoded, outdated history – and unable to assist us in timing today’s markets. But there are some classic tips for analyzing real estate trends that still serve us well, in both bull and bear markets, and we can examine a couple of those in order to help you navigate the changing tide of the next wave.

One phenomenon that holds true when rates rise is that it often spurs sales of homes, contrary to conventional wisdom. The reason is that buyers who have been sitting on the proverbial fence, watching rates slide and trying to decide when to lock in their best (i.e., lowest) rate, suddenly panic when the numbers reverse and head upward. Rather than sitting by and idly watch interest rates climb beyond their reach, they jump in and buy without hesitation. This often brings a flock of reluctant buyers out of the woodwork, and can be a pleasing reaction to otherwise troubling news of inflationary rates. But the phenomenon is somewhat misleading, because this flurry of purchases is only harvesting the last crop of qualified buyers, without promising any new growth.

In many parts of the country, this last hurrah has already happened, and sellers are now faced with a shrinking market that is quickly becoming a buyer’s – no longer a seller’s – market. The South Florida and especially Fort Lauderdale and Broward County residential real estate markets are more fortunate however.

How do we know whether it is a buyer’s or seller’s market? It is a bit like watching the tides when they begin to shift on a beach – only by looking very closely at the action of the currents can you observe the specific signs that indicate whether the water is receding or coming inland. But fortunately, one of the most dependable clues in the real estate business is also one of the easiest to read, and is based on how long it takes for a house to sell. To track this critical data, simply ask your Realtor Andy Weiser to provide you with information on home and condominium sales in your neighborhood, and make sure they include a category known as “time on the market”.

The broad average of this measure is normally about 12 weeks. But this can vary considerably, depending on the particular market dynamics of a given region of the country, section of town, or neighborhood. To gather accurate data related to your particular market, study the time on the market for your specific neighborhood of homes, by viewing the information from the local Multiple Listing Service or your Realtor.

In a Fort Lauderdale and other bullish residential real estate markets, time on the market may be a matter of days, not weeks.

In a bear market, such as cities that are actually losing population, it can extend to six months or more.

But as a general rule, whenever it takes an average of more than four months for houses to sell, it is defined as a buyer’s market. Conversely, if houses sell in two months or less, we have a seller’s market. Between the two ends of the scale, there is room for all sorts of change and variation, but you can adjust your reading of the market timeline by watching the figures related to the time on the market. If the average compresses to a matter of two or three weeks, it may be a sign that demand is extraordinary, and that the market is extremely favorable to sellers. During a recession, the time a house sits on the market can extend to years, even if sellers continue to drop the price.