Andy Weiser Fort Lauderdale Realtor Blog

Summer Sales Volume Doesn’t Effect Rising Home Prices

The summer real estate market in many regions of the country typically has a slow down by comparison to spring. This year South Florida had seen a slight dip in the number of transactions in July although the softer month didn’t hurt prices.

According to the Realtors Association of the Palm Beaches, Palm Beach County had a slight dip in single family home sales by 15% compared to July of 2015. The Greater Fort Lauderdale Realtors shared that Broward County also had a slight dip by 11% when compared to this time last year and Miami Dade County had a 16% decrease according to the Miami Association of Realtors.

Despite the slight percentage change home values have remained steady for July. In fact, the median price increased between 3% and 8% in the tri-county areas.

The shortage of inventory levels continues especially in Broward County. The supply shortage is measured at being down 12% in July compared with July of 2015.

The lack of homes that are available for sale could be playing a role in the slight dip we are experiencing in the number of monthly sales.

So what does this mean as we are entering fall market? It does remain to be seen. With an election coming up we can anticipate that there could be a small hiccup towards the end of the year. However, we cannot overlook that employment has been strong with more jobs being created at faster rates this past summer. In addition, mortgage rates have still been consistently hovering at extreme lows around 3.5% for an average 30 year fixed loan.

The low rates will continue to create a sense of urgency that buyers will want to take advantage of. For others, life changes and the need to move will always be there – and with fall market, many are eager to get their transaction complete and get settled before the holiday season.

Common Home Buyer Oversights

Purchasing a new home is like buying a new car. Both are large ticket items and typically create a very exciting time of your life. However, as a real estate purchase will likely be one of the most expensive things you will buy in your lifetime, it is crucial that you don’t overlook some very important steps before you submit any offers to purchase. Here are some common oversights that you want to be sure you don’t fall victim to.

Homeownership Expenses
“People focus so much on mortgage payments and closing costs,” says Brendon DeSimone, author of “Next Generation Real Estate. “What they don’t realize, until after the fact, is that there are expenses like oil or propane and landscaping that are built into home ownership.”

Buyers should forecast all expenses that go into caring for the home. Sometimes operating costs are made available by the seller which can help you budget. Some finance experts also recommend that you set aside 1% of the home’s value per year for repairs and maintenance.

Failing to Consider Resale Value
Not many buyers stay in their homes for decades anymore. When purchasing your home, consult with your realtor about neighborhood trends and comps. This can help you see how things are selling and what this particular home may sell for in years to come. The home may be a perfect fit for you today, but if your situation changes you want to be sure you can sell when that time comes.

Not Researching the Neighborhood
Aside from making sure that the location works for schools, proximity to work and necessary services, it is a good idea to go above and beyond. It is recommended that you visit the neighborhood many times during different times of day. It is also wise to talk to the neighbors to get an accurate feel for the area.

Failing to Research the Homeowners Association
“Never close on a home without doing serious due diligence on the homeowners association,” says DeSimone. Many HOAs can be well structured and supportive, but there have been reports of a few cases where homeowners have not agreed on issues. Also, you will want to know if there are a lot of delinquent homeowners because “if there is an upcoming assessment, or there are delinquent homeowners, the HOA and you will have to cough up the money to cover it,” DeSimone says.

More Apartments Planned off Federal Highway

A 34,000+ square foot parking lot at the corner of Northeast 4th Street and Northeast 20th Avenue in Pompano was just sold by 225 North Federal Highway LLC, managed by Scott Brenner of Brenner Real Estate Group in Fort Lauderdale. The buyer of the $5 million site off of Federal Highway is Pompano Atlantic LLC, an affiliate of Coral Gables based developer, Meyers Group.

The property was recently approved by Pompano Beach for an 8-story, 147 unit apartment building of over 160,000 square feet. Design was provided by RLC Architects.

Alan Losada, Meyers Group COO, stated that his firm will make some improvements to the design of the apartments, although the scope of the project will remain somewhat the same. Plans to begin breaking ground are slated for the first quarter of 2017,

“We think it’s an up-and-coming area,” Losada said. “There’s a lot happening right now there on the beach with new construction and restaurants…U.S. 1 has seen a lot of improvements with new shopping centers and a new LA Fitness.”

Brenner’s entity, 225 North Federal Highway LLC owns the office building and bank at 225 and 301 North Federal Highway.

The real estate market continues to offer slim inventory for those in search of purchasing homes. For others, many are not in the position to buy their home just yet whether it is down payment challenges or simply not being ready for longer term homeownership. With the rising costs of real estate, many millennials and empty nesters are looking for options that are easily attainable like one would find in an apartment rental. As rents increase in more traditionally downtown neighborhoods, areas like Pompano offer great convenience, proximity to beaches and local services and are becoming prime destinations for those in need of good quality housing.

Downtown Fort Lauderdale Caters to Boomers, Millennials and Developers

We have seen the trend in many parts of the country, downtown urban areas emerging as hot destinations for millennials and empty nesters in search of an active lifestyle. Here in Fort Lauderdale, the empty lots, warehouses and run down housing is disappearing quickly as developers move in to create housing.

A few years ago the revitalization of Flagler Village, the area west of U.S. 1 and between Broward and Sunrise Boulevards, began with FAT Village (Flagler Arts and Technology). An area of older warehouses were converted into performance spaces, hip businesses and galleries that are appealing to millennials.

Since then, developers have followed and there are 42 projects either in planning stages or are under construction for the 300 acre neighborhood. Many are rentals which are targeting the young professionals, but some are condo projects. Flagler 626 is a 12-story condo tower on NE First Avenue which will offer 97 units, including 3 townhomes, at an average of $350 per square foot. Flagler 626 is nearing completion of the approval process and is being developed by BRYL Development, LLC and designed ty Stewart Robin of Nest Plan. The project will offer studios, one and two bedrooms that range in size from 671 SF to 1,580 SF.

Morgan Group who is based in Texas has many projects in the Flagler area. Earlier this year they sold the Edge at Flagler Village to TIAA for $114.4 million. The Edge is a 332 unit apartment complex on North Federal Highway. In addition, Miami based Related Group developed and sold the Manor at Flagler Village for $149 million last year.

With more and more residents moving into the district, commercial demand will follow suit where older buildings can be repurposed into office spaces and the like. Public transportation will also be a key factor in the success of the development for the area. All Aboard Florida is slated to launch its Brightline in 2017 with service between Orlando and Miami. A stop in Flagler Village will be created for the line.

Nearby in North Bay Village, the informal name of the area to the east on Las Olas Blvd, new developments of luxury condo projects are emerging like Gale Residences, Fort Lauderdale Beach, Auberge Beach Residences & Spa and Paramount Fort Lauderdale Beach. These upscale residences are catering to the empty nesters who may be living outside of the city and looking to sell the larger home for an exciting lifestyle downtown by the beach.

Low Mortgage Rates: Pros and Cons

Many economists had predicted that economic growth would be accompanied by climbing interest rates for 2016. However, despite even recent implications of the Brexit vote in the United Kingdom, economic uncertainty has influenced otherwise.

Contrary to the forecasts, the United States has been seeing some of the lowest mortgage and interest rates since 3 years ago in 2013. The low rates are playing a role in increasing home sales as they arm buyers with more purchasing power. However, “A look at the pros and cons of this recent drop in mortgage rates shows that they may not be as unambiguously beneficial to the housing market as previous low rates have been,” says Danielle Hale, NAR’s Director of Housing Statistics.

Here are some of the pros and cons per Danielle Hale’s recent blog post:

PROS

  • This year we have experienced a rate reduction of more than 50 basis points. This drop provides buyers with more purchasing power. The reduction of 50 basis points translates to reducing monthly mortgage payments by $50 per $100,000 in home price.
  • The amount of income needed to qualify for a home loan is also reduced by approximately $1,000 due to this decrease.
  • When calculating this based off of recent median home price statistics, this means there is a reduction of $2,500 that is needed to finance a home with a 20% down payment.

CONS

  • Despite June’s Brexit vote eliciting the decline of mortgage rates along with instilling economic uncertainty, most of the rate decline had actually already occurred in Q1 of 2016. This suggests that many had concerns about the economy before the vote in the U.K.
  • The global financial news of uncertainty is making consumers less optimistic about the housing market. This slowdown of global growth may also lead to consumers being skeptical of the effect on the U.S. labor market.
  • First time buyers are currently having difficulty locating affordable options due to the slim inventory levels. Others are struggling to accumulate funds towards a downpayment due to high rents and student loan debts. Hale points out that given these challenges, the only ones who are benefitting from the low rates are those who already own a home which is in large part contributing to the gap in wealth in the U.S.

Still, “Thus far, the U.S. economy has proven resilient to the weaker global economic environment,” says Hale. “A stronger U.S. consumer, who benefits from lower financing costs, may help ensure that trend continues.”

Tips for Homebuyers in a Competitive Market

The real estate market in several parts of the United States is certainly fast-paced these days. Many homes are selling very quickly with homebuyers struggling to find the right home before someone else puts it under agreement. The pressure is real.

Buying a home can already be emotional without the added pressure of a competitive landscape. If you are experiencing a challenging home buying process, here are some helpful ways to be ahead of the competition.

Create Property Alerts

Some real estate websites, including AndyWeiser.com, have the capability of saving your search criteria and provide daily updates of new properties and price changes emailed. This is a great way to be notified daily of new properties that meet your criteria and to cut down on lost time.

Select a Fast Moving Agent

Not all real estate agent are created equal. Some work more with sellers, some with buyers and some just work part time. Make sure you align yourself with one who works well with you. In markets like the current one, it is best to select an agent who is aggressive and always available to meet you. Agents who often work with buyers will be well aware of the struggles that buyers are having in the fast-paced market. Agents who simplify the process can help you beat out competing buyers which will improve your chance to solidify a deal.

Make an Aggressive Offer

In a competitive market, you don’t always have the luxury of time to be picky. If you have toured many homes and have lost out on several occasions then you may be asking for too much in your offer. Listing agents can often times receive 10 or 20 offers on a property and have to sort through and present them to their sellers. Some buyers are offering thousands of dollars over asking prices for an increased chance of getting the property. If you want to compete, you have to keep up and move quickly.

A good real estate agent will know the best way to strategize an offer and make it as attractive as possible to sellers. Discussing your offer tactics before you select a particular home is a good idea so that your process will go much smoother. The best plan of attack is to learn your market, develop a strategy and stick to it.