Andy Weiser Fort Lauderdale Realtor Blog

Florida Real Estate Market Improves

The Florida real estate market has shown improvements in several areas recently including increased median prices, fewer days in contract, increased new listings and fewer cash closed sales according to data from Florida Realtors. The number of closed sales had slipped only by approximately a half of a percentage point due to the challenge of low inventory levels.

“Still, low mortgage interest rates and a strong jobs outlook are positive trends for Florida’s housing market,” said Florida Realtors President Matey Veissi, broker and co-owner of Veissi & Associates in Miami. “We’re also seeing a rising number of new listings added to the market, which is a trend that needs to continue as many areas still face a shortage of supply, particularly for single-family homes.”

New listings for existing single family homes had increased by 3.1% annually according to Veissi. Home sale prices also increased as the median number of sellers were seeing a 95.9% sale to list price ratio. The median sale price in April increased by 9.2% up to $213,000 according to Florida Realtors. This made for the 53rd month in a row that median sale prices in the state of Florida has increased.

“The positive growth we’re seeing in sales for homes priced above the $150,000 mark is being offset by a continuing decline of homes for sale in the most affordable price ranges,” Florida Realtors Chief Economist Brad O’Connor said.

“This trend is due in part to the ongoing decline in listings and sales of distressed properties,” O’Connor said. “In April, distressed sales accounted for less than 12% of all closed Multiple Listing Service sales in Florida, the lowest such percentage we’ve recorded since the initial stages of the downturn last decade.”

New construction starts have been on the rise in the tri county areas while distressed property sales are decreasing. The economic recovery has been evident in the Florida real estate market in all of these statistics. As we approach the midpoint of the year, the great health that we have experienced thus far looks to be carrying on for the third quarter.

Index Shows Buying Better than Renting

The national buy versus rent index is progressing more towards the “buy” territory which shows us that U.S. markets and especially Broward County continue to be strong. This study which was conducted by Florida Atlantic University and Florida International University also indicates that home prices have risen by 5.4% in Q1 of this year.

“This appears to be driven by a steady but strengthening job market, rising rents relative to rising ownership costs and recent slower growth in traditional financial portfolios consisting of stocks and bonds,” says Ken Johnson, a real estate economist and one of the index’s authors.

This study examined the relationship between buying property and building wealth via equity versus renting a comparable home and investing in stocks and bonds. The conclusion is that “In terms of wealth creation, the U.S. housing market, when considered as a whole, has swung more in favor of homeownership over renting a comparable property and investing monthly rent savings in a portfolio of stocks and bonds.”

Some areas like Boston, Chicago and New York moved into the buy category. “These cities should have room for price growth without much worry of overheating,” says Eli Beracha, co-author of the index and assistant professor in the T&S Hollo School of Real Estate at FIU. “This is especially true for Chicago, Cincinnati, Cleveland and Detroit.”

Meanwhile other cities are near an “indifference” point with the relationship between buying and renting. Cities like Miami, Los Angeles, San Francisco and Seattle the index score moved in the direction of homeownership.

“This movement suggests that most consumers in these markets appear to have learned from the real estate crash and now understand that residential property prices can get too high,” Beracha says. “This is a good sign for future housing price stability in these markets.”

Only a few cities like Houston and Denver moved into the rent category. “Strong economic support within these two markets should make for a soft landing in terms of slowing property price growth, increased marketing time for properties and lower probabilities that sellers will actually transact and close during a given marketing effort of their property,” Johnson says.

Flipping Homes Still Hot in South Florida

South Florida showed strong numbers for the amount of homes sold that were flips during the first quarter of this year. In fact, according to RealtyTrac Inc., approximately 10% of all condominium and home sales during the period between January and March were were homes that were being flipped. This was the highest amount since Q3 of 2006 and a 9% increase since that time period last year.

RealtyTrac Inc. defines a flip as a property that has been sold twice within a 12 month period.

Investors have played their part in the recovery of the 6 year slowdown of the market by fixing up properties and adding value to homes in need of repair states Daren Blomquist, a vice president of RealtyTrac. However, too much flipping can “accelerate home-price appreciation beyond what the market can handle,” he said.

Flipping homes has represented about 7.5 percent of all home and condo sales in South Florida, according to RealtyTrac. The increase in home prices in recent years have prevented many flippers from staying active in the market, but those who are remaining are still enjoying some strong returns.

RealtyTrac reported that the gross profit for a home flipped in the tri-county area in Q1 was $65,000 which was up from $54,500 from last year. The return on investment was 51%, also up from 46% in Q1 of last year. The median purchase price for a flipped home in Q1 was $127,500 which translates to approximately a 24% discount from market value.

The current market has fewer homes that are going into foreclosure, but Florida judges are moving existing cases through the court system. This in turn is putting more homes into the hands of lenders which are putting them on the market for sale.

“The backlog was so severe that it’s taken years for properties to work their way through the foreclosure pipeline,” said Greg McBride, a senior financial analyst with Bankrate.com, a consumer website based in North Palm Beach.

Ryan Kuhlman, president of the Broward Real Estate Investors Association, stated that hedge funds that bought foreclosures too fast and for too much money during the housing rebound are now unloading those properties.

Kuhlman stated that the aggressive flippers are finding homes by knocking on doors and talking to homeowners that are faced with entering into foreclosure.

“It’s absolutely still lucrative,” Kuhlman said of flipping. “You just have to open up your parameters.”

How to Add Curb Appeal for Buyers

Today’s real estate market is certainly robust with homes spending fewer days on the market. However, making sure that your home is in the best shape possible is still important to ensure a timely sale for the most amount of money. Don’t take the current market conditions for granted and underestimate the power of curb appeal, the exterior of your home is the first and last thing that every prospective buyer will see.

For condominiums, the lush grounds and a well maintained building will be inviting for buyers. Typically the property management company will routinely manage the maintenance of the building and grounds with direction that is provided by the trustees.

For single families, it is the sole responsibility of the homeowner to maintain the home in its entirety. From yard maintenance to roof repairs these homeowners must take care of the property themselves.

Regardless of the property type that you are trying to sell, a great looking profile online with complete descriptions, professional photography and dimensions are essential to entice buyers to want to view your home in person. You will also want to be sure that the home is just as perfect when buyers arrive for the viewing. Here are some tips on how to best prepare your home for sale.

Targeting Buyers – Everyone wants to attract a buyer that will want to pay top dollar for their home. It is a wise idea to identify the reasons why you bought the home and then highlight these features. If it was the lush grounds or the large glass doors leading to the backyard that loved, chances are the buyer for your home will appreciate these just as much as you did. Be sure to highlight these when you are marketing your home for sale.

Appeal to the Masses – This can be challenging should a seller have a specific taste or has used their home as their means of creative expression. Making your home as neutral as possible in its decor is always best when appealing the largest amount of people as possible. Select color palettes that are far from bold or daring both inside and out.

The Exterior – The exterior of your home should not be cluttered or overgrown with plantings. Strong or bold colors or even gardens that are overdone can be a turn-off to buyers. Identify a happy medium where your home stands out as being well maintained but is not drastically different from the rest of the neighborhood.

Cleanliness – Cleanliness is extremely important. Making sure that your home looks and smells clean is always going to be more inviting for buyers. Don’t forget to wash the windows as that can be noticed both inside and out. It is always best to keep the home in perfect condition throughout the entire sale process.

Curb Appeal – Make a great first impression. Start with your front door and follow on into the foyer. A freshly painted front door that greets buyers into a quality home’s entrance will make any buyer excited to see more and hopefully make an offer.

Homebuilding is Going Strong in South Florida

New home construction has increased in South Florida in the beginning of 2016. Builders have reported a great demand by families and retirees who are in need of such housing.

Palm Beach County had 560 housing starts in Q1 of this year which was up 17% from that period of 2015 and 51% compared to Q1 of 2012 when the recovery began according to the Metrostudy research firm.

Broward County showed a 3% increase in the first quarter of this year over last despite land constraints. Up to 291 from 282 in 2015 and a 16% increase over 2012.

Miami-Dade County showed its best quarter in three years with 792 starts which is a 28% increase over last year and more than triple the starts from the first quarter of 2012.

“Basically, any builder who has something open is selling well,” said David Cobb, division president of Metrostudy.

The firm’s research reported on single families and townhomes but not condominiums. The outlook is positive yet the pace of construction is a fraction of what its peak was in 2004 and 2005 when builders started 2,000 homes per quarter in each county.

Today, homebuilders are up against a challenge of finding land to build, especially in Broward County where the Everglades create a boundary. Analysts state that builders will eventually have to focus on more “infill” projects which are scattered in between already established neighborhoods. Redeveloping older golf courses, shopping centers and mobile home parks will be sources for newer construction projects.

Executive Vice President of the Builder’s Association of South Florida states that the growth this year is more steady where it is more sustainable.

“People are showing confidence in the market,” Burton said. “It isn’t wild, robust and frothy, and we don’t want to go there.”

President of Label and Co. Developments, Harry Posin, also agrees that the demand has been steady and developments in good locations are experiencing no difficulty in sales. Label started construction in Pembroke Pines on an 89 unit townhome project with homes ranging from the $360,000’s to the low $500,000’s. Models were open in March where the development is nearly 25% sold out and states the foot traffic has been excellent.

As we have recovered from the economic downturn it is great to see the positive signs for a strong South Florida real estate market.

Foreign Developer Focuses on Fort Lauderdale

A group of foreign developers are targeting Flagler Village for the development of a new condo project that will cater to young professionals. Flagler 626 is a proposed 12-story tower located at 626 Northeast First Avenue and will offer 97 units. According to developer, Uri Redler, there will also be three townhomes offered at an average price of $350 per square foot.

BRYL Development LLC, the development group, is still seeking approval by the city for the project. The assortment of residences will include studios, one and two bedroom units ranging in size from 671 square feet to 1,580 square feet. Interiors will be designed by Natasha Broman while the exterior will feature a graffiti wall that will be painted by a group of artists selected via a competition.

Building amenities will be all inclusive of a park, pool, gym and party room. A charging station for electric cars, moped and bike parking will also be available. Parking for 105 cars will complete the common amenities.

Records state that the developers purchased the site in 2014 for a total of $725,000. Redler stated that they expect to launch sales by the end of the year with a ground breaking happening in approximately five months. “The neighborhood is changing so nicely, but it’s not there yet,” he said. “But it’s definitely getting there,” states Redler.

Flagler Village is often regarded as being similar to Wynwood, the artsy area that has quickly become one of Miami’s hottest neighborhoods. Redler states that many of the residential buildings in Flagler Village are rentals, not condos.

The increase in activity in the commercial market is another sign of developers looking to take advantage of the neighborhood’s hip reputation. Besides the Flagler Village condo tower, several of the development team’s principals are embarking on townhome projects in nearby Victoria Park.

“Townhomes are very strong in Fort Lauderdale,” Redler said.

The target demographic for these townhomes is similar to that of the tower – young professionals looking to purchase a home in an exciting, up and coming area. Redler also stated should the townhome sales go smoothly in Victoria Park, there will be others that they will build down the road.