South Florida Real Estate News

 

March 25, 2020

Mortgage payments for homeowners may be delay up to 1 year because of the covid virus

President Trump recently announced that delayed mortgage payments could be an option for borrowers due to the covid-19 virus

People who have experienced a loss of income because of the outbreak may qualify to make reduced payments. Under the new plan, they will not get penalties or late fees, and delayed payments will not be reported to credit agencies.

“Our thoughts are with everyone who may be impacted by Coronavirus  and we urge you to stay safe and well during these unprecedented times,” Malloy Evans, senior vice president and single-family chief credit officer for Fannie Mae, said in a press release. “Fannie Mae, along with our lending and servicing partners, is committed to ensuring assistance is available to homeowners in need. We encourage residents whose employment or income are impacted by COVID-19 to seek available assistance as soon as possible.”

Borrowers will initially only need to testify over the phone to their lender that they’re on financial deprivation ; documentation will come later. Payment relief can also apply to any type of property, whether it’s a primary home, secondary home, or investment property.

Throughout the loan tolerance period, Fannie Mae and Freddie Mac may reconsider the borrower’s ability to pay the loan to ensure the plan is still necessary for that borrower. After this period is up, servicers will develop a feasible repayment plan with the borrower, including potentially extending the life of the loan.

Some banks are also offering mortgage tolerance periods for customers during this time, although, as of now, they are much shorter than 12 months. Fifth Third Bank, for example is offering borrowers a 90 day tolerance period on mortgages, and Ally is offering a 120 day tolerance period for mortgage customers. Bank of America also stated it will defer mortgage payments for borrowers who request it, although it did not specify a length of time.

“We don’t want people who have been responsible in making their mortgage payments to suddenly be declared delinquent and to lose their access to credit,” Chris Mayer, a real estate economist at Columbia University’s business school, told NPR. “Let’s fight the virus, and let’s hold people harmless for something that they didn’t control.”

Posted in Market Updates
March 4, 2020

Result from the Fed’s emergency rate cut

The Federal Reserve reduced interest rates today, cutting the federal funds rate by 0.50 percent to a range of 1-1.25 percent. The Fed is trying to stay ahead of disturbance and economic slowdown caused by the fast spreading coronavirus.

On Friday, the Fed announced that it was willing to support the economy with accommodative interest rates.

The latest rate cut is an emergency measure that underscores the Fed’s commitment to keeping the economy on track, as the virus and the aggressive response to it cause an economic slowdown to percolate through the global economy.

The reduction is the Fed’s first rate cut in 2020, after a series of three smaller cuts in 2019 that were meant to support a somewhat slowing economy and balance other threats to growth, such as trade tensions with China. Many Fed watchers had anticipated the substantial 0.50 percent cut, given the Fed’s statement on Friday.

Lower rates encourage more money into the economy, inducing businesses to invest and consumers to spend and borrow. That keeps money flowing through the economy.

While the federal funds rate doesn’t really impact mortgage rates, which depend largely on the 10-year Treasury yield,

they’re often moving the same way for similar reasons.

In 2018, the Fed raised rates on the belief that a stronger economy could handle higher rates, and mortgage rates climbed as well during much of that period. As investors began to anticipate a slower economy, they pushed the yield on the 10-year Treasury lower in 2019 and 2020, and that hit mortgage rates well before the Fed even acted.

 

A home equity line of credit (HELOC) will adjust relatively quickly to the lower federal funds rate. HELOCs are typically linked to the prime rate, the interest rate that banks charge their best customers. So when the Fed adjusts its rates, the prime rate usually follows immediately.

Lower rates uplift more money into the economy, prompting businesses to invest and consumers to spend and borrow. That keeps money flowing through the economy.

However, while lower interest rates help some groups, they don’t help everyone. Here’s who stands to benefit the most from lower rates, and also who could be hurt by them.

While the federal funds rate doesn’t really impact mortgage rates, which depend largely on the 10-year Treasury yield, they’re often moving the same way for similar reasons.

In 2018, the Fed raised rates on the belief that a stronger economy could handle higher rates, and mortgage rates climbed as well during much of that period. As investors began to anticipate a slower economy, they pushed the yield on the 10-year Treasury lower in 2019 and 2020, and that hit mortgage rates well before the Fed even acted.

A home equity line of credit (HELOC) will adjust relatively quickly to the lower federal funds rate. HELOCs are typically linked to the prime rate, the interest rate that banks charge their best customers. So when the Fed adjusts its rates, the prime rate usually follows immediately.

Many variable-rate credit cards change the rate they charge customers based on the prime rate, which is closely related to the federal funds rate. So as the federal funds rate changes, interest on variable-rate cards is likely to quickly adjust, too.

“Credit card rates will move lower for most cardholders, but more slowly than they’d increased when rates were rising,” says McBride. “Don’t expect to see that lower rate on your account for another 60 to 90 days, as issuers drag their feet on passing along lower rates.”

The latest Fed move will likely lower interest rates on auto loans. While auto loans are influenced by the direction and trend of the federal funds rate, they don’t move in lockstep.

Lower interest rates are generally a positive for the stock market. Lower rates make it cheaper for businesses to borrow and invest in their operations, and so companies can expand their profits at a lower cost. In addition, lower rates make stocks look like a more lucrative option for investors, so stock prices tend to rise when rates are cut, if the economy looks strong otherwise.

The stock market tends to price in the potential for a rate cut sometimes weeks or months before it actually takes place. In this case, the S&P 500 soared 4.6 percent the day after the Fed made it clear that it was willing to lower rates and the day before it actually did so.

With the market expecting some economic weakness due to the coronavirus and unemployment sitting near historic lows, you’ll want to consider how much longer the economy’s expansion can continue. When the economy enters a recessionary period again, rates should fall, so it may make sense to make your money moves (such as locking in higher CD rates) while you can still receive relatively higher yields.

 

Posted in Real Estate News
March 4, 2020

Advantages and disadvantages of a home equity line of credit

Property owners who want to check into their home’s equity to consolidate debt with high interest or finance home improvement projects often decide to take out a home equity line of credit, which is called HELOC.

Unlike a home equity loan that let you borrow a lump sum, a HELOC offers a line of credit you can borrow when you need to. Like credit cards, HELOCs also come with changeable interest rates, and your monthly paymentdepends on how much you borrow at any given time and your current interest rate.

HELOCs is popular because they use to make good financial sense, says Sean Murphy, AVP of equity lending at Navy Federal Credit Union.

“Specifically, if you are someone who is looking for a home improvement or debt consolidation loan with lower interest rates than personal loans or unsecured products, a HELOC may be right for you,” he says.

 

Advantages of a home equity line of credit

Home equity lines of credit usually lends you up to 85 percent of your property's value, which means these loans is not applicable for consumers who don’t have considerable equity. You also need good credit to qualify, and you will need an approved income to repay your loan.

If you’re a candidate for a HELOC, here are some of the biggest advantages:

Interest rates have been at or near all-time lows for a couple of years now, and home equity lines of credit let you take advantage of that fact. Financial attorney Leslie H. Tayne says HELOCs can have lower interest rates and lower initial costs than credit cards.

In fact, some of the best home equity rates fall below 5 percent. Meanwhile, the average APR on variable-rate credit cards is around 17.4 percent.

Even after the Tax Cuts and Jobs Act of 2017, you can still deduct interest paid on a home equity line of credit (or home equity loan) if you use the money for home improvements.

IRS says that interest payments on home equity products are not deductible “unless they are used to buy, build or substantially improve the taxpayer’s home that secures the loan.”

JPMorgan Chase Home Lending Representative Keosha Burns says another advantage of HELOCs is that you can “use what you need, when you need it.” Where home equity loans and even personal loans require you to take out a lump sum, you can use a HELOC in spurts if you want, only borrowing the cash you’ll use as you go along.

Tayne also points out that your monthly payment varies based on how much you’re borrowing, so you can wind up with a smaller monthly payment if you end up needing less cash.

Lastly, don’t forget that HELOCs often provide flexibility in terms of how you pay them off. Joseph Polakovic, owner and CEO of Castle West Financial in San Diego, says that this can include the option to make interest-only payments — at least at first.

The timeline for your HELOC can vary depending on how much you want to borrow and the lender you go with, but HELOCs can last for up to 30 years including a draw period and a repayment period.

 

Disadvantages of a home equity line of credit

First, you put your home up as collateral for the loan, which is also required to do with a home equity loan. While having a secured loan can help you secure a lower interest rate, you’re taking on some risk.

“Because you are borrowing against your home, if you can’t make your monthly payments, you risk foreclosure,” Murphy says.

Polakovic says that one disadvantage of HELOCs often stems from a lack of borrower discipline because they are so easy to access. Since HELOCs offer the chance to make interest-only payments, it’s also almost too easy to access this cash without feeling the pain of your decisions right away.

Lastly, don’t forget that you’re borrowing against home equity you may have worked hard to build up. This could mean spending more time paying off your house in the long run, but also paying more interest over the time you own your home.

If housing prices drop, borrowing against your home equity also means you could wind up owing more than your home is worth.

Murphy says that if you’re looking to spend as you go — and only pay for what you’ve borrowed, when you’ve borrowed it — a HELOC is probably a better option.

Home equity loans come with a fixed monthly payment and a fixed interest rate. This means you’ll know exactly how much you will owe each month, and you never have to worry about your interest rate going up or down.

A cash-out refinance replaces your existing mortgage with a new loan with a higher balance. Many lenders will let you refinance and borrow up to 80 percent of your home’s value, letting you receive the difference in cash.

Lastly, don’t forget to consider personal loans. This type of loan comes with a fixed monthly payment and a fixed interest rate, and you get a lump sum of money upfront like you do with a home equity loan. The big difference is personal loans are unsecured, so you don’t have to put your home up as collateral.

 

 

 

 

Posted in Real Estate News
Feb. 28, 2020

Why Inherited Home Sales Can Get Difficult

There are three siblings that inherited their sister's house upon her death, and then one of the brothers died without writing his will. The question is, can the remaining siblings still sell the house without proper documents?

 

Richard from FORT LAUDERDALE, Fla. asks:My sister passed away and left her house to me and our two brothers. We decided to sell the house, but before we could, one of my brothers also passed away. We are his only family and he did not have a will. Can we still sell the house? 

ANSWER: You will still be able to sell the house but there are some things that you need to process.

 

When a person dies, the court processes a gathering and distributing their property which is called "probate". When you probated your sister's property, her home was transferred to the three remaining siblings.

Each of the remaining three siblings owned a third of the property equally. All three of you need to work altogether to sell the house but since one of the remaining brothers died, it is impossible to do so now. 

Even though the deceased brother doesnt have a wife or children, his property still needs to be probated. When a person left a will before he/she dies, their probate is called “testate,” and the will is used to know to whom the properties will be given.

But when there is no valid will, the estate will be “intestate,” and the law will provide default instructions.

In some scenarios, it can be complicated to know who will get the properties, but the hierarchy should be: decedent’s spouse, his/her children, and then the grandchildren. If the deceased person doesnt have a a wife or kids of his/her own, the decedent’s parents are next in line, followed by the siblings, and so on.

Next step is to get an attorney and file a probate case. Unlike most areas of law where people can file a lawsuit themselves, probate requires using an attorney. Just within a few months, you will be able to sell the house with the help of the estate’s representative. The money from the sale will still get split three ways, with your deceased brother’s share being distributed through the probate process.

 

 

Posted in Market Updates
Feb. 18, 2020

Some FHA Loans Facts to Know

FHA Loan facts to know about one out of every eight homes sold each year. For decades, it’s been popular with first-time buyers because it was the first significant source of low down payment loans. First-time buyers can choose from thousands of low down payment loans. Yet FHA remains the most popular gateway to home ownership with 3.5% down.

 

Myths about FHA single-family loans confuse many new buyers. FHA loans are not restricted to lower-income buyers, nor to first-time buyers. They are available in every state and have no income or age requirements.

 

Here are some facts about FHA.

FHA’s “life of the loan” policy on mortgage insurance is one of its most unpopular features. Many first-time buyers shy away from FHA when they learn that FHA requires them to keep their FHA mortgage insurance as long as they have an FHA mortgage.  

 

Borrowers with conventional loans and private mortgage insurance (PMI) can drop their mortgage insurance once they have accumulated 20 percent equity in their homes.  Equity grows with increases in value and paying down the loan principal.

FHA borrowers can get out of an FHA mortgage by refinancing into a conventional mortgage. To refinance an FHA loan, you must wait at least 210 days after your FHA mortgage clears or have six months of on-time payments before applying. 

 

You can qualify for an FHA mortgage only two years after a bankruptcy and three years after a foreclosure.

FHA is more lenient than many conventional lenders on giving qualified borrowers a second chance after foreclosures and bankruptcies.  After a foreclosure, a former owner must wait at least three years. If the foreclosure also involved an FHA loan, the three-year waiting period starts from the date that FHA paid the prior lender on its claim. On the other hand, former owners who defaulted on conventional loans can wait just as long before they can qualify for a mortgage.

 

To qualify for conventional financing after a Chapter 7 bankruptcy, borrowers will often need to wait four years. Filing for Chapter 13 bankruptcy can take as long as five years but a borrower can get an FHA loan with court approval, and after making 12 months of payments on time under their bankruptcy plan.

 

You can get an FHA mortgage with a much lower credit score than a conventional mortgage.

Borrowers with credit scores as low as 580 can qualify for FHA financing with 3.5 percent down. Scores between 500 and 580 can be eligible for mortgages with 10 percent down, of course these lower credit scores can require additional guidelines to qualify for the loan.

 

 FHA loans usually have lower interest rates than conventional loans.

There’s no guarantee that FHA-approved lenders will give you a better rate on an FHA loan than a conventional one, but they usually do. 

 

However, credit scores have a more significant impact on the rates that a borrower pays than the difference between FHA and conventional rates. FHA borrowers with credit scores of 660 will often qualify for the same interest rate as would conventional borrowers with a score of 740, according to Carla Blair-Gamblian, a home loan consultant for Veterans United Home Loans.

 

FHA is not for everyone. Investment properties, second homes and higher-end homes don’t qualify.

FHA will not finance second homes, vacation homes, investment properties. Properties must be primary residences where owners live for the majority of the year. The FHA requires that a buyer moves into the property within 60 days of closing.

 

The current (2019) limits for FHA debt-to-income ratios meaning what you make in income after you pay your monthly  debts are 31 percent for housing-related debt (mortgage, property taxes), and 43 percent for total debt or less.

 

Last year, FHA tightened the way it treats student loan debt. Before applying for a mortgage, many student loan debtors defer payments on their student loan debt for three years. Now, FHA requires that one percent of that debt be included in your DTI (Debt to Income) calculation.

 

If you have a good credit score, you will pay more for FHA mortgage insurance than private mortgage insurance. 

A study last year by the Urban Institute found that borrowers with better credit scores are better off with a conventional mortgage than FHA.

Borrowers with credit scores below 640 will pay $266 a month more for PMI than FHA insurance while borrowers with PMI and an excellent score over 760 will pay at least $69 a month less.

 

 

 

Posted in Real Estate News
Jan. 7, 2020

Broward County Single-Family Home Sales Rise in November

Broward County single-family home sales, median prices and dollar volume went up year after year in November 2019, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

Broward single-family home sales went up 2.2% year-over-year, from 1,149 to 1,174. Broward County continues in a seller’s market (inventory below 6 months of supply) with months of supply decreasing, a sign of the high demand for Broward real estate. 

“New federal tax law limiting deductions on state and local taxes and low mortgage rates will continue boosting home sales,” said Broward-MIAMI President Jonathan Keith, a Fort Lauderdale broker.

Broward total home sales went down 5.3% year-over-year, from 2,460 to 2,330. Lack of inventory in lower price points was a part of the decline in transactions. With consumer confidence rising, unemployment low, job creation high and increased migration to Florida, Broward real estate should enjoy steady growth.

According to Freddie Mac, the median commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 3.70% in November, up from 3.69% in October. The average commitment rate across all of 2018 was 4.54%.

Broward single-family home median prices increased 4.2%, from $360,000 to $375,000. Broward existing condominium median prices increased 2.4%, from $166,000 to $170,000. Only 4.3% of all closed residential sales in Broward were distressed in November 2019, including REO (bank-owned properties) and short sales, compared 4.3% in November 2018. Total Broward distressed sales decreased 3.8% year-over-year, from 105 to 101.

The average number of days between listing and contract dates for Broward single-family home sales was 46 days, a 12.2% increase from 41 days last year. The average number of days between the listing date and closing date for single-family homes was 88 days, a 3.5% increase from 85 days.

The average time to contract for condos was 51 days, an 8.5% increase from 47 days. The average number of days between the listing date and closing date for condos was 94 days, a 9.3% increase from 86 days.

The median percent of original list price received for single-family homes was 95.7%. The median percent of original list price received for existing condominiums was 94.9%.

 

Nationally, total existing-home sales transactions went down to 1.7% from October to a seasonally-adjusted annual rate of 5.35 million in November. However, sales are up 2.7% from a year ago (5.21 million in November 2018). Statewide closed sales of current single-family homes totaled 21,842 last month, up 6.1% from November 2018, according to Florida Realtors. Florida’s condo-townhouse market totaled 8,101, down 6.3% from the level a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written. The national average current home price for all housing types in November was $271,300, up 5.4% from November 2018 ($257,400), as prices rose in all regions. November’s price increase marks 93 continuous months of year after year gains.

Months supply of inventory for single-family homes went down to 13% to 4.0 months, which indicates a seller’s market. Current condominiums have a 5.8-month supply, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six and nine months of supply. Total active listings at the end of November went down 7.1% year-over-year, from 14,356 to 13,331. Inventory of single-family homes went down 11.8% in November from 6,039 active listings last year to 5,329 in November 2019. Condominium inventory went down 3.8% to 8,002 from 8,317 listings during the same period in 2018.

Nationally, total housing inventory at the end of November totaled 1.64 million units, decreased approximately 7.3% from October and 5.7% from one year ago (1.74 million). Unsold inventory sits at a 3.7-month supply at the current sales pace, decreased from 3.9 months in October and from the 4.0-month figure recorded in November 2018. Unsold inventory totals have lessen for five consecutive months, restricting home sales.

 

 

Posted in Real Estate News
Jan. 7, 2020

Miami Condo Sales Went up in November for Eight years

Miami-Dade County current condominium sales, including $1-million-and-up transactions, went up year after year in November 2019, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system. Pending sales, which are indicators of future closed sales and reflect demand, are up in November and year to date for single-family homes and condos.

“Miami pending sales have increased in eight out of the last 10 months for both property types,” MIAMI Chairman of the Board José María Serrano said. “Homebuyers in tax-burdened states continue relocating and moving businesses to South Florida as result of the new tax law limiting deductions on state and local taxes.” Miami luxury ($1-million-and-up) condo transactions increased 4.1% to 51 transactions. Miami luxury single-family transactions decreased 11.9% to 74 transactions. Single-family home dollar volume decreased 2.2%, from $538.3 million to $526.7 million. Condo dollar volume decreased 0.2%, from $377.7 million to $377 million.

 Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA. Miami-Dade County single-family home prices increased 2.8% in November 2019, increasing from $355,000 to $365,000. Miami single-family home prices have risen for 96 consecutive months, a streak of 8 years. Existing condo prices increased 6.5%, from $230,000 to $245,000. Condo prices have increased or stayed even in 98 of the last 102 months. Only 6.3% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 5.8% in November 2019. In 2009, distressed sales comprised 70% of Miami sales.

Total Miami distressed sales increased 8.5%, from 118 to 128. Nationally, total existing-home sales transactions decreased 1.7% from October to a seasonally-adjusted annual rate of 5.35 million in November. However, sales are up 2.7% from a year ago (5.21 million in November 2018). Statewide closed sales of existing single-family homes totaled 21,842 last month, up 6.1% from November 2018, according to Florida Realtors. Florida’s condo-townhouse market totaled 8,101, down 6.3% from the level a year ago. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The national median existing-home price for all housing types in November was $271,300, up 5.4% from November 2018 ($257,400), as prices rose in all regions. November’s price increase marks 93 straight months of year-over-year gains. Miami cash transactions comprised 35.1% of November 2019 total closed sales, compared to 36.9% last year. Miami cash transactions are almost double the national figure (20%). 

Inventory of single-family homes decreased 8% in November from 7,091 active listings last year to 6,526 last month. Condominium inventory decreased 4.9% to 15,369 from 16,162 listings during the same period in 2018. Months supply of inventory for single-family homes decreased 9.1% to 6 months, which indicates a seller’s market. Existing condominiums have a 13.2-month supply, which indicates a buyer’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.

Total active listings at the end of November decreased 5.8% year-over-year, from 23,253 to 21,895. Active listings remain about 60% below 2008 levels when sales bottomed. New listings of Miami single-family homes decreased 11.6% to 1,438 from 1,627. New listings of condominiums decreased 9.6%, from 2,217 to 2,005.

Nationally, total housing inventory at the end of November totaled 1.64 million units, down approximately 7.3% from October and 5.7% from one year ago (1.74 million). Unsold inventory sits at a 3.7-month supply at the current sales pace, down from 3.9 months in October and from the 4.0-month figure recorded in November 2018. Unsold inventory totals have declined for five consecutive months, constraining home sales.

 

 

Posted in Real Estate News
Dec. 23, 2019

Family Home Sales Went Up in November at Palm Beach County

According to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system, Palm Beach County single-family home sales went up year-after-year in November 2019.

“Palm Beach real estate continues to see strong demand and low supply in particular price points,” JTHS-MIAMI President Kim Price said. “Several Palm Beach County cities are in hot demand with low months’ supply of inventory. We expect to see an increased number of buyers from tax burdened states.”Total Palm Beach County home sales decreased 3.7%, from 2,205 to 2,124. Palm Beach single-family home sales increased 0.4%, from 1,189 to 1,194. Palm Beach condo sales decreased 8.5%, from 1,016 to 930.

Insufficiency of inventory in lower price points played a part to the decreased in transactions. With consumer confidence rising, unemployment low, job creation high and increased migration to Florida, Palm Beach real estate should enjoy steady growth.

A new condo approval process could increase sales in the future. The new guidance, which goes into effect in mid-October, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, should yield thousands of new homeownership opportunities.

 

Total Palm Beach distressed sales decreased 30.6%, from 85 to 59.

Short sales and REOs accounted for 0.7% and 2.1%, respectively, of total Palm Beach sales in November 2019. Short sale transactions decreased 38.1% year-over-year while REOs decreased 28.1%. Nationally, distressed sales represented 2% of sales in November, unchanged from both October 2019 and November 2018.

The median number of days between listing and contract dates for Palm Beach single-family home sales was 44 days, a 12% decrease from 50 days last year. The median number of days between the listing date and closing date for single-family homes was 88 days, a 3.3% decrease from 91 days. The median time to contract for condos was 46 days, a 6.1% decrease from 49 days last year. The median number of days between listing date and closing date decreased 2.3% to 86 days.

The median percent of original list price received for single-family homes was 95.2%. The median percent of original list price received for existing condominiums was 94.4%. The national median existing-home price for all housing types in November was $271,300, up 5.4% from November 2018 ($257,400), as prices rose in all regions. November’s price increase marks 93 straight months of year-over-year gains.

Statewide median sales prices for both single-family homes and condo-townhouse properties in November rose year-over-year for 95 consecutive months. The statewide median sales price for single-family existing homes was $265,000, up 3.9% from the previous year. Last month’s statewide median price for condo-townhouse units was $195,000, up 5.4% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Palm Beach cash transactions comprised 43.7% of November 2019 total closed sales, compared to 44.9% last year. Palm Beach cash transactions are more than double the national figure (20%). Condominiums comprise a large portion of Palm Beach cash purchases as 57.5% of condo closings were made in cash in November compared to 32.9% of single-family home sales.

Inventory of single-family homes decreased 13.7% in November from 7,405 active listings last year to 6,390 last month. Condominium inventory decreased 6.4% to 5,844 from 6,242 listings during the same period in 2018.

Months supply of inventory for single-family homes decreased 11.8% to 4.5 months, which indicates a seller’s market. Existing condominiums have a 5.3-month supply, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply. 

 

Total active listings at the end of November decreased 10.4% year-over-year, from 13,647 to 12,234.

New listings of Palm Beach single-family homes decreased 13.1% to 1,662 from 1,913. New listings of condominiums decreased 1.1%, from 1,587 to 1,570.

Nationally, total housing inventory at the end of November totaled 1.64 million units, down approximately 7.3% from October and 5.7% from one year ago (1.74 million). Unsold inventory sits at a 3.7-month supply at the current sales pace, down from 3.9 months in October and from the 4.0-month figure recorded in November 2018. Unsold inventory totals have declined for five consecutive months, constraining home sales.

 

 

 

Posted in Market Updates
Dec. 6, 2019

Rich Home Sales in Miami went up twice digits in October; Total Sales, Average Prices Also went up

Miami-Dade County luxury $1-million-and-up home sales, total home transactions, single-family home purchases, median sale prices and dollar volume went up year after year in October 2019, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

Miami single-family home sales increased up to 2.3% year-to-date versus the first 10 months of previous year; condo sales are up 0.5% year-to date. 

“Miami’s rise as a global city, a new federal tax law limiting deductions on state and local taxes and low mortgage rates continue boosting home sales,” MIAMI Chairman of the Board José María Serrano said. “Northerners and other homebuyers are not just purchasing second homes; they are bringing businesses and moving here full time.”

Miami Luxury Home Sales, Total Sales Rise in October

Total luxury ($1-million-and-up) home sales surged 13.8% year-over-year in October 2019, from 123 to 140. Single-family home luxury sales jumped 16.7% to 77 transactions last month. Condo luxury sales went up to 10.5% to 63 transactions.

Total Miami-Dade County home sales went up 3.1% year after year, from 2,285 to 2,355. With loyal consumers, low unemployment rate, high job vacancies and increased migration to Florida, Miami real estate has a promising growth.

Miami single-family home sales increased 6.8%, from 1,073 to 1,146. Miami existing condo sales decreased a negligible 0.2%, from 1,212 to 1,209. Single-family home dollar volume rose 7.7%, from $522.9 million to $563.1 million. Condo dollar volume jumped 8.1%, from $426.2 million to $460.7 million.

According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage increased to 3.69% in October, up from 3.61% in September. The average commitment rate across all of 2018 was 4.54%.

Lack of access to mortgage loans continues to restrain further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.

Almost Eight Consecutive Years of Price increased in Miami - Miami-Dade County single-family home prices increased 6.8% in October 2019, increasing from $350,000 to $365,000. Miami single-family home prices have risen for 95 consecutive months, a streak of 7.92 years. Existing condo prices increased 5.1%, from $235,000 to $247,000. Condo prices have increased or stayed even in 97 of the last 101 months.

Despite the price increase, Miami, where the average price is still comparable to 2006 figures, remains a bargain compared to other global cities. In Miami, $1 million can net homebuyers 93 square meters of prime property, according to Knight Frank’s 2019 The Wealth Report. Monaco (16 square meters), Hong Kong (22), New York (31), Los Angeles (36) and others offer significantly less prime land for $1 million.

Miami Distressed Sales Stay Low, Reflecting Healthy Market

Only 6.4% of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 6.6% in October 2019. In 2009, distressed sales comprised 70% of Miami sales.

Total Miami distressed sales stayed even at 150 in October 2018 and October 2019.

Short sales and REOs accounted for 1.2% and 5.1%, respectively, of total Miami sales in October 2019. Short sale transactions increased 3.6% year-over-year while REOs decreased 0.82% percent. Nationally, distressed sales represented 2% of sales in October, unchanged from September but down from 3% in October 2018.

The median number of days between listing and contract dates for Miami single-family home sales was 50 days, a 16.3% increase from 43 days last year. The median number of days between the listing date and closing date for single-family homes was 95 days, a 6.7% percent increase from 89 days. The median time to contract for condos was 71 days, a 1.4% increase from 70 days last year. The median number of days between listing date and closing date stayed even at 113 days. The median percent of original list price received for single-family homes was 95.9 percent. The median percent of original list price received for existing condominiums was 93.7 percent.

Miami cash transactions comprised 32.6% of October 2019 total closed sales, compared to 37.2% last year. Miami cash transactions are almost double the national figure (19%).

Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.

Condominiums comprise a large portion of Miami’s cash purchases as 43.9% of condo closings were made in cash in October compared to 20.7% of single-family home sales.

Seller’s Market for Single-Family Homes, Buyer’s Market for Condos

Inventory of single-family homes decreased 4.6% in October from 6,864 active listings last year to 6,548 last month. Condominium inventory decreased 4% to 15,295 from 15,928 listings during the same period in 2018.

 

Posted in News
Nov. 20, 2019

Approximately 30 percent of Millennial Renters from Miami are only saving enough money to buy a property

In South Florida, a study concluded that only less than half of the millennial renters can afford to buy a property.

As per a study made by Apartment List, an online rental listing website, renters from 23-38 over the past five years within 16 U.S. metro areas. Researchers considered what percentage of millennial renters in a given metro area could afford a down payment of 20 percent, 10 percent or 5 percent within the next five years.

Only a few millennial renters in Broward, Miami-Dade and Palm Beach counties could afford an average priced condo of $202,500. While only 13 percent of millennial renters could afford a 20 percent down payment, 30 percent could afford a 10 percent down payment and 43 percent could afford a 5 percent down payment.

In spite of less than half of millennial renters being able to buy, Miami is still included in the five metro areas with the highest share of millennial renters on track to put 10 percent down on their first home within the next five years: Minneapolis (34), Houston (34), Philadelphia (33) and New York (31).

But as per George Jalil, broker and president of First Service Realty ERA Powered, the lack of state and city income taxes compared to other cities like New York may be allowing renters to save more.

The study also reckoned the portion of millennial renters that expect to rent for the rest of their lives: Miami and Philadelphia were the only cities that had the highest percentage of millennial renters on track to buy a home within the next year with the most positive attitude about buying for the first time. About 8 percent of millennial renters in Miami and about 9 percent in Philly believed they would never be able to purchase a home and just continue on renting.

Renters in Miami may be more positive about buying since they may be looking to relocate elsewhere in the state to buy, said Popov. He found Miami renters are looking to relocate to Tampa, Jacksonville and Orlando.

Millennial renters in San Francisco (17 percent), New York (15), Los Angeles (15) and Chicago (13) believed they would rent for the rest of their lives.

 

Millennial renters are looking at town houses in Cutler Bay and Miami Gardens in Miami-Dade County for their first home property. In Broward, millennial renters often consider Pembroke Pines, Hollywood, Tamarac, Coral Springs and Cooper City.

The Miami metro area is included in the least affordable rental markets in the country, according to a 2018 study by Apartment List. As much as millennial renters wanted to get a property, since they are not getting a wage increase, they are unable to do so.

Posted in Real Estate News