According to Florida Realtors, in April 2018, Florida's housing sector reported more closed sales, higher median prices and more new listings from owners ready to enter the market.
"Not enough for-sale inventory, especially in the range for first-time homebuyers, is an ongoing challenge for many local housing markets," said 2018 Florida Realtors President Christine Hansen. "Pent-up demand continues to put upward pressure on prices. In April, sellers continued to get more of their original asking price at the closing table. Sellers of existing single-family homes last month received 96.6 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 95 percent (median percentage).
"But there is some positive news for buyers: New listings for single-family homes in April rose 9.8 percent year-over-year, while new townhouse-condo listings increased 8.3 percent. This trend will hopefully continue, which would help ease the too-tight inventory in many areas."
Sales of single-family homes statewide totaled 24,804 last month, up 4.1 percent compared to April 2017. Meanwhile, the statewide median sales price for single-family existing homes was $253,895, up 8.1 percent from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in April was $190,000, up 10.5 percent over the year-ago figure.
April 2018 was the 76th month in a row that the statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. The median is the midpoint; half the homes sold for more, half for less.
According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in March 2018 was $252,100, up 5.9 percent from the previous year; the national median existing condo price was $236,100. In California, the statewide median sales price for single-family existing homes in March was $564,830; in Massachusetts, it was $369,000; in Maryland, it was $283,405; and in New York, it was $260,000.
Looking at Florida's townhouse-condo market, statewide closed sales totaled 11,236 last month, up 9.2 percent compared to a year ago. Closed sales data reflected dwindling short sales and foreclosures in April: Short sales for townhouse-condo properties dropped 27.5 percent and foreclosures fell 41.8 percent year-to-year; while short sales for single-family homes declined 48.8 percent and foreclosures fell 50.7 percent year-to-year. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
"More often than not, the pace for Florida's busy spring and summer homebuying season seems to be set in March and April," said Florida Realtors Chief Economist Dr. Brad O'Connor. "On the heels of a somewhat slow month of March this year, it's good to see that state existing home sales rebounded quite nicely in April. With last month's sales factored in, we're ahead of last year's pace of single-family home sales by about a half of a percent.
"Demand for single family homes remains strong across the state and this abundance of buyers continues to deplete active inventories and drive up prices."
For-sale inventory in April remained tight, at a 3.8-months' supply for single-family homes and 5.8-months' supply for townhouse-condo properties, according to Florida Realtors.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.47 percent in March 2018, significantly up from the 4.05 percent averaged during the same month a year earlier.
WPJ News | Florida Residential Market Sales Activity
Thursday, May 31, 2018
Saturday, May 26, 2018
The Most Creative Ways To Find Real Estate Deals For Growing Investors
Learning to invest in real estate while wading through markets both full of foreclosures and light on inventory helped me experience the best of the market and the very worst. These tactics for locating deals stand out as my favorites that any new investor can utilize to find their first or latest real estate deal.
Calling For Cash
This is hands down my favorite method of locating deals. It gets you speaking to potential sellers right away, and without costing you a dime. All it takes is a little nerve, a bit of effort and research, and a phone.
Begin by compiling For Sale by Owner and For Rent by Owner lists, because the information is relatively easy to obtain. Foreclosure information can be, too. Once you have the property and contact information, call every single person selling or renting their home within your preferred distance or travel time — mine was within 45 minutes of my house — and ask a few questions to try to gauge the sellers' motivations.
If the seller seems to be experiencing financial pressure, either caused by the house or that could be fixed by selling the house, ask them to meet. At that meeting, begin your negotiations to purchase their home. Great investors are great at talking to sellers, and there is no better way to practice than by meeting with people for free.
Driving For Dollars
This tactic simply involves driving through neighborhoods looking for signs of seller motivation: neglected houses, moving trucks, "for sale" or "for rent" signs in the yard, etc. When you locate a house showing signs that the owner may be willing to speak to you about selling, get out of the car, and knock on the door. Tell the owner you are interested in buying a house in the area and are curious if they could point you toward someone looking to sell. The ultimate goal of this scenario is to get into the house to sit down and make them an offer.
If no one answers the door, leave a flyer on the door indicating you are someone who buys houses in their area, and provide your contact information. Consider taking down the address in case you want to add it to a direct mail campaign or follow up in some other way.
Network
Over time, your network will bring you the best and most deals. But it takes a while to build this. As you move through your real estate investing career, you will likely graduate from driving neighborhoods and calling for cash, but you will never graduate from networking. These two important contacts could help you find your best deals:
1. Wholesalers: A real estate wholesaler is an investor who is good at finding quality deals with the intent to sell them to other real estate investors. Be mindful that wholesalers typically mark these houses up a little in order to profit from finding the deal. You can find wholesalers through your local real estate clubs or other industry networking events. Be sure to give every wholesaler your card, and let them know you would like to be added to their buyer list.
2. Other Investors: You may have heard people say that real estate is not competitive. I may not fully agree with this, but it does drive home the point that real estate investors can work well together. Many investors are looking for properties with a lot of equity that they can get in and out of quickly. Others are looking for less equity but more cash flow, as they want to hold onto the property for the long haul. Investors generally fall into one of two categories: wanting great value or wanting great terms.
Examining investors by these two categories makes it easy to see if and how you can work together. Both types set up marketing campaigns to find sellers. Great terms include easy financing and an owner who will carry the loan or a long-term lease. If I am a terms buyer and value buyers know that, we could collaborate on deals that do not have enough equity for them. I can pay them a small fee and have leads come to me. The opposite is also true for terms buyers who don’t want big equity deals. They can mark those houses up and sell them to another investor. Big equity deals typically means rehab and resell, and not everyone is looking for that.
As you grow as a real estate investor, you will become able to allocate a marketing budget and start campaigns that will help get your phone ringing. After driving for deals or calling for cash, there is no better feeling than answering a call from a seller who wants you to buy their home.+-
Calling For Cash
This is hands down my favorite method of locating deals. It gets you speaking to potential sellers right away, and without costing you a dime. All it takes is a little nerve, a bit of effort and research, and a phone.
Begin by compiling For Sale by Owner and For Rent by Owner lists, because the information is relatively easy to obtain. Foreclosure information can be, too. Once you have the property and contact information, call every single person selling or renting their home within your preferred distance or travel time — mine was within 45 minutes of my house — and ask a few questions to try to gauge the sellers' motivations.
If the seller seems to be experiencing financial pressure, either caused by the house or that could be fixed by selling the house, ask them to meet. At that meeting, begin your negotiations to purchase their home. Great investors are great at talking to sellers, and there is no better way to practice than by meeting with people for free.
Driving For Dollars
This tactic simply involves driving through neighborhoods looking for signs of seller motivation: neglected houses, moving trucks, "for sale" or "for rent" signs in the yard, etc. When you locate a house showing signs that the owner may be willing to speak to you about selling, get out of the car, and knock on the door. Tell the owner you are interested in buying a house in the area and are curious if they could point you toward someone looking to sell. The ultimate goal of this scenario is to get into the house to sit down and make them an offer.
If no one answers the door, leave a flyer on the door indicating you are someone who buys houses in their area, and provide your contact information. Consider taking down the address in case you want to add it to a direct mail campaign or follow up in some other way.
Network
Over time, your network will bring you the best and most deals. But it takes a while to build this. As you move through your real estate investing career, you will likely graduate from driving neighborhoods and calling for cash, but you will never graduate from networking. These two important contacts could help you find your best deals:
1. Wholesalers: A real estate wholesaler is an investor who is good at finding quality deals with the intent to sell them to other real estate investors. Be mindful that wholesalers typically mark these houses up a little in order to profit from finding the deal. You can find wholesalers through your local real estate clubs or other industry networking events. Be sure to give every wholesaler your card, and let them know you would like to be added to their buyer list.
2. Other Investors: You may have heard people say that real estate is not competitive. I may not fully agree with this, but it does drive home the point that real estate investors can work well together. Many investors are looking for properties with a lot of equity that they can get in and out of quickly. Others are looking for less equity but more cash flow, as they want to hold onto the property for the long haul. Investors generally fall into one of two categories: wanting great value or wanting great terms.
Examining investors by these two categories makes it easy to see if and how you can work together. Both types set up marketing campaigns to find sellers. Great terms include easy financing and an owner who will carry the loan or a long-term lease. If I am a terms buyer and value buyers know that, we could collaborate on deals that do not have enough equity for them. I can pay them a small fee and have leads come to me. The opposite is also true for terms buyers who don’t want big equity deals. They can mark those houses up and sell them to another investor. Big equity deals typically means rehab and resell, and not everyone is looking for that.
As you grow as a real estate investor, you will become able to allocate a marketing budget and start campaigns that will help get your phone ringing. After driving for deals or calling for cash, there is no better feeling than answering a call from a seller who wants you to buy their home.+-
Monday, May 21, 2018
Why You Should Consider Triple Net Investment Properties For Your Portfolio
Imagine what it would look like to have a multibillion-dollar company send you a check every month for the next 25 years. Is the idea of having companies like Walgreens, McDonald's, or Bank of America sending you monthly rent checks enticing? It should be — the peace of mind this could give you is likely far superior to that offered by a local or regional commercial business tenant. With a publicly traded tenant, you could look at its stock ticker to track what condition it's in.
After selling a hands-on property like a multifamily residence, many investors look to take advantage of the 1031 exchange and seek a replacement property. A variety of net lease investment options come into play here. Per the CCIM Institute, they include:
"Bond Lease. The tenant is fully responsible for operating expenses, maintenance, repairs, and replacements for the entire building and site, without limitation.
NNN Lease. These leases follow the bond lease definition except that capital expenditures are limited, usually in the final months of the lease. The lessee is liable for all of the property’s expenses, both fixed and operating.
NN Lease. This lease follows the NNN, except the landlord is responsible for structural components, such as the roof, bearing walls, and foundation.
Modified Net (or Modified Gross) Lease. The tenant pays its own utilities, interior maintenance and repairs, and insurance. The landlord pays everything else, including real estate property taxes."
Net leased properties with credible tenants have long been favorites of insurance companies, real estate investment trusts (REITs) and high-net-worth investors. They acquire them because they have long-term leases with little or no management dependability. The occupants are public companies that are often worth billions and have brilliant credit ratings.
You are probably beginning to see the benefits of holding properties like these. When you start looking closer, the deal gets even sweeter: It's simple, quiet and calm. You can sleep at night without being concerned about cash flow. With no day-to-day management, a multibillion-dollar company is an occupant that tends to all its own maintenance, property taxes and insurance. The property is an imperative part of business operations, and leaseholders are very concerned about exteriors. They want a prime location among demographics that predict high traffic and sales.
These tenants pay their rent like clockwork every month, and the steady cash flow permits you, the owner, to build equity constantly over the lease term. The worth of the main real estate and the excellent credit of the tenant should enable you to get very positive financing terms. Predictably leveraged, with a self-amortizing loan, the assets will be paid off at the end of the original lease term. If the tenant leaves, you still have a valuable property that could be debt free.
When you own these properties, it is important to monitor your lease agings. If you do need to sell, the longer term you have left, the better. If the occupants stay beyond the preliminary term after the asset is paid off, which many do, your investment profits may be increased significantly.
If you don’t want the trouble of management and continual ongoing expenses presenting themselves, read on.
It is essential to invest in a location that is likely to spawn extensive sales for a commercial tenant. If the leaseholder is able to make a huge amount of money in a great location, it is doubtful they will leave following the initial lease term. When buying a net leased property, you should cautiously consider the location you want to procure. It is helpful to use demographic studies and mapping software to compare and contrast the attributes of various businesses to decide the best one to venture into. Fantastic locations with the best occupants are always in demand and will sell at a premium. It is generally worth it to pay extra to get a premium location. This will enable you to sell the property faster if you decide to sell prior to the end of the lease.
Net leased properties with credit tenants have increased in popularity with investors because many investors are receiving very little returns on convertible or liquid assets. Net leased properties with credit tenants can be a harmless, reliable investment if you choose them wisely.
If you are interested in a triple net investment property, contact a firm that is versed in the sales and acquisition of such properties. If you have an appetite for more risk, look into value-added properties. While there is little risk in triple net properties, the main thing to consider is the tenant strength. Publicly traded companies offer transparency as to condition through readily available resources. Inflation should also be considered, since most long-term leases have flat rental rates until the exercise of the option period.
I invite you to begin your search for triple net properties. Call a few brokers, and see what they have in their inventories. Once you've digested the information, take a plunge toward a peaceful and long-term investment.
After selling a hands-on property like a multifamily residence, many investors look to take advantage of the 1031 exchange and seek a replacement property. A variety of net lease investment options come into play here. Per the CCIM Institute, they include:
"Bond Lease. The tenant is fully responsible for operating expenses, maintenance, repairs, and replacements for the entire building and site, without limitation.
NNN Lease. These leases follow the bond lease definition except that capital expenditures are limited, usually in the final months of the lease. The lessee is liable for all of the property’s expenses, both fixed and operating.
NN Lease. This lease follows the NNN, except the landlord is responsible for structural components, such as the roof, bearing walls, and foundation.
Modified Net (or Modified Gross) Lease. The tenant pays its own utilities, interior maintenance and repairs, and insurance. The landlord pays everything else, including real estate property taxes."
Net leased properties with credible tenants have long been favorites of insurance companies, real estate investment trusts (REITs) and high-net-worth investors. They acquire them because they have long-term leases with little or no management dependability. The occupants are public companies that are often worth billions and have brilliant credit ratings.
You are probably beginning to see the benefits of holding properties like these. When you start looking closer, the deal gets even sweeter: It's simple, quiet and calm. You can sleep at night without being concerned about cash flow. With no day-to-day management, a multibillion-dollar company is an occupant that tends to all its own maintenance, property taxes and insurance. The property is an imperative part of business operations, and leaseholders are very concerned about exteriors. They want a prime location among demographics that predict high traffic and sales.
These tenants pay their rent like clockwork every month, and the steady cash flow permits you, the owner, to build equity constantly over the lease term. The worth of the main real estate and the excellent credit of the tenant should enable you to get very positive financing terms. Predictably leveraged, with a self-amortizing loan, the assets will be paid off at the end of the original lease term. If the tenant leaves, you still have a valuable property that could be debt free.
When you own these properties, it is important to monitor your lease agings. If you do need to sell, the longer term you have left, the better. If the occupants stay beyond the preliminary term after the asset is paid off, which many do, your investment profits may be increased significantly.
If you don’t want the trouble of management and continual ongoing expenses presenting themselves, read on.
It is essential to invest in a location that is likely to spawn extensive sales for a commercial tenant. If the leaseholder is able to make a huge amount of money in a great location, it is doubtful they will leave following the initial lease term. When buying a net leased property, you should cautiously consider the location you want to procure. It is helpful to use demographic studies and mapping software to compare and contrast the attributes of various businesses to decide the best one to venture into. Fantastic locations with the best occupants are always in demand and will sell at a premium. It is generally worth it to pay extra to get a premium location. This will enable you to sell the property faster if you decide to sell prior to the end of the lease.
Net leased properties with credit tenants have increased in popularity with investors because many investors are receiving very little returns on convertible or liquid assets. Net leased properties with credit tenants can be a harmless, reliable investment if you choose them wisely.
If you are interested in a triple net investment property, contact a firm that is versed in the sales and acquisition of such properties. If you have an appetite for more risk, look into value-added properties. While there is little risk in triple net properties, the main thing to consider is the tenant strength. Publicly traded companies offer transparency as to condition through readily available resources. Inflation should also be considered, since most long-term leases have flat rental rates until the exercise of the option period.
I invite you to begin your search for triple net properties. Call a few brokers, and see what they have in their inventories. Once you've digested the information, take a plunge toward a peaceful and long-term investment.
Wednesday, May 16, 2018
Luxury Home Sales in Miami Spike in Early 2018
According the Miami Association of Realtors, Miami luxury home sales surged 12.3 percent in 1Q 2018 as median prices rose for the 25th consecutive quarter.
Total Miami luxury home sales ($1 million and up) rose 12.3 percent to 421 in 1Q 2018, up from 375 in 1Q 2017. Median prices for single-family homes increased to $337,000, a 5.9 percent increase from last year. Miami existing condo median prices rose 4.5 percent year over year to $230,000.
"Miami real estate continues to see major pent-up demand for luxury properties," said George C. Jalil, the 2018 MIAMI Chairman of the Board. "Miami and Florida as a whole is attracting Americans leaving high-tax states such as New York as the new tax law cuts into their income-tax deductions."
Miami Single-Family Luxury Homes Sales Rise 16.2 Percent
Miami single-family luxury home sales jumped 16.2 percent in 1Q 2018, rising from 185 transactions to 215. Miami existing condo luxury home sales increased 8.4 percent year over year from 190 to 206.
Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent for 1Q 2017, up from the 4.17 percent average recorded during the same quarter a year earlier.
Total Sales Decline in 1Q 2018
Total existing Miami-Dade County residential sales declined 6.5 percent year-over-year in 1Q 2018, from 6,169 to 5,770.
Total sales volume accounted for $2.6 billion in 1Q 2018, a decline from the $2.7 billion sales volume a year ago. The sales do not include Miami's multi-billion dollar new construction condo market.
Total Miami distressed sales declined 39.7 percent year-over-year, from 755 transactions in 1Q 2017 to 455 in 1Q 2018. Only 7.9 percent of all closed residential sales in Miami were distressed in 1Q 2018, including REO (bank-owned properties) and short sales, compared to 12.2 percent in 1Q 2017. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 1.6 and 6.3 percent, respectively, of total Miami sales in 1Q 2018. Short sale transactions decreased 47.1 percent year-over-year while REOs fell 37.6 percent.
Miami Median Prices Rise for 25th Consecutive Quarter
The median price for single-family homes in Miami-Dade County increased to $337,000 in the first quarter, a 5.9 percent jump from $318,375 in the same period last year. The median price for existing condominiums increased 4.5 percent year-over-year from $220,000 to $230,000.
Statewide, the median sales price for single-family existing homes in 1Q 2018 was $248,000, up 9.7 percent from the same time a year ago, according to Florida Realtors. The statewide median price for condo-townhouse properties during the quarter was $180,000, up 7.8 percent over the year-ago figure.
The national median existing single-family home price in the first quarter was $245,500, which is up 5.7 percent from the first quarter of 2017 ($232,200), according to the National Association of Realtors (NAR).
Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas
Months' supply of inventory is a strong indicator of real estate activity. Top Miami neighborhoods with the lowest months of supply of inventory in 1Q 2018:
Single-Family Homes
Westview, a north Dade community east of Hialeah, had 6 months supply
Miami Gardens, a north Dade community along the Broward line, had 3 months supply
Virginia Gardens, located north of Miami International Airport, had 2.4 months supply
Hialeah Gardens, a North Dade community west of Hialeah, had 2.4 months supply
Palmetto Estates, a South Dade community west of Palmetto Bay, had 2.6 months supply
Condominiums
Tamiami, a central west Dade community west of Westchester, had 7 months supply
Three Lakes, a South Dade community west of Kendall, had 7 months supply
Sunset, a central Dade community north of Kendall, had 2.5 months supply
The Crossings, a South Dade community west of Kendall, had 2.3 months supply
University Park, a central west Dade community west of Westchester, had 3.3 months supply
National, State Home Sales in 1Q 2018
Nationwide existing-home sales, including single family and condos, decreased 1.5 percent to a seasonally adjusted annual rate of 5.51 million in the first quarter from 5.59 million in the fourth quarter of 2017, and are 1.7 percent lower than the 5.60 million pace during the first quarter of 2017, according to NAR.
Statewide, closed sales of existing single-family homes totaled 60,204 in 1Q 2018, down slightly, 0.9 percent, from the 1Q 2017 figure, according to Florida Realtors. Florida's townhome-condo market totaled 27,088 during 1Q 2018, up 2.8 percent compared to 1Q 2017.
Balanced Market for Single-Family Homes, Buyer's Market for Condos
At the current sales pace, the number of active listings represents 6.2 months of inventory for single-family homes and 14.9 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Miami real estate had 22,560 active listings in the first quarter; a 3.6percent increase from the 21,771 listings at the same time last year. The inventory for single-family homes increased 2.5 percent, from 6,355 to 6,517. Miami existing condo inventory grew 4.1 percent, from 15,416 to 16,043.
Miami Homes Selling Close to List Price
The median percent of original list price received was 95.2 percent for single-family homes and 93.6 percent for condos in 1Q 2018.
The median time to contract for single-family home listings was 48 days, a 17.2 percent decrease from 58 days in 1Q 2017. The median time to contract for existing condos was 80 days, a 3.6 percent decrease from 83 days in 1Q 2017.
The median time to sale for single-family homes decreased 11.8 percent, from 110 days to 97. The median time to sale for existing condos decreased 3.9 percent, from 127 days to 122.
Miami Cash Sales Double National Figure
Cash sales represented 40.8 percent of Miami closed sales in the first quarter of 2018, compared to 44.8 percent in 1Q 2017. About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics. The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.
Cash sales accounted for 54.2 percent of all Miami existing condo sales and 26.7 percent of single-family transactions.
Total Miami luxury home sales ($1 million and up) rose 12.3 percent to 421 in 1Q 2018, up from 375 in 1Q 2017. Median prices for single-family homes increased to $337,000, a 5.9 percent increase from last year. Miami existing condo median prices rose 4.5 percent year over year to $230,000.
"Miami real estate continues to see major pent-up demand for luxury properties," said George C. Jalil, the 2018 MIAMI Chairman of the Board. "Miami and Florida as a whole is attracting Americans leaving high-tax states such as New York as the new tax law cuts into their income-tax deductions."
Miami Single-Family Luxury Homes Sales Rise 16.2 Percent
Miami single-family luxury home sales jumped 16.2 percent in 1Q 2018, rising from 185 transactions to 215. Miami existing condo luxury home sales increased 8.4 percent year over year from 190 to 206.
Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent for 1Q 2017, up from the 4.17 percent average recorded during the same quarter a year earlier.
Total Sales Decline in 1Q 2018
Total existing Miami-Dade County residential sales declined 6.5 percent year-over-year in 1Q 2018, from 6,169 to 5,770.
Total sales volume accounted for $2.6 billion in 1Q 2018, a decline from the $2.7 billion sales volume a year ago. The sales do not include Miami's multi-billion dollar new construction condo market.
Total Miami distressed sales declined 39.7 percent year-over-year, from 755 transactions in 1Q 2017 to 455 in 1Q 2018. Only 7.9 percent of all closed residential sales in Miami were distressed in 1Q 2018, including REO (bank-owned properties) and short sales, compared to 12.2 percent in 1Q 2017. In 2009, distressed sales comprised nearly 70 percent of Miami sales.
Short sales and REOs accounted for 1.6 and 6.3 percent, respectively, of total Miami sales in 1Q 2018. Short sale transactions decreased 47.1 percent year-over-year while REOs fell 37.6 percent.
Miami Median Prices Rise for 25th Consecutive Quarter
The median price for single-family homes in Miami-Dade County increased to $337,000 in the first quarter, a 5.9 percent jump from $318,375 in the same period last year. The median price for existing condominiums increased 4.5 percent year-over-year from $220,000 to $230,000.
Statewide, the median sales price for single-family existing homes in 1Q 2018 was $248,000, up 9.7 percent from the same time a year ago, according to Florida Realtors. The statewide median price for condo-townhouse properties during the quarter was $180,000, up 7.8 percent over the year-ago figure.
The national median existing single-family home price in the first quarter was $245,500, which is up 5.7 percent from the first quarter of 2017 ($232,200), according to the National Association of Realtors (NAR).
Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas
Months' supply of inventory is a strong indicator of real estate activity. Top Miami neighborhoods with the lowest months of supply of inventory in 1Q 2018:
Single-Family Homes
Westview, a north Dade community east of Hialeah, had 6 months supply
Miami Gardens, a north Dade community along the Broward line, had 3 months supply
Virginia Gardens, located north of Miami International Airport, had 2.4 months supply
Hialeah Gardens, a North Dade community west of Hialeah, had 2.4 months supply
Palmetto Estates, a South Dade community west of Palmetto Bay, had 2.6 months supply
Condominiums
Tamiami, a central west Dade community west of Westchester, had 7 months supply
Three Lakes, a South Dade community west of Kendall, had 7 months supply
Sunset, a central Dade community north of Kendall, had 2.5 months supply
The Crossings, a South Dade community west of Kendall, had 2.3 months supply
University Park, a central west Dade community west of Westchester, had 3.3 months supply
National, State Home Sales in 1Q 2018
Nationwide existing-home sales, including single family and condos, decreased 1.5 percent to a seasonally adjusted annual rate of 5.51 million in the first quarter from 5.59 million in the fourth quarter of 2017, and are 1.7 percent lower than the 5.60 million pace during the first quarter of 2017, according to NAR.
Statewide, closed sales of existing single-family homes totaled 60,204 in 1Q 2018, down slightly, 0.9 percent, from the 1Q 2017 figure, according to Florida Realtors. Florida's townhome-condo market totaled 27,088 during 1Q 2018, up 2.8 percent compared to 1Q 2017.
Balanced Market for Single-Family Homes, Buyer's Market for Condos
At the current sales pace, the number of active listings represents 6.2 months of inventory for single-family homes and 14.9 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.
Miami real estate had 22,560 active listings in the first quarter; a 3.6percent increase from the 21,771 listings at the same time last year. The inventory for single-family homes increased 2.5 percent, from 6,355 to 6,517. Miami existing condo inventory grew 4.1 percent, from 15,416 to 16,043.
Miami Homes Selling Close to List Price
The median percent of original list price received was 95.2 percent for single-family homes and 93.6 percent for condos in 1Q 2018.
The median time to contract for single-family home listings was 48 days, a 17.2 percent decrease from 58 days in 1Q 2017. The median time to contract for existing condos was 80 days, a 3.6 percent decrease from 83 days in 1Q 2017.
The median time to sale for single-family homes decreased 11.8 percent, from 110 days to 97. The median time to sale for existing condos decreased 3.9 percent, from 127 days to 122.
Miami Cash Sales Double National Figure
Cash sales represented 40.8 percent of Miami closed sales in the first quarter of 2018, compared to 44.8 percent in 1Q 2017. About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics. The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.
Cash sales accounted for 54.2 percent of all Miami existing condo sales and 26.7 percent of single-family transactions.
Saturday, May 12, 2018
Mortgage Rates in U.S. Remain Flat in Early May
According to Freddie Mac's latest Primary Mortgage Market Survey, U.S. mortgage rates were unchanged over the past week in early May 2018.
Sam Khater, Freddie Mac's chief economist, says the 30-year fixed mortgage rate remained at 4.55 percent. "The minimal movement of mortgage rates in these last three weeks reflects the current economic nirvana of a tight labor market, solid economic growth and restrained inflation," he said. "As we head into late spring, the demand for purchase credit remains rock solid, which should set us up for another robust summer home sales season."
Added Khater, "While this year's higher rates - up 50 basis points from a year ago - have put pressure on the budgets of some home shoppers, weak inventory levels are what's keeping the housing market from a stronger sales pace."
Freddie Mac News Facts
30-year fixed-rate mortgage (FRM) averaged 4.55 percent with an average 0.5 point for the week ending May 10, 2018 (unchanged from last week). A year ago at this time, the 30-year FRM averaged 4.05 percent.
15-year FRM this week averaged 4.01 percent with an average 0.4 point, down from last week when it averaged 4.03 percent. A year ago at this time, the 15-year FRM averaged 3.29 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.77 percent this week with an average 0.3 point, up from last week when it averaged 3.69 percent. A year ago at this time, the 5-year ARM averaged 3.14 percent.
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Sam Khater, Freddie Mac's chief economist, says the 30-year fixed mortgage rate remained at 4.55 percent. "The minimal movement of mortgage rates in these last three weeks reflects the current economic nirvana of a tight labor market, solid economic growth and restrained inflation," he said. "As we head into late spring, the demand for purchase credit remains rock solid, which should set us up for another robust summer home sales season."
Added Khater, "While this year's higher rates - up 50 basis points from a year ago - have put pressure on the budgets of some home shoppers, weak inventory levels are what's keeping the housing market from a stronger sales pace."
Freddie Mac News Facts
30-year fixed-rate mortgage (FRM) averaged 4.55 percent with an average 0.5 point for the week ending May 10, 2018 (unchanged from last week). A year ago at this time, the 30-year FRM averaged 4.05 percent.
15-year FRM this week averaged 4.01 percent with an average 0.4 point, down from last week when it averaged 4.03 percent. A year ago at this time, the 15-year FRM averaged 3.29 percent.
5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.77 percent this week with an average 0.3 point, up from last week when it averaged 3.69 percent. A year ago at this time, the 5-year ARM averaged 3.14 percent.
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Thursday, March 29, 2018
Miami Condo, Home Sales Continue to Rise in 2018
According to the Miami Association of Realtors, Miami existing condominium and total luxury home sales increased in February 2018.
Miami-Dade County existing condominium sales--which are competing with one of the most robust new construction markets in the country -- rose for the fourth consecutive month in February. Miami luxury $1-million-and-up sales jumped 31 percent, from 116 in February 2017 to 152 in February 2018.
"Miami $1-million-and-up home sales have surged in four of the last five months, a sign of the robust pent-up demand for Miami luxury properties," said George Jalil, a Miami broker and the 2018 MIAMI chairman of the board. "In regards to Miami existing condos, a spike in condo transactions in the $200,000 to $300,000 range fueled another strong month for the sector."
Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.
Condo Sales Rise for Fourth Consecutive Month
Miami existing condo sales increased for the fourth consecutive month, rising 3 percent to 983 from 954. The increase was fueled in a surge in entry-level home sales. Existing condo home sales in the $200,000 to $300,000 price range jumped 21.4 percent, from 220 in February 2017 to 267 in February 2018.
Single-family home sales decreased 6.9 percent, from 881 to 820. Lack of single-family home supply in mid-price ranges is negatively impacting sales despite strong demand.
Total existing Miami-Dade County residential sales decreased 1.7 percent year-over-year from 1,835 to 1,803.
Total sales volume for all properties accounted for $864 million last month, up 3.6 percent from $834.1 million a year ago. Sales don't include Miami's multi-billion dollar new construction condo market.
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 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
Miami Luxury Sales Surge in February
Total Miami luxury $1-million-and-up sales jumped 31 percent, from 116 in February 2017 to 152 in February 2018.
Miami condo luxury sales jumped 30.9 percent, from 55 to 72, in February 2018. Miami condo luxury sales have risen in four out of the last five months (Feb. 2018, Jan. 2018, Dec. 2017 and Oct. 2017).
Miami single-family luxury home sales rose 31.1 percent, from 61 to 80. Miami single-family luxury sales have risen in four out of the last five months (Feb. 2018, Jan. 2018, Dec. 2017 and Oct. 2017).
More than Six Consecutive Years of Price Appreciation in Miami
Miami-Dade County single-family home prices increased 3.6 percent in February 2018, increasing from $321,000 to $332,500. Miami single-family home prices have risen for 75 consecutive months, a streak spanning more than six years. Existing condo prices rose 4.5 percent, from $220,000 to $230,000 in February. Condo prices have increased in 78 of the last 81 months.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage moved higher for the fifth straight month to 4.33 percent in February (highest since 4.34 percent in April 2014) from 4.03 percent in January. The average commitment rate for all of 2017 was 3.99 percent.
Miami Distressed Sales Continue to Drop
Only 7.6 percent of all closed residential sales in Miami were distressed last month, including REO (bank-owned properties) and short sales, compared to 13.3 percent in February 2017. In 2009, distressed sales comprised 70 percent of Miami sales.
Total Miami distressed sales declined 43.9 percent year-over-year, from 244 to 137 last month.
Short sales and REOs accounted for 1.7 and 5.9 percent, respectively, of total Miami sales in February 2018. Short sale transactions dropped 41.2 percent year-over-year while REOs fell 44.6 percent.
Nationally, distressed sales accounted for 4 percent of sales, down from 7 percent a year ago.
Miami Real Estate Selling Close to List Price
The median number of days between listing and contract dates for Miami single-family home sales was 46 days, a 24.6 percent decrease from 61 days last year. The median number of days between the listing date and closing date for single-family properties was 94 days, a 16.1 percent decrease from 112 days.
The median time to contract for condos stayed even year over year at 83 days. The median number of days between listing date and closing date decreased 3.1 percent to 123 days.
The median percent of original list price received for single-family homes was 95.4 percent. The median percent of original list price received for existing condominiums was 93.8 percent.
National and State Statistics
Nationally, total existing-home sales grew 3.0 percent to a seasonally adjusted annual rate of 5.54 million in February from 5.38 million in January. After last month's increase, sales are now 1.1 percent above a year ago.
Statewide closed sales of existing single-family homes totaled 18,620 last month, up 3.3 percent compared to February 2017, according to Florida Realtors. Statewide closed condo sales totaled 8,457 last month, up 6.4 percent compared to February 2017.
The national median existing-home price for all housing types in February was $241,700, up 5.9 percent from February 2017 ($228,200). February's price increase marks the 72ndstraight month of year-over-year gains.
The statewide median sales price for single-family existing homes last month was $246,500, up 9.6 percent from the previous year, according to Florida Realtors. The statewide median price for townhouse-condo properties in February was $179,500, up 7.2 percent over the year-ago figure.
Miami's Cash Buyers Represent almost Double the National Figure
Miami cash transactions comprised 42.8 percent of February 2018 total closed sales, compared to 47.4 percent last year. Miami cash transactions are almost double the national figure (24 percent).
Miami's high percentage of cash sales reflects South Florida's ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash. Miami has a higher percent of cash sales for condos due to lack of financing approvals for buildings.
Condominiums comprise a large portion of Miami's cash purchases as 54.2 percent of condo closings were made in cash in January compared to 29.0 percent of single-family home sales.
Seller's Market for Single-Family Homes, Buyer's Market for Condos
Inventory of single-family homes decreased 2.3 percent in February from 6,489 active listings last year to 6,342 last month. Condominium inventory increased 4.0 percent to 15,902 from 15,289 listings during the same period in 2017.
Monthly supply of inventory for single-family homes increased 1.7 percent to 6.0 months, which indicates a seller's market. Existing condominiums have a 14.4-month supply, which indicates a buyer's market. A balanced market between buyers and sellers offers between six and nine months supply of inventory.
Total active listings at the end of February increased 2.1 percent year-over-year, from 21,778 to 22.244. Active listings remain about 60 percent below 2008 levels when sales bottomed.
New listings of Miami single-family homes increased 11.3 percent to 2,814 from 2,950. New listings of condominiums increased 7.3 percent, from 2,414 to 2,590.
Nationally, total housing inventory at the end of February rose 4.6 percent to 1.59 million existing homes available for sale, but is still 8.1 percent lower than a year ago (1.73 million) and has fallen year-over-year for 33 consecutive months. Unsold inventory is at a 3.4-month supply at the current sales pace (3.8 months a year ago).
http://www.worldpropertyjournal.com/real-estate-news/united-states/miami-real-estate-news/miami-association-of-realtors-miami-existing-condominium-sales-2018-miami-luxury-home-sales-february-2018-miami-condo-prices-in-2018-10808.php).
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Tuesday, March 27, 2018
How To Win A Real Estate Bidding War!
How to win a real estate bidding war in today’s home buying market is a fine art. From Los Angeles to San Francisco to Boston offering a home’s asking price is just the starting point in negotiations.
In Long Beach, California, Breanna LePante of Nook Real Estate recently got her client’s offer for a 1,000 square foot condominium to stand out from 21 competing offers. How did she do it? I always have my buyers write a nice letter to the seller telling them how much they want the house. I continually communicate with the listing agent. I also make sure my buyers have pre-loan approval with proof of funds. LePante confides. Her buyer got the property for $375,000 against an asking price of $349,000.
Ron Shuffield, President of EWM Realty International with offices in Miami and Fort Lauderdale has three decades of industry experience.
Everyone wants a deal and everybody has the same information today. Your real estate agent should know about offers. Be prepared to go above the asking price initially, Shuffield explains. If you can make your deal as clean as possible without financing contingencies, that is a big deal to a seller. In multiple offer situations you don’t get a second chance to bid, he adds.
Bidding wars are fast, furious and nerve racking. Know the actual market value for a property. Decide what price you are comfortable paying and will feel good about when moving day arrives.
Listen to Paul, Habibi, Continuing Lecturer of Finance and Real Estate at UCLA Anderson School of Management. Have a plan in place where you know you what your number is before you even make your offer. Buying a personal residence that others want causes people to make irrational judgements based on emotions. They have a skewed view of the property’s fair market value. Make sure your offer is as strong as it can be. Contingency periods and length of escrows do make a difference to eager sellers, Habibi advises.
Shutterstock: "Many Los Angeles buyers can expect to automatically be in a multiple offer situation,"notes real Ben Belack, Director Residential Estates at The Agency
Ben Belack, Director Residential Estates at the luxury real estate brokerage firm, The Agency in Beverly Hills teaches seminars to real estate agents on the topic. Properties are priced low to create maximum awareness and excitement. However that doesn't mean a buyer is over-paying. In the Los Angeles market today, buyers looking at properties up to $1.8 million can expect to automatically be in a multiple offer situations. According to Zillow there are more than a dozen single family homes listed in desirable West Los Angeles, with the lowest at an auction price of $1.57 million. The list price has become more of a sales and advertising tool and less of a metric of value. Belack adds.
In San Francisco according to Zillow the median home value is a staggering $1,285,000. Bidding wars there are as common as the City’s infamous fog. Nina Hatvany, Luxury Property Specialist at Pacific Union and the top residential sales agent in San Francisco from 2008-2015 and 2017 shares her on-the-ground experience.
Clients who don’t get a property tell me after, they would have bid higher. In this type of market, you must come out of the gate with your best offer. Having strong relationships with listing agents and communicating your buyer’s enthusiasm makes a difference. A 1,650 square foot home with full ocean view in San Francisco’s Sunset District listed at $1,250,000. It recently sold to Hatvany’s happy buyer for $1.6 million.
Shutterstock: Bidding Wars Are Common In Boston
Boston’s David Bates, a long-time Broker Associate at William Ravis Real Estate has years of bidding war experience.
One of the first things I learned as an agent was to prepare my clients to be in a bidding war. If my clients didn’t know that was a possibility or in today’s market maybe a certainty, they wouldn’t feel comfortable doing all the other things that it takes to win a bidding war. Sometimes the agent starts asking them to do these wicked aggressive things, the buyers feel pushed and just won’t do what it takes.
William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami provides some stats.
If you look at 2% to 4% of sales nationally there have been some type of bidding component involved. Today it has jumped to around 10% to 11% mainly in urban areas with younger buyers and increasing incomes.
Mark Hughes, President of Nook Real Estate has worked in residential real estate sales and management for years. Hughes sums it up well.
From my experience the loser in a multiple offer situation always ends up thinking, I should have gone higher. It takes a few times to not get that house you want so much to be able to offer what it takes to win.
Do work with a real estate professional who has a solid track record and strong relationships with other agents to give them the insider info needed to make the deal.
(https://www.forbes.com/sites/ellenparis/2018/03/21/how-to-win-a-real-estate-bidding-war-advice-from-the-pros/#5df8da135463).
In Long Beach, California, Breanna LePante of Nook Real Estate recently got her client’s offer for a 1,000 square foot condominium to stand out from 21 competing offers. How did she do it? I always have my buyers write a nice letter to the seller telling them how much they want the house. I continually communicate with the listing agent. I also make sure my buyers have pre-loan approval with proof of funds. LePante confides. Her buyer got the property for $375,000 against an asking price of $349,000.
Ron Shuffield, President of EWM Realty International with offices in Miami and Fort Lauderdale has three decades of industry experience.
Everyone wants a deal and everybody has the same information today. Your real estate agent should know about offers. Be prepared to go above the asking price initially, Shuffield explains. If you can make your deal as clean as possible without financing contingencies, that is a big deal to a seller. In multiple offer situations you don’t get a second chance to bid, he adds.
Bidding wars are fast, furious and nerve racking. Know the actual market value for a property. Decide what price you are comfortable paying and will feel good about when moving day arrives.
Listen to Paul, Habibi, Continuing Lecturer of Finance and Real Estate at UCLA Anderson School of Management. Have a plan in place where you know you what your number is before you even make your offer. Buying a personal residence that others want causes people to make irrational judgements based on emotions. They have a skewed view of the property’s fair market value. Make sure your offer is as strong as it can be. Contingency periods and length of escrows do make a difference to eager sellers, Habibi advises.
Shutterstock: "Many Los Angeles buyers can expect to automatically be in a multiple offer situation,"notes real Ben Belack, Director Residential Estates at The Agency
Ben Belack, Director Residential Estates at the luxury real estate brokerage firm, The Agency in Beverly Hills teaches seminars to real estate agents on the topic. Properties are priced low to create maximum awareness and excitement. However that doesn't mean a buyer is over-paying. In the Los Angeles market today, buyers looking at properties up to $1.8 million can expect to automatically be in a multiple offer situations. According to Zillow there are more than a dozen single family homes listed in desirable West Los Angeles, with the lowest at an auction price of $1.57 million. The list price has become more of a sales and advertising tool and less of a metric of value. Belack adds.
In San Francisco according to Zillow the median home value is a staggering $1,285,000. Bidding wars there are as common as the City’s infamous fog. Nina Hatvany, Luxury Property Specialist at Pacific Union and the top residential sales agent in San Francisco from 2008-2015 and 2017 shares her on-the-ground experience.
Clients who don’t get a property tell me after, they would have bid higher. In this type of market, you must come out of the gate with your best offer. Having strong relationships with listing agents and communicating your buyer’s enthusiasm makes a difference. A 1,650 square foot home with full ocean view in San Francisco’s Sunset District listed at $1,250,000. It recently sold to Hatvany’s happy buyer for $1.6 million.
Shutterstock: Bidding Wars Are Common In Boston
Boston’s David Bates, a long-time Broker Associate at William Ravis Real Estate has years of bidding war experience.
One of the first things I learned as an agent was to prepare my clients to be in a bidding war. If my clients didn’t know that was a possibility or in today’s market maybe a certainty, they wouldn’t feel comfortable doing all the other things that it takes to win a bidding war. Sometimes the agent starts asking them to do these wicked aggressive things, the buyers feel pushed and just won’t do what it takes.
William Hardin, PhD, Professor of Finance and Real Estate and Director of the Hollo School of Real Estate at Florida International University in Miami provides some stats.
If you look at 2% to 4% of sales nationally there have been some type of bidding component involved. Today it has jumped to around 10% to 11% mainly in urban areas with younger buyers and increasing incomes.
Mark Hughes, President of Nook Real Estate has worked in residential real estate sales and management for years. Hughes sums it up well.
From my experience the loser in a multiple offer situation always ends up thinking, I should have gone higher. It takes a few times to not get that house you want so much to be able to offer what it takes to win.
Do work with a real estate professional who has a solid track record and strong relationships with other agents to give them the insider info needed to make the deal.
(https://www.forbes.com/sites/ellenparis/2018/03/21/how-to-win-a-real-estate-bidding-war-advice-from-the-pros/#5df8da135463).
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