Home sales volume increased in South Florida yet again in June, and the first six months of 2011 have been marked by soaring sales and unstable prices.
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com
The volume of South Florida home sales continued its historic upward trend in June while prices showed a mix of results driven by investors’ appetite for all-cash deals on distressed properties.
Is the real-estate bucket half full or half empty midway through 2011? It all depends on which view of the market you happen to be taking.
For real estate agents and investors, happy days are here again, as both cash in on the rapid sales pace and international appetite for low-priced properties.
For homeowners and those looking to become homeowners, times are less certain, as home values across the market remain far below their peaks. For homeowners, the stubbornly declining values add insult to injury, as a 55 percent decline from 2006 values has left a landscape of underwater mortgages and foreclosures.
Potential buyers see the low prices as enticing, but tight credit, aggressive cash investors and a rapidly declining supply of available homes can make finding the right buy more and more difficult. Still, some buyers, like North Miami chef Hornel Joseph, are navigating the market to find bargains.
“I saw that the market was down, and now is a good time to buy a home,“ said Joseph, who recently purchased a four-bedroom in North Miami for $150,000. “We got a good deal.”
In Miami-Dade County, resales of single-family homes reached 923, up 35 percent from June 2010 and up 5.5 percent from May, according to data released Wednesday by the Miami Association of Realtors. Condo sales equaled 1,136, up 54 percent from June 2010 and down slightly from May.
Real estate agents sold 1,274 single-family homes in Broward County in June, a 6 percent increase from the year before. Month-over-month, the sales increase was 11.6 percent. In the condo market, Broward saw year-over-year sales increase 7 percent to 1,511. Compared to May, sales slipped 1.7 percent.
Prices were down in Miami-Dade, with the median-priced single-family home price dropping 9 percent to $185,400. Things looked better in Broward, where prices for single-family homes jumped 26 percent to $196,000.
Real estate agents
Agents say they have not been this busy since 2006, when speculators and flippers flooded the market and real estate commissions hit record highs.
If the current sales pace continues through December, 2011 will set a record for the number of homes trading hands in a year. There have been 12,369 home and condo sales through the first six months of 2011, up 79.3 percent from last year and the highest January-to-June total on record.
Mike Pappas, who owns South Florida-based Keyes Realty, said he sees no sign of a slowdown after the busy spring selling season. June was the strongest month for the company in as long as he can remember, and the interest from international investors has kept his offices buzzing.
“We’ve been running hard since March,” he said. “We haven’t had four months like that since 2006.”
Inventory levels have declined rapidly since last year, and the number of homes for sale stands at about 30,000, down from 45,000 last June.
“I’m confident that we’re out of the bust, and on our way to a recovery,” said Pappas.
Investors
Real estate investors are enjoying this market just about as much as local agents. Both individual investors — many from outside of the country — and multibillion dollar investment firms have swarmed to South Florida’s distressed housing scene, looking for steals. In many cases, they’ve found them in the copious foreclosure market.
Miami-based investor group BH III scooped up 175 units at the $355 million Trump Hollywood condo tower in a $160 million bank note sale last year. After buying the note in November, the investors relaunched sales with an over-the-top condo party in January.
BH III says sales so far in 2011 have already topped $100 million, and the investors are well on their way to realizing their costs and making a profit.
“The summer has been very strong,” said Greg Freedman, a partner at BH III, predicting the project could sell out much earlier than the expected 2014 closeout target. “We did not think that the market would have the appetite that it has and we were certainly surprised by the volume of sales.”
For individual investors with cash, the 2011 South Florida housing market has been a free-for-all fire sale, with prices down 55 percent from their peak, back to 2002 levels.
International buyers have the luxury of slashing additional percentage points off already discounted prices, thanks to the strength of some Latin American currencies against the dollar. The Brazilian real, for example, has gained nearly 40 percent against the dollar since 2008.
Sellers
For most everyday homeowners, the fast moving sales, investor activity and international buyers mean little — home prices and values are still falling in much of the market. With nearly half of all South Florida mortgages underwater and plenty of foreclosed homes, the 2011 housing market has been one of continued gloom, although there are signs that the worst may have passed.
Median prices for single family homes were down 9 percent in Miami-Dade to $185,400, and condo prices fell 7 percent to $119,800. In Broward, single-family prices wiped out last month’s 18 percent decline by climbing 26 percent to $196,000. In the condo market, median prices reached $76,900, up 11 percent from last June but down 4.4 from May.
Home prices have struggled to rally because of the large number of distressed homes, which make up 57 percent of all sales.
Robert Berrios put his Miami home on the market three years ago and is still waiting for a buyer.
He has cut the price a few times, and said he may be forced to slash even further to drum up interest in the property, which he said he needs to sell before moving his family to the Northeast.
“You have to relist again and lower the price and bite the bullet, and then you get bites,” he said. “When people see the ‘just reduced’ sign, you start to get calls. We’ll probably be doing that soon.”
According to a report by real estate research firm Trulia, nearly one in five home sellers in South Florida have slashed prices this year. The average discount is about 11 percent.
Buyers
There is no $8,000 federal tax credit for first-time homebuyers this year, but prices have fallen more than enough to compensate, and buyers who are in a position to take advantage of the discounts are actively searching for bargains.
But some potential buyers say they are being boxed out of the market by all-cash investors, and many cannot qualify for a loan.
Interest rates, long predicted to rise, have held below 5 percent throughout the year, but banks are scrutinizing potential borrowers’ credit and financial backgrounds before qualifying them for financing.
Joseph, the North Miami chef, was able to get a loan, putting a 10 percent down payment for the home. After renting for six years, he saved up enough for the down payment and had a strong enough credit history to pre-qualify for a mortgage loan.
“It was not too difficult,“ he said. “As soon as I found out that I qualified, I started looking for a house and it took about a month. We’re happy with the price we got—I don’t think the market is going down much more.”
Read more: http://www.miamiherald.com/2011/07/20/v-fullstory/2323130/south-florida-home-sales-continue.html#ixzz1SwvLnXdo
Saturday, July 23, 2011
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