May 29, 2014

Markdowns Are Supplanting The Bidding Wars

Miami Today reports from Florida. “Tallying what’s on the drawing boards of real estate developers, greater downtown Miami appears to be on the verge of a condominium explosion. There are 49 projects with a total of 16,843 units in the preconstruction phase in the greater downtown area, according to data compiled by a website affiliated with the Miami Association of Realtors that tracks condo preconstruction projects in South Florida. In addition to those units in preconstruction, said veteran Miami real estate broker Ron Shuffield, about 4,500 units currently are in construction in the Brickell area alone.”

“As the situation stands, Brickell may be facing an oversupply of condos that could cause prices to stagnate, according to Mr. Shuffield, who has worked the local real estate market for 39 years. He estimated that once those units are completed, Brickell will have an inventory of condos that should take about 15 months to be absorbed. ‘Generally,’ he explained, when there’s an absorption period of ‘12 months or over, prices begin to stagnate at some point.’”

The Miami Herald. “South Florida homes continue to get pricier, but slowing sales momentum is signaling that buyers are balking at sellers’ lofty expectations as their choices widen. The median condo price rose 10.3 percent to $193,000 from a year earlier, but slipped 3.5 percent from March. Sellers commonly expect to command a higher price than the home that just sold down the street. Dickering over deals and markdowns is supplanting the bidding wars and back-up contracts of last year.”

“‘I try to counsel a seller that a house is worth what someone is willing to pay for it — not necessarily how much they need to buy their next house,’ said Philip Vias, a broker associate with Berkshire Hathaway HomeServices Florida Realty in Fort Lauderdale. ‘Unfortunately, some sellers are not as realistic as they should be.’”

“A key shift in the housing market continues to be the rise in choices for home buyers. In Miami-Dade, the number of single-family home listings rose 24 percent to 6,034; condo listings swelled 38 percent to 11,033. That was the highest level of existing condos listed for sale in Miami-Dade since May 2011, and it amounted to 7.7 months of supply — a level that tips the balance toward buyers. The swelling level of existing condos for sale comes as Miami-Dade is in the midst of a new wave of condominium construction.”

“‘It’s starting to slow a little bit, and I think a lot has to do with sellers’ expectations,’ said Bette Abrams, a Coldwell Banker agent in Coral Springs. ‘For the first time, I’ve seen price reductions. A year ago, people were jumping in with the full price and above the full price.’”

The News Journal. “The number of homes sold in Flagler County last month was the first time in nine months that sales have topped 200, but the sixth time in the last 12 months that sales have not been better than the same month a year ago. The median price of homes sold in Volusia County was $125,000 in April, up 8.7 percent compared to the same month a year ago, but down from $135,000 in March.”

“There were 3,818 homes for sale in April in Volusia County, up almost 20 percent from a year ago. Flagler County had 1,159 homes for sale in April, up 18.6 percent from a year ago. ‘Sellers feel confident to list their home and the good news is we are able to keep pace,’ said Ian Anderson, president of the Daytona Beach Area Association of Realtors. ‘While the market may have softened a bit, it’s like a train running steadily ahead.’”

The Sun Sentinel. “South Florida sellers aren’t seeing as big a bump in home prices as they did last year. The percentage increases have slowed considerably in recent months. In 2013, median prices in the two counties were soaring, with year-over-year gains above 20 percent. Home sales in the two counties increased slightly last month from a year earlier. Broward had 1,334 sales in April, up 1 percent. Palm Beach County’s 1,478 sales were 5 percent higher.”

“Over the past two years, buyers have complained about a shortage of homes for sale. But listings in both counties are on the rise as sellers feel more confident that they can get the prices they want. The percentage increases have slowed considerably in recent months. In 2013, median prices in the two counties were soaring, with year-over-year gains above 20 percent. ‘Those days are gone,’ said Liz Caldwell, a Fort Lauderdale agent who also sells in southern Palm Beach County. ‘It’s a more normal market now.’”

From WOKV. “Florida led the nation in foreclosures last month and Jacksonville is among top ten in the state. Realtor Christine Lee tells WOKV 50 to 60 percent of the sales for homes worth less than a hundred thousand dollars are in distress. ‘Under $100,000 you are definitely going to see some much more incredible and distressed foreclosure short sale rates.’”

My Suncoast. “The most recent numbers are showing around 1 in 4 real estate sales in our area still involve a short sale or foreclosure. Deb Bean-Guinto with Anytime Realty in North Port says you can still find a discounted home in the area. These days though, you are going to have to put some work in. ‘This is what you are getting for $110,000…a pool, a four bedroom house that needs work,’ says Bean-Guinto.”

“More and more homes like these are coming on the market every month. ‘As far as foreclosures, we are seeing more, but it is steady.’ Bean-Guinto says that could just be that a bank released a bunch. ‘They are holding onto homes and releasing so many at a time.’”

“In fact, driving around you will notice homes which look distressed, but are not for sale. ‘They are not in the MLS and it does the realtor no good to call the asset manager company, because they don’t want to talk to you. They have not done all of their work to release the home for sale,’ says Bean-Guinto.”

“Despite improvements with around a quarter of all local real estate sales involving a distressed home, it leaves the area in the bottom quarter of the country. ‘We are going to see foreclosures in this area for a couple more years I would think. None of us know how much is truly out there,’ explains Bean-Guinto.”

“Florida has more than 200,000 backlogged cases of pending foreclosure. In Manatee, DeSoto and Sarasota counties there are nearly 10,000.”

Bits Bucket for May 29, 2014

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