Southeast Florida Monthly Market Update, April 2013

April, 2013 Market Update for the "BIG 5" Hialeah, Miami Lakes, Miami Gardens, Miramar and Pembroke Pines in Florida

Market update for the cities of Hialeah, Miami Lakes, Miami Gardens:

Area 20
Total Active Listings:			77
Total Value Dollar Volume:			$19,645,038.00
Average List Price:			$255,130.00
Median List Price:			$124,900.00
Change from Previous Month (N. of Units)			-18%
Change from Previous Month (Dollar Vol.)			-23%
Total Sold Properties:			155
Total Dollar Volume Sold:			$25,209,954.00
Average Sold Price:			$162,645.00
Median Sold Price:			$129,900.00
Change from Previous Month (N. of Units)			5%
Change from Previous Month (Dollar Vol.)			-3%
Total Pending Sale:			214
Total Dollar Pending Volume:			$30,483,901.00
Average Pending Price:			$142,488.00
Median Pending Price:			$119,700.00
Change from Previous Month (N. of Units)			11%
Change from Previous Month (Dollar Vol.)			0%

Market update for the cities of Miramar and Pembroke Pines:

Area 3990
Total Active Listings:			26
Total Value Dollar Volume:			$10,433,975.00
Average List Price:			$401,307.00
Median List Price:			$417,450.00
Change from Previous Month (N. of Units)			24%
Change from Previous Month (Dollar Vol.)			27%
Total Sold Properties:			51
Total Dollar Volume Sold:			$16,783,324.00
Average Sold Price:			$329,085.00
Median Sold Price:			$335,000.00
Change from Previous Month (N. of Units)			55%
Change from Previous Month (Dollar Vol.)			67%
Total Pending Sale:			37
Total Dollar Pending Volume:			$12,716,280.00
Average Pending Price:			$343,683.00
Median Pending Price:			$350,000.00
Change from Previous Month (N. of Units)			-16%
Change from Previous Month (Dollar Vol.)			-24%

Total Sold for Dade and Broward Counties

Dade County
Total Sales Count:			2808
Total Sales Dollar Volume:			$1,091,518,544.00
Change from Previous Month (N. of Units)			7%
Change from Previous Month (Dollar Vol.)			14%

Broward County
Total Sales Count:			3117
Total Sales Dollar Volume:			$759,818,317.00
Change from Previous Month (N. of Units)			10%
Change from Previous Month (Dollar Vol.)			17%

The above data is for Residential Real Estate Only, Market Data from SEF MLS

For an update on your market area please contact us

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Distressed homes lure cash investors

House hunters looking to buy a foreclosure in South Florida often discover they are getting outflanked by the pros: investors wielding cash.

“If you don’t have cash, or you’re looking for financing, you can’t play in the distressed arena,’’ said Doug DeWitt, owner and broker at Concierge Real Estate Services in Miami Beach, who markets bank-owned properties for some major lenders.

When a bank-owned house in the Hammocks in West Kendall went on the market in late April, the 3-bedroom, 2-bath villa drew 29 purchase offers and 60 showings over a 10-day listing period mandated by the bank. The asking price was $159,900.

The lender narrowed the field to the all-cash buyers, who were told to make their highest and best offer, and the house is now under contract.

“It went for well above asking price. They all do,’’ said DeWitt, who is the listing agent. “I have one happy buyer and 28 people I sent on their way.’’

DeWitt said he feels sorry for the first-time buyers and other house hunters looking simply to finance the purchase of a home they plan to live in.

“The banks need to move these properties. The cash offers weren’t low, they were right in line,’’ DeWitt said. “If you can take the [uncertainties of] the appraisal and inspection out of the parameters, your chance of closing goes up substantially.’’

To be sure, homebuyers still can ferret out opportunities to purchase distressed properties. Fannie Mae, for instance, offers financing with low downpayments and no mortgage-insurance requirement on select Fannie Mae-owned homes under its HomePath mortgage program.

“On some of Fannie Mae’s foreclosed properties, Fannie Mae is putting them back on the market and offering up to 97 percent financing,’’ said Ray Barkett, regional vice president and district sales manager at Keyes Realtors in Fort Lauderdale.

Another option, Fannie’s HomePath mortgage renovation program, even provides funds to fix up rundown foreclosures.

One of the top worries during the real estate crash was that the housing market would take another nosedive when lenders dumped a slew of distressed properties on the market. So far, that simply hasn’t come true. Lenders have managed the flow of properties onto the market. Indeed, many real estate agents are clamoring for more such inventory in South Florida, where the inventory of homes and condos for sale has plunged to its lowest level since 2005.

“There is definitely an increase in REO [bank-owned] inventory,’’ said Dewitt, “but the whole theory of shadow inventory dragging down the market has proven completely false.’’

Victor Gonzalez, a Miami real estate investor who bids on foreclosures at Miami-Dade county’s cash-only online courthouse auctions, said banks have gotten more aggressive in bidding on properties they have foreclosed on, rather than letting them go at discounts.

“It’s getting very competitive again. Prices are going up,’’ Gonzalez said.

Even in auctions where lenders don’t take back properties themselves, competition is keen from institutional buyers like hedge funds and investor groups created to snap up distressed properties, Gonzalez said.

And the process is fraught with uncertainty. Scheduled auctions of homes often get cancelled at the last minute for a host of reasons, such as a lender’s decision to go with a short sale.

Those bidding at auctions need to know how to search records for liens. Even so, they can’t be sure how much is due in homeowners’ association or condominium fees. “I research 20 or 30 properties before bidding on one,’’ Gonzalez said.

Source: The Miami Herald. Distributed by MCT Information Services.

FHA policy shift nixes some condo financing

Real estate columnist Ken Harney says that FHA officials assured him the agency is not trying to exclude hundreds or thousands of condominiums nationwide from qualifying for financing under its mortgage insurance program.

However, he says FHA’s abrupt, new “no-tolerance” stance has many condo associations wondering if that’s true.

The issue is complicated, and it revolves around language tucked away in many condo complex’s covenants, conditions, and restrictions (“CC&Rs”). While the CC&Rs may ban rentals for periods of 30 days or less, many also have a seemingly innocuous exception to that rule – one that allows units taken back via foreclosure by mortgage lenders or investors to rent the unit for 30 days or less.

Until recently, FHA showed little interest in the 30-day language. A few weeks ago, however, it started rejecting applications. According to Harney, Department of Housing and Urban Development (HUD) lawyers claim the 30-day language violates a 1994 amendment to the National Housing Act.

The Community Associations Institute has received numerous complaints from members upset by what they consider a sudden and unannounced policy shift. Harney says FHA is “aware of the problem,” but “had no choice” in taking the action.

Source: Inman News (05/21/13) Harney, Ken & INFORMATION, INC. Bethesda, MD

Vacation Home Market Heating Up

As consumer confidence, the economy, and job market all make gains, more Americans are feeling like they have money to spend on second residences and summer homes. Low interest rates are still a big draw.
Vacation home sales increased 10 percent nationwide in 2012, according to the National Association of REALTORS®. Real estate professionals are also reporting sales have been strong this spring in many vacation home hot spots.
"A lot of buyers who were sitting on the sidelines decided last year was probably a good time to take advantage of buying a vacation home," says Paul Bishop, NAR’s vice president of research. "They were feeling pretty good about their own financial situation, given the growth in the market and in the economy."
In vacation home hot spots like the Hamptons, home prices are “roaring back” and rentals are fully booked for the season, CNBC reports.
"We've seen bidding wars in the four to five million dollar range as well as in the overall market," Laura Nigro, a real estate broker in Bridgehampton, N.Y., told CNBC. "It's so much better than when the 2008, 2009 economy shrank and people were very much afraid to invest in anything.”
Mostly fueling the demand for vacation homes in the Hamptons has been buyers from China, Nigro says.
After super storm Sandy struck the coast last year, more buyers are evaluating the FEMA flood requirements more closely and coastal erosion zones before buying, real estate professionals report. But the storms of the past aren’t appearing to dampen their willingness to buy.
For example, New Jersey beach vacation spots in Avalone and Stone Harbor were hit by Sandy last year, but second-home buying activity remains strong and there was no big price fluctuation after the storm, says Allan Dechert, co-owner of Ferguson Dechert in Avalon.
Source: “Vacation home sales sizzle; rentals book up,” CNBC (May 20, 2013) and “Desire For Vacation Homes Heating Up, Sales Strong,” Investor’s Business Daily (May 16, 2013)

Low Mortgage Rates Making Big Difference

An infographic from Loans.org shows just how big a difference mortgage rates can make to lowering home buyers’ and home owners’ monthly payments over the years.
For example, the infographic shows that a home owner in 2013 could pay $1,347.13 a month for a four-bedroom, three-bath home.
But just four years earlier, in 2008, the average interest rate was nearly double at 6.03 percent and a monthly payment for that same size home averaged $1,503.70.
The infographic shows mortgage rates from the 1980s to today and mixes in pop culture references to illustrate the change over time.
For example, in 1982, mortgage rates averaged as high as 16.70 percent. A monthly payment would be $3,503.36.

READ MORE...

Fed Official: 'We Can Declare Victory on Housing'

The Federal Reserve should withdraw some of its housing policies aimed at boosting housing since the real estate market is well on its way to recovery, Dallas Fed President Richard Fisher told attendees at the National Association for Business Economics.
The Fed has been buying up $85 billion of Treasuries and mortgage-backed securities each month, which has helped to keep mortgage rates near historical lows.
“I think we can rightly declare victory on the housing front and [dial back] our purchases, with the aim of eliminating them entirely as the year wears on,” Fisher said. "I believe the efficacy of continued purchases is questionable." Fisher has long been a minority critic of the agency’s bond-buying program.
For the first time since 2005, the housing market added to growth last year, Fisher noted. Single-family home prices are on the rise across the country too.
Fisher said that he is concerned that if the Fed continues its purchases of bonds, it will distort the economic recovery.
"In my view, the housing market is on a self-sustaining path and does not need the same impetus we have been giving it," Fisher said.
The Fed’s next meeting is in mid-June to discuss its monetary policy actions, Reuters reports.
Source: “Fed should declare victory on housing, end MBS purchases: Fisher,” Reuters (May 16, 2013)

CoreLogic: 2012 big year for home price increases

Home prices in the U.S. rose 7.3 percent in 2012 and are projected to rise 3.9 percent annually for the next five years, according to the latest CoreLogic analysis.

Florida cities, however, vary from the nation and even each other in 2012 home values, as well as CoreLogic’s projections for the future. Prices rose during 2012 in all six Florida cities tracked by the index, varying from a low of 3.5 percent in Jacksonville to a high of 13.5 percent in Miami. However, the company predicts a slight price decline in five cities by the close of 2013. It predicts only Tampa will see an increase this year, with prices rising 3.9 percent.

As 2013 continues, CoreLogic predicts, “market dynamic shifts” in bubble/crash metro areas. The company points out that homes are still undervalued in bubble cities, including some in Florida, but it predicts that investor demand for foreclosed properties will decline.

In addition, today’s rising prices will, over time, make a home purchase less affordable for some families, and “other demand factors that have driven recent double-digit price gains are unlikely to persist throughout the year.”

CoreLogic also thinks higher home sale prices will draw more sellers into the market, particularly those who recently emerged from being underwater. That higher inventory of for-sale homes coupled with lower investor demand will, according to CoreLogic, moderate price increases in 2013.

“Home prices were up in seven out of every 10 metro areas (nationally) in 2012,” say Dr. David Stiff, chief economist for CoreLogic Case-Shiller. “In 2011, prices appreciated in fewer than one-in-five markets.”

Stiff isn’t worried about another housing bubble, however.

“Even if double-digit price appreciation were to continue in the former bubble metro areas, there is no reason to believe that new home price bubbles are forming,” he says. “That’s because single-family homes in these markets are still very affordable, even after last year’s large price gain.”

He does expect some price volatility, however, as the market adapts to changing conditions. Nationally, CoreLogic forecasts a 2.5 percent price increase in 2013.

Florida cities

The CoreLogic analysis offered three price points for six Florida cities – the price increase or decrease over three years at the end of 2012; the price increase or decrease in 2012; and the forecasted price increase or decrease in 2013. They include:

Fort Lauderdale: A 3% price increase in the three years prior to Dec. 31, 2012; a 9.6% rise in 2012; and a 3.9% price decline forecast for 2013.

Jacksonville: A 10.2% price decline in the three years prior to Dec. 31, 2012; a 3.5% rise in 2012; and a 0.8% price decline forecast for 2013.

Miami: A 7.2% price increase in the three years prior to Dec. 31, 2012; a 13.5% rise in 2012; and a 4.4% price decline forecast for 2013.

Orlando: A 1.1% price decline in the three years prior to Dec. 31, 2012; a 9.5% rise in 2012; and a 2.9% price decline forecast for 2013.

Tampa: A 3.3% price decline in the three years prior to Dec. 31, 2012; a 7.1% rise in 2012; and a 3.9% price increase forecast for 2013.

West Palm Beach: A 1.5% price decline in the three years prior to Dec. 31, 2012; a 9.8% rise in 2012; and a 3.4% price decline forecast for 2013.

Source: Florida Realtors®