South Florida Residential Real Estate
The Residential Market. Seemingly everyone’s
favorite subject in Florida since the beginning of time. While this is not what
I do, this information is very important as it signifies many things about the
local economy in general and the commercial market. The commercial market
typically is 6 months behind the residential market, so it is a future
indicator of sorts. It is also a monitor of business activity in many ways.
Every time someone buys a house, they need contractors, painters, furniture,
etc. It helps lots of different businesses and sometimes the people moving are
new to the area and might need or provide jobs, bringing more money to the
local economy. The residential sales numbers we have been seeing are generally
positive and have been for some time now. With so many people having all their
money tied up in their homes, it is crucial for them that this good news
continues and it is a big reflection on consumer confidence since the value of
their homes are higher. As we all know, as people’s personal incomes go so does
the economy.
There have been increasing numbers monthly for
sales prices, volume and velocity, and there is a more streamlined foreclosure process
bringing product to the market faster. It all sounds good right? Not exactly,
and here is where the conflicting info comes it. Right now Florida is leading
the nation is residential cash sales. Why? One of the biggest reasons is the
global economy. We are seeing a huge influx of money from Russia, China,
Brazil, the UK and of course Canada. The reason is that with their weakened
economies, people from those places are seeking safe investments in a stable
country and market. So these international cash buyers are not even moving into
the apartments in many cases, seeking to either flip, hold the property or rent
it. This doesn’t help the economy and inflates the residential market with
unrealistic data. Speaking of which, the rental market deserves mention. It is
booming now, and has even revived the construction and development industries
to an extent. The underlying reason for this is that since so many people have
lost their homes they no longer have the credit or capital to buy them. So they
have to rent, not necessarily a good thing especially when there are
historically low interest rates available to buyers. It is worth noting that
Florida is once again leading the nation in foreclosed homes and high end
foreclosures.
Bottom line – is this good market? Like everything, it is good
for some and bad for others - a true mixed bag. I think it is not very good,
and that the numbers and data have been very misleading. If you are not
informed it could cause you to make some poor decisions. That being said, I
prefer a positive message highlighting the good news out there than the
opposite. With anything really so local and national television news please
listen up! Can you imagine a news program that highlighted all the good things
that happened in a day instead of all the bad? It would be great!
