WHERE IS THIS SOUTH FLORIDA REAL ESTATE MARKET???

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!