With Turkey Day behind us and New Year’s nearly upon us, it is time to take a look at the South Florida real estate market. We have seen a shift in market sentiment and there is, in my opinion, more to come.
This year has been a story of a ‘class system.’ For homes below $400K, there is still a good deal of activity. Between $400K to $700K, the market is considered slow and getting under contract is taking approximately 30 percent longer this year over last. From $700K to $1.2M, things swing heavily toward a buyer’s market. Above $1.2M, each home really stands on its own as to how quickly it will sell, but many homeowners are looking at nearly a year on market.
One constant in real estate, when looking at single-family home sales, is the annual buying cycle. Starting about a week before Thanksgiving and running until just after New Year’s Day is the slowest time in regards to buyers out looking. Most people are either hosting get-togethers or traveling to others during this time. So, if you are a seller, you are likely looking forward to 2020 right about now. As soon as 2020 begins, the buyers are back at what we will call ‘normal’ levels until just before the school year ends. About two weeks before the kids get out for summer, families look to move. So, from mid-May to mid-July, you’ll see an ‘elevated’ level of buyers out at homes. What is interesting this year (and likely next) is that external factors such as the White House and International Affairs have changed the temperament for large purchases and therefore the ‘normal’ and ‘elevated’ levels of homebuying are muted quite a bit.
With fewer buyers and longer sales cycles, one might conclude that prices would be falling.
This is true, but thankfully at a more gradual level than many would expect. Whether a buyer or a seller, you don’t want to see precipitous corrections in the real estate market.
“What has likely held the market together is near historic low interest rates. With low rates, buyers can pay more while keeping their monthly payment at a reasonable level,” explains Senior Loan Officer David Demarchena from CrossCountry Mortgage. “If interest rates were to rise, buyers have to settle on a less expensive home and that ultimately means sellers have to lower their prices to get sold. Thankfully, rates are not expected to rise.”
PRMG Senior Loan Officer Raul Alvarez shared his thoughts, too..
“The good news is that the maximum conforming mortgage amount has just been raised to $510,400 for a single-family home,” explains Alvarez. “This will allow homebuyers to purchase up to a $638,000 home with a 20 percent down and still attain a conventional loan. Conventional loan guidelines are sometimes less stringent than Jumbo Loan guidelines in terms of reserves, credit score, etc.”
Yes, buying a home is an individual project and accomplishment with unique facets to each transaction. But to fully take advantage in any market condition, one must understand the current sentiment, inventory and how best to create their own leverage. I am happy to take this conversation further and answer any questions by you contacting me at firstname.lastname@example.org.
Real Estate Update
As of November 30, the Pinecrest market is a strong buyer’s market. A healthy $1M+ market has 6-9 months of inventory. Pinecrest currently has 15 months. If you’re ready to move, I can assist you with local expertise, realistic expectations and truthful guidance. It’s easy to get started at miamihal.com/getstarted.