COVID19 and real estate

Hello friends,

While it might be surprising to many, banks are being inundated with applications for new mortgages.  This is largely due to the fact that real estate markets, with the notable exception of the 2008 recession, are generally minimally effected by recessions or extraordinary events such as COVID19.  Real estate prices move one way or the other based on the interplay between supply and demand.  And right now, even though March 2020 closings are about 25% below March 2019 closings, prices are still remaining stable and in certain areas actually increasing!  How can this be?  Well, as it turns out many sellers and would be sellers are keeping their homes off the market because they’re concluding that this is not a good time to sell.  The net result of this hesitance to sell now is causing a noticeable decrease in the amount of available housing inventories, and that places upward pressure on prices.

See here: https://www.yahoo.com/money/mortgage-applications-for-home-purchases-spike-despite-pandemic-200710195.html

So if you’ve been considering making a move, please know that’s it’s still indeed possible.

Playground

flying the playground: http://youtu.be/TgH0K2WgZXE

Working with Carlos

Working with Carlos VI: http://youtu.be/amS58pRWd1U

Insulated Concrete Forms

Insulated Concrete Forms: http://youtu.be/a8c7_GfxI1A

How we feed the public's negative view of real estate agents

I'm normally not the one to complain about my colleagues nor post anything negative online but my experiences this morning with so called "luxury listing agents" have me so disappointed in my industry that I've just got to vent!  It's no wonder the public often sees us as glorified used car salesman (no offense to my used car salesman colleagues; I know some darn good ones).

So I showed four luxury homes this morning and here are my observations:

• home number one- the listing agent opens the door, dogs barking, kids running around, house is dark, cluttered, and the owner is following us around
• home number two-the listing agent shows up in a low cut blouse and skin tight pants. Really?  Are we marketing luxury homes or going out clubbing?
• home number three-the listing agent doesn't even both to show up, the house is dark, the owner is home, the dog's running around, and the owner is giving away her bargaining position by simply talking too much!
• home number four-(and this one's my favorite) the listing agent opens the door, we introduce ourselves. Then the listing agent turns to the owner and asks her...................wait for it........................"would you like to show the house or should I?"

I guess today's showings leave me both sad and encouraged.  Sad because these folks have absolutely no clue the harm that they're doing to our industry.  And encouraged because if this is my competition, then the sky's the limit for me!

Back To The Blog

It's been a pretty long time since I've visited my blog, and quite frankly I feel pretty darn guilty about it.  With so much happening in the real estate industry it's hard to fathom that I should have writers block.  Oh how fortunes have changed in such a short period of time!  Home sellers are now back in the driver's seat, and multiple offer scenarios for well-priced homes are once again the norm. 

So are we creating another bubble? Depends on who you ask actually.  My observations are as follows: 2013, particularly the summer, was crazy.  There was just so much demand and so little supply that most areas in South Florida saw double digit price increases over 2012.  Then, as has been the historical case, things slowed down in the last quarter.  However January 2014 is off and running!  This year will continued to see, albeit tempered, price appreciation in most markets. Why tempered?  Well, for starters interest rates will continue to gradually rise as the Federal Reserve begins to curtail its purchase of mortgage backed securities.  Additionally, a fair amount of the new developer inventory is beginning to come online thereby absorbing some of the demand for housing.  As for buying opportunities, they're still certainly out there though get ready to "fight" for them; there's no room for low-ballers or week long negotiations in this market.  Remember that time is the enemy of all real estate deals.  Highest and best is the order of the day!

Until nest time; thank you for reading!

Predictable Equilibrium Part Deux

Just thought that you'd might like to know that I've noticed a small change in the Country Club of Miami these past few weeks.  There have been at least four price reductions of on market listings in the neighborhood.  Now this is not necessarily a cause for alarm, yet it is indeed an indication that the local market may have gotten a little ahead of itself.  The recent interest rates increases could bear some of the blame, and the imbalance of supply and demand that's driven the double digit increases over the past 18 months seems to be easing.  One of my colleagues that works in West Broward has also noticed this in his local market.  That being said, I feel that we're on the cusp of a return to a more balanced market with historically conservative appreciation levels , heading towards a phrase I coined in 2009; predictable equilibrium.  Here's where I wrote about this back then in my blog: http://bitsaboutrealestate.blogspot.com/2009/07/predictable-equilibrium.html

4 Major Myths about the Housing Recovery

This is a MUST WATCH!

4 Major Myths about the Housing Recovery | Watch the video - Yahoo! Finance

Poppin!

What can I say, the real estate market is popping!  My big challenge today is simply in finding homes for all of the prospective buyers out there.  Yet, industry experts agree that it won't stay this hot for much longer.  The double digit price increases that we're experiencing right now a function of a noticeable imbalance between supply and demand.  Yet as more homeowners are now in a positive equity position thereby allowing them to move up or down, interest rates continue to creep up, and much of the new home inventory gets closer to completion, we will be in a more balanced marketplace as we enter 2014.  And price appreciation will naturally abate to a more historically relevant rate.

 

There is a unique window of opportunity in today's marketplace to sell for top dollar.  Yet like all windows, this one, for the reasons mentioned above, will close.

A new bubble?

I just read a headline in the Miami Herald that the rate of real estate price appreciation is back to 2006 levels.  Now, the first thought that came to mind was 'Uh oh, not again!"  After all, right after prices hit their peak in 06...........well, you know what happened next.

Really? Are we doing this again?  Actually, we're not.  You see, our prior real estate boom in South Florida was falsely propped up by sub-prime loans, questionable lending practices, and so called "real estate investors" making huge bets with 100% financing.  Not to mention all of the buyers that were salivating to get their hands on so called "mortgage backed securities" This "house of cards" without any real substance behind it was destined to collapse.

Fast forward to 2013:  We have more than 100 projects is some stage of construction in Miami-Dade County. Many of these projects are 50% sold out already, and not a day goes by that I don't get an email from a developer touting their new community or building.  Sounds allot like 2006.

However, there are some observations that I've made which lead me to believe that we, as a market, are not heading towards the same mistakes of the past.  For starters, the percentage of cash sales is much higher than it was prior to the bust.  Also, anyone that's financing must be rock-solid; good credit, strong down payment, verified assets, etc.  Liar loans simply don't exist.  Furthermore, the consumer has become a more conservative animal.  Just about everyone that I've sold a home or condo to in the past 12 months has, on average, purchased 30% less property than they could actually qualify for.  So in the event that there's in interruption in the household income, chances are that that property won't end up in foreclosure.  And as for the developers; they too have learned from past sins by adopting a more European/South American model with respect to financing.  Many now require as much as 40% down payments.

All in all, this paradigm shift in the minds of lenders, builders, and consumers leads me to be very optimistic that we're not creating another Frankenstein that will eventually turn on us.  : )

I threw it in the trash

When someone is thinking about selling their home more often than not they call a real estate agent, or two, or three.  They then proceed to interview these agents and based upon various different factors they choose the one that they want to work with.  Simple enough right?

Last week I found myself in just such a situation.  I was agent #4!  So by the time I rolled around you can imagine they they had heard it all.  Well.......actually I didn't have to imagine it because they told me "We've heard it all!"

So the challenge was how to differentiate myself and show these folks that I knew something that the others didn't, that "something" that would assure them that I was the best person to get the job done.

I proceeded to have them sit down at the kitchen table.  I then asked where the garbage can was, took all of my recent sales data (which I wasn't planning to use anyway), and threw all of the papers in the trash!  You can imagine the puzzled look on their face...

To make a long story short, the value of your home as nothing to do with what another home sold for six months ago, three months ago, or even yesterday.  The true market value of a home is determined by examining the delicate dance of supply and demand, determining what buyers are not willing to pay, and employing a proactive positioning strategy.  And THAT has nothing to do with past sales.
And what about the results:  3 offers in less than a week at full price!  Congratulations Mr. Seller!

The other foreclosure shoe will not drop

News > US foreclosure activity hits five year low

Come one come all!

http://db.tt/r5LU2sHO
great value!

Multiple offers possible in tight housing market, experts say

My biggest daily challenge lies in getting the sellers that extend me the privilege of bringing their homes to market to price them realistically.  Here's further proof of the results that can be had by pricing aggressively.

Multiple offers possible in tight housing market, experts say