The dawn of the new year has seemingly given way to an increase in inventory levels throughout the price points of the Ft. Lauderdale real estate market. If one solely looked at the increase in the months of inventory, the condition of the local Ft. Lauderdale market would be taken totally out of context. Actually, the market is stronger than ever these days.
From this time last year, single-family inventory levels have decreased an amazing 42.2% while the inventory of attached homes have decreased an astounding 52.9%. As of this article, another significant shift has occurred. Traditional sellers are now again a clear majority of what is being offered on the MLS. In the single-family arena, traditional sellers represent 60% of the homes offered with an additional 34.2% offered as short sales and a minute 5.8% as foreclosures. The news is quite similar in the multi-family sector with 61.3% of the properties offered by traditional sellers, 32.7% offered as short sales and only 6% of the multi-family properties currently offered are bank owned foreclosures.
It's clear that low interest rates are a key component to the recovery process of the local Ft. Lauderdale real estate market. Currently, according to the Florida Association of Realtors, the 30 year fixed rate product was offered at 4.97% dipping back below the 5% benchmark. Interest rates have been hovering on either side of the benchmark for the past several months. Another kick in the pants to the local real estate market has been a jump in the consumer confidence level. Having recently peaked at a 2 year high, it's clear that the average person in the Ft. Lauderdale area is seeing a definite sign of recovery. Finally, the Federal income tax credit has created a substantial advantage for not only the first time buyer, but the people moving up the property ladder as well. When the vast numbers of first time buyers decided to take a leap of faith in property ownership, this allowed the sellers of those properties to take the advantage of the expanded tax credit and move up the ladder as well.
The question at hand is whether the growth in the local real estate market will continue if the Federal government doesn't extend the tax credit beyond its current deadline of April 30,2010. If the Ft. Lauderdale market must now sink or float without artificial help, I think it's going to float rather nicely. Granted, $8,000 is a nice stimulus to buy a home, but the first time buyers are now well past their buying zenith and the market continues to get stronger. I think the market is quickly becoming self-sustaining and while some might decide to put off their purchases, the $8,000 incentive is a relatively small incentive in the grand scheme of things. Low interest rates, which directly affect the affordability of the monthly payment, are the key to a long lasting recovery. Many experts are on board by saying they feel that rates will remain low for the foreseeable future.
What does this all mean? When there is sustainable growth, there is prosperity. When you find a prosperous environment, there is usually price appreciation. Not only has the greater Ft. Lauderdale market stabilized, we are on the brink of price appreciation once again. You heard it here first. If you'd like to discuss this further, click here and voice your opinion.
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