The real estate market in Greater Miami, may have already bottomed out in December '07. As we look at single family properties, we see that inventories continued to climb slowly but pended sales appear to have hit bottom in December. Consequently closed transactions reached their lowest point in January '08. Since that time pended sales have been climbing and so have the sold or closed sales.
Actual closed sales transaction take about 60 days to be fully recorded and communicated to the local Boards. So based on previous months we see that about 75% of pended sales may close in the following months. That means that total closed sales in April may be about 435 and in May we can expect about 550. That shows an increasing trend that started in January '08 and is continuing through May.
Sales seem to be fueled on one hand by an increase of foreign buyers on the higher priced properties and and on the other by bargain hunters absorbing some of the foreclosed properties. If the trend continues through the summer months, we could see ourselves in a more stable market for the single family properties this fall or early '09. We could even see single family properties appreciating again in 2009, but in the traditional 4-6% rate.
The Condo market shown below, is exhibiting similar trends, but I would be more careful with this one. We still have a lot of new inventory coming into the market. Some of the new buildings are having problems keeping up with maintenance expense because there are not enough owners to share the costs. Renters are being evicted from foreclosed units and that is fueling some fear on renters who are renting some of the units bought in pre-construction but not flipped in time to miss the downturn.
Previously I thought that newer buildings would be in higher demand than the older buildings because people usually want newer facilities with lower maintenance costs. However with the reports about increasing maintenance fees in newer buildings that are not completely sold out, is causing some buyers to look at more established and stable older buildings.
So the condo market may go through a few more changes before this is all over. But for now it looks like inventories are leveling off and pended sales and closed transactions are on the rise. All signs of a market that may have reached bottom.
However, the economy is so unstable that anything could spook buyers and send us back to the bottom. But if we have a quiet hurricane season; solid election results that give voters a sense of confidence and continuing low interest rates -- Miami may be saying good bye to the real estate slump that started on April 2005. Let's keep our fingers crossed.
Comments(6)