Back in May I wrote a blog asking the question, did Miami's real estate market hit bottom? A month later the experts are beginning to say that South Florida's real estate market may be bottoming out. However bottoming out has many meanings for many people. To us in the real estate business the market shifts are related to sales.

The market peaked on April 2005... most experts now agree on that. What did that mean at the time? What that meant is that was the point that inventory started climbing and sales started declining. Prices started declining months later.

So now many of us are already indicating that the market has bottomed out. Does that mean that prices have stopped dropping. No, prices may continue to drop probably another 3 to 5% for the next 3 to 9 months. That prediction is conditioned upon the absence of other external forces affecting the market. For example if a hurricane traverses Florida - that could impact the real estate market negatively or positively as the case may be.

So why many experts are beginning to think that the real estate market has bottomed out. If you look at the graph below you will see that while volume is leveling off, pended sales reached its lowest point in December 2007 with 767 contracted properties. About 75% of those properties became closed sales in January making that the lowest closed sales with 716 closed sales. Take a look at the pended sales for the following months and you see 1002, 1291, 1527 and 1567 by the end of May. The increase in pended sales resulted in increase in closed sales and by the end of May we had over 1000 closed sales or a 40% increase in sales.

What has changed in this period has been seller's expectations. If you look below you see that in the past 15 months sellers have been reducing their asking price to the point that they are almost at the same level as the sold prices. Smart seller's have learned that the good times are over. So seller's with realistic expectations are meeting buyers who have been sitting on the sidelines for the past two years and we are once again closing sales.

The next question is who is buying? In South Florida, the first buyers were the foreigners. For months, they had been looking at our properties with their valuable currencies and wondering when is the right time to buy? Then they had a little scare a few weeks back when the Euro took a small dip and that seems to have convinced them that now is a good time.

The Europeans started buying some of our upper level properties primarily waterfront and other unique properties. The next group to join the were investors and bargain hunters who started buying foreclosed properties. Now we have the middle group who are finding out that while there are many properties in the market, when they set the criteria for the property they like in the location they want at the price they want to pay - there are only 5 or 6 properties that meet their criteria. Next comes their reality check when their first choice property is bought out from under them.

The South Florida real estate market is resilient and as long as people want to keep coming to the Sunshine State, real estate will continue to go up in value. There are great deals for those who come into the market before South Florida real estate heats up again. If you have good credit and a reasonable downpayment, I suggest you get active now.