Has everyone started to feel the love again? In the greater Ft. Lauderdale real estate market, not only has the inventory sharply declined, prices are climbing as well.
As I've been reporting for several months, the market in the greater Ft. Lauderdale area has bounced back and this month, I am forecasting the momentum to continue in spite of the tax credit expiration date coming at the end of April. The only immediate cause for concern is if the interest rates which spiked .3% in one week, continue to rise. Most analysts state they feel the recent spike was well expected and already built into the home market since it's been known that the Federal Reserve would no longer be buying residential mortgages after March 31, 2010.
Since April of 2009, prices in the greater Ft. Lauderdale real estate market have increased by 5%. While people might feel this is pale in comparison to the declines we've seen in years past, not only have we stabilized, we're now finally going in the right direction. When a market is balanced, many problems disappear like trying to appraise a property. While prices were declining almost 1-2% per month at one point, trying to determine a value was impossible. It is customarily normal and usual to see 3%-5% gains in appreciation within a balanced market.
Equilibrium is also seen in the amount of inventory currently on the market. According the Ft. Lauderdale MLS, there is approximately 7 months of single-family inventory currently on the market. This inventory is selling for 92% of asking price within 84 days of being listed. These figures are all indicative of a balanced market. Inventory levels within a balanced market tend to run from 6-12 months of supply of homes. Homes usually sell within 90 days of the listing date. When I segmented the inventory based on prices up to $400k, the inventory level within the greater Ft. Lauderdale market was only 5.6 months commanding 95% of the asking price within 75 days of the listing date.
The same tale can be told about the multi-family real estate market. Within the multi-family arena, there is currently 7.7 months of inventory which is a far cry from nearly 40 months of supply back in April of 2008. The Sellers are receiving 90% of their asking price within 92 days of the listing date. When drilled down to prices below $400k, Sellers are receiving 93% of their asking price within 88 days of the listing date.
The average dollar per square foot within the greater Ft.Lauderdale area is presently $148 for single-family homes and $112 for multi-family homes. Be advised, this is a running average. Better quality neighborhoods and better looking and well maintained homes will command higher.
Typically a quality home (single-family or multi-family), under $400k is receiving multiple offers. It started within the price points under 100k approximately 7-9 months ago. Now that has grown to price points up to $400k. As soon as regular, standardized financing channels are reestablished for price points exceeding the FMNA conforming loan limits ($417k in Broward County), we will then see a spark in the upper end markets.
Many naysayers are thinking that doom and gloom is on the horizon when the Federal tax credit expires on April 30th, 2010. It looks pretty apparent that the credit will not be extended again since other sectors of the economy are also bouncing back. In Florida, at least, people were not able to fund their down payments with the tax credit. Some states did allow this through special loan programs. While it's great to get free money, this was not the prime focus of first time buyers. They had to come up with the deposits and closing costs aside from the eventual windfall. If anything, some might grimace that they didn't get their windfall, but I don't think this will stop people from purchasing a home. In my professional opinion, I think interest rates will have a direct correlation to the buyer's attitudes towards purchasing a new home. Let's all hope the experts have it right and that lower interest rates will continue to prevail which will allow the sun to continue to shine over South Florida.
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