Credit Crunch? A weekly observation

What a turbulent week it's been!  There is no denying that the credit markets have been in turmoil over the past week- particularly the interest rate for jumbo loans for *well qualified* buyers in the real estate market.  The good news is that the Feds have stepped in and lowered interest rates this morning (interbank rates), eventually we WILL see a stabilizing effect on the real estate market.  As the financial news outlets are reporting, this is a healthy cleansing process that will eventually lead to a stabilization and (eventual) recovery of the real estate market.

My team and I have had an incredibly busy week doing the following:

• Reviewing property pricing with sellers (and planning for appropriate adjustments in the next few weeks).  This pricing will be determined by how the financial (credit markets) shift in the near future.
• Reviewing all pending sales with mortgage brokers, buyers, sellers, cooperating brokers and checking in with appropriate bankers/mortgage brokers.  Making sure that the market turmoil of the past week does NOT derail existing deals. 
• Communicating with international buyers (and presenting them with appropriate properties) that have been waiting on the sidelines for the Florida real estate market to significantly adjust downward.

My advice to sellers today is to stay informed, Miami Beach is still one of the most highly desirable real estate markets in the world (particularly for waterfront and income producing properties).  I believe that an effective strategy for selling properties in this environment to market aggressively to international clientele (U.S. dollar is low compared to the Euro) and having the expertise to communicate the affordability of today's adjusted real estate market.  If I were a seller today, I would only work with experienced real estate salespeople that have a realistic (but not pessimistic) medium and long-term outlook for SE Florida real estate market.

Even in the midst of the financial uncertainty of the past week, we have had a crisis-free closing take place (waterfront condo). 

We have also had two buyers present offers:

The first on an income-producing property in Miami Beach, and the second a large waterfront property in Hollywood.  In both cases, the sellers purchased their properties in 2002 and are being offered an annual return of just under eight percent (8%).  These are less than the potential returns to be had at the height of the market, but not catastrophic.