Wednesday, June 22, 2011

May Real Estate Sales Were Booming in Florida, Especially in Miami, Where "Home Sales Go Nuts"

Nationally, home sales fell in May by 3.8% from April and by 15.3% from May last year, but the real estate market in Florida was booming in May, with strong gains statewide in condo sales, but especially in the Miami metro area.  

Statewide, Florida Realtors just reported that existing home sales increased by 3% in May and sales of existing condos rose 17%, both compared to a year ago. The median sales price for existing homes in Florida decreased by 5% in May to $135,500 from $142,900 a year ago, but the median price fro homes sold in May increased by almost 3% from April.

In the Miami metro area, the May increases in home and condo sales were even stronger.  The Miami Herald is reporting that there were "875 sales of existing single-family homes, and 1,420 condo sales in May, increases of 20 percent and 46 percent from last May, respectively. Compared to April, home sales were up 5.4 percent in Miami-Dade and up 1.1 percent in the condo market." Here's another news story with the title "Miami Home Sales Go Nuts."

Foreign buyers are helping to fuel the increase in Miami real estate sales, here's a Bloomberg story about strong demand for Miami homes and condos from Brazilian investors, who are taking advantage of the 45% appreciation of Brazil's currency since 2008. 

13 Comments:

At 6/22/2011 1:46 PM, Blogger Benjamin said...

Maybe we should open up a bunch of Brazilian restaurants in Los Angeles.

 
At 6/22/2011 2:46 PM, Blogger morganovich said...

how does foreclosure work in florida?

is it easy of difficult relative to other states, how much administrative overhead is there, and how quickly can you move properties through the process?

how do short sales work?

i'm wondering if we may be seeing the results of differing policies making it easier for the florida market to clear.

 
At 6/22/2011 4:44 PM, Blogger Benjamin said...

You know, every time I hear a "business is good" story in the USA, it is related to trade-enhancing exchange rate (lower) of the US dollar.

Now, Bernanke is stopping QE, and the dollar is going up.

 
At 6/22/2011 4:58 PM, Blogger DL said...

A lot of "cash only" sales occurring in Florida. May be some disconnect between ability to qualify for a loan, and the sales numbers.

^^^^^^^^^^^^^^

Realty check:

http://www.cnbc.com/id/15837671

 
At 6/22/2011 6:47 PM, Blogger Bill said...

morganovich: Florida is a judicial foreclosure state meaning that the lender must sue the borrower and obtain court permission before forcing a foreclosure sale which is conducted by the court. The bottom line is that foreclosures take a very long time in Florida (up to 2 years) and a debtor can delay this even further by filing one or more Chapter 13 Bankruptcies.

 
At 6/22/2011 6:53 PM, Blogger morganovich said...

benji-

your reading is selective and ignorant. the weak dollar is causing more harm that good.

imports are up in price 12.5%. exports 9 and change. import size exceeds exports.

sure, it helps a few businesses, but it hurts everyone else more.

here's a good piece that lays out just how badly QE (1+2) has failed.

http://www.hoisingtonmgt.com/pdf/HIM2011Q1NP.pdf

 
At 6/22/2011 6:55 PM, Blogger morganovich said...

bill-

thanks. so, if FL has such a long and difficult foreclosure process, what is driving these sales? long foreclosure would seem to extend the adjustment period, not hasten it.

is it developers cutting losses?

 
At 6/22/2011 7:00 PM, Blogger VangelV said...

There will always be some market that picks up for a while even if prices have fallen on a y-o-y basis. But the big issue is still the poor national sales, which fell by 15% from last year. You can try to spin this as a positive but it really isn't yet. Prices have to fall some more and all those foreclosures have to hit the market before we can find the true bottom in real terms.

 
At 6/22/2011 10:39 PM, Blogger Bill said...

morganovich: It looks to me like there are a lot of cash investors who are from all over - local, national and international. For non-homestead properties, the banks are requiring ridiculous downpayments so all cash is the way to go if you have the means.

 
At 6/22/2011 11:37 PM, Blogger Richard Rider, Chair, San Diego Tax Fighters said...

Just keep in mind how percentages confuse most folks. Prices drop 50%, but then they SOAR 100%!

And thus we are back where we started, but feel richer for the experience.

 
At 6/23/2011 5:16 AM, Blogger niknaknoo said...

Benjamin this isn't a business is good story. This is a story about how the Brazilians have more purchasing power than Americans. Their economy is thriving while yours is going down the toilet.

And even Bernanke isn't stupid enough to openly advertise QE3. Commodities are already sky high.

There will be Q3 don't you worry because printing money is about the only thing the FED know how to do.

But has printing money ever solved a country's problems before?

No, and it won't this time either.

 
At 6/26/2011 6:46 AM, Blogger DM said...

I just bought a house in south Florida last week after looking for 6-8 months. I obtained an orthodox 30 year conventional mortgage where the purchase price was just 2x my yearly income. My credit score is over 780. The underwriting process was not easy. It was pretty darn painful. Obtaining insurance in this state is rather difficult as well. Due to being about a mile from the ocean and the age of the home (over 30 years), I could not find a private insurance company that wanted to touch the house. The house, by the way, is in fine condition with a relatively recent roof and a number of renovations in the last 10-12 years. Moreover, I bought in an area that has seen a lot of sales. Acceptable offers are developing within 45 days of listing and, in many cases, much sooner than that.

What I found during this process is that there are a number of cash buyers with whom I could not compete. Sellers did not want to go through a loan process, with all its potential problems, when a cash buyer and a quick close was possible. I don't know if these cash buyers were foreign as I didn't spend any time trying to identify these people. There is a small sliver of south Florida - 10-15% that will attract buyers from all over. I suspect those neighborhoods will continue to experience flat to small growth. The rest of the area is another question.

 
At 6/26/2011 3:04 PM, Blogger Ron H. said...

"What I found during this process is that there are a number of cash buyers with whom I could not compete. Sellers did not want to go through a loan process, with all its potential problems, when a cash buyer and a quick close was possible."

This is likely the case at all times and all places.

Imagine two potential buyers for your car approach, and one says "OK, I want to buy your car. Let me go see if my uncle Lenny will loan me some money, as I don't have enough."

The other one says "I have the cash in my pocket."

Who gets the car?

 

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