Southeast Florida MLS Regional Sales and Price Activity - February 2012

Regional data is important.  However, if you are buying or selling real estate, knowing the sales and price performance of properties within the specific communities you are interested in is vital to your decision making process.  An experienced and knowledgable Realtor is your best resource.

Southeast Florida MLS Regional Sales and Price Activity

At February 29, 2012

Single Family = Single Family Res
Condo = Condo/Co-Op/Villa/Townhouse
Reports generated from Clarus MarketMetrics®

		% Price Change			% Sales Change
Southeast Florida MLS	Median Price	from Prior Month	from Prior Year	Total # Units	from Prior Month	from Prior Year
MLS Wide
SEFMLS (Single Family)	$165,000	-2.90%	10.10%	947	-1.70%	-12.60%
SEFMLS (Condo)	$100,000	-4.50%	25.00%	1,248	-4.30%	-25.40%
MIAMIRE Region Cities
Single Family Only
Coconut Creek	$232,500	36.80%	25.70%	4	33.30%	-20.00%
Coconut Grove	$482,500	-20.20%	37.90%	8	60.00%	14.30%
Cooper City	$235,000	14.60%	13.30%	7	40.00%	75.00%
Coral Gables	$550,000	0.00%	-2.40%	25	-19.40%	-3.80%
Coral Springs	$178,000	-8.70%	4.10%	11	-15.40%	120.00%
Cutler Bay	$160,000	3.60%	20.70%	23	64.30%	-17.90%
Davie	$275,000	40.70%	-50.90%	11	-21.40%	22.20%
Deerfield Beach	$101,000	-35.60%	-39.60%	1	-50.00%	-75.00%
Doral	$429,750	29.20%	22.80%	12	-25.00%	-29.40%
Florida City	$96,000	37.30%	92.00%	2	-60.00%	-60.00%
Fort Lauderdale	$77,475	10.10%	3.30%	20	-4.80%	11.10%
Hallandale	$125,000	22.00%	13.60%	5	25.00%	66.70%
Hialeah	$151,600	2.80%	4.60%	28	7.70%	-3.40%
Hollywood	$94,900	-13.70%	-5.10%	45	-4.30%	-16.70%
Homestead	$95,000	0.50%	1.10%	61	13.00%	-29.10%
Lauderhill	$85,000	-19.00%	-7.60%	9	12.50%	80.00%
Margate	$146,000	52.90%	49.80%	4	-33.30%	-66.70%
Miami	$175,000	7.40%	16.70%	341	-2.80%	-21.60%
Miami Beach	$1,070,000	28.70%	40.50%	7	-41.70%	-65.00%
Miami Gardens	$107,700	10.50%	37.80%	21	-19.20%	75.00%
Miami Lakes	$350,000	0.00%	-5.30%	7	-12.50%	40.00%
Miami Shores	$250,000	-63.20%	-24.20%	7	75.00%	-41.70%
Miami Springs	$245,000	12.30%	32.40%	8	33.30%	14.30%
Miramar	$197,500	-6.00%	19.70%	38	-2.60%	2.70%
North Lauderdale	$76,305	-33.10%	-14.20%	2	-50.00%	-66.70%
North Miami	$118,167	73.80%	37.80%	14	27.30%	-22.20%
North Miami Beach	$99,199	-19.70%	-17.30%	11	-8.30%	-31.30%
Oakland Park	$70,000	-12.60%	-19.50%	6	100.00%	-14.30%
Opa-locka	$61,380	18.00%	57.40%	9	-25.00%	-10.00%
Palmetto Bay	$282,500	-4.20%	-27.10%	10	-23.10%	-28.60%
Pembroke Pines	$235,000	7.40%	9.30%	29	-9.40%	-21.60%
Pinecrest	$712,500	11.30%	14.90%	10	-23.10%	100.00%
Plantation	$260,000	0.00%	22.40%	17	30.80%	21.40%
Pompano Beach	$70,000	40.00%	31.50%	7	0.00%	16.70%
South Miami	$222,000	-32.70%	-3.90%	3	50.00%	-50.00%
Sunrise	$115,500	-22.00%	3.90%	15	50.00%	7.10%
Tamarac	$65,000	-40.90%	-11.30%	11	-15.40%	37.50%
Unincorporated Dade County	$145,000	-51.70%	-19.00%	7	133.30%	75.00%
Weston	$400,000	14.00%	51.80%	17	-39.30%	0.00%

Buying a Home? The COST Is More Important Than the PRICE

Buying a Home? The COST Is More Important Than the PRICE

by The KCM Crew on March 19, 2012

• 
• 
• 
• Share
• 10
  inShare

inShare10

We have often advised buyers to look at the COST of purchasing a house more than the PRICE of the home. Obviously, price is part of the cost equation. The other piece, assuming you are not an all cash buyer, is the mortgage rate. The mortgage rate to finance a purchase can have a dramatic impact on the overall cost. Recently, there are more people talking about the possibility that mortgage rates could begin to increase.
HSH.com studies trends in mortgage rates. They explain:

“A better economic climate almost always brings higher rates, and a lessening of the troubles in Europe from massive central bank assistance adds to the movement of money from safe havens to more risky assets, driving rates upward.”

Dan Green of The Daily Market Reports recently stated:

“The Fed sees growth coming faster than originally expected. There’s suddenly less chance that the Federal Reserve will intervene to help keep mortgage rates low. Absent Fed intervention, mortgage rates are apt to rise and Wall Street is now betting that the Fed has bowed out. With no stimulus, mortgage rates rise.”

Lawrence Yun, chief economist for the National Assoc of Realtors, recently wrote:

“Mortgage rates will be starting to rise. From the 3.9 to 4.0 percent average rate in the past five months on a 30-year fixed mortgage, the new rates will soon be in the range of 4.3 to 4.6 percent.”

We do not attempt to predict future interest rates. We leave that up to the experts in the field. However, we want our readers to understand the potential impact on the cost of purchasing a home if they do rise. Here is a simple table that shows, even if the PRICE of a home softens, the COST of a home could increase.

Bottom Line

Many purchasers think they should wait until they are sure that prices have hit bottom. Deciding whether or not to wait should be determined by where the COST of a home is headed.

2.6M of Shadow Inventory To Be Resolved

2.6M of Shadow Inventory To Be Resolved

by The KCM Crew on March 16, 2012

Short Sale Success: What is an Acceptable Hardship?

Short Sale Success: What is an Acceptable Hardship?

by Christopher Reale on March 12, 2012

A short sale, in most instances, is a complex transaction. However, there are two very simplistic characteristics that every qualified short sale possesses:

1. The house must be valued at less than the homeowner owes on their mortgage debt obligation. In other words, the home must be “underwater”.
2. The homeowner must have a qualified hardship.

It is the second characteristic that we would like to touch upon in this blog post.

One question that we answer frequently is “My house is underwater. Is this an acceptable hardship?” Unfortunately, the answer is always “No.”

The simple fact that a homeowners mortgage obligation is in access of their house value is not an acceptable hardship. A Short Selling bank will entertain a short sale when and only when there is a hardship that will, now or in the future, affect the borrower’s ability to pay their mortgage.
The following is a list of acceptable hardships that may be used when submitting a short sale package:

• Mortgage Rate Adjustments
• Loss of Employment or Reduction in Wages
• Business Failure
• Medical Hardship
• Death in the Family
• Divorce/Separation
• Military Service
• Overwhelming Debt Obligations
• Job Relocation

As always, should you have questions as to the acceptability of a hardship scenario, you should seek advice from an expert that has been trained in the short sale field.

One additional note:  Short sale approval by lenders and investors are very impersonal processes.  The hardship letter is one of the few, if not the only opportunity a borrower may have to express their personal sorrow over having to go through a short sale and lose their home.  Sincere words to this effect may make a difference.

Real Estate Commissions - You Get What You Pay For

Real Estate Commissions: You Get What You Pay For

by The KCM Crew on March 7, 2012

Considering a Discount Broker?

Does it makes sense to pay a full commission to your real estate agent in today’s market? Sellers, buyers and even agents are debating what should be charged to assist a consumer in completing a real estate transaction. Forget what the actual amount of the commission is. The bigger question is whether you should pay a ‘full fee’ when hiring a real estate expert to guide you through the complexities of today’s rapidly changing housing environment.

 If a full fee was the rule in 2006 when completing a deal was so much simpler, why would you now consider cutting the fee of your agent in today’s tumultuous market? You are depending on this person to help you reach your goals in a sale or purchase. In 2006, buyers were willing to pay almost anything to a seller just to get into a home. Banking entities seemed to be willing to mortgage any property for any buyer. The process was rather simple.

Today, a person looking to buy or sell should be willing and ready to pay a full fee for two reasons:
You need an expert guide if you are traveling a dangerous path:

The field of real estate is loaded with land mines. You need a true expert to guide you through the dangerous pitfalls that currently exist. Finding a buyer willing to pay fair market value for your home at a time that there are mass inventories of foreclosures and short sales will take a true real estate professional. Finding reasonable financing can also be tricky in today’s lending environment.
Experts in any profession do not discount their fees; especially when the job is becoming much more difficult.
You need a skilled negotiator

In today’s market, hiring a talented negotiator could save you thousands, perhaps tens of thousands of dollars. Each step of the way – from the original offer, to the possible re-negotiation of that off after a home inspection, to the possible cancellation of the deal based on a troubled appraisal – you need someone who can keep the deal together until it closes.
When an agent is negotiating their commission with you, they are negotiating their own salary – the salary that keeps a roof over their family’s head; the salary that puts food on their family’s table. If they are quick to take less when negotiating for themselves and their families, what makes you think they will not act the same way when negotiating for you and your family? If they were Clark Kent when negotiating with you, they will not turn into Superman when negotiating with the buyer or seller in your deal.

Bottom Line
We believe that famous sayings become famous because they are true. You get what you pay for. Just like a good accountant or a good attorney, a good agent will save you money…not cost you money.

Real Estate Forecast 2012 and Beyond: Warren Buffett Says Buy, Baby, Buy!

Real Estate Forecast 2012 and Beyond: Warren Buffett Says, "Buy, Baby, Buy!"

By Hao Li

February 29, 2012 11:03 AM EST

Warren Buffett's real estate forecast for 2012 and beyond is extremely rosy, with the so-called Oracle of Omaha even recommending buying them over investing in a diversified group of leading companies.

In an interview with CNBC on Monday, Buffett said single-family homes, along with stocks, are cheap and attractive investments. By contrast, investments in Treasury bills, gold or simply keeping money in cash are not as attractive.

Buffett said if he had a way to buy "a couple hundred thousand single-family homes" and easily manage them, he would "load up on them" and "take mortgages out at very, very low rates."

However, he said that managing "a couple hundred thousand single-family homes" is an impossibly Herculean logistical task.

This line of reasoning likely holds true for many brilliant investment minds who choose not to bother with buying single-family homes -- even though they are undervalued -- when buying and owning stocks is as easy as a few keystrokes and mouse clicks on a computer.    

Because of the absence of many of these big institutional investors in the U.S. residential real estate market, it is less competitive than the stock market, Buffett said. When institutional investors of size do enter the residential real estate market, they usually go for apartment buildings, which leaves the single-family homes segment even less competitive than the general residential real estate market.
When asked if a young individual investor should buy stocks or his first single-family home, Buffett recommended buying a single-family home with a 30-year mortgage.

"It's a terrific deal," he said. "It's a leveraged way of owning a very cheap asset now and I think that's probably as an attractive an investment as you can make now."
In fact, if the young individual investor is "a handy type," he could "buy a couple of them at distressed prices and find renters," said Buffett.

Buffett is famous for only investing in assets he believes are undervalued. He must, therefore, believe that the U.S. residential real estate market is undervalued.
One valuation metric for residential properties is the price-to-rent (P/R) ratio, which roughly corresponds to the price-to-earnings (P/E) ratio for stocks.

As seen on the chart below, the rent-to-earnings ratio has fallen to 2004 levels.





Moreover, as the economy recovers, both rent and housing prices should rise as well.

A perhaps even better argument that the real estate market is historically cheap, however, is that mortgage rates are at or near the historic low.

Mortgage rates are a huge driving factor of the ultimate cost of purchasing a home.

For example, the total interest expense of a $200,000, 30-year fixed-rate mortgage at a 4 percent mortgage rate, which is the current rate, is $144,000. At 10 percent, which was the prevalent rate in 1990, interest expense comes to $432,000.

Landmark Settlement with Mortgage Lenders Provides Relief for Some Struggling Home Owners

Note to Sellers:  $25B National Settlement on Rob-Signing Scandal - How It May Affect the Value of Your Home

Limbo makes for a very unpleasant place to live, and that is exactly where thousands upon thousands of homeowners have been over the past year since the scandal broke.  Now that virtually every state including Florida has signed off on the $25B settlement ($8.4B earmarked for Florida), the court system is no longer encumbered by this pending litigation and the backlog of foreclosure proceedings will likely decrease as the pace of finalizing the processes get undereway again and accelerate.

The second page of the article in today's Miami Herald gives us a hint as to the potential impact this may have on the number of foreclosure properties that may come on the market:

"There are also more than 250,000 homes stuck in Florida’s lengthy foreclosure process, more than any other state in the country. The settlement may shorten the state’s foreclosure timeline — currently above two years — as banks will no longer be held up by charges of robo-signing. Still, several of the homes in foreclosure are so far behind on payments that even if banks reduce the amount owed, the homeowner will not be able to catch up."

"Several", in my opinion, may be a kind choice of words used to describe the vast number of homes whose delinquent mortgage balances are beyond the home owners' ability to bring current.  If balances are not able to be satisfied either by full payment or some other installment agreement reached between the lender and the home owner, the banks will likely take posession of the homes and re-sell them as REO properties.  Needless to say, the homes will likely be sold at substantial discounts which will affect the value of surrounding homes.  This can affect future appraisals and will probably create a higher number of short sales.  End result:  the price of your home may come down.

Bottom Line:  If you are currently selling your home or plan to sell in the near future, pricing your home as competitively as possible today to get it sold now will produce greater net proceeds than waiting for the unintended consequences of this court settlement.  

Read more here: http://www.miamiherald.com/2012/02/09/2634050_p2/landmark-settlement-with-mortgage.html#storylink=cpy