"So, how's the market?"
If I had a dollar for every time I encounter that question, let's just say I wouldn't be spending my time creating colorful graphs and analyzing data until it's engraved in my brain and smoke blows out of my ears. I'd probably be somewhere in Miami Beach right now looking at colorful (or not so colorful) paintings and enjoying an alcoholic beverage (or two or three) of some kind.
But I don't get a dollar everytime that question is asked and even if I did, I'd probably still be making colorful graphs and analyzing data cause I can't leave this game (real estate) alone no matter how much I enjoy Art Basel this time of year.
In an effort to answer that question, or rather assist you in answering your own question, I present to you the following statistics and colorful graphs. Please hold your wine glass tightly before proceeding. Keep in mind that these statistics are for single-family residences that sold from 1/1/09 - 11/30/09 in Miami-Dade County only.
An estimated 8,798 single-family residences sold in Miami-Dade County from 1/1/09 - 11/30/09 according to the Southeast Florida Multiple Listing Service (MLS). The majority of those single-family residences, an estimated 4,751 (54%), were bank or corporate-owned REOs (Real Estate Owned). It is estimated that another 2,897 single-family residences (32.9%) sold as arms-length transactions (non-distressed sales) during the same time period. The smallest piece of the pie (chart) belongs to the oft-discussed short sales with an estimated 1,150 of all single-family residences sold in Miami-Dade County being of the short sale kind.
Contrary to popular belief, conventional financing is still readily available in today's market as evidenced by the chart above. Most single-family residences in 2009 YTD (37.64%) were purchased with conventional financing. However, no one can argue against the (sometimes overused) cliche "cash is king" either. The vast majority of bank or corporate-owned single-family residences in Miami-Dade this year were purchased with good old fashioned cash money - 45.38% to be exact. See below.
The good news about all of this is that as of November 30, 2009 sales of single-family homes were already up almost 35% (8,798 vs. 6,532) compared to all of last year. The bad news? There's still plenty of inventory on the market.
What's got so many people confused, including myself, is the lack of REOs on the market. Considering that Miami leads the country with 12.2 percent of first mortgages in default, I'd expect there to be more than just 462 (out of 8,889) active bank or corporate-owned REOs on the market at this time. The inverse relationship between closed REOs and active REOs on the market, coupled with the amount of short sales on the active market and the lack of success with closing short sales tells me that:
- the distressed market isn't going anywhere in 2010.
- a lot of those properties actively marketed as short sales will become REOs in 2010.
- incentives will be created for lenders to facilitate the execution of short sales in 2010.
- values will continue to inevitably drop in 2010.
OK, you can put your wine glass down carefully now. Feel free to pour yourself another glass. Sip slowly. Next week we talk about shadow inventory. Fun, fun, fun.
*The statistics above were compiled using the Southeast Florida Multiple Listing Service.
DASH – Real Estate Company is a privately-owned real estate company engaged in the management and marketing of residential real estate throughout Miami-Dade County and Broward County. We offer advice and facilitate the execution of property sales, leases, and asset valuation for lenders, national asset management companies, asset valuation service providers, and YOU.
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