By Teresa King Kinney, CEO, Realtor Association of Greater Miami and the Beaches
The real estate market attracts constant media attention. This is understandable, considering the importance of real estate in relation to the economy. Different sources offer varying arguments and perspectives on the future of the market every day, making it somewhat difficult for agents and consumers to determine the proper course of action for success. But it is important for agents to realize that the market and the outlook are bright and filled with business opportunities. The current South Florida real estate market combines factors that point to a favorable business environment. Now, more than ever, buyers and sellers need you – their professional brokers and agents.
South Florida real estate market
According to Florida Association of Realtors’ (FAR) October statistics, Realtor sales of single-family existing homes increased by 6 percent in Miami and 5 percent in Ft. Lauderdale, compared to the same period a year ago. This is as opposed to the statewide figures showing sales were down 22 percent.
Sales of existing condominiums decreased by only 6 percent in Miami and 21 percent in Ft. Lauderdale, still much stronger than statewide numbers, which were down 31 percent.
The median sales price for single-family, existing homes decreased by 3 percent to $356,000 in Miami, and 5 percent to $349,400 in Ft. Lauderdale, while there was no change in median sale price statewide at $242,500. Existing condominiums decreased by 4 percent to $250,000 in Miami, and actually increased 8 percent to $210,100, compared with a decrease statewide of 2 percent to $209,200.
While October 2005 home sales in Florida, especially in Southeast and Southwest Florida, were directly affected by Hurricane Wilma, the figures still indicate a substantial difference when comparing South Florida and to other markets in the state and throughout the country.
Jay R. Chernoff, 2005 Chairman of the Realtor Association of Greater Miami and the Beaches (RAMB), explains why he calls this a “broker’s market,” and why agents stand to gain more business in markets such as this.
“Now is when Realtors are getting all of the listings and earning full commission,” he says. “We are getting the inventory back, because buyers and sellers now need agents.”
And market fundamentals are improving, according to David Lereah, the National Association of Realtors’ chief economist. “The present level of home sales demonstrates some confidence in the market, but sales are lower than sustainable due to the psychological factors,” he says. “The demographics of our growing population, historically low and declining mortgage interest rates, and healthy job creation mean the wherewithal is there to buy homes in most of the country, but many buyers remain on the sidelines. After a period of price adjustment, we’ll see more confidence in the market. A lift to homes sales should be apparent in the first quarter of 2007.”
During the recent real estate boom that took place in South Florida and other U.S. markets, the level of growth was unsustainable. The current market is a healthy one. The 2006 RAMB chairman, Pat E. Dahne, says there are positive market conditions that will result in continued investment in South Florida real estate.
“It’s not a bad picture,” Dahne says. “The market has not crashed; there has been a gradual leveling because booms don’t last forever. Still, interest rates are low, and there is job and economic growth.”
Also, economically, there are factors that affect real estate both on a large and small scale. While various real estate markets are generally characterized or impacted by similar factors, there are specific conditions that may affect a particular market.
The 2007 RAMB chairman, Renate Smith, says both macro and micro economic factors impact real estate decisions. “Real estate is a long term investment decision impacted by both macro and micro economic factors. Consumer confidence, inflation rates and the job market impact real estate on a macro level. Most real estate decisions actually are more heavily impacted by influences on a micro level, such as current local comparable sales, active listings available in the neighborhood, and the personal motivation factors concerning each buyer or seller.”
South Florida is a unique market in many ways. The highest net migration of any state, large numbers of international buyers and investors, historically low unemployment rates, climate and lifestyle are just a few of the factors that will continue to generate demand and sustain price appreciation in our market.
Realtors offer valuable services
For agents, the current market is your opportunity to take advantage of the buyers and sellers that now need you and the services you can provide. RAMB has compiled a list of services that Realtors offer, which can be used with their customers and clients. RAMB members can view, download, and/or print the list of “Over 200 Valuable Services Realtors Offer,” by visiting www.Miamire.com, and clicking on the “Realtor Resources” tab.
Teresa King Kinney is CEO of the 13,000-member Realtor Association of Greater Miami and the Beaches (RAMB), which includes 12,000 members in their Residential Association and over 1,000 members in their Realtors Commercial Alliance. The Association also hosts the largest local International Real Estate Council in the nation, with 1,400 members. RAMB recently celebrated its 85th year of service to the industry, the public and the community.