January Market Update from the Gregg Team
If you read the newspaper or just follow the news via the internet or cable TV, you have to know that Florida’s housing market is well on the way to recovery. Prices are up from last year, the number of homes sold is up, and average prices are up. Inventories of available homes and condos are significantly lower than a year ago. We only have about a six month supply of homes in the local market, so our market has become “normal” in that regard. It is a pretty neutral market, not really favoring buyers or sellers. I believe our market is quickly shifting to a seller’s market, however, because of the dwindling supply of homes. Here’s what is happening:
1. Savvy buyers are buying homes every week to take advantage of low prices and very low interest rates—would you believe 3.5% on a 30 year fixed rate mortgage?.
2. Very few new homes are being built. Not nearly enough to help our shrinking inventory.
3. Many sellers are waiting for the market to go up before putting their homes on the market—holding homes off the market that would normally be available.
4. Foreclosures that become available every month are quickly bought by eager homebuyers or cash investors—they are not “stacking up” in our inventory.
My advice for anyone who is renting a home, but plans to stay in the area for more than two years is to buy a home now. They may never see prices and interest rates this low again. In over 30 years in real estate, we never dreamed that homebuyers would be able to get a mortgage under 4%! FHA loans are still available with only 3.5% down—why not buy. Buying is cheaper than renting!
My advice for cash investors is to buy single family homes that can be fixed up and rented while prices are low. Prices will rise faster than rental rates, so the best opportunity is now. Demand for rentals is very strong for single family homes. Three bedroom homes in good condition can be bought in Port St Lucie for $60-80,000 and rented for $900 per month. Investors, please call me for details and listings. The return on investment is very strong even without the anticipated appreciation.
What about short sales? My advice is to avoid them like the plague! Call and ask me why before trying to buy one! There are too many great deals on foreclosures and other bargain priced properties to go through the aggravation of a 4-6 months process of a short sale with no certain outcome. Call us, we’ll find you the bargain properties without the aggravation.
Gary Gregg, Broker Associate
Keller Williams Realty