It’s happening all over the country. Houses appear for sale at 9AM and are in contract an hour later. Homes in Boca Raton, Delray Beach and Boynton Beach appear to be under siege, as buyers arrive looking like assault teams.
We’ve watched agents and buyers literally race out of their cars, trying to be the first to enter the premises. Agents are armed with pre-signed, full price – or higher than full price — cash offers.
This practice of warp speed purchase has become known as a “flash sale.”
Once upon a time, you had time to discuss the pros and cons of homes in Boca Raton.
Back in ancient real estate times, maybe 4-5 months ago, when you looked at homes in Delray Beach, you took some photos, went home to deliberate with your spouse, and made a decision within a day or two.
Well, those relaxing days are gone. Now it’s buy or die. If you can’t make a decision before the end of your Boca Raton home tour that day, fuggedaboudit. That Boca home is gone, never to be viewed again, because the buyer right behind you will snatch it.
These flash sales are not confined to homes in Boynton, Delray Beach or Boca Raton. It’s a nationwide trend. According to a recent study, Phoenix, Arizona, until recently one of the hardest hit markets during the real estate downturn, now leads the league in flash sales.
The tri-county area leads in 2 week sales figures.
Not every home in Boynton Beach, Delray or Boca Raton moves off the market in day. As of last month, homes were averaging 78 days on the market, compared with 90 days last year at the same time.
However, homes priced at $400,000 or under are not waiting that long.
What brought down that days on market (DOM) average is that there were more than 1500 home sales in Palm Beach, Broward and Miami Dade Counties that were in contract within a two week span. That number is one and a half times more than last year’s totals for sales within a similar short period.
While we didn’t lead in flash sales, the number of homes sold within two weeks in our area placed our three counties ahead of all other markets for that particular honor.
Investors and hedge funds are fueling the market.
The housing market has definitely turned around, as evidenced by price rises totaling as much as 28% since last year in parts of Palm Beach County, Broward County, and Miami-Dade County.
However, much of this price rise is fueled by foreign buyers who see homes in South Florida as not only an excellent value but, often, as a hedge against inflation. They are purchasing with cash that has long lain dormant in their own countries.
That cash infusion from investors, plus the fact that private investment funds, such as Blackstone Group, are buying foreclosed homes by the thousands, has created a very limited inventory of homes.
Sellers in hot areas have no mercy. Buyers have no leeway.
The result is that the few sellers out there have taken advantage of a tight market with a vengeance. They price at the top of the market and have come to expect full price offers, often in cash. FHA and VA mortgages, which take longer for approval because they have stricter terms than conventional mortgages, are being rejected by many sellers.
At the moment, if you’re looking for a home in Boca Raton, Delray Beach, or Boynton Beach, try to make up your mind based on the photos your realtor send you, before you see the property. Because if you you still like it when you get there, but you want to see some other homes before you’re certain, you won’t have to make a decision at all. Because that house will already be sold.
Marc Jablon, the Jablon Team
Re/Max Complete Solutions