It’s still a seller’s market, with prices up and homes for sale down in South Florida.
According to the Realtors Association of the Palm Beaches (RAPB), the number of single family homes listed for sale in Palm Beach County is lower than it was last October. Listings are also down in Miami-Dade and Broward counties.
What this means for the majority of buyers – those in the $150,000 – $350,000 range – is that competition remains very tight. There are bidding wars in some areas, as buyers struggle to find homes that give them the home of their dreams with no extra work to be done.
Get a mortgage pre-approval.
In order to prepare themselves for the current market, the first thing that buyers need to do is obtain pre-approval letters from their lenders. According to Preston Ware, of the Mortgage Firm, a pre-approval indicates to sellers that the bank has already vetted your finances.
“A pre-qualification is just a discussion of how much house you can afford and arriving at where you want your monthly payment to be,” Ware said. “But a pre-approval means you have provided us with a credit report and real financial proof of your assets, your income, and your debts.”
“Every loan application is run through desktop underwriter. This automated underwriting engine gives you a yes, no, or maybe on day one.”
It’s not a guarantee, but it’s an advantage.
All buyers should be aware that pre-approval doesn’t guarantee your final approval for a mortgage. Final approval – and the actual loan – occurs only after the property is appraised and the title proven to be clear.
However, it is much more assuring to a real estate agent and a seller when they see evidence that your financing is in place. And in the increasing competition for home purchases today, buyers need every advantage they can find.
Prices are up again
To give you an idea of what home buying competition is like in the tri-county area, these are some of the current market statistics.
According to the S & P / Case-Shiller Index, we’ve seen a 7.7% rise in prices in the tri-county area since last year. (But South Florida is not the fastest rising area in the nation. San Francisco, Denver, Portland (OR) and Dallas outpaced us).
Supply is down again
Information from the local real estate boards indicate that Broward County has a 3 month supply of homes on the market, with the number of active listings down by more than 7% from a year ago.
Miami-Dade County has dropped 4% in the number of active listings from this time last year. Similarly, the number of active listings is down from last October to just over 6,000.
Palm Beach County shows only a 4.7 month supply of homes in the market at present. (A six month supply indicates equilibrium in the market, where neither buyer nor seller has a distinctive advantage). MLS statistics show a drop of 6% in number of homes listed in October of this year as compared to October of 2014. However, there are more than 7,000 properties for sale in the County.
The largest percentages of properties that show declines in availability between these two dates are in homes priced at $300,000 and under.
We remain in a seller’s market.
The lower supply of homes for sale in the area is still evidence of a seller’s market. Until more sellers are willing to let go of their homes, prices are likely to continue their rise. Competitive bidding – especially in the prime buying range of $350,000 and below – will remain a fact of home buying life in this county for the foreseeable future.
For the moment, in order to beat out the competition, it looks like south Florida buyers may need to carry mortgage pre-approval, a little extra cash, and a great deal of luck in order to purchase the home of their dreams.
Marc Jablon, the Jablon Team
Re/Max Complete Solutions