Submitted by: Mike Benton
As of today, January 18, 2012, mortgage applications are up by 23.1% for the month of January. This is great news for home buyers and investors alike, as it may be an early indication that we could see some substantial improvements in the Fort Lauderdale real estate market this year. Here are 10 more statistics that lead us to believe that 2012 will be a great year for home buyers and investors looking to buy one of the existing Fort Lauderdale homes for sale.
1. Florida existing home sales rose 11% y/y in November, moderating slightly from the 13% y/y increase in October. Though metro areas may lag behind the state sales rate, Fort Lauderdale real estate is in high demand by investors and international buyers. The state sales rate increase is encouraging, and our level of sales activity is consistent with this information.
2. Good news! Bank repossessions in Florida are down 33% in November according to RealtyTrac. This is a good indication that perhaps fewer homeowners and investors are going upside down on their mortgage payments. However, it could also be a sign of massive foreclosure delays due to improper documentation have falsely deflated the number of foreclosures, in which case it would be too early to celebrate. Time will tell, but the fact that income rates in the Miami and Fort Lauderdale areas are expected to rise would suggest otherwise. Our hope is that increased income levels in the area will support home ownership.
3. More specifically, South Florida sales increased by 14% in November 2011. This is exciting news for those of you with Fort Lauderdale homes for sale. We can thank international buyers who have come to this area in search of a primary or secondary homes for sale in Fort Lauderdale. These buyers typically purchase homes with all cash transactions, causing a significant sales increase during the month of November. In Miami 64% of re-sales were all-cash transactions up from 62% a year ago, according to Dataquick. Meanwhile, CentralFlorida sales rose 10% y/y (versus +14% y/y in October), while North Florida sales rose 15% y/y (versus +9% y/y in October).
4. Statewide median prices held steady in November, an improvement over the trend we saw in October 2011. Statewide foreclosure delays would suggest that the price stabilization is temporary. Though the statewide unemployment rate is 10%, the unemployment rate in the Fort Lauderdale and Miami metro areas is lower at 9%. This rate is expected to decrease again in 2012, which may help offset the effects of the looming foreclosure backlog. Buyers who have more cash in pocket are more likely to buy when interest rates are as low as they are right now.
5. Florida condominium sales rose by 2% to 5,590 units in November 2011. Though Fort Lauderdale condo sales decreased by 1%, West Palm Beach condo sales increased 19% y/y, and sales in Tampa rose 8%. Even more interestingly, Miami sales improved 2% y/y. Fort Lauderdale condos for sale do continue to sell if priced well enough, and even then Fort Lauderdale condo prices have increased by 19%. Even better is the fact that statewide condo prices rose by 4% in November to $86,700.
6. Real estate listings in Florida key markets are down, but the reasons for this remain unclear. It could be that a temporary decrease in bank owned real estate listings have defrayed the number while the shadow inventory grows larger. It could also be that the severe negative equity situation for many real estate owners is slowing down the listing rates. The monthly supply of real estate listings in most major metro areas in Florida (Orlando, Tampa, Broward, Dade) are all below the national average of 7.6. Then again, the number of mortgages not being paid in Florida are higher than the national average. Again, we suspect that negative equity and foreclosure delays have deflated the real estate listings number. We have read that there is about a 19 month backlog of statewide distressed inventory, not including bank owned properties. Yikes.
As real estate professionals, we wish the Broward County supply of shadow inventory would make its way to MLS. We see a shortage of real estate inventory here for our buyers, who often compete for properties and put in 2-3 contracts before having an offer accepted.
7. The rental market is improving. Occupancy and rental rate trends improved across most Florida markets during the 3rd quarter of the year. More specifically, Miami (+3.6%), Tampa(+3.3%) and Fort Myers (+2.3%) recorded the largest y/y increases in rent, while West Palm Beach (+0.7%), Fort Lauderdale (+1.7%), and FortMyers (+2.3%) showed less significant improvements. While Miami and Tampa may represent the highest increases in rental rate trends, the rental market in Fort Lauderdale is alive and well. The rental conditions across the state of Florida have improved over the past year, and we only expect that to get better in 2012.
8. November 2011 was the best month yet for Fort Lauderdale real estate sales, with an increased sales rate of 22%. August was also a good month, with sales increasing by 19%-perhaps due to the back to school effect. Many people put contracts on homes during that time of year before school starts.
9. So far, January mortgage applications are at an all time high at a 23.1% increase, which suggests that this rate of growth will continue. At least, we hope it will. This spike in mortgage applications means that many people are seeing the light at the end of the tunnel, and theyre not afraid to bank on it. The people who act before others are usually those who make the most money from their investments. Were hoping thats the case with the cowboys/cowgirls in this new economic frontier.
10. Mortgage interest rates are at an all time low, which makes for an inviting scenario for those with cash in pocket. Between the influx of international buyers who buy property with all cash transactions and the number of new home buyers and investors taking advantage of the low interest rates right now, we think there is more reason than not to feel optimistic about the Fort Lauderdale real estate market.
More good things are happening than bad in the Fort Lauderdale housing market-there is a light at the end of the tunnel, and its not a train, folks. You can read more about the Fort Lauderdale real estate forecast for 2012 in our recent article on this topic, too.
About the Author: Mike Benton is a real estate professional specializing in short sale and foreclosure properties in the greater Fort Lauderdale area. Learn more or find the best Fort Lauderdale homes for sale at