Is It a Good Time to Buy or Sell Florida Homes or Condos?

This month I’m going to go over the reasons why it may, or may not be, a good time for you to buy or to sell a condo, townhouse or home in Florida right now.  But first, let’s look at how the market here did in May.

Last month I wasn’t so certain that the strong sales we’d been seeing would keep up at the same pace it had been but once again I was pleasantly surprised to see that the strength in our local market is continuing.

Now that the final figures are in we can see that May saw a nice increase over last May (and over each May back through 2007) and is up in the range of March and April which were the 2 highest months since 2006.

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru May 2012.

If you want to see a full size version of the chart just click on it, and check back in about a week to see the final numbers.

As I mentioned in last month’s newsletter, the strong sales has been affecting the overall inventory available for sale and in March and April we had a 4-5 month supply of inventory.  May’s inventory is not only in that same range but is even lower than either of those 2 months.

A 4-5 month inventory supply is considered to be in or moving into a seller’s market and as a result there is much more competition for those properties in high demand.  This doesn’t mean that every type of property will have high demand and multiple, competitive offers – there are some areas and types of properties where there is still a higher supply and less demand and these tend to be a little more difficult to sell and require more in the way of price adjustments.

Information for this chart was taken from PRO/Suncoast MLS from Jan 2007 thru May 2011 and from the MFRMLS for May 2011 thru May 2012.

So overall, May continued the trend in sales that has been going on since at least last November and the trend in inventory has continued since it began last March.  Prices are starting to rise some for those areas and properties that have a strong demand while those in areas or complexes with high supply and lower demand are not yet seeing much of an increase.

What This Means for Buyers

As a buyer, you will need to determine if it is the right time for you (depending on your personal circumstances) to be buying.  If you are in a position to buy and just haven’t been sure if you should wait or not, you should consider that the current trends here indicate that by waiting you will have less selection and will see increased prices the more you wait.  I don’t think we’ll see dramatic price increases like we saw during the boom years but I am noticing that prices are definitely up from where they were this time last year and there are more instances of multiple offers and sales prices above the list price than we have seen for nearly 5-6 years.

If you do decide that it is a good time for you to buy, you will need to be prepared as a buyer for the way the current market works.  It is vital that you have the financial aspect of your purchase worked out, whether you’ll be paying cash or getting financing.  You will not be able to make an offer if you don’t have proof of funds for a cash purchase or a pre-approval letter for financing, and taking the time to work this out after you’ve found a house or condo you want to buy may allow time for another buyer to come along and secure a contract, or put you in a position where you are having to outbid them.  This is especially true for those properties that are priced well.

The other thing you need to do as a buyer to be successful is to get things done quickly.  I can’t tell you how many offers I’ve had accepted because the listing agent knew they could have confidence that both me and my buyer client would follow through with what we said we would do – including getting them the needed paperwork quickly.  In a market such as this one where there may be more than one potential buyer, the agent who represents the seller (and the seller themselves) will sometimes find themselves in a position where they have to make a decision about which buyer’s offer to choose.  In some cases it all comes down to the price offered, but in a lot of cases it hinges on which buyer’s agent (and buyer) they feel most confident with and that they feel they can count on to get to a successful closing.

There is a lot I’ve learned over the years about what to do to make sure that my client is chosen as the buyer that the seller and their agent want to go with – but a lot of that depends on how you perform the tasks that are required of you.

What This Means for Sellers

You may have a house, condo or townhouse here that you’ve contemplated selling and are wondering whether you should sell now or wait.  A lot of owners are in that very same situation.  Whether it is a good time for you to sell now or not depends on a lot of factors.

Your personal financial situation is one of these factors.  If you have a loan on your property and are underwater and need to sell, you really shouldn’t hesitate at this time due to a few reasons.

First is the fact that there is a  law that allows you to avoid having to pay taxes on any portion of your loan that your lender writes off when you sell in a short sale.  This law is set to expire at the end of this year and we don’t know whether or not it will be renewed.  So if you wait too long and the law expires, you will have to pay taxes on any portion of your loan that your bank forgives.

Second is the fact that some lenders are actually helping people with underwater loans with their moving expenses.  These particular lenders will pay a borrower $5000 and up to $25,000 upon the completion of a successful short sale.  So if you had a hesitancy of selling in a short sale situation due to possible moving expenses, it would be wise to find out where you stand.

Third is the state of the current market here.  Right now sales are strong, demand is high and supply is low for many types of properties in many areas.  Hopefully this will continue but it doesn’t make sense to possibly miss out on selling in a strong market.

Another factor that should be looked at when deciding whether to sell now or not is the supply and demand for your type of property and in your area.  I recently had a client ask what the market was like for the condo complex they had bought in and unfortunately there were a good number of condos for sale in that complex with a small number of sales.  So right now wouldn’t be the best time for them to sell and they aren’t in a rush so they are going to wait.  However, there are certain types of properties and in certain areas where there is a strong demand with only a small inventory – and in that case it does make sense to look at selling now.

I can help you here by looking at what the current situation is for your home, condo or townhouse and your area.  You need to have as much information as possible to make your decision but if you want to sell and have been waiting for the right time, it wouldn’t be a bad idea to find out whether now is the right time or not.

That’s probably enough for now, but I thought I should at least try to give you a way to view the current market and how it might affect your buying and selling goals.

Please feel free to contact me for help with either of these areas and I look forward to seeing you soon.

Sincerely,
Ron