Property Prices of Miami Condos Increase for the Fourth Consecutive Month

Figures from the Miami Association of Realtors show prices of condos have increased for the fourth consecutive month, and overall residential property sales look set to have ended the year on a high.

Sales of previously owned single family homes rose by 11% in November in the Miami metropolitan area when compared to the same month in 2010, while sales of previously owned condominiums increased by 2%.

The median price of a condominium now stands at $125,000, an increase of 18% when compared to the same time a year ago. The median price of a single family home has remained steady at $171,300.

In Miami Dade County the average price for a single family home rose by 8.2% to $324,846 in November 2011 compared to $300,369 in November 2010. However the increase for the average sale price of condominiums is even more impressive having risen by 21.5% to $226,151 in November 2011 compared to $193,486 in November 2010.

The chairman of the board of Miami Association of Realtors, Jack Levine feels these figures reflect the strengthening property market in spite of continued restrictions on mortgages.

Sales to overseas buyers still account for a considerable percentage of all transactions, as do cash sales. Some 79% of condominiums bought by overseas buyers were purchased with cash as were 41% of single family homes. As the excess housing inventory is being absorbed the effect of short sales and foreclosures on sales prices are decreasing as the market gradually becomes more balanced and healthy. In Miami Dade County the inventory of residential listings has decreased by 40% during the last 12 months from 24,278 to just 14,461 active listings.

Increased Demand for US Holiday Homes

Although house prices in many regions of the US are still falling, the luxury holiday home sector is proving to be far more resilient. A number of estate agents are reporting that they are receiving far more enquiries than they have had for years.

It certainly looks like a good time to buy provided you intend to invest for the long term, as property which was once out of reach to many is now far more affordable. A three-bedroom home in Vail, Colorado which changed hands for $3.3 million in 2008, was sold in February for just $2.5 million.

Another property on Hilton Head Island, South Carolina previously sold in June 2006 for $1.2 million, was bought for just $750,000 in April this year.

Overall the average price for holiday homes was $150,000 in 2010, which is a reduction of around 25% since 2006, however homes in the multimillion dollar range have fared much better, and this sector is recovering much more quickly.

The recovery of the second homes market hasn't gone unnoticed, as on Palm Beach Island, Florida, sales have increased by 50% to the year ending June 30, while sales in the Hamptons have risen by 59% during the second quarter compared to a year earlier. Sales in Aspen, Colorado have increased by 10% to the year ending May 31.

In spite of these figures being very encouraging, there is no suggestion of a property boom, as the types of properties which are selling well are those located near water or near ski slopes. Properties in less desirable areas are still taking a long time to sell. Another problem is financing, as banks tend to be much warier about second home mortgages, particularly the so-called "jumbo" loans which are more than federally guaranteed limits.

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Florida Property Market Continues to Show Signs of Improvement

The Florida property market continues to show signs of life, as sales of condominiums in Miami have increased by 46% over the last year, and sales of family homes have improved by 20%.

In May, sales of condominiums increased by 1.1% on April while house sales increased by a respectable 5.4%, according to a report from Miami’s Association of Realtors. An incredible 60% of closed sales were cash transactions, while international sales accounted for 60% of this figure. International sales accounted for 90% of new construction sales.

It’s not just Miami that is seeing a turnaround in the market, as sales throughout the whole state have increased. Condo sales have increased by 17%, while single family home sales have increased by 3%.

According to Jack Levine, chairman of the National Association of Realtors, the performance of the housing market in Miami is exceeding expectations, with sales now at their highest levels since the boom years.

At the moment there is just a 7.4 month’s supply of housing, as both international and American buyers take advantage of bargain prices. However the high number of foreclosures and short sales is continuing to have an effect on the market, as 57% of all closed sales during April were distressed in some way.

The good news is that prices seem to be gradually recovering in Miami, as even though prices for single family homes in May were 8% lower than a year ago, they had increased by 7% from the previous month. Condominium prices were 1% lower compared with a year earlier, but had increased by 7.4 compared with April.

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Foreclosures Make for Hot Florida Property Investments

Ocala, Florida has seen home prices drop lately and the sales of single- family homes have increased as the abundance of foreclosures abound. With the struggling economy and higher unemployment rate, it seems as if now is the time for those wanting to relocate to Florida to purchase that retirement or winter home.

It appears that property prices for residential homes last month in Marion County were at levels that we haven’t seen since the 1990’s. The average median home price decreased from $87,800 in November 2009 to $75,900 in November 2010. That is a significant 14 percent drop and the biggest percentage drop in the Florida metropolitan area.

The home prices in Ocala have been decreasing for about three years now due to the recession and double digits unemployment rate. Home investors at home and abroad are taking advantage of the price decline and buying up investment properties. According to MLS surveys, just last month in November, realtors sold 269 residential homes compared to 251 a year ago in 2009. That is a 7 percent increase in sales mainly due to the amount of foreclosures on the market. The past year has seen many more foreclosures and distressed sales due to the struggling economy.

Almost 630 homes were on the foreclosure list in November, which equals out to one in every 251 homes were looking at foreclosure. With so many foreclosures, investors have taken advantage of such a prime market to buy up homes for short or long term rentals in the hopes of gaining significant returns in the future.

American Property Market: Volatile but Bountiful in Opportunities

The US property market is probably the most volatile in the 1st world right now. We have reports of prices falling, and we still have tens of thousands of homes being repossessed every week, some reports talk of falling repossessions because of the freeze, other's say the freeze was barely a blip. On the other hand mortgage interest rates are at all time lows and most reports concur that sales are increasing in most regions.

Volatility aside, few can deny that the US market is currently abundant with opportunities, and that these opportunities are in their best presented to foreigners, or certainly out-of-state buyers. Foreign and out of state buyers needn't care about the effect that the rock-bottom price they are paying for a distressed or repossessed property, only that the price they are getting for will increase their rental yield (rents haven't fallen as fast as sale prices, and there is no such thing as a distressed rental -- not now anyway). Not to mention the potential capital growth when America finally gets back on her feet.

And what an opportunity it is:

The dozens of repossessions don't only increase availability of property at rock bottom prices, but they also increase the number of people and families in demand of rental accommodation. Thus, investors can buy in at low prices and with a large pool of potential tenants.

In fact, there is an even better way to invest...

Shrewd investors, developers and anyone else with the cash to do so, have decided to cut out the void between buying and finding a tenant, they are buying distressed homes and renting them back to the original owner. This is why we are currently seeing so many tenanted deals coming across the Atlantic. The average yield on the tenanted deals is 6%.

There is nothing average however, about the Village at Town Centre development in Orlando, offering tenanted 3 bedroom apartments just minutes from Disney World from just £47,300. Understandably, net yields of 10% are currently being achieved.