Low mortgage rates and Federal incentives had created a surge of sales towards the end of 2009 and helped prices begin to stabilize. This increase in activity levelled off when it was announced that the Federal incentives would be expanded and extended into 2010 as buyers realized they could take longer to make their commitments.
The 548 single family homes that sold in Dade County in January were almost 37% below December’s figures and almost 4% below January of 2009. The Condo market saw similarly disappointing numbers as countywide closed sales (732 units) were 31% below the previous month. On a positive note, condo sales are up 16% versus the closed units of January 2009.
Industry forecasters predict a steady but modest improvement in home sales and new construction for 2010. The Federal Home Buyer Incentive Program is due to end in April, when South Florida sales tend to soften which might result in another dip in sales (and consequentially of prices). At about the same time, the Federal Reserve’s Mortgage-Backed Securities Purchase Program will also be ending resulting in a slight increase in mortgage rates. This will increase the cost of purchasing and create pressure to further reduce prices in some sectors of the market.
It definitely remains a buyers market with home buying affordability at one of its highest historical levels. 2009 ended on a strong note for home sales and in 2010 the next phases of recovery will be slow but steady.