To Our South Florida Friends….
As we wrap-up 2007 and turn our thoughts toward 2008, the common question that I am being asked by many of our home buyers and sellers is, “How much longer will this sluggish market last”?
While many factors help to answer this question, the simple answer is that the first signs of a recovery will be a decline in our inventory levels. The build-up of South Florida inventory began in April 2005 when Realtors® had 14,000 single-family homes and condos for sale in Miami-Dade and Broward counties. By November 2007, we had 82,000 homes and condos in inventory. These numbers are expected to increase slightly into 2008, but at monthly increases far less then the double-digit increases of 2006. Once the inventory levels show sustained monthly decreases, values will then have a chance to begin re-building. Some higher-end price ranges have already begun to see reductions in the number of properties for sale; therefore, some are saying that the recovery in selected markets has already begun.
In the short term, we’re going to continue to see value adjustments. These adjustments will not be uniform across all markets, or all across all product types. Neighborhoods and/or buildings with high concentrations of investors and speculators will have greater adjustments. More desirable properties in neighborhoods or buildings with higher percentages of owner/occupants will maintain their values, while some will even experience modest increases during 2008.
We forget that we have seen steep downturns in our volume of sales in past market cycles… only to see the turn-arounds come ever-so-quickly as buyer confidence re-kindles. Our sales associates have spoken first-hand to many potential buyers over this past year who have told them that they are “sitting out” the market, waiting for a final settling of values. The number of properties rented monthly through our Multiple Listing System is up 54% from two years ago… another good indication of the demand that is “waiting in the wings”. By 2011, Florida is projected to bypass New York as the third most populated state in the nation behind California and Texas… which will create additional housing demand. The # 1 driver of real estate activity is population growth, and no one is suggesting that our growth will not continue. New full-time residents, as well as our part-time residents, will continue to create solid long-term demand for housing.
South Florida’s market fundamentals are still very strong: solid interest from international and second-home buyers, good corporate growth, low unemployment, mortgage rates still at historically low levels, a dwindling supply of developable land, and a permanent population that is still growing by almost 70,000 new permanent residents per year in just Miami and Ft. Lauderdale. Add ample housing inventory, a dose of sunshine and the attention of the entire globe… and you have all the ingredients for a world-class region that will continue to grow!
So… what should we be doing to ease the anxiety that comes with each new alarming front-page article or national news segment about our marketplace? We need to inform ourselves with accurate information. There are many great opportunities today to own a single-family home or condominium that didn’t exist just a few months ago, but it takes a little extra effort to find that fair value for both buyer and seller. One of our associates can share with you many examples of the great deals which are now available… or you can spend a few minutes on your own at http://ewm.com/properties/ to see firsthand the hundreds of South Florida properties from which you can choose.
Our future today is as bright as it has ever been. Those who have the vision to make a move today will be the ones who participate in South Florida’s vibrant future. There are many great opportunities spread across all our markets.
Our EWM Family wishes you a joyous, healthy and prosperous New Year. We all have much in which to look forward. South Florida is a wonderful place to call home.
Sincerely,
Ron Shuffield
President
Esslinger-Wooten-Maxwell, Inc.
A Member of the HomeServices of America Family of Companies
An Affiliate of Berkshire Hathaway