Timing is Right For South Florida Buyers

Prospective South Florida home buyers have been hammered by rising prices for years, but the Sun-Sentinel has some good news. If you are looking into buying a single-family home in South Florida, your time might very well have arrived.

Take the case of Joe Lynn.

He found a house for sale near Lake Ida Road in the southern part of Palm Beach County. The property was listed at a steep $675,000, but Lynn was interested nevertheless. Before he could make an offer, however, another buyer closed on the place after the seller agreed to reduce the price — by $50,000.

“I think I could have gotten it for under $600,000,” said Lynn, a 46-year-old Delray Beach builder and real estate investor.

But his missed chance is also a reason for hope. Lynn continues to search, confident that the cooling South Florida housing market will deliver him a house much more cheaply than he could have found even a few months ago. The question he and many others have is whether or not they should buy now, with the market in flux.

If you are in the same boat as Lynn, the answer depends largely on your intent.

“If you can afford it, now’s as good a time as any to buy,” said Robert Stroh, director of the Shimberg Center for Affordable Housing at the University of Florida in Gainesville.

Declining sales and appreciation levels returning to mild single-digit increases make the timing right to buy a home — if you plan to live in it. Investors who intend on flipping properties for fast profits might want to reconsider that strategy, with the current glut of inventory and buyers regaining bargaining power. Yet people who intend to occupy homes and build equity should be able to find good deals, with impatient sellers agreeing to take less money.

Sellers here had the upper hand for years. Receiving multiple, full-price offers in a matter of weeks has become commonplace with Palm Beach, Broward and greater Miami real estate. But with 30-year Florida home loan rates rising closer to 6.5 percent and investors opting to stash their cash in stocks instead of real estate, the supply of homes is finally outpacing demand. Thus, prices rising 25-30 percent or more a year will not happen, nor will homes selling in five days — at least not at current prices.

Home and condo sales declined steeply last month across South Florida compared with January 2005, the Florida Association of Realtors said, with the total sales in Palm Beach County marking the lowest since 1997. In Broward, January sales were lowest on record — the group began tallying monthly data in 1994. Prices are also leveling off.

• In January, the median home price fell below $400,000 in Palm Beach County for the first time since July, meaning smaller windfalls for sellers.
• Meanwhile, Miami-Dade and Broward County real estate are cooling down as well, with previously-occupied houses holding steady in the $370,000-$375,000 range.

This is the opening buyers like Yanet and Yasit Sanchez need.

The Hialeah couple owns a condo and wants to move to a bigger one or a single-family home soon. They drive through neighborhoods almost daily, looking for homes in the $350,000 price range. Yasit wants to move on a place now, while Yanet wants to let the market simmer down even further.

“I want to wait a few more months for homeowners to really get desperate. I feel like I’m going to get a better deal in the second half of the year. I feel that once a house sits on the market awhile, the owner will say, ‘OK. Let’s work out a price.’” said Yanet, 28, an associate with RBB Public Relations in Coral Gables.

That’s a possibility, for sure. But certainly one with an element of risk. Prices aren’t rising as fast as they were in the past five years, but homes aren’t losing value by any means. Therefore, prospective buyers should look for a good deal, but not hold out for a major price plunge.

“I learned when I was very young that he who hesitates is lost. If you wait for the bargain, the bargain may not be there. Buyers who do their homework and shop around will get a good home for a fair price. You never want to wait for the peak or valley,” Michael Cannon, managing director of Miami-based Integra Realty Resources, said.

Lynn thinks spring will be an ideal time to shop for homes, as the market likely won’t pick up again until the summer. Families typically move in the summer months so they can be situated before the next school year. One of Lynn’s tips is to look for properties that have been on the market for 100 days or more. There will often be more room for negotiation there.

But William Meredith, a Fort Lauderdale mortgage broker, said prospective buyers need to be careful about houses that have been on the market awhile. There’s usually a reason houses sit unsold, be it hurricane damage or a price that is just too high. He recommends consumers hire competent real estate agents and educate themselves on the fluctuating housing market.

“There are some bargains out there due to the amount of houses out there. That’s why it could be a time to buy. The best way to judge it is by looking, and when you have a good idea about what the market is, then you will know what a bargain is,” Meredith said.

The impact of the housing boom has been wide ranging, and hopefully this year will mark the beginning of a more balanced U.S. market. Florida home loan rates are still reasonable, and prices are starting to come down out of the stratosphere. If you have been looking into buying a home, this could be your opening! For a free, no-obligation consultation with our mortgage group, complete our free Florida home loan application — above!