Real Estate Vultures Don’t See Lowered Prices Yet in South Florida
With the South Florida housing market stalled, one would think real estate vultures - those hoping to swoop in, receive approval on Florida mortgage loans and snare houses at low costs - would be circling. However, prices are yet to fall far enough to create the bargains these buyers crave.
Even though many sellers in the area are desperate enough to seek help from above, these individuals haven’t taken the step of actually reducing the prices of their properties. That may come soon, though. How else will they attract future owners just waiting for a break in order to take out a Florida home mortgage?
Pam Liebman, CEO of the Corcoran Group - a brokerage that specializes in Manhattan, Eastern Long Island and Florida properties - says she has seen no price fall off to date in Florida.
“Buyers may be negotiating more, but sellers are mostly holding firm,” she says. “There’s been a drop in sales volume but not in prices.”
The latter should may soon take place, however. Just ask Jonas Lee, co-founder of Redbrick Partners. He makes his living buying residential properties at the right price. Lee hasn’t noticed any wholesale bargain hunting yet, though he says the general slowdown in markets nationally should create buying opportunities for vultures.
Lee says that there could be some bargains soon in some once strong markets, such as South Florida. While applications for Florida mortgage loans remain low, that figure should rise as sellers realize they must come down on their asking prices.
Jim Gillespie, CEO of Coldwell Banker, says some real estate investors were able to grab bargains in the hurricane-devastated Gulf Coast this year, something he admits to feeling ambivalent about.
“I’m all for an investor going into a marketplace to fix up homes and put them up to code - something that the government hasn’t been able to do,” Gillespie says. “But if they’re just going to try to steal a property, it’s not the right thing to do.”
As for vulture investing, Gillespie doesn’t think that the once bubbly markets on both coasts offer much; prices are still just too high and rents, although strong, don’t throw off enough money to produce cash flow. Investors buying in most of these areas would have to rely on big price rises, something that may not be in the cards for a while.
Don’t get caught up in that thinking, however. Even in a down time, looking into a Florida mortgage loan and buying a home could still be a great investment.
