South Florida’s housing sector asserted its independence from national trends in July as a key measure of the real estate market improved year-over-year, with the region’s international buyers and still-drooping prices propping up the local housing market.
In July, pending home sales in Miami-Dade County stood at 10,113, up 40.5 percent from July of 2009, according to figures released Tuesday by the Miami Realtors. In Broward, pending sales stood at 7,830 in July, up 25.4 percent from a year earlier.
Pending home sales refer to the number of housing contracts that have been signed, and offer an early indicator of sales activity because typical sales have a one- to two-month lag between a sales contract and a completed deal.
South Florida sizes up well when compared to the national picture, where the pending home sales index hit a record low 75.7 in June, according to the National Association of Realtors. It was the second monthly falloff after the April 30 deadline to enter the federal homebuyer tax credit program, with June’s pending sales down nearly 19 percent from the same month a year earlier.
The local market hasn’t been completely immune from the post-tax-credit slump. In the past three months, pending home sales are down 3.2 percent in Miami-Dade and down 5.1 percent in Broward.
“We are encouraged by the statistics for pending home sales in the South Florida real estate market even after the expiration of the homebuyer tax credit,” Jack H. Levine, chairman of the board of the Miami Realtors, said in a statement. “While the number of pending sales has dropped slightly month-over-month, they are still significantly higher than they were a year ago.”
With financing still difficult to obtain, all-cash buyers and deep discounts on distressed properties are propping up sales, said Peter Zalewski, a principal at Bal-Harbour-based Condo Vultures.
About 60 percent of South Florida sales have gone to foreign buyers, who are more likely to pay with cash and were never eligible for the tax credit.
Additionally, more than half of recent sales in Miami-Dade and Broward counties involve short sales or bank-owned home sales. In the last 12 months, the number of bank-owned condos and single-family homes sold has more than doubled.
A short sale occurs when a home is sold for a price that is less than the value of the outstanding mortgage. In what has become a notoriously lengthy process, both the seller and the bank must agree to the price.
Banks have recently become more willing to allow sellers to pursue short sales, which now account for one in four South Florida sales.
There were 944 short sales in Miami-Dade and Broward in June, up from only 379 a year earlier, according to analysis by Esslinger-Wooten-Maxwell Realty.
That’s a reason to be cautious while interpreting pending homes sales data in a market like South Florida’s, said Doug DeWitt, Miami-based real estate broker.
Many short sale contracts are rejected by the bank after a seller agrees to sell for a price below what they owe, meaning those pending sales don’t lead to closings.
Additionally, because short sales take months to process, many remain in the “pending” stage longer than normal, boosting pending sales numbers for multiple months.
Read more: http://www.miamiherald.com/2010/08/03/1760066/for-s-fla-market-a-hopeful-sign.html#ixzz0vfJULtON
Avg. Sales Price: 379,000
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