When taking generalizations into consideration, one has to be careful. Nobody denies that the Housing Market in South Florida was deeply affected by the crisis but even though the road to fully recovery is still a long one, we can find positive signs. Inventories are stabilizing and buyers are taking advantage of low interest rates.
According to NAR (National Association of Realtors) pending home sales have modestly risen following a sharp drop in the months immediately after expiration of the homebuyer tax credit. The Pending Home Sales Index (PHSI), a forward looking indicator, rose 5.2% 79.4 based on contracts signed in July from a downwardly revised 75.5 in June; it’s 19.1% below July 2009 when it was 98.1. Pending sales data reflects contracts and not closings, which usually occur one or two months later. This improvement though modest shows a good sign.
Let us examine the inventories in Broward and Dade County.
Dade County shows an inventory of 14.1 months by July 2010 compared to 15 months by July last year. During the past months inventories remained close to 11 months due to a larger number of sales as a result of government incentives. Where is this inventory going to? We need to monitor it closely.
Broward County shows an inventory of 9.5 months for July 2010, close to the upper limit of 6- 9 months for a healthy and stable market. Again where this inventory is going to? We have to watch out for the effects from the general economy.
According to an article shown on KCM (Keeping Current Matters) months’ supply of inventory will increase and prices will drop. Demand for housing in the second half of the year will be stable at best. At the same time more sellers are beginning to realize that this may be the time to put their houses on the market before prices drop any further.
But then again, we have to take global and general statements as they are: guidelines, general trends. The real facts and real effects on every market will vary depending on a large number of factors.
South Florida Market continues to be a very attractive option for buyers wanting to take advantage of better prices and low interest rate, buyers wanting to upgrade, investors wanting a reasonable return.
The road to recovery is still long but let us try to focus on every bit of improvement.
Avg. Sales Price: 379,000
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