The inventory persists in piling up, weakening the position of some sellers who hold variable rate mortgages. Miami continues to be an appealing place for investing although if you intend to sell properties, you ought to be ready not to expect to acquire short-term gains as of the moment. The most positive requirement for those who want to take part in the Miami Real Estate market is the ability to hold property for at least 2-3 years.

      Activity has increased in terms of pending residential sales up 118% from April to May in Miami-Dade County, and the rate of price increase has slowed in Miami as the Miami Real Estate market, in general, has been trending towards favorability to buyers. Pending sales numbers indicate the amount of purchases one can expect to close in the next 30-60 days on the average, whereas, closed sales are the consequence of activity initiated 40-60 days before on the average. The number of closed sales was down 17% within the span of April to May, which is indicative of the state of activity from about two months ago. The median sale price, however, is not diminishing as the property values generally remain stable. Meanwhile, the prices are not increasing quite as spectacularly as they were before, but currently still pacing at record rates. So far, 2006 is a strong year and it is predicted that such a trend will carry on throughout the year for sales in the Miami area. As a word of admonishment though, present sellers must focus on planning on their homes which are taking longer to sell.

      The next several months are going to be very favorable for buyers because interest rates are still relatively low, and sellers are showing more than usual flexibility in terms of price negotiations because of the decelerating rate of sales of their homes and condos. Prices still remain stable in the single-family home market; condo prices however, point to a small drop in some buildings.

      Currently, the supply of condos for sale is still considerably increasing. Look for lower prices in some of the luxury buildings and the vanilla condo conversions where there currently is a lot of inventory and the supply far exceeds the demand right now. In some of the luxury buildings, the sellers were anticipating 25%-50% annual appreciation to continue and had factored that into their selling price. Now reality is forcing these sellers to adjust their prices more drastically than others. Also, look for a number of investors to bail out of the market as they realize they will not be able to flip their properties for the profits they were hoping for. They will want to sell sooner rather than later as their carrying costs are becoming increasingly burdensome.

      On the positive side with regards to the selling market, Miami Real Estate resort areas are always in high demand and will continue to attract buyers both foreign and local, investors, and celebrities. Since the dollar is quite weak in Europe, potentially increased investment will come from there as well as from other foreign countries where there is political unrest and unstable economies such as Latin America.

Earl Juanico

Real Estate News