Ft Lauderdale Real Estate Review

The Broward County Market Snapshot for March 2024 is out. We have a continued decline in sales volume for both single family homes and condos. Regardless of the decline in demand, median sales price for both are up more than 7% over March of last year. As for supply, inventory of single family homes is up 34.1% and months supply is up 44.4% to 3.9 months. It is a different story for condos. Inventory of condos has almost doubled and we have 7.2 months supply.

Months supply is an important number. It is also known as the absorption rate. It means that if nothing new came on the market, it would take 7.2 months to sell all the condos in Broward County, which is about where we were pre-pandemic before interest rates dropped. If your curious to know what the months supply of inventory is in your community or building is just divide the number of active listings by the average number of sales per month. If it is around 6, the market is balanced. The lower the number to more it favors sellers and the faster homes sell.

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Serving The Greater Fort Lauderdale area since 2006

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We are running out land to build on in South Florida. Especially in Broward County which is just a 10 mile strip of land between the ocean and the Everglades. We have become almost completely built out. In order to build something new a developer is most likely going to have to tear down an existing building. Currently I have seen older office buildings and churches torn down to make way for new apartment buildings. 

It is very common for waterfront property that has a small home built in the 1960s to be torn down and replaced by multi million dollar mansions. The older home may have some charm but the land underneath it far exceeds the structure on top of it. Everyone knows that home values has jumped significantly post Covid. But the rise in values of waterfront property has far exceeded everything else due to its limited supply. I have even seen some examples of homes that were larger and more modern get torn down. Take a drive up A1A in Hillsboro Beach and see all the new construction going on there. It is amazing. Many of those tear down projects are being done by speculators. A developer comes in buys the property, tears down the existing structure and rebuilds a new oceanfront palace to resell. 

I have also seen some amateur flippers that didn't understand the that the property they bought to renovate was obsolete and the best use was to tear it down. Four years ago before the market went on fire, one such flipper asked me to list his property in Fort Lauderdale after he "rehabbed" it. The house was just barely 1000 square feet with only two bedrooms. It had 50 feet on a canal and it was walking distance to the beach. He put $50,000 into it thinking he could make close to $200,000. Instead he lost money because nobody wanted to buy a 2 bedroom home for $1,200,000. Taxes and insurance would be over $30,000 for such a property. That property was eventually purchased by someone who knew what they were doing. It was torn down and replaced with a 4000 square foot home that took up most of the lot.

It isn't just waterfront homes that are tear down candidates. Older oceanfront condos are being targeted for redevelopment. They are mostly in Miami, but it could happen here in Broward as well. Developers are attempting to buy out condo owners at a big premium. It is a long and difficult process that usually requires at least 80% of the building owners to agree to a buyout. The new law that goes into effect in 2025 that requires condos to carry adequate reserves for repairs and maintenance will likely accelerate the process because many owners won't be able to afford the assessments that are coming to be in compliance.

Owning a tear down candidate isn't a bad thing. It just means the dirt underneath the house is worth a ton of money in relation to the rest of it. Before you do major renovations to a potential tear down candidate get the opinion of real estate professional like myself. Selling it As-Is many be the best course of action.

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Serving The Greater Fort Lauderdale area since 2006

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On April 1, 2024 my listing at 2670 E Sunrise Blvd # 1224 was sold. This property is a a condo hotel known as Gallery One. It is unique in that it allows daily rentals and Airbnb operations. Owners can choose to have Hilton run it under one of two management agreement options or they can self manage.

This sale was a challenge. The monthly condo fees doubled in the past year and a minor non-monetary lawsuit caused the first contract to fall apart. With the help of a title agent that had experience closing in the building the sale was able to be completed in cash to an owner that already owned another unit in the building. The asking price at the time of contract was $229,000 and the sale price was $200,000. See the great review the seller gave.

See the listing details here.

If you have a home or condo in the area you wish to sell please call me for a consultation. 954-895-2431

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Serving The Greater Fort Lauderdale area since 2006

You can reach me 954-895-2431

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I just listed a very nice turn key condo in Palm Aire Country Club. This 3 bedroom corner unit was undated 10 years ago. It is being sold completely furnished. It features impact resistant windows and doors throughout and overlooks the Cypress Course.

Asking price is $269,900.

See the complete listing details here. Follow Link

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Serving The Greater Fort Lauderdale area since 2006

You can reach me 954-895-2431

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The Broward County Market Snapshot for Feb 2024 is out. The statistic that stands out to me is Condo inventory. It is up 112% over last year and the Month's Supply of Inventory in now 7.8 months. That means we are crossing over into a buyer's market for condos. At the beginning of the years everybody's condo fees went up and some of them were substantial increases. Despite these fee increases median sale prices are up 6.6% from last February.  

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Serving The Greater Fort Lauderdale area since 2006

You can reach me 954-895-2431

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In my latest video I discuss the implication of the NAR Lawsuit Settlement and how it will affect both agents and home buyers.

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Serving The Greater Fort Lauderdale area since 2006

You can reach me 954-895-2431

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It is generally accepted that if a home priced correctly should sell in 45 days or less. That is the short answer to the question. 

Of course there are exceptions to this rule. We don't expect a multi-million dollar waterfront home to sell that fast. The pool of buyers for that type of home is much smaller.  Folks in colder climates have to deal with the fluctuations of a more seasonal market. It takes longer to sell a home in the winter than in the spring or summer. Here in Florida we don't need to worry about that much. Average days on the market can vary from neighborhood to neighborhood depending on supply and demand. It is a complete myth that selling quickly means you left money on the table. 

For the purposes of this article I am going to focus on homes most of us can afford. Let's call that anything within 50% of the median price in your area. You may have a home on the market or about to put one on the market and need to know what to expect. My expectation as a seasoned agent in a warm climate would be 45 days or less.

The two keys factors in home selling are Price and Exposure.

If you are at the 45 day day point or beyond, it is time to re-evaluate the marketing strategy. But it could also be the price. There is an undeniable correlation between price and the amount of time it takes to sell a home. Think of it this way. No matter what home we are talking about, there will always be a price it will sell for tomorrow. There is also a price where it will never sell. The true market value is somewhere in the middle. 

Setting a price is as much art as it is science. In a cookie cutter community with a lot of sales activity it is usually not too hard to figure out a homes market value. Often we don't have that luxury. So it is important to listen to what the market is telling you after the home is listed. Your agent should be trying to get feedback from buyers whenever possible. Keep in mind, it may not always reliable. Most folks don't want to offend anyone with harsh criticism. Conversely, they may have a serious interest in your home, but don't want to show it and lose negotiating leverage.

I prefer to judge my listings performance with hard data. For me the best determination of how well my listing is doing in the market is the number of showing requests I get from other agents. For agents, time is money and most won't waste their time showing a listing they don't think they can make a deal on.

Not everyone who looks at your home will like it enough to make an offer. It usually takes between 8 and 10 showings to generate one offer. From there it can take several offers before a seller can make a deal.  So as a seller you may need to have from 15 to 30 showings before you get it under contract. Therefore, if you aren't getting at least one to three showings a week, it doesn't look good for reaching a goal of selling in 45 days or less. If time is of the essence then you don't want to wait until you are at the 60 day mark to take action. Instead, evaluate the situation every two weeks and make adjustments if you aren't getting the traffic needed to reach your goal.

I bet if you are a seller you were hoping this article wouldn't be all about price. There are other factors that could be affecting traffic through your door. Proper marketing and exposure is important too. Ask your agent for links to your listing where it is being advertised. Are there plenty of high quality photos? Do the photos flatter the home? I'm sorry to say this but most agent make lousy photographers. The MLS is littered with horrible photos. Professional photography make a huge difference.

Where is it advertised? It's important that your home is visible on all the major real estate websites. Social media is becoming a great way to increase the visibility of your home listing.  Digital advertising is changing rapidly. Have you ever shopped for something online and seen ads for the same item elsewhere on the internet? Since you are reading this you will likely see my ads soon. 

Another key factor that will affect traffic to your home is the commission offered to the buyers agent. This may shock you, but agents tend to go where the money is. If you are offering a commission that is less than the properties you are competing against, your home will be promoted less.  9 out of 10 buyers will hire an agent to help them buy a home. Consider offering a bonus to the buyers agent.

Who wants to buy a home no one else wants?

Without question the number one question I get asked when showing a home to a prospective buyer is "How long has it been on the market?". This is an important criteria for buyers. Who wants to buy a home no one else wants? Once a home has been on the market for more than 90 days that number is working against the seller. At this point buyers will question whether there is something wrong with the property or the neighborhood. They may also question whether the seller is truly motivated to sell.  The number two question I get asked from buyers is "Why are they selling". That's because buyers prefer to work with motivated sellers. 

If your home has been on the market for a while its time to reflect on your motivation to sell. You should also take a close look at how you can make your home more competitive against other homes in the neighborhood. Conditions favor the seller right now a little bit. Yet, there is enough uncertainty in the economy that buyers are being very cautious. It is a myth that there is one perfect buyer for your home. You will grow old waiting for that phantom buyer.

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It is a proven fact that the easier and less expensive it is to finance a home, the more it will sell for in the end, and the quicker it will sell. Almost all of the run up in values in the last few years can be attributed to the extremely low interest rates we had post pandemic. Conversely the shock of expensive mortgages has curbed demand and appreciation. Here I outline the pros and cons of seller financing, also known as a purchase money mortgage or "taking back paper".

A homeowner that has an otherwise difficult property to sell can add value by simply offering financing terms that make it more attractive.

Pros of Seller Financing:

Expanded Pool of Buyers: Seller financing opens up the possibility of purchasing a property to a wider pool of potential buyers. Buyers who may not qualify for traditional bank loans due to credit issues, lack of a substantial down payment, or unconventional circumstances can benefit from seller financing. For example, business owners can be high earners but banks prefer to lend to people with steady provable W-2 income.

Flexible Terms: Sellers have the flexibility to negotiate terms directly with the buyer, allowing for more customized agreements. This flexibility can include the down payment amount, interest rate, repayment schedule, and even the duration of the loan.

Streamlined Process: Seller financing often streamlines the buying process by bypassing the stringent requirements and paperwork associated with traditional lending institutions. This can lead to quicker transactions and less administrative hassle for both parties involved.

Higher Sales Price: Sellers may be able to command a higher sales price when offering financing, as they are providing a valuable service and assuming additional risk. Buyers may be willing to pay a premium for the convenience and accessibility of seller financing.

Interest Income: Sellers can earn a steady stream of interest income by financing the purchase of their property. This can be especially attractive in a low-interest-rate environment where alternative investment opportunities may offer lower returns. A seller can even higher a company to service the loan for them for a nominal fee. They send out statements and handle collections on your behalf.

Tax advantages: You may be subject to capital gains taxes if you are selling a non-primary home or if your gain is more than $500,000 for a married couple. Seller financing can defer capital gains taxes. Check with your accountant or financial advisor to see how it could benefit your tax situation.

Cons of Seller Financing:

Risk of Default: Seller financing carries inherent risks for the seller, chief among them being the risk of default. If the buyer fails to make timely payments or defaults on the loan altogether, the seller may face the burden of foreclosure or costly legal proceedings to reclaim the property. A properly structured promissory note that has a higher, built in default rate can actually make this an advantage if there is enough equity in the property.

Lack of Liquidity: By tying up their funds in a seller-financed transaction, sellers may face a lack of liquidity. Unlike a traditional sale where sellers receive the entire purchase price upfront, seller financing involves receiving payments over an extended period, limiting immediate access to capital. Notes are an asset that can be sold or even borrowed against as collateral. Most seller financing is amortized over a 15 to 30 period by have what is know as a Balloon Payment due much sooner. For example 5 to 10 years is common. If the terms of the note dictate a Five Year Balloon payment, the buyer has to pay the seller the entire loan balance in five years either by selling the property or refinancing with a different lender.

Credit Risk: Sellers assume the credit risk associated with the buyer's ability to repay the loan. Without the rigorous underwriting standards of traditional lenders, sellers may unknowingly extend financing to buyers with poor credit histories or unstable financial situations, increasing the likelihood of default. Substantial down payments can overcome this risk.

Legal Complexity: Seller financing arrangements can involve complex legal agreements and documentation. Both parties should seek legal counsel to ensure that the terms of the financing agreement are clearly defined and legally enforceable.

Opportunity Cost: Sellers who opt for seller financing may miss out on alternative investment opportunities that offer potentially higher returns or better diversification. Tying up capital in real estate transactions may limit the seller's ability to pursue other investment avenues.

Most owners of residential real estate shy away from seller financing because of the perceived complexities. Seller financed deals are closed everyday here is South Florida. What you need is an attorney that can draw up the mortgage documents for you. Those costs can be passed on to the buyer. I can refer you to an experienced real estate attorney if you need one.

Seller financing can be a mutually beneficial arrangement for buyers and sellers in real estate transactions, offering flexibility and accessibility that traditional financing may not provide. However, it is essential for both parties to carefully weigh the pros and cons and fully understand the risks involved before entering into a seller financing agreement. Clear communication, thorough due diligence, and proper legal guidance are critical to ensuring a successful and mutually satisfactory transaction.

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Serving The Greater Fort Lauderdale area since 2006

You can reach me 954-895-2431

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Redfin is reporting that homeowners are now staying put almost twice as long. No doubt that is a contributing factor to the supposed housing shortage we are seeing now. Homeowner's tenure is a statistic I haven't paid much attention too throughout my career. I do remember when I got started selling real estate in 2006 I was trained on the importance of staying in touch with my customers because on average people sell there home and move about every six or seven years. I was surprised to learn that since 2005 the length of home ownership has been trending up. Way up in fact.

Of course there are variations from region to region. Florida, you would think would have a shorter duration than the national average due to the aging population and more transient nature of those that live here. But, also according to Redfin, the Miami Metro region is pretty close to the national average. 

Boomer's seem to be happy to just age in place. I have noticed less demand to downsize since prior to Covid. I used to get a lot of calls from folks wanting to leave their big house in the western suburbs and downsize into an oceanside condo or townhouse. That's not happening as much anymore. They are still coming from out of state, but I see less movement locally.

The chart shows that tenure peaked in 2020 and has since been declining a bit. The forecast is for tenure to remain flat at current levels. 

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Serving The Greater Fort Lauderdale area since 2006

You can reach me 954-895-2431

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The Market Snapshot is out for January 2024. Values are still trending slightly higher in Broward County. Inventory is up slightly for single family homes and way up for condos over this time last year. The number of active condo listings is up 100% from January 2023 and we now have a six months supply of condos. That means we are in a balanced market for condos. Neither the buyer or the seller has the upper hand. I noticed a lot of increases in Condo fees at the beginning of the year, thanks mostly to increased insurance costs.