How’s The Real Estate Market?
I love this question. I probably get it three times a day.
The answer really depends on two things. Who we’re asking and what class of property.
In the real estate industry, we have Agents, Brokers, Investors, Developers, and many more. Depending on who you ask, you can expect very different answers. We also know that there are several real estate asset classes like residential, commercial, agricultural and industrial. So to simplify things, lets review 3 facts about Miami’s Single Family Home Real Estate Market.
- 1,335 Homes Sold in June- Down less than 1% from June 2017
- $355,000 was the Median Sales Price- Up 6% from June 2017
- 56 Foreclosures/REO Closed Sales- Down 37% from June 2017
I’m not an economist so I don’t think it’s appropriate for me to interpret this data. But I’ll do it anyway, what the heck.
The amount of homes sold in June 2018 compared to June 2017 was virtually unchanged. The medium sales price of homes in June 2018 were 6% higher than they were in June 2017. And foreclosures being down 37% is huge. It’s a sign that the economy is stable. People have money to pay their bills and aren’t losing their homes.
Now I don’t want to undermine the fact that there are some practical reasons to be cautious of the market. Perhaps the most important factor is the following:
Home prices continue to rise and low inventory limits choices. The result is a decrease in affordability for buyers. However, the solution is relatively clear. Two things must happen:
- Builders need to produce more inventory, particularly in supply starved markets, which is where the home prices have ballooned the most.
- Home prices need to slowly decline. Once that happens, they will begin to offset the mortgage rate increases and ultimately make homes more affordable again.
But there are also reasons to be optimistic, at least in the near future as far as I’m concerned.
Everybody is crying about mortgage rates are rising. Sure, they’re going up. But are the rates actually high?
By historical standards, not at all.
Think about this. Leading up to the recession between 2007 and 2008, mortgage rates reached 6.7%. Today, the average rate on a 30 year fixed mortgage is 4.7%.
So the real question is, why is this important to you? 4.7% vs. 6.7%?
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