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The Real Estate Market
The real estate market is a cycle.
It will cycle from a peak seller's market where prices are driven up by conditions where there are more buyers looking to purchase homes than there are homes on the market, to a buyer's market where there are more homes on the market than there are buyers willing to purchase homes.
The cycle will vary from area to area, city to city and neighborhood to neighborhood
.
It will also vary for different price ranges and types of properties. If you intend to purchase or sell real estate, It's important to review current statistics to get an overview of your area's market activity and plan accordingly.
A buyer's or seller's market can be determined by how many months of inventory is available based on the number of homes on the market divided by the number of homes that sold in the same area that month. Six months or less is considered a "hot" market and is great for sellers. Twelve months or more of inventory is considered a "slow" market" that is good for buyers. Anywhere in between is considered a "level" market.
Buyers drive the real estate market.
They
are influenced by
interest rates, loan programs, housing options available to them, competition from other buyers, holidays, seasons, school years and other events that occur that would cause them to hesitate to make a commitment to a purchase. Foreclosures have created a downward push on property values as buyers find some of these are good bargains. Short sales are another option but are difficult to work and the wait time more than many buyers can handle.
Interest rates
remain very low. Changes in the sub prime mortgage market reduced the quantity of buyers. 100% financing is no longer available.
Housing options
available to buyers were at record highs by mid 2008, but inventory levels have been on steady downward trend indicating a shift in the market cycle. We've gone from buyers having all the time they needed to shop and decide to properties selling rather quickly and multiple offers on the same property becoming a common occurance. Selling at asking price or above is also on it's way back.
Competition
is driven by many factors, especially here in South Florida. This is a destination target area where 2nd home, retirement, investment or vacation home purchases are made by our neighbors north of us, investors both local and foreign, and a fairly consistent number of people moving to our area. Now Buyers that have been renting as they wait to time the bottom of the market and get their best deal possible are making their move. Competition is growing as inventory levels decline.
Holidays
influence market activity. The market generally slows down at the end of each year between Thanksgiving and New Years. Other holidays may affect or slow real estate activity but for the most part it will be offset by the activity generated imediately after.
Seasons
also have an influence. Seasons influence the market in South Florida due to our tropical and warm environment those in colder climates may visit during the winter months. A percentage of them will purchase a second or vacation home here and others will decide to move here permanently.
School years
influence the market somewhat due to the fact that some homeowners and buyers with children in school will wait the school year out to minimize the distraction and stress of moving to new home and school district.
2008 Miami-Dade County Real Estate Market Review
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