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I’ve been a Miami Realtor since 1993, I’m a second generation Realtor and a Miami native. I’ve closed a lot of transactions and negotiated over 4,100 deals.
So what is going on in the market? It’s pretty crazy. These are some of the headlines that I picked up in the last week. I mean the earth is falling apart, right? ● “Average market rates climb to a 13 year high”
● “Economy’s future unclear”
● “Housing predictions.. will prices drop? Maybe not.
Then you’ve got one in the middle.
● Miami and Tampa are the most popular destinations for relocating buyers in the country. What in the world is going on?!?!?! Let’s talk reality. These are real statistics. I pulled this yesterday. This is all in Miami Dade County. Remember these stats change constantly. I split this into single family homes and condos/TH/Villas between $ 800,000 and 2 million.
●Single Family Homes: There are 858 active listings right now in Miami Dade County. This is our busiest selling season typically. This is the spring summer season. That’s crazy low. That shouldn’t be like that.
●Condos/TH/Villas: These are not even that much better. Only 1,237 active condo listings in Miami Dade County.
●Single Family Homes: There are 386 pending sales. Why? Because there’s no inventory, that’s why. I did this search two days ago and it was already different, there were more listings and fewer pendings which is good because we need the market to normalize.
●Condos/TH/Villas: There are 358 pending sales in Miami Dade County.
CLOSED SALES – This is going back 90 days.
●Single Family Homes: There are 715 closed sales.
●Condos/TH/Villas: There are 921 closed sales.
So what does this mean? Let’s break it down. We basically have a 1.95 months of supply inventory. This is up 3%.Believe it or not. That’s really not good. Now what does that mean to you? A buyer’s market is basically six months of inventory or more. A seller’s market is six months or less. We are at 1.95 mos. It’s going to take a long time to get to six months.
Okay, let’s not freak out. Let’s all take a breath.
You can NOT have a crash unless you have a lot of people willing to sell at a loss.
That’s not going to happen. Everybody has a ton of equity in their property.. It’s completely different and I know we’ve been here before and people are kind of sell shocked and scared..
There’s a ton of equity in every property, the job market is good. I know the economy is not doing great but it’s not the same in real estate.
The other reality check, and this is actually really key, everybody that basically bought in the last couple of years and refinanced at these crazy low 2.65% historically low rates, will not be selling anytime soon, if ever. It would need to take a major life event for those people to sell because it would not make sense.
Now, this is going to affect our future market. These are mostly 30 year term loans because let’s face it, if you’re going to get a loan for 2.65% you’re going to get it for 30 years. That’s almost free money. What is this going to mean in inventory in the future? .
Now the other reality check.. This is a historic mortgage rate chart. And you see from 1992 to where we were at 8% interest rate. So right now we’re at about 2014 rates. We are normalizing. Getting these interest rates up to this point is normal in our market. This is where we should be.
The other issue is what I call the war between generations. And I don’t mean that in like, Baby Boomers vs Millennials. No, let me clarify, I am speaking in real estate jargon. Remember the boomers control the inventory. Boomers are not selling because they don’t have a place to go. The ones that sold last year, they pretty much moved to another state. Not every recession for the housing recession. This is a supply and demand issue.
Right now we are seeing a lot of new inventory coming on the market. I got two listings in the last four weeks. This is great! However I do want to add one last thing, sellers that need to buy need to get in the game immediately because once this inventory is absorbed, which I predict is going to take a couple of years, we’re probably not going to be seeing a lot of new inventory in bulk for a while.
Maji Pace Ramos
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DISCLAIMER: THE STATISTICS USED IN THIS PRESENTATION WERE PULLED ON 6/21/2022. THE MARKET IS CHANGING CONSTANTLY. PLEASE CONTACT ME FOR TODAY’S STATS.