Real Estate prices are dropping in Florida. What does that mean for the Real Estate Market – for 2010? Whether you and I are buying or selling (or just curious) … information will be key to our decision-making.
New York Real Estate Guru, Steve Harney, and founder of “Keeping Current Matters” flew to Miami last week to shed some light – and met with Realtors from Esslinger Wooten Maxwell: “Shadow Inventory hasn’t (yet) hit the real estate market in South Florida. Just How big a role will foreclosures play?”
Steve Harney says that homeowners more than 90 days delinquent in mortgage payments numbered less than 1% for most of the decade. That number rose to 40% delinquent just within the last 3 years though. Zillow predicts that 7000 new foreclosures will come on the market . The onslaught of foreclosures won’t be limited to any particular price point. Luxury homes are affected by foreclosure and jumbo mortgages are delinquent.
Florida has the highest % of distressed properties coming onto the market – tops the charts across the United States. There will be a waive of distressed sales. If you are looking to sell, and get out, what does that mean and how does that effect you? What we can do is look at the facts, and evaluate what the experts are saying. Florida has a 90% mortgage delinquency rate. That’s staggeringly high! That means that your neighbor’s homes… my neighbor’s homes… will go into foreclosure. People you and I know will be losing their homes to foreclosure. If you are waiting… holding out… and hoping for real estate prices to start creeping up again before lising your house for sale, you may need to be prepared to wait.
Mortgages Over 90 Days Delinquent:
6.3% of all mortgages under $250,000
12% of all mortgages over $1 Million
7.4% of ALL mortgages are over 90 days late!
What is the “Cure Rate” on current mortgages in default likely to be? In other words, how many homeowners will be able to figure out how to get current on their mortgages? In the past, homeowners struggling to make payments took a second job, or looked to a family member for a “stop-gap” loan. Today, fewer homeowners do that. In the past, 80% of homeowners who fell behind on their mortgage payments were able to “figure it out”… and keep their heads above water. Now, less than 1% will figure it out.
Florida has the highest percentage of distressed properties coming onto the market – of any state. There will be a waive of them and according to New York Real Estate Expert, Steve Harney, if you need to sell, waiting is not the answer. In Florida, 44.7% of mortgages are underwater. People are ‘walking away’. Defaulting is now used (with unfortunate frequency) as a strategy. More than 25% are going under on purpose. The New York Times wrote an article last month, with a Step by Step Process for “HOW TO WALK!”
The Wall Street Journal wrote about “Existing vs Shadow Inventory”. Inventory is coming down in price. Pricing is becoming considerably more compelling, and buyers are sitting pretty. Some banks have not foreclosed yet, or haven’t yet released their foreclosures. But they will. The ratio between supply and demand is what determines price. With shadow inventory hovering in the wings, if you need to get out from underwater, waiting may not be the answer. MiamiRealEstateCafe reports on what the Real Estate Market will look like as we move into 2010, and equally as importantly, “Why”.
If you are considering buying or selling Real Estate in Miami, or would like additional information call Miami Real Estate Consultants Alexandra and Vicki Restivo with Esslinger Wooten Maxwell 305 -793-1365. Or contact them here with questions.