Are you willing to Pay Full Market Value or Over?

Today's Real Estate Market in South Florida has a low supply level. For the past 2 years we have been witnessing a very strong Sellers’ Market. Are you willing to Pay Full Market Value or Over? That is what we keep hearing, and this scenario has been winning the bid on purchasing a home. Yes, most offers are only accepted with a high price. Sellers would like to see buyers with a minimum of 3% to 5% in escrow as they feel this is a stronger buyer.

 

Passe is the traditional way!

Make your strongest offer, highest and best the first time you make an offer if you really want to purchase a home. Please have your pre-approval letter ready ahead of time or call me for a mortgage professional to qualify you. An offer cannot be made without a pre-approval letter or proof of funds. Mortgages make up 2/3rd of the offers on properties and cash is used on 1/3rd of the offers. Cash is king, but not the only way to win a deal.  If you are looking for a bargain, it has been almost impossible in this market to find one. Foreclosures were here 10 years ago, and they have yet to return. Foreclosures are almost non-existent due to sellers seeing high equity in their homes. Why should foreclosures return when there is so much value in a residential property?

 

Covid Concerns

Most individuals are now vaccinated.There is a new strain of covid that just arrived. People are not as nervous about Covid as when the onset occurred, but we know it exists and new variants keep popping up. Joe Biden, our US President, has Covid in July 2022. Yes, this pandemic is keeping inventory levels lower than normal, but time will tell if Covid is still part of this equation. 

Real Estate Cycles

In general, South Florida is experiencing a housing shortage at historically low levels. The market supply range has been averaging in the one-month supply level. This 1-month supply level of housing has recently increased from 1.1 months of supply to 1.5 months of supply in June 2022.  Now that July 2022 has arrived, I am glad to report, we are finally hitting the two-month level. This is still a Sellers’ Market!  A normal market is 6 to 9 months of supply, which we have not seen in several years. The supply of homes across the country is up for the first time in nearly three years. The inventory increase is occurring. Seller reduction in price is starting to happen. Homes are staying on the market for 31 days. Prices are starting to respond to the higher level in inventory.

Mortgage Rates and Market Shift

The interest rate increased again July 27, 2022, by .75 percentage points. The higher mortgage rate and housing prices is taking a toll on South Florida’s real estate market and the country in general. We have witnessed mortgage rates go from 3% to nearly 6% in a blink of an eye. Buyers want the home values to lower to make up the difference in the high mortgage rates. Houses are starting to stay on the market longer due to higher mortgage rates. The medium time to contract is 12 days and the medium time to sell is 51 days. Sellers are starting to cut pricing to stay competitive.


Thanks!
Susan J Penn, PA Realtor - 17 Years

2645 Executive Park dr #125
Weston FL 33331
954-557-5993
susanjpennpa@gmail.com
www.susanjpennrealtor.com