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Brian Halste…, Real Estate Pro in Miami, FL

When will the real estate market recover?

Asked by Brian Halstead, Miami, FL Mon Dec 13, 2010

I heard a very influential mortgage broker in Miami Florida stated that she believe the real estate market will recover in the next two to three month.
I also saw in Florida realtor news today that Florida just surpass California to become the second most distress state in the country, something just do not add up here.
So when do you think the market will recover three months or three years and what exactly must be done to make this happen?

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Answers

21
4.27 AM June 16th 2018 to be exact
3 votes Thank Flag Link Mon Dec 13, 2010
We need a stimulus again to provide buyers with incentives. Like the $8k tax credit. Financing , key factor to recover . The banks guidlines must loosen up and offer alternative programs for the self employed
3 votes Thank Flag Link Mon Dec 13, 2010
Hi Brian,

You may be interested in the Case-Shiller report with Fiserv and they address this very question for each state. Here is a blog I wrote specifically about my neck of the woods but the map is included so you can check out Florida...and it's not good news.

https://mikemalvey.wordpress.com/2010/12/22/when-will-home-v…
1 vote Thank Flag Link Wed Dec 22, 2010
In the January 2011 issue of Realtor Mag , Chief Economist Lawrence Yun states the following:

Yun is forecasting 5.2 million existing-home sales in 2011, up from 4.8 million last year. He also expects modest improvement in prices—a rise of about 1 percent this year on a national basis. That would be the first in what Yun says will be a series of small but steady gains in the years ahead that will eventually bring home sales back to a period of normalcy.

At the root of these gains is continuing improvement in the overall economy. Yun is estimating modest 2.5 percent growth in the country’s gross domestic product in each of the next two years, job gains of about 1.5 million in the same time frame, and a slowly improving jobless rate, which he projects will dip from a stubbornly high 9.6 percent in the latter part of 2010 to a better but still-high 8 percent in 2012.

All of the price excesses from the housing bubble have been squeezed out of the market and interest rates remain at historically low levels, making buying attractive now. In San Diego, for example, buyers at the end of 2010 would be paying $1,564 a month in mortgage payments for a median-priced house that at the height of the boom would have cost them $2,833 a month.

"Home prices have overcorrected a bit," Yun says. "The cost of duplicating an existing home, when you factor in the expense of buying bricks and mortar and putting it all together, is going to be more expensive."

Hope this was helpful.

Carlos del Amo
Smart Growth Realty
1 vote Thank Flag Link Wed Dec 22, 2010
When people have secure employment banks will be much more likely to lend. Banks lending to people who shouldn't have had the loans they did is part of what led us to this mess in the first place.
1 vote Thank Flag Link Tue Dec 14, 2010
Every market is different. The market is declining due TO NEGATIVE BUYER SENTIMENT, AS WELL AS TIGHTER LENDING STANDARDS WHICH IS REDUCING THE POOL OF POTENTIAL BUYERS. When the lender start to lend home loans the market recovery is a reality.
1 vote Thank Flag Link Tue Dec 14, 2010
Kevin, although I agree with some of the first half of your post, I am seriously hoping the 2nd half was tongue in cheek.
Except for the part about Congress. That I definitely agree with.
1 vote Thank Flag Link Mon Dec 13, 2010
Three months?????

My guess is that she misspoke and meant to say 3 years.......

There is another large wave of foreclosures out there that will undoubtedly slow the recovery and the number of short sales grows daily. A recovery is going to require more than a spike in home sales, government incentives and low interest rates.

A true recovery will happen when the confidence of the general public is restored and unemployment numbers return a reasonable number.
1 vote Thank Flag Link Mon Dec 13, 2010
I personally don't see recovery happening in 2-3 months. At least few years, how many ? I don't know although I wish to know. Some good reasons were mentioned already here. One of them should be lending-financing will be one of the key factors as Dominick pointed out.
1 vote Thank Flag Link Mon Dec 13, 2010
OK for real now. No time soon. In my humble opinion,

The government has reimbursed the banks for their loses...and then some. They, then abnks also foreclosed on the property so thay have both now.

Also, part of the deal with the government is they couldnt deal with the existing owner and amke a deal if they wanted the governments's money, so they dont. They deal with new people so thay have to pay new fees and costs etc. More money for the banks.

Now these banks pulled their REOs off the market so there will be less inventory for sale hopefully raising the prices, then they will flood the market with all their inventory and sink it again.

Also, a number of banks are raising their minimum loan amounts to $50,000 so if you did want to buy a run down short sale to remodel and live in, now you are NOT asking to borrow enough money to obtain the loan. And just to make sure nobody slips through the cracks, they raise the minimum credit score to 640 from 620 to eliminate those dastardly people that put feeding their family in front of making the bank richer.

Following so far?

Now interest rates have increased to almost 5% which I agree is low, but coupled with the 6 month plus turn around on a short sale ANSWER FROM THE SELLER'S BANK makes the whole process mute because the buyer has bought someting else by then. See the banks have no real rules to follow, just the make believe ones we are all told to make you THINK there is a concerted effort to bring this crisis to a close.

Here is a solution I am sure would solve all of our issues and allow us to actually pick a time sooner than 10 to 12 years.

There are about 40 million people over 50 in the work force. Pay them $1 million apiece severance for early retirement with the following stipulations:

1) They MUST retire. Forty million job openings - Unemployment fixed.

2) They MUST buy a new AMERICAN Car. Forty million cars ordered - Auto Industry fixed.

3) They MUST either buy a house or pay off their mortgage - Housing Crisis fixed.

It can't get any easier than that!!

P.S. If more money is needed, have all members in Congress pay their taxes and also have Congress retire on Social Security and Medicare. I'll bet both programs would be fixed pronto!

Kevin Cloutier
1 vote Thank Flag Link Mon Dec 13, 2010
Real Estate market recover no yet. There are many, many properties/cases in Miami-Dade Court waiting for disposition no just cases from 2009 and ahead also the huge backlog from 2008 and back. Plus conflict in foreclosure process under the State Attorney Investigation. Therefore, is going to take time to recover an economic which touch the bottom and continue with a big deep situation in foreclosure properties.
1 vote Thank Flag Link Mon Dec 13, 2010
On a macro level in Real Estate almost nothing regarding supply and demand happens in just 3 to 4 months.

The market has definitely seen signs of stabilization... but this is still a bit shaky and subject to:
1. Employment rates getting better

2. Interest rates remaining low (if they rise substantially, then mortgages become less affordable, prices may fall to compensate).

3. A reduction in foreclosure/distressed activity. This is harder to determine in the short term, but certainly over a period of 1-3 years, foreclosure filings and distressed sales should diminish, leaving a tighter supply of less desperate sellers.

What does a recovery mean to you? Stability? Appreciation? I dont' think you're going to see appreciation rates of greater than 3ish% on Real Estate for another 5... maybe even 10 years once pts. 1-3 are solidly in place. There is still a very large supply of housing no matter who owns it... and builders will start building again, keeping prices in check for awhile to come.
1 vote Thank Flag Link Mon Dec 13, 2010
Good question. You probably will receive many different answers to this question. 3 to 4 months "not going to happen"; I think maybe 3 to 4 years. Once the economy start to stabalize and a lower unemplyment rate than we may possibly see a better market. I have to say I agree with Dominck, we need another stimulus or a tax credit for buyers. Also, if the bank scan offer strong modifications and principle reductionson current loans, that can possbily help reduce the inventory of homes for sale.
Ainsley Daux
Home Run Real Estate inc
(813)546-1954
1 vote Thank Flag Link Mon Dec 13, 2010
The market is back now- banks are foreclosing, people are buying, condo associations are collecting rent and evicting families and that's the way the round bounces.
1 vote Thank Flag Link Mon Dec 13, 2010
There is no such thing as a "V" curve or graph in Real Estate it is alway a Bell Curve, up or down, there is no exact top and no exact bottom. Real Estate Values do not go up and down with the speed of stocks becaue Real Estate is illiquid ( hard to cash out of). To truly understand Real Estate price movement, you have to understand Trends and Support over increments of time, 6 month, 1 year, 3 year and 5 year. At present, we have 6 months of support of todays prices, if you look again in 6 months and the prices are more or less the same as they are today or slightly higher, you will have a trend,,, at that time you can say what the bottom is. If you are wating for the bottom, you should not be buying Real Estate because you are acting like an investor when in reality you are a consumer. You should be asking consumer questions like, Value vs Rate, cost of Money, cost of holding vs renting etc etc,,,,,
1 vote Thank Flag Link Mon Dec 13, 2010
Hello Brian,

I guess it depends on what you mean by "Recover."

Does recovery mean a return to the peak home prices years ago?

Or does recovery mean a stabilized housing market with a moderate 4% gain year over year?

I think the big answer lies in the overall unemployment numbers. More people back to work equals more people able to buy a home.

My hope is that we will see a spike in hiring in the first quarter in the new year. The news is reporting dismal job numbers for November, but really, what company does a mass of hiring right before Thanksgiving and Christmas?

I think the first quarter of the new year will indicate where we will be in the "recovery" process.

Good question though.

Here is hoping to a brighter future!

-Bryce
1 vote Thank Flag Link Mon Dec 13, 2010
More buyers than sellers. Probably 5 years away unless something creative is done to make the current inventory more in demand, i.e. significant jobs growth, significant inflation, opening up our immigration to high net worth individuals, going with a Flat Tax to eliminate all corporate and individual income tax, etc.
1 vote Thank Flag Link Mon Dec 13, 2010
Hi Mike,
Thank you for the Case-Shiller report with Fiserv
https://mikemalvey.wordpress.com/2010/12/22/when-will-home-v…
very interesting stuff seems to be putting it all into perspective with some brilliant Data for many it seems to calm some expectation but only for the Data minded the numbers people but what about the emotional folks? Can't the market recover much faster?
Some people would agree that it might just do that it is that hope that cause the unnatural rise in the first place I am not saying the recover would happen now but how about 10 or 15 years down the line when memories are not so fresh?
You see a housing cycles you can predict but the speed of recovery and collapse or completely blurred that is why some many people are hurting right now, with many perhaps saying man
"If I only know when to I would have sold everything and made a fortune".

Brian Halstead
786-303-1046
Halstead Homes Realty
License real estate broker
0 votes Thank Flag Link Thu Jan 27, 2011
Tuesday at 3:34 p.m. Eastern Standard Time.
0 votes Thank Flag Link Wed Dec 22, 2010
Alan May, Real Estate Pro in Evanston, IL
MVP'08
Contact
Thank you for all your comments so far I could not help but to give everyone a thumb up in appreciation and some comment was really good for those I wish I could give two thumb up.
Dominick's suggestion is very thoughtful but I think could be expounded on a bit, Kevin's sarcasm seems to be well received.
Thank you all for your opinions and all best in your business and for all our sakes, I hope the market will recover sooner than later.

Brian Halstead
Halstead Homes Realty
786-303-1046
0 votes Thank Flag Link Tue Dec 14, 2010
Different areas will start to recover slower than others.
It looks like Hampton Roads in Virginia is already recovering.
0 votes Thank Flag Link Mon Dec 13, 2010
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