Foreclosure in Miami>Question Details

Chris, Home Buyer in Miami, FL

The housing market has been in a slump for the past year...

Asked by Chris, Miami, FL Wed Oct 10, 2007

The housing market has been in a slump for the past year, as more and more foreclosures are occurring. This is common knowledge today. But, I had a friend visit from Ft Lauderdale, who said now is still not the time to buy, as it's going to get worse! Note, he's a real estate appraiser. No one has a crystal ball, but do you concur or disagree?

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I think if your appraiser friend was really smart, he would know that nobody knows what is going to happen in the next few years and not give you advice that he does not have a crystal ball to give.

If you are buying in a buyers market, that is as good as it gets.

The key is to know what the stats are, and why are you buying? Investment? Primary residence? What is the cash flow analysis? You don't make money when you sell, you make it when you buy.

The area you are looking at comes into play here as real estate is local. We need more specific information before anyone can give you any advice. Where are you considering to purchase? What mtg are you considering? Is it investment or primary residence? Exactly WHERE have you narrowed down your search? Florida is a big State, and there are good and bad area's all over the map. Questions to consider are if this is a primary residence, will you live there for 2,3 or 5 or more years? If it is an investment, what are the rents in the area? Will you have a positive cash flow?

Give more specifics and we can help you more.

M
3 votes Thank Flag Link Wed Oct 10, 2007
I have talked to many investors and about 50% feel it is wise to wait another 6 months and the others would buy now. You make the deal, not the market. if I am interested in a property, i am offering about 60% below "market value". This is purew investment rehab or rental type property. If you friend is buying a home for himself, he should look at it differently. I have seen properties in Miami going on average 5-10% below asking price. If anyone could predict the bottom of the market exactly, they would be rolling in it !
1 vote Thank Flag Link Fri Dec 28, 2007
Obviously your "friend" has not noticed the drop in the interest rate. Alot of what is happening in Miami is a result of over priced condos. The other thing is you can't have 2 bmw's. eat $120 dinners on south beach, and live in a $400,000.00 condo on $80k a year. This is why more of us need to take math in college.

One has to be more specific than say "nothing is of value to buy". It wasn't to long ago many of my neighbours drowned after Katrina in an average of 3 ' of water. So do not drown in commentary...get the facts...get some of that information in the age we live in and empower yourself to a proifitable investment
Web Reference: http://www.iansellsnola.com
1 vote Thank Flag Link Wed Oct 10, 2007
Chris - the housing market is very local in nature. I can tell you that there are cities experiencing major price reductions and others that have not. In my immediate market we are seeing prices hold strong with just minor price adjustments.

The best method to know what will happen is to study an area's history - what are the market trends in the past year? How do low sales and foreclosures in that area compare to regular sales? A Realtor proficient in their area should be able to give you a good idea without having a crystal ball.
1 vote Thank Flag Link Wed Oct 10, 2007
There is never a bad time to make a good choice or decision. So on those lines of thought, sure the market could still decline for some neighborhoods or certain properties. But generally the better properties will maintain or increase in value.
0 votes Thank Flag Link Fri Dec 21, 2007
I disagree - When you find a negotiable seller, you have found an excellent deal - Most are willing to negotiate very far down from their asking prices. Ifthey are not - then the best advise is to move to the next property - his neighbor - who will negotiate. In addition, There are many homeowner's in trouble and the time to purchase a home is when it is in pre-foreclosure. It is usually in excellent shape compared to a foreclosure. The banks are willing to negotiate more than they used to be....so if a buyer has the time to wait on the bank's response, the short sales are great to buy - and you help a seller out of a bad situation at the same time.
0 votes Thank Flag Link Wed Oct 17, 2007
I don't know about Ft. Lauderdale but in Southeastern Monroe, Michigan we are still falling. Leading the nation in foreclosures as well as a very poor economy tells me that we're not at the bottom yet. Buyers are in the shadows waiting for better prices. Even they know it's not time. Mortgage banking is estimating the approval of loans for 2008 to be 18% less than 2007 and another 6% less in 2009. My crystall ball says 3-5 years in my area before we get back on track.
0 votes Thank Flag Link Wed Oct 17, 2007
I spoke to a mortgage broker in Miami who uses an extremely convervative appraiser and this appraiser is starting to buy properties. So he must think we are at the bottom in Miami. I think it really depends on where you are. As a real estate broker, I am seeing activity from buyers pick up quite a bit in the last 2 months and other agents I have talked to say the same. But Miami has had a much better prognosis from all the statistics I have followed than Ft lauderdale/Palm Beach market. I have several listing in Hallandale/Hollywood and there is no activity there.
0 votes Thank Flag Link Wed Oct 17, 2007
I like to say that you want to buy when know one else wants to.

I received a very interesting video today.
I will attach the link. it runs about 6 minutes. It says a lot.
Land they ain't making any more of it.

I disagree with your friend and Jim Cramer.
This cycle has 6 more months then back to the old 3% gain.
Every weekend I see more people coming out to looking for deals.

That`s what I see for Arizona.
So first Weekend in May.

You will wonder what the video has to do with Real Estate. My answer is that this market, with all of our technology, will change on a dime.
As fast as they say the sky is falling....
0 votes Thank Flag Link Wed Oct 10, 2007
Mr.P, Other/Just Looking in Arizona
MVP'08
Chris,

When there is blood on the street, it is always a good time to buy.

For instance, I have a project in Biloxi. $5000 to reserve and the developer will apply for you for $73,000 in forgivable loans from the Miss Small Rental Assistance for a $265,000 duplex.

If you get approved, you sign a contract, if not you get your deposit back.

The property is cash flow positive, is 12 minutes to an area of Biloxi that is resurgent. There are 27 casinos in the works in that area. In 10 years this area could be like mini Las Vegas.

Is this a good opportunity? Yes, $73k in cash from the govt, $35k in depreciation from go zone incentives, positive cash flow and zero money out of pocket. I think so.
0 votes Thank Flag Link Wed Oct 10, 2007
It really depends on what you are trying to accomplish. Is this a single family home or condo? Is it for your primary residence or for an investment?
You see, you could wait six months and prices WILL be lower in the condo market. No one needs a crystal ball for that, just a simple lesson in economics--we have a 5-6 year or more inventory of condos (and growing) in some areas. If you are investing, I would suggest you wait. If it is for you to live in, you have two considerations--are you staying in it for a while, like more than 3-5 years? Then buy now, and take advantage of low interest rates. We don't know where they will be in six months.
The money you save over the years of your loan will certainly be better than what you'll save in a price reduction.
Foreclosures are not necessarily ALL good deals. Each bank prices them differently. Get with a Realtor who knows the neighborhood and work closely with them on market conditions.
0 votes Thank Flag Link Wed Oct 10, 2007
The media has labeled our current situation to be a "buyer's market" . Real Estate will always be a good investment if done wisely. In fact the most recent article from the National Association of Realtors feels that because of the current mortgage market holding its own and the number of homes available -that it is a good time to buy. Getting a loan that does not cause you to be totally leveraged out and buying in a neighborhood that has traditionally held its value are two items to consider. Do your research on the home you wish and take the time to evaluate your lending and what that means to you and your lifestyle.
0 votes Thank Flag Link Wed Oct 10, 2007
I believe your friend the appraiser is on the right track, according to the Daily Business review, the Wall Street Journal and the New York Times. All three of these publications are talking about that the grunt of all this mess might finally be coming to an end by the second quarter of 2008. But you still have to keep in mind that a lot of banks are holding on to the foreclosed inventory until the market has stabilized a little, until the dump their inventory back on the market. Banks are listing some of the properties that they are taking back, but other inventory is being kept on the books for a later date.
Web Reference: http://www.hagenhendrix.com
0 votes Thank Flag Link Wed Oct 10, 2007
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