Recent news revealed a rather nice combination for the real estate market. Specifically, inventory and sales are up, and mortgage rates are down. Obviously, an increase in housing inventory presents more choices for buyers in the market for a home. This is particularly important right now given that strong buyer demand has outweighed the supply, leading to bidding wars in some markets. We’ve certainly been seeing multiple offers on prime South Beach condos for sale, and many properties are under contract within days of hitting the market.
For quite some time there, the lack of inventory locked some first-time homebuyers out of the market altogether. This was especially true for first-timers seeking lower price points or utilizing conventional financing as investors could snatch up lower-priced properties with all cash deals and rent them out for reasonable returns. The fact that sales have been increasing may have actually helped cause the inventory to increase as well, and should continue to do so, as homeowners who were previously hesitant to sell may be encouraged by the surge in sales and climb in home prices. Hopefully, the larger inventory will allow those individuals who have been searching for some time to find the right property. And, the drop in mortgage rates may further fuel these increases because it should encourage more buyers to jump into the market.
Clearly, there are ebbs and flows in the real estate market. Sales in Miami Beach and Downtown Miami have been good so far this year, and we’re hopeful that this activity will continue throughout the rest of the year. Although there are some specific markets, not in Miami fortunately, that are still struggling to gain their footing, the overall outlook on the real estate market seems pretty positive.