Florida Residential Sales, Prices, Listings All Uptick...

According to Florida Realtors, in April 2018, Florida's housing sector reported more closed sales, higher median prices and more new listings from owners ready to enter the market.

"Not enough for-sale inventory, especially in the range for first-time homebuyers, is an ongoing challenge for many local housing markets," said 2018 Florida Realtors President Christine Hansen. "Pent-up demand continues to put upward pressure on prices. In April, sellers continued to get more of their original asking price at the closing table. Sellers of existing single-family homes last month received 96.6 percent (median percentage) of their original listing price, while those selling townhouse-condo properties received 95 percent (median percentage).

"But there is some positive news for buyers: New listings for single-family homes in April rose 9.8 percent year-over-year, while new townhouse-condo listings increased 8.3 percent. This trend will hopefully continue, which would help ease the too-tight inventory in many areas."

Sales of single-family homes statewide totaled 24,804 last month, up 4.1 percent compared to April 2017. Meanwhile, the statewide median sales price for single-family existing homes was $253,895, up 8.1 percent from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in April was $190,000, up 10.5 percent over the year-ago figure.

April 2018 was the 76th month in a row that the statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in March 2018 was $252,100, up 5.9 percent from the previous year; the national median existing condo price was $236,100. In California, the statewide median sales price for single-family existing homes in March was $564,830; in Massachusetts, it was $369,000; in Maryland, it was $283,405; and in New York, it was $260,000.

Looking at Florida's townhouse-condo market, statewide closed sales totaled 11,236 last month, up 9.2 percent compared to a year ago. Closed sales data reflected dwindling short sales and foreclosures in April: Short sales for townhouse-condo properties dropped 27.5 percent and foreclosures fell 41.8 percent year-to-year; while short sales for single-family homes declined 48.8 percent and foreclosures fell 50.7 percent year-to-year. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

"More often than not, the pace for Florida's busy spring and summer homebuying season seems to be set in March and April," said Florida Realtors Chief Economist Dr. Brad O'Connor. "On the heels of a somewhat slow month of March this year, it's good to see that state existing home sales rebounded quite nicely in April. With last month's sales factored in, we're ahead of last year's pace of single-family home sales by about a half of a percent.

"Demand for single family homes remains strong across the state and this abundance of buyers continues to deplete active inventories and drive up prices."

For-sale inventory in April remained tight, at a 3.8-months' supply for single-family homes and 5.8-months' supply for townhouse-condo properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.47 percent in March 2018, significantly up from the 4.05 percent averaged during the same month a year earlier.

The Most Creative Ways To Find Real Estate Deals For Growing Investors

Learning to invest in real estate while wading through markets both full of foreclosures and light on inventory helped me experience the best of the market and the very worst. These tactics for locating deals stand out as my favorites that any new investor can utilize to find their first or latest real estate deal.

Calling For Cash

This is hands down my favorite method of locating deals. It gets you speaking to potential sellers right away, and without costing you a dime. All it takes is a little nerve, a bit of effort and research, and a phone.

Begin by compiling For Sale by Owner and For Rent by Owner lists, because the information is relatively easy to obtain. Foreclosure information can be, too. Once you have the property and contact information, call every single person selling or renting their home within your preferred distance or travel time — mine was within 45 minutes of my house — and ask a few questions to try to gauge the sellers' motivations.

If the seller seems to be experiencing financial pressure, either caused by the house or that could be fixed by selling the house, ask them to meet. At that meeting, begin your negotiations to purchase their home. Great investors are great at talking to sellers, and there is no better way to practice than by meeting with people for free.

Driving For Dollars

This tactic simply involves driving through neighborhoods looking for signs of seller motivation: neglected houses, moving trucks, "for sale" or "for rent" signs in the yard, etc. When you locate a house showing signs that the owner may be willing to speak to you about selling, get out of the car, and knock on the door. Tell the owner you are interested in buying a house in the area and are curious if they could point you toward someone looking to sell. The ultimate goal of this scenario is to get into the house to sit down and make them an offer.

If no one answers the door, leave a flyer on the door indicating you are someone who buys houses in their area, and provide your contact information. Consider taking down the address in case you want to add it to a direct mail campaign or follow up in some other way.

Network

Over time, your network will bring you the best and most deals. But it takes a while to build this. As you move through your real estate investing career, you will likely graduate from driving neighborhoods and calling for cash, but you will never graduate from networking. These two important contacts could help you find your best deals:

1. Wholesalers: A real estate wholesaler is an investor who is good at finding quality deals with the intent to sell them to other real estate investors. Be mindful that wholesalers typically mark these houses up a little in order to profit from finding the deal. You can find wholesalers through your local real estate clubs or other industry networking events. Be sure to give every wholesaler your card, and let them know you would like to be added to their buyer list.

2. Other Investors: You may have heard people say that real estate is not competitive. I may not fully agree with this, but it does drive home the point that real estate investors can work well together. Many investors are looking for properties with a lot of equity that they can get in and out of quickly. Others are looking for less equity but more cash flow, as they want to hold onto the property for the long haul. Investors generally fall into one of two categories: wanting great value or wanting great terms.

Examining investors by these two categories makes it easy to see if and how you can work together. Both types set up marketing campaigns to find sellers. Great terms include easy financing and an owner who will carry the loan or a long-term lease. If I am a terms buyer and value buyers know that, we could collaborate on deals that do not have enough equity for them. I can pay them a small fee and have leads come to me. The opposite is also true for terms buyers who don’t want big equity deals. They can mark those houses up and sell them to another investor. Big equity deals typically means rehab and resell, and not everyone is looking for that.

As you grow as a real estate investor, you will become able to allocate a marketing budget and start campaigns that will help get your phone ringing. After driving for deals or calling for cash, there is no better feeling than answering a call from a seller who wants you to buy their home.+-

Why You Should Consider Triple Net Investment Properties For Your Portfolio

Imagine what it would look like to have a multibillion-dollar company send you a check every month for the next 25 years. Is the idea of having companies like Walgreens, McDonald's, or Bank of America sending you monthly rent checks enticing? It should be — the peace of mind this could give you is likely far superior to that offered by a local or regional commercial business tenant. With a publicly traded tenant, you could look at its stock ticker to track what condition it's in.

After selling a hands-on property like a multifamily residence, many investors look to take advantage of the 1031 exchange and seek a replacement property. A variety of net lease investment options come into play here. Per the CCIM Institute, they include:

"Bond Lease. The tenant is fully responsible for operating expenses, maintenance, repairs, and replacements for the entire building and site, without limitation.

NNN Lease. These leases follow the bond lease definition except that capital expenditures are limited, usually in the final months of the lease. The lessee is liable for all of the property’s expenses, both fixed and operating.

NN Lease. This lease follows the NNN, except the landlord is responsible for structural components, such as the roof, bearing walls, and foundation.

Modified Net (or Modified Gross) Lease. The tenant pays its own utilities, interior maintenance and repairs, and insurance. The landlord pays everything else, including real estate property taxes."

Net leased properties with credible tenants have long been favorites of insurance companies, real estate investment trusts (REITs) and high-net-worth investors. They acquire them because they have long-term leases with little or no management dependability. The occupants are public companies that are often worth billions and have brilliant credit ratings.

You are probably beginning to see the benefits of holding properties like these. When you start looking closer, the deal gets even sweeter: It's simple, quiet and calm. You can sleep at night without being concerned about cash flow. With no day-to-day management, a multibillion-dollar company is an occupant that tends to all its own maintenance, property taxes and insurance. The property is an imperative part of business operations, and leaseholders are very concerned about exteriors. They want a prime location among demographics that predict high traffic and sales.

These tenants pay their rent like clockwork every month, and the steady cash flow permits you, the owner, to build equity constantly over the lease term. The worth of the main real estate and the excellent credit of the tenant should enable you to get very positive financing terms. Predictably leveraged, with a self-amortizing loan, the assets will be paid off at the end of the original lease term. If the tenant leaves, you still have a valuable property that could be debt free.

When you own these properties, it is important to monitor your lease agings. If you do need to sell, the longer term you have left, the better. If the occupants stay beyond the preliminary term after the asset is paid off, which many do, your investment profits may be increased significantly.

If you don’t want the trouble of management and continual ongoing expenses presenting themselves, read on.

It is essential to invest in a location that is likely to spawn extensive sales for a commercial tenant. If the leaseholder is able to make a huge amount of money in a great location, it is doubtful they will leave following the initial lease term. When buying a net leased property, you should cautiously consider the location you want to procure. It is helpful to use demographic studies and mapping software to compare and contrast the attributes of various businesses to decide the best one to venture into. Fantastic locations with the best occupants are always in demand and will sell at a premium. It is generally worth it to pay extra to get a premium location. This will enable you to sell the property faster if you decide to sell prior to the end of the lease.

Net leased properties with credit tenants have increased in popularity with investors because many investors are receiving very little returns on convertible or liquid assets. Net leased properties with credit tenants can be a harmless, reliable investment if you choose them wisely.

If you are interested in a triple net investment property, contact a firm that is versed in the sales and acquisition of such properties. If you have an appetite for more risk, look into value-added properties. While there is little risk in triple net properties, the main thing to consider is the tenant strength. Publicly traded companies offer transparency as to condition through readily available resources. Inflation should also be considered, since most long-term leases have flat rental rates until the exercise of the option period.

I invite you to begin your search for triple net properties. Call a few brokers, and see what they have in their inventories. Once you've digested the information, take a plunge toward a peaceful and long-term investment.

Luxury Home Sales in Miami Spike in Early 2018

According the Miami Association of Realtors, Miami luxury home sales surged 12.3 percent in 1Q 2018 as median prices rose for the 25th consecutive quarter.

Total Miami luxury home sales ($1 million and up) rose 12.3 percent to 421 in 1Q 2018, up from 375 in 1Q 2017. Median prices for single-family homes increased to $337,000, a 5.9 percent increase from last year. Miami existing condo median prices rose 4.5 percent year over year to $230,000.

"Miami real estate continues to see major pent-up demand for luxury properties," said George C. Jalil, the 2018 MIAMI Chairman of the Board. "Miami and Florida as a whole is attracting Americans leaving high-tax states such as New York as the new tax law cuts into their income-tax deductions."

Miami Single-Family Luxury Homes Sales Rise 16.2 Percent

Miami single-family luxury home sales jumped 16.2 percent in 1Q 2018, rising from 185 transactions to 215. Miami existing condo luxury home sales increased 8.4 percent year over year from 190 to 206.

Federal tax reform, which was signed into law Dec. 22, sets a deductions cap for income, sales and property taxes at $10,000. The new cap is leading more residents of states with high property values and state income tax to purchase properties in states such as Florida, which has no state income tax and a pro-business tax structure.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.27 percent for 1Q 2017, up from the 4.17 percent average recorded during the same quarter a year earlier.

Total Sales Decline in 1Q 2018

Total existing Miami-Dade County residential sales declined 6.5 percent year-over-year in 1Q 2018, from 6,169 to 5,770.

Total sales volume accounted for $2.6 billion in 1Q 2018, a decline from the $2.7 billion sales volume a year ago. The sales do not include Miami's multi-billion dollar new construction condo market.

Total Miami distressed sales declined 39.7 percent year-over-year, from 755 transactions in 1Q 2017 to 455 in 1Q 2018. Only 7.9 percent of all closed residential sales in Miami were distressed in 1Q 2018, including REO (bank-owned properties) and short sales, compared to 12.2 percent in 1Q 2017. In 2009, distressed sales comprised nearly 70 percent of Miami sales.

Short sales and REOs accounted for 1.6 and 6.3 percent, respectively, of total Miami sales in 1Q 2018. Short sale transactions decreased 47.1 percent year-over-year while REOs fell 37.6 percent.

Miami Median Prices Rise for 25th Consecutive Quarter

The median price for single-family homes in Miami-Dade County increased to $337,000 in the first quarter, a 5.9 percent jump from $318,375 in the same period last year. The median price for existing condominiums increased 4.5 percent year-over-year from $220,000 to $230,000.

Statewide, the median sales price for single-family existing homes in 1Q 2018 was $248,000, up 9.7 percent from the same time a year ago, according to Florida Realtors. The statewide median price for condo-townhouse properties during the quarter was $180,000, up 7.8 percent over the year-ago figure.

The national median existing single-family home price in the first quarter was $245,500, which is up 5.7 percent from the first quarter of 2017 ($232,200), according to the National Association of Realtors (NAR).

Hot Markets Overview Reveals Strong Demand and Limited Supply in Many Local Areas

Months' supply of inventory is a strong indicator of real estate activity. Top Miami neighborhoods with the lowest months of supply of inventory in 1Q 2018:

Single-Family Homes

• Westview, a north Dade community east of Hialeah, had 6 months supply
• Miami Gardens, a north Dade community along the Broward line, had 3 months supply
• Virginia Gardens, located north of Miami International Airport, had 2.4 months supply
• Hialeah Gardens, a North Dade community west of Hialeah, had 2.4 months supply
• Palmetto Estates, a South Dade community west of Palmetto Bay, had 2.6 months supply

 
Condominiums

• Tamiami, a central west Dade community west of Westchester, had 7 months supply
• Three Lakes, a South Dade community west of Kendall, had 7 months supply
• Sunset, a central Dade community north of Kendall, had 2.5 months supply
• The Crossings, a South Dade community west of Kendall, had 2.3 months supply
• University Park, a central west Dade community west of Westchester, had 3.3 months supply

 
National, State Home Sales in 1Q 2018

Nationwide existing-home sales, including single family and condos, decreased 1.5 percent to a seasonally adjusted annual rate of 5.51 million in the first quarter from 5.59 million in the fourth quarter of 2017, and are 1.7 percent lower than the 5.60 million pace during the first quarter of 2017, according to NAR.

Statewide, closed sales of existing single-family homes totaled 60,204 in 1Q 2018, down slightly, 0.9 percent, from the 1Q 2017 figure, according to Florida Realtors. Florida's townhome-condo market totaled 27,088 during 1Q 2018, up 2.8 percent compared to 1Q 2017.

Balanced Market for Single-Family Homes, Buyer's Market for Condos 

At the current sales pace, the number of active listings represents 6.2 months of inventory for single-family homes and 14.9 for condominiums. A balanced market between buyers and sellers offers between six and nine months of supply inventory.

Miami real estate had 22,560 active listings in the first quarter; a 3.6percent increase from the 21,771 listings at the same time last year. The inventory for single-family homes increased 2.5 percent, from 6,355 to 6,517. Miami existing condo inventory grew 4.1 percent, from 15,416 to 16,043.
 
Miami Homes Selling Close to List Price 

The median percent of original list price received was 95.2 percent for single-family homes and 93.6 percent for condos in 1Q 2018.

The median time to contract for single-family home listings was 48 days, a 17.2 percent decrease from 58 days in 1Q 2017. The median time to contract for existing condos was 80 days, a 3.6 percent decrease from 83 days in 1Q 2017.

The median time to sale for single-family homes decreased 11.8 percent, from 110 days to 97. The median time to sale for existing condos decreased 3.9 percent, from 127 days to 122.

Miami Cash Sales Double National Figure 

Cash sales represented 40.8 percent of Miami closed sales in the first quarter of 2018, compared to 44.8 percent in 1Q 2017. About 20 percent of U.S. home properties are made in cash, according to the latest NAR statistics. The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash.

Cash sales accounted for 54.2 percent of all Miami existing condo sales and 26.7 percent of single-family transactions.

Mortgage Rates in U.S. Remain Flat in Early May

According to Freddie Mac's latest Primary Mortgage Market Survey, U.S. mortgage rates were unchanged over the past week in early May 2018.

Sam Khater, Freddie Mac's chief economist, says the 30-year fixed mortgage rate remained at 4.55 percent. "The minimal movement of mortgage rates in these last three weeks reflects the current economic nirvana of a tight labor market, solid economic growth and restrained inflation," he said. "As we head into late spring, the demand for purchase credit remains rock solid, which should set us up for another robust summer home sales season."

Added Khater, "While this year's higher rates - up 50 basis points from a year ago - have put pressure on the budgets of some home shoppers, weak inventory levels are what's keeping the housing market from a stronger sales pace."

Freddie Mac News Facts

• 30-year fixed-rate mortgage (FRM) averaged 4.55 percent with an average 0.5 point for the week ending May 10, 2018 (unchanged from last week). A year ago at this time, the 30-year FRM averaged 4.05 percent.

• 15-year FRM this week averaged 4.01 percent with an average 0.4 point, down from last week when it averaged 4.03 percent. A year ago at this time, the 15-year FRM averaged 3.29 percent.

• 5-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) averaged 3.77 percent this week with an average 0.3 point, up from last week when it averaged 3.69 percent. A year ago at this time, the 5-year ARM averaged 3.14 percent.

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