South Florida Rentals And Home Sales

As I look at the Hotsheets for Monday i am a little dismayed. The number of new listings and price changes are very high. If you look at the number of sales and compare them to the back on market properties, it is disappointing. They are close meaning alot of pending or contigent sales or rentals are falling through. The market does not seem to be getting any better. <br>
 Today’s Hotsheet
 Days Back: 0 1 2
 New Listings 1765
Price Change Listings 720
Contingent Listings 90
Pending Listings 296
Sold Listings 166
Expired Listings 704
Temp Off Market Listings 116
Cancelled Listings 423
Rented Listings 312
Withdrawn Listings 10
Back On Market Listings 10

According to WebProNews link exchanges are not the only factor to raise your rankings. The search engines are shifting their focus on determining rankings. They stated “recently Google seems to have placed more weight on buzzy, timely resources, which comes from news sites, social bookmarking, and often social networks and blogs. Google definitely weights Wikipedia, Digg and YouTube pretty heavily.

So what we have here, in a controversial example, is a lesson in buzz creation and SEO. This campaign was highly targeted and highly specific. From the SEO standpoint we can confirm:

Links are crazy important for higher rankings
Anchor text matters
Content matters
Keyword density matters
Link authority matters
Timeliness matters
Generating buzz via social media matters”

Since I stated incorporating these principles I have seen my rankings soar.

    I had written a previous post that most of the leads that I received on my other sites when people had to register to use the MLS search were of not much value.
     On this site, people are not required to register to search the MLS. Instead, There is a registration form on each page. Since the people register because they want to, the leads have proven to be much more valuable. I contact them by phone the next day and have goten much better results and interest.  

As a Realtor in Florida, I realize that there are many factors contributing to the decrease in the number of South Florida home sales. They consist of high home prices, high property taxes and high taxes. One factor that is contributing to the collapse of the sale market that many people do not seem to consider is the influence of the South Florida rentals market. At this time, this factor is probably having the strongest effect.
    Home ownership was the American dream. Since the South Florida real estate boom the lower and middle class have been driven out of the real estate market, because of the high costs associated with home ownership. Because of the uncertainty of the direction of home prices, consumers are not stepping back into the market. Prices are still unrealistic and continue to drop.
     Adding to the current situation, are the people who invested at the height of the market. As I look through the MLS, the number of short sales, pre-foreclosures, new listings, and expired listings and back on the market listings are increasing at alarming rate. This is adding to the existing inventory. It has been a buyers market. The problem is that there are no buyers.
     For example, today in Dade, Broward and Palm Beach County the following are the figures for the activity by category from the MLS:

  
     To go into my explanation of the influence of the massive effect that the South Florida rentals market is having on the sales market, you have to take into account the fact that apartment complexes do not list on the MLS. Also, the number of rentals done by private owners is not included.
     The most important factor is the economics of renting versus buying. Rental prices have been dropping, as inventory has been building. Consumers can rent a home at a price that they could never afford to buy. To attest to this, I would like to point out two examples. In my first one, a consumer rented a home that had been purchased for $950,000 for $2500 a month. If he had bought the home, his taxes alone would have been $20,000 a year. In the second case, a home purchased for $550,000 was rented for $2000 a month. The rental payments totaled $24000 a year. If you figure mortgage, taxes, insurance and homeowners fees, the landlord is paying approximately $50,000 a year. By renting, the renter could put $26,000 a year in the bank and would get a much better rate of return on his money, then the landlord who is losing money, since his property is depreciating and he is paying $26000 out of pocket to maintain his investment.
       Appraisers are taking 1.5% a month off the value of South Florida homes every month. This is lowering comps and causing a further decline in home prices. Builders are lowering prices, causing pre-construction buyers to either walk away from the closing table or buy a home and incur an immediate loss. Landlords are renting property and incurring monthly loses. Until this downward spiral ends, the answer is to rent. As the available rental supply tightens up and prices rise and rental prices and mortgage rates come to a point where it makes sense to purchase to get the benefits of home ownership the crises will not end.   

I am in the process of trying to understand the new tax law and the effect it will have on the Real Estate Industry. The basic points I was looking for was a decrease in taxes for residents, a decrease for buyers making a upgrade and lower taxes for out of state residents relocating here or buying a second home. I am not sure if all these will be accomplished.     

Timing the Real Estate market is as difficult as timing the Stock market. Both are influenced by outside factors which we have no control over.
The South Florida real estate rental and sales market are influenced by many factors.
  Interest rates
  Supply
  Demand
  Employment
  Weather
  Taxes
 Insurance
 World Events
some of these factors can be semi-controlled, others cannot. We must do our best to manipulate the factors that we can control to keep the market stable.

If some of the measures that are being worked on go into effect, we could see a spurt in sales. They are talking about a 30% reduction in home owners insurance. If this does happen and we can get a property tax decrease , homeowners will have a much easier time and sales should pick up.

Today, I received 3 calls from landlords wanting to know why their rentals are still empty. I spent some time explaining what is happening here with the prices and the complexes. All three lowered their asking price. I think reality is setting in.

I am a Realtor in Florida. I have alot of investors that I deal with. They bought property at the top. Now we are getting close to the bottom. The main problem that they face is that rental prices have not kept up with the rise in home prices. The majority of investors are losing hundreds, if not thousands of dollars a month. The question is How Long Can This Go On For.
I am starting to see investors want to get out of their properties, even if they have to take a loss. Also, there are a certain number that are willing to give them back to the banks. If these properties are sold below market value, the comps will go down, thus will housing prices.
The sad part is that landlords and owners are not being realistic. They have some inflated idea of their properties value and will not lower the price. The end result is that they maintain their prices, sit ion the property and then reach a point when they are forced to unload them for less then they could have gotten.
As Realtors, it is our job to educate sellers and to the market conditions. By effectively helping them market their property we will build  a lasting relationship.

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