Peak real estate season is here! Realtors here typically do 60-65 percent of their annual business in the first six months.
Most buyers are aware that prices fell off a cliff from 2006 into early 2011, but often don’t know how much they have recovered. Sellers know prices have strengthened but have heard rumblings of flattening.
What’s the real story?
Using Multiple Listing Service data for single family homes sold in arms-length transactions, I’ve looked at fourth-quarter sales (median prices and volume) for each of the last five years.
Prices during the 2013-14 high season got ahead of themselves, particularly east of Dixie. Prices then cooled significantly there and throughout all of the Island City to a lesser degree. Many other neighborhoods in east Broward saw similar cooling (if not outright declines) as I showed in my Broward’s Real Estate Yearbook (available by request or online at issuu.com/jamesoaksun/docs/2015_yearbook).
Now there is evidence of stronger (2013 level) pricing again, with a possible bubble in higher priced homes in West Wilton.
The basic laws of economics are affirmed even in looking at something like Island City real estate. Demand goes up (as it did in 2012-13) and prices march up almost in lockstep. But then just as there can be over correction on the downside, there can be “irrational exuberance” in a rising market. Demand then drops, and prices along with it. Ultimately a more steady state can be achieved, at least for short time frames.
What we are seeing now, mainly, is two types of owners selling. The first type are the more investment-oriented people who bought at or near the market bottom and are now able to cash out at a healthy profit. These people might be more willing to negotiate price and terms.
The other main class of sellers are people who bought as prices were headed upward in 2002-04, but before the absolute peak. With the run up in prices these people are now (finally) able to sell at roughly what they still owe on the property. These people are ready to sell but really need to get their price.
A smart Realtor will be able to identify for their buyers which sellers falls into which classification, as well as how to help sellers get the optimal price on sale.by