Is The Real Estate Market Recovering? Low Inventory Is Creating Demand

It seems like it was just yesterday when the recession had a dramatic and negative effect on real estate market. The result of this impact could be directly observed by the large amount foreclosures, short sales and active homes on the market. This nationwide epidemic apparently has taken a change for the better and in the past couple of months, the declining number of available homes for buyers to purchase has dwindled down to record lows. This positive story is clearly evident when examining the sales and inventory statistics for Brevard County Florida. For instance, Brevard had nearly 10,000 single-family homes available when the recent recession first hit in December of 2007. Today’s number of only 2750 homes available is stark contrast to those dismal numbers of days past.

For nearly 5 years, the real estate sector faced excess inventory leading to falling prices and as the economy sank, consumers became even more wary of buying property. Now, the economy is slowly inching its way back to normalcy and buyers are trying to find permanent addresses for themselves. The problem though is that now there is a shortage of good houses for the interested and qualified buyers. This translates well for potential sellers, since they now get to talk within their terms. Well priced homes are seeing multiple offers and the sellers no longer have to respond to lowball offers.

People who are renting homes could be feeling the squeeze in the near future. Rent is bound to increase for a large number of households because of the pent-up demand for rental homes. The end result will most likely encourage landlords to hike up their leasing rates. The ensuing rental inflation will inevitably require many families who were renting, to buy a home of their own. Apart from this, there is the administration-initiated program that stipulates that homes obtained under Fannie/Freddie financing can be rented out but not sold for the next 5 years. The same goes for bank-foreclosed homes that until some time back were being sold off the courthouse steps to individual investors. Now, the banks are retaining those homes and may eventually attach them to the Fannie and Freddie packaging program selling them to large pools of investors with massive amounts of capital meaning these would be available for rent but their sale restricted for the next 5 years.

The economy is gradually improving and more jobs are becoming available. Consequently, families who were living in rented homes, doubling up or living with their parents are gradually able to stand on their own two feet, regain their former freedom and have a home of their own. Add to this the HARP-2 refinance program, which is kicking in that allows those who continued paying their mortgage to be automatically refinanced and their current rate which is historically low will be applicable to the new finance. This again translates to even less inventory of available homes to purchase.
Shifting focus on Brevard County once again; so far in 2012 there has been an average of 550 homes purchased each month. With the economy’s upswing in momentum, now more than ever people and investors believe that no investment gives better returns than real estate. The current “Market Absorption Rate” is less than 4 months. A 6 month or less absorption rate is considered a healthy market. Buyers who are sitting on the fence deciding on whether or not to purchase may regret not acting now. If you are thinking about starting your search for your next dream home, the clock is ticking.

Investor Condo Flip Returns Great Profit – Bank Owned Property

A real estate investor I have been working with purchased this bank owned property – REO condo property at a fantastic price of $386,199 in February. My client quickly fixed up the condo unit in Somerset Ocean Front Condo to make it more appealing to potential buyers. We then listed the condo for sale at an asking price of $489,000. The condo was under contract in 32 days and closed near the end of May for $476,800. Even with real estate fees and taxes my client made over a 9% return on investment.

There are plenty of great deals out there right now, but they are selling quick. Inventory in Brevard County is at an all time low. Call me if you have any questions regarding the great opportunities in Brevard or leave a comment.

On to another deal!!!

Good News For Investors – FHA Temporarily Lifts Its Anti-Flipping Rule

FHA has rescinded its 90 anti-flipping rule and will, for a period of 1 year, allow FHA buyers to obtain loans on properties that have been recently purchased by investors who intend to flip them for a profit. This “green light” by FHA means that if you’ve been on the sidelines of property flipping, you need to educate yourself as soon as possible, because investors will be coming on strong for 2010 given this latest news.