Because Florida’s real estate industry has experienced significant growth the past few years, some experts—namely the Home Buying Institute—predicted that “Florida’s real estate market will move into the media spotlight” in 2014.
So as the year comes to a close, was 2014 an extraordinary year for Florida’s real estate market? More importantly, how did the real estate market’s performance affect you? We asked Warrington alumni in real estate to share their thoughts on the past year, where the market currently stands and what to expect.
“2014 was a very strong year for real estate in South Florida with sales exceeding the previous year. We have seen some leveling off in the past month or so, but that may be a function of the summer months and not a true indication of demand. The winter buying season will be the true test.”
“It’s been a good year, definitely strong here in Naples. Frankly, the market has been steadily increasing. We bottomed out in late 2011. Since then, there’s been a steady increase in median prices.”
“2013 was a big year, a huge recovery year. We saw 35 and 45 percent increases in the number of deals—both residential and commercial—and pricing increases were strong. Understandably, 2014 has not been at that same pace, but it’s still at a healthy pace.”
Beery: “Of course it will. We’ll definitely hit into another bubble, and that one will burst as well. We’ve seen it throughout history. And we’re already preparing for it so in 6 to 10 years—or whenever it happens—we’ll be ready for it. I don’t think the next one will be as bad, however. People still have fresh wounds from the last one.”
“Prices have not yet reached the levels of the previous bubble, but they will at some point in the future. If you look at the major real estate recessions in history, the market always recovered and exceeded previous price levels. We can’t predict if it will be in five, 10, or 15 years, but, at some point, prices will exceed the previous bubble.”
Murphy: “Average days on the market and weeks of inventory are important supply and demand indicators in the pricing equation. If weeks of inventory and average days on the market go down over time, average home prices increase. If weeks of inventory and average days on the market increase over time, average home prices decrease. These indicators along with comparative sales over the last six months can help sellers price a house correctly or buyers prepare an offer to purchase.”
Macia: “I tell my clients the most important statistic is the ratio of annual closed sales to active listings. If a community has a ratio of 1 to 2, that’s not a strong market, not a lot of demand. Some communities here in Naples are 5 to 1 or higher showing very strong demand. I always remind my clients: When you’re buying, you’re also selling. Unless you plan on living there for the rest of your lives, someday you’re going to sell that home. It’s an investment.
Bregman: “New construction is back! There are cranes all over Miami and they cannot erect luxury condos fast enough. Miami is literally on fire with many buyers from South America, Canada, Russia and Israel taking advantage of the still record low prices and low interest rates. Many ‘all cash’ buyers are making all cash offers, but are getting financing because they can invest their cash elsewhere for a greater return than what a mortgage will cost.”
Beery: “We determined through past history, current transactions and the future market that multifamily [housing] is the asset to concentrate on. I revamped my current business based on that. We’ll never stop doing general commercial real estate, but multifamily is a niche I will concentrate on.”
Murphy: “If you’re going to sell your house, the most important thing is to prepare it so it looks like the best house on the block. If any part of your home has paint, have it freshly painted. Go visit new home communities and see what those houses look like. You don’t need to spend a lot of money, but make sure it looks good and is meticulously cleaned.
“As far as buying, there are still a lot of bargains with new short sales and foreclosures coming on the market every day. Interest rates are at historic lows, and it is a great time to buy.”