The short-term forecast for South Florida real estate depends on whether you’re a buyer or a seller.
Like the residential scene nationwide, strong demand keeps shrinking the supply of homes on the market — obviously not good for the scads of buyers out there. But the dearth of properties is driving up prices, making for very happy sellers.
The region, though, is distinguishing itself from other parts of the country with its high number of cash transactions, nearly all by international buyers.
Using numbers that came out in April as an example, two-thirds of all deals in Miami and half in Palm Beach were made without any kind of financing, according to the real estate associations for both cities. Nationwide, only a third of sales went down without an outside lender.
And many of South Florida’s cash buys involved international investors, who prefer to bypass borrowing to save on both time and interest payments.
Foreign investors, of course, have been the most eager to buy in the area for a while, according to Vanessa Grout, president and CEO of Douglas Elliman’s Florida operation.
“People view Miami as a haven to put their money,” Grout said.
American buyers, though, are increasingly doing their part in driving demand because of rock-bottom mortgage rates.
Meanwhile, the sales frenzy is shutting out many first-time buyers and those looking to move up from starter homes, said Jeff Miller, an agent for Zilbert International Realty.
Many left out in the cold are young families that want to jump from condos to single-family homes, Miller said. Some are so discouraged that they’re pulling up stakes and moving out of state, he said.
The supply-and-demand problem, though, doesn’t alarm Lynda Fernandez of the Miami Association of Realtors. She sees another strong year ahead.
“We thought with the housing shortage that was evident pretty early last year, things might slow down, but we had a second consecutive year of record sales in 2012,” she said. “Therefore, that may not have an impact.”
Grout agrees with Fernandez — to a point. “The market is cyclical, so at some point it’s going to reset. We just don’t know when.”