Real estate outlook and figures for 2010-national and Miami where inventory positively drops

As we welcome a new year and a new decade, I want to share with you some insight and information regarding the outlook for real estate in general for 2010. By the looks of it, this January is much better than January 2009. For example, November 2009 condo sales were over 110% than November 2008 condo sales.

In his latest forecast for 2010, Lawrence Yun, Chief Economist for the National Association of Realtors foresees a continued uptick of existing home sales at around 20% during the first half of 2010 as compared to the same time frame in 2009. Additionally, Yun anticipates that the national median existing home price could rise up to 4% in 2010.

Also, the following excerpt from Chief Market Analyst Michael J. Malpade of Easy Forex can also corroborate that 2010 looks better than early 2009.

• “The US housing market has improved and shows sign of stabilization. According to Ip the housing market will benefit because the inventory of new homes are at their lowest level in 17 years. The outlook for housing remains uncertain. A number of analysts suggest that the housing market remains weak and that the recovery was driven by foreclosures and short sales. The Fed announced plans to add additional support to government mortgage agencies (Fannie Mae, Ginnie Mae and Freddie Mac) and the tax credit for first time home buyers has been expanded to April 2010. This could keep the recovery in US housing market going during the first half of 2010.” Source: Some thoughts on the US economy in 2010 by Michael J. Malpade, Thu, Dec 31 2009, 08:43 GMT.

On a local level as real estate is local in nature, I want to highlight that for the past week, inventory in Miami Beach condo sector has been falling. While inventory drop alone doesn’t equate a complete shift from a buyers to seller’s market, it signals a strengthening in activity and renewed interest of purchase. The current rate of demand has been increasing as the number of properties dropped by around 2% in Miami Beach and 2.9% to 16, 146 in Miami-Dade County in just one week according to Condo Vultures latest figures. And, if we compare the stats to 13 months ago, the inventory drop is over 33%, meaning that there are now 8,254 properties less for resale than a year ago, when there were 24,400 properties. As we can see, inventory is trending downward and the market activity index is skewing upward.
Caution- after the party, there is the hangover for some. Mortgage money is getting costlier. Just this week, the rate for a 30-year fixed loan went up to 5.18% from 4.94% on the third week of December 2009. And, it is crawling upwards.


Freddie Mac predicts that financing rate for the 30-year loan will hit the 6% mark later this year. So, perhaps after the credit for home buyers expires on April, and as the economy gets better, and after the Fed money has evaporated by March, rates will raise.

Advice to those who are in the position to secure a loan, don’t wait much longer, if you want to refinance. Refinancing at 5.00% is different than refinancing at 6%. Even though this is still a very low rate, it may be bad alternative for several homeowners. However, if you compare it to 20 years ago, you are much, much better. In the1980’s the rate was between 17-19%. Rates today are on a historical low level.

So it still may be a party, with headaches and all.