The National Association of Realtors (NAR) estimates that distressed sales have accounted for 45 percent of existing home sales in recent months, which is one reason why prices have fallen so sharply. The combination of falling home prices and lower mortgage rates has made home ownership much more affordable. The NAR Housing Affordability Index has surged more than 50 points over the past 6 months and is at an all-time high.

In Florida, nearly two-thirds of all sales are foreclosures and short sale properties, many of which are not counted by real estate agents since they are sold at auction or by banks directly to home buyers.

A study conducted by the National Association of Realtors (NAR) for the Realtor Association of Greater Miami and the Beaches (RAMB) provides a profile of homebuyers in Miami-Dade and Broward counties.  The 2008 Profile of Home Buyers and Sellers provides a comparison of the current state of the South Florida real estate market, and how it compares to the rest of the state and the nation.

• A significantly higher number of South Florida home buyers were born outside the U.S.  44 percent of South Florida buyers were not born in the U.S. compared to 17 percent in Florida and 9 percent in the U.S.
   
• The median age of South Florida homebuyers is 41 compared to 43 in Florida and 39 for the entire U.S.  For first-time homebuyers, the median age in South Florida is 34 compared to 32 in Florida and 30 for the entire U.S. 
   
• The 2007 median household income of homebuyers in South Florida was $74,000 compared to $68,500 in Florida and $74,900 in the U.S.

California is traditionally the first state in previous real estate depressions to signal a turn around in the housing market. In an unprecedented turn of events, Florida is pulling out of the housing downturn first.

Moderately growing home and condo sales in Florida that have lasted for more than a half year is signaling real estate in Florida may be taking a turn for the better. “The increase in sales in the Miami market over the last seven months shows a clear strong upward trend indicative of a market recovery,” said Rick Burch the Chairman of the Realtor Association of Greater Miami and the Beaches. The sales of single-family homes have shown gains every month since August 2008 and condominium sales have increased every six out of the last seven months.

Miami had a 70 percent increase in existing-homes sales including single-family, townhomes, and condominiums for February 2009 compared to February 2008.

The number of days a property stays on the market and inventory levels has also decreased substantially.  In August 2008, the total number of listings on the market was 43,058 that number had dropped to 35,562 by March 2009. “We expect sales to continue to rise in the coming months, and once distressed properties are not a major force, prices will begin to rebound to normal levels,” said Burch.

Record population growth in Florida may contribute to the more promising market after nearly a four year slow down in home sales. The Florida real estate slowdown started after the state was battered by a series of hurricanes and the financial crisis. As a result Florida real estate sales turned sluggish before anywhere else in the U.S.

The U. S. Sunbelt states have a well-known history of attracting large numbers of domestic and international tourists along the U. S. coastline.

Tourists have several available options when it comes to their choice of accommodations, ranging from hotels and motels to the luxury condominiums and resorts.  For families, providing accommodations over a extended vacation, hotels and resort daily rate cost become significant. A growing trend is to choose Short Term Vacation Rentals.

Short Term Vacation Rentals typically offer accommodation by the week or by the month and are generally located in the heart of vacation destinations which have access to local amenities and attractions like the beaches that line the coast of the Carolinas or the Gulf Coast as well as the vacation hot spots like Orlando’s Disneyland Resort or Galveston’s Moody Gardens.

Instead of renting a hotel room for mom and dad, a room for the kids and a room for the grand kids, the extended family rents a three or four bedroom vacation home.  When you do the math for three or four hotel rooms, diners out and add a collection of rental cars, it is easy to see how quickly the costs jump up and how attractive a $3,500 a week vacation home can become.

THE VACATION RENTAL MARKET

The future for Short Term Vacation Rentals is bright. 

The Recent Vacation Rental Management Association (VRMA) has compiled research that confirms that the vacation rental industry is in fact growing and becoming more professional and competitive as more and more products are brought online to provide more and more opportunities for vacationers find that vacation home for the family.

VRMA also reports that the inventory of short term vacation homes that are being offered for rent is increasing every year.  As more second homes are purchased, more short term leasing opportunities are being created.  Obviously a second home owner will not want to enter into a long term lease, so their only opportunity to benefit from owning a second home is to rent it for a short period of time.

There is data confirming the fact that more and more of the second homes are being purchased for use by homeowners and that these homes are also being rented out or used as investments.

As a result, there is a growing market of second homeowners that are seeking out properties that have quality vacation rental management firms that can provide rental services and property management in place.

When you research the second home and the Short Term Vacation home industry, it is pretty easy to confirm this trend.  Almost all of the data you will find will confirm that the inventory of short term rental homes is continuing to rise in many of the destination vacation real estate markets where second homes are being purchased.

VRMA also reports that the income from vacation rental operations is continuing to rise as the Short Term Vacation Property become a more recognized and sought after alternative.

MANAGED OWNERSHIP SOLUTION

Owning a well located, professionally managed, short term furnished vacation property provides an excellent opportunity for Canadians to enter into the US Real Estate market.  The fact that the lease term is short and that the stay is being compared to hotels and resorts increases rents to a point where properties can break even when they are only rented out half a year or so.

This is the ideal situation for a Canadian that would like to rent out their property in the summer in the high season and vacation down south in the winter avoiding the sleet and snow of our winters.  They will quite often be able to manage a scenario where they will be able to stay for a few months for free.

Central Showplace is featuring buying opportunities of short-term rental properties of two, three and four bedroom furnished condominiums and homes that are located in the heart of tourist hotspots and that are ideally suited for families who want to vacation together. 

Harold Green

Central Showplace

Sarasota Association of REALTORS Press Release:

*The following press release was sent to local media on April 16

The Sarasota real estate market saw sales rise to the highest level of the year in March 2009, besting the previous month by 33 percent. In addition, the median sales price for single family homes rose after steadily declining since late last year, indicating a potential sign of the bottoming of the local market.

The overall sales level of 481 was the highest since June 2008, and nearly equaled the level of 504 sales reported in March 2008. Of those sales, 353 were single family homes while 128 were condominiums.

The good news also extended to pending sales, which once again rose in March 2009 to 817. The last time pending sales climbed over 800 was in March 2006, when pending sales also were reported at 817. The total of 817 was 21 percent higher than the 679 pending sales reported in March 2008.

According to statistics from the Mid-Florida Regional MLS for members of the Sarasota Association of Realtors®, 645 single family homes and 175 condominiums went under contract in March 2009, compared to only 471 homes and 208 condos in March 2008.

Pending sales have now exceeded the 500 level for the 15th consecutive month, and the statistic bodes well for the next two or three months, when many of these pendings will become closed sales. Pending sales reflect contracts executed by buyers and sellers during the month. The report continues to reflect a steady, strong pattern, and indicates buyers are more active in the Sarasota market even in the face of difficult economic times.

“We believe the current climate of historically low interest rates, major incentives for first-time homebuyers, and the many other government programs designed to stabilize the economy and the housing industry is all having a very positive impact,” said 2009 SAR President Bill Geller. “Every downturn is followed by an upturn - we know this to be true historically. We’ve been through a difficult time in the real estate industry, and hopefully we are seeing the beginnings of a new, dynamic era.”

The recently enacted first-time homebuyers’ tax credit of $8,000 will likely continue to boost sales this year, Geller said. Those who meet eligibility requirements and purchase a home this year prior to Dec. 1 are eligible for a tax credit of up to $8,000, and unlike the 2008 tax credit, this one does not have to be repaid.

The median sale price for single family homes rose to $152,125 in March 2009 from $142,000 in February 2009 - a 7 percent increase. The median sales price for condominiums fell to $166,750 in March 2009 from $198,000 in February 2009, for a 15 percent drop.

The median price of all single family homes sold in the last 12 months was $217,000, compared to a median of $299,900 for the 12 months ending in March 2008. For condominiums sold in the last 12 months, the median sales price was $256,000, compared to last year’s figure of $295,000.

Another important market tracker - the absorption rate of properties on the market - continues to track lower than last year at this time for both single family homes and condominiums, as inventories have declined. Absorption rate is the number of months it would take to sell the entire remaining listed inventory in a particular category, based upon the sales for that particular month.

For March 2009, the absorption rate for single family homes stood at 17.1 months, compared to 24.1 months the previous month and 25.1 months in March 2008. For condominiums, the absorption rate was at 21.2 months, lower than the 28.5 months in the previous month, and much lower than the 34.1 months reported in March 2008.

*A 12-month rolling median price is not as susceptible to the volatility that can occur within any particular month, which sometimes results in drastic statistical swings up or down from one month to the next.

Download the full report

A U.S. real estate investment expo held in Beijing, China April 10th - 12th had a great turn out as Chinese buyers took advantage of the discounted U.S. real estate. The Chinese economy is far less affected by the current crisis compared to the U.S. combined with the high savings rate of Chinese households, puts the Chinese buyers in a great investment position. Chinese buyers flocked to the expo to finds ways to take advantage of the situation and buy discounted U.S. real estate.

Exhibitors showcases new developments from all over the U.S. as well as discounted resale and government auction solutions. Central Showplace interviewed buyers show particularly strong interest in Florida and Texas. One Texas developer used China’s own Yao Ming to draw crowds of attention and making front page of a local newspaper.

The three-day event concentrated on investment potential of U.S. real estate. Despite the strong Chinese economy buyers were interested in diversifying investments. While other were drawn by the investment U.S. green card opportunities available though the EB5 program. Investors say this is a great time to participate in an investment immigration U.S. green card because the underlying property is so heavily discounted.

More images from the China-USA real estate expo visit our photo gallery

The frenzy is consistent with comments by Lawrence Yun, National Association of Realtors chief economist, “A steady share of investment-home sales results from buyers taking advantage of deeply discounted prices in many areas, with a smaller portion of new homes in the sales mix.”

Many analysts believe that the U.S. government plans are starting to turn around the U.S. real estate market. “Over time, lower mortgage rates should help to improve conditions in the housing market, whose persistent weakness has had a major impact on economic and financial conditions more broadly,” Bernake said.

Forecast by the mortgage bankers’ group raised its 2009 home-loan originations by $800 billion to $2.78 trillion last month. Refinancing will increase to $1.96 trillion in 2009 and purchase originations will total $821 billion. This is evidenced by a surge of refinancing and low interest rates sent homeowners to apply for new loans.

For foreign investors the interest shown by the Chinese buyers is definitely a sign that this is the right time to take advantage of the U.S. real estate discounts.

More images from the China-USA real estate expo visit our photo gallery

Pulte Homes Inc. is buying Centex Corp. for $1.3 billion in stock in a deal that will create the largest U.S. homebuilder. This will give Pulte a large holding of land in Texas and the Carolinas, two of the most resilient real estate markets, and a presence in 29 states.

This purchase supports the buzz that the housing recovery is right around the corner. After a rise in existing and new home sales in February, and a increase in mortgage applications for actual home purchases, the sentiment is clearly improving.

This positions Pulte to be the leading survivor company amongst the big homebuilders in the U.S. Despite the fact that they are taking on Centex’s less healthy balance sheet, this still leaves Pulte with well over three billion dollars in cash.

“We’re not here to necessarily call a bottom of the industry. We do think we’re close to that, and we think this combination provides an accelerated return to profitability which frankly is very important as public companies to return to profitability for our shareholders.” Said Richard Dugas, Pulte’s CEO.

Palm Beach County home prices continued to fall in February, but sales spiked as bargain hunters snapped up foreclosures and short sales, the Florida Association of Realtors.

The median price of a single-family home in Palm Beach County was $228,100, down 34 percent from a year ago. However, 532 homes sold during the month, up 33 percent from a year ago.

Buyers are targeting lower-priced homes that sell for far less than they fetched in 2005 and 2006. “Bargain properties are selling, but expensive Palm Beach County’s homes attract few buyers”, said Steven Presson, an agent at Corcoran Group Real Estate in Palm Beach.

President Barack Obama said he is “very confident” the administration’s plan to purchase toxic assets from banks will unlock credit markets and that there already are signs of a thaw in the housing market. “This is one more element that is going to be absolutely critical in getting credit flowing again,” said the president and added the plan’s primary purpose is “stabilizing the financial system so that banks are lending again, the secondary markets are working again.”

Geithner announced a public-private partnership plan to purchase as much as $1 trillion in devalued real-estate assets and other securities, using $75 billion to $100 billion of the Treasury’s remaining bank-rescue funds.

Market Response

Investors gave a overwhelming endorsement to the initiative as bank shares rose, led by Citigroup Inc. and Bank of America Corp., after the Treasury announcement.

The Dow, up 241 at 8017 in the past week, was up 21 percent in the past four weeks, its best move of that duration since May, 1933. It was also the Dow’s first close above 8,000 in two months. The S&P 500 rose 26 points, or 3.3 percent for the week, to 842. The Nasdaq rose 76 points, or 5 percent to 1621.

Investors last week poured money into the financials, which were best performers with a 6.4 percent gains, but they also bought consumer discretionary stocks, which gained 6.3 percent. Defensive issues were the worst performers, with health care down 1.6 percent and consumer staples down a slight 0.1 percent.

Real Estate markets follow the reponse?

The enthusiasm in the stock market seems to have begun spilling over to real estate. Real estate stocks have also seen significant gains over the pass weeks, as investors are betting on a real estate turn around.

“Prices are so low, we’re starting to see that,” says Marc Savitt, a realtor there for a quarter of a century. “In our area, you’re at the bottom.”

Savitt, is the president of the National Association Of Mortgage Brokers, and may seem a little overly optimistic. But he is hardly alone in sensing a long-awaited bottom in the real estate market.

The National Association of Realtors reports that sales of existing homes grew 5.1 percent to an annual rate of 4.72 million during February 2009, from 4.49 million units in January.

It was the largest monthly sales jump since July 2003, first-time buyers accounted for about half of all transactions. The median price of existing homes in the West was $204,600 in February, 5.1 percent below January and 30.3 percent below the February 2008 figure.

Lawrence Yun, the National Association of Realtor’s chief economist, said first-time buyers accounted for half of all U.S. home sales in February, especially in the lower price ranges.

“Because entry-level buyers are shopping for bargains, distressed sales accounted for 40 to 45 percent of transactions in February,” he said in a statement. “Our analysis shows that distressed homes typically are selling for 20 percent less than the normal market price, and this naturally is drawing down the overall median price.”

“If January was a disaster for housing, February may be the rebound month,” wrote Joel Naroff, president of Naroff Economic Advisors. The sales figures don’t yet reflect the new $8,000 tax credit designed to lure even more first-time buyers into the market, should help early summer sales, but how much will depend on the overall condition of the U.S. economy.