SO WHERE IS THIS GOING? UP OR DOWN!?

There seems to be conflicting data out there regarding just where real estate IS going in this current financial climate. First, the seemingly BAD NEWS..... New foreclosure filings rose 18 percent in Miami-Dade County and 14 percent in Broward between July and August, according to data released by RealtyTrac, a foreclosure tracking firm. Compared to a year ago, new filings were up by 11 percent in Miami-Dade and 19% in Broward.

In August, roughly one of every 109 homes in Miami-Dade and one in every 79 in Broward were in some stage of foreclosure process in August, up 19 percent and 24 percent from July respectively. Those figures include homes that have received a notice of default, have been scheduled for auction sale and were repossessed by lenders.

Banks took back 699 properties in Miami-Dade and 1,414 in Broward in August.

Now for the BIG PICTURE and the BRIGHTENING PICTURE.

1) These figures are a slight up tick in foreclosures which is typical in summer months. Especially in South Florida, real estate sales dip in summer as well as economic activity. High season and job creation take place in the winter with our number one trade, tourism.

2) Absorption of inventory and the average price of a home are the true gage of property and future values. These two indexes are linked. Its simple supply and demand.. The more units available, the lower the price. If absorption is brisk and inventory shrinking, then prices stabilize. Absorption and sale rates have been on double digit rises both in Miami-Dade and Broward for the last 7 months in a row. Inventory of Condo units in Miami Dade have shrunk from a high of about 16,700 last October to just over 11,000. That is a brisk absorption rate.

Median prices of condos and homes in Miami Dade have stabilized over the last 4 four months which is an encouraging sign. Since this stabilization is taking place in the summer months, that is a very good sign. 74% of sales have been of foreclosures, Short Sales or REO's. There have been many overseas investors with all cash deals snapping up the best properties.

I have one property that is in escrow that was appraised by the bank at 1.3 million in 2007. It is in escrow for $650,000 and is a Class A beach front 2,100 sqft condo in Sunny Isles Beach.

Truly, the deals are at their best. The market is beginning the turn... Every broker I have spoken with sees this. There are many buyers back in the market but they are picky, shopping for the best deals and usually have a heavy cash investment. What I AM seeing in the last several months is multiple offers on properties as the very best deals dry up. And yes, I have even seen buyers BIDDING against each other, driving the price up.

Interest rates are at their lowest levels in MANY years, Property values are almost at replacement values for land and materials. And of course, like all business cycles, this will not last. Inflation is already on the horizon with all the government spending. The dollar has been weakening for weeks. Watch the price of OIL and you will see where we are headed. OIL is traded and pegged to the US dollar. As the value of our currency erodes, the price of oil will go up as will REAL ESTATE and INTEREST RATES. NOW IS THE TIME! You heard it here first.

DO THESE ABC's

(A) If you are in a mortgage at more than
7% or in an ARM loan. REFI NOW!

(B) IF you are looking for a new property, get on the 8 ball NOW. It will take you months to close and if you are financing, you are running the risk of a higher interest rate on your mortgage.

(C) GET RID of all revolving debt on cards etc. Whatever you have to do to acheive this.. DO IT. Those rates are headed UP and they also affect your credit rating AS those rates go up and may hinder you in getting a home loan.