I was watching Channel 7 News last week when a special segment about real estate foreclosures in South Florida aired. I felt badly for the people in this story that are losing their homes but there are two messages in the video segment below which I feel may be beneficial to some.
It is my feeling that foreclosures in general ARE NOT the best buys for one reason: the majority of the foreclosures that are available were originally purchased at or near the “peak” of the market—and the banks have lent too much money on these properties. Since the banks are owed so much money on a typical foreclosed property, they don’t have the ability to sell it at today’s market price. From WSVN’s Foreclosure Forced Out
Auctioneer: “Welcome to the mortgage foreclosure sale.”
Each week, hundreds of properties in foreclosure are auctioned off.
Auctioneer: “Home Equity Mortgage Corp. vs. Butler.”
On this day, for the first time in 21 years, not a single property sold, the banks had to keep them all.
Luis Valdeon: “The banks lent too much money. They did first mortgage and second mortgages, and they’re completely off of what the price really are, and that’s why everything is so high; you can’t sell them.”
And the foreclosed properties are piling up.
Click Above to Play Video
Why The Miami Beach Real Estate Market Isn’t That Bad
This is a five year history for the South Beach condo market for area code 33139. The dark green bar represents condo sales and the light green bar represents condo units on the market.
I know that some of the numbers are a bit hard to read but they really don’t matter anyway. What matters is the incredible amout of inventory (light green bar) that started to accumulate in May 2005. The number of sales are off from the peak, but nothing alarming. The real story here is the amount of inventory on the market. People have not stopped buying here and Miami Beach real estate continues to sell if it is priced right. If you need to sell your Miami Beach condo, PRICE IT RIGHT. If you don’t need to sell your condo, now is NOT the time to sell and you should take it off the market until some of the inventory gets absorbed. More from Foreclosure Forced Out
Barry Habib: “There’s no simple solution.”
Barry Habib is a nationally known mortgage expert. His advice? Get out before you get in trouble.
Barry Habib: “If they have equity in it, they’ve got to find a way to protect that equity. Put the house up for sale. Don’t be greedy. Don’t try and put it up at an unrealistic number. Homes sell, and they sell very quickly if they’re priced right in every market.”
Miami Beach real estate, South Beach real estate, South Beach condos, Foreclosures