Foreclosure Peak Expected in 2013

The sale of properties repossessed through foreclosure may not peak until 2013, keeping home prices from a meaningful recovery for some time, analysts estimated Monday.

Nearly half of the more than 552,000 REO properties liquidated in the first half of 2011 were held by private banks. In the years ahead, the government — including the Department of Housing and Urban Development, Fannie Mae and Freddie Mac — will begin taking a majority of the activity.

In 2013, REO sales could reach 1.48 million properties, according to estimates from Bank of America Merrill Lynch analysts, a 10% increase from projected amount in 2012.

"We do not expect to see anywhere near the downward pressure on home prices that we had back in 2008, since the expected percent changes in liquidation volumes are so much smaller," BofAML analysts said. "But home prices are starting from a negative point, so the implication is that home prices will continue to decline as the foreclosures transition through the pipeline."

Most of the projected increase will come as the government begins to unload its backlog. The government-sponsored enterprises and HUD, analysts estimate, will liquidate roughly 595,000 properties in 2013 alone.

Total REO liquidations wouldn't drop below 1 million until 2015, according to BofAML.

The Obama administration began work last month developing new strategies for selling this mass of properties, which may involve renting more of them. The Federal Housing Finance Agency is also working on a way to refinance more underwater borrowers to entice them from walking away.

"I would essentially rent the house back to those who are living in them now," said Susan Woodward, an economist with Sand Hill Econometrics. "I don't think it makes a lot of sense to push 4 million people out of their homes when they're victims of a slower economy they had nothing to do with."

Other analysts were skeptical of anyone who could predict accurately what the GSEs or Washington would do, especially after the elections in 2012.

"Do they really think that the government under any administration would let 500,000 homes hit the market and crash prices all over again, six years after the first crash?" said Scott Sambucci, chief analyst at Altos Research.

He said even if unemployment improved by a full percentage point or two — which he said would be a stretch — the market would still struggle to meet such a supply influx.

"It would crash the market, so no, it'll never happen," Sambucci said.

Daren Blomquist at RealtyTrac, which monitors foreclosure filings across the country, said the sale of REO is on track to reach 825,000 by the end of 2011.

"We do expect the REOs to pick back up in 2012 as lenders push through some of the foreclosures delayed by processing and paperwork issues," Blomquist said, adding the inventory needed to be sold could reach well into the millions.

If half of the 800,000 mortgages currently somewhere in the foreclosure process and another half of the 1.5 million loans in serious delinquency end up REO, it could mean an additional, 1.15 million properties that would need to be liquidated — not including new foreclosures that enter the process, according to RealtyTrac.

"That's very possible given continued high unemployment rates and high underwater rates," Blomquist said. RealtyTrac estimates roughly 27% of all outstanding mortgages are worth more than the underlying property.

Woodward said refinancing borrowers, in negative equity or not, down to current market rates could result in a total savings for U.S. households at $250 billion annually. When asked if private investors would return to fund the future mortgage market after such a radical change, she said they would.

"I think the whole world would see this as a one-time fix. We did similar extreme things during the Great Depression," Woodward said.

Investors themselves, though, showed little confidence they would take on such a risk again. In fact, most are trying to keep the government involved in the housing market for the future, to keep risks as low as possible. Otherwise, foreign investors would flee.

While the estimates on how many REO will be sold in the future are extremely difficult to nail down, the size of the best projections share a common and threatening scale. Analysts said major refinancing schemes or new strategies for liquidating REO on a local level would need to be completed soon to rescue house prices from the still increasing pressure of mounting foreclosures.

"The need for policy support would therefore be considered urgent," the BofAML analysts said.

The author of this article is: Jon Prior 

Realty Times - The Joys of Homeownership

Realty Times - The Joys of Homeownership

Real estate gender gap: Men list more homes, women list pricier homes | Inman News

Real estate gender gap: Men list more homes, women list pricier homes | Inman News

Prices Up, Listings Down, in Many Markets

National home sales and median price listings in September rose from a year ago with the home inventory down about 20%, according to multiple reports Thursday.  These positive signals were offset by a continued slight downward trend in home sales prices, down 3.3% from a year ago.  Of the 53 markets surveyed by the company,

17 saw yearly sales price increases, including Detroit (13.4%), Miami (8.4%) and Orlando, Fla. (7.8%).  Home sales nationally went up 7.6% from September 2010 with increases in 44 of 53 markets, including Des Moines, Iowa, (31.3%) and Minneapolis (30.1%).  Single-family home, condo, townhouse and co-op inventory was down 3.27% from August and down 20.09% from September last year, according to Realtor.com.  This year-over-year decrease could mean a return to seasonal patterns and higher prices in the coming months, though markets are still fragile and could weaken in bad economic conditions.

Realtors Should Not Be the Obstacle to Selling Real Estate

I have spent the better part of two days responding to Realtor requests for showings that get cancelled, or rescheduled, or where the agent doesn’t even show up. Maybe I have just been in real estate too long. Maybe I just have an old fashioned sense of how to behave toward others. Yes, I really do believe that manners- treating others as you would like to be treated, and about making others feel comfortable, is important. I believe in the power of ethical and polite behavior.

Real estate veterans remember well the days when our professional relationships meant something. The pros know that we will deal with each other time and time again, and that has always nurtured camaraderie. For the most part real estate was a gentle business. It was a small community of Realtors that embraced ethics and the power of cooperation through the MLS. While there were still untrustworthy agents, we all knew who they were, and acted accordingly.

Today there are a huge number of new Realtors in the business who lack the basic fundamentals of business behavior. Market knowledge, professionalism, respect for your peers, empathy, ethical behavior and adherence to the Realtor Code of Ethics are keys, if not to success, then certainly to a respectable career that doesn’t abuse the rest of us.

The nature of the business has changed so that the traditional mentoring relationship that a broker had with a new agent doesn’t exist. How can we expect professionalism when franchise offices recruit new agents like mad in pursuit of a profit margin? I am amazed by the number of Realtors who lack respect for the value of other Realtor’s time. Please, let’s not ruin it for everyone. At the very least can you speak clearly on the phone, make appointments in advance during the business day and keep them, get familiar with a map, qualify your buyers and be on time? Is that too much to ask?

Upside Down in Your House?

Upside down in your house? Owe more than it is worth? Rob can help you turn your house over and get it sold via a short sale. Rob uses a local law firm to handle the short sale negotiations with your lender, at no cost to you. Often they are able to wipe out the debt as part of the negotiated settlement. There are many tricky issues that arise with a short sale. Preparing the buyer for the process, qualifying you with your lender, negotiating a contract price that is likely to be approved by your lender, then negotiating with your lender and the buyer again in the event they don't agree to the contract price, and keeping the buyer from walking away out of frustration are among the tasks unique to selling properties as a short sale. Most short sales fall apart, and properties are often put under contract multiple times before a successful short sale closes. I recently sold a short sale house as the buyers agent where in the 11th hour we were told by the listing agent a foreclosure sale would occur that week. I was able to get the attorney I use to go to court to ask the Judge to delay the sale in order to allow the short sale to go through. A hair-raising ordeal for all concerned but the final outcome was a successful short sale. Not something a novice could accomplish. Please contact me to discuss the finer points of your short sale situation, and give me the opportunity to explain how I can help you get your short sale approved and closed.

Photo - A postcard of The Upside Down House, a developers promotion for houses in Sunrise Gold Village, Sunrise Florida, early 1960's

Have We Reached The Bottom?

The biggest question my clients seem to have is whether we have reached the bottom of the market. I agree with real estate pundit Barbara Corcoran who says that when we have a consensus that the bottom has been reached, it is long past. I think for the most part the bottom was sometime mid-2010. What has the market in Broward been like so far in 2011? I have worked with a number of out of town buyers and have had hundreds of inquiries from others in the last few months, who have gathered from the news that Florida is having a huge fire sale. A big part of selling real estate has always been reconciling buyer’s expectations with the reality of the market. That is the biggest challenge in today’s market. I worked with four different clients in the last few months who all bid on foreclosure properties. I advised each of them to offer full price, and even more, and they all did. Two succeeded and two lost out to higher offers, one to an offer 50,000 more than the 840,000 list price. Before you think I am nuts to suggest anyone should pay over list during the worst real estate market of my 30-plus year career, let’s look at what the Broward County real estate market of condominiums and houses over 100,000 has done in the last 90 days according to the area MLS data. There are currently 4,206 houses for sale in Broward County over $100,000 that are conventional listings. There are 476 foreclosure listings and 1944 that are short sales. In the last 90 days 1000 conventional sales, 118 foreclosures sales and 443 short sales occurred. In the condominium market priced over $100,000 there are 4106 conventional listings, 291 foreclosures, and 1214 short sale listings. In the last 90 days 721 conventional sales, 330 foreclosure sales and 287 short sales occurred. I looked closer at this data and there are some definite trends that should help buyers understand what is happening in the market. First of all, the number of foreclosure listings is less than most consumers would expect. Foreclosures are the fastest selling category, with most selling within a few weeks of being listed. Most importantly, foreclosure listings are selling in a range from 5% under list to full price, to over list price in many cases. Buyers expecting to get discounts on foreclosure buys were entirely unsuccessful with that strategy, according to the numbers. The sales of short sale properties, that is, homes and condos where the mortgage balance is higher than the market value, had the longest days on market of all. Banks are still not moving with any speed in approving short sales. Short sales are the most frustrating segment of the market where the buyer has little control over the time frame for approval and closing, or if it will happen at all. Pre-approved short sales are the best bet, that is, one where the seller is pre-qualified and a price has been agreed on by the bank. The mortgage company is going to be looking for market value. Some sellers list short sales low to encourage a buyer, but be prepared to agree to a number that aligns with recent comparable sales when the lender responds. Conventional sales have been relatively strong in the last 90 days, pointing to strength in the market coming from the bottoming out of prices. Condos with water views and houses in all price ranges that are priced well, are attracting buyers. Again, the numbers show that properties sell when the price is within ten percent of what they sell for. No huge discounts off list are happening, but the seller has to be realistic in pricing to attract a realistic buyer. It looks like in general Broward County is trending to toward a stronger market. Smart buyers have the largest inventory of available properties to choose from right now. The best deals are in those places where there was the most speculative buying during the boom, such as condos downtown, and infill townhome developments. We don’t have the condo glut that downtown Miami has, or the housing glut of west Florida where overdevelopment was rampant, two areas that have contributed most to the perception of Florida being a real estate disaster. The market in Broward County will continue to be aggravated by the poor economy more than anything. The savvy buyer, however is acting now, and getting some of the best buys Broward County real estate consumers will see for a long, long time.

Symphony Condominium 2/2.5 bath SW Corner Awesome Views!

Search Fort Lauderdale MLS for Houses

Why I Prefer Being the Second Wife of a Listing

I have always said I like to be the second wife of a listing. The first wife is the one who struggles through the hard times when the listing is over-priced and the seller overly ambitious. It is during the first marriage of a listing that the sellers start to find fault with their agent. The honeymoon is over after a few months, and even the most reasonable seller starts to look for any reason why the property hasn't sold, and the reason is clearly you.

Then they divorce the first agent, disappointed by the failed relationship, and start dating again, looking in earnest for the trophy wife, the agent who really holds the key to the sale of their property.

What this seller tends to overlook are the price reductions that took place, or that certainly will, once the trophy lister is engaged. Perhaps the seller will do some things to make the property more appealing. Unlike the first go round, now the seller is serious, and listens in earnest to the trophy lister, agreeing to make them happy with price reductions, easier showings, maybe a cleaner appearance overall.

It is during this second relationship that a sale occurs before the honeymoon is over and the seller starts to blame and complain again.

If you have had it with your agent who has failed you, take me on a date. I'll laugh and smile and make you proud, and in the end, I will sell your property, I guarantee!

Ok People, the Bottom is Clearly Here

Ask anyone who has bought real estate in Broward County this year, or any Realtor currently working in this market. The market has tightened up dramatically as people have come into the market with a determination to buy that we haven't seen since Early 2005. Multiple offers, offers over list price on foreclosures. Today I put a house under contract for a buyer who hasn't even seen it. Earlier this week, a new listing of mine sold in hours for cash, over list, with multiple offers and a back up offer. While we are far from the heady days of 2000-2005, and prices are not increasing, there is now a price that buyers will strike with confidence. If you have been on the sidelines of this market concerned that values are declining, I am confident that that is no longer the case. Well-priced properties are finding eager buyers.

See Fort Lauderdale Real Estate by Boat!

While Venice is not known as the Fort Lauderdale of Italy, Fort Lauderdale is called the Venice of America, and for good reason. There are over 144 miles of waterways in Broward County. If you are in the market for a waterfront home or condominium, I am happy to show you the area by boat. I have been a boater in the area since I was 15. Whether your interest is a condominium or home with Intracoastal, Ocean, New River, Middle River or canal views, or dockage for a kayak or super yacht, seeing the area from the water gives you a great perspective hard to imagine by land.

A Piece of Florida Sunshine for Canadians

The cars in a parking lot at Walmart in Hallandale Beach south of Fort Lauderdale tell the tale. About 1 of out every 10 vehicles is from Canada. It's February; the weather is warm in Florida, so many are visiting tourists. But other Canadians are putting down roots.

One recent transplant, Doug Flood says, "If there ever was an 11th [Canadian] province, it probably would be Florida."

Canadians are the largest single group of foreign homebuyers, accounting last year for some 8 percent of total residential sales in Florida.

The maple leaf has long been a familiar symbol in Florida beach communities, on both the Atlantic and Gulf coasts. But over the past several years, Canadian visitors have increasingly become homebuyers.

Canadians are buying property to rent ou to generate cash flow. In most major centers in Canada, you can't buy property and be cash-flow positive. Not even close.
If you're Canadian, you have very low interest rates at home if you want to borrow against your house. You've have a foreign exchange par, dollar-for-dollar. Prices down here that are 40 to 50 percent lower than what they were five at the peak of the boom in 2005.

Canada Avoided The Housing Crash

Canada largely avoided the collapse in housing prices that devastated American homeowners and the U.S. economy.

Because of tighter financial regulations, things like subprime lending and securitized mortgages are unknown in Canada. Foreclosures are rare. So Canadian real estate steadily appreciated while property values in Florida, Arizona and other hard-hit U.S. markets went into the tank.

Brian Ellis, with Florida Home Finders of Canada, a real estate company based near Toronto, says, "It's put a lot of us in a very, very strong position in that we do have a lot of equity in our homes. And now, we can take some of that equity out, pay cash for either an investment property or a second home in the state of Florida."

Ellis holds seminars in Ontario and Quebec for people interested in buying homes in Florida. His company mostly markets new homes in developments where prices are good and where it can assure clients there are no hidden problems, such as underfunded homeowners associations or Chinese drywall.

Most buyers, Ellis says aren't planning on moving to Florida. They're investors, "all looking at buying property to rent out today to generate cash flow." Ellis says you can't do that in most major cities in Canada. "You can't buy property and be cash-flow positive. Not even close," he says.

Who's Buying

There are wealthy Canadians buying multimillion-dollar beachfront homes. And there are people like Dennis Kivlahan, who recently bought a two-bedroom condo in Fort Myers, Fla., sight unseen.

Kivlahan is a high school history teacher from Ajax, Ontario. He used money from a home equity loan to pay $56,000 cash for the property in Florida.

"I liked the price. It was a very straightforward sale," he says. "We went on vacation there myself, my wife and children. And I saw the unit about three months after I purchased it."

Kivlahan is renting it out with the idea of possibly moving to Fort Myers when it's time to retire.

It's not just individual homebuyers taking advantage of low Florida prices. The Minto group, a Canadian homebuilder, recently bought nearly 1,000 lots near Tampa.

For Canadians, it is an investment and something more — a reminder in the depths of winter, they own a place where it's actually warm.

In a recent phone interview from his home in Ajax, Kivlahan said, "You know right now, as we speak, it's about minus 20 with the wind chill, so I wouldn't mind being down there."

That as much as anything explains why, through boom and bust, Florida real estate eventually always bounces back.

Real Estate Taxes in Broward Made Easy

Real estate taxes in Broward Dade and Palm Beach Counties are often confusing to buyers. Here is a general guideline that will help you determine what your taxes will be on a purchase.

The existing tax bill on a property can vary greatly, depending on how long the sellers have owned it, what they paid, and whether they have homestead exemption, or other types of exemptions that reduce their tax bill. Don’t try to value a property based on the current tax assessment, it won’t make sense.

If you buy a property in 2011, your taxes will be the same as what they were for the seller. In 2012, your property will be re-assessed, and generally your taxes will be about 2.25% of the sales price. To get a more precise estimate of your future property taxes in Broward County, visit http://www.bcpa.net/TaxCalc.asp

There is no penalty charged for out of area property owners, but there are advantages to naming a residential property in Florida as your homestead, or primary residence. To do that you must be able to demonstrate that the property is your primary home. If it is, then you receive a reduction in your tax assessment and your taxes can only go up 3% over the prior year.

If your property is your homestead there is a list of other possible exemptions you may be eligible for. Go to http://www.bcpa.net/TaxCalc.asp to learn more.

For all of your Greater Fort Lauderdale real estate needs, contact:


Rob Rose
R.L. Rose & Co., Realtors
217 NE. 2 Street
Fort Lauderdale, Florida 33301
Office (954) 467-3305
Mobile (954) 328-9700
email robrose@southfloridahome.com
Web www.southfloridahome.com
Facebook www.facebook.com/rlrose
Blog www.robrose.blogspot.com

"Helping People Make Southeast Florida Home For Over 30 Years"

Out Of Town Buyer?

Being an out of town buyer in today’s southeast Florida real estate market can be a challenge. Desirable, well-priced properties are selling better than they have since the market crash that started in the Summer of 2005. It is often the case that good properties aren’t available during a buyer’s short visit to the area. Looking at sales in Broward County in the last 90 days, I see that well-priced properties, properties listed within 10% of recent comparable sales, are selling fast. Foreclosures are getting offers over list in a third of the cases. I sold one last week within hours of it coming on the market, with multiple offers coming in.

Here are some ways I am able to help my clients find the best property, at the best price, as an out of town buyer.

I can set you up to get automatic emails of any property that may be of interest to you as it comes on the market. All listings, including foreclosure properties, are listed on a MLS system in this area. If a property that meets your criteria is listed today, comes back on the market, or has a price reduction, you will automatically get an email alert of it. If you would like to subscribe to this service the best way to begin is to answer the questions found on my Buyer Survey at:

http://www.southfloridahome.com/bin/web/real_estate/AR40906/ACTIVATE_FRAMES/HOME_FINDER/Fort+Lauderdale/1262874358.html

Keep in mind, I don’t necessarily see the properties you are receiving. Please email me with any questions you may have on a property as soon as you receive them. As a native of the area with over 30 years in real estate, there isn’t a condo, city or neighborhood in Broward that I am not familiar with. I will give you invaluable, unglossed information to help you make an informed buying decision.

If a property is something you are seriously interested in I can make a custom video of it that can be viewed online. You will probably find that this gives you a very good picture of a property. I have sold many properties this way to out of town buyers. Due to the time involved in accomplishing this, please only ask that this be done until you have looked at all available information and pictures and are serious about the possibility of a purchase.

If you decide to make an offer on a property site-unseen, I can provide details on recent comparable sales and advise you on the sales history of the property, the situation of the seller, and other pertinent information to determine the best offer price and strategy. I will then prepare an offer that can be signed by you via email.

In the best case scenario, you would have a week or two to come to the area to see what you have contracted to buy. This way you are not coming to the area to see a property that you find has already sold when you arrive. There are a number of ways to structure an offer where you would have the ability to cancel the purchase within a short time frame, without specifically adding a clause that the contract is contingent on your personal inspection on some future date; terms that sellers typically won’t accept, and don’t accept if it is a foreclosure.

Of course, I offer this incomparable level of service only to buyers who are loyal to me as their Realtor. My time and knowledge are valuable commodities that I try not to give away. My website at www.southfloridahome.com should give you a sense of my knowledge of and experience with greater Fort Lauderdale real estate.

Is Your Agent Really Working For You?

I was taught long ago that the role of the Realtor representing a seller was to get the best price possible for their property. In today’s soft market, I have seen many instances where the agent managed to get the seller to accept a price considerably lower than true market value, costing the seller thousands of dollars. Of course, many sellers are stressed and anxious about the possibility of further decline in value, but like a shark that smells blood, self serving agents can feed on that vulnerability by further instilling fear aimed to make a weak offer sound attractive.

I recently had an agent encourage me to accept an offer on a property I have listed at $195,000, for $100,000. He explained that $100,000 is current market value and that I should take it. A week later this property sold for $175,000. Who is this agent working for?

I live in a townhouse complex where two different Realtors have convinced sellers to accept offers that caused everyone in the complex to lose at least $25,000 in value by getting the sellers to take considerably less than they could have gotten.

One of these agents has been very successful listing properties that have already been on the market and not sold, normally because they were over-priced. Looking at the MLS sales history of this agent, he consistently manages to sell properties 10 and 20 percent below market value. For this he is paid three to six percent of the sales price?

Another agent has sold three units under market value. Using the first and second of these sales as a comparable sale to demonstrate why the seller should take less. This was done by the same firm who encouraged me to take $75,000 less than an offer I got a week later.

More times than not, listing agents tend to list properties too high. That is as unprofessional as listing them too low, the main difference being in the second instance the Realtor gets paid but costs the seller money he didn’t have to lose, and in the first the Realtor wastes everyone’s time.
There is of course a middle ground. That is a property that is priced well with a seller prepared to be patient while the buyer is found. For my money, a Realtor who is able to identify the right price and obtain it has earned his commission.

As an example, I recently listed a townhouse in an eight unit community for $325,000. The last sale in the complex was a foreclosure at $285,000. I received three offers at or under $285,000 from agents who pointed to that sale, and even argued that prices had decreased since then. I sold the property for $315,000. As the sellers Realtor, I could have pushed the buyer to accept $285,000 or even less, and argued persuasively in favor of that due to the market. I would have been paid and avoided the risk of being fired for not selling it quickly (often the case with the first listing agent), and the seller would have lost $30,000. To me, that is not doing my job. Many agents would also be concerned that the property wouldn’t appraise at the higher price, but I was able to provide comparable sales of units in the area that supported the sales price.
Self-serving Realtors know that a seller faced with a short sale situation or a foreclosure are desperate. Sellers of short sales often don’t think about the possibility of a deficiency judgment against them after the sale, for the difference between what their lender netted from the sale and what it cost them. They are usually too stressed over the trauma of the sale. While the market is soft and sellers are at a disadvantage, be sure when you choose a Realtor, that they are on your side and not costing you money. In one of the examples I site, a potential judgment $30,000 less than it could be in the future is significant, and not something your Realtor should ignore in pursuit of a quick commission.

Fort Lauderdale Florida The Tropical Wonderland

This is a travel brochure for Fort Lauderdale from the 1920's showing the Riverside Hotel in the background and the New River in the foreground.

What does a 5 hour cab ride cost?

I got an email yesterday from a Canadian couple who thought it was reasonable to expect the following. Now, my guess is that a cab for 5 hours would cost 1000? And that is without the real estate tour, and no tip. Mind you this is a first visit for the possibility of some future retirement purchase and for a "bargain". If these people buy anything in the future in Fort Lauderdale from anyone I will eat my computer. Layovers can be boring, but perhaps a restaurant?

"Hi Ron:

I had to read your email a few times. You want me to drive 45 minutes in rush hour traffic to pick you up in Miami then 45 minutes back to show you some condos in the dark in Fort Lauderdale and return you to Miami by 10 p.m. for your flight to South America assuming your arrival and departure flights are on time, and drive back for another hour in traffic home? Are you serious?

My time is worth about $250 an hour. In 30 years I have not picked up clients at the Miami airport and not for a few hours of looking for some possible future purchase for sure. My time is just too valuable.

If you want to schedule a trip when you can be in the area when you are serious about buying something I am happy to work with you, but if you expect that kind of service I am not your man. I doubt anyone competant would do that.

Enjoy your trip to South America "

I doubt I'll hear from them again!

Broward County Real Estate Market Report February 2011

The biggest question my clients seem to have is whether we have reached the bottom of the market. I agree with real estate pundit Barbara Corcoran who says that when we have a consensus that the bottom has been reached, it is long past. What is the market in Broward like so far in 2011?

I have worked with a number of out of town buyers and have had hundreds of inquiries from others in the last few months, who have gathered from the news that Florida is having a huge fire sale. A big part of selling real estate has always been reconciling buyer’s expectations with the reality of the market. That is the biggest challenge in today’s market. I worked with four different clients in the last few months who all bid on foreclosure properties. I advised each of them to offer full price, and even more, and they all did. Two succeeded and two lost out to higher offers, one to an offer 50,000 more than the 840,000 list price. Before you think I am nuts to suggest anyone should pay over list during the worst real estate market of my 30-plus year career, let’s look at what the Broward County real estate market of condominiums and houses over 100,000 has done in the last 90 days according to the area MLS data. There are currently 4,206 houses for sale in Broward County over $100,000 that are conventional listings. There are 476 foreclosure listings and 1944 that are short sales. In the last 90 days 1000 conventional sales, 118 foreclosures sales and 443 short sales occurred. In the condominium market priced over $100,000 there are 4106 conventional listings, 291 foreclosures, and 1214 short sale listings. In the last 90 days 721 conventional sales, 330 foreclosure sales and 287 short sales occurred. I looked closer at this data and there are some definite trends that should help buyers understand what is happening in the market. First of all, the number of foreclosure listings is less than most consumers would expect. Foreclosures are the fastest selling category, with most selling within a few weeks of being listed. Most importantly, foreclosure listings are selling in a range from 5% under list to full price, to over list price in many cases. Buyers expecting to get discounts on foreclosure buys were entirely unsuccessful with that strategy, according to the numbers. The sales of short sale properties, that is, homes and condos where the mortgage balance is higher than the market value, had the longest days on market of all. Banks are still not moving with any speed in approving short sales. Short sales are the most frustrating segment of the market where the buyer has little control over the time frame for approval and closing, or if it will happen at all. Pre-approved short sales are the best bet, that is, one where the seller is pre-qualified and a price has been agreed on by the bank. The mortgage company is going to be looking for market value. Some sellers list short sales low to encourage a buyer, but be prepared to agree to a number that aligns with recent comparable sales when the lender responds.

Conventional sales have been relatively strong in the last 90 days, pointing to strength in the market coming from the bottoming out of prices. Condos with water views and houses in all price ranges that are priced well, are attracting buyers. Again, the numbers show that properties sell when the price is within ten percent of what they sell for. No huge discounts off list are happening, but the seller has to be realistic in pricing to attract a realistic buyer. It looks like in general Broward County is trending to toward a stronger market. Smart buyers have the largest inventory of available properties to choose from right now. The best deals are in those places where there was the most speculative buying during the boom, such as condos downtown, and infill townhome developments. We don’t have the condo glut that downtown Miami has, or the housing glut of west Florida where overdevelopment was rampant, two areas that have contributed most to the perception of Florida being a real estate disaster. The market in Broward County will continue to be aggravated by the poor economy more than anything. The savvy buyer, however is acting now, and getting some of the best buys Broward County real estate consumers will see for a long, long time.

Listing Appointment

http://ff.im/s8LsS

Miami Beach Tourism Film 1964

Boy does this bring back memories! Like the story that Marti King, whose husband Lewis was the Oldsmobile dealer in Fort Lauderdale, told me about driving a pink Oldsmobile 98 from Fort Lauderdale to the Car Show on Miami Beach for the show in the 50's. She said it had a lucite hood with a rocket, of course. Well, it broke down near Overtown, steamy coolant everywhere. Talk about a buzz kill!

Fisher Auction Co. Inc - A Real Estate / Personal Property Accelerated Marketing Firm :: Auction Details

Fisher Auction Co. Inc - A Real Estate / Personal Property Accelerated Marketing Firm :: Auction Details

Mid Century Modern 3/2 pool- 180 ft of waterfront

Rob Rose | R.L. Rose & Co., Realtors | 954-328-9700 Text too 2100 NE 17 Terrace, Wilton Manors, FL Mid-Century Modern Gem on 180 ft. of River and canal front, Wilton Manors FL 3BR/2BA Single Family House offered at $795,000 Year Built 1964 Sq Footage 2,400 Bedrooms 3 Bathrooms 2 full, 0 partial Floors Unspecified Parking 4+ Lot Size 10,500 sqft HOA/Maint $0 per month DESCRIPTION A dream of a Modernist house on over 10,000 sq. ft. lot with 180 ft. of water frontage. 2400 sq. ft. of artfully designed and carefully maintained space. Kidney shaped black pool, Koi pond and mature bamboo forest at entry. Walled courtyards/aviary/Japanese gardens off master bedroom, master bath and 2nd bedroom. Wonderful light throughout the house. see additional photos below PROPERTY FEATURES - Central A/C - Central heat - Fireplace - High/Vaulted ceiling - Walk-in closet - Tile floor - Family room - Living room - Office/Den - Dining room - Breakfast nook - Dishwasher - Refrigerator - Stove/Oven - Microwave - Granite countertop - Basement - Washer - Dryer - Laundry area - inside - Balcony, Deck, or Patio - Yard - Swimming pool - Sauna OTHER SPECIAL FEATURES - Designed by Modernist Architect John Rude - Point lot with Middle River and canal frontge - One of the few very pure examples of mid-century modernist architecture in Fort Lauderdale ADDITIONAL PHOTOS Entry with Koi pond Living Room Dining Room Master Bedroom Middle River View Middle River View Contact info: Rob Rose R.L. Rose & Co., Realtors 954-328-9700 Text too For sale by agent/broker Equal Opportunity Housing Posted: Oct 4, 2009, 7:27am PDT

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The market is HOT with foreclosure and short sale bargains. In the last 30-60 days there has been a noticeable shift in the market. I have had three clients bid on different foreclosure and short sale properties where there were multiple bids, some over the asking price. This is really the time if you want to buy at rock bottom, to make your move.

Buyers, get into negotiating position

Bridging the price gap between home buyers and sellers can be a challenge in today's market. Sellers, many of whom have a hard time accepting that their home has lost value, often expect to sell for more than buyers are willing to pay.

Buyers, on the other hand, are concerned that home prices could drop further. So, they're making sure that they don't overpay.

There are exceptions to the rule. Very desirable homes in the best locations sometimes sell for over the asking price, particularly if there isn't much inventory of similar homes on the market. Some foreclosure properties at bargain prices are attracting multiple offers. Prices are rising in select areas. Overall, however, it's a still a buyer's market in most parts of the country.

There's not much you can do to convince an unrealistic seller that he should accept your market-price offer. Many of the listings on the market belong to sellers who will sell only if they get a certain price. They may not be able to sell for less because of the size of the mortgage(s) secured against the property. In some cases, sellers bought at the peak and then improved the property. They can't bear to take the loss they would incur if they sold at market price. In other words, these sellers would like to sell, but they won't sell unless they get their price.

Before you make an offer on a listing that's priced over market, try to find out as much as possible about the sellers' motivation, and if there's any flexibility in their price. A lot of time and emotional energy goes into making an offer. Save your efforts for listings where the sellers are motivated. That is, they don't just want to sell -- they need to sell.

Some sellers want to test the waters at a price that's higher than the market will support. They usually feel that someone will appreciate the added value their home offers and pay more for it. However, these sellers will often negotiate with a legitimate buyer who offers a price that is less than the list price.

HOUSE HUNTING TIP: To put yourself in the best negotiating position, make sure that your financing is in order and that you are able to show the seller that you are capable of closing the deal. The fallout ratio is high in the current market. Many of these transactions fail to close because the buyers couldn't get financing.

It's always a good idea to be preapproved for the financing you'll need to buy a home before you make an offer. Preapproval involves making a formal loan application, having your credit checked, as well as verifying your funds for down payment and closing costs, and validating your income and employment. Lenders often want to know that you have enough surplus cash to make house payments (mortgage, property taxes and insurance) for two to three months.

Buyers who make an initial low offer and who aren't in competition should make as clean an offer as possible. This means omitting anything that's not necessary. However, you should include contingencies for loan and appraisal approval and an inspection contingency.

It's a good idea to include a copy of your preapproval letter with your offer. If you are approved for a higher price than you are offering, ask your lender or mortgage broker to issue a preapproval letter for the price you're offering.

THE CLOSING: Then be prepared to negotiate. It may take several rounds of counteroffering back and forth to reach a mutually acceptable price.

Miami housing: The power of cheap

Prices soared in the bubble and have crashed in the downturn. Now buyers are venturing back. Meet Theresa Caccamise, owner of an $85,000 fixer-upper.

By Tami Luhby, CNNMoney.com senior writer

Last Updated: April 9, 2009: 5:39 AM ET

MIAMI (CNNMoney.com) -- Ivette Castillo thought buying a home at a time like this was out of the question. But when a friend told her there were great deals to be had in Miami, Castillo decided to test the waters.

To her amazement, she found she could have her pick of condos in the trendy Brickell neighborhood for less than the $1,200 she was paying to rent in nearby Doral. She bought a $99,000 pad that had been in foreclosure but needed little more than a paint job. The same condo sold for nearly $185,000 a few years ago.

"It was such a great opportunity. I didn't think twice," said Castillo, 24, who owns a marketing agency. "I'm getting more for my buck."

Castillo is among the thousands of people scooping up homes and condos in the Miami area, where properties are selling for a fraction of what they were just a few years ago.

It wasn't too long ago that the Miami housing market was one of the hottest in the country. Cranes filled the skies as developers rushed to cash in. Home values shot up 75% over three years, and some of the most desirable addresses doubled in price.

The market peaked in late 2005, and then it crashed hard.

As foreclosures soared, South Florida housing prices fell an average of 36%. The foreclosure rate hit 8.9% in February, up from 3.8% a year ago, according to First American CoreLogic. That compares to 1.7% for the rest of the country. Sales ground to a standstill.

But in recent months, low prices and low interest rates have been luring buyers. First-timers are finally finding homes they can afford, while investors say that for the first time in years they can negotiate deals that make sense.

The sales numbers are dramatic. In February alone, condo purchases skyrocketed 71% from a year earlier, while home sales soared 68%, according to the Florida Association of Realtors.

"I'm busier now than I was at the height of the market," said Ron Platt, an agent with Keller Williams Realty.

Miami isn't the only area experiencing a resurgence. Sales are up throughout Florida, as they are in other hard-hit markets, such as California. What's driving the spike? Bargain basement prices on foreclosed homes.

Sales of foreclosed properties and short-sales, where the bank agrees to forgive any remaining debt above the sale price, make up two-thirds of the transactions in Miami, according to Condo Vultures, a consulting firm.

The distress sales have driven prices lower. In February, the median price of a condo fell by half and the price of a single-family home dropped by 36% from a year ago, according to the Realtors group. Some newer condos that were selling for close to $500,000 are now going for a quarter of the price.

More to fall, but then steady

To be sure, the Miami market is far from returning to normal, real estate agents say. It will be years before it returns to its pre-boom patterns.

Most industry experts seem to agree that home values will fall another 10% or so over the next year. Then prices will stabilize.

Financing remains a challenge for some buyers, particularly those interested in condos. People paying cash or qualifying for government-insured FHA loans, which require only 3.5% down, are in the game. But they are having trouble buying condos in buildings where more than 15% of units are delinquent, since mortgage finance companies Fannie Mae and Freddie Mac won't touch those loans.

"We know the buyers are here," said Ron Shuffield, president of Esslinger Wooten Maxwell Realtors. "They just can't get financing."

Miami is also marked by a huge number of properties available for sale: 13,200 homes and 21,600 condos, according to Rick Burch, chair of the Realtor Association of Greater Miami and the Beaches. That's a 31-month supply of houses and a 52-month supply of apartments. And foreclosures keep coming.

Burch is hopeful the market will digest the inventory by the end of next year; he notes that 43,100 properties were available in July. But he's one of the more optimistic ones. Other experts say it could be years before inventories return to the traditional level of six to eight months' supply, the true sign of a normal market.

"When you've got that kind of inventory, you'd expect not to be able to sell things anywhere near the cost to build them for years to come," said Wayne Archer, executive director of the Bergstrom Center for Real Estate Studies at the University of Florida. "We've got to go through this before we get to recovery."

Buyers keep rushing in

But the uncertainty about the Miami market, including the possibility of further price declines, isn't stopping buyers.

Take Ricardo Melendez, 47. After losing money last year on a condo he bought in 2007, Melendez sat on the sidelines until recently because he felt homes were still overpriced. Then his agent, Kevin Veilleux, showed him an apartment that listed for $120,000, nearly one-quarter the price it sold for in 2005. The upscale condo, in a full-service building with a wrap-around balcony overlooking Biscayne Bay, needed almost no work. So Melendez bought it in late March.

"If I lose now and gain it later, as long as I'm even in the end, I'm okay with that," said Melendez, a corporate comptroller who plans to live there for at least five years.

Some buyers find they can buy more for their money each passing month.

When Raul Lamus started looking for homes a year ago in upscale Pinecrest, just south of Miami, he could afford to purchase a 5,000-square-foot dwelling on a half-acre lot. Within six months, the Kraft financial executive found he could upgrade to a larger home on a bigger piece of property closer to the water.

"The houses we were seeing were significantly better than the houses we were seeing in the beginning," said Lamus, who relocated to South Florida from Buenos Aires with his wife and two children.

After months of negotiation, he closed in February on a grand $1.7 million home, with hurricane-proof windows and a swimming pool, on an acre of land. The house was originally put on the market in 2007 for close to $2.5 million.

Plummeting prices have also brought investors back into the market, a welcome sign for real estate agents who are depending on them to soak up the excess inventory. Many had been waiting either because they felt the market was overpriced or because they lost their shirts in the crash.

A real estate investor for 20 years, Theresa Caccamise stopped buying in 2002. She didn't want to get involved in the frenzy, concerned the market could change overnight.

Now, she sees bargains. Last month, she bought a fixer-upper in foreclosure in working class North Miami for $85,000. The house, on a block of generally well-kept homes, had sold for $410,000 two years ago.

Caccamise, who works in the mortgage industry, plans to put about $30,000 worth of work into the property, which needs a new kitchen and bathroom and repairs to the roof. She figures she could get $190,000 for it.

Now, she's on the prowl for more opportunities. Banks, she said, are willing to make deals since they want to get foreclosed properties off their books.

"It's the Kmart blue light special sale," she said.

You Don't Have to Be Rich to Own a Home on the Beach

Rob Rose worked with the Wall Street Journal’s Brett Arends as he took a tour through Florida's best luxury real estate deals last month. Here is an article the Brett wrote about his observations of the market in southeast Florida

Miami Beach, Fla. --Yes, this state is on sale. But how cheaply can you get a weekend home? After all, not everybody is in the market for a multimillion-dollar residence, or is ready to spend $1,000 a month on condo fees. So what kind of deals are out there now for the rest of us? The answer is that for less than $200,000 you can now get something pretty reasonable, on or near the water.

Whether you count that as value may depend on a lot of things. But these are prices not seen down here since well before the bubble.

For example, $150,000 might now get you a three-bedroom house in a distressed sale in Cape Coral, a town on the Gulf coast just north of Naples. "I've got one in a short (read distressed) sale," says local agent Joan Psarros at Re/Max. "It's 2,000 square feet, on a fresh water canal, and it has a pool. It's only a few years old – it was built in 2005."

The owner, a speculator from Connecticut, paid $275,000 for it in the boom.

Some of the best bargains are to be found in the southeastern crescent, from Miami to West Palm Beach. That's where the torrent of new homes flooding onto the market has washed all prices downstream.

In West Palm Beach, if you look hard, you can find new, upscale one-bedroom condos for less than $200,000 if you look hard. A few years ago, when they were being built, the same units were selling for nearly twice that.

You have to do serious detective work to find the best deals. Look beyond the sticker prices. There is a lot of inventory around. There's often a desperate seller.

I looked at one unit that was on the market for $225,000 – while a few floors below an almost identical apartment was being offered in a distressed sale for $175,000.

In Fort Lauderdale, the cheapest bargains are in some of the older co-ops a few blocks from the beach. I looked at some one- or two-bedroom units for around $150,000. A few years ago, they would have cost around $250,000 or more.

No, they aren't fancy. The architecture is what brokers, with some humor, call "mid-century modern." That means they were new in 1950.

But the buildings are perfectly sound, your fees may be only $200 a month, and you'll find yourself with a pool and a five-minute walk to the beach.

If you want to go 20 minutes west, $200,000 or less will buy you a brand new two-bedroom unit in a development with gyms, spas, pools and tennis courts. When they were being built, they were being sold for twice that.

But probably the cheapest deals I saw were in the historic Art Deco district of Miami Beach itself. Here you can get small one-bedroom units for well under $200,000. Some are selling for much less than that.

South Beach broker Leslie Cooper of Douglas Elliman Florida showed me a tiny one-bedroom of about 450 square feet that is being sold in a distressed sale for $139,000. You might get it for less. The owner, an artist, bought it a few years ago for $175,000 and has also fixed it up beautifully. You even get a designer bathroom, if such things matter to you.

I also looked at one-bedroom units nearby that had been completely renovated and are now being offered for about $170,000.

Lots of these places are on the market in the Art Deco area. They're a short walk from the Lincoln Road shops and restaurants and a short walk to the beach. What else are you looking for? You'll even have the New World Symphony around the corner.

At the height of the boom these prices were a lot higher. "A few years ago many of these types of units were selling for $230,000, some as high as $270,000," says Ms Cooper, the real estate broker.

By the standards of the Northeast, let alone Europe, these prices seem cheap. To those elsewhere in the country, they may not. But they are certainly a lot cheaper than they were.

Wall Street Journal Video Quotes Rob Rose on South Florida Bargains

Rob Rose Interviewed by Wall Street Journal on S. Florida Real Estate

Brett Arends is in south Florida for a week writing a series of articles on the real estate market. Rob spent two days with Brett as he visited Miami, Fort Lauderdale, Delray and Palm Beach. Here is his first article on the market in SW Florida.

Florida for Sale!
May 22, 2008 7:18 p.m.

NAPLES, Fla.-- You can hardly escape the real estate crash down here. Even the young woman who checked me into my hotel just lost her home.

So if you are looking to buy a place, someone is going to make you a deal.

The surprising twist: It isn't just at the bottom end of the market. As my colleague June Fletcher noted in March¹, there have been huge price drops in areas where foreclosures are at record highs. But you also see deep discounting in the snazzier parts of town. For three years, Americans have been using Web sites like Zillow to rubberneck the biggest real estate crash since the Great Depression and, maybe, to scout for values. But there's only so much the Web, or the statistics, can tell you. So I decided to come down here to see it up close. I'll be writing a series of columns over the next few days to tell you what I've learned.

WSJ's Brett Arends shows some high-end homes in Florida that are selling at cut-rate prices.

And who knows? I'm not really in the market for a winter home here. But you never know...

What I'm finding so far?

The market's even worse than you hear. Which means, if you're a buyer, it's even better.

The biggest price drops haven't fully shown up in the official data because that stuff isn't selling at all.

Some condo developments out in alligator swampland -- excuse me, on 'pre development golf courses' -- have gone dark.

Meanwhile, hard though it is to believe, plenty of others in the market are still in denial.

Brokers will tell you about homes still being offered vainly at $899,000 long after identical units in the same building have sold for $500,000.

This extends to some brokers too. When I called around before flying down, a remarkable number told me, "Gosh, I'm just the busiest I've ever been! The market's really picking up."

I guess they were gambling I hadn't read a newspaper in, oh, about three years.

But the good news is that there are deals around in the kinds of places you might actually want to buy.

Realtor Craig Jones of John R. Wood in Naples showed me a two-bedroom, sixth-floor co-op near the beach that probably would fetched more than $600,000 at the peak. Today it's on the market for $498,000. And Ms Jones whispers you can probably get it for $425,000.

That' a big price cut. The apartment has spectacular Gulf views and is a five-minute walk to the beach.

According to official data, this unit sold for $480,000 back in July 2002. So in some cases we are back to those prices, maybe even earlier. That's pretty much pre-bubble.

Zillow, for its part, says this co-op was last worth about $425,000 in 2000 --2001.

Incidentally, Zillow now thinks this property is worth $740,000². And the Web site says the value has risen by $200,000 in the past year.

So much for relying on the Web. What's actually happening in these markets isn't always showing up right away.

Meanwhile, a one-bedroom condo near the beach just sold for $237,000. At the end of 2004 the owners bought it for $370,000.

It's the same elsewhere along the west coast. On Siesta Key, near Sarasota, a corner condo right on the water is on the market for $500,000, and you could probably get it for $450,000. Realtor Raul Elizalde, at Michael Saunders and Associates, says that at the peak it sold for more than $700,000.

There are other deals on the island. It looks more interesting than snooty neighbor Longboat Key, where the lawns have been trimmed with toenail scissors, and former Florida Congresswoman Katherine Harris has a home.

Along the coast there are gorgeous, brand new homes on the water down from $3.1 million to $2.1 million; and the broker whispers you can get them for $1.8 million.

Bill Earls in Naples is showing a waterfront mansion with a boat dock for $9.9 million that "would have sold for $12 million, maybe $ 14 million, a few years ago." Sure, he's a broker; he would say that. But it's not implausible.

I was tempted to buy it and put it on my expense account. But the place was a little ornate for my taste.

Mr Earls largely deals with the high end and the very high end of the market. But he says the rich are as reluctant to buy as anyone.

Write to Brett Arends at brett.arends@wsj.com³

Barbara Corcoran Sites Fort Lauderdale Among 6 Scariest Markets

Barbara Corcoran was on the Today Show last week and sited Fort Lauderdale as one of the top 6 scariest markets.Here is what she says:

Fort Lauderdale, Fla.
One in 73 homes is in foreclosure in Fort Lauderdale, about twice as many as this time last year. The median home price is $345,900, down 5.7 percent from last year. Unemployment is slightly below the national average at 4.3 percent.

There are some factors here that are keeping prospective buyers on the fence. One reason is that there's too much candy on the shelf. Between standard listings, foreclosures and short sales, there is entirely too much product from which to choose. Media reports predicting that real estate hasn’t neared bottom yet encourage buyers to try to time the market. Sellers reluctant to come down to reality are still holding on to peak market prices. But brokers say buyer confidence here is improving and that they’re seeing increased activity over the past six months as people realize they have a terrific opportunity to get a great value in a home in the current market.

Has the Market Bottomed Out?

Here is an article from the Wall Street Journal that is good news for the housing market. I am finding that I am super busy with buyers who suspect it is time to buy.

The Housing Crisis Is Over

By CYRIL MOULLE-BERTEAUX
May 6, 2008; Page A23

The dire headlines coming fast and furious in the financial and popular press suggest that the housing crisis is intensifying. Yet it is very likely that April 2008 will mark the bottom of the U.S. housing market. Yes, the housing market is bottoming right now.

How can this be? For starters, a bottom does not mean that prices are about to return to the heady days of 2005. That probably won't happen for another 15 years. It just means that the trend is no longer getting worse, which is the critical factor.

Most people forget that the current housing bust is nearly three years old. Home sales peaked in July 2005. New home sales are down a staggering 63% from peak levels of 1.4 million. Housing starts have fallen more than 50% and, adjusted for population growth, are back to the trough levels of 1982.

Furthermore, residential construction is close to 15-year lows at 3.8% of GDP; by the fourth quarter of this year, it will probably hit the lowest level ever. So what's going to stop the housing decline? Very simply, the same thing that caused the bust: affordability.

The boom made housing unaffordable for many American families, especially first-time home buyers. During the 1990s and early 2000s, it took 19% of average monthly income to service a conforming mortgage on the average home purchased. By 2005 and 2006, it was absorbing 25% of monthly income. For first time buyers, it went from 29% of income to 37%. That just proved to be too much.

Prices got so high that people who intended to actually live in the houses they purchased (as opposed to speculators) stopped buying. This caused the bubble to burst.

Since then, house prices have fallen 10%-15%, while incomes have kept growing (albeit more slowly recently) and mortgage rates have come down 70 basis points from their highs. As a result, it now takes 19% of monthly income for the average home buyer, and 31% of monthly income for the first-time home buyer, to purchase a house. In other words, homes on average are back to being as affordable as during the best of times in the 1990s. Numerous households that had been priced out of the market can now afford to get in.

The next question is: Even if home sales pick up, how can home prices stop falling with so many houses vacant and unsold? The flip but true answer: because they always do.

In the past five major housing market corrections (and there were some big ones, such as in the early 1980s when home sales also fell by 50%-60% and prices fell 12%-15% in real terms), every time home sales bottomed, the pace of house-price declines halved within one or two months.

The explanation is that by the time home sales stop declining, inventories of unsold homes have usually already started falling in absolute terms and begin to peak out in "months of supply" terms. That's the case right now: New home inventories peaked at 598,000 homes in July 2006, and stand at 482,000 homes as of the end of March. This inventory is equivalent to 11 months of supply, a 25-year high – but it is similar to 1974, 1982 and 1991 levels, which saw a subsequent slowing in home-price declines within the next six months.

Inventories are declining because construction activity has been falling for such a long time that home completions are now just about undershooting new home sales. In a few months, completions of new homes for sale could be undershooting new home sales by 50,000-100,000 annually.

Inventories will drop even faster to 400,000 – or seven months of supply – by the end of 2008. This shift in inventories will have a significant impact on prices, although house prices won't stop falling entirely until inventories reach five months of supply sometime in 2009. A five-month supply has historically signaled tightness in the housing market.

Many pundits claim that house prices need to fall another 30% to bring them back in line with where they've been historically. This is usually based on an analysis of house prices adjusted for inflation: Real house prices are 30% above their 40-year, inflation-adjusted average, so they must fall 30%. This simplistic analysis is appealing on the surface, but is flawed for a variety of reasons.

Most importantly, it neglects the fact that a great majority of Americans buy their houses with mortgages. And if one buys a house with a mortgage, the most important factor in deciding what to pay for the house is how much of one's income is required to be able to make the mortgage payments on the house. Today the rate on a 30-year, fixed-rate mortgage is 5.7%. Back in 1981, the rate hit 18.5%. Comparing today's house prices to the 1970s or 1980s, when mortgage rates were stratospheric, is misguided and misleading.

This is all good news for the broader economy. The housing bust has been subtracting a full percentage point from GDP for almost two years now, which is very large for a sector that represents less than 5% of economic activity.

When the rate of house-price declines halves, there will be a wholesale shift in markets' perceptions. All of a sudden, the expected value of the collateral (i.e. houses) for much of the lending that went on for the past decade will change. Right now, when valuing the collateral, market participants including banks are extrapolating the current pace of house price declines for another two to three years; this has a significant impact on the amount of delinquencies, foreclosures and credit losses that lenders are expected to face.

More home sales and smaller price declines means fewer homeowners will be underwater on their mortgages. They will thus have less incentive to walk away and opt for foreclosure.

A milder house-price decline scenario could lead to increases in the market value of a lot of the securitized mortgages that have been responsible for $300 billion of write-downs in the past year. Even if write-backs do not occur, stabilizing collateral values will have a huge impact on the markets' perception of risk related to housing, the financial system, and the economy.

We are of course experiencing a serious housing bust, with serious economic consequences that are still unfolding. The odds are that the reverberations will lead to subtrend growth for a couple of years. Nonetheless, housing led us into this credit crisis and this recession. It is likely to lead us out. And that process is underway, right now.

Mr. Moulle-Berteaux is managing partner of Traxis Partners LP, a hedge fund firm based in New York.

How the Market has Changed

I’ve received lots of feedback on the lead story in my last newsletter in which I lamented the current state of the real estate business in south Florida. Although it felt great for me to vent about my frustrations, I realized the article was not especially helpful to the very people I have dedicated my business to serving: prospective buyers. The fact is, many people from around the country view this as an unprecedented occasion to buy into what remains one of the nation’s most desirable communities. And I’d like to help them. Beginning with this newsletter, I am going to offer some insight about the current environment and some practical suggestions for buyers who are serious about getting the most from their real estate investment – and their broker – during tough times.

Many of the people seeking to buy real estate in and around Ft. Lauderdale today have had prior exposure to the market. Maybe they invested in property and sold it shortly after purchase for a significant profit. Or they came close to buying but decided to wait until prices came down. Or maybe they have spent time here over the years and decided they would like to buy a second home or a place for retirement when the time is right. In order to get the best deal -- and the best service -- in this environment, it is important for buyers to understand the ways in which the market is the same as they have experienced in the past and the ways in which it is has changed.

WHAT’S THE SAME WHAT HAS CHANGED

Diverse Properties Ft. Lauderdale offers a wide range of Florida traditional and contemporary homes, condos and apartments at prices to suit every buyer.	More Inventory Real estate development has outpaced recent growth and significantly more people are selling than average, so there are many more properties available.
Motivated Sellers Divorce, relocation, and settling estates are among the life changes that motivate some sellers to try to sell their properties quickly and price them accordingly.	Different Motivations Today, some of these sellers are more likely to be motivated by financial hardship and are reluctantly selling real estate to help regain solid financial footing.
Pricing Factors To fairly price real estate today, sellers and their agents still take into account time-tested factors, including quality and condition of the property, location, and recent comparable sales.	Off-Market Deals In addition to properties openly listed for sale at market-tested prices, there are now other opportunities that are not widely promoted including foreclosures and short sales.
Financing Options Qualified buyers will find responsible and responsive lenders willing to offer a range of financing options.	Focus on Highly Qualified Buyers Reputable lenders are now more risk averse and will only consider prospective buyers with excellent credit history.
Complex Transaction The process of buying real estate is time-consuming and complex and requires buyers and sellers to have professional counsel and to maintain focus.	Emotional Transaction Real estate transactions today are often highly emotional, with all parties feeling somewhat compromised by the process or the ultimate deal.
Solid Long-Term Investment Ft. Lauderdale real estate has shown solid growth over the long term and remains a good investment today.	Short Term Risk Buyers who purchase now will need to wait longer for properties to appreciate and they may face some risk of short term decline.

By understanding the changes in the market, buyers are in a better position to go into the process of buying real estate in south Florida with realistic expectations. From my perspective, the more my clients know about the market dynamics we’re going to be dealing with as a team, the easier it is for me to help them navigate the new environment and find just the property they’re seeking.