Despite the sales statistics we give out in our market analysis, people still ask me if it is the right moment to sell or the right time to buy a condo. I’d like to answer with another question: what is your time frame?This question is really useful for me to envision the direction you should take. Furthermore, it’s fundamental to clarify the situation both from a buyer’s point of view and from a seller’s point of view.For example, if you are buyer it’s important for me to know if you will buy, remodel and flip the house or if you want to move-in with your family and intend to keep it for the long term.If you are a seller, I would ask you why are you selling your condo? Is it a life changing decision such as moving to another city or are you just looking for a bigger/smaller house?
Let’s analyze these situations from different points of views and let’s check how they differ according to the neighborhood.
From a seller point of view, you should check how many units are listed in the neighborhood, or in your condo. For example, in the Murano Grande there are right now 31 units for sale but only 6 sales in 2016. You should also analyze the average sold price and how long do the properties stay on the market. If the properties stay on the market a long time and you are in a hurry, it’s better to list at a reasonable price. Your realtor should advise you about the real estate market situation so that you make an informed decision. On the other hand, if the inventory is limited, and you are just testing the waters, then you can price it above market value. So as a seller in nowadays market I would advise you to wait or price it above market value if you are not in a hurry to sell. Now if your timing is quick then price your property at the correct price and you will sell it.
From a buyer’s point of view, if the properties in your neighborhood stay on the market for a long time then it’s the perfect time to go house hunting, make offers and wait till they get accepted. Overall if you are thinking about keeping the property for a minimum of 5 years it is even better because you will have had an opportunity to negotiate with the seller and took advantage of lower fixed interest rates. If you are in hurry to buy then consider renting for a few months till you get the seller to reduce his listed price. If you are looking to flip then for sure it, it is not the right timing because you should already consider the seller’s costs which are at a minimum of 7% including the realtor’s commission.
As you can see the inventory of properties on the market plays a important role on your strategy.
Assuming that in mature real estate market such as in Miami the number of buyers is stable, if the number of condos increase and prices are stable then it takes more time to sell a condo. If sellers want to sell fast and they have to lower their price. For this reason, prices could drop easily when preconstruction condos will be ready for occupancy.
At the moment in Greater Downtown Miami, the resale inventory is increasing. In February 2016, the inventory had absorbed 3,000 units. Unfortunately, since January the number of transactions closed decreased.
The inventory expansion is an important aspect that affects all areas in South Florida, but not all of them. For example, in Broward County in June 2016 the residential statistics were positive and in Palm Beach the inventory stayed steady. Also in Miami Beach and other luxury markets in Miami Dade the inventory was stable.
In conclusion, we can say that depending on the time you have to buy or sell your condo this will dictate if it is the right timing for you. Nobody can tell you except you if in this market if it is the perfect moment to purchase or sell your condo.