It should not come as a surprise to anyone that foreclosures are still driving our Miami-Dade real estate market. But what is interesting to me is how many homeowners are still trying to sell their single family houses at prices far above what the market demands.
For the homes that are going under contract, the “days on market” aren’t that bad. REO’s (foreclosed property) are selling in an average of 70 days. Regular non-REO, non-short-sale listing are selling within an average of 105 days. Even the short sell listings are going under contract within an average of 154 days.
The difference is in pricing. REO properties are selling at an average of 97% of listed price, compared to 89% of list price for non-REO properties. This indicates that even for the homes that are selling, the original listed price was too high for the market and it slowed down the sale by an average of 33% compared to the fast moving REO sales.
Because of pricing, there is less than two months worth of inventory for the REO listings, compared to more than a year’s worth of inventory for non-REO, non-short-sale listings. Too many home sellers are still trying to “test the market” instead of pricing the house to attract offers.
The good news is that the average “price per square foot” of the regular closed sales are substantially higher than either REO or short sale closings. Homeowners don’t need to list their homes at rock bottom distressed sale price levels to attract a buyer. But we do need to be more realistic.
Next time: the condo market