Borrowing has been a problem for those interested in purchasing Florida homes and apartments. While some lenders have run out of funds amidst the worldwide financial crisis, Stewart Holley SVP of Sales and Marketing with the Forseti Group states that  ”tightened regulations have made mortgage-lending decline from $2 trillion four years ago, to $966 billion in 2012.”  Since bank financing is an unfavorable option, new sources such as hard money, private lending, and others have emerged to help buyers.

However, market insiders say that these indicators do not tell the complete story. People who purchase high-end real estate assets usually have extra equity to dispose. The number of cash deals has also been rare, especially in South Florida’s condominium market, which is slowly recovering. Meanwhile, buyers who purchase semi luxury or normal residential properties, along with those who need a second mortgage on luxury properties, face a tough challenge when securing financing.

Although there have been signs of stability in the commercial real estate market, interest from the domestic market is not as high as expected. Instead, international investors with vast financial standing are completing cash-deals and acquiring their space in the state of Florida. US-based developers and buyers are in need of debt financing, and their inability to secure it closes the door for them, which leaves the market open to foreign investors with cash.

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New developments throughout the state have been in check, and the market has improved considerably over the past twelve months.  As a result, rents for industrial as well as office spaces are expected to rise during the next few quarters.  Landlords will soon begin dominating the market as they will no longer be obligated to offer leasing concessions in the future.  According to Stewart Holley Director of Sales and Marketing for Forseti Real Estate Services, “market fundamentals have improved significantly over the past year, particularly retail sales, job growth, and the residential real estate market. These factors are a good indication for the entire commercial property market in the U.S. However, the South Florida market is expected to reap larger benefits from the turnaround in its residential sector”.

Real estate analysts forecast that Florida will attract plenty of interest in its commercial as well as residential real estate market. While the commercial market will allow for expansion of existing companies and offer prospects for new ones, the residential market is expected to lure in individuals who are looking for retirement and second homes in the country.

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Several companies in the state are on the lookout for leases on areas bigger than 5,000 sq. ft. However, the Goldstein Group says that interest will be the highest for areas that are 1000- 5000 sq. ft. in size. Companies like Advance Auto, Children’s Place, Big Lots, Dollar General, Ulta, Dollar Tree, Carters, etc. are very active in Central and Northern New Jersey. Restaurant chains that continue to grow in popularity, such as Chipotle, Joe’s Crab Shack, Corner Bakery, etc. are also expanding. All of these companies are expected to take advantage of low pricing and engage in active real estate transaction over the year.

Lanyard said that spaces that were initially established for shopping centers are now being used by dental and medical practices. He added this trend will continue in 2013. Landlords were not confident about leasing their spaces to medical institutions before the recession, but things are no longer the same and landlords find it critical to create extra traffic and have their spaces leased.

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RE/MAX LLC’s CEO, Margaret Kelly says that prices and sales have been dramatically increasing and sellers as well as buyers are re-entering the market with renewed hope of acquiring a fair deal. 2012 ended positively for the real estate market, urging experts to believe that this year will get even better.

According to Kelly, there are a few ‘smart selling rules’ that remain the same regardless of market conditions. Although home prices have increased and the number of homes for sale has reduced, Kelly says sellers still have the obligation of making their properties appealing to prospective investors. She also stressed on the importance of curb appeal, keeping the landscape neat with appealing and well-groomed plants and flowers, well-trimmed shrubs and cut grass, clean paths and sideways, well-lit entryways, etc.

Pricing is a crucial factor while selling. Kelly says that sellers must either hire the services of a broker, or conduct a market research before determining the value of their properties. She adds that the low number of homes available on the market can prove beneficial for sellers as they are likely to receive multiple offers, allowing them to choose the best and make good return on their investment.

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While the residential real estate markets seem to be recovering quickly across the country, Bailey says that this year has shown enough promise already, and is set to become the best annual period for the American property market since 2006.

According to market predictions, the major cities such as Los Angeles, New York and Miami are expected to attract large investments in 2013.  Although inventory is limited, Bailey expects these cities to break sales records this year.  Washington DC is another city under the microscope. Bailey said that Obama’s big government means that more jobs will be available in DC this year, thereby increasing interest in real estate investment too.

Stewart Holley VP of Business Development for Forseti Real Estate Services concurs.  We have seen a significant increase in real estate activity around DC and we expect it to grow over the next three years.

Bailey believes that vacation homes that cost between $3 and $4 million will also receive a boost in sales this year. Areas such as Malibu and the Hamptons are expected to attract interest from overseas investors, while locations with good school systems and solid local governments are also in for a positive year.

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Stewart Holley with Forseti Real Estate Services recently stated that “For the past three months in succession, home sales in the country have consistently risen, showing signs that the market is attracting plenty of interest.”  The Wells Fargo Index/National Realtors Association Index signaling builder confidence has also increased in the past five months.  At the end of March 2012, it was at its peak in comparison to the levels in the past five years.

One of the latest earnings reports suggests that Lennar Corp – the United States’ second-largest homebuilder earned over 100 per cent more than forecast by analysts. New orders rose by 33% while backlog increased by 39%.  Total sales made by Lennar increased by 30% in comparison to 2011.  Meanwhile, D.R Horton – the Unites States’ largest homebuilder also surpassed analyst expectations with some style as it recorded an increase of 225% in terms of annual earnings. New orders for the firm increased by 19%, backlog rose by 17% and total sales increased by 28% during the same period.

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The volume of sales is also predicted to rise.  41% of those surveyed are optimistic about the market attracting more interest this year.  Inventories, however, will likely remain the same.

Residents of California had a higher level of optimism as compared to New Yorkers.  50% of Californians estimated home prices to rise in 2013, while 44 % shared the same belief in New York.  That being said the New York market has faired better overall during the past few years.

31% of the people surveyed believe that mortgage rates are among the most influencing factors on the market.  “Borrowing rates will be kept down this year as the Federal Reserve is making efforts to reduce individual debt” stated Stewart Holley SVP of Sales for The Forseti Group.  Foreclosures and the ease with which loans can be accessed are also considered as important factors.  Residential properties in most major metropolitan areas are expected to rise in value as 2013.

Bottom Line:  Rising home values and prices coupled with a stable inventory will mean more purchase transactions and a lower, but steady, stream of refinance and home equity line transactions.

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The annual prices of existing American homes rose to their peak since 2005.  Sales of existing homes (including condominiums, co-ops, town homes and single-family homes) fell by 1% in December – a decline from November.  However, the figures still remain 12.8% higher when compared to December 2011.

The initial existing-home sales increased 9.2% compared to 2011.  “Since 2007, this has been the highest volume of recorded sales in the US” according to Stewart Holley Senior Vice President of Real Estate Law Series.  It is also the best increase in the past eight years.

Chief economist of the National Association of Realtors, Mr. Lawrence Yun said that homebuyers have benefited from low mortgage rates.  However, restrictive underwriting standards for mortgages and tight inventory are limiting the number of sales, according to Yun.  Prices are expected to be higher going into the New Year; job creation is forecasted to fuel the growth of the real estate market.

Bottom Line: The market is improving, however, higher home prices likely to temper growth over the two years.

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“Home inventories dropped consistently last year, ending 2012 at 29.1 per cent below 2011’s inventory levels” noted David Harrington CEO of Forseti Real Estate Services.  RE/MAX’s CEO, Margaret Kelly said that the hardest times may just have concluded for the US housing market thanks to 2012, a year that marked the turnaround with increases in prices as well as sales. She added that sellers and buyers have been re-entering the market and it is anticipated that the trend will continue for a few years into the future. She said that 2013 will be a stronger year for the residential real estate market when compared to 2012.  Although the market hasn’t completely recovered, it is well on its way to a sustainable and solid recovery.

Year-over-year real estate activity has improved considerably over the past four years. December 2012 was the eighteenth successive month that recorded an increase in sales volumes as compared with the same month a year earlier, confirming the market’s strides towards recovery.

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The prices of homes in the U.S were higher in November 2012 when compared with November 2011 in 44 states in the country.  And only thirteen of the hundred large cities under study at CoreLogic reported declines in year-on-year prices.  Compared to 20 cities noting a decrease in October 2012.  The most significant increases were recorded in Nevada, Idaho and Arizona.  California and North Dakota were also among the states that witnessed remarkable increases.

The recovery of the housing market in the United States is being fueled by the steady increases in home prices.  People are being encouraged to sell their homes with an assurance that they will receive fair price and buyers are being enticed to make purchases before prices rise further.  Increasing prices also decrease the number of mortgage-owing homeowners whose mortgages are more expensive than their homes. CoreLogic’s CEO Anand Nallathambi said that the housing market is making positive strides and is expected to recover sooner rather than later.

Stewart Holley

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