I decided to write this market update because I feel that the market has changed so fast, it’s almost as if a light switch has been turned on. My concern is that the general community does not understand how massive the change we have experienced this year is. Six months ago, properties took much longer to sell. Sellers needed to market properties for several months before they would expect to find a potential buyer and even then getting buyer financing was a hefty challenge. Around February, we saw more and more people coming to understand that not only were the real estate hedge funds coming to Florida and buying up large amounts of single-family real estate, but the hedge funds clearly had no intention of slowing down.
It is remarkable how our Central Florida market went from 0 to 60 in just a few months’ time. Every day, I talk to families and friends who want to buy homes and hear stories about how they are looking for a home priced from $100,000 to $250,000, and they literally cannot find any available homes for sale. The hedge funds have invested in as many of the single-family residences as they possibly can, and there seems to be no sign of them slowing down. The result is individuals and families trying to buy houses to live in have becoming very frustrated. Everyone is telling me the same thing. They’re making multiple offers on multiple properties and they’re making these offers the first day houses become available on the MLS.
The results are all the same as well, they’re being outbid by cash offers from hedge funds…AND other owner-occupant buyers.The best advice I can give to anyone trying to buy real estate right now is that the days of the lowball offers are over. Six to twelve months ago, sellers were listing properties but not getting any offers, and offers they did yet we’re low balls. In order to buy a house now, a buyer or investor needs to have cash lined up, or have their financing lined up with a very strong preapproval letter. On top of that, they will need to offer the asking price or very close to the asking price in order to be considered a serious offer by the seller.
We are back to a seller’s market people! There is no telling how long this will last, and it feels similar to the bubble of 2002. Right now, if you want to buy a house, you need to be prepared to PAY! Making lowball offers or trying to use creative investor financing with sellers will not result in any property acquisition. I’m definitely not a believer in real estate bubbles, and I, too, question how long this current market will last. The only thing I know is if you want to invest in real estate right now, you are going to pay!