Article: Homes More Affordable; Loans Are Not

The Miami Herald featured an article yesterday about a growing issue that's causing the property market in southeast Florida to stagnate. Although prices are - finally - coming down, local buyers very often either can't get the mortgages they require; can only get mortgage at rather prohibitive terms; or need to stump up large downpayments. As the title of the article suggests, homes are indeed now becoming more affordable. But they're still out of reach to many - first time buyers for one - who can't get appropriate loans.

This means that the supply of properties is swelling ever more. Currently, Dade county has a 32-month supply of houses and a massive 41-month of condos, whilst Browward has a 20-months supply of houses and a 29-month supply of condos. In a "normal" market, there would ordinarily be a six to twelve month supply of such properties.

So, what about prices? 62% of condos in Dade county are under $300,000, whilst this percentage is at 78% for Broward. $300,000 is (at the moment) just over £165,000 - so there's plenty of supply of properties at the lower end of the market. But this doesn't help if people are unable to find loans to pay for the properties - something that, given the recent major financial wobbles - probably won't be rectified anytime soon.

This all means that as a foreign buyer, you may well be at an advantage. If you're purchasing a property with cash or are able to obtain a loan in your home country, you're in a very great position. Sellers will view you as a keen buyer and this in itself may work to your advantage - you may well be able to negotiate on price.

Article: Homes more affordable; loans are not (28th September 2008, The Miami Herald)