Miami Real Estate and Community News

Nov. 3, 2021

New Build or Existing Home: Which One Is Right For You?

New Build Or Existing Home, Miami Homes for Sale, Douglas Elliman

New Build or Existing Home: Which One Is Right for You? 

 

Homebuyers today are facing a huge dilemma. There simply aren’t enough homes for sale.1

 

Nationwide, there were 1.27 million active listings in September, down 13% from the previous year. According to the National Association of Realtors, that’s about 2.4 months of inventory, which is far less than the six months that is generally needed to strike a healthy balance between supply and demand.2

 

Given the limited number of available properties, if you’re a buyer in today’s market, you may need to expand your search to include both new construction and resale homes. But it can feel a little like comparing apples to oranges.

 

Let’s take a closer look at some of the factors you should take into account when choosing between a new build or an existing home.

 

 

TIMEFRAME

 

How quickly do you want (or need) to move into your next home? Your timeframe can be a determining factor when it comes to choosing between a new build or resale.

 

New Build

If you opt for new construction, you may be surprised by how long you have to wait to get the keys to your new digs. Currently, many home builders are dealing with unique challenges brought on by the COVID-19 pandemic, including rising costs, labor and material shortages, and shipping delays. While historically it took around five to six months to build a home, many builders are now reporting construction timelines closer to a year or more.3

 

These issues have led some builders to cancel contracts or raise the price on unsuspecting homebuyers long after agreements were signed. Unfortunately, this scenario can throw a major wrench in your moving plans and significantly delay your timeline.

 

To minimize these types of surprises, it’s crucial to have a real estate agent represent you in a new home purchase. We can help negotiate better contract terms and advise you about the potential risks involved.

 

Existing Home

If you're in a hurry to move into your next residence, then you may want to stick to shopping for an existing home.

 

You can typically move into a resale home as soon as you've closed the deal. The average time it takes to close a home purchase is around 51 days, but it can vary based on loan type and market activity.4

 

If you need to move even sooner, it’s sometimes possible to close faster, especially if you’re a cash buyer. In fact, many sellers prefer a quick closing, so it can give you an advantage in a competitive market.

 

 

LOCATION

 

From commute to construction to amenities, there’s a lot to consider when choosing your next neighborhood.

 

New Build

With a brand-new home, you're more likely to move into a neighborhood that's located on the edge of town and is still undergoing development.5 This could mean a longer commute and ongoing construction for some time.

 

However, new developments can also offer a lot of amenities that appeal to modern homebuyers. Water features, hike-and-bike trails, tot lots, and dog parks are just a few of the enhancements we’re seeing pop up in master-planned communities across the country. And some feature new schools and their own urban-like centers with restaurants, retail, and office space.6

 

Existing Home

An existing home is more likely to be located close to town in a neighborhood with mature trees, established schools, and a deeply-rooted community. As a result, you may find the neighborhood's trajectory to be more predictable than an up-and-coming area.

 

But the amenities may be lacking and the infrastructure dated when compared to newer communities. And while some homebuyers love the charm and eclectic feel of an older neighborhood, others prefer the sleek and cohesive look of a newer development.

 

 

MAINTENANCE

 

Are you a DIY enthusiast, or do you prefer a low-maintenance lifestyle? Set realistic expectations about how much time, effort, and money you want to devote to maintaining your next home.

 

New Build

When you build a home, everything is brand new. Therefore, in the first few years at least, you can expect less required maintenance and repairs. A 2019 survey found that millennials' homebuying regrets often came down to maintenance issues, rather than other concerns.7 So if you would rather spend your weekends exploring your new neighborhood than fixing a leaky faucet, you may be happier buying a turnkey build.

 

That doesn't mean, though, that a new home will be entirely maintenance-free. In fact, depending on the builder, you could find yourself repairing more than you expected. Some home builders have reputations for shoddy construction and subpar materials, so it's important to choose one with a solid reputation. We can help you identify the quality builders in our area.

 

Existing Home

No matter how good a deal you got when you purchased it, you could come to regret buying an older home if it costs you heavily in unexpected maintenance and repairs. According to HomeAdvisor's yearly True Cost report, home renovations have grown more expensive in recent years. For example, installing a new HVAC system could cost you $5,371 on average. And you can expect to pay nearly double that amount ($9,375) for a new roof.8

 

Fortunately, there are ways to prepare for these large expenditures. We always recommend that our buyers hire a certified home inspector, whether they buy a new or existing home. Once we have the inspector’s report, we can negotiate with the seller on your behalf for reasonable repairs or concessions.

 

 

ENVIRONMENTAL IMPACT

 

On a quest for greener living? If so, there are several factors to consider when deciding on your next home.

 

New Build

There’s a growing demand for energy-efficient housing, and many builders are rising to the challenge. Nearly 1 in 4 homes built in 2020 received a HERS (Home Energy Rating System) Index Rating by the Residential Energy Services Network. A HERS rating provides an index score that compares the newly-built home to those that were standard in 2006. The more energy-efficient the home is, the lower the score it receives.11

 

The average home rated in 2020 was 42% more efficient than those built in 2006 and 72% more efficient than a typical home built in the 1970s.11 So if energy efficiency is a top priority, a new home with a low HERS rating may be a good choice. You can also look for one that’s ENERGY STAR Certified, which means it meets a series of strict efficiency guidelines set by the Environmental Protection Agency. In 2020, only 7.9% of homes built in the U.S. received this designation.12

 

Existing Home

Of course, a basic tenet of sustainable living is: reduce, reuse, recycle. And since a resale home already exists, it automatically comes with a lower carbon footprint. Research has also shown that remodeling or retrofitting an older home is often greener than building one from scratch.13

 

With some energy-conservation effort and strategic upgrades, environmentally-conscious consumers can feel good about buying an existing home, as well.

 

 

DESIGN

 

Open floor plan? Kitchen island? High ceilings? Must-have design features could drive your decision to build or buy resale.

 

New Build

With a new home, you can bet that everything will look shiny and perfect when you move in. Builders tend to put a lot of emphasis on visual details and follow the latest design trends. For example, newly-built homes are likely to feature an open floor plan, central kitchen island, and 9+ foot ceilings, which are must-haves for many modern buyers. They are also unlikely to feature carpet on the main level or laminate countertops, both of which have lost mass appeal.14

 

However, some buyers complain of the cookie-cutter feel of new homes since they are often built with a similar aesthetic. That doesn't mean, though, that you can't incorporate your own style. We can help you negotiate custom features and upgrades to personalize the space and make it feel like your own.

 

Existing Home

In some of the most coveted neighborhoods, an older home with classic styling and character can be highly sought after. But unless the previous homeowners have invested in tasteful updates, an existing home is also more likely to look dated.

 

While some buyers prefer the traditional look and character of an older home, others crave something more modern. If that’s the case, we can help you find a resale home that leaves enough room in your budget to renovate it to your liking.

 

 

WHICHEVER PATH YOU CHOOSE, WE CAN HELP

 

When it comes to choosing between a new build or an existing home, there’s no one-size-fits-all answer. There are numerous factors to consider, and you may have to make some compromises along the way. But the homebuying process doesn’t have to feel overwhelming.

 

We’re here to help. And in many cases, our homebuyer guidance and expertise are available at no cost to you! That’s because the home seller or home builder may compensate us with a commission at closing.

 

Some new-construction homebuyers make the mistake of visiting a builder’s sales office or even purchasing a home without their own real estate representative. But keep in mind, the builder’s agent or “sales consultant” has their best interests in mind—not yours.

 

We are knowledgeable about both the new construction and resale home options in our area, and we can help you make an informed decision, negotiate a fair price, and avoid mistakes that can cost you time and money. So give us a call today to schedule a free, no-obligation consultation—and let’s start searching for your next home!

 

 

Sources:

1.     Reuters -
https://www.reuters.com/world/us/us-existing-home-sales-fall-august-inventory-declines-2021-09-22/

2.     National Association of Realtors -
https://www.nar.realtor/newsroom/existing-home-sales-ascend-7-0-in-september

3.     KFVS 12 -
https://www.kfvs12.com/2021/09/22/covid-19-pandemic-affects-delivery-rate-building-materials/

4.     Rocket Mortgage -
https://www.rocketmortgage.com/learn/time-to-close-on-a-house

5.     Real Assets Adviser -
https://irei.com/publications/article/master-planned-communities-changing-u-s-housing-trends-favor-investors-can-benefit/

6.     Builder Online -
https://www.builderonline.com/land/development/5-master-plan-trends-home-buyers-gravitate-toward-today_o

7.     Bankrate -
https://www.bankrate.com/real-estate/homebuyer-regret-survey-may-2021/

8.     Home Advisor -
https://www.homeadvisor.com/r/true-cost-report/

9.     Roofing Calculator -
https://roofingcalculator.com/news/how-long-do-roofs-last

10.   Plumbing and Mechanical Engineer -
https://www.pmengineer.com/articles/94873

11.   National Association of Home Builders -
https://nahbnow.com/2021/10/nearly-1-in-4-new-homes-in-2020-was-hers-rated/

12.   EnergyStar -
https://www.energystar.gov/newhomes/energy_star_certified_new_homes_market_share

13.   Advanced Materials Research - https://www.researchgate.net/publication/271358381_Comparative_Study_of_New_Construction_and_Renovation_Project_Based_on_Carbon_Emission

14.   National Association of Home Builders -
https://nahbnow.com/2020/04/most-likely-and-unlikely-features-in-a-new-single-family-home/

Posted in Buying a Home
Oct. 17, 2021

Celebrate Fall With Family Fun Activities

Pumpkin Patch - Miami Homes for Sale - The Sanchez Team - Douglas Elliman

Celebrate Fall With Family Fun Activities

Autumn is sometimes that overlooked period between the last of summer’s outdoor activities and hectic preparations for the holidays. But fall offers its own opportunities for rewarding family fun. Check out these leisurely ways to make some happy autumn memories.  

  • Pick Pumpkins – …but not from the local market. Look for a fall festival or farmer’s market where you can get your fill of fun activities and head home with the best of autumn’s harvest, including the perfect pumpkins.
  • Enjoy Oktoberfest – Somewhere in your area, you can probably find a commercial or sponsored Oktoberfest celebration, featuring authentic German foods, a beer and/or cider garden, guides in German folk dress and a variety of games and shopping opportunities the whole family can enjoy.
  • Take a Haunted Road Trip – For a good, friendly scare, find a haunted house to explore during the month of October. If all else fails, tour a cemetery at night and make up your own ghost tales.
  • Make Costumes – Forget the commercially-made costumes at the store and brainstorm some ideas of your own. Find the fabrics and accessories you need and spend some happy family hours making your costume wishes come true.
  • Get Cooking – Spend some time in the kitchen together making pumpkin spice muffins, pumpkin pies or even some pumpkin-based soup. You’ll be making memories your kids will remember all while enjoying the fruits of your labor.
Posted in Family Activities
June 28, 2021

How To Make Your Offer Stand Out

You finally found the house of your dreams. Now it's time to make an offer. 

In today’s market, it’s not uncommon to be in competition with several other buyers for your dream home.  When you find that perfect house, with the chic chandelier and the doggy door for Fido, the last thing you want to do is lose it because your offer didn’t stand out to the seller, Taking the time to submit a well-written offer can work wonders for a buyer. Each seller and agent may have different opinions on what makes the best offer, but here are some that we’ve found are the most consistent:

1. Include a pre-approval.

If you want to show the seller that you’re serious about buying a home, get pre-approved before you ever sign an offer.   Not only does it show that you didn’t just waltz up, see the for sale sign and throw something out there, but it also alleviates some of the seller’s worries that you’ll back out when the bank finds out your credit isn’t actually as good as you thought it was.  Be sure to include that pre-approval letter from the bank with the signed offer.

2.  Make a decent earnest money deposit.

When you’re sure you can’t picture yourself without this house, be ready to boost your earnest money deposit. Earnest money shows the seller that you’re putting your money where your mouth is, and you’re prepared to give up that chunk of cash if you back of the contract for any reason other than those allowed under the contract terms.  There is usually a typical amount offered for your area, so if you really want to look good, go above and beyond that amount.

3.  Remove all the contingencies you can.

Having two mortgages while trying to sell the home you’re in now isn’t really a dream that anyone has, but if you have the cash to do it, it’s definitely going to make your offer more desirable.  Anytime you can waive contingencies in the contract, like the sale of your current home, it gives the seller more confidence that the deal will go through without a hitch.  Another option would be to shorten the typical time periods.  If it’s customary for your inspection period to be 15 days, shorten it to 10 to let the seller know you’re looking to make this happen quickly.

4.  Make it Your Best

When you’re up against multiple offers, don’t waste a lot of time expecting to negotiate.  Base your offer on solid research of the surrounding comparables and really offer what you would be willing to pay.  If you don’t, your offer may not be taken seriously and be tossed aside. This includes more than the price, too.  Maybe pay out of pocket for some of those extras, like a home warranty or closing costs, instead of asking the seller to contribute.

Posted in Buying a Home
Feb. 12, 2021

Miami Single-Family Homes Post Fourth Biggest Sales Year in History; Total Home Sales Finish with Ninth-Most Annual Sales

As reported by The Miami Association of Realtors.

MIAMI — Despite the ongoing global pandemic, Miami-Dade County recorded the fourth-most annual single-family home sales in history and total existing home sales finished ninth all-time in 2020, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.

Miami registered 13,250 single-family home sales in 2020, a negligible 0.5% year-over-year decline from 2019. Only 2015 (13,898 transactions), 2014 (13,508) and 2019 (13,322) had more annual Miami single-family home sales. MIAMI and the MLS have been tracking county sales since 1994.

“The Miami real estate market displayed its resiliency in 2020, pivoting in the wake of a global pandemic to have one of its top sales years in history,” MIAMI Chairman of the Board Jennifer Wollmann said. “Pent-up demand, record-low mortgage rates, Florida’s low taxes, low inventory and purchases from home buyers in tax-burdened states, and increased interest from international buyers are all boosting Miami real estate.”

Lack of supply is expected to improve later this year as housing starts increase and sellers become more comfortable listing properties and allowing strangers in their homes once the COVID-19 vaccine is widely distributed. 

Total Home Sales Finish with Ninth-Most Annual Sales
Miami-Dade County finished with the ninth-most annual total home sales in 2019. Miami had 26,345 total home sales in 2020, a year-over-year decline of 3.9% from 2019.

2013 (30,032 transactions), 2014 (29,845), 2015 (29,795), 2012 (27,846), 2019 (27,436), 2011 (26,812), 2018 (26,796) and 2016 (26,768) had more annual Miami total home sales.

Existing Condominiums Post 11th-Best Sales Year
Miami existing condominiums posted the 11th-best sales year in history despite competing with Miami’s multi-billion-dollar new condo construction market. A total of 13,095 Miami existing condominiums were sold in 2020, a 7.2% decrease from 14,114 in 2019.

Miami real estate’s top sales years for existing condos: 2013: 17,120; 2012: 16,383; 2014: 16,337; 2011: 16,187; 2015: 15,897; 2019: 14,114; 2018: 13,864; 2016: 13,604; 2010: 13,321; 2017: 13,13 and 2020: 13,095.

Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA

A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR have championed, are expected to generate increased homeownership opportunities.

Miami Luxury Sales Post Major Gains in 2020
Luxury ($1 million-and-up) single-family home sales jumped 41.2% year-over-year to 1,447 transactions in 2020.

Luxury condo transactions increased 1.6% year-over-year to 837 sales in 2020.

Record-low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.

Miami Median Prices, Dollar Volume Rise in 2020
Miami existing single-family homes finished 2020 with a median sales price of $402,000, up 10.1% from $365,000 the previous year. The Miami median price for existing condominiums in 2020 was $264,000, an increase of 7.8% from $245,000 in 2019.

Single-family home dollar volume increased 25.6% year-over-year, from $7.3 billion to $9.2 billion. Condo dollar volume increased 1.7%, from $5.6 billion to $5.7 billion.

Hottest Miami-Dade Neighborhoods at Year-End 2020
Months’ supply of inventory, which is an important indicator of consumer demand and market performance, reflects limited supply in many neighborhoods and price ranges. As a result, lack of supply is also impacting property sales, particularly for single-family homes.

Top Miami neighborhoods with the lowest months of supply of inventory with at least 100 new pending sales at year-end 2020:

Single-Family Homes
1. The Crossings, a south Miami-Dade community west of Kendall, had 0.8 months supply

2. Three Lakes, a south Miami-Dade community west of Palmetto Bay, had 0.8 months supply

3. Country Walk, a south Miami-Dade community west of Palmetto Bay, had 1.0 months supply

4. Cutler Bay, a south Miami-Dade city south of Palmetto Bay, had 1.0 months supply

5. Country Club, a north Miami-Dade community north of Miami Lakes, had 1.1 months supply

Condominiums
1. Three Lakes, a south Miami-Dade community west of Palmetto Bay, had 1.1 months supply

2. The Hammocks, a south Miami-Dade community west of The Crossings, had 1.5 months supply

3. Kendale Lakes, a south Miami-Dade community located north of The Crossings, had 1.6 months supply

4. Miami Lakes, a north Miami-Dade town east of Doral, had 2.1 months supply

5. Country Club, a north Miami-Dade community north of Miami Lakes, had 2.1 months supply

Miami Real Estate Selling Close to List Price
The average percent of original list price received for single-family homes in 2020 was 96.2%, an increase of 0.8% from a year earlier. The median number of days to contract for Miami single-family homes decreased 21.4% to 44 days in 2020 from 56 days in 2019.

The median number of days to contract for condominiums sold in 2020 was 72 days, a decrease of 6.5% from 77 days. The average percent of original list price received was 94.2%, a 0.6% year-over-year increase.

State Year-End Statistics
Statewide closed sales of existing single-family homes totaled 310,378 at the end of 2020, up 5.8% compared to the 2019 figure, according to Florida Realtors. The statewide median sales price for single-family existing homes at year’s end was $290,000, up 9.6% from the previous year.

Looking at Florida’s year-to-year comparison for sales of condo-townhouses, a total of 119,336 units sold statewide in 2020, up 2.5% over 2019. The statewide median price for condo-townhouse properties at the end of the year was $215,000, up 12% from year-end 2019.

The interest rate for a 30-year fixed-rate mortgage averaged 3.11% for 2020, down significantly from the previous year’s average of 3.94%, according to Freddie Mac.

Miami’s Cash Buyers Top the National Figure
In 2020, cash deals represented 29.4% of Miami’s total closed sales, which is a decrease from 34.3% in 2019. About 20% of all U.S. housing sales are made in cash, according to NAR. Miami’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international home buyers, who tend to purchase properties in all cash.

Condominiums comprise a large portion of Miami’s cash purchases as 41.5% of condo closings were made in cash in 2020 compared to 17.3% of single-family home sales.

Distressed Property Transactions Continue to Decline in Miami
About 3.7 % of all closed residential sales in Miami were distressed in 2020, including REO (bank-owned properties) and short sales, compared to 6.2% in 2019.

Short sales and REOs accounted for 0.9% and 2.9%, respectively, of total Miami sales in 2020. Short sale transactions dropped 32.9% year-over-year while REOs decreased 44.1%. A decline in short sales points to more homeowners with increased equity, which should result in increased market activity.

Seller’s Market for Miami Single-Family Homes, Buyer’s Market for Condos
Inventory of single-family homes decreased 40.9% in 2020 from 6,190 active listings in 2019 to 3,659 in 2020. Condominium inventory decreased 12% to 12,898 in 2020 from 14,662 listings in 2019.

At the end of 2020, inventory for Miami single-family homes stood at a 3.3-month supply, a 41.1% decrease from 5.6 months in the previous year. Inventory for Miami existing condominiums at the end of 2020 stood at 11.8 months, which is down 5.6% from 12.5 months. A balanced market between buyers and sellers offers between six and nine months supply of inventory.

Total active listings at the end of 2020 decreased 20.6% year-over-year, from 20,852 to 16,557. 

New listings of Miami single-family homes at year-end 2020 decreased 9.6% from 20,110 to 18,175. New listings of condominiums decreased 3.2%, from 26,241 to 25,400.

Lack of supply is expected to improve later this year as housing starts increase and sellers become more comfortable listing properties and allowing strangers in their homes once the vaccine is widely distributed.

4Q 2020: Miami Single-Family Home, Condo Sales Rise
Miami closed sales of existing single-family homes totaled 3,852 in the fourth quarter of 2020, up 17% compared to the previous year. Miami existing condo sales totaled 4,334 in 4Q 2020, up 23.1 % year-over-year.

Statewide closed sales of existing single-family homes totaled 86,543 in the fourth quarter of 2020, up 23.6% compared to the year-ago figure, according to Florida Realtors. Looking at Florida’s year-to-year comparison for sales of condo-townhouses, a total of 35,865 units sold statewide in 4Q 2020, up 29.4% compared to the same period a year earlier.

Median sale prices for Miami single-family homes increased 18.9%, from $370,000 to $440,000, in 4Q 2020. Condo median prices increased 10.2% from $245,000 to $270,000.

The national median existing single-family home price in 4Q 2020 rose 14.9% on a year-over-year basis, to $315,900. 

The statewide median sales price for existing single-family homes for 4Q 2020 was $306,000, up 14.6% from 4Q 2019. The statewide median price for condo-townhouse properties for the quarter was $226,000, up 15% over the previous year. New pending sales for condo-townhouses for 4Q 2020 increased 30.9% compared to a year ago, while new listings were up 5.9% from the same quarter the previous year.

New listings of Miami single-family homes for sale in 4Q 2020 decreased 3.7% compared to the same quarter the previous year, from 4,461 to 4,297. New listings for existing condos in 4Q 2020 increased 7.5% from 5,960 to 6,407.

To access Year-end 2020, 4Q 2020 and Local Residential Market Metrics Year-end 2020 Miami-Dade Statistical Reports, visit www.SFMarketIntel.com

Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system

Posted in Market Updates