Much of the news around the country is proclaiming the recession to finally be over and with that comes the news that real estate is once again moving.
After the long slump following the market ‘crash’ in 2008 and 2009, this is welcome news indeed. Sellers, buyers and real estate agents are more enthusiastic than they have been for several years and according to one of the latest in a long line of surveys, the majority of brokers expect good things in the year ahead. SPIN Real Estate brokerage has their own spin on the market and the group has high expectations for the coming months.
Berger Singerman Survey
In late 2015, a survey was conducted by Florida Law Firm Berger Singerman in which approximately 100 brokers, developers, investors, contractors and lenders were polled to get their opinion on the real estate climate in South Florida for the upcoming year. The questionnaire, The 2016 South Florida Real Estate Outlook Survey, indicated that the atmosphere is highly positive for growth in this sector. Of those surveyed, more than 42% feel that the real estate outlook will be “somewhat better” in 2016 with approximately 37.4% saying it would probably stay the same and somewhere around 13% coming in as a bit worse this year.
Building on the Excitement
According to Lee Kearney, SPIN’s owner and broker, “It has been a long time since real estate agents in Florida have seen this much excitement but at SPIN we work on an entirely different model so our agents have always been upbeat. It is traditional for most brokerages to offer a 60/40 cut with their agents but here at SPIN our agents keep 100% of their commission. Even when the market is down, this gives them incentives to make deals. Our unique approach has been successful in moving properties resulting in everyone being happy from the agents involved in the transaction to buyers, sellers and even lenders.”
Even so, Kearney says that the survey is probably right on the money. With reports surfacing that the economy is on the mend, properties are beginning to move more quickly than they had in years and it has quickly moved from a buyer’s market to a seller’s market. Typically, a buyer’s market is the harbinger of bad news for the economy. It signals a time when few people have money, lenders are not lending and so properties aren’t selling as quickly as they should. Sellers anxious to make a deal will often take a drastically reduced price.
A seller’s market, on the other hand, is one in which the seller can name the price and hold firm because there is money out there, lenders are once again underwriting mortgages and so there is no reason to take a reduced price. Buyers abound and properties are at a premium. This is what South Florida has been seeing in recent months and there is no reason to believe the trend will not hold true for the remainder of 2016 and into the coming year.
Multifamily Properties Projected to Move the Quickest
According to the survey, multifamily properties are set to move the fastest, coming in at almost 27% of respondents believing this is the sector that will have the most rapid growth. Hospitality came in second at 21% and retail a close third at 20% of those polled believing this sector will see rapid growth. Oddly, it is felt that the largest amount of investments will come from Latin America as just over 34% said they feel this is where money will come from. Following that, about 18% felt that Brazil would invest a significant amount of money in the real estate market in South Florida in 2016 and in following years as well.
The only downside to the survey was the fact that almost everyone polled had some amount of uncertainty as to how governmental policies would impact the market. This appeared to be the only real cause for concern but even that didn’t seem to be a huge issue, it was just identified as the one variable that ‘could’ have an impact on the market this year. Since it is an election year, it is only normal that political concerns would come into play as they do every four years. For this reason, not much weight was given to this concern.
SPIN Real Estate has their own spin on the real estate climate in South Florida for 2016. With an innovative business model and super enthusiastic agents, they feel it is within their ability to capture a huge portion of the market in the Tampa/St Pete/Clearwater portion of the South Florida real estate market this year. With agents getting their full cut, there is no reason to believe they will not succeed.