Friday, August 31, 2007

Crashing House Prices - Miami

After witnessing one of the fastest explosions in house prices, Miami is now looking at a similarly rapid increase in housing inventory. Since August last year, inventory has increased by 95 percent.

Listed prices on the MLS database are also sliding. Loooking at the listed price chart, one can almost hear the realtor advice. After Thanksgiving, MLS prices did not fall. No doubt the realtors were advising "the holiday season is always slow, wait until the spring." Well, the moment of truth has arrived - today is Superbowl Sunday, and if you believe realtor spin, the buyers come back to the market starting Monday.

Given the rapidly rising inventory, sellers are becoming increasingly desperate. According to the database, just over 20 percent of listed properties in central Miami are offering price reductions.

There is a spike in the data at Christmas, when MLS listed prices temporarily rise. One can only assume that sellers were expecting some seasonal generosity from house hunters. In contrast to previous years, buyers were just not in a giving mood. Their mood hasn't improved in recent weeks. Expect rising inventory, seller panic, rapid and large price reductions in Miami over the coming months.

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