Ramesh Nyberg's Real Estate Blog

While the pulse of the residential market picks up every month, things in commercial real estate are taking a different turn, albeit a familiar one.

The latest edition of the South Florida Business Journal calls it the beginning of the "meltdown."
At a sales meeting this morning, Duff Rubin, the director of NRT Commercial for south Florida said the latest data for commercial sales is "sobering." He noted an 82%--yes, you read it right--82% decrease in sales compared to last year.

Rubin went on to tell us in detail that it looks like the commercial real estate market is entering a phase that the residential market started to experience a year and a half ago. Phrases like "short sale" and "REO" were virtually unknown to commercial Realtors before, and now, Rubin pointed out, they are becoming household words. Sound familiar?
Last week, I met a commercial broker who has an agent in his office who does solely foreclosures.

So, what does all this mean? It means that if the commercial market is following in the footsteps of the residential market, then opportunities will abound. Remember, when residential sales began to drop, and the inventory began to swell with foreclosures, some people moaned and wrung their hands. Others started to gather their funds, and went on the hunt. Those people today are buying at what could be the bottom of the residential market (or at least near the bottom, with remarkably low interest rates).

If the SFBJ and Rubin are right (and others have echoed the same forecast), then there is no reason to believe that the commercial market won't morph into a "buyer's market."

Nobody likes to hear that sales are decreasing. But keep the faith, and remember those "silver linings." And remember one of my favorite definitions: "Luck" is when preparation meets opportunity.

Let me hit the "Sweet Sixteen" first: If any of your friends try to tell you that foreclosures aren't selling, tell them about the Sweet Sixteen-- I posted the best unsold foreclosure properties I could find in south Miami-Dade County, so we could all track their success together, on February 11th, just a month ago. In 34 days, 9 of the 16 have gone under contract, and one has closed. It was in the West Kendall, 13265 SW 102 St. It was 7 days on the market, and sold at asking price, $209,000. (I'll update the status of the properties on the Sweet Sixteen page soon, and of course, start replacing them as well)

The stats for February 2009 are out: the sales keep ticking upward, and the inventory keeps shrinking. The number of unsold single family homes in Miami-Dade dropped for the fifth straight month, to under 14,000 for the first time in well over a year. We saw 1096 pending sales in February, which is more than double the number for February 08!
Recommendation: Get out your wallet, and buy while the interest rates are still low.

I know an investor who watched a foreclosure go from $237,000 in November of 2007, to $68,000, in December 2008. He made an offer, and settled with the bank at $65,000, for a 2/2, 1003 square foot villa in Palmetto Bay, in a gated community.  

The day before the closing, he got a tenant.
Want to see the place, or another one like it? I can show it to you, because I'm that investor. I like describing the workings of the real estate market here in my blog, but I walk the walk too.

Did the stock market go up or down today? What will it do Monday? No one really knows. The value and worth of our hard earned savings goes up or down based on news, opinion, and conjecture. It is a wildly unpredictable, volatile atmosphere.

Take a look at the Real Estate market. We can track it through the boom, when home prices were soaring to incredible heights. We can continue tracking it through its current cycle of depreciation. It doesn't have this short-term roller coaster behavior we see in the stock market. Why? Because the real estate market is dictated by supply and demand. What? you ask.. my house is a commodity?? YES, IT IS.

My new money strategy is to try to limit the taxation of my money, avoid it where I legally can, and move my money into a solid venture I have a clearer picture of--that's real estate.

A very intense and informative seminar I attended recently taught us Realtors how real estate can be purchased through a retirement fund, such as a 401k or and IRA. If you have this type of fund, and you want to put your money to work for you, protect it from volatility--and taxation--you need to talk to the new team of investment strategists I have just partnered with, and listen to what you can accomplish with your money. I found it exciting and inspiring, and I will be making moves of my own soon to take advantage of this as a survival tactic for these severe economic times, the future of which we know little about--unless we control our money.

There are silver linings to everything--if you read this blog you know I focus on them all the time. This one is a silver lining and a rainbow all rolled into one. You owe it to yourself to at least take a look.
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Foreclosures continue to sell! All the Realtors I work with report a huge spike in buyer activity (and that's supported by the sales stats we've talked about here (see $ales by the Numbers). And what I am finding in my showings, is that more and more of them are in good shape. Banks are spending the money to fix them up, paint them, and cut the yard, because (wow, what a concept) they sell better that way!