Are there bargains in today’s market? Not exactly…read on…February 15, 2010
WEST PALM BEACH, Fla. – Feb. 12, 2010 – Think there are all kinds of crazy deals to be had in today’s real estate market?
That’s what 31-year-old Jason Bellak thought, too – a year ago. He’s been searching that long for something in the $150,000 price range in Palm Beach County. Short sale, condo, townhouse, foreclosure – he’s looked at them all, made offers on several, but is still living with his parents in Royal Palm Beach.
Despite a perception that three-bedroom, two-bath beauties with granite countertops and good schools can be yours for a song – or at least for 20 percent down – it’s not a market reality, say frustrated homebuyers and their Realtors.
Cash investors, sluggish banks and thorny financing are limiting the options for your average homebuyer, who, by the way, is sick of hearing, “It’s a buyers’ market.”
“I was like most people, thinking there were a lot of deals out there,” Bellak said. “But it quickly became apparent that it wasn’t going to be such an easy process.”
Competition is highest now in the $150,000 to $250,000 price range, said market analyst Jack McCabe of McCabe Research and Consulting in Deerfield Beach.
The median single-family home in Palm Beach County sold for $238,000 in January – 9 percent higher than in 2009, according to the Realtors Association of the Palm Beaches. Inventory in January was down to eight months, less than half of what it was in January 2009.
“Most people still think we’re in this terrible market, but the inventory tells a different story,” said Realtor Scott Smith, who has clients struggling to find homes in the Jupiter and Palm Beach Gardens area even though they’re willing to spend between $350,000 and $400,000.
Bellak can’t even recall the details of all the offers he’s made on homes in the past year. He bid on a three-bedroom townhouse in foreclosure but lost. He made an offer on a short sale condo – meeting the $141,000 asking price – waited three months, but then couldn’t get financing because the homeowners association had too many delinquent accounts.
In most cases, for a buyer to get a Federal Housing Administration-backed loan for a condominium, no more than 15 percent of the units can be more than 30 days past due on association fees.
Now Bellak has his heart set on a two-bedroom Jupiter townhouse.
“I think if this one doesn’t go through, I may hold off for now,” said Bellak, who has been working with Realtor Craig Fialkowski of Herman Group Real Estate in Palm Beach Gardens.
Realtors say part of the problem is that people hear the hype about the down market and expect to find a steal in a great neighborhood.
Last year, more than 500,000 Florida homes received some type of foreclosure notice, according to the Irvine, Calif.-based company RealtyTrac.
But while foreclosures are usually priced low, they’re not always good deals. They could be tagged with liens, have missing appliances or be in general disrepair.
“It’s not like everything just became half-price overnight with no repercussions,” said Realtor Shannon Brink of Re/Max Prestige Realty in downtown West Palm Beach. “Plus, many banks still sell homes off at auction or to capital investors, so not everything even hits the open market.”
Crystal Paul and her fiancé, Antonio Hester, both 25, have been working with Brink since December to find a home for about $150,000.
They’ve looked at a dozen or more properties and have made some offers. But they’ve lost out to investors with ready cash, which is more attractive to banks.
“You find a house you think you can live in, but then you lose it,” Paul said. “The cash investors have the upper hand and here we are just trying to get started.”
When a short sale off Military Trail popped up last week for $139,900, Paul and Hester made an offer that the homeowner accepted. But he owes more than $230,000 on the house, and in the end it’s up to the bank to OK the sale.
Brink said banks will sometimes set a low asking price on a short sale to attract buyers, but with no plans to actually settle for that price.
While short sales have traditionally taken months to settle, new federal guidelines that go into effect in April require banks to respond to short sale offers within 10 days.
More good news for buyers this year is the prediction of an increase in foreclosures that could further reduce prices.
G. Stacy Sirmans, a real estate professor at Florida State University, said the market hasn’t hit bottom and won’t for at least another year.
“It’s definitely a buyers’ market,” Sirmans said.
Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.