Every week, we ask a Miami real estate professional for their thoughts on the top stories in Miami real estate.
This week, we talked with John Seidel, a Miami native who, in his 14 years as a licensed Realtor, has achieved numerous successes, including the top 2 percent of all Coldwell Banker sales associates worldwide, a membership with the Master Brokers Forum and the board of directors for the 200 Club, Member of the Kiwanis of Coral Gables, Florida Association of Realtors, National Association of Realtors and Realtor Association of Greater Miami and the Beaches.
Miami Agent (MA): We recently wrote about the plight of first-time homebuyers, and whether or not there are less first-time homebuyers in today’s housing market than in the past; is that consistent with what you’ve been seeing in your clients, or are there still many first-time buyers out there looking for homes?
John Seidel (JS): I’m not seeing a slowdown with first-time homebuyers, and as a matter of fact, I just closed on a house two weeks with some first-time buyers, two young attorneys who had been renting downtown.
The thing with first-time homebuyers, though, is even though inventory is low – and we had a hard time finding something – they were determined to buy a house because of the interest rates. They can’t keep holding like this. It’s a catch-22, because nobody knows where the prices are going and inventory is definitely low, so they were determined to close on a house now and lock-in a good interest rate.
First-time homebuyers are also more anxious. They take longer to sell something to, because they want to see everything; they ask a ton of questions – all very good, intelligent questions – but they do ask a lot of them, and you really have to take them through the process on buying a home and explain all the costs that are involved.
I’m torn, though, on whether rising interest rates will push away first-time buyers. Think of where we are historically – we’re still very low, even if they were to go up another half-point. I think psychologically though, yes, it has to have some kind of impact. Realistically, I’m still pointing out to my buyers that rates are historically low.
MA: Though asking prices were up by yearly amounts in September, they actually fell from the second quarter; are you seeing asking prices wane at all, or are they just as competitive as ever?
JS: It really comes down to the sellers. We’ll do a market analysis, we’ll meet with the sellers, and we’ll say, ‘Here’s where recent sales are.’ And the majority of the time, the seller is always bumping up the price on us. They’ll tell us, ‘Well, inventory is low; we have all these foreign buyers.’ I swear, they all read the same book!
I just went through this twice, on two listings that I took. They really pushed me to go higher on the price, even though there’s nothing justified to go that high; you can’t appraise the house at that price.
One dynamic I’ve seen, though, is that now, buyers are becoming more and more cognizant of these asking prices. They are very aware of what’s selling at what price, and they’re becoming more resistant. I’m noticing this with my own buyers, that they are starting to see these unjustified prices.
And again, it’s because sellers are reading about low inventory, relocating buyers and so on, and they think they can just ask for anything, but the buyer is not foolish with their money, so they are looking at this very carefully and what the true value is today on the homes.
So in the last couple of months, I’m seeing more price reductions, but it’s on those homes that were overpriced to begin with.
MA: Finally, among the clients you deal with, what seem to be the most common reasons for their interest in buying a house? Do any reasons seem more common than others?
JS: I see several things with my buyers: they’re relocating here; they think it’s a waste of money renting; and they want to be part of that American Dream and own their own home.
I also find that many of my clients want a pool and a yard, but there’s others, the empty nesters, who want to get rid of that pool and yard, and they want a more convenient lifestyle with less maintenance and less cost. And I’m still seeing buyers with kids who want to move into certain school districts.
And the empty nesters who are in a more suburban setting are all moving closer to the downtown areas – the Grove, the Gable, Brickell – they’re closer to work, and it’s where their lifestyle is today.