subject: Signs of Economic Recovery [print this page] Signs of Economic Recovery Signs of Economic Recovery
What is a major sign that the economy is on the path to recovery? People are spending on "non-essentials". This usually means that consumer spending on travel and luxury items is increasing, and one place this can be most readily seen is in the purchase of vacation and second homes. Just consider the Sunny Isles Beach area of Florida. It is a place that is convenient to Miami and all that the region has to offer, and its sales and pending sales of luxury condominiums has increased by more than ten percent in a two month time span.
In fact, the number of property sales during the first six months of 2010 exceeded any point in the prior five years. While it was the 2007 and 2008 periods that were the lowest points of the period, with no more than 50 luxury properties being sold in a single month; there are now well over 200 units being sold each month instead.
What is to blame for this dramatic increase? If you simultaneously look at the median sales prices over the past six months you would be surprised to note that as sales have escalated, prices have decreased quite substantially. This is due to a few relevant issues. Firstly, builders and sellers are more than willing to drop prices in order to relieve themselves of the financial burdens of a second home or a vacation property. The average savings available are roughly 30% to 40% below pre-construction prices. This is an enormous amount of money on a luxury property, and is a huge appeal to people from Europe and South Americas as well as those living in the United States.
Another reason for the decline in median sales pricing is the frequency of the foreclosure and short sale process too. Foreclosures in general are going to consistently drive the average pricing down, but the short sale price is actually going to have an even stronger impact on the figure. This is because the home or luxury condominium is viewed as being actually sold, and often these prices are less than the home is worth. This is going to consistently keep median pricing quite low.
Fortunately, the Miami area luxury condominiums did not depreciate in the same way that many other real estate segments did. This means that as prices decline sharply, people are able to get better and better bargains because the homes are still worth tremendous amounts of money. These are only a few of the many reasons to consider a serious investment in Miami luxury condominiums right away.
