South Florida housing sales flatten as prices strengthen
The South Florida housing market famously and expensively boomed in 2004 and 2005. At the end of last year, however, it was only expensive and no longer booming. By December, home sales in the region had dropped by double-digits in many areas, including Miami. The West Palm Beach-Boca Raton area was the only one that saw an increase in sales from November 2004 to November 2005, according to the South Florida Business Journal; sales there increased 8 percent over the 12-month period. But, in Miami and Ft. Lauderdale, sales dropped by 21 percent and 25 percent, respectively, over the same period. Home sales prices, however, swung upward as 2005 ended, recovering from hurricane-induced slumps in October. In Broward County, the median price for an existing single-family home jumped 6 percent from October to November to $391,100, the Miami Herald reported. That jump came after a two-month decline in median prices in Broward. In Miami-Dade, the median single-family price in December increased 4 percent to $381,600 compared to the month before.
Condos sprouting inside Atlanta proper, rather than on its fringes or in its suburbs, should add thousands of new residents to the more urban areas of the city. These condos include the 88-unit Central City, where one- and two-bedrooms are selling from $179,000 to the $290,000s, the Atlanta Journal-Constitution reported, and the 418-unit Plaza Midtown, where top-priced units go for $505,000.
The 10-year-old Centennial Olympic Park has become the nexus of a real estate revival for downtown Atlanta. The immediate area around the 21-acre park, built for the 1996 summer Games, has recently seen a raft of office, retail, and residential development, including the new $290 million Georgia Aquarium and the World of Coca-Cola museum, the Atlanta Business Journal reported. If Atlanta lands the NASCAR Hall of Fame, that, too, would skirt the park’s edges.
Even as the overall Boston housing market cools, demand remains strong for condos priced under $500,000, according to the Boston Globe. But there’s a catch: These condos are difficult to build. Developers in the city must increasingly offset growing land and construction costs by selling new condos at luxury prices – $650 or more a square foot – that often boot the condos out of the under-$500,000 range. So, developers look for buildings to convert in the more urban areas of Boston, rather than build from scratch.
A skyscraper at 111 South Wacker Drive set a new downtown Chicago office building sales record in late December when it was sold by developer John Buck Company to DIFA Deutsche Immobilien Fonds, a German investment fund. The skyscraper sold for $410 million, or more than $400 a square foot, the Chicago Tribune reported. The sale surpasses the previous per-square-foot downtown sales record of $385, paid in 1990 for 181 West Madison Street.
The price for top downtown Chicago office space increased in 2005, while the sales volume for the city’s commercial market overall decreased. Last year, the total volume of transactions in the city’s commercial market dropped to $1.9 billion from $2.4 billion in 2004, the Chicago Tribune reported. But the price per square foot for top quality downtown office space increased in 2005 over the year before by almost 25 percent to $226, the Tribune reported.
The housing market in America’s fourth-largest city finished 2005 stronger than the national market. When federal data, for instance, showed that new single-family home sales nationwide dropped in November by more than 11 percent, data from the Houston Association of Realtors showed that single-family home sales in the city increased by 8.7 percent during that same month. Also, by late December, year-to-date residential property sales in Houston had increased 9.1 percent over the same time period in 2004, the Houston Business Journal reported, and the average price for a single-family home hit a record of $193,810 by December.
Could the hot Las Vegas housing market trend downward in 2006? Yes, according to one national publication. Fortune magazine in December ranked the 100 largest housing markets by their prospects for this year – Las Vegas ranked last, with the magazine predicting the city’s housing prices would decrease by 13 percent in 2006.
What was touted as the tallest luxury residential high-rise in the West became by the end of 2005 a metaphor for Sin City’s cooling housing market. The 82-story Ivana Las Vegas – named after backer and ex-Mrs. The Donald, Ivana Trump – was put up for sale in early December for $49 million, only three months after a spokesperson told The Real Deal the tower would generate more than $1 billion in sales, making it the most expensive residential building ever sold. The tower’s ground-breaking was six months away when the sale was announced, according to media reports, and the slow sales and rising construction costs were among the catalysts behind it.
An overall strong economy will give Los Angeles County a robust commercial real estate market in 2006, according to a December report from the University of Southern California. Vacancy rates dropped substantially in the county throughout 2005; downtown L.A.’s vacancy rate reached 15 percent, something not seen since the 1980s. Also, commercial rents are rising throughout L.A., and the county’s industrial market continues to have the lowest vacancy rate in the country at 0.8 percent, the report stated.
The strong L.A. commercial market should be complemented in 2006 by a strong residential market, especially in the long desolate downtown. Plans are under way, in fact, to more than triple the number of residential units in downtown from 8,000 to 27,000 in the next four years, the Washington Post reported. Demand for the units remains high, despite concern over downtown’s desirability as a place to live. In October, for instance, the Post reported that a new building with 191 condos downtown sold out in seven hours.
Philadelphia’s Center City is undergoing a retail renaissance. In 1999, following years of tough economic times, the neighborhood hit a peak of 405 retail vacancies, the Philadelphia Inquirer reported. But, in the last few years, dozens of retailers have set up shop in Center City, including H & M and Cole Haan, capitalizing on a population boom fueled by the young and the affluent. By July 2005, the Inquirer reported, there were 2,146 retailers in Center City, up from 1,988 in mid-1999.
Its expensive housing market may have snagged headlines, but San Francisco’s office market also saw a lot of activity in 2005. More than $4 billion worth of office buildings in the city changed hands last year, the San Francisco Chronicle reported, including the iconic Bank of America building and 550 Terry Francois Boulevard, which sold at a reported $600 a square foot, an all-time record for San Francisco.
The Washington, D.C. metro area, particularly Fairfax and Montgomery counties, will be short about 92,000 homes by 2030, according to a December forecast from the Metropolitan Washington Council of Governments. The council projects that the area will grow by about two million over the next 25 years, and will add about 1.6 million new jobs, the Washington Post reported. Those people and those jobs will translate into housing needs that the area, the council concluded, isn’t currently on track to fully meet.