High rents chill tourist season
Snowbirds — temporary residents of Florida who soak up the warm climate during the winter months — are coming to Florida in fewer numbers and for shorter stays, tourism experts say.
In Brevard County, the number of snowbirds fell nearly 9 percent to 27,600 in 2005 from 30,300 in 2003, according to market research firm Schulman, Ronca & Bucuvalas.
High rents, which have risen to keep pace with spiraling property insurance rates from recent hurricanes, have priced some retirees out of the market, the Miami Herald reported. Other retirement destinations that are increasingly competing with South Florida may be another factor. Some brokers who work with snowbirds said this year was the slowest January they’ve seen in recent memory.
Homes on market double
South Florida has more than twice as many houses for sale than it did a year ago. The home resale market increased from 31,000 in December 2005 to 65,827 in December 2006, according to multiple listing service statistics for Miami-Dade and Broward counties.
Despite inventory growth, Miami-area prices remain flat. The median single-family home sale price in Miami-Dade was $370,000 in December, unchanged from $370,000 in December 2005, the Miami Herald reported.
The median condominium sale price in Miami-Dade actually rose 4 percent to $260,000 from $250,000 a year ago.
In Broward, the median price of a single-family home fell 3.6 percent to $371,000 in December from $385,000 a year prior.
Industry insiders say prices have mostly remained level because sellers are offering incentives to buyers, reducing the buyer’s actual cost without affecting the closing price.
Florida residents move out of state
Priced-out Florida residents are leaving the Sunshine State. According to an informal study by the moving company United Van Lines Inc., more are moving out of Florida than arriving. Analysts say the cost of living in Florida has become too high.
United Van Lines reported 16,212 shipments to Florida last year and 17,019 shipments out of state. United moved more people to Florida in each year from 1999 to 2004, but the number of inbound moves fell in 2005, company spokeswoman Jennifer Bonham said. Analysts say the numbers are due to rising property taxes and insurance rates.
Intrastate moves were also stymied. The five-year rise in property values pushed up property tax rates, and now residents say they can’t afford to move elsewhere in Florida, the Sun Sentinel newspaper reported.
United’s report showed that North Carolina, Oregon and South Carolina were the top destination states in 2006. Michigan, hit by automobile industry layoffs, North Dakota and New Jersey were the states that saw the most people leave.
Office market overcomes hurdles
South Florida’s commercial market last year experienced substantial growth despite obstacles.
According to brokerage Jones Lang LaSalle, Miami is now the country’s fifth-largest office market, after Manhattan, San Francisco, Los Angeles and Washington, D.C.
The firm reported that a significant property, Courvoisier Centre on Brickell Key, is expected to sell for $170 million.
The Miami Beach submarket had record sales, and some brokers say asking leasing rates will eventually reach $50 a foot. They now hover around $35 a foot, the South Florida Business Journal reported.
Brokerage CB Richard Ellis reported record rent increases in West Palm Beach and Boca Raton, where the average price per square foot for triple-net leases increased to $20.55 and $18.44, respectively.
In downtown Fort Lauderdale, Class A triple-net leases increased to $19.78 per square foot, up 10 points from 2005, according to CBRE. Still, many building owners have seen their incomes halved — a result of higher insurance premiums, energy costs and property taxes, the Business Journal reported.
Developers see red over housing plan
Developers are upset over a recently enacted affordable housing law in Palm Beach County.
County commissioners last year required builders to make 16.5 percent of new homes affordable in developments with 10 or more houses, the Sun Sentinel reported.
Affordable homes are classified as those priced from $164,000 to $304,000, based on the county’s median household income of $48,099, according to the U.S. Census.
But developers say rising costs of land, labor and taxes make selling new houses for less than $304,000 a money-losing proposition. Some industry insiders say the new housing plans will drive homebuilders out of South Florida and cause job losses, weakening the state economy.
The county has made concessions, including letting builders increase project density and build more homes.
Construction slows for home builder
Miami-based home builder Lennar Corporation saw its first quarterly loss in a decade at the end of 2006 as a result of the housing slowdown.
Lennar predicted a loss of 88 cents to $1.28 a share during the fourth quarter, the Sun-Sentinel reported. The company’s new home orders slipped 6 percent in the quarter and dropped 3 percent for the fiscal year. Earnings were set to be released on Jan. 17.
Other builders are seeing similar losses. Toll Brothers said its fiscal fourth-quarter home-building revenue fell 10 percent and orders dropped by more than half.
But low interest rates and a stable economy will help lead a rebound in the residential market, according to Lennar chief executive Stuart Miller.