Sales of single-family homes hit low
Existing single-family home sales in Palm Beach have hit an all-time low, according to a recent report by the Florida Association of Realtors. Some had hoped that a healthier local economy would improve sales.
There were 459 single-family home sales in November 2007, the lowest number since the company began tracking data in 1994. That figure was down 13 percent from the 525 sold in November 2006, according to the association. Also, the median price declined 7 percent in November 2007 from the year-ago period.
Lawrence Yun, senior economist for the National Association of Realtors, told the Palm Beach Post that improving market conditions should yield more home sales soon. This notion was rejected by Jack McCabe, president of McCabe Research and Consulting in Deerfield Beach, who said 2008 will probably be one of the worst years for real estate in the country.
At the same time, national sales of previously owned homes inched up slightly in November, doing little to improve the housing slump. Over the past 12 months, existing home sales went down 20 percent.
In Palm Beach County, lagging sales have pushed up the inventory of single-family homes to a 57-month supply, according to Illustrated Properties Real Estate.
Posh golf course sees teardowns
Golf courses appear to be the main attraction for wealthy homeowners in Palm Beach County, where homes at Delaire Country Club in Delray Beach run from $400,000 to $6 million—even though many are torn down to make way for custom homes, the Palm Beach Post reported.
Claire Abrams, a Delaire resident and Coldwell Banker realtor, said the community is one of South Florida’s richest and has many young buyers. Within five years, all 324 homes in the neighborhood, which range from 3,000 to 5,000 square feet, could be rebuilt. The golf is reportedly what attracts people, with programs that allow residents’ family members to golf for free.
Delaire also features a pool, fitness center and tennis courts and requires an $80,000 membership fee, half of which is refundable upon termination of the membership. Residents also pay $3,400 a year in fees, which cover 24-hour security, maintenance of common areas and basic cable.
Empty buildings lead to rise in housing foreclosures
Housing foreclosures in Miami-Dade and Broward counties are on the rise as large new residential buildings remain largely unoccupied and mired in hundreds of millions of dollars in defaulted mortgages, the Miami Herald reported.
According to Condo Vultures, a Bal Harbour real estate consulting firm and brokerage, in the 20 buildings in Miami-Dade and Broward counties with the most units in foreclosure, loans in default totaled more than $271.8 million. Condo Vultures principal Peter Zalewski said the high rate of foreclosures reflects the wave of speculators that entered the market seeking investment opportunities.
Lucas Lechuga, a real estate broker with Esslinger Wooten Maxwell, attributed the rise in defaults to mortgage fraud stemming from inflated appraisals and fake buyers.
Zalewski said one effect on the Miami-Dade housing market is the increasing number of bargains that can be found as construction continues to add to the surplus of units on the market.
Residents of buildings with an excess of unoccupied units are seeing special assessments and hikes in maintenance fees, as community associations face budget shortfalls due to the lack of bill-paying residents.
Florida hotels surviving recession
The flow of tourists to Florida hotels and resorts has remained relatively strong with conventions still being booked and European travelers seeking to take advantage of the weak dollar, the Miami Herald reported.
However, while people are continuing to travel, they are spending less to do so. Hotel managers and tourism directors are reportedly noticing a decrease in customers’ travel budgets as they shun extra expenses, from eating out to using hotel mini-bars.
Atlanta advisory firm PKF Consulting forecasted Miami-Dade County room rates will increase 6.7 percent in 2008, down from 10.5 precent growth in 2007 and 13.3 percent growth in 2006. In Broward County, the firm predicts a 5.7 percent growth, down from 8 percent in 2007 and 15.6 percent in 2006.
Hotel owners are not yet worried though; they are still hitting or exceeding financial marks, and bookings are normal to above average so far for 2008, the Miami Herald reported.
Mixed-use projects suffering
The ailing housing market is bringing South Florida’s mixed-use projects to a standstill, according to the Sun-Sentinel, halting what was supposed to be the region’s next big thing in real estate development.
The mixed-use projects, which include shops, offices and condominiums, are being delayed or scaled back due to a lack of demand in the market. Developers had banked on these projects as an affordable way to accommodate the expected influx of new residents to South Florida. Broward County’s population was expected to surge to almost 2.2 million by 2020, an increase of nearly 400,000.
Almost every city in Broward was at one point considering approving more of these complexes, the Sun-Sentinel reported. Some developers now plan to ride out the housing slump, while others are simply adjusting their plans to build retail space or develop smaller projects.
One developer, Nob Hill Partners LLC, reportedly refunded buyers’ deposits at one of its proposed projects, Downtown Davie, which would have had 227 condos, 18 luxury townhouses and 100,000 square feet of retail. The firm is considering switching to rentals and adding more office and retail space.