Hit by taxes, sales of vacation homes drop
Second-home owners in Florida are feeling the sting of skyrocketing property taxes. Unlike primary residences, owners of vacation and rental homes are not protected under the state’s homestead exception, which caps increases in property tax assessments at 3 percent per year.
The tax issue may be affecting the volume of second-home sales. According to Coldwell Banker, second-home sales fell by 10 percent in 2005, followed by a 20 percent drop in 2006.
Second homes occupy a multibillion-dollar portion of South Florida’s housing market. About one-third of Miami-Dade homes and 40 percent of Broward residences belong to second-home owners from around the country and overseas, the Miami Herald reported. These properties range from modest mobile homes to sprawling waterfront estates.
Palm Beach County hotel rates now rival New York City
Although hotel guest spending and occupancy in South Florida were weak this winter compared to the same period last year, new figures hint at a brighter future.
West Palm/Boca Raton hotels had an occupancy rate of 87.9 percent in March, the latest figures available, up 3.8 percent from the same period last year. The number topped the national average of 64 percent, and the area claimed Florida’s highest average hotel occupancy rates. In addition, hotel rooms in Palm Beach County averaged $210.12 per night, rivaling New York City’s average rate of $212.
Investor interest in developing hotels in the area has not faltered. One group hopes to build a 250-room hotel at Datura Street and Dixie Highway in West Palm Beach, the Palm Beach Post reported. Another has plans to erect a 22-story InterContinental Hotel and office complex nearby.
State Road 7 to see residential and commercial makeover
North Lauderdale developers plan a series of residential and commercial projects along State Road 7, the Sun-Sentinel reported. A 2.1-mile stretch of the road will soon be lined with townhouse and condo communities, many of which have residential and retail spaces built into the same complex.
Tuscany Village will have 392 new condos, villas and townhouses, with condos priced in the mid-$100,000s and townhouses starting in the low $200,000s. The project will replace the existing Imperial Estates mobile home park, which is not the only one being vacated. A project called Marbella will displace residents of about 300 mobile homes in Village Park Mobile Home Estates.
Projects completed recently as part of redevelopment plans include the 129-townhouse community Santa Catalina, the 292-unit rental apartment complex Sanctuary Cove, and Gennaro’s Farmer’s Market, a 35,000-square-foot space that opened in April 2006. Timetables have not yet been set for construction on the newly proposed projects.
$1B resort to replace one of region’s largest hotels
A New York-based developer has finalized plans to build a luxury St. Regis resort at the site of the Sheraton Bal Harbour, which is expected to be demolished later this year. Starwood Hotels and Resorts first announced the project in 2005, the Miami Herald reported.
The oceanfront project is expected to bring in more than $1 billion in condo sales and will replace one of the region’s largest hotels. Contracts and reservations are already in place for about a third of the resort’s 268 condos, which will sell for between $1.8 and $5.8 million. Rising 27 stories, the new three-tower resort will also house 219 hotel rooms and 24 luxury timeshares.
The 645-room Sheraton Bal Harbour, which first opened in 1956 as the Americana, is set to close July 1 and will be demolished in the fall. The delay in an official announcement is said to be the result of rising construction costs and a weak luxury-condo market. The new St. Regis resort is scheduled to open in 2011.
Home sales market remains sluggish
Home sales in South Florida are down across the board, as buyers and sellers await possible changes in property tax legislation. About 75,000 houses and condos were up for sale in March, the latest figures available — 4 percent more than in February and a 58 percent increase over a year ago.
The number of single-family home sales fell by 33 percent in Miami-Dade County and condo sales dropped 45 percent compared to a year ago.
Single-family homes in Miami-Dade sold for a median $382,600 in March, showing no appreciation compared to February and last year, the Miami Herald reported.
Condo prices were down 18 percent from a year ago to $295,100 — the weakest part of the Miami-Dade market. Potential reasons for the slump include overbuilding, tightened credit standards and rises in property taxes and insurance costs.