South Florida sees lower inventory, but still slowest sales in nation
The three-county housing market of Broward, Miami-Dade and Palm Beach saw a three-year inventory of homes on the market drop to a two-year inventory earlier this year, according to the Palm Beach Post. While some analysts say this indicates the market is poised for a rebound, it’s worth noting that sales in the region remain the slowest in the nation, and much of the decrease in inventory is due to frustrated owners taking homes off the market.
Palm Beach County sellers listed 31,020 houses and condos for sale in August, a month when only 1,122 homes sold, according to research firm Trendgraphix. Brokers say a six-month supply of existing homes is normal, so today’s 28-month supply is far from healthy.
According to a recent survey by Altos Research and Real IQ, houses in Palm Beach, Broward and Miami-Dade took an average of 160 days to sell in August. Tampa was a distant second at 129, followed by Detroit at 126. South Florida has led the survey since it began last September.
Lehman Brothers’ bankruptcy hits Miami market
When Lehman Brothers filed for Chapter 11 bankruptcy last month, it held $2 billion in large loans in the region, some of which leveraged major projects in the Miami area. Miami Beach’s Canyon Ranch Resort, Ian Schrager’s investment in the Riande hotel chain, the Donald Trump condo rising in Hollywood and the Related Group’s Icon Brickell in Brickell Bay were all financed by Lehman.
While the fate of Lehman’s interest in these major projects will ultimately be determined by bankruptcy courts, some experts predict that they will be unloaded at greatly discounted prices — possibly in bulk sale to vulture funds — in the investment bank’s effort to pay off its $613 billion in debt to creditors. A fire sale of sponsor-owned units at any one of these projects would greatly harm the value of those already purchased by buyers, analysts said.
Rising property values in Florida City
While most of South Florida suffered declining property values this year, Florida City bucked the trend with a 13 percent increase, or a $70 million jump in property values. The increase contrasts with a 2.6 percent decline in the total value of property in Miami-Dade County, the Miami Herald reported.
Florida City Mayor Otis Wallace claims that residential developers there had a
realistic projection of the area’s housing needs, and thus avoided the overbuilding that drastically reduced prices elsewhere in Dade. Neighboring Homestead, for example, saw a drop in property values by 5.2 percent, or almost $200 million, in
the past year, largely as a result of speculative development.
The property appreciation was also largely due to retail and commercial growth in the area, including the introductions of Cracker Barrel, Starbucks, Badcock Furniture, Largo Honda, and Power Financial Credit Union, as well as a Best Buy in the pipeline. Recently, Florida City has been offering businesses incentives to move in, such as waiving impact fees and providing financing through tax increment funding. The city commission also recently approved rezoning to allow for a new shopping center, the 12-acre Shops at Dolphin Square.
Ft. Lauderdale marina for sale after shady auction
The New River Marina in Fort Lauderdale, one of Broward County’s nine boatyards for megayachts, is up for sale by its new owner, 84 Marina LLC. The company, which was the marina’s major lender, took the property after a botched bankruptcy auction in July, for which 84 Marina owner Alex Nichols is pursuing sanctions in U.S. Bankruptcy Court.
The winning bidder of the marina’s auction withdrew from his purchase after it was revealed that a lower bid, for $13.5 million, came from an unqualified party, who claimed that his offer was forged. The U.S. Trustee’s Office in Miami, an arm of the federal Justice Department, is currently investigating the legitimacy of the auction.
In March 2007, the marina’s former owners, Bob and Mary Wickman, filed for Chapter 11 bankruptcy on the property, which was valued at more than $21 million in 2006. An auction was then set up in an effort to pay back $13 million owed on the property to Nichols.
Insurance regulators enforce wind coverage discounts
Florida’s Office of Insurance Regulation announced it would take a hard stance on insurance companies’ failure to give homeowners mitigation discounts — reductions in wind coverage charges provided to those who fortify their homes against hurricanes — after making the state’s largest private insurer, State Farm, refund $120 million in such fees to 98,000 customers. Windstorm premium savings can account for up to 68 percent of a homeowner policy’s cost, or as much as $1,360 on a $2,000 premium. The discounts have been required by the state since 2003, but consumer complaints have now alerted state regulators that many insurance providers may not be complying with the law.
Compiled by James Kelly