The drastic recent price drops on oceanfront condominiums in Hollywood and Hallandale exemplify a trend that had the Miami-Dade free-money mindset creeping up into lower Broward County, and now leaving brokers in the area shifting their practices.
A recent report by Condo Vultures on oceanfront condo prices shows significant drops at several oceanfront condos in Hollywood and Hallandale. The average price of a condo unit in the Waterways in Hollywood Beach fell 60 percent to under $100,000, and prices at units at Beach Club in Hallandale Beach fell 45 percent, to a little over $300,000, from their original listing prices in 2007.
“The Hollywood-Hallandale market was a lot more speculative than the Broward County oceanfront market,” said Andy Weiser, a Coldwell Banker realtor in Fort Lauderdale. “There was also a lot more built in Hallandale and Hollywood than there was in Fort Lauderdale. Because of that, we have two separate markets.”
The average price at one Fort Lauderdale building, the Pelican Grand Beach Resort, fell 76 percent to around $200,000 since prices were originally established in 2008.
Hollywood and Hallandale are to many people an extension of the Miami Market, Weiser said. “It’s not a true Broward market, it’s just that they tend to operate more on the Miami model than on the Fort Lauderdale model. It’s the amount of money you had to put down on a new construction. In Miami-Dade, you could do it for a lot less than in Broward.”
The Hallandale-Hollywood market is making it tough for brokers to adapt, with financing nearly impossible. The problem has made one broker, Hollywood-based Lloyd Feinberg, switch from selling $500,000 to $1 million properties in 2004 and 2005 to a practice relying on higher-volume sales of lower-value bank-owned foreclosures for cash.
“I’ve changed my way of going about business, and I’m still closing a large volume activity,” he said, “but prices are down, commissions are down and it’s a volume deal. In the 75 bank units I closed last year, only one was financed.”
Hollywood Beach ReMax broker Judy Buchan said difficult financing in the area had shifted her practice toward a higher volume of cash-only foreclosure and short sale deals.
“We’re selling more foreclosures, the short sales are starting to close,” she said, noting that the deals were not particularly good for either party. “The banks want to cut the commission for the realtor, they’re cutting the fees due to the associations, and the first lien holders are practically cutting the second lien holders to nothing.” Feinberg, a Colwell Banker broker, said, however, that the low cost made many of the properties attractive as rental investments.
Hallandale and Hollywood’s low-rise profiles make them more attractive for speculators and developers, Weiser said.
Fort Lauderdale and areas north in Broward County are more developed, and were originally developed as condos, not rentals. Hollywood and Hallandale are known for having low, three-story oceanfront properties — and while these buildings are great from an environmental perspective in getting light into the community, he said, they were riper for the picking for developers.
Weiser mentioned the low incidence of foreclosures on Fort Lauderdale’s Galt Ocean Mile, where, he said, there were only a dozen foreclosures in “the most populous part of our condo market.” While Fort Lauderdale prices have certainly moderated, he said, they have not taken the radical swing of other parts of the state.