Miami Price Dice?
Although asking prices are still higher than a year ago, sales of condominiums in South Florida have slowed and inventory is rising by the day. In February, sales of existing condominiums in Florida had declined by 23% from a year earlier, according to the Florida Association of Realtors®. In Aventura, near Sunny Isles Beach and North Miami, new condo listings have increased from 15 a day to as many as 100 listings a day. At Mystic Pointe, a five-tower complex in Aventura, there are 59 apartments available, although prices so far have remained at their peak, which was reached at the start of this year. In December, prices were 22% higher in Broward and 27% higher in Miami-Dade than a year earlier. Ken Klein, a mortgage broker and principal of Lenders USA, believes the bubble has burst and that the market will get worse before it gets better. Rising interest rates, oversupply, insurance and tax hikes, and assessments due to hurricane damage are all pointing to a cooling off this year. But Klein believes that good properties will retain their value. “Buyers in this marketplace should not be afraid to buy, however, if it is for a primary residence, since rates are still rather reasonable,” he says. (www.theslatinreport.com)
The Slatin Report (4/14/06); Arlene Hauben
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Hot Homes Get Cold — In Once-Booming Markets Such as the Florida Coast, Housing Sales Languish
For cities like Fort Lauderdale, Fla., Phoenix and San Diego, a drop-off in sales and a rising supply of homes on the market could soon put downward pressure on housing prices. “In some places prices might fall. In other places, price gains will slow,” says David Berson, chief economist for Fannie Mae, adding that the double-digit annual price increases of the past five years in many of the nation’s hottest markets were unsustainable. Todd Linsley, a 37-year old investor, had planned to flip a three-bedroom house he bought in Stuart, Fla. for $318,000 at the end of last year, expecting to sell it for as much as $425,000. But with the market on the decline, he listed it for $379,000, and has been unable to sell it. Instead, he is renting it for $1,000 a month, while paying a monthly mortgage of $2,045 and a $108 monthly home owner’s association fee. (www.wsj.com)
Wall Street Journal (4/12/06); Michael Corkery
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Is There a Pink Slip in Your Future? If You’re Involved in Real Estate, the Answer Is ‘Maybe’
Joseph Kalish, of Ned Davis Research in Venice, Fla., calculates that 30% of the 705,000 jobs added to Florida’s private-sector work force from November 2001 to November 2005 were related to housing. “This has been a historic housing boom,” said John Challenger, of Chicago-based placement firm Challenger, Gray & Christmas. “This nexus of industries, different kinds of companies, has staffed up to meet this unprecedented demand for the services and work, which inevitably is going to be scaled back.” Though she foresees a pickup in mortgage activity in 2007, Sarasota mortgage broker Marta Grande expects some rough times between now and then because mortgage industry payrolls have grown quite substantially, and the industry’s profit margins are now being squeezed because investors won’t pay as much for loans on the secondary market. A 20-month hiring spree that roughly coincides with the 2004-05 real estate run-up has created 53,000 new jobs for lenders, loan service companies and other professionals in real estate finance, according to National Mortgage News, suggesting that about 10% of the nation’s current mortgage industry work force of 533,000 are relatively new hires. (www.heraldtribune.com)
Sarasota Herald-Tribune (4/10/05); Michael Pollick
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Backyard Accents, Growing Like Weeds
Annual retail sales for outdoor furniture have gone from $2 billion in 1994 to about $4.7 billion in 2004, fueled by a building boom in large new homes and heavily renovated older ones, with multiple doors leading outside to multilevel decks. The biggest outdoor furnishings purchases are being made by home owners who are over 45 and have been in their homes for more than 16 years, according to Gary McCray, vice president of Laneventure, the North Carolina-based indoor and outdoor furniture company. High-style lower-priced goods are also luring younger buyers into the market, however, and outdoor rugs are the fastest-growing category, he says. Sales are brisk even in the Northeast and Midwest, and with the exception of grills and fire pits, women are doing most of the buying. To meet the growing demand, manufacturers of outdoor furnishings have developed hardy all-weather materials such as vinyl wicker and rattan, molded plastic and cast aluminum. (www.washingtonpost)
Washington Post (4/13/06); Annie Groer
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Local Builders and Buyers Going ‘Green’ With Gusto
Paying $150 in yearly dues and $50 to register each house for participation in his green home building program, Seattle builder Jim Barger can hang a “Built Green” tag on his dwellings, indicating that the home is potentially healthier than a traditionally built home, that it should take less energy to operate over the long haul and that it is better overall for society and for the people who reside in it. Among certification options chosen by Barger’s Greenleaf Construction company for recent projects are: beefed-up insulation levels, tankless water heaters, fluorescent lighting, pre-used materials such as plywood and timbers, and 50-year metal roofs. He also prepares a home’s electrical system so that in the future the power of solar energy can be tapped without a costly retrofit. “We have to go through an introductory training program to learn about the checklist of options and how to use it, and once a year someone from your company is required to attend a Built Green seminar,” he explains. “Until now there hasn’t been a compelling reason for builders to change their business paradigm,” said Aaron Adelstein, director of the Master Builders Built Green program. “Most of them figured they had a business model that worked in what has always been a highly competitive industry. But now consumers are quite savvy, especially the consumers in this area, and builders are seeing that they need to change in response.” (www.seattlepi/nwsource.com)
Seattle Post-Intelligencer (4/8/06); Gordy Holt
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Bar Association Seeks Study of Eminent Domain
In response to last year’s U.S. Supreme Court decision in the case of Kelo v. City of New London allowing New London, Conn. to take the property of home owners for the development of a hotel, convention center, office space and condominiums, the New York State Bar Association is pushing for a state commission to study proposed amendments to eminent domain laws. “Kelo is based on established legal precedent,” said the association’s president, A. Vincent Buzard. “It is not a revolutionary departure from existing law, and, in fact, would have been decided the same under New York law. Furthermore, our position is that unwarranted attacks on the …decision are based on misunderstanding, that they undermine public confidence in the judiciary, and are inappropriate. Referring to members of the (Supreme) Court as ‘commissars’ or accusing them of using ‘Gestapo tactics’ is demeaning to our judicial system and is contrary to the facts.” (www.rismedia.com)
Rismedia (4/13/06); Beth Bresnahan
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