December 30, 2013

A Window Of Opportunity For Sellers

WGCU reports on Florida. “According to the latest Market Trends statistical report from the Fort Myers-based real estate company Land Solutions, Inc., home permits up 61% in Lee, Collier and Charlotte Counties. ‘Where we’re at right now is ‘Wow,’ to put it in one word, it’s been an incredible year.’ said Land Solutions CEO Randy Thibaut. According to Thibaut, its all part of a positive trend, but that there’s also concern and confusion about the market as we look toward 2014. ‘While we’re experiencing these great results and everyone’s getting back to work and permits are being pulled and homebuyers are buyer, we also have to look at, ‘Is it too good to be true?’ The main question that we get is ‘Is this sustainable? Are we in another run up?’”

From Miami Today. “Brickell’s development business is back, and it’s booming. Whereas last decade saw empty condo towers standing tall as skeletal reminders of a recession past, 2013 saw the continued construction of the Brickell CityCentre, as well as the sale and groundbreaking on numerous other projects from developers like Related Group and Rilea Group.”

“‘Construction has come back really fast, a lot faster than everyone thought,’ said Diego Ojeda, VP of the Rilea Group, which broke ground last week on its 1080 Brickell Ave. condominium project, the Bond. The 43-story residential building offers 328 planned units, averaging around $500,000 a unit, Mr. Ojeda said. Looking forward, however, this boom in construction not just in Brickell but across Miami may be hampered by construction costs.”

“‘Construction costs have already escalated a lot, mainly in cement and metals. You’re seeing an increase by the month,’ Mr. Ojeda says. Because cement and metals aren’t simply finishing materials for interiors, a delay of a month in planning will result in a jump in construction costs, he said. So build now, and build fast.”

The Miami Herald. “While home and condo prices in Miami-Dade and Broward counties continue to post double-digit gains from 2012 levels, real-estate experts broadly agree that price increases will slow during 2014, just as sales are doing. ‘There are definite, definite signs the market is shifting [from a seller’s market] to a more balanced one,’ said Mark Zilbert, CEO of Miami Beach-based Zilbert International Realty, who has watched prices for beachfront and Brickell-area condos cool modestly from their summer peaks.”

“With prices up sharply, more inventory is coming up for sale. The selection of Miami-Dade existing homes and condos listed for sale continued to increase in November, with a 14 percent gain in single-family inventory from a year earlier and a 23.5 percent jump year over year in condos on the market. More unit owners have been listing their condos for sale, sensing that now is the time to sell — before a host of new projects under construction are completed. ‘Sellers are finding more competition [from the increase in available inventory], and sellers aggressively pricing their condos are going to find they’re not going to move,’ said Zilbert.”

“Meanwhile, cash-rich investors are seeing fewer bargains in South Florida. ‘As home prices have increased, it’s starting to cool off a lot of investors and hedge funds,’ said Stephen McWilliam, past president of the Greater Fort Lauderdale Realtors.”

The Tampa Tribune. “A conspicuous drop in condominium and townhome sales in the Tampa Bay area last month may have been caused by the perception of unaffordable flood insurance rates, if not the reality, real estate agents say. Most agree that stories of skyrocketing flood insurance premiums on older properties scared away many buyers.”

“The problem is the federal flood insurance reforms mostly don’t affect condominiums, at least not yet. ‘For a lot of people, buying on the water in Florida is psychological,’ said Cliff Roe, who runs Roe Realty in Seminole. ‘I think what it boils down to is everybody is confused about flood insurance and people just aren’t buying.’”

The Tampa Bay Times. “Tampa Bay home sales slid 10 percent last month compared to a year ago, as short sellers and cash buyers continued to exit the market, new MLS data show. About 2,500 existing single-family homes sold locally in November, down from about 2,800 the year before, the largest year-over-year drop in three years. Recovering prices have squeezed out investors, with cash deals dropping last month to 40 percent of total sales, the lowest point since early 2012.”

“Low inventories of good homes for sale — because sellers are asking too much, or are waiting for prices to keep climbing — are stalling potential buyers. And Realtors in Pinellas said ‘we can’t deny’ the effect of substantial flood insurance increases on slowing potential home sales.”

The Sun Sentinel. “2014 might be the year the market finally takes a breath. Analysts predict prices will stop rising at a breakneck pace, bringing moderation to the market and making homes a more stable and predictable investment. On an annual basis, the median single-family home price in Broward County has increased by more than 20 percent for 12 consecutive months, the Greater Fort Lauderdale Realtors said recently. Palm Beach County’s median has jumped by double digits for 13 months in a row, according to the Realtors Association of the Palm Beaches. Historically, home values increase at about 4 percent a year.”

“‘What I’m seeing is the rate of growth will be slower — but that’s a positive thing,’ said Jonathan Gelman, a real estate lawyer for the Greenberg Traurig firm in Fort Lauderdale. ‘A slower rate of growth will help us avoid the frothiness or a bubble in the market.’”

“A leveling of prices in 2014 will make conditions less favorable for sellers, experts say. Sellers will face more competition and won’t be able to dictate terms as they did in 2013. ‘There is a window of opportunity,’ said Douglas Rill, broker for Century 21 America’s Choice in West Palm Beach. ‘But it’s really important that if a seller has something, they should get it on the market quickly.’”

Bits Bucket for December 30, 2013

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