Beyond The Light At The End Of The Tunnel
A report from the Sun Sentinel in Florida. “In May, Max Martin, an agent for the Keyes Co. in Fort Lauderdale, picked up a $1.25 million listing for a two-bedroom condominium with a direct oceanfront view at L’Hermitage in Fort Lauderdale. The owner recently authorized a fifth price cut in seven months, and now the unit is on the market for $899,000, Martin said. About 20 units are for sale in the building and nearly all have had price cuts, according to Martin, who says a new wave of condo construction in Broward is making it difficult for owners of existing units.”
“‘The luxury condo market is flooded,’ he said. ‘With all those new buildings in Fort Lauderdale, people want the brightest and the best. People who are selling luxury properties will have to be ready to make some major price drops.’”
The Daily Business Review. “When Newgard Development Group landed a construction loan for a high-end condominium in Fort Lauderdale, the financing came from Hall Structured Finance, a private lender — not your traditional bank. Howard Taft, who helped secure the $36 million loan for the Gale Residences, said only nonbank lenders like Hall were interested in backing the project. Traditional construction financing ‘is almost nonexistent’ for new condo and apartment projects across South Florida due to the large number of units already underway, said Taft, a senior managing director with Miami-based Aztec Group Inc.”
“Banks have all but exited that market. Taft said alternative lenders have stepped in to fill the financing void — but at a cost. ‘They are normally higher-priced, higher-cost loans, and [the lenders] are only dealing with the top-tier developers,’ he said.”
“In the past, Joshua Emory, a principal with Primrose Capital, would reach out to 10 of the usual lenders, including BB&T, BankUnited and Wells Fargo, among others, and generally all would show interest in financing the deal at hand. Today, however, the Miami capital broker has to reach out to 50 lenders to lure only a few term sheets. ‘Many of the banks we used to deal with to place construction loans are simply no longer originating construction debt,’ Emory said.”
“Miami-based TotalBank senior vice president James Venney noted an oversupply of condo inventory in specific markets like Miami’s Brickell and downtown corridor, Sunny Isles Beach and some parts of Miami Beach has been the main deterrent for lenders like TotalBank. ‘We certainly are here to serve the community, but we also need to make intelligent and thoughtful decisions on how we deploy money into the community,’ Venney said.”
From ABC Action News. “The latest real estate report shows housing prices around Tampa are continuing to get higher. The report, by real estate website Zillow, shows the cost of a home for sale around Tampa is up by around 11 percent year to year since 2006. The average home goes for around $177,000. However, that depends on where you’re looking. The average home in South Tampa sells for around $400,000.”
“Prices are inching closer to what they looked like before the housing bubble burst. ‘I think we’re beyond the light at the end of the tunnel,’ said Lisa Spencer, general manager at the Chadwick Group. ‘We’re actually in a full steam ahead market.’”
“Finding a home will cost more in popular areas like South Tampa, but she suggests people wanting to move there to consider other options, like purchasing an apartment instead. You could also rent. According to the Zillow study, rent prices are going down by around 10 percent, but the average rent remains at $1,300 a month.”
