It wouldn’t seem like Florida would be doing well in real estate right now, given the fact that as a state, Miami has been taking somewhat of a battering recently. But apparently that’s exactly what has been happening. Just taking a look at the statistics for the sale of various properties in the region, according to the Miami Realtors Association, it seems like right now Florida might just be setting a record.
This fact however, has probably stemmed from bad news however, in the Florida housing market. What’s been happening is that there have been many discount priced foreclosures as well as short sales. Still, the facts are the facts and there has been an increase in condominium sales by 58 percent as pointed out by Housing Predictor. Further, from its peak in August 2008, there has been a reduction of over 65 percent in the amount of residential properties available in Miami-Dade County. Close to 60 percent of residential sales – such as bank-owned REOs and short sales – experienced “distress” last month. This figure was almost 70 percent in September of last year.
It may be true that condos in South Florida are going down the pan, but it’s certainly not the case for the area’s apartments. Indeed, plans are in motion to erect over 4,000 rental apartments: two high rises in downtown Fort Lauderdale; around 400 apartments on Young Circle and a complex with about the same amount of units in Boca Raton, at the old Levitz shopping center.
What happened was, in response to when real estate was doing great in the area, many apartment buildings and complexes were made into condos. But given that it seems like there is now a greater supply for tenants, apartment buildings are being constructed once again. Today, lots of young professionals who are somewhat skeptical about entering the property purchasing market, are looking to rent apartments or are unable to afford the mortgages on the original homes they bought so need an alternative.
It seems that these days instead of buying big homes with tough mortgages, the trend is moving towards smaller places, that do not require a down payment, with less monthly payments and someone to take care of any problems in the property. It is much less of a hassle than having to deal with it on your own and way cheaper. And it’s certainly been a huge plus for the South Florida community vis-à-vis people looking for affordable housing.
The figures for this year real estate market in South Florida, show quite simply that there are not enough properties to go around. According to real estate agencies, there has been a steady decline in property availability in the area in the last few years. For example, the amount of single-family homes and condominiums for sale in the Broward County and Palm Beach County area is around 50 percent lower than it was a few years ago. According to Keyes Co. Chip Rowand, there are tons of people going for the same few properties available, and almost as many offers being made. The bottom line is, more properties are needed. According to a comment he made in a recent article, Rowand says “analysts expect that’ll happen soon enough as a new wave of foreclosures hits the market.”
Shadow Inventory Homes
According to CoreLogic, last July, the “shadow inventory (homes that will soon enough be on the market due to a foreclosure but cannot be counted in the figure of homes for sale as are not yet on the market) of homes for sale” was at 1.9m. That figure dropped to $1.6m this July. The research company’s chief economist, Mark Fleming said, “the steady improvement in the shadow inventory is a positive development for the housing market. However, continued price declines, high levels of (underwater mortgages) and a sluggish labor market will keep the shadow supply elevated for an extended period of time.”