•

florida-homeFlorida Realtors reported a peak during the first quarter of 2013 in the Florida housing market.  This translates into additional pending sales, closed sales, an increase in median prices and a decrease in supply of homes for sale, as compared to figures for the Florida housing market in the first quarter of 2012.

According to Dean Asher, President of Florida Realtors, the comparative figures are significant: “the first three months of 2013 demonstrate that Florida's housing market is gaining momentum and continuing to bolster the state's economy. It's taking less time to sell a home, and, coupled with tight inventory, that shows buyers are eager to lock in historically low mortgage interest rates and take advantage of favorable, but rising, prices.”

One of the possible explanations for the bolstering of the Florida housing market is that this time frame witnessed an escalation in job creation in the region, as well as a growing population – both factors offering a more solid foundation for housing market stability and growth.

 

•

florida-homeFlorida’s largest residential real estate brokerage – Coldwell Banker Residential Real Estate LLC – recently announced its latest acquisition.  The firm accrued the assets of Keldorff, Inc., and Pruitt Real Estate.   Thus Coldwell Banker today boasts over 80 offices and close to 4,800 sales associates in Florida.

On this acquisition, president of the company Clark Toole spoke about how pleased he was, adding that “their professionals bring an excellent reputation in the industry and local community, and we are especially excited that these acquisitions will expand our footprint into a new part of the state. This further strengthens our leadership throughout Florida and helps us better serve our relocation clients.”

It will also be beneficial to the companies that were accrued.  According to Michael Pruitt, joining Coldwell Banker is going to open up doors to a “global network with incredible brand strength, online reach and marketing resources, which will benefit both our clients and our sales associates.”  And, as Barb Keller of Keldorff Inc. noted, their company’s “philosophies and practices are a good match with Coldwell Banker Residential Real Estate and that our sales associates and customers will benefit from their global network, brand strength and online exposure.”

•

The upper 9th ward Florida public housing development has just been reopened, following a hard-working campaign by Diane Conerly to the Housing Authority of New Orleans (HANO). HANO administrative receiver David Gilmore found that Florida was being ignored, with some of the worst buildings ever, but thanks to Conerly, it is being saved.  Being the resident leader for the Florida housing development, she pushed Gilmore into never forgetting the people who had been waiting seven years to come home following Hurricane Katrina.

Gilmore was torn since there are such budget restrictions on all departments, but through Conerly’s sheer determination, he relented and thus happily announced at HANO’s February 19th board meeting that Parkcrest Builders had been awarded authority for 51 new units where Florida once stood.

The reason it was so important to Conerly was because she would regularly be inundated with calls from residents desperate to come home and leave their Section 8 housing.  At times some of them would tell her “it’s never going to happen.”  She felt so bad for them, she too “shed a lot of tears.”

Now, there are plans from HANO to erect the public housing units as well as a management office on a tract of land linked by North Dorgenois, Congress, Law and Alvar streets.  This will include: six one- 25 two- and 20 three-bedroom units.  Of the $1.3m needed to complete the project, $8.3m is coming from FEMA and $4.8m from capital funding.  The plan is that infrastructure work will begin early this summer.

•

At the end of March the Palm Beach International Real Estate Expo will take place at the Palm Beach County Convention Center, West Palm Beach.  To date, close to two hundred exhibitors (architects, brokers, lenders, developers, etc.) have signed up to participate.  Sponsored by 2030 World LLC, this is a good time for the event given the booming condominium market and the increase in single-family homes in the southern parts of the State.

Many of the excess condominium units that were erected during the 2000 to 2005 housing boom have since been sold to foreign investors.  Now, there is such an increasing demand, that housing developers are planning on building close to 15,000 new units.  Around 3,000 of these will be in the Broward and Palm Beach counties.

Clearly the Florida real estate market is on the up.  Indeed, so much so that the Boca Real Estate Investment Club is booming with increasingly more people feeling that getting into this career is more stable than others right now.  Founded by David Dweck, the group of young twenty- and thirty-something professionals are seeking to make real estate flipping in Florida, a full-time job.  And it seems that they are succeeding!  One guy purchased a bank-owned home in Boynton Beach for $68,000, renovated it at a cost of $30,000 and then six months later sold it for $135,000.  And they enjoy the actual job – finding something that is very unlivable and turning it into a beautiful home.  


The club is working for a few reasons.  First, it is because of the boom in Florida real estate and second, because as Dweck argues, the age-old staying in the same job for tens of years working 40 hours a week just isn’t the American way anymore.  “People are starting to realize that real estate investment is viable,” he added.


So if the Florida housing market continues on its upward spiral, this really could be a potential new job possibility for many young, up-start professionals looking to get their foot on the career ladder.
 

•

There has been some relatively good news for those concerned about the housing market in Southwest Florida.  In December of 2012, prices in the region were the same as those for the rest of the nation with increasing demand from purchasers.  However, according to CoreLogic Inc., on the bad side, there have been quite a number of both short sales at decreased prices and foreclosures which are bringing the market down.

Still, in comparison to the situation of a year ago, there is a bright side.  In the Sarasota-Bradenton-North Port metropolitan area, there was an increase of 13 percent in house prices.  Leaving distressed sales out of the equation, year-over-year prices in Sarasota jumped by 10 percent throughout the year.

The ideal is not for huge escalations in house prices; what field analysts really want to see is a "modest appreciation."  Huge increases are not good long-term, as has been seen in the past.  Ultimately though, across Florida, prices have overall increased 9 percent despite the fact that analysts feel the figures are misleading since most of the increase has come from lower-end properties which are now in greater demand by institutional investors purchasing them for rentals.  And the nice house worth approximately $350,000 is not really witnessing much of an appreciation.

•

The property market in northwest Florida is improving.  Figures for the end of 2012 on a high note.  Sales figures for November 2012, issued by Florida Realtors indicated significant improvement from a year earlier, most notably in Okaloosa, Santa Rosa and Walton counties, which witnessed an average escalation of close to 35 percent. 

So what is the reason for this optimistic trend?  According to one expert, it’s all about supply and demand, which is completely in play in this market right now. 2012 president of the Emerald Coast Association of Realtors, Judi Rutland also noted that right now there are great deals for buyers and investors.  This results in those listings that were overpriced being forced to readjust or come off the market.  This leads experts to believe that in northwest Florida the market is improving.

And it seems that the feeling of optimism is not just restricted to the northwest of the region. For South Florida homeowners, 2012 has been described as “the best year for housing since the housing crash began in the first part of 2006.”  Should this trend continue, it looks like the damage caused by the housing crisis should be erased by early 2019.  In 2012, figures for the South Florida real estate market should an average 1 percent increase per month from January to October. 

Thus the figures above show that if trends continue as they have been for the last 12 months, Florida is set to make a complete recovery from the housing crisis that started more than six years ago.

•

 

Recent news has indicated that Florida’s housing sector has gained the attraction of foreign buyers, specifically from Latin America.  Christopher Wood, Managing Director of CLSA  (Credit Lyonnais Securities Asia), is hesitant to use this information too flippantly though since the average US citizen has not encountered a substantial increase in income.  Wood is somewhat of an expert in this field, having been “consistently voted best strategist in Asia’s leading industry polls,” in his provision of “award-winning coverage of global equity markets.” It should also be noted that international investment professionals and the media wholly commend his weekly ‘Greed & fear’ column.

Wood also points to the other issues on the table.  Many people will continue paying rent rather than buying because of the flexibility it provides.  In an analysis of today’s mortgages rates however, buying is usually less expensive vis-à-vis monthly payments.  Thus the feeling remains that the country’s residential investment real estate is in an optimistic upswing.  According to the CPI shelter index, rents have increased by 4.4 percent which is having an impact on the country’s CPI inflation numbers since shelter expenses account for 31 percent of its CPI basket and 41 percent of CPI’s core.

•

There is not just good news for those interested in Palm Beach County real estate, there is GREAT news.  Over the last year, there has been more than a 60 percent increase on home construction, which is the highest number since early 2007.  However, before one gets out the champagne, they should know that according to Chief Economist of MetroStudy Brad Hunter, this figure is still a mere third of the activity that is considered “normal,” and way lower than when Palm Beach County was really on a high toward the end of 2004 which saw the beginning of construction of 2,754 new homes.  Still, major escalation as this is (as compared to last year) cannot be discounted and really is GREAT news especially since it seems like the trend will continue given that demand for new homes is increasing while supplies decrease.  There was also an increase of 46 percent of people moving into new homes in Palm Beach County, during this year’s third quarter as compared to last year’s.

Southeast Florida

The highest demand for property throughout the state of Florida is Southeast Florida which has encountered a true recovery.  Indeed, home values in the region increased close to 8 percent in the third quarter of 2012, compared to the figure for the same time last year.  It is anticipated that this will continue through 2013.  It hasn’t always been like that since in late 2011, South Florida’s figures were really poor, with nearly 40 percent of homes there selling for a loss in September. 

While there is some basic good news in the American housing market, many local markets are still struggling.  As well, while new foreclosure filings decreased 44 percent during the first three quarters of 2012 compared to 2008, Palm Beach County still fared worse in four categories: foreclosure inventory; sales prices; share of distressed sales and unemployment.

•

 

Compared to this time last year, Florida housing market is strong and continuing in this positive trend.  A report from Florida Realtors has shown that house sales in the region have increased by 11 percent compared to 2011 with pending sales having escalated by a staggering 40 percent. Throughout America house sales are up 9 percent but this still renders Florida in a leading position. However, when comparing median home prices, Florida is somewhat lower on the totem pole with $147,000 versus $188,000 nationwide.

In addition, according to data analysis undertaken by Coldwell Banker Real Estate LLC and Onboard Informatics of over 11,000 areas, for those who enjoy the suburban lifestyle, Cooper City, Parkland, Palmetto Bay, Jupiter Farms and Lake Charles Shores all rank among the top 20 best places to live. Factors tested included: good local schools; leisure activities; job opportunities; recreational outdoor activities and entertainment options.

So with real estate improving and quality of life in the region escalating, it would seem that the Florida housing market is out of the woods.  However, with this good news comes some bad.  There are concerns at a deflating inventory of properties for sale.  With an inadequate amount of affordable homes on the market, further growth will be diminished in the long-term housing market.

Thus balance is key.  Florida’s real estate market should continue to develop, but the hope is, that this should be with a focus on affordability for the masses.

•

Although the whole of America has encountered mortgage difficulties due to the economic crisis, it seems that now – especially for those in the South Florida region – there could be room for optimism.  Figures are indicating that, in recent times, fewer homeowners are facing the dreaded prospect of foreclosure, thanks in large part to the recovering economy, but also due to government-backed and other programs offering assistance.

For example, the Bank of America has been extending its financial supportive hand, and the results have been very positive.  Indeed, the numbers speak for themselves: in June 2011 there were 30,000 of “seriously delinquent mortgages” in South Florida and now – in August 2012 – this figure has dropped to 12,000 – a staggering 60 percent decrease.  BankUnited and Chase can also support the occurrence of a similar reduction in such numbers, most notably since 2009.

Since banks in the region have been particularly helpful, this has made a huge difference. Indeed, just a few months back, the majority of states in the nation made a $25bn settlement between Ally Financial Inc., Bank of America, Citigroup Inc., JPMorgan and Wells Fargo & Co.  As part of this, Bank of America wrote letters to 200,000+ mortgage holders (primarily in California and Florida), offering assistance. Other programs include the Home Affordable Modification program (offered by the federal government) that could lead to a reduction in monthly payments for some mortgage holders, as well as 46,032 trail/permanent modifications in Florida counties from various lenders.  Lenders thus seem to be making major efforts to help tackle the area’s “housing debacle,” rather than continue with its prior attitude of jumping to foreclosures. There has been a clear increase in banking flexibility, with some evening forgiving principal.  In addition, according to RealtyTrac, in the Miami-Fort Lauderdale-Pompano Beach region, foreclosure filings dropped 15 percent in July 2012 from their substantially higher figure in July 2011

Getting the Whole Picture

So while this all sounds extremely positive, why is it that homeowners in the South Florida region still seem to be struggling?  Is this the whole picture?  There are those in the industry who are not convinced Bank of America has made such a significant drop with over a third of homeowners no longer at least 60 days delinquent in four months.  Indeed, some have even suggested that the picture isn’t positive at all and that all the Bank of America is doing is merely unloading problematic mortgages to other servicers.  Although, having said that, the Bank has received around 10,000 requests from homeowners at their offices over the last two years, to which it has responded.  And for those who still feel they have not received the help they need, there will be a Bank of America free event next week to further extend a helping hand to struggling homeowners.

Further, there is still a large amount of Florida homeowners facing foreclosures.  Indeed, the figures show that one out of every 352 Florida homes is currently at some stage of foreclosure, according to figures from RealtyTrac.  This could be – at least in part – due to a revival in banking activity that, during litigation from state attorneys to protect consumers, had been delayed.  Now that these have been settled, banks are picking up again on long-overdue mortgages.  As well, even RealtyTrac – despite the positive trends it has witnessed – predicts an increase in foreclosure activity in the next few months.

Perhaps these facts shouldn’t come as such as a great surprise though, given that, according to a recent survey undertaken by Bankrate, Florida comes in at Number 4, for the country’s highest mortgage costs.  Given that the average cost for origination, title and closing in America is $3,747, Florida’s average of $4,395 is substantially higher, thus having the potential to cripple way more homeowners as they struggle to pay off their mortgages in troubling economic times.

So while there are definite improvements in America’s overall situation for homeowners – and indeed perhaps even more so for those residing in the South Florida region – there is still an undeniable amount of uncertainty putting pressure on these mortgage holders, that needs to be addressed.