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According to a report from Zillow, in the third quarter of 2011, those selling their homes in Palm Beach County lost money on almost 46 percent of occasions.  This was an increase of 3.4 from the second quarter.  As well, in September, national figures were 34 percent of homes selling for a less which is three percent more than for the same time frame last year.

And it looks like there is more bad news along the way.  According to one economist at Zillow, home prices are meant to plummet a further three to five percent before hitting rock bottom nationwide.  The economy isn’t doing great with unemployment, negative equity and more. With such features plaguing the economy, is going to be a long time until the housing market stabilizes.

Florida Homeowners

Close to 50 percent of homeowners in Broward, Miami-Dade and Palm Beach owed more on their mortgages than the worth of their homes during the third quarter.  This figure has slightly increased since the second quarter.  It also looks like next year, the values on South Florida homes will be hitting bottom.  At that point, banks will have to start unloading all these homes.  The one silver lining on the cloud according to the Zillow report is that there has been a reduction in pace of home-values.

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Sterling University Housing (an auxiliary of Dinerstein which has built approximately 30,000 housing facilities for students), is set to construct four off-campus student housing constructions, one in Florida, one in Texas, and two in South California. They are due to be up and running by the end of next summer and hope to achieve LEED for Homes Silver Certificate.

Going Green in Top Quality

There will be some great amenities at the Florida student housing construction which will be built next to the University of South Florida, in Tampa.  The furnishings in the building will be very modern; a park will be developed with areas for exercise, as well as various games rooms, two swimming pools, a tanning dome, computer center, etc.  Inside there will be a washer and dryer, a 42 inch TV and more.  the main objective of the apartments is to go green and thus they will be constructed in an eco-friendly manner as much as possible with top quality clean air quality and other energy-saving features.

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New homes are to be built in the Lely Resort, which is located in Naples, Florida.  The company engaged in the building work is Stock Construction.  The residential units will comprise five floors plans which are named: Santa Ana, Santa Clarita, San Clemente, San Pablo and San Pablo B.  In each of them, there will be maximum natural light capacity as additional windows will be fitted.

Santa Ana

This property will comprise three bedrooms, two-and-a-half bathrooms, living and dining areas, and a garage for two vehicles.  This will span 1733 sq. feet.

Santa Clarita

The building will be a town home with two floors, covering 1989 sq. feet, which will have two/three bedrooms, a half-bath, a side-loaded entrance, covered porch from the kitchen and a Juliette balcony off the guest suite.  Attached to the unit will be a garage suitable for two vehicles and two closets for storage.

San Clemente

Two bedrooms, two bathrooms, two lake-facing lanais, garage for two cars, large living area and altogether measure 1404 sq. feet.

San Pablo

This will span 1774 sq. feet and be on the second level.  It will comprise: three bedrooms, two bathrooms, a fancy kitchen, large front porch, a garage with the capacity for two vehicles.  San Pablo B will be the same.

All five new designs call for installation of more windows which leads to optimum natural light penetration.

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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.

Every Cloud…

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.

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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.

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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.”

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In today’s strapped economy, many struggling homeowners have difficulty selling their properties. Oftentimes, those in need of immediate cash flow will find themselves selling their properties at a substantial discount.  The real estate research firm Radar Logic, for instance, estimates that the discount that sellers face at the moment averages approximately 40%-.

Helping those in need, companies like Transcendent Investment Management with Jordan Kavana offer a balanced strategy.  While purchasing properties from banks, courts and other sources, TIM can purchase and sell single-family homes, condominiums and multi-family properties while also purchasing properties for rental.

As TIM explains, “This provides capital gains balanced with a stable cash flow from a portfolio of value-priced hard assets.”  Transcendent earns its returns by serving as a capital provider for distressed properties and best in class investment manager across the country. Their knowledgeable team finds high absolute return investments in real estate that show fundamental value, a favorable risk-return profile and an identifiable exit.

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For those looking for a rental in various parts of Florida, there are many companies that offer this service.  One such firm – Southern Vacation Rentals – has recently opened a new office in the Santa Rosa Beach area, which can be found in the Publix shopping center.  The office can be accessed from Highway 98.  According to the company’s owner, Mike Shoults, since the company has anyway been very integral to the South Walton community for more than a decade-and-a-half, it just made sense that it would eventually have an office in a more easily-accessible place for its customers.  As well, it enables the company to offer an improved service on its vacation homes and rentals in the most sought-after communities in South Walton.

 

In addition to its new office, Southern Vacation Rentals will be developing an additional website, which will also assist its customers in a similar way.  This will not be replacing its current website: www.SouthernResorts.com but just supplementing it.  Indeed, the new website is meant to focus entirely on the South Walton area.  The main aim of this is to maximize revenue for the owners, which is more likely to happen if the properties are exposed on line.  The management at the company believe this will be a great way of pushing the original location where they began their work.

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Taking a look at last year’s real estate figures and comparing them to this year’s, it is clear that the Florida housing market is on the rise again.  In August 2011, there were 1,185 home sales in Broward County, the north of the state – nearly a fifth more than the figure for 2010.  Not only is this great news for Florida, it is also promising for America’s housing market in particular and economy in general.  In addition, there was a five percent increase in the average price for a home from last year.

Remaining Cautious

It is true that this is good news.  Especially given the fact that there are other areas in the state that have also been enjoying this increase in house sales and prices. Yet there are still analysts who are promoting caution, as the real recovery they say will only come later on next year.  As president of Florida Realtors Patricia Fitzgerald pointed out, “over the past few months, it appears that home prices have been stabilizing in many local markets across the state.”

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It looked for a while as if things were improving for the housing market in South Florida.  But now it seems they are not looking so good after all.  Standard & Poor's Case–Shiller Home Price Indices released their figures for July indicating that south Florida is still going through a depression vis-à-vis its housing market.  While values of home prices have smoothed out somewhat, they are still less than 5 percent of what they were last year during the same time frame.

Nonetheless, July was certainly better than June 2011.  But we shouldn’t be popping the champagne just yet.  According to the research, this is just due to seasonal adjustments and really the increase overall, comes to a mere 1 percent.  But staying the same has to be better than getting worse and just looking at figures for February 2011, there has been a 1.5 percent increase.  This marks South Florida’s largest increase since August 2006.

Florida Housing Market 2006-11

Still, one has to really take a look at the bigger picture to work out what is really going on in the South Florida real estate market.  Unfortunately it’s not great.  The last five years have not been promising at all overall.  And this is made especially worse when one takes a look at how well it was doing in 2003.  The only optimistic part of this is, the only way is up.  And hopefully that will be the case for the Florida housing market in the near future.