Fort Lauderdale Housing Thread (Jacksonville, Miami: condos, crime, mortgage)

[fauve]

Casual - thanks! And, you're welcome to come by for plants when you're ready!

[granitelady]

when the asking prices drop down to what it was 4- 5 years ago then the market will be back to reality, but don't expect the prices to drop too much, remember that FL will always be a desirable area like California and New York...have you checked the prices there? A 1300sf house in California is $700k and the most it will ever go down to is $500k

[acegolfer]

Pricing falling back to year 2003 level? When did the bubble start in S. FL? Is it 2003?

I'm ignorant and would like to know.

[Wild Style]

Originally Posted by granitelady

when the asking prices drop down to what it was 4- 5 years ago then the market will be back to reality, but don't expect the prices to drop too much, remember that FL will always be a desirable area like California and New York...have you checked the prices there? A 1300sf house in California is $700k and the most it will ever go down to is $500k

Incorrect. Prices fell by 75% in NYC during the last housing bubble which was late 80s early 90s. Same thing happened in Cali. More people have left Broward than came here. Regardless of how "desirable" people imagine it to be here, houses can only be as much as the local economy can take. Putting a year figure on home prices really is irrational. It depends on the local economy. If the locals are making more than what they were 4 yrs ago then prices will go to that. If they are making less then the prices will reflect that too.

[casualobserver]

There's no crystal ball here, folks, it is all speculation. The closest you can come to having some rational approach is to study the market statistics like a hawk and be prepared to act quickly if the key stats start firming for a couple of months in a row.

Like Phoenix, Las Vegas and other desirable sunbelt locations, Florida's real estate boom was as influenced by investment speculators as much as, in not more than, traditional economic/employment drivers. In this regard, speculators, with later/higher acquisition cost bases, will be quicker to sell out since they are just cutting an investment loss as opposed to giving up a roof over their heads. Nonetheless, there are still huge amounts of cash and capital floating around out there looking for a return. There is already evidence that real estate vulture outfits are starting to make some moves.

It is true that banks and other financial institutions will be quick to unload any inventory they are forced to take on, since unoccupied houses are non-income producing assets and REO attracts an especially punitive risk-based capital charge to their balance sheets. Nonetheless, a lot of mortgages were originated by the late night TV outfits who unloaded loan risk via securitization traunches. This fragmentation of risk will delay not only loss recognition pressures but also make it hard for a single creditor to make a decision relative to a single property.

While I will take the locals word that the employment economy is south Florida is not good, there are still a zillion baby boomers to retire. Some will choose Georgia, Texas and the Carolinas, but a goodly number will still choose Florida.

And even for those early wave retirees that are now looking to migrate out of Florida because of insurance costs and more "crowded" conditions, they may indeed want to sell, but chances are they will keep their house listed for a long time at a high price.

While the US economy is struggling, South American economies like Brazil are still going along quite well. Miami and its surrounds will still likely benefit as the logical points of service for South American operations.

This is hardly an exhaustive list of factors......my point being though nobody is going to perfectly predict whether the minuses overrule the pluses and even if so, for how long. A lot of this real estate slump is consumer confidence induced. Who knows what and when something will be reported that turns sentiment around?

We're ultimately left to our own individual brainpower and risk/reward appetite in making our decisions. Best of luck to us all.

[Wild Style]

^^

casual

there was a report on retirees. Many are leaving Florida and a lot are remaining in the North East now so you can't count on that anymore.

As for crystal ball, you don't need one. If you understand economics and how housing works you can predict with accuracy where prices will go. They did it in the 90s, they did it in the 80s and they did it in the 70s.

[fauve]

There's also another thought. South Florida is almost completely built out. If/when the next period of growth comes along (and it will, due to unrest in South America, or European and Canadian influx, or just 20-somethings who want to live in Miami because it's hip, etc.), there will be price pressures on existing property. The export business in South Florida is also very hot right now because of the declining dollar - I really don't see how this area could ever become another Detroit or Cleveland.

Wild, btw, we sold 2 pieces of property in NYC (Manhattan) during the height of their drop. One was an apt that we purchased in 86 for $112k and sold in '89 for $75k. And, the other was an apt we bought in '84 for $235k and sold in '89 for $175k, so not quite a 75% drop, but painful just the same. And, if we had held on a few years, obviously, we would have done much better. One thing NYC has in common with S Florida is limited land and a steady influx of newcomers in every kind of economic state.

Also, on the subject of interest rates - when they increase, and I believe they will, remember that they reached the 12-14% level during the height of the inflation and took a LONG time (like decades) to come down again - we didnt reach 5-6% till only a very few years ago. I wouldn't try to time this beyond low interest rates.

So, my advice is if you find something you like, plan to stay beyond a few years, and you can afford a 30 year fixed mrtgage, grab it because you will have timed it as best as you can during a difficult period.

[happymccamper]

Originally Posted by casualobserver

There's no crystal ball here, folks, it is all speculation. The closest you can come to having some rational approach is to study the market statistics like a hawk and be prepared to act quickly if the key stats start firming for a couple of months in a row.

Like Phoenix, Las Vegas and other desirable sunbelt locations, Florida's real estate boom was as influenced by investment speculators as much as, in not more than, traditional economic/employment drivers.
A lot of this real estate slump is consumer confidence induced. Who knows what and when something will be reported that turns sentiment around?

We're ultimately left to our own individual brainpower and risk/reward appetite in making our decisions. Best of luck to us all.

I think this is one of the best posts on this thread, very well put. I know history is the best predictor of future. But history of other states and areas are what they are history. We are here and now...I do think home choices need to be based on the individual and their situation. As far as I think it is a gentleman that mentioned renting "outside" or maybe buying outside of Broward. I find that very hard for most to do if you work, or in my case my hubby works in Ft Lauderdale. We moved here from Michigan where he use to have over an hour commute at times w/terrible traffic...there is no way he is going back to that...and most others that may work in the area are not going to go for the large commute especially w/gas prices....I would think....I can't speak for them, but for us...we have had a huge saving in gasoline moving down here even w/the crazy gas prices! Yikes! But I must also say everyone on here as made wonderful educated statements so I am not trying to discredit anyone...I am just adding my two cents and thought the above post said things well...

[compelled to reply]

I don't know if buying or renting "outside the county" is the solution. It doesn't get cheaper until you get to about Port St. Lucie which quite honestly isn't a desirable location compared to someplace in South PBC or West Broward. I have also heard of people moving to Leigh Acres and taking the alley down here for a cheaper house. But what does that area offer? Well, it offers a cheap house. It offers nothing else except for a two hour commute to Ft. Lauderdale if you want a (comparatively) decent job, since the economy in Lee County is in shambles. And as far as Dade or Palm Beach, well, they are more expensive than Broward. Palm Beach has a little bit of a perceived desirability edge and that's why it is more expensive than Broward. On top of that, there is a huge population of wealthy retirees and second homes compared to Broward and they blow up the prices for the market in general and increase the demand for real estate. Dade has a high rate of immigration and people willing to live 5 families to a house, which also blows up the prices for people who don't want to live like that. Broward is shrinking in value (and population) because it's too expensive for what it is and the average wage here. Compared to Dade or Palm Beach, Broward has the closest thing to a "normal" economic structure although it is still far from that (thus the reason the prices blew up so much in the first place), however because it is the closest thing to "normal" it will fall back to sustainable prices quicker. It does still have the "Florida factor" (second homes, immigration, imported foreign money, etc) but not to the same extremes. As we all know, speculation and exotic loans were a problem state wide.

Either way, EVERYWHERE in Florida is overpriced right now, desirable/good economy or not.

[Bette]

I live in Boca but would move to a condo or townhome in FTL in a minute. I love FTL around Las Olas and the beach. I would keep my home in Boca and rent it out if need be. Real estate is a tangible asset and if bought well and for the long term, you will do fine.

During the run-up, speculators played a huge part especially in condo land. There will be people always retiring to Florida, don't worry about that. Many have family here, have visited and feel comfortable. The retiree of tomorrow will be vastly different than the retiree of 30 years ago. No offense intended please!

As a prior poster said, each situation is different and unique. We all have to be responsible for our own decisions whatever they may be.