Wednesday, 30 September 2009

Recession ending in Florida?

As the third quarter of the year draws to a close today, you may well have been cheered by news that the recession in your home country (or region, I suppose) is "over". Well, maybe. (At least, that's what I got this morning from a paper in the UK).

Today, the Miami Herald also claims that the recession in Florida may be coming to an end, according to a couple of important factors - consumer confidence and the house prices.

According to the Case-Shiller home price index, property prices increased for the second month in a row, as figures for July were released. Though the increase was small - only 1.2% - it's an increase nevertheless and modest price rises are clearly the way forward as the economy (hopefully!) recovers. Nevertheless, the index shows that prices are still far below the same period last year - by 21%.

Meanwhile, the Florida Association of Realtors shows that median prices in Miami rose by 1% from July to August, though prices decreased by 1% for Broward county. The median property price for these two counties now lies at $194,800 and $217,000 respectively. This small increase and small decrease for the two counties would suggest that prices are reaching their lowest point. The only major factor that would cause prices to significantly drop again would be a large amount of supply flooding the market, and we're hoping seeing these days behind us as well.

Moving on to the consumer confidence, a University of Florida report shows that this rose 3 points in September to 74, following on from a four-point increase for August.

Overall, the increase in property prices and in consumer confidence in Florida points to a recovery in the economy. If you're interested in purchasing property there in the near future, you may well want to start the ball rolling now whilst there's plenty of supply and before the market recovers too much!

Article: Signs point to recession's easing in Florida (30th September 2009, Miami Herald)

Thursday, 17 September 2009

Condo boom - of sorts - in downtown Miami

A recent article in the Miami Herald showed how sales of condominiums in downtown Miami - around the Brickell Avenue area - are rocketing...all because prices have finally come down to a level that is now attractive to many buyers.

After a lull following the collapse of the property market which saw many condo units remain unsold, and developers struggling to offload them (with some opting to rent them out instead) some building developments are seeing units fly off the shelf. Desperate to sell these condos, and needing to pay back their construction loans as well as trying to avoid bankruptcy, developers are - almost - taking what they can get. Some lenders are even allowing developers to sell for less than cost purely so they can get what's owed back.

Some of the developments mentioned in the article include 500 Brickell (which has an amazingly annoying website, I might add), Brickell on the River South, The Ivy and 1060 Brickell.

Many of those that are snapping up these units are foreign buyers; at 1060 Brickell it is estimated that about 80% of purchasers are from abroad. A huge 98% of these people had purchased with cash - not so surprising given the difficulty in obtaining suitable loans and mortgages these days. These buyers are investing in these condos as holiday homes for themselves or to rent them out, and aren't baulking at the idea of holding onto them until the market and prices rise again - which might be three years away.

Because interest and demand has increased so dramatically for these units - and because there's such a wealth of supply - there's unlikely to be a rise in prices any time soon. Whilst this is good news for buyers - pay attention, buyers! - those property owners looking or needing to sell in the near future may not be able to. Or, at least, not for price that's reasonable to them.

Whilst the increase in the number of units being sold is good news for the moment, the amount of cash-ready buyers will run out at some point. It will be then that condo units will need to be available at prices that are within reach for those that need mortgages to fund their purchase.

So, if you're after a smart new Miami condo and have funds in place, be sure to check out some of these developments. You may find a complete bargain.

Article: Downtown Miami enjoys mini-boom over cut-price condos (4th September 2009, Miami Herald)