Survey: 2016 won’t turn real estate market upside down in South Florida

Florida Real Estate

Real estate insiders expect 2016 to be a strong year for South Florida despite slowing sales and price gains in the condo market and FL land for sale, according to a survey conducted by Berger Singerman.  The law firm polled about 100 top developers, Realtors, investors, lenders and contractors for their take on the new year.

The overall consensus is that things are going to continue in a similar direction, 2016’s going to look a lot like 2015. So while everyone is asking, “Are we in a bubble? Is it all going to come crashing down?” the smart money says that’s not the case.

About 42 percent of respondents said 2016 will be “somewhat better” than 2015.  About 37 percent said there would be “no change” in the market next year.  Only 13 said they expect a “somewhat worse” year.

The reason growth won’t pick up much?  Struggling economies in Latin America and Europe are holding back the foreign investment that has fueled South Florida real estate since the recession, particularly the new condo market, an important local economic driver.  Single-family homes are still selling at a record pace because of tight inventory.

More than 60 percent of respondents pegged “global economic conditions and uncertainty” as their top reason for a lack of confidence in the market.

The poll also revealed that developers plan to build more than just condo towers on their empty home sites.  While 26 percent of respondents said condo development will produce the highest returns in 2016, the hotel and hospitality (21 percent) and retail (20 percent) sectors weren’t far behind.  That’s a change from previous years.

Real estate experts are definitely seeing more diversity in the market especially in investment real estate.  Following the multi-family rebound, experts have a feeling that these other areas are going to take off too.

 

South Florida is a Seller’s Market as We Start 2016

South Florida Real Estate

Talk to the experts in Palm Beach or Naples or Fort Myers or even Punta Gorda, and you get variations on a theme.

The theme is this: Home prices will continue to rise in 2016, wherever you are. It’s a seller’s market now, but in Florida a market for rational sellers, not proud sellers — for people who will do best by not expecting to get more than the market bears especially when selling real estate investments.  Every property sells now if it’s priced right, but experts see some bubbles forming (in the region) with higher inventory — one problematic area in Collier County is near the heart of Naples, with a lot of tear-downs and people rebuilding.

Sellers who saw their property values tank five years ago might look at current conditions and assume that the market is booming and its a great time to be selling and buying land in Florida.  That perception might make them too optimistic and they might want more now than the market can bear.

In each market there are nuances — factors that suggest national figures for home prices are constructs, not literal representations of markets here.

Lee and Collier counties

Expert’s comparative analysis of Lee and Collier suggest some significant nuances, and differences, in those markets. Lee County sales (including Cape Coral land) were up 11 percent last year while Naples area sales were up about 3 percent, in part because of price points: Collier has a median sales price of $405,000, which is almost double Lee’s $211,000 median.

Charlotte County

Although Sunshine State numbers are higher than that, about 8 percent, Charlotte County prices are most likely to reflect the national trend.

The counties numbers have been pretty consistent for several years with sales running from a low of just over 2,000 in 2008 to a high of 4,500 this year, and — as a “retirement market” — an influx of baby boomers 62 or older expected to continue through 2023.

Palm Beach

In the town of Palm Beach, at the heart of Palm Beach County, national data might as well exist on another planet.  The median sales price in 2014, at $3.475 million, was up 20 percent to $4.2 million for 2015.  And in Palm Beach County as a whole there were 12 and 14 percent increases in 2013 and 2014.  The county appraiser’s office was estimating a similar increase by the end of 2015 though those numbers aren’t tallied yet.

 

 

2015 in SWFL Ends with a Housing Surge

2015 ended on an up note for promised Lee County housing starts – 216 percent up for multifamily projects compared with this time last year.

As if rushing to make its new year’s resolutions before midnight, the county permitted 200 multifamily units in December including those being built on Lehigh Acres land. November had been sleepy with only six such permits, and 2014 had closed with only 30.

A highlight of the 12th month was The Reef in Estero, which got its green light for 174 units of off-campus student housing at 19655 Three Oaks Parkway – a first for the village’s new design review board.

Single-family homes didn’t do badly in unincorporated Lee, either. The year ended with 132 December permits, almost two times more than the previous year, according to the county’s community development department.

And for 2015 overall, the county ticked up 21 percent in the home permit sector this doesn’t include the massive gains in Charlotte county including Port Charlotte land.

With a total of 1,202 single-family and 2,094 multifamily units permitted in 2015, Lee starts promised a market value of about $491.3 million.

Cape Coral’s housing market in 2015 was at its healthiest in a long while, with August and October breaking the 100 permit threshold for single-family homes. That hadn’t happened since 2007.

The Cape issued six duplex and 95 single-family permits in December.

Bonita Springs finished the year with 601 single-family and 40 multifamily permits issued. Although slightly under its 2014 performance, the year proved demand for Bonita housing continues strong into 2016.

2015 may be remembered as the year foreclosures progressed so far in the reverse direction since the recession as to become a nonissue.

The year cash sales began to slow; lending markets began to open up; and mortgage rates increased – timidly – for the first time since the recession.

But the year’s hottest development was a headline-making ALN Apartment News study that placed the Cape Coral-Fort Myers area among the most rent-burdened metro areas in the country

“Florida has the highest number of renter households in the U.S. paying unaffordable rent, with nearly 1 in 3 renter households in Florida’s top 10 metro areas paying at least half of their household income (before taxes) toward rent and utilities,” a survey by nonprofit Make Room found.

With the year only half over, Fort Myers area rents had risen over 14 percent from the year before. Statewide, the people most severely burdened by high rents: 6,223 people aged 18 to 34, and 4,257 people ages 50 to 64.

While real estate experts see an exciting lineup of new construction starts on the 2016 horizon, the same can’t be said for affordability.