Headlines – Week of September 25, 2011
October 6, 2011
Primary Users – Only 13% of New South Florida Coastal Condos
According to report by Miami-based CondoVultures only 13% of the more than 43,200 South Florida coastal condo units created and sold since the real estate boom began in 2003 are owned by primary users who filed for Homestead Exemption.
The study is based on a review of every folio property identification number within the 987 projects with nearly 125,000 units on the coastal markets of South Florida.
According to Peter Zalewski, a principal with Condo Vultures, Freddie and Fannie typically require 51% primary users in order to provide financing for a building. Based on his research, only 175 buildings out of the 937 reviewed would quality for financing.
Of the 76,100 units created through the year 2002, nearly 27,100 units, approximately 36 percent have obtained Homestead Exemptions from their respective counties. Overall, South Florida’s seven largest coastal condo markets have a Homestead Exemption rate of 27%. Zalewski believes renters are now occupying a majority of the coastal condos built during the South Florida real estate boom.
The report reinforces the fact that second buyers and investors are the primary drivers in the South Florida market. Only one out of every ten condo transactions are local buyers. Foreign investors with strong currencies and domestic second-home buyers are the lifeblood of the South Florida coastal condo market.
10 States for the Cheapest Real Estate
The following is a list of states ranked by the lowest median list price of homes viewed at real estate search site Realtor.com
Top 10 States with Lowest Median List Price of Homes Viewed at Realtor.com in August 2011
||Med. List price of homes viewed
Commercial market hits a snag in rebound
According to a recent Wall Street Journal
article, some companies looking for office space have delayed their plans as uncertainty looms in the economy, stalling what had been a two-year rebound.
The commercial market had been picking up in recent months based on expectations that rents and occupancies would continue to rise. But the economy and fears of a double-dip recession has worried some investors about moving forward.
Companies such as UBS AG, Morgan Stanley and the Quidsi unit of Amazon.com Inc. have all recently postponed looking for office space in New York.
In the first half of 2011, U.S. commercial-property sales boomed, rising 107 percent over the same period a year earlier. Firms completed more than $93 billion in deals in that time, according to Real Capital Analytics Inc
. Since then, sales growth slowed considerably.
More companies still planning to press ahead find deals falling apart when funding evaporates, thanks to banks that remain squeamish on issuing commercial loans. About 400 banks have failed since 2008, and bad commercial real estate loans are considered one of the primary culprits, according to a new report by Deutsche Bank AG
Some investors view any slowdown in the commercial market as temporary, particularly in hot spots like New York and Washington. Low interest rates and prices and rents in niches like high-end retail are still a major lure, analysts say.
Posted by Scott R. Lodde