Condo Prices Down 66%

[Karl-G]

The Fort Lauderdale Sun-Sentinal reported yesterday that condo prices in Broward County (= Fort Lauderdale) have fallen 66% since 2006. The average price of a condo right now is $73K. That is pretty incredible. In 2006, a 2 BD 2BA condo in a nice building in a nice neighborhood sold for $250K; today they sell for $80K or less. In 2006, one bedroom 1 BA condos sold for $150K; today they are selling for $50K or less.

 

According to the article, this does not apply to the expensive ( $800K +) units in properties along the beach or in a few new towers downtown. And to be sure, the paper lists real estate sales each week and there are occasional sales of high priced units. Anecdotal - in the article a man reports he bought a unit for $803K in 2007, and he just sold it for $800K - not bad.

 

Perhaps. But it does not say how much the owner paid to the real estate agent, nor how much he paid for closing costs and other fees. These days, buyers can always get owners to pay all the fees. He may actually have received closer to $700K finally. There is other anecdotal evidence of an owner who paid $5.0 M for a penthouse unit four years ago, and just sold it for $1.7 M.

 

The Trump Tower on Ocean Boulevard in Fort Lauderdale stands empty on the oceanfront. It was completed, they say, although it has never been occupied. People who paid down payments were promised occupancy four years ago. They are suing to get their down payments back, so far unsuccessfully.

 

Miami built 22,000 condo units in the past five years. They claim 2/3 have been sold and "only" 7,000 units remain unsold. But "sold" means someone has paid a deposit, usually 10%, on a condo. It does not mean that the sale was completed. Anecdotal evidence is that very few Miami units have actually sold. Many buyers just have walked away. The towers are all dark at night with no occupants, and all sorts of special incentives are being tried to lure buyers, including two-for-one. But there is a huge glut of condos, new and old, waiting in Broward and Dade Counties.

 

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[Guest Spanky]

The Fort Lauderdale Sun-Sentinal reported yesterday that condo prices in Broward County (= Fort Lauderdale) have fallen 66% since 2006. The average price of a condo right now is $73K. That is pretty incredible. In 2006, a 2 BD 2BA condo in a nice building in a nice neighborhood sold for $250K; today they sell for $80K or less. In 2006, one bedroom 1 BA condos sold for $150K; today they are selling for $50K or less.

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What's the rental market like in Broward/Dade? If it's even reasonably storng, seems like a real opportunity for a local.

[Karl-G]

Fort Lauderdale Rentals

 

Rentals have also come down because there are so many properties on the market. People who can't sell a house are renting it. My cleaning lady tells me that you can easily get a nice apartment in a good neighborhood for about $900 a month. In a brand new apartment complex, rentals only, in a very nice location close to the gay village, they started by quoting me $1600 a month, but by the time we finished it was down to $1050, and they have called me several times offering to go lower, plus free first month and other incentives. Lots of opportunities to rent.

[jawjateck]

I feel ripped off! In Atlanta, I paid 38 cents on the dollar! LOL! I just bought a high-rise unit at a 62% discount from the sales price 5 years ago. Not too bad I reckon.

[Luv2play]

After I retired in 1998, I started spending my winters in S Florida. I rented because the Canadian dollar was low and I found a Canadian owner of 5 rental properties in North Miami Beach who liked to rent to Canadians because "we didn't cause any problems". Also my house was close to Haulover Beach and my landlord let me keep my furniture in the house all year altho I only rented for 6 months. He closed the place for the summer.

 

I spent 5 years there but in 2003 he was getting older and the market was so strong he felt obliged to sell out all his properties, which he had bought for pennies on the dollar. I already had 3 other properties and was not inclined to buy in Florida in a strong market with a weak Canadian dollar.

 

I went back to South Beach in 2006 and rented a condo that was 5 blocks from the beach and worth about $300,000 and was a one bedroom tiny unit (but very nicely furnished with a nice interior courtyard). I was amazed at prices when I looked in the local papers. including HotSpots which had lots of properties that 6 years earlier were about one third the prices of 2006.

 

Well, 2006 turned out to be the peak of the market. Of course this was not the first time in history that this had happened in S Florida. In the early 1990's a similar thing happened and properties on Brickell (sp?) in S Miami that had sold for hundreds of thousands were slashed to $75K.

 

One comment I would make is that dark condos do not necessarily mean empty units. Many are owned by absentee owners who live in S America or Europe. I remember whole condo buildings in Aventura owned by Russians who hardly ever spent any time there and were thus dark most of the time.

 

Still, if I were younger I might be tempted to buy a place there. But I still have 3 residences and find that quite enough to handle.

[+ Lucky]

So what is the value of the place you bought in SoBe in 2006?

[Kevin Slater]

I've been told that because Florida has no personal income tax, real estate taxes are relatively high. I wonder how to figure this into the equation. I also wonder whether it's worth investigating Florida-specific REITs.

 

Kevin Slater

[+ ArVaGuy]

I've been told that because Florida has no personal income tax, real estate taxes are relatively high. I wonder how to figure this into the equation. I also wonder whether it's worth investigating Florida-specific REITs.

 

Kevin Slater

 

Kevin,

 

Everyone I've ever known who's "invested" in Florida real estate have come to regret it in some way or another. Of course they were in the speculative boom periods and absentee owners. A REIT might just be the way to go but take the long view.

 

I think the only people who ever really made a killing in the Florida real estate market were Henry Flagler and Walt Disney.

[Mark Gordon]

Meanwhile, in Toronto, prices are up 10% from last year and developers can't build them fast enough to satisfy demand. Whole new neighbourhoods of highrise and midrise condos are taking shape.

[Luv2play]

So what is the value of the place you bought in SoBe in 2006?

 

I justed rented it. I imagine it's dropped along with the general market there. Still, the rental rates may have held up a bit better since people still visit Sobe although the economy may have dampened that as well.

 

Just as there are fewer Americans coming to Montreal I would guess there are fewer Europeans and others visiting Florida. On the other hand, if the oil washes up on the west coast of Florida, there will be a spike in demand for east coast properties, a silver lining some might say!

[edjames]

I'm selling My FL Condo...

 

Like many, I inherited a Florida condo on the Gulf Coast very close to Clearwater. My Mother was in a nursing home for almost seven years and so during that time I began to renovate the condo and installed a new kitchen, updated the bathrooms, installed new air-conditioning and a water heater, etc. Although it's a lovely ground floor 2BR, it's just not in an area that I think I'd like to be in. The community is not very "gay friendly," hell, they aren't friendly at all. I always intended to sell when the dust cleared and it is in A+ condition and the new owners are getting a move in ready apartment.

Therefore, I listed the property last fall with an agent and although there has been lots of interest, I was pretty sure I'd be hanging on to the place for a couple of years. The market on the west coast of Florida is just as bad as the rest of the state and housing prices have plummeted. It is quite common to see foreclosure and for sale signs all over the neighborhoods in the Tampa area.

That said, the first offer was a joke! A low ball offer by two morons didn't have any idea how they were going to finance the deal and were asking for a 60 day hold on the sale until they were able to put the financing together. Needless to say, I refused their offer.

After a lovely trip to London and the strenuous volcanic ash delay I arrived home in NYC to rest and relax. Within two days, the phone rang and it was the agent with another offer from another couple interested in the property. Their offer was just a few thousand off the asking price, and they want to close on May 28, so I accepted the offer!

Fortunately for me, the majority of the money I will get from the sale will be profit (spoke to my tax Accountant and I probably won't pay any taxes either) and the renovations; etc., weren’t all that expensive (I have an incredible handy man who works cheap!).

So, I hired a RE lawyer to handle the closing and I am getting another education in Florida law, this time in the real estate market. Although prices are low, if you’re a buyer, it is an excellent time to get a property at a greatly reduced price. It's a bad time if you're a seller. I'm happy that I will no longer have to maintain the property, go down there to check on things and of course, that monthly maintenance bill, utilities, insurance and property taxes all stay in my pocket! And I won't have to fly down to Tampa any more.

Right now I am going to sit back and savor the moment, but I think at some point I may look at another Florida property, probably in the Atlantic coast. Without state and local taxes, Florida is still an attractive place to retire. If you're in an area like South Beach with cultural events to attend and close to stores, etc, it's not a bad lifestyle.

In the meantime I am keeping my fingers crossed that the inspection and apprasial all go well and the closing will be a smooth one.

 

ED

[Guest Tristan]

Just as there are fewer Americans coming to Montreal I would guess there are fewer Europeans and others visiting Florida. On the other hand, if the oil washes up on the west coast of Florida, there will be a spike in demand for east coast properties, a silver lining some might say!

 

Unfortunately, there's a good chance that the oil could get caught in the Gulf Stream, which would take it down the west coast of FL. The same currents could bring the oil around the southern tip and up the east coast. This is a very real possibility.

 

The following article appeared in today's Sun Sentinel:

 

http://www.sun-sentinel.com/fl-loop-current-20100503,0,2846542.story

[+ Charlie]

When I retired, my partner and I looked very carefully at Ft. Lauderdale vs. Palm Springs. After reading everything we could find, talking to people who lived there, and seeing a lot of real estate with agents, we concluded that, contrary to our original expectations, Ft. Lauderdale had very little financial advantage over Palm Springs, for us. Even though our house in CA has declined in value since the bubble burst, it has still held up better than some of the places we considered in FL. And despite CA's well-known budget problems, I have heard rumors that FL is in even more dire straits (for the first time in decades, the state actually had more people move out than in last year.).