Continuing the trend from 2012, the Florida housing market ended 2013 in an improved position, giving signs of being in a solid recovery from the disastrous crisis of 2008. The percentage of concluded home sales was up 11.8% over 2012. Sales contracts, not yet finalized, on re-sales was up by 17.6% over 2012.
2014 appears to be going in the same direction, although there are some factors to keep an eye on, such as a shortage of homes for sale in certain areas, extremely tight lending practices, and rising interest rates. Nevertheless, from all accounts, the remainder of this decade looks strong across all sectors.
Residential Real Estate Overview
2013 was filled with very good benchmarks: mortgage rates were low; prices steadily increased, along with values; the overall state economy improved, meaning better incomes resulting in more qualified buyers; and length of time from listing to sale shortened, with the average length of time sitting on the market being around 1.5 months. This trend should continue throughout 2014. We can expect to see a 10% rise in residential sales and a 5% annual increase in home values. Median sales price for single-family, re-sales was $180,000 in May, 4.3% higher than May, 2013. Condo and townhouse properties were also performing well, with a 13.7% gain over May, 2013. All of this is good news for sellers, who are getting close to their asking prices.
The South Florida market
South Florida’s rebound is being propelled primarily by Miami which has become the darling of foreign investors from Russia, Brazil, China and the Caribbean who arrived with cash and turned Miami in an international luxury destination. Miami’s northern coastline communities are awash with total scrape-offs, making way for vast estates. Foreign developers from China and Dubai, for example, are investing millions in new condominium projects.
Commercial real estate sector also performing well
The median sales price of commercial property increased from $1.2M in the last quarter of 2013 to $1.4M in the 1st quarter 2014. The commercial leasing situation also improved. Vacancies are down in all commercial buildings, except multi-family, giving the advantage to landlords to hold firm against requests for lower rents. Rental rates actually rose by 2% during the 1st quarter of 2014. New construction is accelerating, gaining 4% in the 1st quarter 2014, a considerable improvement from the 2% increase seen in final quarter of 2013. These strong signs of recovery are not limited just to Miami and other south Florida markets. Southwest Florida is also seeing a stronger and steadily improving commercial real estate sector. While still below pre-recession levels, the market is nearer than ever before to a complete rebound.
Yizhak Toledano, CEO of Sky Development, has successfully captured the emerging opportunities of Florida’s improving real estate sector, bringing to market exciting, unique residential and commercial projects that add to Florida’s reputation as fertile ground for residential and commercial real estate development. With what we see so far in 2014, there is every reason to believe that the gloomy pictures of Florida’s collapse are well behind us, not to be repeated for the remainder of this decade, and beyond.