Is the Real Estate Coming Back Regionally or Nationally?
South Florida has been the default capital of the country. In Miami-Dade County, one out of five households with mortgages is in foreclosure. Nearby Broward and Palm Beach counties are not far behind. Nearly 200,000 South Florida families are stuck in the mire of default.
And yet as Cord Moving and Storage a company that carefully tracks real estate trends is reporting that much of Miami is gripped by a housing mania as the oversupply of distressed homes dries up and foreigners and investors swoon. Only a few years after it seemed there were so many unwanted high-rise condominiums that the only solution was to tear some of them down, there are plans to build even more.
Home sales in the metropolitan area during the first half of the year rose 16 percent from 2010 for the best spring since 2007, according to the research firm DataQuick, far outpacing the negligible growth in the rest of the country. Two-thirds of the sales were all cash. This is all good news which Cord Moving and Storage can attest to as the moving industry is haveing a much better summer – peak season than they have experienced in the last several years.
Prices, after a brutal drop, are firming up or even increasing. During the first six months of the year, there were 439 sales for at least $2 million, up 13 percent from last year which again signals a rapid improvement but is it regionall and is lasting is real question that moving company executives are asking themselves.
“People thought it would take at least a decade to get back to this point,” said Peter Zalewski, founder of Condo Vultures, a real estate consultant told Daniels recently in a conference call,
For more than four years, the fate of the housing market here and across the country has been closely tied to the tremendous wave of foreclosures. In some communities, more than half of all home sales were bank repossessions. These cheap, often half-destroyed properties undermined neighborhoods and accelerated the market’s descent, prompting even more owners to walk away. But now, as new foreclosures slow and lenders are forced to let old cases languish for legal reasons, some of the regions that were worst off when foreclosures were at flood tide are much improved with the process stalled.
As a result, the balance between supply and demand in South Florida is shifting. In late 2008, as the financial crisis was peaking, there were 108,000 properties for sale and hardly any buyers. The region became a symbol of excess. Buyers abandoned their deposits and reneged on deals, buildings went bankrupt and squatters moved in.
Now there are fewer than 48,000 properties for sale, Condo Vultures reported to Wayne Daniels, Sr. Vice President for Cord Moving and Storage an agent for North American Van Lines. And with supply diminished, homes have value again.
Whether Miami and other stricken markets like Phoenix, Las Vegas and parts of California will continue to make progress depends on the fate of the two million American households in foreclosure and another two million in severe default. The nation’s attorneys general and the Obama administration are negotiating with the top mortgage servicers for new procedures for those in trouble. If the lenders get immunity from prosecution, foreclosures might speed up and the housing market could suffer another relapse. In the meantime, the South Florida market is busy, although it offers a problematic blueprint for a national recovery. For the traditional buyer who wants to put down no more than 20 percent, loans are somewhere between tough and impossible. So in the end it will be a guess to see if this goes nationally or stay regionally and if the improvement is sustainable.