Good news continue to pour in for South Florida homeowners as the real estate market recovers. From prices falling as high as 40 percent when the housing bubble burst in 2008, residential values have risen steadily since 2012. Earlier this week S&P/Case-Shiller Home Price Indices reported home prices in Miami-Dade, Broward and Palm Beach Counties increased 7.4 percent in August this year, compared to August 2014.
Miami-Dade Realtor Ingrid Belnavis says there are definite signs that the housing market is getting stronger every month.
“In 2007 the average price of a four bedroom dwelling house in West Kendall was approximately $450,000, but fell to around $165,000 in 2008/09,” says Belnavis. “Today that same house can attract around $33o,000.”
And while prices are still lower than in 2007, homeowners can recover values for his house if he chooses to sell, or “have more equity if he wants an extended loan on his mortgage.”
But Belnavis notes that the market is “no picnic” for realtors. Demand for dwelling homes is extremely strong – a factor that is helping to drive prices up – but the inventory of available homes is not meeting the demand, and neither is new construction.
Miami Banker Peyton Manhertz, says banks are still cautious about construction loans after the “massive losses” incurred in 2008.”
“We are making construction loans, but these are subject to forensic-like scrutiny before a decision is made,” says Manhetz.
But Reggie Bernard, a Doral construction company executive says, “significant movement” is now being made in the construction sector compared three years ago, particularly in Downtown Miami.
“Downtown Miami is now a residential Mecca, unlike the 90’s,” says Bernard. “The demand for condos in high rise buildings is super strong. The challenge is now to build the condo and apartment buildings fast enough to meet the demand. And I think the banks are more confident lending for condo developments.”
Bernard also believes high rise condo construction continues to grow in South Florida., “because the construction of dwelling homes have expanded so far west in Dade and Broward Counties, we have encroached pretty close to the Everglades. So in the future instead of building homes toward the west, we will be building towards the sky as in most other big cities in America. This will further escalating the prices of the existing dwelling home inventory.”
These rising prices may have scared off foreign buyers, says realtor Lance Roth, who specializes in sales to foreigners. He says the current strength of the U.S. dollar compared to some other countries, has also made the demand for homes from foreigners to dip. Last year alone he had “a long waiting list of Canadians seeking homes in South Florida, but this year the list has dwindled as the Canadian dollar has declined against the US dollar” – hovering at approximately US$1 = Can$0.75.
But “there’s still a strong demand coming from countries like Brazil and Venezuela for residential property, especially apartment buildings and condos,” says Roth.