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News: Florida market in flux

Tue, 08 May 07

The news isn't all bad in Florida real estate, reports the International Herald and Tribune...

For several years, the defining images of Florida's frenzied real estate boom were crowded open houses and speculators flipping preconstruction condominiums. But since the market sputtered in mid-2005, as sales have fallen and inventories soared, property auctions and price cutting have become commonplace.

Today, as the gavel comes down on everything from vacant lots to multimillion-dollar estates, sales are still off, and foreclosure and mortgage delinquency rates are rising.

Yet a closer look at different parts of the state, and at a wide range of properties, reveals a more complex picture of a market in flux.

In Miami, once the epicenter of giddy buying and selling, the inventory of unsold homes in April was up 58 percent over the same period last year, but real estate brokers and agents say there are some properties that are still attracting buyers.

Smaller condo units in prime locations and large luxury condos are in demand, they say, especially those designed by a star architect and loaded with hotel services. Prices for homes on prime waterfront lots, including exclusive islands like Hibiscus and Sunset, which are favored by celebrities, are also stable.

Buyers and sellers becoming more ‘pragmatic’

Diane Lieberman, a broker and owner of South Beach Investment Realty, says that although there are fewer buyers, both buyers and sellers have become more pragmatic.

"Those who sat on the sidelines during the boom and thought they lost out are now saying, 'It's my turn,' " Lieberman said.”They are more cautious, but they understand that there is no place like Miami Beach."

For bargain hunters, it is a chance not only to cherry-pick properties at good prices, but to lay plans to cash out in the future.

"Right now, you can steal houses," said Chris Castellanos, a real estate investor who recently bought several studio apartments in a renovated building on Collins Avenue in Miami's South Beach.

Although small, the 400-square-foot, or 37-square-meter, units that Castellanos acquired are a block from the beach and come with high-end fixtures and appliances. Castellanos figures that the $250,000 price tag for each unit is about $100,000 lower than it would have been during the boom.

His plan is to rent the properties, and perhaps live in one, until the market recovers. "When there's an upswing, this will be a wonderful place to have," he said.

Discounting is best

For some sellers in Miami, discounting is the best way to close a deal.

In April, David Holtzman sold his 4,200-square-foot house in Bayside, an enclave wedged between Biscayne Bay and Biscayne Boulevard, but only after knocking more than $100,000 off the list price.

Built in 1925 and recently renovated, the house had languished on the market for six months. At one point, Holtzman removed auction signs from neighbors' lawns, fearing they would discourage prospective buyers.

"It was just bad luck to be caught in the tail end of what used to be the strongest housing boom in history," said Holtzman, the vice president of Dacra, a real estate company in Miami.

In Naples, a sedate resort area in southwest Florida that is popular with retirees, the market has developed a split personality.

Prices are generally holding for more desirable properties on golf courses or with waterfront access costing $500,000 and more. But bargains are available for houses below $500,000 because of a bloated inventory of standard two-bedroom, two-bath condos.

"We have a ton of similar properties out there, so what is going to make the decision? Price," said Spencer Haynes, a broker at John R. Wood Realtors in Naples. "You are going to get a better deal."

Statewide sales decrease

Statewide, condo sales fell 32 percent in March and single-family existing homes were off 28 percent compared with the same period a year ago, according to the Florida Association of Realtors.

Yet some smaller cities are faring better than large ones. Jacksonville and Gainesville in the north, for example, which did not experience rampant overdevelopment, have not felt the impact of the downturn as much as has southern Florida, where high-rise condo construction was largely fueled by speculators.

Property auctions may provide a way for sellers to recoup some, but usually not all, of their investment. Yet it is unclear what types of houses will sell at auctions in such a soft market.

When Marsha Wolak, a realtor-turned-auctioneer in Sarasota, on the Gulf Coast, held an auction in the city last month, 26 properties of the 90 being offered found buyers, including vacant lots for under $30,000 and condos in the $300,000 range. But high-end properties, like a $4 million gulf-front home, went unsold.

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