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FAR: S. Fla. home prices rose by a third in March
The madness in South Florida median home sales continued in March. The year-over-year price tag for a single-family existing home rose by about a third across the area, with Miami boasting the biggest year-over-year price hike.

In that city, the March median increased 40 percent, to $322,300 from $230,700. At the same time, Realtor sales in Miami dropped 27 percent, to 777 homes from 1,078 homes.

The numbers in the other two South Florida metropolitan statistical areas followed similar year-over-year trends for March, but did not swing as far as the Miami changes.

In Fort Lauderdale, for example, the median price increased 31 percent, to $332,400 from $254,400. Sales dropped 10 percent, to 1,175 homes from 1,303 homes.

Meanwhile, in West Palm Beach-Boca Raton, the 37 percent price increased bumped the figures to $371,500 from $272,100, while the 7 percent sales decline pulled the number of homes sold to 1,394 from 1,496.

The Florida Association of Realtors, which supplied the numbers, said out-of-state buyers and those moving within Florida's borders are pushing up demand for existing single-family homes.

Statewide, sales increased 6 percent, to 24,045 homes from 22,748 homes. Prices increased 28 percent, to $212,300 from $165,700.

The numbers, which are all for single-family existing homes, also saw an impact from low mortgage rates, FAR said. The group put the average interest rate for a 30-year, fixed-rate mortgage at 5.93 percent last month. That's up from 5.45 percent a year ago, but still considered low.

Will the home buying madness continue, even if rates see their forecasted increase?

"It's always difficult to predict exactly what will happen next, but we're confident prices will remain high as the number of available homes continues to tighten," said Ann DeFries, president of the Realtor Association of Greater Fort Lauderdale.

DeFries' group said the median price of a condo-townhouse in Broward climbed 31 percent, year, over year, to $172,000, up from $131,000 in March 2004.

Kiwi 'n Miami
56 Posts
Just to give everyone another perspective of what could eventually happen to Miami. I found this article after perusing the Sydney, Australia papers. Sounds like their housing boom is now a bust.

Some hurting, others gloating in property
By Elizabeth Knight
May 4, 2005

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In the six months to March, St George Bank grew its home-loan book by a hefty 12 per cent, while ANZ said last week it did even better than that. Both admit the market is slowing - albeit at a seemingly gentle pace.

On the other side of the property ledger, Mirvac had a different story. It told the market yesterday its 2005 earnings would be about $231 million compared with an expected $269 million. This would bring it in lower than 2004, and its share price was slashed 12 per cent.

The third piece of news in this property puzzle was from the Australian Bureau of Statistics, which announced that March approvals for new residential dwellings and renovations were down a massive 6.8 per cent - a much bigger fall than the market had been expecting.

It wasn't a good day for Mirvac's Greg Paramor to come out with the news because the housing approval stats would have further added to the shock factor in the market.

However, he might have derived some comfort that other developers have taken a pasting in the sharemarket.

We have known for 18 months that CBD apartments - particularly in Sydney and Melbourne - have been most affected by the fall in property prices.

There has been a glut of property in the CBD - just the sort of product built and then sold by the likes of Mirvac. The company said yesterday there had been a decision to retain some projects previously earmarked for sale.

By this, read that Mirvac can't sell them at a price that would give a reasonable profit margin.

The most surprising part of the statement was that it took so long between the slump in apartment prices and the slump in income from those developing them.

Some of the earnings pain from Mirvac's current quarter is about contract completion rates at pre-sold residential developments. In other words, the contract has been signed but buyers are backing out.

It's the biggest sign yet of the collapse in this part of the market. Assuming that Paramor's disclosure is up to date, we are seeing trouble in the current quarter.

Certainly Gail Kelly from St George gave no indication in her commentary on results that things were that bad on the lending side. Her residential lending numbers were quite strong.

Kelly said they were even stronger in April. Nothing to suggest there is any widespread collapse in lending rates for residential property.

The residential mortgage market is St George's heartland.

Although its percentage of low-documentation and no-deposit loans has grown over the past six months, the loan book still looks pretty conservative.

The percentage of bad debts to total amounts lent is 0.16 per cent. The loan-to-value ratio across all St George's home loans is just under 40 per cent. So it's pretty well covered. Loans written in the first half of this financial year comprise 66 per cent of the value of the properties. Still quite a bit of fat there.

Sure, lending growth rates are not in the high teens as they were until a year ago, but there is no sign from any of the major lenders that system growth will slow below 10 per cent.

The apartment market, on the other hand, has taken a far bigger hit. Some lenders were being more conservative with lending on inner-city apartments 18 months ago.

They will all feel some hit if housing approvals continue to weaken, but those with conserva

tive loan books won't get the double whammy of increases in delinquent loans, although it wasn't an issue that Kelly needed to address yesterday.

When David Morgan steps up to the plate to announce Westpac's results tomorrow, there will be scrutiny on loan volumes going forward given yesterday's statistics on housing approvals.

But for Kelly, her results were overwhelmed by the attention given to whether she was going to stay with St George or consider any offer from the Commonwealth Bank to replace David Murray when he retires some time in the next 13 months.

Kelly, for her part, delivered a very impressive set of numbers that she dearly wanted to gloat about.

All this did was increase the speculation that she would be a likely contender to replace Murray. The tack she took was to ignore the speculation without denial.

She has certainly delivered the credentials to take the top spot at the country's largest bank.

3,888 Posts
Comparing Oranges to Kiwi's

Guys...the main thing to understand about the Miami real estate market is that real estate is local...
The Miami Beach real estate market has been in boom cycle for over a decade...the rest of the United States/world has not. Of course much of the accelerated boom has to do with interest rates, but we should all remember, that 30 yr fixed home loan interest rates were at 8% in 2000. That is not so long ago (different President yes...). When interest rates were as "high" as 8% the median sales price for real estate in Miami was up 16%.
Because of the heightened awareness of the nationwide real estate boom, people tend to make the false assumption that Miami's local real estate market might behave like San Francisco's, the North East's, Australia, and (amazingly) Japan's! Supply and demand is the overwhelming law in real estate...low interest rates fuel demand true...but so does sunshine, low taxes, and quality of life.
Secondly, real estate doesn't trade like an Internet stock. So, please don't believe that there is such a thing as a "bubble". Man I hate that phrase. Real estate moves in cycles...booms and busts...sellers markets and buyers markets...peaks and troughs...whatever you want to call it except a bubble.
I've offered a friend one beer for every article that he can show that contains the phrase "real estate bubble" and was written prior to the internet company stock crash of in the late nineties. So far....not one. And he loves free beer.
And now...I will step off of the soapbox. :runaway:

3,888 Posts
Buy real estate and wait. Don't wait to buy real estate.

1,387 Posts
Roark said:
Buy real estate and wait. Don't wait to buy real estate.
I agree.

Just watch out for variable or interest only loans. If you plan to live in your home for a number of years, you'll be fine. Speculators on the other hand should be cautious and plan for the worse.
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