The Current Housing Market in Southeast Florida

Time for an update for all you statistics-fans who are riveted by real estate minutiae (yes, all two of you).

I am not quite sure when, but I believe in July or August I got the first hunch that the market for single family homes was loosing steam.

Back then, a prospective seller had waited forever to list her house with me, to a point where she and I did not agree on a list price anymore. Another seller, a couple, was very realistic when a price pre-determined in May had to be corrected downward – with the result that their house sold within four days of becoming available and appraised properly. Which confirms again what I learned in a seminar a few years ago: once a house enters the proper selling price corridor, it should sell within approx. 45 days.

More on that in another post. Today's subject is market data.

As available inventory started to creep up in fall – the low point for the Tri-County area was April with 12,513 single family homes for sale – asking prices did not react until two months later, when the first noticeable drop came (median $408,150 to $401,650).

But the interesting part: selling prices increased until Christmas.

They rose from $255,333 in April to $265,000 in December, and only dropped again in January, to $250,917.

Psychologically perhaps to be explained by a lower "Disconnect" ratio – what sellers want and what buyers are willing to pay – heading from 166% in April down to 141% in December, back up to 151% in January.

So the Seller-Buyer-Disconnect, which I have been calculating since five years, again mirrors the overall market and proves to be a good trend indicator.

Judging from the current trend, it seems like at least for the first quarter, there is no upswing in prices – niche products and super-trendy areas like the Miami Bay perhaps excluded.

Consequences for sellers and buyers? I will talk about that next time. In the meantime, please do contact me with any questions you may have.

SE Florida single family homes market last three years: Inventory, Median asking prices and Median selling prices, Dec 2010 - Jan 2014. Break indicates end 2012. Source: Kaiser Assoc.

South Florida Housing Market, 2nd Quarter 2013

The second Quarter 2013 sales statistics for single family homes in the tricounty area Palm Beach, Broward and Miami-Dade didn’t surprise: traditionally, May and June are the busiest sales numbers throughout any year, and 2013 continued the trend.

Probably a major factor in this purchase pattern are families moving into desirable school districts as soon as school is out for the summer, so everything is place when the new school year starts in August.

In addition, a lot of cash floating around needs to be parked somewhere, so when stocks, bonds and gold are a tad volatile, what’s the average millionaire to do? Hide it? No – buy waterfront homes; what else?

Q II 2013 vs. Q II 2012 by the numbers:

    –16%   Number of Houses for sale
    –27%   Inventory for sale (absorption rate in months)
    +17%  Median list price
      +9%  Median list price/sf
    +15%  Number of Houses sold (quarter)
    +24%  Median selling price
    +20%  Median selling price/sf

One prospective buyer reprimands me at every contact, in a stern tone of voice: “I will not let the market force my hand to buy something”. He has been completely priced out of the market, but still clings to the believe he has the upper hand. Correct in some way: he didn’t have to buy, and now he can’t, because he waited to long. 

SE Florida single family homes: inventory, median asking prices and median selling prices, June 2010 - June 2013. Source: Kaiser Assoc.

My specialty, modern architecture, is especially difficult: inventory under ca. $900,000 has fallen off the cliff in the last 10 to 16 months, and is now basically wiped clean. The few good modernist homes that come to market typically sell within a few weeks, often only days, without ever seeing the MLS, to registered buyers ready to act with their finances all lined up.

For the near future, unless some unforeseen events happen, I do not expect a drastic change in direction, though according to a new CoreLogic/Case-Shiller report, some analysts predict a trend reversal for 2014. This August at least seems already a bit saner, if one can tell in the middle of the month. With Florida home ownership rates on the decline and affordability dwindling, calmer winds would not be a bad situation.

For now – if you own a modern home and have questions about it or consider selling: I’d love to hear from you!

Property Values: What you get for $800,000

In the ever-shrinking real estate market South Florida currently experiences, modern architecture is not exempt from the dreaded TIS, also known as the Tight-Inventory-Syndrom. Especially hard-hit are the price brackets under $1.0 million.

Here is a sampling of what is available now if you are looking for modernist homes between $750,000 and $850,000:

2 bedrooms, 2.5 bathrooms, 1,531 sf under air (141 m2), built in 1960. Asking $799,500 ($522/sf, $5,676/m2). A fine remodel of a flat roof mid-century-modern home, probably one of the nicest current examples in this price bracket.

2 bedrooms, 2 bathrooms, 2200 sf under air (202 m2) on a 9,000 sf lot (828 m2), waterfront with bay access, built in 1952. Asking $849,000 ($386/sf, $4,195/m2). Typical MiMo-style house on the water with fixed bridges, in a nice area to boot.

5 bedrooms, 3 bathrooms, 3953 sf under air (364 m2) on a 8,359 sf lot (769 m2) with pool. Asking $849,000 (215/sf, $2,334/m2). Appealing modernist two-story house in a neighbourhood with quite a few hidden modernist gems.

3 bedrooms, 2 bathrooms, 1,742 sf under air (160 m2) on a 7,500 sf lot (690 m2), with pool,, built in 1968. Asking $749,000 (430/sf, $4,674/m2). A fine example of the architecture of beloved local Donald Singer.

5 bedrooms, 3 bathrooms, 2,935 sf under air (270 m2) on a 15,290 sf lot (1,407 m2), with pool, built in 1963. Asking $860,000 (293/sf, $3,185/m2). Not quite consequent in all details (e.g. crown molding), but a nice open remodel.

4 bedrooms, 2 bathrooms, 2554 sf under air (235 m2) on a 2554 sf lot (235 m2), with pool, built in 1958. Asking $849,000 (332/sf, $3,613/m2). Not yet verified, this house shows a lot of details typical for a true Florida luminary: APB, or Alfred Browning Parker.

3 bedrooms, 3 bathrooms, 2530 sf under air (233 m2) on a 41817 sf lot (3,847 m2), with pool, built in 1953. Asking $750,000 (296/sf, $3,222/m2). The opposite to above, so to speak: this kitchen photo exemplifies the train wreck that happens when uninformed (or uninterested?) owners remodel a modernist house. Be prepared to de-renovate.

3 bedrooms, 2 bathrooms, 2,986 sf under air (275 m2) on a 17,244 sf lot (1,586 m2), with pool, built in 1973. Asking $749,000 (251/sf, $2,726/m2). Owners with considerably more taste left this house mostly untouched, with good period details worth keeping.

3 bedrooms, 2 bathrooms, 2,844 sf under air (262 m2) on a 10,075 sf lot (927 m2), with pool, built in 1971. Just sold for $775,000 (273/sf, $2,962/m2). This classic by architect Wahl Snyder was so briefly on the market that I didn't have a chance to view it – but if the new owners read this and ask me over I will make time right away, naturally.

3 bedrooms, 4.5 bathrooms, 3,925 sf under air (361 m2), pool, waterfront, built in 1988. Asking $795,000 (203/sf, $2,202/m2). On the border between modernist and contemporary, but a light-filled space in an area sparse with modern architecture could make this house an appealing option.

3 bedrooms, 2 bathrooms, 1810 sf under air (167 m2) on a 6,255 sf lot (575 m2), built in 1976. Asking $799,500 (442/sf, $4,801/m2). An earlier design of Miami architect Michael Simonhoff, who seems to be still practicing.

What are you comments on these houses, and what do you think of the value equation they offer?

Looking forward to your thoughts: good, bad or indifferent – and have a great weekend!

Art, Architecture or $?

If you haven't been shopping for modern waterfront homes in Miami in the last month or so, you're excused. But for everyone else, including this lowly real estate broker and modern architecture fanboy, some price developments are flat out ridiculous. Even considering current market-trends.

Franz Marc: House with Trees, 1914

I'm at a loss to explain to clients why a house for $3,300 per square foot is ten times nicer than one for a realistic $330 a square foot. Or why this location is ten times nicer than that one.

My suspicions of occasional random price determination were confirmed by a recently closed sale in Miami that topped the charts at $47,000,000. That house has been on the market for five years (!), starting at $60m. Based on the size of the house and a lot price of $10m, I figured that $60m was a number picked by other reasons than a normal mark-up. And true, the builders admitted that they just wanted to have the most expensive property on the market. Hats off to my colleagues who still sold it.

But when pricing is getting out of hands at times, sellers and their estate agents have to come with up with very flaky explanations, including my favourite one: "It's not real estate, it's art. Dummy". (They don't say dummy, but you somehow feel it).

My beloved NYT recently printed a good piece about it – nice to know that even some heavy hitters in The City don't buy into the art-logic, and understandably so.

Can you follow the "it's so expensive, it's art" argument? Because I sure don't.

Property Values: What you get for $2m - $3m

The price range between $2,000,000 and $3,000,000 hardly appeals to the first-time-homebuyer, fresh out of college. Unless you're a college drop-out and own a social media site.

But the 37 modernist homes in this bracket which are on the market in South-East Florida make up 14% of the total modern inventory for sale, and contribute 11% of the total Dollar volume, so it's rather significant.

While the price tendency for these homes seems stable, exceptional locations and waterfront homes are becoming increasingly rare. That is especially true for Key Biscayne, the small island connected to Miami by causeway, which is slowly developing into a little hotbed of contemporary modern design. A recent street-by-street survey there showed nearly all new single family home construction to be modernist.

A $2m-to-$3m South Florida market overview:

Miami: 5 bedrooms, 6.5 baths pool home, built 1973. Ca. 5,700 sf under air. #0594, $2,375,000

Key Biscayne: pool home with 5 bedrooms, 5 baths, ca. 4,050 sf, built 1973. #5141, $1,975,000

Lighthouse Point: Pool home w/ocean access, 5 BR, 5 baths, ca. 6,090 sf. #6150, $2,999,000

Key Biscayne: 5 bedrooms, 5.5 baths, pool, ca. 3,525 sf, new construction. #1490, $2,700,000

Fort Lauderdale: Intracoastal pool home, 4 BR, 4.5 baths, ca. 5,000 sf, built 1973. #1062, $2,795,000

Fort Lauderdale: 6 BR, 7.5 baths, pool, riverfront w/ocean access, ca. 4,545 sf. #5407, $2,250,000

Miami Beach: 4 bedrooms, 4.5 baths, ca. 5,900 sf, lap pool, built 2004. #2521, $2,950,000

South Miami: 5 bedrooms, 5.5 baths, pool, ca. 6,080 sf, built in 1980. #2556, $2,999,900

Fort Lauderdale: 4 BR, 3.5 baths, ca. 4,080 sf, pool, across A1A from beach, #7971, $2,295,000

South Miami: 4 bedrooms, 4 baths, ca. 5,000 sf on over one acre, built 1972. #3971, $2,379,000

If you are interested in one of these properties (or any other modern home) or have a question, please feel free to post here or to email me - thank you!

More modern homes for sale can be seen on ModernSouthFlorida.com.

Property Values: What to expect for $250,000 to $350,000

In this new series of posts, I will explore how much modern home per Dollar you currently can expect in SE Florida. With asking prices as of yesterday ranging from $179,000 to $42,000,000, expectations from a modern home at $75 per square foot surely differ greatly from one for $2,100 per sf.

In the first installment today, I will look at modern homes listed between $250,000 and $350,000.

In this price bracket, over half of the listings offer three or more bedrooms, but the houses are certainly not huge. Square feet under air – assuming that you want to live in air-conditioned space or don’t count your car port as living space – range from 1,020 to 2,274, with one lonely outlier of (unverified) 3,542 sf. The average lies somewhere around 1,800 sf.

Half of the homes in this price range have a pool, 55% have a garage. What you do not find in this group is new construction: the majority was built between 1950 and 1970, the youngest house in this group is still 21 years old.

But the homes are often in good to very good upkeep. Updates are quite common, but not always in the spirit of modern architecture: Mexican or some funky tile on top of terrazzo, lead-glass front-doors, country cherry kitchens with stainless-steel appliances and granite counter-tops or bow/bay windows are quite typical.

So either a remodeling budget or willingness to live with a stylistic mismatch for a while are helpful. Occasionally I see homes in original condition, often even well-kept: those are much easier and more fun to update in period style than a house that needs to be de-renovated.

From the houses on my for-sale list (remember that there is no “modern”-specific search in the SE Florida MLS) between $250,000 and $350,000, I chose six examples typical for this range:

Fort Lauderdale: 2/1 with room to expand, ca. 1020 sf, pool, carport, short-sale listed at $249,000. Notice the original corral wall and clerestory windows.

Boca Raton: 3/2, 1896 sf, remodeled, keystone entry, fireplace, marble floors, cabana bath, pool. $298,000.

North Bay Village: 4/3, 2577 sf, remodeled, pool, $349,000. Note the kitchen renovation: corner window meets cherry cabinets.

Lake Worth: 2/2, 1162 sf, garage, completely renovated, $249,000. Noticeable: crown- and door-moldings in a modernist home.

Delray Beach: 2/2, 1740 sf, PGT windows, sunken living room, diamond-brite pool, large lot, carport, $349,000.

Fort Lauderdale: 2/2, 1102 sf, waterfront with ocean access, move-in condition, new kitchen (with Mexican tile), fireplace, room for pool, short sale listed at $269,000.

In summary: between $250,000 and $350,000, you certainly can find interesting mid-century modernist properties. It helps tremendously if you are not in a hurry or if you are geographically flexible, as the houses shown here are over 40 miles apart.

Interested in more examples, questions regarding any of these properties, or would you like a specialist for modern architecture – that would be me – help you find the right home? Then do let me know. I look forward to hearing from you.

Unclear Market Direction

I looked at a (non-modern) house in Lauderdale-by-the-Sea with clients of mine. Interesting project, but what a project. I wonder: are deepwater (= waterfront with no fixed bridges) home prices on their way up?

I run my own statistics every month, condos and townhomes in Palm Beach, Broward and Dade, as well as single family homes in these three counties. Yes, you certainly can atomise the market into nano-sectors. But I don’t have the time to do that. I created two subsets of two “model homes”, one on a dry lot and one on the water with no fixed bridges.

After the peak in Jan 2006, where $527 per sf under air were paid on average for my waterfront “model home”, prices tanked to a low of $355/sf or so under air. Now I see three months of increases, and a preliminary April search showed another uptick.

This would be in line with what I had previously mentioned in my client newsletter*: houses will recouperate before condos, and the best locations will improve before the others. Three-and-a-half months sure don’t make a trend, but I will keep an eye on that one.

(*Please let me know if you are interested in subscribing; I'll be happy to send it to you).