The Daily Soak - May 10

Southwest Florida Housing Absorption Rate Encouraging

According to a new report released by Metrostudy, the absorption rate of unsold inventory in certain areas of Lee and Collier Counties is encouraging. Lennar's Bella Terra community in Estero is one of those developments that has changed product and price points (approximately $150 per SF) to meet shifting demand. As a result, the community had 267 move-ins during the first quarter of this year alone. End-user occupancy of finished units combined with the dramatic decline in new housing starts should continue to boost absorption rates in Southwest Florida going forward.



Creative or Desperate? Florida Incentives Reaching Six Figures

A different story emerges on the East Coast of Florida where developers are offering boatloads of incentives at projects in Royal Palm Beach and Deerfield Beach. Price guarantees, free maintenance, free HOA fees, and even luxury cars are fair game in the condo concession craze. Researcher Jack McCabe points to the downside of the incentive game, "If everyone’s offering concessions, then it’s not a concession; it’s just seen as part of business. Then, you have to ultimately move to the last resort--cutting prices. Once you lower prices, it’s very difficult to ever raise them again in the future."



NBR Spotlight on Cape Coral and South Florida

The Nightly Business Report saved the worst for last in its five-part series on "the nation's battered housing market." Cape Coral is ground zero in Southwest Florida where foreclosures are off the charts and a new wave of buyers (most likely speculators) are snatching up properties for 40 cents on the dollar that some buyers paid just a year ago. The outlook is not much brighter in Miami and Fort Lauderdale where excess inventory is compounded by a "steady supply of new units" that keep pushing prices in general in a southerly direction.