The Daily Soak - May 23

Home Prices Post Largest Drop In 17 Years


As a timely follow-up to yesterday's post regarding housing price data not reflecting local market reality, it looks like historical data might be catching up to the status quo. One of the most comprehensive barometers of U.S. home prices posted a 3% drop in the first quarter of this year compared to the first quarter of 2007, the largest single drop in the 17-year history of the OFHEO's home price index. The states with the sharpest drops in home prices were California (-10.6%), Nevada (-10.3%) and Florida (-8.1%). In an attempt to make non-Floridians feel better and emphasize that certain states are skewing nationwide data, one economist offered this soothing gem, "Most people don't live in a Miami condo."



More Setbacks, Competitors for Troubled Sarasota Condo Project

In recent years an Ireland-based investment group spent over $100 million to assemble 15 waterfront acres in Sarasota adjacent to the Ritz-Carlton. The group planned an ambitious $1 billion high-end condo complex called Sarasota Bayside, but a series of miscues, costly redesigns, land carrying costs and the evaporation of interest in Sarasota's high-end condo market have apparently wiped out most of Irish American's equity in the project. The developer just announced the first tower completion date is being pushed back to 2012, and there is speculation they will have to charge "hundreds of thousands" more for already overpriced units. Factor in the presence of more sophisticated, better financed developments like the Proscenium with 200 condos and a 225-room Waldorf-Astoria, and it's obvious Sarasota Bayside is fighting an uphill battle in a downhill market.



HousingBath Can't Douse Threat of Everglades Fires

The most recent blaze in the Everglades National Park engulfed over 40,000 acres and kept several South Florida residential communities on high alert. While the fire is almost 75% under control, the debate is still heating up between scientists and environmentalists regarding the cause of the fire and, interestingly enough, whether such blazes are net positives for Florida's ecosystem. Rick Anderson, the fire management officer for Everglades National Park, points to the nutrient-rich ashes and reminds us, “The Everglades dies without fire. Fire is (Florida's) grizzly bear...it has to be here.” Then Anderson points to the roofs of new housing developments bordering the Park and adds, “But it can’t be over there.”