The Daily Soak - September 23

McHard Times in South Florida

The International Herald Tribune reports on U.S. Census data released today showing the high cost of living for U.S. homeowners. To accentuate the negative, IHT came directly to Florida and interviewed an unemployed Davie man. Al Ray lost his engineering job last year, struggles to pay his $1,400 mortgage and $330 HOA fees, and only only eats on Wednesday and Sunday when McDonald's sells 49 cent hamburgers. "Ray is one of more than 7.5 million people — almost 15% of American homeowners with a mortgage — who are spending half of their income or more on housing costs...up from nearly 7.1 million the year before." And affordability is an even bigger problem for South Floridians. The Miami-Fort Lauderdale metro area is home to the most cost-burdened homeowners in the country where 58% of homeowners are spending 30% of their income on housing costs.


Homestead: Florida's "Comeback City"

The Wall Street Journal's Paulo Prada points to the devastation of Hurricane Andrew and the post-Andrew recovery as a model for Gulf cities currently recovering from major tropical storms. "Homestead demonstrates the difficulties of resuscitating a destroyed local economy but also how a community can redefine itself and return more robust than it was before the storm." Prada's article acknowledges the glut of unfinished, vacant homes around Homestead, but greater emphasis is placed on "retailers and other commercial developers (who) are flocking to Homestead to do business with the growing customer base. Where crops once grew, big-box developments have popped up to host stores including Lowe's, a soon-to-open Sports Authority, a multiplex cinema and a host of national restaurant chains."


South Florida Condo Q&A

Commercial Property News sits down with Peter Fitzgerald, COO of The Radco Companies, for a Q&A on the state of the South Florida condo market. The picture is bleak according to Fitzgerald who points to the current supply/demand imbalance in downtown Miami, the coming wave of 20,000 additional units and continued downward pressure on prices. "There are 10 high-rise condo developments on Biscayne Boulevard, six sites on Brickell Avenue and eight on the Miami River. There is simply too much inventory." He believes if developers want a winning exit strategy, they need to price their units very aggressively. The same goes for individual sellers, but Fitzgerald predicts the current "stalemate between buyers and sellers with a large spread between the buy/ask price" will continue.