The Daily Soak - November 30

South Florida Rental Rates "Dropping Like A Rock"

The glut of thousands of unsold high-rise units in downtown Miami coupled with falling median prices is keeping potential buyers on the sidelines and converting many would-be buyers into renters. And the longer they wait, the better the rental deals get, according to A CBS4 report. "Reduced occupancy has prevented landlords from raising rents, and in many areas of South Florida, rents have fallen or remained stagnant. Homeowners and builders stung by the crunch in the real estate market are seeking ways to unload homes to get some return on their investment - flooding the rental market and lowering prices." Rental prices have fallen 5-10% over last year alone, and they should fall further once thousands of new units hit the market in the first quarter of 2009. (Video)


Luxury Foreclosures On The Rise in Boca, Lake Worth

Alexandra Clough of the Palm Beach Post reports on the growing number of foreclosures in the high-end luxury sector of the South Florida market. One project in Boca Raton, Azura, originally promised "luxurious living and stellar amenities, including concierge services such as limousines, dry cleaning and yes, plant watering." Regions Bank just filed a lawsuit against Azura's developer citing failure to repay some $36 million in construction loans. Only 7 of the 92 luxury homes in Azura were ever sold. Another development up the road in Lake Worth, Villas Santorini, was just placed in receivership with Scott Brenner of Brenner Real Estate Group. Clough concludes, "Brenner said no one could have anticipated the real estate market would claim so many developers, of all size and experience. And with all the new construction that took place over the past few years, no one ever thought to ask this question: 'What if the development never gets done?'"


Florida's Growth Engine Officially On Life Support

An excellent Florida economic analysis today in the St. Pete Times. State economists just met in Tallahassee and are projecting the state will now collect $31 billion (yes, with a "b") less over the next four years than previously forecast. So what's the problem? People aren't moving to Florida like they used to, and that trend is not likely to change in the near future. But don't tell that to Governor Crist who keeps dropping soundbites totally out-of-sync with the state's economic reality: ''Florida will probably come out of it first. I mean, the sun always comes up in Florida first." Contrast that with Florida CFO Alex Sink's recent appraisal, "We are in trouble. We're writing checks like crazy and the money isn't coming in. We can't rely any more on attracting fixed-income retirees from up north and selling them cheap land," Sink said. "Those days are over.