Four Great Condo Foreclosure Deals on the Market Now

Home sales surge in June with inventory at 42-year low

* Instant view: New home sales exceed forecasts for June
10:28am EDT

WASHINGTON | Mon Jul 26, 2010 6:21pm EDT

WASHINGTON (Reuters) – Sales of new homes rebounded strongly in June from May’s record low, pushing the number of houses on the market to the lowest level in nearly 42 years.

But downward revisions to sales estimates for April and May in Monday’s report left in place a picture of a weak housing market and perceptions that economic growth moderated somewhat in the second quarter.

Sales of new single-family homes vaulted 23.6 percent to a 330,000 unit annual rate, the Commerce Department said. Still, the sales pace last month was the second lowest since records started in 1963.

“We can’t take too much joy in one month’s figure. The roadblocks to a healthy housing market are high, the most important one being the still high jobless rate,” said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

The percentage increase last month was the largest since May 1980, and it partially unwound May’s historic 36.7 percent drop as the U.S. housing market was roiled by the expiry of a popular tax credit that boosted sales. Analysts polled by Reuters had forecast new home sales rising to a 320,000-unit pace last month from May’s previously reported 300,000 units.

New home sales account for only a fraction of the total U.S. housing market.

The report, together with package delivery and business services company FedEx Corp’s upgrading of its quarterly and full-year earnings forecasts, prompted a rally on Wall Street.

Each of the three major U.S. stock indexes gained 1 percent for the day, with the Standard & Poor’s 500 at 1,115.01 — just a fraction of a point shy of the break-even point for the year. The Dow Jones industrial average is back in the black for the year. The Nasdaq, which edged back into positive territory for the year on Friday, is now up 1.2 percent for 2010 so far.

http://www.reuters.com/article/idUSTRE65M2WK20100726

Topical regarding future SoFla foreclosures/pricing pressure

————-
Don’t hold your breath for a bounce in home prices
By ALAN ZIBEL (AP)
http://www.google.com/hostednews/ap/article/ALeqM5jfUWTT51JjdBvNwgqAXDPT0Qw1YQD9H6VBJ01

IMO, the relevant line is
“In Miami, nearly a quarter of mortgage borrowers have missed at least three months of mortgage payments or are already in foreclosure, according to Moody’s. That’s the highest level in the country. In four other Florida cities — Fort Lauderdale, Cape Coral, West Palm Beach and Naples — the proportion exceeds 15 percent. The same is true for Las Vegas”
———
And according to other data from the past 6 months, housing in the +300K/jumbo Miami market seems to now be defaulting more (% wise) than the lower price points.

Mike:

Thanks for the great article – – statistical analysis much appreciated! Though I feel compelled to take a pot-shot at the author for merely revising the piece he wrote concerning May – – and changing the numbers. (But his comments on the impact of the tax credit and the timing issue in the earlier article was insightful.) (See: http://www.calculatedriskblog.com/2010/06/new-home-sales-collapse-to-record-low.html)

I also appreciated this article containing some interesting comments concerning the Case-Shiller index.

http://www.calculatedriskblog.com/2010/07/survey-shows-house-prices-falling-in.html

I also appreciated the article that broke down sales by price: (See: http://www.calculatedriskblog.com/2010/05/new-home-prices-median-lowest-since.html) Granted, they are using median sales prices, but the analysis was still helpful.

Again, thanks for the great link!

scriv

Gixxer 1000 said: “Here is the info from you’re same “respected” source:”

— Oops, looks like Gixxer 1000’s “spell check” failed him again. LOL.

Hopes rise with sales of downtown Miami condos

The idea of a vibrant city center in Miami is bolstered by a Downtown Development Authority finding that condo sales — and prices — are going up.
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A report found sales of downtown Miami condos have accelerated during the first half of this year, and the inventory of empty new condos on the market is steadily declining.
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A report found sales of downtown Miami condos have accelerated during the first half of this year, and the inventory of empty new condos on the market is steadily declining.
MICHAEL HAMERSLY / MIAMI HERALD FILE

marXTheSpotFilms (July 05, 2010)
By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com

Residents and officials longing to see downtown Miami transformed into the nexus of a bustling, 24-hour city are beginning to see a little cooperation from the market.

Even as home prices have continued to drop across South Florida, downtown Miami — the hub of the over-development that many believe sparked the housing market collapse — seems poised for a comeback, a new study released by the Miami Downtown Development Authority shows.

The report found sales of downtown condos have accelerated during the first half of this year, and the inventory of empty new condos on the market is steadily declining. Prices are on the rise as well.

In the first six months of this year, there were 1,933 units sold in Miami’s downtown area, which stretches from Brickell north to Midtown and from I-95 east to Biscayne Bay. That’s an increase of 110 percent over the first six months of 2009, when 919 units closed.

“Downtown is an exciting place to be right now, with everything going on, and the report shows that people want to live downtown. They want to live in the heart of the city,” said Leo Zabezhinsky, the DDA’s manager of business development, real estate and research. Zabezhinsky moderated a downtown-themed discussion during the Greater Miami Chamber of Commerce’s Real Estate Committee meeting on Tuesday.

The average sales price of a downtown home was $356,100 in the first six months of the year, up about 16 percent from the first two quarters of 2009, when the average unit sold for $306,700. For comparison, existing condo prices across Miami-Dade County dropped about 9 percent between June 2009 and June 2010 to $128,800.

The inventory of new, unsold condo units in the downtown area stood at an estimated 5,400 units as of June 30.

About half of the unsold units in the downtown area are in the Brickell area. The Central Business District, bounded by NE Fifth Street on the north and the Miami River on the south, contains nearly a quarter of the remaining new condo units.

At the current sales pace, downtown Miami’s glut of new condos could be absorbed within the next 18 months, but there are a couple of caveats.

First, the DDA’s numbers do not include the 870 units at the completed Mint at Riverfront and Paramount Bay buildings, currently empty but set to begin sales in the near future. Secondly, much of the sales activity has been generated by investors, who are largely expected to unload these properties back onto the market once prices rise and the housing picture brightens.

“Resale of investor-owned properties could continue for four or five years,” said Craig Werley, president and owner of Focus Real Estate Advisors and one of the authors of the study.

In the meantime, those hoping that an active rental market can spur the type of downtown renaissance longed for by a growing group of supporters are encouraged by an occupancy rate inching towards 75 percent. The DDA’s report shows leasing activity up 14 percent in the first six months of the year compared to 2009, with average rent down about 1 percent, to $1,787.

Another potential economic stimulator for the area, though still untested, is the arrival of the revamped Miami Heat team at downtown’s AmericanAirlines Arena. With LeBron James, Chris Bosh and Dwyane Wade promising multiple championships, the effect on AAA’s neighborhood could be transformative, said William Talbert III, president and CEO of the Greater Miami Convention and Visitors Bureau.

“Just think about all the restaurants that are going to open up,” he said. “You talk about a stimulus package — that’s one.”

But a number of major issues still hinder Miami’s downtown from rivaling some of the other metropolitan hubs like Chicago and New York, said Sharon Dresser, co-founder of High Street Retail USA in Midtown.

The lack of flagship shopping destinations, inadequate public transportation between central downtown and areas like Midtown and the Design District and “real or perceived” safety issues all need to be addressed, she said.

“If you want to do serious shopping, you have to leave the downtown area,” she said.

Thanks for posting Gixxer. I’m glad you pointed out existing home sales they are still higher than the historical median because it seems people neglect to recognize this.