Real estate: the outlook for 2003 - South Florida's real estate market

South Florida CEO, Feb, 2003 by Richard Westlund

An interesting trend that we're seeing now is a growing number of sales of small investment properties. Many owners took advantage of low interest rates to refinance their homes. Now they have cash available and see this as an attractive way to invest those funds. We also see acquisitions and consolidations in the real estate industry continuing, but without the "mega-mergers" of the past year.

Ron Shuffield

President

Essliner-Wooten-Maxwell Realtors, Coral Gables

* This year will be bigger than 2002. We've already seen tremendous activity in the first weeks of January. Interest rates are still very attractive to buyers; in fact, financing is not an obstacle at all. We are still seeing a great deal of South American demand from Brazil and Argentina, as well as increasing numbers of buyers from Central America. Also, our region is now appealing to buyers from all over North America, especially with such a cold winter up north. The weather is a very important factor.

On the supply side, there is little vacant land for new developments. As a result, there is a great deal of infill activity. This provides an opportunity to complete some of our nicer communities, like Pinecrest and Coral Gables. There are some very substantial [homes] coming up in these markets, and on the Beach you have continual remodeling and renewal. Suburban areas like Weston are virtually built out. Home values will continue to be strong throughout the region.

Robert Hanna

Homebuilding Division President

WCI Communities, Palm Beach and Treasure Coast Division

* We are expecting our South Florida communities to do very well this year. The reception has been very strong for homes from the $200,000s to the $700,000s.

Our traditional profile is a 'move over' "move up" or "move down" buyer from within the region who sees an opportunity for an attractive lifestyle. We also draw buyers from the Northeastern corridor who appreciate our weather and want to move to South Florida.

The South Florida lifestyle remains a really important factor. Whether or not you offer a golf course in the community, it's very important to provide buyers with a lifestyle in tune with their wants and needs.

We expect low interest rates to continue, which is important at different price points. There is a diversity of purchasers out there, and the dynamics are changing constantly.

MULTIFAMILY HOUSING

Richard Davis

Senior Vice President, Grubb & Ellis South Florida Multihousing Team, Boca Raton

* The keys to the multifamily market going forward this year are jobs and population growth. While our population will undoubtedly continue to grow, job growth remains a concern. But we may have reached a turning point, as unemployment rates are starting to decline.

Owners of multihousing properties have enjoyed a tremendous appreciation in value, with sellers paying record prices. There remains tremendous demand for a limited supply of properties. In Miami-Dade and Broward, it's virtually impossible to find sites for garden-style apartments. We will see a fair amount of new supply in the downtown Miami and Broward markets in the next 18 to 24 months, with several new projects under construction. If our economy turns around by then, filling these units won't be an issue.