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

South Florida CEO, Feb, 2003 by Richard Westlund

On the other hand, the Miami and Fort Lauderdale airport markets are quite strong. There is limited new development because of lack of land. It's the leisure markets like Miami Beach and the corporate markets like downtown that have been hurting. Palm Beach County is a more stable market. It has declined but not as much as Broward and Miami-Dade.

HIGH-RISE CONDOS

Brian Street

President, Boca Developers, Deerfield Beach

* I think it's arrogant to make projections. There are too many outside influences that have a direct bearing on South Florida. Political stability in Latin America, currency fluctuations and other international factors influence our market. But, my general feeling is that we're likely to have a rather tough time. I think we're going to have to deal with an economy that is in difficult straits with no respite on the horizon.

We are scaling back at the high end. The $400-per-square-foot market is nothing I want to be involved in right now. That will be the first segment to let us down, and there are too many developments crowding a shrinking arena.

Our buyers are still coming from everywhere, so you have to pay attention to those feeder markets. Many Latins want to come to Miami, for instance, but may not be able to afford to do so right now. Suburban empty-nesters need someone to buy their single-family home before they can buy a luxury condo. But if those offers fall, there will be limits on what they can buy on the eastern side.

Philip Spiegelman

President,

International Sales Group, Aventura

* We think South Florida holds a unique position in the United States. There may be soft markets, but the economic forces that stabilize the real estate market in South Florida continue to favor growth. Stable pricing and a continued supply of in-migration serves to absorb the volume of new product being offered throughout the marketplace.

As a project matures, the buying profile shifts. Initial interest in a new high-rise waterfront condo can be very investment driven; as a building nears completion, the majority of buyers become resident users.

Looking at new opportunities in 2003, we made the business decision to focus on a smaller apartment to help keep absolute prices close to $500,000 on average. Pricing has got to be everyone's concern. If we're sensitive to the fact that the greatest success comes within the broadest band of the market, condos need to be priced not for a million-dollar buyer, but for one spending $200,000 to $500,000. That buyer can get more home for the money and we can take land that might not otherwise be viable and produce great product.

Jorge Perez

Chairman and CEO

The Related Group of Florida, Miami

* Miami is probably the most difficult market in the country to predict. Most of the other markets respond to local demand patterns. In Miami the universe is so much greater than our local economy. It's not just what the US and local economies are going to do, but also what the European and Latin economies are doing, and what is happening from the political point of view.