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

South Florida CEO, Feb, 2003 by Richard Westlund

I think you will see a strong demand in the starter to mid-price units, below $500,000. You are going to see condos in the million dollar-plus range becoming competitive, and you will see a slowdown there. The waterfront condos that are affordable, $500,000 and $600,000, will continue to experience a strong base.

In the mid range we have opened up a whole universe of buyers. Now, if I can provide people a second home or an investment home under $500,000, with interest rates as they are, that product will do well over the next year. Overall, I'm cautious but optimistic. lam very surprised at the duration and energy of the market from the local point of view, but more than 50 percent of [luxury] sales are international.

Gordon Deckelbaum

Principal, Premier Developers, Fort Lauderdale

* I think 2003 is going to be more of the same. I think we'll see reasonably good business in the South Florida market as a whole. Interest rates will stay low and that has helped stimulate real estate activity and will continue to do that. As a luxury condo developer, I'm hearing a lot about the high-end market slowing down. But I'm not seeing it. Good product will continue to make good sales.

In Palm Beach and Broward, we have been seeing a market driven by out-of-town buyers - snowbirds and recent immigration. This is what fuels our marketplace. That flow has been supplemented in recent years by people moving from the western suburbs to the condos on the barrier islands. That purchaser tends to be younger, and wants more out of that condominium residence. That demand will help the upper-end market stay vibrant. People still want homes in the sky.

Single-Family

Sergio Pino

President, Century Builders, Miami

* It will be another banner year for the building industry. We have a backlog of 1,700 [sold) homes, and we sold 11 more homes in the first week of 2003. Demand is coming from all sectors of the market, including Venezuelans and Brazilians. When interest rates are low, people will invest in their homes. They see that their homes will soon be worth even more than what they paid.

Interest rates might even drop again, which would be amazing for the market. The lower rates provide an opportunity for people to refinance or to upgrade their homes. We've seen buyers go from a town home to a single-family home where they can have a backyard. In 2001, about 80 percent of our sales were town-homes, but that fell to about 50 percent last year, simply because people can afford larger homes.

SINGLE-FAMILY RESIDENTIAL

Pat Dahne

Miami-Dade Regional President

Coldwell Banker Residential, Coral Gables

* I think that the transaction volume of home sales will remain strong, and appreciation in home values will continue. Our market will continue to grow, but perhaps at a slower rate. We've enjoyed a rocket-ship' market for the past several years. Now, we're starting to see more inventory building up, especially in the high-end condo segment. There are more projects coming on line and the rate of sales are slowing down.