Dennis Lockhart, president of the Federal Reserves Atlanta division, expected far worse from Miami real estate.
In 2008 and 2009, what I was hearing was condo towers essentially being empty in downtown Miami, Lockhart told a Broward County business group Wednesday morning. A recent survey shows something far different: about 90 percent of downtowns condos are either rented or occupied by an owner.
Its an amazing turnaround, Lockhart said.
Lockharts comments to the Broward Workshop capture a recurring theme for one of the most battered and bashed housing markets in the country. After years of national attention for an ill-fated condo boom and epic housing crash, South Floridas recovery has caught some people by surprise.
When someone says something good about Miami, you get some head scratching, said Mark Vitner, who follows the Florida economy for Wells Fargo. People are surprised at how quickly things have turned around in Miami. Miami-Dade remains one of the most depressed housing markets in the country, with housing prices down 49 percent in six years compared to 33 percent for the nation as a whole. Unemployment only slipped below double digits in February after three years of being stuck above 10 percent, far worse than the national average.
But on many measures, South Floridas recovery is gaining attention.
This week, Moodys issued a report noting Miami-Dade led Floridas largest counties in posting the first yearly growth in property tax rolls since 2007. Miami-Dade saw its values increase 1.5 percent, followed by Browards 1.2 percent gain, and a tiny .1 percent increase for Palm Beach. In the last six months, only Phoenix saw a sharper rise in home values than the 4 percent gain posted by South Florida, according to the Case-Shiller index on residential real estate.
Everybody knows how bad Miami was, said Chris Lafakis, a Moodys economist. I think not as many people know about the strong increase in ... investor demand.
Cash buyers from Latin America and Europe get most of the credit for Miamis real-estate bounce. Strengthening sales, mostly from cash buyers and investors, were noted by most Florida contacts, the Federal Reserve reported Wednesday in its latest Beige Book report on the national economy.
But those foreign ties could make this a rougher year in South Florida than elsewhere in the country, as Brazils slowing economy and Europes potential financial meltdown threatens to upend Miamis advantages.
South Florida also retains one of the countrys biggest inventories of foreclosed homes, and that pipeline of distressed real estate could drag down the regions housing prices. Jack McCabe, a real-estate consultant in Deerfield Beach, said: When people say were at the bottom and things are on the upswing, I just dont think theyre looking at all of the available information.
Moodys predicts a 9 percent decline in property values in South Florida this year, thanks to a growing pipeline of distressed real estate. Still, thats better than the 12 percent drop forecast at the start of the year. Lafakis said demand from foreign investors for Miami real estate prompted Moodys to upgrade the forecast.