It’s official: Miami’s single-family homes are the most overpriced in the nation. (more…)

Miami housing prices would have to drop 41.4 percent to return the city’s income-to-housing cost to its historical ratio, said a report by John Burns Real Estate Consulting. (more…)

Since the South Florida real estate party ended, the hangover has taken different forms - sales plunging, foreclosures rising, lawsuits flying. (more…)

Sandra Stella spent most of the decade trying to profit from the South Florida housing market boom. (more…)

A licensed Miami real estate agent is accused of bilking a South Florida couple out of more than $100,000 by acting as a Florida mortgage broker. (more…)

Soaring property tax bills are making it increasingly burdensome to buy or keep a second home in Florida, raising questions about the future of a real estate niche that’s long been a mainstay of the state’s economy.

(more…)

The South Florida housing market decline has been well documented. Even as Florida mortgage rates remain low, a glut of inventory and sky-high prices have depressed sales greatly. Just the same, the commercial real estate market in the region continues to boom.

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The Worst 25 U.S. housing markets in 2007 in the Housing Predictor forecast represents markets in 13 states, which shows housing prices in much of the nation are still declining, despite local markets in another 13 states that are appreciating.

Miami was selected as the #1 worst housing market in the U.S., mainly due to a market that had seen high-flying double digit appreciation pushed by new and condo conversions, causing Miami to spiral downward, resulting in a slower market with increasing unemployment.

More than 25,000 new units are due to hit the Miami condo market in the next 15 months, providing an inventory of new units on the market that should take years to sell out.

• Not all of the Miami market will see double digit depreciation in 2007, particularly not lower priced single family homes under $250,000.
• Nonetheless, the average loss in values is forecast by Housing Predictor to hit 13.9 percent by the end of 2007.
• Low Florida mortgage rates won’t spur demand in Miami, experts believe, as the glut of inventory will continue to depress sales.

In the west, San Diego has a home market where sales are slow. San Diego will see prices fall an average of 13.5 percent in 2007, experts predict, to take the second position on the Worst 25 Market list.

San Diego experienced some of the fastest and highest appreciation in the nation before hikes in mortgage rates at first slowed the market and then brought the days of soaring appreciation to an end.

Higher end homes in the outskirts of La Jolla, known for being a home to the rich and famous, are now being sold for as much as 35 percent below their all-time high home prices of nearly three years ago.

The California housing market is showing signs of stability in some areas, but it will take time for the markets to reach pricing levels where buyers are comfortable again in many parts of the state.

California has more local housing markets on the Worst 25 List than any single other state with seven making the grade.

On the east coast, Florida is only second to California with four markets making the list, including the Tampa and Orlando housing market.

However, many parts of Florida have already stabilized and are experiencing growth in sales activity. After a series of hurricanes hammered the state in 2004 and 2005, home sales fell off, but low Florida mortgage loan costs helped many areas escape long-term housing slumps.

Many of the nation’s most densely populated urban centers are still seeing weak markets as a result of higher mortgage rates and five years plus of above average appreciation, many in the double digits.

These cycles typically run in 7-10 year cycles nationally, with some exceptions. Only two years typically run at fever pitch appreciation levels.

New York, Massachusetts, Virginia, Colorado, Oregon, Michigan and New Jersey are among other states with markets listed on the Worst 25.

SOURCE: HousingPredictor.com

Key West Florida mortgage broker Melanie Crocker sums up the past year’s housing market this way: “It’s been tough.”

She’s not kidding.

Both prices and sales fell considerably in 2006 in Monroe County, where the standoff between buyers and sellers has already given way to a down market.

The median price for a single-family home went down 11 percent, settling at $625,000, according to a Miami Herald survey comparing sales in the second half of 2006 to the same period a year earlier. Florida condo prices were off even more, dropping by 17 percent to $440,000.

Things were especially bad in Key West, where prices for single-family homes dropped 37 percent to $395,000. Condo prices fell 19 percent to $440,000.

The downturn comes after prices in the Keys soared into orbit. In past few years, investors and vacation buyers bid prices up so high that few residents could actually live there; and most Florida home mortgage loan borrowers stayed away.
Hospitals ran short of nurses, and hotels had to offer shelter for their employees. Companies searched for workers willing to drive south from Homestead and Florida City.

Now, lower prices may come as a relief to Keys residents priced out by the boom.

But they’re not rushing to buy just yet. Sales of houses in 2006 were down 38 percent from a year earlier. For condos, it was 47 percent.

”There were no buyers because they wanted to see the prices adjust,” says Crocker. “Now that has happened, and we are starting to see a little more activity. Though people are still wondering if we have hit bottom or not.’

Two years ago, the Miami real estate market was hot — red hot — and the hype was contagious.

When ABC News shot a story about it in the fall of 2005, it called it “Boomtown Miami.” Old buildings were falling to make way for new condo towers that were selling out in just a few days.

“It was very exciting. It was an adrenaline rush,” Kari Fernandez, a condo sales agent, says. “We’re talking almost 1,000 units sold in a week.”

Investors, speculators, flippers, everyone seemed to be making staggering profits — at least on paper — in a matter of weeks.

Across the country, the real estate market has gone flat, but nowhere like in Miami. Not that Miami is suddenly at a standstill: In the skies, flocks of building cranes compete with birds as Florida condos race to completion. Look around, and you can see a skyline transformed, with more than 100 new condo buildings now under construction, representing about 25,000 condo units due to be completed and delivered in the next 18 months or so.

But developers are avoiding new projects, focusing instead on completing construction and sales for all those buildings already under way. It’s a far cry from the adrenaline-fueled Florida mortgage loan boom of just two years ago.

A Cautionary Tale

Back when this was Boomtown — in 2005, when ABC News did that first story — it met a young real estate lawyer and speculator named Richard DeNapoli. He’d bought four condos worth $1 million with a $200,000 down payment. DeNapoli was banking on a $400,000 profit for his four condos.

Today, those condos are nearing completion, and his expectations are more modest.

DeNapoli has flipped his four units to other Florida home mortgage loan applicants, but for less than he’d hoped. Because he bought in early enough he’ll make a $275,000 profit — maybe. The worst-case scenario, he said, would be to break even or have to buy and then rent the units he speculated on.

“It’s a stalemate right now,” DeNapoli said, “between buyers who have a lot of supply to look at and sellers who don’t want to budge on their asking prices.”

Back in 2005, Jack Winston, an analyst with Goodkin consulting, saw a boom based on shaky foundations.

“The equation is that you have speculators buying units, and they’re trying to flip their contract to other speculators who in turn are trying to flip their contract to other speculators,” he said at the time. “Somewhere along the line, you are going to run out of speculators.”

Now, Winston is saying: I told you so.

“Basically, we predicted at that time it was pretty close to a Ponzi scheme,” he says. “And the last person is the one who gets hurt. And that’s basically what happened here.”

Winston and others estimate that 70 percent of the Miami condo market was driven by those speculators in search of quick profits.

“Probably some time around September or November of 2005, it was as if someone turned off the spigot,” he says. “Since that time, new sales at condominium projects have come to a halt, practically a stand still.”

Whom To Blame?

Though there is an overabundance of supply, the eight hurricanes that battered this state in 2004 and 2005 can also take credit. Hurricane insurance rates have doubled, tripled. And with the inflation of property prices, so have property taxes.

To continue reading this ABC News report, click here.