2014 Fort Lauderdale Real Estate Outlook
Let me preface this by saying I hate writing articles, or giving opinions, based on speculation. I think it's dangerous, and lets face it, it's easy to be wrong! That being said I've fielded a dozen phone calls over the last 24 hours from clients asking my opinion on the upcoming years real estate market. I'm not sure how to approach this, but I'll do my best to organize my thoughts.
Let me begin by giving a top down overview. At some point in the market cycle the cash buyer will dry up. It's not normal, or healthy, to see 70% of real estate transactions occurring in cash. Undoubtedly the use of leverage (mortgages) accelerated the run up, and subsequent crash, of the housing market. However, loose lending standards and over leverage were the real issue. Interest rates are going to tick up this year, we can't maintain these low rates forever. As time passes and the economy (hopefully) improves we will see a return of the credit worthy buyer. As long as lending standards stay tight enough that they exempt low credit quality, more specifically those that can't prove income, I believe we will see 50% of transactions occurring with a mortgage in the coming year. Remember a number of the cash transactions that occurred happened because the property conditions were often too poor to qualify for lending. As those properties are improved and resold we can reintroduce the financed buyer into the Fort Lauderdale real estate market.
The lure of the RAC! The City of Fort Lauderdale is really trying to provide liberal zoning in the RAC district. I believe we'll see a lot of interest in the zone in 2014. However, I think the bulk of that interest will be in commercial properties. My feeling is that a lot of new stories coming out of Fort Lauderdale in the coming year will be on the commercial real estate side. Office space is running at a ridiculously low vacancy rate. If we're going to continue to grow on the residential side, we're going to need to grow the work space for those residents. I've spoken with a number of people interested in constructing office buildings and mixed use projects. I believe the biggest splashes in the coming year will come from the Las Olas and Downtown Fort Lauderdale core area's. If you have interest in buying commercial property, or land, in Fort Lauderdale feel free to call me. Though it's not the focus of this blog, I do a number of transactions in those spaces.
New construction, non rental, residential projects were slow to come to market this year. For the most part that will be the case for 2014. If you bought a piece of land today to build a condominium project on, you'd need two (2) years minimum before you completed the project. This factors in everything from closing the deal, to permits, to project review, to inspections, through construction, and into initial marketing. So unless you have a project that is near completion right now, you won't be selling in 2014. Unless you're selling pre construction, but that's a whole different animal. A number of builders that have the reach to take down large projects sat on the sidelines this year. Unless they can find well located land to build on, at a reasonable price, we'll see that again in 2014. I'm hoping for new residential project announcements, but I'm not holding my breathe for them.
What do I think we'll see in terms of new construction in Fort Lauderdale through 2014? Home builders will build spec homes. In choice neighborhoods I think we'll see a number of new construction homes, though this will be limited to the higher end. I believe we'll see builders going after land that they can build townhomes on. This is more feasible, at this point, for builders in a number of neighborhoods that I cover. In short I believe we'll see a decent amount of construction in Rio Vista, Victoria Park, Flagler Village, Las Olas Isles, and Coral Ridge. I also think we'll continue to see buyers clamoring for townhomes in Fort Lauderdale.
I'd like to select a few neighborhoods that I believe we'll hear a lot about in the coming year. Let's start with Fort Lauderdale Beach. I've written about my affinity for North Beach Village several times. If you're looking for an area undergoing a transformation unlike anywhere else in Fort Lauderdale, just head to the beach! You have the Escape Hotel getting ready for construction. The former Orion build site getting ready for demolition. But the really huge story, the already constructed Conrad Fort Lauderdale Beach! I've been in the Conrad a couple of times over the last week. I believe sales are going to be very fast in the project, I also believe it's a project with great upside for the early buyer. If you take some time to understand what's being proposed in the North Beach Village area, and take a look at what's already there, I believe you'll conclude that the area's prospects are phenomenal. The coming year we should see a more refined plan from city government that will outline how this neighborhood will progress.
Fort Lauderdale is a town obsessed with boating. I have a steady stream of buyers looking for homes with docking space. We're also a town of snow birds and seasonal residents. Las Olas Isles has been doing a magnificent job of building out high end townhomes with available docking space. I think we'll see that trend continue this year, Aquavita is an example of that continuation. I expect other projects to be announced on Las Olas Isles by the end of 2014. I really like this product for people looking for a luxury residence, that can be lived in seamlessly 6 months or more out of the year, without the maintenance headaches of a single family home. I'm talking to you my Canadians, Northeasterners, and all others escaping your cold weather climates. (It's 73 degrees Fahrenheit and sunny at the time of this posting here in Fort Lauderdale)
Victoria Park, Rio Vista, and Coral Ridge should continue to see prices rise. All three of three of these neighborhoods are well established. Their values rose through 2013, and I believe will through 2014. The stories of the neighborhoods are a little different. Rio Vista and Coral Ridge will see new construction, single family luxury residences, continue to rise. Victoria Park should continue to see a well refined, and luxurious, selection of townhomes come to market. None of these sections will be poised for condominium style project growth, nor do I believe they should be.
The sleepers will come alive in 2014! 2013 saw the values in Tarpon River experience almost hockey stick growth trends. In 2014 I believe we're poised to see decent price appreciation in Croissant Park, Lake Ridge, Wilton Manors, and Pointsetta Heights. If you look at a map these areas are the next step away from Downtown Fort Lauderdale's core. This year we saw prices firm and rise in area's closest to the city center. As buyers looking for value are priced out of those area's closest to the Downtown Fort Lauderdale core, I believe we'll see them stepping into these four neighborhoods. In short, I really like future value prospects in these select neighborhoods.
The coming year is going to be very exciting. Locally I'm seeing the resurgence of the American second home buyer. The story over the last few years has been the foreign buyer in South Florida. I believe we may see a shift in that pattern this year, or at least a decline in the foreign buyers dominance of the market. Fort Lauderdale is an incredibly unique, and wonderful place to live. We have an incredibly diverse selection of housing, neighborhoods, and people that live here. As time goes on more and more people discover this. Whether you're looking to relocate to Fort Lauderdale, buy a second home in Fort Lauderdale, invest, or vacation here, I promise I'll be able to find a home that fits your needs!
Happy New Years.
I work as a Realtor in Southeast Fort Lauderdale. If you’re interested in buying or selling a home, condominium, or townhouse (townhome) in: Rio Vista, Victoria Park, Downtown Fort Lauderdale, Fort Lauderdale Beach, Sailboat Bend, Tarpon River, Croissant Park, Collee Hammock, Wilton Manors, Pointsetta Heights, Coral Ridge, or Las Olas Isles, please feel free to contact me at (786)443-7203 or through my email email@example.com. I am a Realtor that works on Saturdays to accommodate those with busy schedules.
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Written By Casey Prindle