Take a look at the excellent article in the business section Real estate experts face off on Real Estate Meltdown. The pensive looking guy is Jack McCabe who seems to see the future less bright on the real estate front.
The happy guy, Michael Cannon, writes a Herald column about real estate and he is more optimistic. You can see the difference pretty clearly in their predictions (which are at the end here).Most important, these guys are both bowling champions. What are the odds of that? Anyway...
I found something McCabe said rather interesting, especially in light of Jorge Perez wanting to buy the Miami Herald (this would NOT be in the paper if he were a major investor in the Miami Herald):
McCabe: Last year (Cannon) said project failures are isolated. That’s not true. There are project failures all over the place. Perez buying his own condos (at 50 Biscayne) is a project failure. When he buys them at $250 a square foot, after he sold them at $400 a square foot, he has cut out the legs of all previous buyers. Everybody who previously bought and closed has been wiped out.
That is pretty alarming for the other buyers in the building, glad I am not one of them and I am sure Perez is hopping mad at reading this.
The Herald said in the article that there are 76,829 homes on the market in Miami Dade County. McCabe said there is a 17,176 supply of single family homes in multiple listing which, he says, is a 33 month supply (condos are at a 42 month supply).
Here are McCabe's and Cannon's predictions for the future (but do read the entire article in the Miami Herald):
McCabe Predictions:
The coming year will be as bad as 2008. Expect price declines of 10 to 15 percent through 2009. Prices are already at 2004 levels and will likely see a retreat to at least 2002 levels. The foreclosures and inventory will continue to drive price declines. Sales have not hit bottom yet. Yes, there will be sporadic periods of increased sales, but it will amount to false bottoms. For 2009, sales will be slightly above 2008, but that's only because of lower prices, and there are still years and years of inventory to absorb.
Cannon Predictions:
Sales will continues to increase due to lower prices. But stabilization in prices will vary neighborhood by neighborhood and, in some areas, building by building. Prices have reached sustainable levels in established areas close to employment and urban centers, like Coral Gables and parts of Miami Beach. But prices in outlying markets such as Homestead or Lantana will likely drop more. Pockets hit hard by predatory lending will decline further too.
2 comments:
I read this, and I have to say that neither analyst's point of view has changed much.
It's kind of a re-hash of the re-hash.
Anyway, good post.
Gimleteye writes: agree.
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