“When you look at the looming oversupply in the Miami-Dade condo market, it’s likely there will be several years of down pricing.” — Real estate consultant David Dabby [Photo: Daniel Portnoy]

It appears that 2008 will be the year of the trough for residential real estate, the low point before conditions start to improve — most likely around the third quarter. Meanwhile, those moving to Florida should find plenty of homes for sale at falling prices. And it appears people are still coming. Between 2006 and 2007, the state picked up 331,000 new residents, according to the Bureau of Economic and Business Research.

Lewis Goodkin, president of Goodkin Consulting in Miami (and a contributor to Florida Trend), expects the state’s builders to keep cutting home prices as land and construction costs fall. He adds one caveat: “Our pricing has escalated so much in recent years that genuine users have really thinned out because of affordability.”

Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida, says the state’s lower-cost markets are most likely to attract residents. Orlando, Tampa Bay and Jacksonville will recover more quickly than Miami/Fort Lauderdale and Naples/Fort Myers, he believes.

The Trends More rentals Falling land, labor and material costs For condo developers and buyers, higher presale and equity requirements More existing homes on the market More foreclosures and distressed sales Credit crunch for buyers, builders and developers

Miami’s market may remain troubled longer than others. Real estate consultant David Dabby, president of the Dabby Group in Coral Gables, estimates there are about 35,000 new condominium units recently completed or under construction.

Meanwhile, Florida’s luxury second-home market remains one of the few bright spots, says Ron Shuffield, president and CEO of EWM Realty in Coral Gables. “The high-end buyer is very active in our marketplace,” he says. “They see an opportunity to buy choice units at prices they may not see again.”

Scott Agran, founder and president of Lang Realty in Boca Raton, expects the market to begin stabilizing in the latter half of this year. “The market is being driven by psychological influences rather than fundamentals,” he says. “Florida still is attractive to Baby Boomers and has unmatched weather, lifestyle, shopping and restaurants.”

Florida Housing Starts
Year	Starts
2006	204,000
2007	117,700
2008	116,400
2009	138,200
2010	147,400
*Note: 2007-10 projected Source: Institute for Economic Competitiveness, University of Central Florida

Foreclosures (through September)
State	Foreclosures
California	302,323
Florida	225,762
Texas	151,115
Michigan	118,102
Georgia	117,815
Ohio	112,680
New York	82,047
North Carolina	62,958
Arizona	51,900
New Jersey	50,346
Nationwide	2,034,370
Source: RealtyTrac, 2007

For Rent

Still-high home prices and elevated for-sale inventories have revitalized the state’s rental market. “Demand will remain strong, especially for garden-style, low- to medium-density developments in growth-oriented submarkets,” says Michael Wohl, founding partner of Pinnacle Housing Group in

Miami, a joint venture partner in the mixed-use Sheridan Stationside Village in Hollywood. “As more consumers choose to rent for several years rather than buying, the opportunities to build affordable, workforce and market-rate rental communities will continue expanding.”

Going Green

Matthew Greer [Photo: Nicholas Von Staden]

Slower market conditions may stall the adoption of environmentally friendly green construction. “Florida already lags other states,” says Matthew Greer, CEO of Carlisle Development Group in Coconut Grove, an affordable housing developer with three LEED-certified developments under way in Florida. “The biggest problem is lack of demand for material choices — it’s hard to find low-cost shower heads and low-flow toilets in our market.”

But it is possible to incorporate energy- and water-efficient features in residential projects at all price levels, adds Greer, whose company is working with the Broward County Housing Authority on Tallman Pines, 250-unit LEED certified affordable housing project under construction in Deerfield Beach.

“Going green appeals to a higher-end buyer who is looking for a quality product or health benefits,” he says. “But we’ve found that if you’re smart about it and stay within the cost-benefit curve, you can do a lot with rental units and have happier tenants. While LEED certification is not for every project, more developers are looking for ways to incorporate those green features in new projects.”