Housing bubbles have hit Florida hard. Is it ready for another one?
Florida’s economy has bounced back from the pandemic quicker than most — which economists credit in part to a surge of people buying homes in the state. But Federal Reserve officials warn that there’s a housing bubble brewing. Home prices across the country aren’t only rising from explosive demand and limited supply, there are also signs that they’re being artificially pumped by speculation. For some, that feels a little like déjà vu. [Source: Tampa Bay Times]
Fear of missing out is fueling the real estate market, and experts are concerned
Rising interest rates and higher home prices would normally cool a hot housing market, yet the national and local real estate scenes continue to run red hot. Researchers at the Federal Reserve Bank of Dallas are concerned that a fear of missing out, colloquially known as FOMO, is creating a buying snowball effect that may lead to a housing bubble if left unchecked. The current market, where higher prices and other factors are not resulting in a slowdown, is moving away from market fundamentals, they found, suggesting that buyer exuberance, in the form of fear of missing out, is driving the current trend. [Source: South Florida Sun-Sentinel]
Cryptocurrency creeps into real estate: Miami mansion latest Florida property to be sold as an NFT
Despite a housing affordability crisis, Miami is emerging as a hub for cryptocurrency activity and a forthcoming luxury property sale could show what the South Florida real estate market of tomorrow looks like. ONE Sotheby’s International Realty and Voxel Architects are collaborating with developer Gabe Sierra for Meta Residence, an 11,000-square-foot Miami mansion that will have a virtual counterpart in the form of a non-fungible token, or NFT. A digital token can be bought, sold, exchanged in various forms including images and audio. [Source: Miami Herald]
Tiny home owners across Florida are seeking peace with local governments
Because tiny homes aren’t typical dwelling units or even technically RVs, their owners struggle to comply with municipal building and zoning codes. Some areas are more tiny home friendly than others. Brevard County, for example, has amended building and zoning code sections that have allowed for tiny home communities like Braveheart Properties. But with the legal fight related to tiny houses ongoing in many counties, others are helping portable home owners who need a place to park while traveling. [Source: WUFT]
Some mortgage lenders across South Florida are seeing a substantial decrease in the number of applications — as interest rates hit their highest level since the start of the housing boom. Lenders are seeing the effect of interest rates as they receive fewer purchase applications. “We definitely had a dip across the board on applications,” said J.C. de Ona, the southeast division president of Centennial Bank. According to numbers from his bank, recently they’ve seen a 20% to 30% drop in purchase applications. [Source: South Florida Sun-Sentinel]
› Two 1 million-square-foot spec warehouses signal ‘relentless’ demand in Jacksonville [Jacksonville Daily Record]
Two speculative 1 million-square-foot warehouses are breaking ground in Jacksonville, signaling that large e-commerce or other distribution centers are circling Northeast Florida. The city issued a permit April 21 for Evans General Contractors to build the 1,000,400-square-foot Building 8 at Florida Gateway Logistics Park in West Jacksonville at a cost of $34.31 million. In North Jacksonville, the city is reviewing civil engineering plans for the 1,003,200-square-foot Building E warehouse in Imeson Park South.
› Florida company buying, renovating large number of homes in Lima, Ohio [LimaOhio.com]
You may see a 100-year old house in an old neighborhood in Lima. Sayam Ibrahim sees an opportunity. That’s why he and his partners recently purchased 98 rental homes throughout the city, with plans to buy 44 more by July and perhaps reach 300 homes within a few years. “Lima, Ohio, is a great town to invest in,” said Ibrahim, an investor living in Fort Lauderdale, Florida. “There’s enough going on there. There’s definitely a reason we want to be there.”
› Rich and famous are paying obscene amounts for homes in South Florida [NY Post]
The ongoing stampede of the rich and famous into South Florida is propelling real estate prices to new highs. The average cost of a spread in Palm Beach — home to an ever-growing roster of celebrities and financiers — climbed to nearly $16 million in the first quarter of 2022, according to the Serhant South Florida Report issued Thursday. Limited inventory and voracious demand pushed the average price of a Palm Beach pad up by 44% compared to the same quarter in 2021, the study found.
› Iconic Naples hotel Inn on Fifth sells for $156 million [Business Observer]
Another iconic Naples hotel is being sold. This time it’s the Inn on Fifth in Naples, which a Maryland company is buying for $156 million. The sale is expected to close later this year. The Inn joins other prominent properties in Naples that have recently been sold: The Naples Grande Beach Resort sold for $248 million earlier this year, and the Naples Beach Hotel & Golf Club sold for $362.3 million last year.