Brad Hunter Chief Economist (561) 835-9235 (561) 573-8351

Metrostudy Brad Hunter (561) 573-8351

Brad HunterChief Economist

(561) 835-9235(561) 573-8351

South Florida Housing MarketCurrent Conditions and Forecast

April 21, 2009


The Main Factor that is Keeping the Economy Depressed (Locally and Nationally)….?

Falling Home Prices

Talk about a double-edged sword! We want affordable market-priced housing, but it is a painful adjustment!


South Florida Housing Production is Effectively ZeroAbsorption Has Fallen Too

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09

Uni

ts

Quarterly Starts Quarterly Move-Ins


New Home Inventories Are Coming Down (which would normally relieve some downward price pressure)…

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1Q03 1Q04 1Q05 1Q06 1Q07 1Q08 1Q09

Uni

ts

0

2

4

6

8

10

12

Mon

ths

Finished Vacant Under Construction Months Supply


…But South Florida Job Losses Continue to Erode Incomes and Confidence

(120,000)

(100,000)

(80,000)

(60,000)

(40,000)

(20,000)

0

20,000

40,000

60,000

80,000

Feb-06 Feb-07 Feb-08 Feb-09

Y-O

-Y C

hang

e in

Em

ploy

men

t

Source: Department of Labor


New Home InventoriesBy County

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

St. Lucie Indian River Martin Palm Beach Broward Miami-Dade

Uni

ts

0

2

4

6

8

10

12

14

16

18

Mon

ths

Finished Vacant Under Construction Months Supply


The Biggest Source of Downward Price Pressure 2009 and 2010?

R.E.O.


Miami-Dade Mortgage Foreclosure Filings and Certificates of Title (Banks Only)

0500

1,0001,5002,0002,5003,0003,5004,0004,5005,0005,5006,0006,500

Jan-

06Fe

b-06

Mar

-06

Apr-

06M

ay-0

6Ju

n-06

Jul-0

6Au

g-06

Sep-

06Oc

t-06

Nov-

06De

c-06

Jan-

07Fe

b-07

Mar

-07

Apr-

07M

ay-0

7Ju

n-07

Jul-0

7Au

g-07

Sep-

07Oc

t-07

Nov-

07De

c-07

Jan-

08Fe

b-08

Mar

-08

Apr-

08M

ay-0

8Ju

n-08

Jul-0

8Au

g-08

Sep-

08Oc

t-08

Nov-

08De

c-08

Jan-

09Fe

b-09

Filings by Banks Certs into Banks


Broward Mortgage Foreclosure Filings versus Certificates of Title (Banks Only)

0500

1,0001,5002,0002,5003,0003,5004,0004,500

Jan-

06Fe

b-06

Mar-0

6Ap

r-06

May-

06Ju

n-06

Jul-0

6Au

g-06

Sep-

06Oc

t-06

Nov-

06De

c-06

Jan-

07Fe

b-07

Mar-0

7Ap

r-07

May-

07Ju

n-07

Jul-0

7Au

g-07

Sep-

07Oc

t-07

Nov-

07De

c-07

Jan-

08Fe

b-08

Mar-0

8Ap

r-08

May-

08Ju

n-08

Jul-0

8Au

g-08

Sep-

08Oc

t-08

Nov-

08De

c-08

Jan-

09Fe

b-09

Mar-0

9

Filings by Banks Certs into Banks


Option-ARM Recasts will Trigger the Next Wave of Foreclosures in late 2009

Source: Business Week/Credit Suisse


11Miami-Dade CountySingle Family Median Resale Home Prices

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Jan-

93Ju

l-93

Jan-

94Ju

l-94

Jan-

95Ju

l-95

Jan-

96Ju

l-96

Jan-

97Ju

l-97

Jan-

98Ju

l-98

Jan-

99Ju

l-99

Jan-

00Ju

l-00

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11

Med

ian

Resa

le P

rice

Median Price5% Annual Increase

Source: Florida Association of Realtors

Febr

uary

, 200

9

?


12Broward CountySingle Family Median Resale Home Prices

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Jan-

93Ju

l-93

Jan-

94Ju

l-94

Jan-

95Ju

l-95

Jan-

96Ju

l-96

Jan-

97Ju

l-97

Jan-

98Ju

l-98

Jan-

99Ju

l-99

Jan-

00Ju

l-00

Jan-

01Ju

l-01

Jan-

02Ju

l-02

Jan-

03Ju

l-03

Jan-

04Ju

l-04

Jan-

05Ju

l-05

Jan-

06Ju

l-06

Jan-

07Ju

l-07

Jan-

08Ju

l-08

Jan-

09Ju

l-09

Jan-

10Ju

l-10

Jan-

11

Med

ian

Resa

le P

rice

Median Price4% Annual Increase

Source: Florida Association of Realtors

Febr

uary

, 200

9

?


13Miami-Dade County vs. City of Miami

Source: Wikipedia


14Quarterly Condominium Starts: Miami-Dade County vs. City of Miami

Note: Conversions Not Included

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1Q03

2Q

03

3Q03

4Q

03

1Q04

2Q

04

3Q04

4Q

04

1Q05

2Q

05

3Q05

4Q

05

1Q06

2Q

06

3Q06

4Q

06

1Q07

2Q

07

3Q07

4Q

07

1Q08

2Q

08

3Q08

4Q

08

1Q09

Quar

terly

Con

do S

tart

s

Miami-Dade Condo StartsCity of Miami Condo Starts


15Condo Inventory Comparison: Miami-Dade County vs. City of Miami

Note: Conversions Not Included

0

5,000

10,000

15,000

20,000

25,000

30,000

1Q03

2Q

03

3Q03

4Q

03

1Q04

2Q

04

3Q04

4Q

04

1Q05

2Q

05

3Q05

4Q

05

1Q06

2Q

06

3Q06

4Q

06

1Q07

2Q

07

3Q07

4Q

07

1Q08

2Q

08

3Q08

4Q

08

1Q09

Quar

terly

Con

do In

vent

ory

Miami-Dade Condo InventoryCity of Miami Condo Inventory


16Quarterly Single Family Starts: Miami-Dade County vs. South Dade*

* South of SW 184th Street

0

500

1,000

1,500

2,000

2,500

3,0002Q

98

4Q98

2Q99

4Q99

2Q00

4Q00

2Q01

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

Quar

terly

Con

do S

tart

s

Miami-Dade SF StartsSouth Dade Starts


17Single Family Finished Vacant Inventory: Miami-Dade County vs. South Dade

0

500

1,000

1,500

2,000

2,500

2Q98

4Q98

2Q99

4Q99

2Q00

4Q00

2Q01

4Q01

2Q02

4Q02

2Q03

4Q03

2Q04

4Q04

2Q05

4Q05

2Q06

4Q06

2Q07

4Q07

2Q08

4Q08

Fini

shed

Vac

ant I

nven

tory

Miami-Dade Finished Vacant InventorySouth Dade Finished Vacant Inventory


Condos


The Good Ole Days (Way back in 2004)

• Projects sold out in a weekend• People camped out to be first in

line• There was Panic Buying!• Same group of investors often

rolled from one to the next• Some projects sold first 50% to

investor groups who bought in bulk at a discounted day-one price


1,658

776

54

1,428

1,180

1,504

2,760

621

3,265

746

385505

1,863

1,184

654

886

0

500

1,000

1,500

2,000

2,500

3,000

3,500

1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 4Q07

Qua

rter

ly S

tart

s

Quarterly High-Rise Starts

Large Projects started in 1Q06:Axis: 718 startsIcon at Brickell: 700 starts500 Brickell: 633 startsSkyview Lofts/Infinity: 449 startsPlaza at Brickell: 440 starts1060 Brickell: 262 starts

Condominium Units Started in Downtown Miami by Quarter The “Spike” represents sales from 2004/early 05…


About the Presenter Brad Hunter, Chief Economist/National Director of Consulting

Brad Hunter spearheads Metrostudy’s current work with the investment community and national developer/builder clients. A large part of his work lately has been with private equity funds, hedge funds, and pension fund advisors. He supervises the bulk of the company’s multi-market studies, and has orchestrated hundreds of site-specific or area-specific housing market studies over the past twenty-plus years. Metrostudy is the nation’s premier advisor on local and regional housing market conditions. With 23 years worth of experience in real estate analysis and local market economic forecasting, Mr. Hunter is a Full Member of the Urban Land Institute, has authored numerous articles and book chapters for ULI, including Market Profiles, and serves on the Housing Market Forecast Panel for the Housing Market Report. He is regularly cited in local and national journals, and has recently been featured in the Wall Street Journal and on Bloomberg News (including Bloomberg’s “On the Money” and “On the Economy” radio shows). He graduated in 1985 from the Wharton School of the University of Pennsylvania with a degree in economics and has been a guest lecturer at Harvard University. Hunter is a speaker at conferences on real estate opportunities and investing, as well as at ULI conferences, and is frequently called upon by key regulatory agencies of the U.S. government for his insights on the housing sector. Hunter has tracked and forecast housing markets and demographic/economic trends at the local level for 23 years.

Brad Hunter Chief Economist (561) 835-9235 (561) 573-8351

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