Miami Herald - October 3, 1982 - 1H HOME & DESIGN
LENDERS, BUYERS BULLISH AGAIN ON HOUSING
It's hard-to-measure, even harder-to-explain, but South Florida's real estate market is showing signs of an upturn. More buyers are out shopping subdivision models and the used home market; lenders are offering mortgages at the lowest rates in 22 months and builders are talking of starting new projects after a year of laying low. "The minute interest> rates went down, we saw a greater demand from qualified buyers," says...
Miami Herald - November 18, 1983 - 1E BUSINESS
LET THE GOOD TIMES ROLL
Florida appears to be off and running again on one of its familiar rapid growth cycles. This time, however, the state is growing in a different manner from the patterns of the past. Linked more closely than ever to national trends, Florida has become a star of the U.S. economic show rather than an extra added attraction with a special flair all its own. Economists and business researchers have determined that the Sunshine State will outpace the nation in good times and bad.
CONSTRUCTION OF HOUSING LAGS IN S. FLORIDA EXPERTS SAYS STARTS TO RISE 17% IN STATE
The housing markets of Palm Beach and Broward counties will continue their significant recovery in 1984, but Dade County will continue to lag, a prominent South Florida real estate consultant said Thursday. Over-all, housing starts in Florida will increase by 17 per cent to 181,900 in 1984, Thomas Powers, vice president and chief economist of Lewis Goodkin Research Corp. told the Economic Society of South Florida.
Miami Herald - April 23, 1983
FLORIDA LEADS RECOVERY, ECONOMIST SAYS
Buoyed by a strong rebound in housing, tourism and defense manufacturing, Florida is "leading the nation out of the recession," University of Florida Economist Henry Fishkind said Friday. "A powerful recovery is already underway" in the state, according to Fishkind, executive director of the university's Bureau of Business and Economic Research. "The stage is set for very rapid growth ... in Florida in 1983
Miami Herald - February 12, 1984
TYPES OF BUYERS CHANGING -- SO ARE HOUSES
Florida's builders could post a 17 per cent gain in housing starts this year. But the type of houses being built and the buyers most active in the market are changing. Housing analyst Tom Powers, chief economist with Goodkin Research Corp., gave these forecasts at the First Annual Southeastern Real Estate Symposium '84 held last week: * Fewer second-home buyers than in the past. * Fewer speculators. * More first-time home buyers. *
ONLY DIRECTION LEFT IS UP: FORECASTERS
Miami Herald
Prosperity may not be just around the corner, but economic forecasters are convinced the recession in Southeast Florida is about to hit bottom.
The next significant move is expected to be moderately upward. There could be a few months of sluggishness, however, before the anticipated recovery begins. "We are near a bottom," observed Merill Blanksteen, vice president and economist for AmeriFirst Federal Savings and Loan Association of Miami.
"But we'll drift for a while. I don't expect a recovery to show up before September." Raymond D. LaCombe, vice president and economist for Barnett Bank of South Florida, pored over an array of statistics and found "a few early signals" that the slump in Florida's most populous region "may be in its final stage."
HITTING BOTTOM Jack Gates, an economist with Florida Power and Light Co., predicted the recession in the state "will hit bottom in the next couple of months and we expect a recovery to begin toward the end of the year."
In the current environment of reduced business activity and somber reports of layoffs, the economists' words may sound a bit Pollyanna-ish. Their observations, however, reflect what their figures show coupled with events that are predictable in the foreseeable future.
A 10 per cent federal income tax cut and a 7.4 per cent increase in Social Security benefits will hit the national economy at precisely the same time -- July 1. Both are expected to provide a lift to the U.S. economy.
The economy of Southeast Florida has changed so dramatically in recent years that its fortunes are more closely linked with those of the nation as a whole.Less lag time Although totally unlike the hard-pressed industrial heartland of America, the Florida coastal counties that some still call the Gold Coast experience general downturns quicker than they once did. The area also emerges from declines with less lag time then previously.
The consensus view among private and government economists is that the current recession will begin fading into the national memory shortly after mid-year, helped along by the tax cut and the additional boost in Social Security benefits.
Southeast Florida will be tagging along soon after, if the projections are correct. What the area probably won't be doing, however, is streaking up as it did in the aftermath of the last big slump, which was marked by more than 100,000 empty or uncompleted housing units in the Dade-Broward-Palm Beach county population center in the middle 1970s.
Prudence in lending and developing is cited repeatedly as a major difference between this major slump and the last one. Real estate investment trusts, the financial phenomena of a decade or so ago, were competing aggressively to parcel out billions of dollars to builders and developers in the earlier period. This time, sounder financing underlies the South Florida construction industry.
Office space that was overly abundant in the early and middle 1970s is scarce today.
ONE BISCAYNE
No better example exists than Miami's tallest building, One Biscayne Tower. In 1974, shortly after it was completed, the 40- story downtown structure was 16 per cent occupied. Today, it is virtually full and new office buildings in and around downtown have had little trouble finding tenants.
"Less than 2 per cent of the space in downtown Miami's office buildings is available for lease, although, in certain suburban office centers, space is becoming available," a survey by Cushman and Wakefield concluded. "Commercial building has helped ease the situation this time," noted Blanksteen. So many large new office buildings are going up in the Miami area, however, that the seeds of overbuilding may be planted.
"Class A office space in downtown Miami and on Brickell Avenue is at full occupancy and will remain so for the next 12 months," the Cushman and Wakefield study said. "After that time, however, about five million square feet of space will be delivered within a relatively short period, raising the prospect that the current shortage may become a surplus in 1984."
HOUSING SLACK
While new offices are sprouting all around South Florida, the building of new residential units has slackened severely."We don't have a large surplus," commented Gates of FPL. "When the economy recovers and population growth accelerates, this housing surplus could turn into a shortage rather quickly."
PRIME LOWER
Declining interest rates helped fuel the strong recovery that began late in 1975 and continued on an inflationary wave until a year or so ago. The prime bank lending rate was 7 per cent when the upswing began in the fall of '75 and it fell even lower in subsequent quarters.
The upswing that carried the cost of money into the high double digits did not start until mid- 1977. No sharp rate decline is foreseen when the economy starts its expected sluggish path out of the present morass. "We need a sizeable decline in rates to get things moving," said Charles Babcock.
Interest rates have proved so unpredictable in recent years that few forecasters are willing to be bold in this field. However, the very fact that there is a 10-point gap between prevailing term borrowing costs and the annual inflation rate encourages some economists. Earl Foster, an investment counselor and manager who was an economist for Southeast Banking Corp. for 10 years, pointed out that the customary spread is about 3 points. I
NTEREST RATES FALL He said one bellwether rate -- the charge for federal funds, or overnight borrowing between banks -- could be down to 10 per cent from the present 14 by the end of this year. "Interest rates go down after a recession, not during it," he said. Gates of FPL agreed, saying "short-term rates will come down 3 to 4 points by the fall of the year." Gates suggested that mortgage rates will also come down "and that will help to eat up the surplus housing on the market." "All the structural underpinnings are present for a healthier economy in Florida," declared Koch of the Federal Reserve.
"Once we have a resolution of the federal budget problem, we should see a sharp decline in interest rates." There was a move toward budget accord in Congress late last week as the House of Representatives adopted a Republican- sponsored measure calling for a deficit just below $99 billion. "Economic recovery will be easier once the budget problem is resolved and rates come down," said Koch, who cautioned that the trip back from the recession is likely to be slow and rocky.
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