Are we back to the future?

Notes from 2012 CCIM Commercial Real Estate Outlook Conference

Wednesday, Jan 18, 2012 @ The Coral Gables Country Club

Presentation:  Are we back to the Future – Diane Gilbert

Sub Heading – We tend to forget that history repeats itself again and again and again….

Giving this presentation was Diane Gilbert for Mike Cannon of Integra Realty Resources.

For those of you who have seen his presentation before, it’s the same every year but has a good message.  We continue to make the same mistakes with South Florida Following a Boom-Bust cycle.

We are currently back to the same values we had in 2002.  This is worst recession since 1948.

Miami-Dade Housing Market – The data only went up to 2010 so we need an update but in 2010 Median Prices were down 40-50% from 2007 Peak.  Volume in used home and condos was showing an increase of over 5,000 units.  New homes and condos were flat at about 5,000 units.  The median sales price as of October 2011 was about $140,000 a 5.4% decrease from 2010.

Foreclosure Filings in Miami – Typically there are +/- 10,000 foreclosures each year.  This jumped up in 2007 to 27,000, 56,000 in 2008 and 64,000 in 2009.  We have started to see a slight decrease to 45,000 in 2010.  No numbers for 2011.

Unemployment – Worst since 1983 and has lasted longer.

Interest rates – Lowest Rates in last 50 years!

Deepest recession – This is the deepest recession but check out the comparisons for yourself: http://www.minneapolisfed.org/publications_papers/studies/recession_perspective/index.cfm

Does history repeat itself? Look at the news clippings from the 1950s to present day (starting at slide14)

Summary

The direction of the market will depend upon:

  • Renewed sound government policies
  • Availability of Capital investment and financing
  • Population growth (net in-migration)
  • Continued business expansions and re-employment

Over the next 12-18 months, all sectors of real estate should continue its workouts as the financial and banking sectors hopefully stabilize.

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