😲 Leaping Listings!

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Happy Friday Highest & Best! Today, we’re talking South Florida housing supply. There’s a lot more of it — and still not enough. Also: hotels.

Here’s the rundown:

📈Home listings are surging — good.

🤗 Fewer bidding wars for Florida homes.

🏨 Florida hotels: everyone wants one.

Let’s get to it!

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Home Listings Are Climbing Sharply. That’s a Good Thing

This week we got our quarterly look under the hood of South Florida’s housing market and here’s how it’s running:

😲 Home listings are surging everywhere. Sales are falling. But prices are not.

Because in most locations, there’s still fewer listings on the market than there were five years ago — before the pandemic-fueled migration swelled South Florida’s population with well-to-do homebuyers from other states.

In other words: while listings are climbing, they haven’t climbed enough to satisfy the post-pandemic demand. (Yet)

“In most of the markets, it’s still a deficit compared to historic norms,” said Jonathan Miller, CEO of Miller Samuel and the author of this week’s spate of Florida housing market reports, along with brokerage Douglas Elliman.

So it’s not quite this:

Here’s a snapshot of findings for the three-month period ending Sept 30:

 🏡 In Boca Raton, single-family home listings shot up 22% from last year to 730. But the median sale price of homes jumped, too — by 7.5% to $937,000. That’s the third-highest median price ever recorded in Boca.

🏡 In Coral Gables, a sought-after suburb of Miami, the number of houses and condos listed for sale surged by a staggering 72% from just a year ago. And yet there are still 50% fewer listings for purchase there today than there were in the third quarter of 2019.

🏡 Now how about Fort Lauderdale? That city was one of three in South Florida where the number of home listings today is higher than it was in 2019, before the pandemic. (7.9% higher to be exact!).

Prices are still up in Fort Lauderdale— but much more modestly: single-family homes sold for a median $560,000 in the third quarter, which is 1.8% higher than a year ago.

🏡 And check out West Palm Beach. Listings for condos and houses climbed 64% from a year ago. But single-family home prices there are still holding strong: they’re up 13% from last year to a median $549,500 — the third-highest recorded in history. (West Palm Beach condo prices, however, have slipped)

💁‍♀️ What the new supply IS doing is making the home buying experience a little less painful for those in the market — by cutting down on bidding wars and the pressure to overpay in order to get to a deal, Miller said.

“I look at it not as something to be fearful of, but something positive, for consumers to reduce the volatility in the market,” he said.

Lastly, Miller Samuel compiled this very useful chart below, which gives some pretty solid proof that context is everything. The first column, YOY1, shows by how much listings have shot up in a given town from just last year. The second column, YOY5, shows that in many locales, today’s housing inventory is far short of what was available for sale five years ago, before Covid.

⏪ Catch up on recent Highest & Best issues:

• Milton and Milestones, Oct. 11, 2024

• Go With the Flow?, Oct. 6, 2024

• Hangar Games, Sept 28, 2024

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Did Someone Say “Hotel”?

Yes, lots of people did this week. Hotels are still top-of-mind for Florida investors who are swooping in to buy them, build them, and cash out of them when the deal’s gone good.

In just the last few days:

🏌️‍♂️ A London-based real estate investor, Henderson Park, is in advanced talks to buy the PGA National Resort in Palm Beach Gardens for $425 million, Bloomberg reported. At that price, (which works out to about $1.2 million per hotel room) the sale would be among the largest real estate transactions in South Florida this year.

The resort, currently owned by Brookfield Asset Management, includes 350 rooms, 19 tennis courts and 60,000 square feet of event space. Oh, and six championship golf courses.

Brookfield acquired the property in 2018 for $232 million and invested $105 million in renovations, including the addition of two golf courses.

💰 Buyers Wanted: Owners of The Ben hotel in West Palm Beach are looking to sell it and are now accepting bids for the waterfront property starting at $1 million per room. (Sensing a price theme here?)

Greenwich, Connecticut-based Wheelock Street Capital — which bought the 208-room hotel in 2021, a year after it opened — is seeking $208 million for The Ben today. That’s nearly double the $106.4 million they paid for it three years ago.

💸 Another 1,000-footer in Miami: The brother of a prominent South Florida developer is proposing a 1,010-foot tower in the Brickell neighborhood that would include 84 hotel rooms (in addition to 560 residences and 117,000 square feet of offices).

The super-tall plan, submitted to Miami-Dade County this month by Walter Defortuna (whose brother, Edgardo, is busy with projects like St. Regis-branded condos in Sunny Isles), envisions an 81-story tower at 1414 Brickell Ave. and an adjacent lot, according to the Real Deal.

It would be a huge change for the site, which Walter Defortuna bought for $5.6 million waaaay back in 2002. Right now it’s occupied by a pair of one-story retail buildings that house a sushi bar, a steakhouse, and a nightclub.

🏗 A Kick in the Grants: Miami-Dade County officials found a way to jolt the construction of a long-stalled hotel adjacent to Miami Beach’s convention center. They offered its developers $75 million in taxpayer funds.

The county’s 13 commissioners unanimously approved that grant this week to kickstart the development of a Grand Hyatt hotel, the plans for which had stalled during the pandemic — then delayed again due to rising costs of construction and a shortfall of funds to keep up.

The developers, Terra and Turnberry, had secured $500 million in private money to build the 800-room hotel, which was initially estimated to cost $400 million, the Real Deal reported. But the costs, including labor and materials, surged by an additional $200 million, the county said in the resolution it approved to help plug that shortfall.

🤔 “I don’t like that we have to invest $75 million of the people’s money into this,” said Miami-Dade Commissioner Eileen Higgins, whose district includes Miami Beach.

But taxes generated by the future site might well make up for it, she said:

“When we look at the economic impact to our county and the tourism revenue it will generate, it is long term beneficial to bring this item.”

That’s it for today!

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