The Calm Before The Selling Storm
- Sep 12, 2008
According to recent National Association of Realtors (NAR) predictions, the level of overall home sales–including multi-housing–is forecast to show little movement in the coming months.
The NAR’s Pending Home Sales Index dropped 3.2 percent from June to July–even with June’s reading being revised to 89.4. (The original reading was thought to be 89.0.)
However, the anticipated calm period isn’t necessarily a bad thing.
Sales rise, and sales decline–but when considering the big picture, many in the industry feel home sales will soon increase.
NAR’s Managing Director of Quantitative Research Jed Smith told MHN that while sales fluctuate from month to month, the market in general has bottomed out, is stable–and ready to rise.
Multi-housing market results would seem to echo that sentiment.
- Yes, sales in the overall U.S. housing market have fallen. In the multi-housing market, condo and co-op sales are down 18.6 percent from 2007 levels.
- So have some multi-housing prices. And as of July 2008, pre-existing condo and co-op prices for the overall market are down 2.7 percent from last year.
- But they haven’t fallen everywhere. In some areas where the market didn’t need to undergo a severe correction–like the Northeast and Midwest, where prices remained relatively steady during the housing boom–condo prices are actually up.
Despite overall market struggles, there continue to be bright spots.
Take, for example, the new, $350 million, seven-acre mixed-use Old Spanish Village development in Coral Gables, Fla.
Florida’s condo market hasn’t had it easy. According to the Florida Association of Realtors, Florida condo prices have dropped 13 percent in the past year alone, falling from $194,100 to $168,500 in July.
And yet, despite statewide condo price declines, interest–and faith–in the market is strong enough to make a condo-intensive project like Old Spanish Village a reality.
The community will feature three mid-rise condominium buildings and 38 villa residences, priced from $500,000 to $3 million. The village will also house 250,000 sq. ft. of commercial space.
The response thus far has been amazing: Half of the condos sold at the pre-construction stage, says Jorge L. Hernandez, founder of Jorge L. Hernandez Architect, the firm that is designing Old Spanish Village.
Projects of this scope–new developments that will create entire new communities upon completion–indicate an ongoing confidence in the multi-housing market.