FORT LAUDERDALE: “THE VENICE OF AMERICA”
TWO MAJOR POSITIVES THAT ARE BOOSTING THE
LAS OLAS CONDO MARKET
By John D'Angelo
First, is tourism – we have already hit an all time high of 22.9 million Florida visitors annually in the 3rd quarter of 2013. In 2012 a total of 12 million tourists brought $9.8 billion in revenue to Broward County. This directly impacts the real estate sector and the spin-off is seen in the rise of Fort Lauderdale condominium sales.
International visitors are a major driver in the South Florida real estate market. Increased international flights to South Florida has fueled tourism and the arrival of tourists with real estate on their radar seeking second homes and investment opportunities. Fort Lauderdale draws a sophisticated and affluent visitor attracted to the carefree lifestyle of the “Venice of America” and its luxury real estate market. The U.S. dollar is inexpensive in comparison to the currencies of other countries. That in turn, offers an increase in value to the buyer. While we have read about the financial struggles of Europe, Fort Lauderdale’s international visitors are coming from Russia as well as from the two strongest European economies, Germany and England. Most significant though is the real estate investor from North America (U.S. and Canada) and Latin America.
The season has begun and tourists are now arriving in Fort Lauderdale. In no other place is that more obvious than on Las Olas, where restaurants, shops and surrounding streets are inundated with visitors. This is always welcomed by business, translating to more exposure and therefore more demand for high-rise condos with easy access to downtown.
The second major event is the drop in inventory since the beginning of the mortgage crisis. We all know about the foreclosure and short sales that prevailed until just about a year ago. As those properties sold off, there was a slow rise in demand for housing, accelerating the price recovery in the Florida market.
There is now a steady decline in inventory of luxury high-rise condo units in the Las Olas area. As the snowbirds begin their migration south and start to consider a second home, they may find that sellers are commanding and receiving reasonable asking prices reflective of the current market.
The National Association of Realtors reports, “the low number of homes for sale is pushing home prices up to double-digit gains year-over-year.” According to Lawrence Yun, NAR’s chief economist, “Low inventory is holding back sales while at the same time pushing up home prices in most of the country.”
In the Las Olas area there is little inventory. This has driven purchase prices up creating a positive uptick for investment returns. The new downtown condominium construction that is expected over the next several years will relieve the pressure on inventory.
The sales statistics demonstrate today’s positive market trends and provide a convincing reason for optimism in the Fort Lauderdale real estate market. There has been a considerable rise in sales, we have seen a run up in prices and the numbers overall demonstrate that the market has stabilized.