Housing Doom Housing Bubble Blog

More bad news in the Florida condo market: [Thank you to John Hernandez who forwarded me his article]

The developers of Downtown Dadeland are walking way from the massive mixed-use project in Kendall and handing over the unfinished complex to construction lender Goldman Sachs Commercial Mortgage.

Gulfside Development principals Jackson Ward and Stefan Johansson say they can no longer afford to make payments on the $224 million construction loan and won’t fight a foreclosure suit filed two weeks ago in Miami-Dade Circuit Court.

The project’s failure is the largest yet in the current real estate downturn, which has hit the overdeveloped condo market especially hard.

The development across the street from Dadeland Mall was planned to have 416 condos and 125,000 square feet of retail space in seven mid-rise buildings. Four of the towers were completed this year, but three still need some minor construction work before closings can start. The project was the centerpiece of redevelopment along Southwest 88th Street near U.S. 1.

“If not the largest one, it is one of the largest defaults in all time in Miami-Dade County,” said David Dabby, president of Coral Gables-based real estate research firm Dabby Group.

Defaults during the savings and loan crisis in the late 1980s and early 1990s were generally under $50 million, he said.

Read the rest of this entry »

The headline this morning from Yahoo Finance:  [Thanks L!]

New Home Construction Up Last Month

I’ve got to admit, I read that and thought "What in the world are they thinking?"  Then I read the Census report.  I still wonder why builders maintain the level of production they do, but this report at least, shows that they continue to slow:

WASHINGTON (AP) — Construction of new homes and apartments rebounded in October by the largest amount in eight months but the unexpected increase was not viewed as a signal of a housing turnaround.

The Commerce Department reported Tuesday that housing construction rose by 3 percent in October, the first increase after three months of declines and the biggest advance since a 6 percent rise last February.

However, all of the strength came in the volatile apartment sector, which jumped by 44.4 percent. Construction of single-family homes fell for a seventh straight month, declining by 7.3 percent in October compared to September.

Here’s the official wording from the Census Bureau:

Privately-owned housing starts in October were at a seasonally adjusted annual rate of 1,229,000. This is 3.0 percent (±10.6%)* above the revised September estimate of 1,193,000, but is 16.4 percent (±8.0%) below the revised October 2006 rate of 1,470,000.

Single-family housing starts in October were at a rate of 884,000; this is 7.3 percent (±10.1%)* below the September figure of 954,000. The October rate for units in buildings with five units or more was 312,000.

So the rise was in the more volatile month-to-month, and within the margin of error.  Year over year we are obviously looking at a decline, particularly for single family homes.

[Graph from U.S. Census Bureau- sorry about the resolution, but I start getting complaints from readers when images are over 600 pixels.]

Read the rest of this entry »