As South Florida's housing crisis enters its sixth year, steep price declines have leveled off, helping to lift the gloom that once gripped the market.
Still, experts envision more angst for sellers in 2011 as uncertainty on the job front and an avalanche of looming foreclosures conspire to keep home values depressed.
Other sectors of real estate also are projected to remain weak next year, although one analyst says condominium pricing along the coast may start to rebound.
"If we're lucky, we'll start seeing a recovery in the second half of 2012," said Lewis Goodkin, a longtime housing consultant in Miami.
Goodkin's forecast generally matches one offered by Moody's Analytics, a West Chester, Pa., data provider. It says Broward County prices for existing homes will tumble another 16 percent or so and hit bottom in the latter part of 2012.
Moody's outlook for Palm Beach County is slightly better: Prices will slide another 11 percent, reaching bottom in the second quarter of 2012.
If those predictions hold true, median prices in the two counties will have plummeted by close to 60 percent since peaking in November 2005. Palm Beach County's median topped out at $421,500, while Broward's median soared to $391,000, according to the Florida Realtors.
Demand from short-term investors and lax lending standards fueled a historic run-up in prices from 2000 to 2005, before the market tanked.
Analysts insisted the price increases were unsustainable, but few anticipated such a calamitous fall because prior to 2006, national home prices hadn't declined on an annual basis in the post- World War II era.
Cheryl Baker, a New Jersey resident who is considering a move to South Florida, said she and other buyers have to balance their concerns about further price declines with plans to live their lives.
"You can't wait around forever," she said.
Here are the 2011 outlooks for other aspects of the real estate industry:
Condos
The median prices for existing condos in Broward and Palm Beach counties stayed below $100,000 for most of 2010, but recent bulk deals by investors could help boost condo values east of Interstate 95 next year.
Bulk buyers snapped up empty condos by the dozens in a rash of deals in Broward and Palm Beach counties. The largest: A Miami company's $160 million purchase of the mortgage on Trump Hollywood, which lenders took back from the Related Group last month. Only about 10 percent of the 200 luxury units have sold.
In Palm Beach County, a private equity firm paid $117.3 million for the remaining 146 oceanfront condos at 2700 N. Ocean Drive on Singer Island in Riviera Beach. The firm brought in Ritz-Carlton to lend its name to the project, now known as the Ritz-Carlton Residences.
Peter Zalewski, principal at CondoVultures.com, a Bal Harbour consulting firm, said bargain hunters are likely to be disappointed as bulk buyers gradually increase prices.
"Now, suddenly, if you're looking to get X price for a condo, you'll have to settle for something out west," he said.
New homes
Housing starts hit bottom in South Florida in 2009, and construction activity remained mostly soft in 2010, said Brad Hunter, head of the Metrostudy research firm in Palm Beach Gardens.
Local builders press ahead, but don't expect a major turnaround in 2011. "It's pretty hard for home builders to compete with values in the used-home market," said Anthony Trella, an industry consultant in Deerfield Beach.
C.C. Devco's 1,600-home Monterra development in Cooper City is a popular draw for new buyers in Broward. Minto Communities of Coconut Creek and Centerline Homes of Coral Springs also remain active in Broward, while Toll Brothers is returning to the county with new homes after buying Parkland Golf & Country Club from WCI Communities Inc.
In Palm Beach County, construction continues at Valencia Reserve, a 55-and-over community west of Boynton Beach. Sunrise-based GL Homes sold 250 homes there this year — 27 percent of its total of 920 companywide.
In fact, GL is faring better than many builders. Through Sept. 30, privately held GL had a 41 percent increase in overall home closings, the third-best showing in the nation, according to Hanley Wood Market Intelligence, an independent real estate research firm.
GL plans to open new developments next year in Boca Raton and Naples.
Division President Marcie DePlaza said the inventory of resale homes is down in many of the company's markets. And she doesn't expect mortgage rates to increase dramatically.
While it's tougher to get loans, DePlaza insists that plenty of qualified buyers remain.
"It's not easy," she said. "But if you really work hard at giving buyers a good product, people will still come out to buy homes."
Commercial real estate
Retail, office and industrial vacancies have been rising in recent years, but that trend is ending as more tenants seek landlord concessions, such as free rent, real estate brokers say.
BGT Partners, an Aventura-based digital media advertising company, recently signed a lease to move to bigger digs at the Village at Gulfstream Park in Hallandale Beach. The retail and office center once had about 80,000 square feet of office vacancies, but by year's end it was down to about 30,000 square feet.
"Tenants are acting on their concerns that they'll miss their window of opportunity," said Jonathan Kingsley, managing director of Grubb & Ellis Co. of Boca Raton and Miami.
Commercial foreclosures likely will continue, however. Already this year, lenders took back a 137,000-square-foot former Office Depot call center in Boca Raton. An 85,000-square-foot Delray Beach retail center anchored by PetSmart and Sports Authority also is facing the same fate.
Amid the economic turmoil of the past few years, commercial property owners negotiated with lenders to avoid foreclosure. Now, in many instances, lenders realize they can do only so much, Kingsley said.
"They just can't help the borrowers any more, and they're moving forward with a true foreclosure," he said. "Over the next few years, there will be some high-quality commercial assets available."
Paul Owers can be reached at Powers@SunSentinel.com or 561-243-6529.
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