Property values in Broward County are rising like the surf at high tide and new construction is fueling the current trend.
The county’s Property Appraiser’s Office has released preliminary 2017 values that are used by local governments to set their tax rates and budgets for the coming year.
Topping the list in the value rush are Hollywood and Dania Beach, followed by Fort Lauderdale and Parkland, both of which have consistently been at the top of the list over the last several years.
Fort Lauderdale and Parkland offer a tale of two cities: Fort Lauderdale has an upscale beach, high-rises, thriving downtown and a population of 180,000. Parkland doesn’t have a beach or downtown and a population of 30,000, but it has vacant land to build on.
“Developers are purchasing large agricultural parcels in Parkland and developing them into single-family home communities,” Property Appraiser Marty Kiar told the Sun Sentinel recently.
The area has been fertile ground for builders that include Lennar, Toll Brothers and CalAtlantic Homes. Other projects include Parkland Golf & Country Club, Watercress.
Parkland is the last area left in Broward with land for developments, according to analysts.
Moreover, construction in Parkland fueled, in large part, a 52 percent increase in the number of Broward homes started during the first quarter of 2017.
Broward Commissioner Michael Udine, a former mayor of the city, pointed out that the land in Parkland is desirable, with many people looking to locate in Northwest Broward and Parkland.
“They love our open space, great schools and family-friendly environment,” he said. “People are moving from within Broward and many from out of state.”
According to new data released from the county Property Appraiser’s Office, Broward’s new construction so far this year is at $2.4 billion, which is $111 million more than the amount listed in the initial report that came out in May. The county’s overall taxable value came in at $177.3 billion, up $17 million from the May report.
For comparison, Miami-Dade County reports an overall taxable value of $272.4 billion, up 8.4 percent, with $8.2 billion in new construction. In Palm Beach County, property values reached $176.8 billion, a 7.3 percent increase. New construction in that county totals 2.7 billion.
Builders started construction on 441 homes in Broward County during the first quarter of the year, up 52 percent from the same period a year ago, according to data from the Metrostudy research firm. There were 446 starts in Palm Beach County, down 21 percent from the first quarter of 2016. Starts fell 8 percent in Miami-Dade to 705 during the quarter.
The pace is much different than it was a decade ago, when builders frequently kicked off construction of 2,000 homes in a quarter.
One problem encountered by builders in Broward is a shortage of lots, leading to rising land costs. Labor shortages also continue to pose headaches for builders in Broward and elsewhere.
A result is that agents find themselves in a competitive market for existing properties and home prices continue to rise in Broward and Palm Beach ZIP codes.
Demand will keep prices elevated, particularly in neighborhoods with nice starter homes, according to Gary Lanham, a real estate agent for Coldwell Banker. He pointed out that a lot of new construction in South Florida today is focused on a wealthy clientele as builders deal with the rising land costs and labor issues.
“I think what is going on is that first-time buyers are competing for a lack of inventory,” he said. “It’s not only a lack of inventory, it’s a lack of affordable inventory.”
All of which can create challenges for agents in this markets, and it is imperative to position yourself to capture new business and get an edge on your competitors by being prepared and informed.