South Florida housing market remains conflicted: Sales soaring but prices plunging
Published: 04/24/2009 by By Paul Owers | South Florida Sun-Sentinel
South Florida housing market remains conflicted: Sales soaring but prices plunging
Cash buyers and investors are returning to the market. And first-time buyers are taking advantage of the bargains, seller concessions, mortgage rates of below 5 percent and an $8,000 tax credit that expires Dec. 1.
By Paul Owers | South Florida Sun-Sentinel
8:46 PM EDT, April 23, 2009
Home buyers are seizing the opportunities in South Florida's housing market as deeply discounted prices and historically low mortgage rates drive sales. Many sellers, however, are reeling, not able to unload their homes for close to what they paid.
Until the sharp price declines ease - and that may take awhile - the region's housing market won't begin to recover from a slump that's nearing 40 months.
Sales of existing homes rose 47 percent in Broward County Click here for restaurant inspection reports in March, to 680 from 463 a year ago, the Florida Association of Realtors said Thursday. The median price plunged 30 percent, to $219,500 from $311,400 last year.
In Palm Beach County, sales rose 20 percent, to 685 from 572 a year ago. The median price plunged 29 percent, to $228,100 from $320,200 last year.
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Cash buyers and investors are returning to the market. And first-time buyers are taking advantage of the bargains, seller concessions, mortgage rates of below 5 percent and an $8,000 tax credit that expires Dec. 1.
"The combination of much lower home prices and record low interest rates represents affordability that home buyers haven't seen in a long, long time," said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach. "Even in a lousy economy, that will add a boost to home sales for the balance of 2009."
Still, the supply of available homes in South Florida, while decreasing, remains at a high level, weighed down by a steady stream of foreclosures and short sales.
Broward County has 28,898 homes, townhouses and condos for sale, down 19 percent from the end of November, according to Condo Vultures, a Bal Harbour-based real estate consulting firm. Palm Beach County has 26,808 properties, a 10 percent dip.
When banks slash prices on distressed properties, it reduces the values of homes nearby. That, in turn, feeds the foreclosure cycle. The price declines lead to homeowners walking away, frustrated that they owe more than their properties are worth.
Moody's Economy.com, of West Chester, Pa., says Broward's median home price might not bottom out until falling below $130,000 - which would mean a decline approaching 70 percent from the November 2005 peak of $391,100.
Palm Beach County's median is expected to bottom out in the $150,000 range – roughly a 65 percent drop from the 2005 peak of $421,500.
"We don't think house prices will rise in a meaningful way until the end of 2011 or toward the beginning of 2012," said Chris Lafakis of Economy.com.
Meanwhile, the sales and price trends held true for the two counties' existing condominium markets in March.
Broward sales rose 28 percent, while the median price plummeted 40 percent to $82,100. Palm Beach County sales increased 17 percent, while the median dropped 33 percent to $99,800. That's the first time it has been under $100,000 since the Realtors' group started tracking condo sales in 2006.
Rising unemployment is expected to affect housing, particularly people who already live here and want to move into larger homes. But for now, at the height of the spring home-selling season, real estate agents across South Florida report increased showings and more interest from buyers as prices fall.
Agent Randy Bianchi said he had four showings on a waterfront home Thursday. "I haven't had four showings on it in three years," he said.
Lewis Lopater recently bought on a three-bedroom house in Palm Beach Gardens. He paid $174,000 for a home that was listed last summer for $229,900.
Lopater and his wife, Dawn, have a monthly mortgage payment of about $1,400, only $200 more than they paid in rent.
"It's well worth it to have a fenced-in back yard and a piece of the pie, so to speak," said Lopater, 48, a father of two and a food service employee at Boca Raton Community Hospital. "I really lucked out."
Nationally, home sales fell 3 percent from February. The median sales price plunged to $175,200, from $200,100 a year earlier. In Florida, sales rose 30 percent, while the median dropped 30 percent to $141,300. The median means half sold for more, half for less.
"The general public is starting to get it, that it's a good time to buy," said Michele Bellisari, an agent in Broward and Palm Beach counties. "Buyers are starting to have more
Home buyers are seizing the opportunities in South Florida's housing market as deeply discounted prices and historically low mortgage rates drive sales. Many sellers, however, are reeling, not able to unload their homes for close to what they paid.
Until the sharp price declines ease - and that may take awhile - the region's housing market won't begin to recover from a slump that's nearing 40 months.
Sales of existing homes rose 47 percent in Broward County Click here for restaurant inspection reports in March, to 680 from 463 a year ago, the Florida Association of Realtors said Thursday. The median price plunged 30 percent, to $219,500 from $311,400 last year.
In Palm Beach County, sales rose 20 percent, to 685 from 572 a year ago. The median price plunged 29 percent, to $228,100 from $320,200 last year.
Video
Related links
*
Affordable housing Photos
*
Priming your home for sale Photo
*
Promising housing program falls short of expectations
*
Home sales Photo
*
Housing: Pending sales to rise
*
South Florida home sales spike in February
*
Coalition to press for more affordable housing
*
Photo
*
Affordable housing crunch persists for poorest
*
Finding bargains in the housing market Video
*
VIDEO: Affordable housing in Palm Beach County VIDEO: Affordable housing in Palm Beach County Video
*
VIDEO: Affordable housing in Broward County Video
Cash buyers and investors are returning to the market. And first-time buyers are taking advantage of the bargains, seller concessions, mortgage rates of below 5 percent and an $8,000 tax credit that expires Dec. 1.
"The combination of much lower home prices and record low interest rates represents affordability that home buyers haven't seen in a long, long time," said Greg McBride, senior financial analyst with Bankrate.com in North Palm Beach. "Even in a lousy economy, that will add a boost to home sales for the balance of 2009."
Still, the supply of available homes in South Florida, while decreasing, remains at a high level, weighed down by a steady stream of foreclosures and short sales.
Broward County has 28,898 homes, townhouses and condos for sale, down 19 percent from the end of November, according to Condo Vultures, a Bal Harbour-based real estate consulting firm. Palm Beach County has 26,808 properties, a 10 percent dip.
When banks slash prices on distressed properties, it reduces the values of homes nearby. That, in turn, feeds the foreclosure cycle. The price declines lead to homeowners walking away, frustrated that they owe more than their properties are worth.
Moody's Economy.com, of West Chester, Pa., says Broward's median home price might not bottom out until falling below $130,000 - which would mean a decline approaching 70 percent from the November 2005 peak of $391,100.
Palm Beach County's median is expected to bottom out in the $150,000 range – roughly a 65 percent drop from the 2005 peak of $421,500.
"We don't think house prices will rise in a meaningful way until the end of 2011 or toward the beginning of 2012," said Chris Lafakis of Economy.com.
Meanwhile, the sales and price trends held true for the two counties' existing condominium markets in March.
Broward sales rose 28 percent, while the median price plummeted 40 percent to $82,100. Palm Beach County sales increased 17 percent, while the median dropped 33 percent to $99,800. That's the first time it has been under $100,000 since the Realtors' group started tracking condo sales in 2006.
Rising unemployment is expected to affect housing, particularly people who already live here and want to move into larger homes. But for now, at the height of the spring home-selling season, real estate agents across South Florida report increased showings and more interest from buyers as prices fall.
Agent Randy Bianchi said he had four showings on a waterfront home Thursday. "I haven't had four showings on it in three years," he said.
Lewis Lopater recently bought on a three-bedroom house in Palm Beach Gardens. He paid $174,000 for a home that was listed last summer for $229,900.
Lopater and his wife, Dawn, have a monthly mortgage payment of about $1,400, only $200 more than they paid in rent.
"It's well worth it to have a fenced-in back yard and a piece of the pie, so to speak," said Lopater, 48, a father of two and a food service employee at Boca Raton Community Hospital. "I really lucked out."
Nationally, home sales fell 3 percent from February. The median sales price plunged to $175,200, from $200,100 a year earlier. In Florida, sales rose 30 percent, while the median dropped 30 percent to $141,300. The median means half sold for more, half for less.
"The general public is starting to get it, that it's a good time to buy," said Michele Bellisari, an agent in Broward and Palm Beach counties. "Buyers are starting to have more
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