August 24, 2006
‘So Much For A Soft Landing’ In Florida
The Herald Tribune reports from Florida. “So much for a soft landing. The median price of a single-family home sold in the Sarasota region in July dropped 11 percent from a year ago and the number of homes sold plummeted nearly 50 percent, according to numbers released Wednesday. The only area in state with a greater July-to-July decline than Sarasota was Naples, at 51 percent.”
“Inventories have gotten truly out of whack. The Sarasota MLS now lists 4,615 single-family homes for sale, versus 952 in May 2005, when sales were still going strong. ‘In all price ranges, if we didn’t list another house, it would take us 23 months to sell all the inventory in the Sarasota MLS at the current rate,’ (broker) Michael Saunders said.”
The St Petersburg Times. “July brings bad news for sellers, particularly in the Tampa Bay area where bidding battles are just a fond memory for homeowners. ‘There were a lot of speculators in the market and when you take them out, the difference is pretty dramatic,’ said Bradford Monroe, president of the Greater Tampa Association of Realtors. ‘Our inventory is four times what it was back then and the number of sales has gone down.’”
“One statistic that dramatically illustrates the change in market climate is the absorption rate, sales divided by listings, a statistic that Pinellas Realtors compile. In the single-family market, the monthly absorption rate has fallen from a peak of 59 percent in June 2005 to 9 percent last month. In the condo market, the rate peaked at 62 percent in April 2005 and fell to 5 percent last month.”
The Palm Beach Post. “Existing home sales in July continued their yearlong downward trend, plunging 44 percent in Palm Beach County and 39 percent in the Treasure Coast, year over year. The number of unsold homes in Palm Beach County also continued its yearlong trend, soaring to three times the number of homes on the market in July 2005.”
“Analyst Thomas Lawler believes sellers are going to blink first. ‘Net, the Southern Florida market is experiencing a hard fall from a meteoric rise, and there is little doubt that overall prices will move lower in most of this region through at least the next several months,’ said Lawler, a former Fannie Mae economist.”
The Sun Sentinel. “For the first time since April 2000, the median price for existing single-family homes in Broward County has fallen from the previous year. ‘What it means for homeowners is that wonderful buildup of equity is starting to erode,’ said David Levin, a housing analyst in Delray Beach.”
“He doubts the slumping market has hit bottom. And with prices falling and interest rates rising, Levin, said residents shouldn’t delay in applying for home-equity loans, which are based in large part on a home’s value. ‘It would have been better to get these loans two months ago, but now is better than tomorrow,’ Levin said.”
“Jacob and Sandy Lehtio had to reduce the price of their five-bedroom Miramar home seven times before finally striking a deal for $580,000. The Lehtios listed their home for sale in September, when the market was still hot. But they now concede their asking price, $723,000, was too high.”
“Tired of carrying two mortgages, the couple were thrilled when a buyer finally stepped forward. ‘You basically have to decide when to cut your losses,’ Sandy Lehtio said.”
The Miami Herald. “This is the South Florida housing market of today: Prices are easing, sales are plunging and the inventory of unsold homes is rising ever higher. It’s a situation that continued in July, according to existing-home sales numbers.”
“Many predict sellers will eventually cave and lower prices to meet buyers now willing to wait it out for a better deal. ‘The longer it takes for sellers to recognize the market they are in, the worse the market will become,’ said broker Manuel Iraola.”
“Selling a house has come to this: offering a new X-Type 3.0 Jaguar to find a willing buyer. For five months, Victor Peralta tried to sell his four-bedroom home in Miami Shores. Twice he lowered the price, by $150,000 in all, yet only two people stopped in to see it. Now he’s dangling the keys to a $32,000 car before buyers’ eyes. ‘I had to do something,’ said Peralta, whose house now lists for $1.075 million.”
“Peralta isn’t giving up hope. ‘The market is so bad,’ Peralta said. ‘I would have open houses and no one would show up. I hope by adding the car it works. If not, I guess I will have a new Jag.’”
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