From SW Florida: Lee home sales peak
December sizzles, but downward trend likely
By Dick Hogan
Originally posted on January 26, 2006
Sales and prices of existing Lee County single-family homes rose sharply in December in contrast to Collier County and the rest of the nation.
The median price of a house hit $322,300, up 46 percent from a year ago when it was $221,200. Figures from the Florida Association of Realtors indicated 1,084 homes were sold, up from 872 a year earlier.
In Collier County, home sales dropped 31 percent, but the median price increased 39 percent, from $355,400 to $492,300.
Nationally, existing-home sales dropped 5.7 percent and the median price rose 10.5 percent to $211,000, according to the National Association of Realtors.
Experts warned a tighter market probably lies ahead in Lee County.
One Fort Myers homeowner said he has been glad to see the run-up in prices and has put his house on the market so he can buy a newer one that is exactly what he wants.
Paul Henderson, former president of Caesars casino in Atlantic City, N.J., bought his riverfront house in 2004 for $862,500 and has it on the market for $1.59 million.
He thinks he'll get that because of the huge appreciation in prices over the past year for riverfront property, but he doesn't expect the boom to last forever.
"I think it was inevitable," he said. "Everything is going to level off eventually."
His real estate agent, Trae Zipperer of RE/MAX Realty Group, said Henderson should get his price. "I think it's the best deal on the waterfront."
Others who bought at the height of the rising prices may not be so lucky, said Brett Ellis of RE/MAX.
Lots in Lehigh Acres that would have gone for $55,000 earlier this year, for example, are available for less. "Some of them are $40,000, and they've been sitting there for 120 days."
More than 400 houses are going on the market each day, Ellis said, but only about 90 are being sold. "We're starting to see hundreds of price reductions a day."
December's strong showing probably is a carry-over from deals started when the market was stronger several months ago, he said.
The strong price increase in Lee County probably had more to do with weakness in the lower ranges of the market, Ellis said. With fewer inexpensive houses selling, the median price was higher.
Still, Lee County's 46 percent price increase was the highest in the state. Only Ocala was close, at 44 percent.
Sarasota-Bradenton saw a drop in sales of 42 percent; the median price, however, rose 25 percent from $276,500 to $344,300. Charlotte County's median price rose 26 percent to $223,800, but sales fell 25 percent to 278.
Broward County home sales dropped 41 percent, while the median price increased from $302,800 to $369,000.
Nationally, purchases declined to a 6.6 million annual rate from November's 7 million. Sales, which have been slowing from the record monthly pace reached in June, still finished 2005 at an all-time high.
While economists forecast a gradual decline in sales, December's slump raises the risk the slowdown could accelerate and become an even bigger drag on the economy this year.
The drop puts Federal Reserve policymakers on notice that more interest rate increases may not be necessary, according to Christopher Low.
"Higher rates at this point risk turning the gentle decline of the second half of 2005 into a housing rout in 2006," said Low, chief economist at FTN Financial in New York. Recent housing reports "make the most compelling argument for the Fed to stop raising the overnight rate."
A rise in the supply of homes relative to sales, less home price appreciation and higher mortgage rates also limit may refinancing, which has helped drive spending and economic growth, economists said.
— Bloomberg News contributed to this report. |
