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Broward, Palm Beach home sales, prices still slumping

Credit, foreclosure woes hurt region

By Paul Owers | South Florida Sun-Sentinel

10:31 PM EDT, April 22, 2008

South Florida's tattered housing market is stumbling into the spring selling season, with any hope for a recovery still months away, experts say.

Prospective buyers are struggling to qualify for mortgages as lenders continue to tighten credit standards. And the rise in Foreclosure filings across the region is helping drag down home prices.

"I still think we'll be going through this in 2009," said Brad Hunter, a housing analyst in West Palm Beach.

Real estate agents and analysts say the South Florida market hasn't reached bottom yet, but they are at least encouraged that inventory of unsold properties across the region appears to be stabilizing.

That median price of an existing Broward County home last month was $311,400, down 16 percent from $372,400 in March 2007, the Florida Association of Realtors said Tuesday.

The median had declined from January to February but inched up 1 percent from February to March. The median means half sold for more and half sold for less.

In Palm Beach County, meanwhile, the median price of an existing Palm Beach County home last month was $320,200, down 15 percent from $375,100 in March 2007, the Florida Association of Realtors said Tuesday.

The median had inched upward there from January to February but fell 7 percent from February to March.

Sales of existing homes are increasing compared with the last two months but still are off last year's pace. There were 463 homes sold in March, up 29 percent from February but down 23 percent from 601 a year ago.

Agents usually are at their busiest during March, April and May, as families with children buy and sell homes so that they can be in place for the next school year.

But the spring season is off to a slow start, despite mortgage rates at a shade below 6 percent and the potential for property tax breaks and price cuts in property insurance.

"The economy is definitely affecting people's decisions," said David Dweck, an agent in northern Broward and Palm Beach counties.

Meanwhile, condominium prices continue to plummet in Broward. The median price of an existing condo last month was $137,000, a 30 percent drop from $195,500 a year ago. Existing condo sales in March fell 8 percent, to 611 from 663 last March.

"Condos are where you saw a lot of the speculation take place," said Mike Larson, a housing analyst with Weiss Research in Jupiter. "So it makes sense that's where we're seeing the sharpest price declines."

Although the housing market across South Florida remains soft, agents insist buyers are willing to commit, albeit at the right price.

"It's comforting that the phones are ringing, and showings are taking place," said Richard Barkett, chief executive of the Realtor Association of Greater Fort Lauderdale.

"With people who are reasonable, their places will sell," said Patti Seward, an agent for Campbell & Rosemurgy in Broward and Palm Beach counties.

Seward's client, Allison Perrine Cabaniss, recently paid $730,000 for a four-bedroom house in Boca Raton that she says easily would have fetched more than $1 million during the housing boom of 2000 to 2005. She turned around and knocked $109,000 off the price of her two-bedroom penthouse Boca condo, and it sold last month for $550,000.

Cabaniss, 33, a freelance editor and aspiring author, says homeowners shouldn't necessarily be afraid to buy another property before selling their existing one.

"Go put the cart before the horse," she said. "If you go out and find a great deal, it gives you more leeway on what you can sell your other house for."

Statewide, existing home sales declined 26 percent in March from a year ago and the median price of $205,600 was off 15 percent. Palm Beach County sales dropped 21 percent, while the median dropped 15 percent to $320,200. The median means half sold for more, half for less.

The National Association of Realtors said sales of existing single-family homes and condos dropped by 2 percent nationwide in March to a seasonally adjusted annual rate of 4.93 million units.

The median price of a home sold last month dropped to $200,700, a decline of 7.7 percent from the median price a year ago. That was the second-largest year-over-year price decline dating to 1999.

Still, the federal government's intervention into the housing slump and mortgage crisis is seen as a positive sign for the nation and South Florida.

"I think conditions are starting to come together for a recovery down the road," Weiss' Larson said.

Reprinted with permission from Sun-Sentinel. Paul Owers can be reached at powers@sun-sentinel.com or 561-243-6529.

Prices, sales of existing homes in Broward County continue slide

Prices, sales of existing homes continue to plummet

By Paul Owers | South Florida Sun-Sentinel

February 26, 2008

Prices and sales of existing homes plummeted last month as South Florida's housing downturn stumbled into a third year.

Broward County's median price fell 14 percent in January, to $314,200 from $364,500 a year ago, the Florida Association of Realtors said Monday.

Sales tumbled 33 percent, to 307 from 458. It was the fewest homes to change hands in any month countywide since the Realtors' group started releasing monthly housing statistics in 1994.

The housing malaise also was evident in Palm Beach County, across Florida and the country. The National Association of Realtors said existing home sales fell to the lowest level in nearly a decade in January while the median price for a home, $201,100, dropped for the fifth consecutive month.

South Florida's housing slump is the worst in at least 30 years, and analysts don't see the market improving before 2009. Lenders are tightening standards and not offering so-called subprime loans and other risky mortgages, which is shrinking the pool of qualified buyers.

What's more, the expected rise in foreclosures this year will add to the glut of homes already for sale. Last month, 2,745 Broward homeowners were notified by their lenders that they intend to take back the properties, nearly triple the 949 from a year ago, according to Realestat.com, a Plantation-based research firm.

"The foreclosures are going to continue to depress home prices," said Brad Hunter, a housing analyst with Metrostudy in West Palm Beach. "So I think 2008 will still be a fairly soft year."

Many people who don't have a compelling reason to buy now are holding off, waiting for the housing boom's inflated prices to keep falling to more reasonable levels, said David Levin, a Delray Beach-based housing analyst.

"Housing prices in [Broward] remain unaffordable for the vast majority of the people who work here," Levin said. "If you don't have to get your kid into that middle school, why knock yourself out and buy?"

Broward's existing condominium market also is in free fall. The median price slid 23 percent in January, to $153,000 from $199,200. Sales declined 26 percent, to 411 from 556. The median means half sold for more, half for less.

Ken and Mindy Rohlman recently sold a South Florida condo for $300,000 and bought a four-bedroom house with a pool nearby for $375,000. The house was priced at $450,000, after the owner had turned down a $550,000 offer last year.

Still, certain sellers are reluctant to drop their prices because they need to get a set amount of money to put down on another property. But those sellers won't have to spend as much as they once thought to buy other homes, Ken Rohlman said.

Also, homes in good condition that don't sell almost certainly are overpriced, Rohlman said. His condo generated little interest for more than two years, and he acknowledges now that he was asking too much. He finally reduced the price twice and had 10 showings in two weeks.

"When you get to the right price, there's no doubting it," said Rohlman, 32, a sales representative. "When I looked around, I saw much cheaper, more reasonable prices."

The property tax amendment approved by Florida voters on Jan. 29 has had little effect on the market so far, said Scott Agran, president of Lang Realty, which sells in Broward and Palm Beach counties. The measure is designed to reduce property taxes for people who have homestead exemptions and give them the chance to take their accumulated tax savings when they move to a new property within the state.

Homeowners still are trying to digest what the amendment means for them, but it at least is generating a positive sentiment among prospective buyers, he said.

"They're waiting for the proverbial bottom [of the market], which they're not going to be able to predict," Agran said. "But people who buy today and get a reasonably good deal will make a lot of money in five or six years from now."

Reprinted with permission from Sun-Sentinel. Paul Owers can be reached at powers@sun-sentinel.com or 561-243-6529.

Rate cut not a quick fix for housing slump

Harriet Johnson Brackey | Personal finance

December 16, 2007

The housing market will not recover because the Federal Reserve cut a key short-term interest rate last week.

When there's a boom gone bust, it takes time and confidence on the part of buyers before the situation can stabilize. A single rate cut can't change that.

Fix the housing mess and do it fast — that's what all South Floridians would like. But we're not going to get that. This story is not sweet and the time frame is not short.

Here's what some analysts say is ahead:

Price cuts

Moody's Economy.com last week cranked out a new housing forecast that pushes back the time when we can expect the market to begin recovering and spells out how much South Florida homes are expected to go down in value before the market stabilizes.

For Broward County, Moody's Economy.com projects the median single family home price will fall 14.4 percent from the peak, which was at the end of 2005, to the trough at the bottom of the market, which the firm says will come in the fourth quarter of next year.

For Palm Beach County, a 15.9 percent peak-to-trough decline. The peak was at the end of 2005, the trough will come in the second quarter of next year.

For Miami-Dade County, a 15.4 percent peak-to-trough decline. The peak was at the start of 2007 and the trough will come in the fourth quarter of next year.

All of which means that South Florida will be going through the bust and bottoming process on about the same schedule as the rest of the nation, which is expected to hit its housing trough in the fourth quarter of 2008. But South Florida's expected price cuts will be steeper than the 12.4 percent expected nationwide.

Palm Beach County will begin to recover more quickly than the other two South Florida counties because "it's not as overbuilt as the others," says Chris Lafakis, associate economist at Moody's Economy.com.

No appreciation

Wachovia Senior Economist Mark Vitner, who along with analyst Adam York put out their own housing forecast last week, is looking for even steeper declines in home values. He says it'll happen in two parts.

In South Florida, Vitner expects a total drop in home values of 30 percent in some markets, such as Fort Lauderdale. That would result from an outright 15 percent price decline and another 15 percent lost to flat home prices for two years once the market hits bottom.

For all of Florida, Vitner expects a 20 percent drop in home values, half of it in price declines and half in the lack of appreciation over two years.

It will take until early 2010 before all the inventory of houses on the market is cleared out.

"We will not see the housing market back in balance before the end of this decade," he said. "And I don't think we'll see the Florida housing market return to conditions anybody would refer to as strong until 2011 or 2012."

Pain, but not recession

The pain in housing has spread. Florida's sales tax revenues this year through October are 6.2 percent lower than last year. The number of unemployed Floridians in October was 33.2 percent higher than last year. Consumer confidence has dropped.

But housing is not everything in this economy. More people are working this year in Florida than last year, despite the rise in unemployment. Personal income in Florida is almost 7 percent higher than last year. Exports are growing at a fast pace and tourism is doing well.

Most forecasters, including the National Association of Business Economists, are looking for slow growth ahead, not doomsday.

"We're not even close to a recession," Vitner said. "But we're facing a very challenging environment."

And don't overlook this

The Standard and Poor's/Case-Shiller Index, which measures home values in major metro areas, shows that the value of an average home in South Florida — Broward, Miami-Dade and Palm Beach — rose 181 percent from 2000 to 2006.

That was the largest gain of any metro area measured.

That gain is extraordinary for another reason. Normal is a gain in home prices of just under 5 percent a year, which was the national average from 1980 through 2002, according to the Office of Federal Housing Enterprise Oversight.

Since 2006, the average value of a house in South Florida has fallen by 11 percent through September.

The gain was huge and the drop is small. The average South Florida home, then, is still worth far, far more than seven years ago.

By comparison, in the same period, on a monthly basis, the Dow Jones industrial average produced a 42 percent total return, the Standard & Poor's 500 an almost 20 percent return and the Nasdaq lost money, producing a negative 27 percent total return.

Even if values go down from here, a South Florida house, for the owners who have been able to hold on for the long term, has been a great investment.

Reprinted with permission from Sun-Sentinel. Harriet Johnson Brackey can be reached at hjbrackey@sun-sentinel.com

The big picture

181%

Average increase in home value in South Florida from 2000 to 2006.

11%

Average decrease in home value in South Florida through September.

5%

Average amount a home appreciates each year nationally

Broward home prices stall as slump intensifies

By Paul Owers | South Florida Sun-Sentinel

November 29, 2007

Broward County existing-home prices remained tepid in October, and analysts say sellers should brace for more hardship ahead as the housing slump intensifies.

"It's uncomfortable, but it makes sense," said David Levin, a housing consultant in Delray Beach. "We have to undo the excesses of our recent buying binge."

Short-term investors and lax lending standards fueled a historic run-up in prices from 2000 to 2005 before the market faded.Some predicted that the downturn would begin to ease by now, but instead it was exacerbated by the mounting foreclosure and credit crises during 2007. In fact, experts say the county's annual median price this year could fall for the first time since the Florida Association of Realtors started compiling statistics in 1994.

The nation's median home price, meanwhile, is expected to drop this year compared with 2006, a first since federal housing officials began keeping track in 1950.

Next year doesn't look any brighter as home loans become harder to get and adjustable-rate mortgages reset to higher fixed interest rates, increasing monthly payments for some homeowners by hundreds of dollars. That will lead to increased foreclosures across South Florida and the nation, which will keep home prices down.

The median price of an existing home sold in Broward last month inched up 1 percent to $354,000 from $349,400 a year ago, the Florida Realtors group said Wednesday. The county's prices have been up and down in recent months, but analysts say prices are trending downward across the region.

Existing-home sales dropped 28 percent in October, to 428 from 591 a year ago.

Broward's median price has slipped nearly 10 percent since peaking at $391,100 in November 2005. One analyst said area prices could drop another 10 percent in the coming year, with some neighborhoods experiencing more severe declines.

"There's no question that prices will continue to fall over the next several months and maybe for the next year," said Per Gunnar Berglund, a senior economist for Economy.com, a Pennsylvania-based research firm. "We're not seeing any recovery in the market until 2009."

Broward's condominium market looked especially grim last month.

The median condo price fell 24 percent to $159,300 from $210,100 a year ago. Sales of existing units declined 27 percent, to 424 from 580.

The median means half sold for more, half for less.

At the height of the boom in 2004 and 2005, year-over-year home prices increased by 25 percent or more, an amount that may never be matched.

"What we're going through is a correction to a more affordable plateau," said Gus Pasquale, co-founder of Element Funding in South Florida.

Statewide, the median sales price for existing homes dropped 8 percent last month to $222,100 from $242,700 a year ago. Sales fell 29 percent.

Nationally, sales of existing single-family homes and condominiums dropped by 1.2 percent last month to a seasonally adjusted annual rate of 4.97 million units.

The median price fell to $207,800, a drop of 5.1 percent from a year ago, the largest year-over-year price decline on record.

Some experts say South Florida home prices need to keep dropping, perhaps to the levels of 2000 and 2001, for the market to improve. Until then, they say, sellers will mostly be frustrated and buyers will have the power to demand good deals.

Joy and Chance Hicks looked at dozens of properties in Broward before finally agreeing to buy a three-bedroom home in Coral Springs. They worked out a favorable move-in timetable and had the seller pay most of their closing costs.

"Everywhere we went, sellers were lowering their prices and saying, 'We'll do this and we'll do that,'" said Joy Hicks, 32.

Other South Floridians are holding off buying, convinced that prices will keep falling. Many also cite escalating property taxes and high homeowner insurance costs as reasons for not committing. Meanwhile, the number of homes listed for sale continues to rise, but at a much slower clip than in recent months.

"Eventually, we'll get the supply levels down and eventually the lenders will start loosening up," said Mike Larson, an analyst with Weiss Research in Jupiter. "The problem is, 'eventually' is a long time."

Reprinted with permission from Sun-Sentinel. Paul Owers can be reached at powers@sun-sentinel.com or 561-243-6529.

South Florida housing market shows no sign of improvement

By Paul Owers | Sun-Sentinel.com

12:24 PM EST, November 28, 2007

South Florida's lackluster housing market showed little improvement in October, according to figures released Wednesday by the Florida Association of Realtors.

The median price for existing homes in Palm Beach County dropped 5 percent to $348,300 from $365,600 a year ago. Existing-home sales in the county fell 27 percent last month, to 450 from 618.

Broward County's median price inched up 1 percent in October to $354,000 from $349,400 a year ago. Broward prices have fluctuated in recent months, and analysts say they think prices are trending downward across the region.Broward's existing-home sales dropped 28 percent, to 428 from 591 last October.

The condominium markets in both counties were particularly bleak last month.

Palm Beach County's median price for existing condos plummeted 30 percent to $158,900 from $225,500. Sales of existing units decreased 12 percent, to 392 from 447.

Broward's median condo price fell 24 percent to $159,300 from $210,100 a year ago. Sales of existing condos declined 27 percent, to 424 from 580.

Nationally, sales fell for the eighth consecutive month in October, with median home prices falling by a record amount. Analysts blamed the worsening housing slump on the credit crunch that hit in August.

The National Association of Realtors reported that sales of existing single-family homes and condominiums dropped by 1.2 percent last month to a seasonally adjusted annual rate of 4.97 million units.

The median price of a home sold last month declined to $207,800, a drop of 5.1 percent from a year ago, the biggest year-over-year price decline on record.

Analysts blamed the October weakness on the fallout from a serious credit crunch that roiled financial markets in August. Banks and other lenders have tightened credit standards significantly in response to a soaring level of defaults, especially on subprime mortgages, loans provided to borrowers with weak credit histories.

The worry is that the credit crisis and a deepening housing slump could be enough to push the country into a recession.

In another sign of spreading economic weakness, the Commerce Department reported Wednesday that orders to factories for big-ticket manufactured goods declined by 0.4 percent in October. It was the third straight drop, the longest stretch of weakness in nearly four years.

Top Tier of Florida Housing Market Holding Up Well

By GERALDINE FABRIKANT
The New York Times

FORT LAUDERDALE | Despite a record number of foreclosures and a raft of public auctions of unwanted houses, the upper tier of the real estate market in Florida remains relatively immune to the spreading disaster.

Houses and condominiums with price tags of $1 million or more are still changing hands robustly in some of the most exclusive areas, though at a pace less brisk than a year ago. The glistening waterfront glass towers on Miami Beach, the sprawling estates set in manicured gardens in Palm Beach and the clustered mansions in Naples are attracting buyers, both domestic and foreign.

As in other once-booming regions, in Florida the housing market seems to be not one market, but two. The lower end is littered with vacant houses and unfinished developments, and homeowners are struggling to meet their monthly payments as rates adjust upward.

The luxury end has its unsold new condos and mansions lingering on the market, too, but as in New York, where the demand in pricey Manhattan is still strong, sales have fallen less. And Miami and other parts of Florida are continuing to attract interest among the wealthy.

Both markets have been buoyed by foreign buyers attracted to the United States because the weak dollar makes American homes comparative bargains. Florida has the added demand from affluent retirees across the country and second-home buyers, particularly from the Northeast.

"The very, very high end of the markets in communities such as the Bay Area, Los Angeles, Manhattan and Miami and to a lesser degree Chicago, Seattle and Washington that have global appeal have held up much better than the rest of the housing market," said Mark Zandi, chief economist at Moody's Economy.com. "A recession would certainly not help the high end, but it would not undermine it. And much of their buying is done with cash and not affected by the global financial turmoil and its impact on the availability of mortgages."

Take the greater Miami area. Over all, home prices have fallen 7.3 percent from their peak in December 2006, according to the Standard & Poor's/Case-Shiller index that tracks repeat sales of specific homes. But because of a shift upward in the value of the homes that have traded hands, the median price for condos sold so far this year for over $1 million is holding steady at $1.5 million, according to the Realtor Association of Greater Miami and the Beaches.

The median price for single-family homes sold is even reported to be up slightly, to $1.51 million from $1.46 million in the 2006 period. In Miami Beach, two brokers, Kevin Tomlinson and Dora Puig, recently represented a buyer from the Midwest who paid $7 million for a beachfront triplex. The sellers, a group of wealthy Mexicans, had bought the apartment for $6.13 million in April 2005, near the height of the market. They put it up for sale in early 2006 for $9.5 million and finally sold it for a 14 percent gain.

"When people are realistic about prices, they can sell," said Tomlinson, a broker with EWM Realty, an affiliate of Christie's.

Based on the number of sales, the Florida real estate market as a whole has taken a huge hit this year. (September sales of existing homes in Polk are down 44 percent from a year ago; building permits for new home construction are down about 36 percent. )

"There is more inventory in all price ranges," said Deborah Boza Valledor, the chief operating officer of the Realtor Association of Greater Miami and the Beaches. But even as more homes linger on the market, some areas remain particularly popular with potential buyers. "They are waterfront properties that are exclusive," she said, "and people are willing to pay the price."

Indeed, more than 78,000 homes were for sale in the Miami area in August, up from 51,000 a year before, according to ZipRealty, the real estate brokerage firm.

The overhang of unsold homes helps explain why reported selling prices do not tell the whole story. Sellers "are making concessions," Boza Valledor said. "They will offer a year's worth of paid maintenance fees to the buyer, or they will pay for the parking space or they will throw in country club fees that might be part of the expense of buying a home in a gated community."

Just a year ago, when buyers were bidding against one another for properties, such deals would have been unusual. And in another sign that the feeding frenzy has ended, the highest price paid for a Miami-area condo this year was $13.9 million, down from the top price of $16.9 million last year.

Tomlinson, the Christie's broker, suggests that sellers are starting to be more realistic. "They are coming off their 2005 prices and are more in today's market," he said. "Two years ago, if you sold something at $3.5 million, the next listing in that building came at $4.2 million. Now it is more reasonable."

Across the state through the end of September, the real estate company Coldwell Banker has sold 1,222 condos worth a million dollars or more, said Clark W. Toole, who runs the company's operations in Florida. The average sale price is down less than half a percent from last year.

To the degree that the market has held up, it has been helped by eager foreigners, checkbooks in hand, who are still showing up and often paying cash.

A survey last year by the National Association of Realtors found that the number of foreign buyers in Florida had dropped significantly from 2005. But of those who bought, 29 percent paid cash. Only 8 percent of domestic purchasers did. More than 10 percent of the foreigners bought homes for over $1 million.