South Florida home sales plunge again
By Paul Owers
South Florida Sun-Sentinel
Posted July 26 2006
Broward County's existing single-family home sales plummeted again in June, and the huge price increases of the past few years have shrunk to near nothing.
"The market's done a complete 180-degree reversal," said Jack McCabe, a Deerfield Beach housing consultant. "It's a stare-down between buyers and sellers, and as time passes, the pressure's on the seller, not the buyer."
Sales fell by 34 percent last month compared with June 2005, the Florida Association of Realtors said Tuesday. It was the 24th consecutive month of declining sales in Broward.
The median price of $377,400 was virtually unchanged from $378,000 in June 2005. During the housing boom of 2000 to 2005, monthly prices increased year over year by 30 percent or more.
Evidence of the continued housing slowdown also appears in the county's condominium market.
Sales dropped 31 percent in June compared with the year-earlier period, while the median price rose a modest 5 percent to $212,300.
Investor speculators looking to "flip" properties have propped up South Florida's condo market during the past several years. Many investors are now leaving real estate.
"We knew condos had to collapse because there was nothing there supporting it, except predominantly speculation," said Lewis Goodkin, a Miami-based consultant.
Brad Hunter, a West Palm Beach housing analyst, said he expects Broward's condo market to recover more quickly than markets in Miami-Dade and Palm Beach counties because of a shortage of land for single-family homes.
"That's going to force people to look at housing alternatives, like condos," Hunter said.
In neighboring Palm Beach County, the median home price spiked and the condo market slumped.
Existing home sales fell by 39 percent in June in Palm Beach County. The median price was $405,500, compared with $406,800 in June 2005. It was the first time since November that the median crossed over $400,000.
Palm Beach County condo sales dropped 41 percent, while the median price of $208,100 was flat compared with the same year-ago period.
Existing home sales in Miami-Dade County declined 33 percent, and the median price rose 4 percent to $378,000. Condo sales decreased 31 percent, while the median price rose 3 percent to $257,600.
The median is the level at which half the homes sold for more, half for less.
Statewide, existing-home sales sagged by 29 percent, and the median price of $257,800 was up 3 percent over June 2005. The Florida Association of Realtors cites rising inventory of homes, mortgage rates and insurance premiums, as well as higher energy costs, for the slowdown. Rising property taxes also are hurting the South Florida housing market. Nationwide, existing-home sales fell 9 percent from June 2005, the National Association of Realtors said.
In South Florida, real estate agents say they're persuading sellers to become more realistic with asking prices. That's a necessity because there are almost 31,000 houses and condos for sale in Broward County, according to the Realtor Association of Greater Fort Lauderdale. That's about triple the amount from last June.
The number of days on market also has increased, with many homes going four to six months before receiving offers, agents say.
"People are waiting [to buy] because they want value," said Marilynn Obrig, a Fort Lauderdale agent and spokeswoman for the Broward Master Brokers Forum.
Sean Donahue, vice president of sales for HomeBanc Mortgage Corp. in Deerfield Beach, said the slowdown has created opportunities for buyers, particularly those interested in 100 percent financing.
Because of the glut of properties, buyers usually can negotiate favorable terms, not the least of which is having the seller pay all of the closing costs.
"I've seen that a lot lately," said Ellie Maio, an agent for Campbell & Rosemurgy in Deerfield Beach. "Two years ago, sellers would never have considered that. Nowadays, they'll look at any offer."
Maio has spent about three months marketing a one-bedroom villa in a 55-and-older community in Deerfield Beach. The owner, Joe Haimowitz, says it's priced to sell at $135,000 and is only about two miles from the beach, but interest has been cool.
Last weekend, agent Ron Rosen parked a truck outside one of his listings, a three-bedroom waterfront home in Pompano Beach on the market for $719,000. He was prepared to give the buyer a $20,000 voucher to a local car dealership.
A few prospective buyers stopped by during an open house, but not one came because of the promotion, Rosen said. Undeterred, he plans another open house this weekend, and this time he'll offer the buyer hurricane shutters.
Rosen and his client, Timothy Penatello, 44, said they don't expect perks to sell the house, but the freebies do help it stand out.
"We're just trying to create a buzz," Penatello said.
Paul Owers can be reached at firstname.lastname@example.org or at 561-243-6529.