With foreclosure glut, more price drops likely
By Paul Owers | South Florida Sun-Sentinel
November 25, 2008
Find Broward County Homes: http://www.InvestFloridaRealty.com/search.htm
Even as job losses mount and mortgage lending remains tight, South Floridians still are buying homes.Bargain hunters continue to respond to plunging prices, with October sales of existing homes in Broward County rising 46 percent, to 625 from 428 a year ago, the Florida Association of Realtors said Monday. The median price plummeted 29 percent, to $252,500 from $354,000 last October.
Sales have shot up since July, but that doesn't mean the region's nearly 3-year-old housing slump is ending, analysts say.
The October figures reflect home sales contracts signed during the summer, before the financial free-fall on Wall Street. Prices are expected to keep dropping as long as the foreclosure problem persists.
"We would be lucky if the market bottoms out in South Florida in 2009," Miami-based housing consultant Lewis Goodkin said.
Broward's condominium sector followed a similar trend last month. Condo sales increased 30 percent while the median price fell 28 percent, to $115,200.
Distressed properties are popular targets among people trying to buy now.
Roger Palermo, a building maintenance supervisor for the city of Pompano Beach, said he looked at almost 50 houses. Many needed new roofs and other major repairs. And most were foreclosures or short sales, in which lenders take less than what's owed on the mortgages and forgive the remaining debt.
Overwhelmed with properties, some banks said they wouldn't consider Palermo's offers for three months or longer. One lender came back with a counteroffer higher than the asking price.
Earlier this month, Palermo and his fiancee finally bought a two-bedroom house in Boca Raton after the previous owner's death. They paid $225,000, $34,000 less than the asking price.
"At least 75 percent of the homes for sale are either foreclosures or short sales and need a lot of work," said Palermo, 48. "But it's hard because you can't even get answers from the banks."
In Palm Beach County, October sales increased 37 percent, and the median price dropped 24 percent to $264,600.
Statewide, sales increased 15 percent last month, while the median price fell 24 percent, to $169,700, the Realtors' group said.
Nationally, sales fell 3.1 percent in October to a seasonally adjusted annual rate of 4.98 million units. The median sales price fell 11.3 percent from a year ago to $183,000. That was the largest year-over-year drop on records since 1968 and the lowest median sales price since March 2004. The median is the level at which half sold for more, half for less.
In South Florida, the recent sales momentum is helping reduce the number of properties on the market.
Broward County had a little more than 28,000 homes and condos for sale at the end of October, down 5 percent from a year ago, according to the Miami-based Keyes Co.
But demand still is lagging. It takes longer to sell a house in South Florida, an average of 172 days, than anywhere else in the nation, according to an October housing report from California real estate firms Altos Research and Real IQ.
"The inventory news is starting to get a little better, but the question is, how much more pressure are we going to get from new foreclosures that come on the market?" said Mike Larson, a housing analyst with Weiss Research in Jupiter.
Regardless, real estate agents here are enjoying the renewed interest among buyers, many of whom are coming from the Northeast.
"We're hoping for a really cold winter up north," joked Pamela Orr, an agent with Balistreri Realty in Lighthouse Point. "If it's priced right, people are buying."
Find Broward County Homes: http://www.InvestFloridaRealty.com/search.htm
Courtesy: Fort Lauderdale Sun-Sentinel http://www.sun-sentinel.com/business/realestate/sfl-flzhousingbr1125sbnov25,0,6508022.story
