Home prices drop 17 percent [Florida]

Herald Tribune ^ | 11/29/2006 | Stephen Frater and Michael Pollick

[ex-Texan]

Prices remain the story in home sales, with Sarasota-Bradenton prices falling 18 percent in October, the second biggest drop in the state.

The median sales price in the Sarasota-Bradenton market was $277,900 last month, compared with $340,700 during the same month in booming 2005.

The Charlotte County-North Port market was not far behind, with a drop of 17 percent, from $243,900 to $202,800.

Only Fort Myers-Cape Coral took a bigger fall, posting a 44 percent decline in median sales price, from $445,100 to $249,200, the Florida Association of Realtors reported on Tuesday.

The median is the point where half the homes sold for more and half for less.

Those numbers came against the backdrop of a national decline in sales price of 3.5 percent, to $221,000, the biggest year-over-year drop on record. It marked the third straight month that prices have fallen nationally, the longest stretch on record.

Home price have been declining in Sarasota-Bradenton since June.

Sellers are giving ground on prices, recognizing that in a local and national market flooded with listings, how much you ask for your home is one of the few ways to differentiate yourself from the competition.

"It's often a matter of educating the sellers that in order to move their property, they've got to give on the price," said Brandy Coffey of Sarasota's Good Life Realty.

Many buyers are well-acquainted with that fact.

After looking at about 40 homes in the $800,000 to $1 million range, Craig Aberle and his wife just landed a deal in a south Sarasota golf course community.

The house they are buying was on the market for about a year, and they were able to get it for 20 percent less than the sellers were asking a year ago.

"They wanted to move," said Aberle, who will close before the end of the year. "They were reluctant to take our offer, which was a strong offer, mostly cash. But we said, 'Look, this is all we are willing to spend, and there are several other houses.'

"You're in a position where, if you want to be aggressive, you can play the sellers off against each other."

Aberle took his own haircut earlier this year when he sold in New Jersey: "We sold for 10 percent less than it would have been in 2005."

Yetta Levitt knows exactly what she is doing as she attempts to market her own spacious waterfront home in the Nokomis subdivision of Sorrento Woods for $850,000.

It is on the Internet with pictures and arrows; Levitt is offering a bonus to the selling agent; she will provide a full mortgage with only 5 percent down.

The problem is there aren't many buyers floating around.

"All I can say is nothing in my neighborhood is moving," Levitt said, noting that one of the less expensive, nonwaterfront homes in her 210-home subdivision sold last month for $410,000. "Prior to that sale, I believe the last sale was November 2005."

The numbers released Tuesday back up Levitt's theme.

In the Sarasota-Bradenton market, 24 percent fewer homes sold this October than October 2005. Sales were virtually flat in Charlotte County-North Port: 226 compared with 225 in 2005.

The Florida Association of Realtors noted that Hurricane Wilma struck Southwest and South Florida during the last week of October 2005, and that the storm's disruption likely reduced the number of sales in many communities.

If activity had been normal, the drop in sales would have been even more pronounced.

Sales nationally edged up 0.5 percent to a seasonally adjusted annual rate of 6.24 million in October. It was the first monthly increase after seven consecutive months of declines.

Meanwhile, Florida's total sales dropped 22 percent, from 16,407 in October 2005 to 12,773 last month.

'About right'

Some Realtors said the price drop during October is what is to be expected in a market where listings have multiplied from the heady days of the real estate market of the last three years, a time when homes moved in a matter of days.

Pricing in 2005 represented historic highs for the region, said Tom Heatherman, a spokesman for Michael Saunders & Co.

"We have experienced some double digit declines, but we are backing off what were historic increases over the previous years," Heatherman said.

Chad Roffers, president of Sarasota-based Sky Sotheby's Realty, said the price decline goes hand in hand with slowing sales.

"An 18 percent decrease feels about right. We're seeing unit sales down by a third across the board and prices off by 20 percent from the peak in mid-2005," said Chad Roffers, president of Sarasota-based Sky Sotheby's.

"We are seeing a 'liquidity point' at values similar to those that existed in the fourth quarter of 2004. Those sellers who accept that level of value are seeing action. Those who hold out for 2005 prices are not."

Budge Huskey, president and chief operating officer of Coldwell Banker Residential Real Estate, agreed.

"These results should not come as a surprise. Price is a function of inventory levels, which have risen across the board," Huskey said, adding that "in some areas we're starting to see inventory levels stabilize or flatten out, although we're not at a point where we've reached equilibrium."

Huskey said pricing is the key: "Aggressive pricing and positioning are important right now for sellers."

He is not convinced that prices are done declining. "Sell now; you may get less in three months than today."

Coldwell Banker has closed 15 of the Florida offices that Huskey oversees from Sarasota, bringing the total to about 160. Real estate agents working for the company, meanwhile, total about 6,800, down 5.5 percent from 7,200 last year.

Homes were not the only part of the housing sector taking a hit in October.

Sales of condominiums in the Sarasota-Bradenton market were off 51 percent from the same time a year ago. The median sales price dropped 27 percent, from $294,000 to $216,000.

"Condos always go belly up when economy gets sluggish," said Barbara Anson of Manatee County's Wagner Realty.

Charlotte County-North Port saw a 24 percent drop in sales, but pricing in the market, which has few condos to offer, was difficult to use as any accurate gauge.

Anson said the 18 percent drop in home prices during October "was caused by homes in the region being overpriced," and she said the same is true across other classes of property.

"We now have to come back to reality," she said. "I am explaining to my sellers in Myakka that the bubble has busted. They're not going to get $350,000-$400,000 for a 10-acre parcel like they used to. They'll get $200,000."

Anson is seeing a lot of "half-backs," people who have moved halfway back north to places like Georgia, the Carolinas and Tennessee, where lower-priced housing is more readily available.

"We've priced ourselves out of the market and it'll take at least a year to get it corrected," she said. "I tell my clients, 'Don't think some Yankee will come down here and buy your property just because it's in Florida.'"

Chuck Edwards and his wife, a pair of those halfbacks, have been wheeling and dealing in Sarasota residential property for 13 years.

They decided last year to cash in their chips and move to coastal South Carolina.

Edwards still has eight Sarasota-Bradenton properties that he wants to sell.

He has been trying to sell 2408 Riverbluff Parkway for more than a year.

At first, he asked for $305,900 on this 55-and-older community home with boat docks available to owners. Now the price is $285,000 as a straight sale.

"We bought it right at the tail end of when the market was going crazy, where all you had to do was put a little two-by-five sign out there and somebody would buy it right away," Edwards said.

To make his Riverbluff Parkway house more palatable in today's tough market, Edwards is also making it available at a higher price of $289,500 for those who want to lease with an option to buy within a year.

"We are offering a lease option for it and any property we have, except for the personal house.

"I need to cash out of that."

[Petronski]

So, you got caught in more pathetic distortions?

You're a sickening excuse for a human being.

[ChildOfThe60s]

I still don't understand why so many people are surprised. This kind of correction was overdue.

Homes are not selling for less than they are worth, they had been selling for a lot more than they were worth. Strictly speaking, I know that my statement is incorrect, anything is worth what a buyer is willing to pay for it. But the kind of price growth we saw for several years was simply not grounded in sound fundamentals and bound to give when the emotional rollercoaster started to slow down.

As an aside, in Lakeland, FL, where we sold in March (just in time), the county raised taxes 27% in 2006 along with 400% increase in "impact fees" (try $8K per house). The city also raised taxes and impact fees. Talked to a builder there yesterday. No one wants to build, it's cheaper to look for existing housing. Add the insurance nightmare and you really have a gigantic hairball.

Oh, and the state's "Save Our Homes" amendment to the constitution is killing home buyers, especially first timers. Property taxes in Florida are extremely two tiered and discriminatory. Another Frankenstein example of the law of unintended consequences.

[Mamzelle]

Homeowner's insurance costs? I'm hearing that it's skyrocketing. Kinda like the malpractice insurance for OBs and trauma surgeons in Orlando.

[straps]

Dear Tom: Insurance in Broward County is about $3000 Property Taxes are about $1600 thats it.
Broward County is still rising in value and price . Homes in my HOA 15 years ago went for 45000 to 95000 now going for $290,000 off lake on lakes $300,000. I sign the estoppels in the HOA

WestCoast is radical right now south-east is stabile north-east also very stabile.

[Wilhelm Tell]

Personally, I thought the bubble was about to burst when all the shows like "Flip this House" came out.

That is a sure sign. I knew some years ago when the news had many stories about day traders that a lot of people were buying high who would have to sell low soon.

[straps]

By law in Broward County they can only raise property taxes 3% per year. Period . We just voted in portability in Broward County.

[Armed Civilian]

Great observation, I own a mortgage company in Broward county and I am still as busy as I was last year and I was closing Refi's and purchases after Wilma. It is difficult to sell a home that was damaged because of Wilma, so of course sales are going to be down (DUH), I bet sales are down in Biloxi and Gulfport Mississippi as well. We got our roof finished at the end of June and the final inspection was TODAY!!!! My kitchen was just finished 2 weeks ago and I am waiting on the granite counter tops to be installed next week.

[LowOiL]

I always wanted to be a "half-back"... guess middle age brought something.

[stainlessbanner]

Property taxes and insurance costs are the hidden costs in FL right now. The rapid growth cycle requires more tax money to build infrastructure. Insurance (if you can get it) has gone upwards of 80%. There's always Citizens.....

[ChildOfThe60s]

With the "Save Our Homes" amendment I'm not talking about tax rates. I'm referring to assessed values for taxation purposes.

Explain portability please. I assume it has something to do with that?

[Porterville]

Still preaching idiocy.

[speekinout]

The drop in housing prices isn't the story. The story is the increase in property taxes. Most people can afford the mortgage, and if they stay in the house for 5+ years, they will make at least a bit of a profit.
But the increase in property taxes, to the new "assessed value" can be a killer.

[Armed Civilian]

Hey straps I own a mortgage company in Broward, Coral Springs to be exact, and I totally agree with you. I have owned my home for 13 years my insurance is $3100 and taxes are around $1900. My neighbor next door is paying $6-7000 in taxes though. I really hope the portability will get some legs. Home values have continued to increase just not at a 25-30% increase.

[stainlessbanner]

                                Florida Sales Report - October 2006

                                    Single-Family, Existing Homes

	Realtor Sales			Median Sales Price
Statewide & Metropolitan Statistical Areas (MSAs)	October 2006	October 2005	% Chge	October 2006	October 2005	% Chge
STATEWIDE	12,773	16,407	-22	$242,500	$243,400	—
STATEWIDE YEAR-TO-DATE	155,633	214,127	-27	$249,400	$233,000	7
Daytona Beach	692	1,037	-33	$216,600	$223,300	-3
*Fort Lauderdale	591	561	5	$349,400	$368,900	-5
*Fort Myers-Cape Coral	686	506	36	$249,200	$445,100	-44
*Fort Pierce-Port St. Lucie	367	334	10	$242,400	$263,500	-8
Fort Walton Beach	199	283	-30	$241,100	$223,500	8
Gainesville	208	267	-22	$225,600	$196,800	15
Jacksonville	1,131	1,504	-25	$197,900	$191,600	3
Lakeland-Winter Haven	382	513	-26	$181,300	$173,500	4
Melbourne-Titusville-Palm Bay	472	512	-8	$212,400	$238,200	-11
*Miami	544	511	6	$356,000	$366,300	-3
Naples	204	280	-27	$420,000	$505,400	-17
Ocala	409	482	-15	$169,100	$159,200	6
Orlando	1,917	2,702	-29	$267,100	$255,100	5
Panama City	87	127	-31	$211,300	$211,800	—
Pensacola	364	495	-26	$156,500	$175,500	-11
Punta Gorda	226	225	—	$202,800	$243,900	-17
Sarasota-Bradenton	604	797	-24	$277,900	$340,700	-18
Tallahassee	271	393	-31	$190,700	$172,700	10
Tampa-St. Petersburg- Clearwater (1)	2,419	3,735	-35	$225,800	$225,700	—
*West Palm Beach-Boca Raton	618	630	-2	$365,600	$416,500	-12

(1)  Data from the Hernando County Association of Realtors was not available.

Editor's note: October 2005 home sales in Florida, especially in Southeast and Southwest Florida,
were directly affected by Hurricane Wilma, which crossed the state during the last week of October last
year. Sales numbers represent totals of Realtors' closed transactions from local Realtor boards/associations
within the MSAs.

This information is based on a survey of MLS sales levels from Florida’s Realtor boards/associations.
MSAs are defined by the 2000 Census. Source: Florida Association of Realtors and the University of
Florida Real Estate Research Center.

[M. Espinola]

This is the hard-core proof the real-estate crowd said was not happening in the housing market. Good reporting!

[rebel_yell2]

These numbers are meaningless. When the market slows, higher priced homes don't transact, leading to a huge drop in "median" sales prices. Great headlines, bad finance.

[Petronski]

Good reporting?

He was caught in a deliberate deception.

[M. Espinola]

"..deliberate deception"

Just because you can't except the current decline in the housing market does not make the facts a "deliberate deception".

This is only the beginning, prices shall continue downward, which is great for buyers, get used to it housing broker - you were wrong.

[Petronski]

His original post, before the admin fixed it, implied that 17 percent was the rate of decline in Florida, when it is the rate for ONE COUNTY in Florida.


Traffic to his shabby website depends on fear, and he'll do whatever it takes, it seems, to promote more fear.

[Petronski]

...get used to it housing broker - you were wrong.

Irony can be so ironic sometimes. It is YOU who is wrong. I am not a housing broker. Nor have I ever been a housing broker.