South Florida Single-Family Home Sales Rise As Prices Drop

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Sales of existing South Florida single-family homes rose in September as foreclosures and weak demand continued to tamp down prices.

Miami-Dade County led the region with a 46 percent year-over-year sales increase, according to Florida Realtors, the statewide industry trade group. The median price of a house in the county declined 6 percent over the same period, to $176,600.

Broward County recorded an 11 percent increase in sales as the median price dropped 7 percent to $188,800.

Single family sales in Palm Beach County jumped 34 on a 20 percent decline in the median price, to $180,300.

Condo sales of previously occupied condo rose 58 percent in Miami-Dade, 33 percent in Palm Beach County and 6 percent in Broward. The median price condos increased in Miami-Dade (17 percent) and Broward (3 percent) and fell in Palm Beach (11 percent).

Nationally, existing home sales dropped 3 percent in September to a seasonally adjusted annual rate of 4.91 million homes, according to the National Association of Realtors. That’s below the 6 million that economists say is consistent with a healthy housing market.

Home sales are on pace to match last year’s dismal figures — the worst in 13 years. Last year 4.91 million previously occupied homes were sold, the lowest level since 1997.

Activity among first-time buyers accounted for 32 percent of all sales, the same as August. First-time buyers are critical to a housing recovery because their purchases of low and moderately priced homes allow sellers to move up to more expensive homes.

Homes at risk of foreclosure edged down to 30 percent of sales, from 31 percent in August. Many of the sales went to investors, who are buying homes under $100,000. Their purchases made up 19 percent of all sales last month, down slightly from 22 percent in August.

The large number of unsold homes and foreclosures on the market are sending prices lower and hurting sales, analysts said. “Home prices continue to languish and now appear to be dropping again,” said Steven Wood, chief economist at Insight Economics.

Many people are reluctant to purchase a home more than two years after the recession officially ended. Even the lowest mortgage rates in history haven’t been enough to lift sales. Some can’t qualify for loans or meet higher down payment requirements. Many with good credit and stable jobs are holding off because they fear that home prices will keep falling.

Most economists say home prices will keep falling, by at least 5 percent, through the rest of the year. Many forecasts don’t anticipate a rebound in prices until at least 2013.

The Obama administration is trying to expand a program that allows homeowners to refinance their mortgages. But economists say that will do little to help the depressed housing market.

Alistair Bentley, an economist at TD Economics, said few people are interested in buying or selling while the U.S. economy struggles. As long as this continues, he said, investors will be “crucial to the housing recovery.”

The high rate of foreclosures has made re-sold homes much cheaper than new homes. The median sales price dropped roughly to $165,400 in September from August. A new home is now roughly 30 percent higher than the price for a previously occupied home — almost twice the normal markup.

A key reason was the rise in foreclosures and short sales — when a lender accepts less than what is owed on the mortgage. Those homes sell at an average discount of 20 percent.

Even homes that are under contract and near closing are falling apart at the last minute. Contracts cancellations remained high in September, with 18 percent of Realtors saying they had at least one contract scuttled. That’s unchanged from August and a record high.

Source:  DBR

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