The National Association of Realtors reported today that existing homes sales for both single-family and condos declined in November.

Single-family, townhomes, condominiums and co-ops, which represent “total existing home sales,” were down 1.7 percent to a seasonally adjusted annual rate of 6.97 million units. Overall, housing also declined slightly in comparison to the previous year - with sales for November 2005 coming in 0.1 percent below the November 2004 level of 6.84 million units.

Nevertheless, Bill Emerson, CEO, of Quicken Loans, remained optimistic about the 2006 market.

“Despite this modest decline, housing is still strong,” said Emerson. “Home buyers and homeowners still have an advantage when looking to buy a home, sell a home or refinance. While 2006 won’t break 2005 records, home sales activity will remain strong as interest rates remain low and the employment picture remains stable.”

According to the latest Housing Market Analysis conducted by National City Corp, a financial holding company (in conjunction with Global Insight, a financial information provider), sixty-five of the nation’s 299 biggest real estate markets are severely overpriced and subject to possible price corrections.

The report named Naples, Florida as the most overvalued of all housing markets in the United States. A single-family, median-priced home there sells for $329,970, 84 percent more than what it should cost — $180,956 — according to the analysis.

National City arrives at its estimates of what the typical house in these markets should cost by examining the town’s population densities, local interest rates, and income levels. It also factors in historical premiums and discounts for each area.

Other markets deemed wildly overpriced included Merced, California (by 77 percent), Salinas, California (75 percent), and Port St. Lucie, Florida (72 percent). As we’ve documented, there has been a 51% increase in median home prices across the nation since 2000.

Undervalued markets were:

• College Station (-23 percent)
• El Paso (-18 percent)
• Killeen (-16 percent)

These are all located in Texas, a state that dominated the discounted markets list with nine of the 10 most undervalued housing markets. Montgomery, Alabama was No. 8 among the undervalued markets. Therefore, those that are being turned away by the lack of affordable home loans may have to consider the Lone Star State for the best deals.

The data did produce some evidence of prices moderating, according to National City’s chief economist, Richard DeKaser.

In Massachusetts, for example, one of the hottest of housing markets over the past few years, each of the seven housing markets analyzed was still overvalued. Prices, however, had fallen in all seven. That would indicate the state is trending back toward normal valuations.

The same could not be said of Florida. The Sunshine State had 15 different markets on the list of extremely overpriced metro areas and all 15 had grown more overpriced during the quarter.

It should be noted, however, that data - or viewpoints - often vary. Previous reports stated the the Florida home loan market, as well as others around the nation, was actually declining in its home values. While the numbers were the same, it was cast in a positive light because the number of overvalued markets has, at least, gone down over the course of the year.

The best conclusion one can draw from this is that thorough research is important before choosing to become a property owner. Don’t sign your name on a Florida home loan without conducting proper research first.

Sales of previously owned homes in the Sarasota-Bradenton market dropped 39 percent during November, mirroring the national trend of a cooling real estate market where the number of existing homes available for sale is at a 19-year high.

Sarasota-Bradenton’s drop from 1,010 homes sold during November 2004, to 621 last month, depicted Florida’s highest in percentage terms. It also was the slowest performance for the market since September 2003.

Another sector of the state that suffered was The Charlotte County-North Port market, which saw 15 percent fewer sales (from 289 to 245), according to the Florida Association of Realtors.

“Last year at Christmas I wrote 10 contracts — year before, wrote seven. This year, I wrote one. That’s a buyer’s market,” said Gary Macklin, owner of Help-U-Sell Macklin Realty in Port Charlotte and Punta Gorda.

Median home prices in these areas

The Sarasota-Bradenton market’s median price was $343,600, up 34 percent from last year and on par with recent months. Meanhwhile, The Charlotte County-North Port market posted a median sales price of $236,900, a 41 percent increase and among the highest on a percentage basis in Florida.

Statewide, home sales rose 1 percent and the median sales price rose 31 percent to $259,500. This is proof that the Florida home loan market is still going strong.

Nationally, the number of existing homes available for sale rose 1.2 percent in November to a pace of 2.90 million units, the highest level since April 1986. At the same time that sales have slowed, the number of listings available in the Sarasota-Bradenton market tripled, and they continue to pile up. There’s no doubt that this is a buyer’s market in Florida.

Relax. It’s just one month of Florida home loan news.

Real estate agents were quick to point out the danger in reading too much into one month’s numbers, particularly during a traditionally slow time for sales.

“You’ve got to look at year-to-date numbers,” said Michael Saunders, president of the Sarasota realty company that bears her name. “If I just looked at November, I’d slit my wrists.”

Let’s hope that no Florida real estate agent takes it that far. Still, the November figures compared with a month last year when the real estate market was still reeling somewhat from the impact of Hurricane Charley in the region.

“This market is going to fall a little bit,” Macklin said. “Sellers are going to say, ‘I can’t wait anymore, I will take $20,000 less.’ That is going to change the comps for the next sales. So the market has to settle. There are more people signing up every day to sell.”

The slow rise of mortgage rates

Moderately rising mortgage rates are allowing the housing market so far to cool slowly, easing fears about a crash, economists say.

The average interest rate on 30-year mortgages in November was 6.33 percent, up from 6.07 percent in October. This week, however, rates on 30-year mortgages dipped to 6.22 percent, Freddie Mac reported Thursday.

Real estate agents said the Sarasota-Bradenton market will probably post moderately lower sales this year than last.

John Lafabregue, a Sarasota Re/Max agent who tracks the statistics, estimated that about 6,500 existing single-family homes will be sold in Sarasota this year, compared with 6,923 last year. That would be a 6 percent decline.

He claims that Southwest Florida is still a “seller’s market,” describing it as “hot.”

A different way of tracking Florida home sales?

Other real estate agents also said they would prefer a different statistic to illustrate the state of the real estate market, but acknowledge that the latter part of 2005 has been slower.

“The fourth quarter, for the market, was not great,” said Chad Roffers of SKY Sotheby’s International Realty in Sarasota.

Roffers notes that with a median sales price of $343,600, Sarasota-Bradenton “has caught up with the other luxury markets and is now the fourth-highest median sales price market in the state,” after Naples, Fort Lauderdale and Miami.

Part of the slowdown in sales is that many speculative buyers have backed away.

“Investors — who represented about one-third of the market — are stepping to the sidelines,” Roffers said, adding that there is a “disconnect between buyer expectation and seller expectation.”

Sellers need to target end-user buyers because the investors have pulled in their horns, Roffers said.

Among other larger metropolitan areas, Miami posted the second-biggest decrease in sales with a 25 percent drop. Fort Lauderdale was third at 21 percent. Part of the problem - a good one to have - is that the Florida home loan market in Miami was so hot for so long, there was bound to be a downfall eventually.

Closer to home, Naples posted a 5 percent increase, while its median sales price rose 36 percent to the state’s highest at $479,800. In the Tampa-St. Petersburg-Clearwater market, sales rose 16 percent and the median sales price rose 33 percent to $222,900.

None of the state’s 20 largest markets saw a decline in prices: increases ranged from 12 percent in Tallahassee to 49 percent in Fort Myers-Cape Coral.

Peter Crowley, president of Sarasota’s Re/Max Properties, blames “constant media attention” for creating an idea with sellers “of sitting on the sidelines.”

“We’re not panicking. Nothing drastic has happened,” he said. The November figures might be skewed because they are “being compared to the hottest market in our history.”

There is a natural cooling-off occurring in the market, which is “not an unhealthy thing,” Crowley said.

Crowley doesn’t expect prices to plummet, but he also does not expect homeowners to continue to see 30-percent-plus appreciation.

This follows the line of reasoning mentioned above. While the numbers for Florida home loans appear to be dwindling, one needs to compare these with the record-breaking figures from earlier this year. That pace was impossible to maintain, but it doesn’t mean the 2006 real estate market won’t be strong.

Golfing icon Tiger Woods is relocating to South Florida, according to the Sun-Sentinel and several other local publications.

Woods, who turns 30 today, purchased a pricey waterfront compound (pictured) on exclusive Jupiter Island in Hobe Sound, near the homes of fellow golfers Greg Norman and Jesper Parnevik. The eight-time major championship winner has lived at Windermere’s Isleworth Country Club (outside Orlando) since his 1996, his first year on the PGA Tour. Now an avid scuba diver and owner of a $22 million yacht, Woods has been actively shopping for new Florida real estate — of the exclusive, waterfront variety.

It includes three adjoining lots, four buildings that have an estimated 16,000 square feet of living space and totals approximately 10 acres, according to local real estate agents. The home features 200 feet of oceanfront, plus 350 feet of frontage on the Intracoastal Waterway, where it has a deep-water boat dock. Woods reportedly is set to make the $40 million purchase late this week.

Woods’ wife, Elin Nordegren, worked for Parnevik before she met her husband, and the pair reportedly have spent plenty of time visiting the area. If the deal goes through, it remains in question whether Woods intends to leave Isleworth permanently. The native Californian also has property in his home state, as well as Sweden and Jackson, Wyo., but has made Isleworth his primary home for the past decade. Residents have always given him privacy, and the club’s course was toughened (and lengthed) years ago for his benefit.

“There’s been a lot of talk about this [Woods relocating], but if it’s true, I don’t know if he’s leaving or if this is just another house in his collection. I don’t know anything, to tell you the truth,” said Doug McMahon, a director at Isleworth.

Woods’ home in Isleworth is relatively modest, at least when compared with the Miami real estate owned by Shaquille O’Neal and other athletic superstars. His lakefront home has only 6,692 square feet and eight bedrooms. The Hobe Sound area is about 30 miles north of Palm Beach. According to the Wall Street Journal, the property Woods was previously owned by Stephen A. Garofalo of New York, who started Metromedia Fiber Networks.

Woods, who raked in an estimated $89 million last year ($6.5 million playing golf, the rest in endorsements) won’t be the first world-class golfer to relocate to South Florida because of the lure of the high seas. Over the course of their careers, prominent players such as Norman, Nick Price and Robert Allenby left Orlando to spend more time near the ocean. Can you blame them? Too bad they don’t issue eight-figure Florida home loans!

In Jacksonville, mortgage rates and the median home price on the rise, which is enough to give pause to area real estate agents and those looking to buy or sell a home in 2006. But don’t worry, says Ray Rodriguez, president of the Real Estate Strategy Center of North Florida.

“We’re OK. We will let some steam off, but the bubble here won’t burst anytime soon. It will slow down a little bit and we will get back to reality. Speculative buying is slowing down a little bit due to rising interest rates,” said Rodriguez, who analyzes every aspect of the local real estate market, from the number of permits pulled in a particular development to the average price of beach condos.

The Jacksonville real estate market has been booming for several years now. The median home price in the four-county area (Duval, Clay, Nassau and St. Johns) surges monthly, and massive developments receive City Council approval at nearly every other meeting. The Northeast Florida Association of Realtors has more than 5,000 members and counting. Blink and you may miss another condo going up at the beach or an entire part of downtown changing.

“The Dinsmore area in the northwest corridor could be a real area of interest for development next year for two reasons,” said Rodriguez, who believes it’s still a good time to be in the real estate business, and that those good times should last through the next year. “One, it’s dry, not like the New Berlin Road area that’s wetlands and marshes. Two, it has good infrastructure. Three, it’s the only area left close to the I-295 corridor that’s affordable.”

One of the key indicators Rodriguez uses to forecast development in a particular area is permit activity. If hundreds of permit applications are filed for a specific area in a relatively short amoung of time, it’s a pretty safe bet that new roads and houses are soon to follow, as he says is taking place in the Dinsmore area. The Market Consultant predicts the Butler Boulevard area and the beach will continue to flourish in the current economy and market.

“That area will continue to grow despite the construction and that growth will happen with two areas: the Southpoint area where people work and the St. Johns Town Center area. That area is one of the hottest markets around,” Rodriguez said.

Development is going vertical at the beach, which is no surprise as land is at a premium. There are several new high-rise condos in the works and about 20 more permitted by the City of Jacksonville. The other development trend is either renovating existing older homes or tearing them down and rebuilding. Land refurbishing, where small duplexes are being converted into condominiums, is happening at highly sought after locations across the nation.

Downtown Jacksonville will continue to grow next year as well, according to the city’s Daily Record newspaper. While the Southbank is proving to be the next big urban residential mailing address, the Northbank is quickly turning into the center of commercial development. Both are growing at an extremely quick pace. Rodriguez also says to keep an eye on the city’s Riverside and St. Nicholas areas, as new announcements will be coming soon.

One area of the North Florida real estate market that does concern Rodriguez is the abundance of homeowners that took out unconventional mortgage loans. Rising mortgage rates and the fact that many owners are not building up equity could lead to serious issues for those with adjustable-rate and interest-only loans. Rodriguez believes those who bought homes worth $250,000 or more may experience problems making payments in the not-so-distant future.

“Those that bought in at that price range wouldn’t have if it had not been for interest-only mortgages,” he said. “Eventually, they are going to have to pay the piper and they won’t have any equity built up.”

November is traditionally a slower month for home sales, as evidenced again this year when Florida’s housing market took a step back from its recently sizzling numbers. Statewide sales of existing single-family homes totaled 17,219 - a one percent increase over last year’s sales activity of 17,110 homes.

Housing markets nationwide are starting to see a better balance between demand and supply, according to many housing industry analysts, such as the Florida Association of Realtors (FAR), placing homebuyers and sellers on a more even footing.

Across Florida, median sales price rose 31 percent in November to $250,500; a year ago, it was $191,300. In November 2000, the statewide median sales price was $117,900, which is an increase of about 112 percent over the five-year period.

Florida home loans surge in Tampa area

Among the state’s larger metropolitan statistical areas, the Tampa-St. Petersburg-Clearwater MSA reported higher figures in both sales and median price last month with a total of 3,799 existing single-family homes changing hands, good for a 16 percent increase over the 3,276 homes sold last year. The market’s median sales price increased 33 percent to $222,900; a year ago, it was $167,100.

The national median sales price for existing single-family homes was $216,200 in October, up 16.6 percent over last year, according to the National Association of Realtors. Some statewide, median resale prices include:

• California - $538,770
• Maryland - $297,682
• New York - $269,000
• North Carolina - $215,762.

Interest rates for a 30-year fixed-rate mortgage averaged 6.33 percent in November, up from the 5.73 percent rate recorded last year. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.

Mortgage rates, while edging up, remained favorable in November, which encouraged buyers to enter the market, said George Bodmer, president of the Greater Tampa Association of Realtors and co-owner of Bayside Realty Group Inc., in a release.

“The real estate market follows the jobs, and this area is basically a community that goes to work,” Bodmer said. “We’ve got places to work, places to play, good schools and even with high demand and a tight inventory, we’ve been fortunate in that we still have homes available to buy. Buyers know housing is a good investment.”

Other larger markets reporting higher sales in November include:

• Jacksonville, where 1,425 homes sold for a 20 percent gain
• Orlando, where 2,656 homes changed hands for a 2 percent increase.

The median sales price also rose in both markets: in Orlando - where Florida home sales are as strong as ever - 45 percent to $254,600; and in Jacksonville, 17 percent to $190,000.

Sales of existing homes fell in November by 1.7 percent as inventories hit their highest point in more than 19 years, according to USA Today. This latest sign that housing market growth is tapering off was released Thursday by the industry’s largest trade group. The National Association of Realtors report that November’s sales of existing homes (which include single-family homes, town homes and condominiums), totaled 6.97 million units at a seasonally adjusted rate - the lowest sales level since March.

As sales fell below 7 million for the first time in eight months, inventories (or number of listed properties for sale) jumped to 2.90 million, marking the biggest supply since April 1986, when the U.S. housing inventory was estiamted at 3.04 million units. At the current rate of sales, the November inventory is the approximate equivalent of 5 months. The 1.7 percent decline was slightly steeper than the 1.3 percent drop analysts predicted before the report was released.

None of this has cooled prices, however. The November median sales price of an existing home stood at $215,000 nationally, up a sizable 13.2 percent from the same month last year. Some markets, such as Southwest Florida real estate, grew by more than 40 percent in the last year. The median price in Florida is now $250,500, up 31 percent from 12 months prior. Even with the drop in sales, economists are predicting a healthy housing market going forward, with the overall 2005 sales on pace to set a 5th consecutive annual record.

“We are really on track for a soft landing,” said David Lereah, the Realtors’ chief economist. “Moderately rising mortgage rates are allowing the housing market thus far to land safely, so there are no balloons popping,” he said.

Other common barometers — including a drop in new construction permits obtained in November — also have flashed signs that the market has peaked. That may be, but it’s no reason to panic if you’re looking to invest over the course of several years. Florida home loan rates are not expected to climb about 6.75 in the next 12 months, which would still represent a historically low figure. Prices should cool off enough to help first-time home buyers, but not so much as to hurt the long-range viability of investing in real estate.

Potential home owners struggling with payments and credit ratings received a gift for the holidays last week:

The Department of Housing and Urban Development increased the limit on government-insured mortgages in 2006 to $362,790 in the nation’s most expensive housing markets. The 2005 maximum had been $312,895.

The new ceiling on minimal downpayment loans insured by the Federal Housing Administration means that buyers with poor credit report numbers can borrow almost as much as those with perfect scores … without having to shop for financing in the subprime market where rates are substantially higher.

For those unaware, FHA mortages or loans are used primarily by first-time purchasers and minorities who have little or no cash for a down payment, typically the largest single impediment to home ownership.

Although the agency requires a minimum of 3 percent down, borrowers can use gift money to make up for any shortfall in their own funds. Moreover, sellers are permitted to cover closing costs up to 6 percent of the selling price.

More information on an FHA Florida home loan

By law, the FHA can back loans of up to 95 percent of any given county’s median house price. At the same time, however, the FHA maximum mortgage amount cannot exceed 87 percent of the limit placed on loans that can be purchased by Freddie Mac, nor can it be lower than 48 percent of the Freddie Mac ceiling.

As of Jan. 1, $417,000 is the new limit on Freddie Mac loans, which are reserved for only those borrowers who have the best credit profiles and represent the least risk to lenders.

In most of the country’s 3,000-plus jurisdictions, 95 percent of the median house price is less than 48 percent of the Freddie Mac limit, so the new FHA ceiling — also known as the “floor” — is $200,160. In 2005, the floor was $172,632.

However, in the 88 high-cost counties where 95 percent of the median exceeds the 87 percent maximum, the new FHA ceiling is $362,790. In 468 counties, the FHA loan limit is somewhere between the floor and the ceiling.

Although government-insured mortgages are considered riskier than those backed by private insurers, lenders are currently charging a lower rate, according to the latest figures published by HSH Associates, a Pompton Plains, N.J., mortgage information company.

Upfront fees on FHA loans are somewhat higher, including points and insurance premiums, but even lower-income borrowers who have been late on their credit card payments or other bills still can qualify.

The new FHA loan limits cover not only the government’s basic 203(b) loan program but also several other key initiatives, including mortgages for the following:

• Disaster victims
• Rehabilitation loans
• Loans on properties in declining areas
• Condominium mortgages
• Home equity conversion mortgages

This should all be welcome news for individuals that feared their poor credit history would get in the way of any Florida home loan deals. 2006 appears to bode well for even the most downtrodden of hopeful buyers.

All the talk of Florida real estate market corrections hasn’t fazed Palm Beach one bit. It’s nice when you have a steady stream of buyers willing to pay millions of dollars - often without financing - for a home in sunny. The island’s luxury real estate market is immune, in large part, to the impact of rising mortgage rates and fluctuating market conditions that may affect markets elsewhere in the state.

Les Evans, a Florida real estate attorney and publisher of The Evans Report, an annual review of the island real estate market released in the spring, began issuing a mid-year report in December because many people did not want to wait a whole year for revised information. The report issued this week is compiled from closing documents filed with Palm Beach County, and shows about $870 million in Palm Beach homes and condominium sales taking place in the first six months of 2005.

That’s a 5 percent increase over 2004, putting the island on track for an estimated $1.8 billion in real estate transactions during this calendar year.

“A lot of people were wondering how this year would be, compared to last year, with rising interest rates,” Evans said. “What we found here are some startling changes. It’s been more positive than people would have thought.”

A combination of fewer homes on the market and more Baby Boomers in the market for Palm Beach retirement homes combined to boost home prices. The average price for a Palm Beach home was $4.6 million in the first half of 2005, up from the $3.47 million price paid by buyers in the first six months of 2004. Prices throughout Palm Beach increased by 24.93 percent in the first half of 2005, compared to 20.24 percent in January-June of 2004.

Marlene Hayes, the new president of the Palm Beach Board of Realtors, agrees with recent data released by the National Association of Realtors that predicts real estate markets in general may level off as overall demand falls and inventory rises. But Hayes also sees the situation on the island as different.

“There will always be a demand in Palm Beach,” she said. “If someone wants a home [in Palm Beach], they will buy it. You have educated real estate agents that will fill that demand as far as information and education. We’re approaching the season, so we’re all looking very hopeful and positive.”

The island’s real estate is also seeing a decrease in its number of overall units, which may be contributing to escalating prices. Every time lots or homes are combined to create larger homes, condo units are combined to create larger units, or small apartment buildings are converted to condominiums and remodeled into bigger units, the island’s inventory drops. Evans estimates it may have decreased 8-10 percent over the past 4-5 years.

In addition, as analysts have observed with other South Florida home loan markets, more Palm Beach buyers are purchasing homes as a long-term investments rather than as their primary residences. Evans’ report showed that the average Palm Beach home solid during the first half of 2005 was owned for around seven years - not exactly the length of time used by people looking to turn a quick profit.

And, because the odds of a hurricane in Florida are much smaller than the odds of cold, snowy winters up north, the past two hurricane seasons have not been major factors in sales. Real estate price increases have also made owning a Palm Beach home or condominium more rewarding than the stock market in recent years. While the stock market has been relatively flat, Palm Beach homes and condos went up about 25 percent in value last year.

“I think a lot of people are putting their money into real estate, and they are trying to get a piece of paradise before it becomes unreachable,” Evans said. “[Real estate is] continuing to outpace any other kind of investment. There is a shortage here, not an oversupply of houses available, and that’s totally the opposite of the situation where there could be a bubble. This report basically validates that there is no bubble here and will be no bubble here on the island.”

• Although only four home sales topped the $20 million mark during the first half of 2005, including two $33.6 million transactions for the same property (at 1960 S. Ocean Blvd.), there were also only three home sales under $1 million.

Although full data is not yet available, Evans believes real estate prices continued to climb during the second half of 2005. He said Hurricane Wilma did affect sales for the end of October and November, but that the market has bounced back strongly since then. The average Palm Beach home appreciated in value by about 25 percent annually for the past seven or eight years, with no end to the appreciation in sight.

Wow. Now there’s an investment everybody should jump at. Too bad few of us will get the chance to join this party. Got a couple million sitting around? Probably not. You can go the route of trying to snag the cheapest place in town, but even then, you’re probably looking at a jumbo Florida home loan. So keep dreaming.

In what has been the fifth consecutive record-setting year for the Florida home loan market, few places in the state saw greater sales and price appreciation than Southwest Florida.

In the 12 month period ending November 30, the median sales price for existing homes in Charlotte County, Englewood and North Port lept 41 percent, from $167,700 to $236,900, according to the Florida Association of Realtors and the University of Florida Real Estate Research Center. The Charlotte market was not far behind the Fort Myers-Cape Coral area, which experienced a 49 percent jump in median price to $295,400 over the same 12-month span.

• By comparison, the median sales price rose 31 percent over the past year across Florida. The Sunshine State’s median home used to cost $191,300. Now, $250,500.
• Nationally, the median sales price was $216,200 through October, up 16.6 percent from a year ago, according to the National Association of Realtors.

The median sales price is the official midpoint figure. In other words, the amount at which half of all homes sold for more and half for less. While many South Florida real estate markets look as strong as ever, with prices continuing to soar, the blistering pace of local home sales has cooled considerably. In November, 15 percent fewer home sales were reported in the area than in the same month of 2004.

Nancy McClary, broker associate with Coldwell Banker Morris Realty and one-time president of the Punta Gorda-Port Charlotte-North Port Association of Realtors, said the current drop in activity is not only expected, but healthy - and extremely temporary. She expects the market to heat back up in the coming months, with no major dropoff in prices or pace.

“The market is definitely seeing a slowdown,” McClary said. “But it’s really just pausing to catch its breath, and that’s a good thing. There are very few buyers right now and there’s a large inventory of available homes. But this is just a plateau.”

Despite moderate gains in the past few months, Florida home loan rates are still significantly lower than they have been historically. There will still be strong demand among buyers, and the migration factor - people up north are retiring, not to mention experiencing staggering heating bills (and the winter blues) - is starting to kick in. Most Florida real estate markets are strong as it is, but the ace in the hole continues to be the weather.

“As long as we have the sun and they have the snow, they will come,” McClary said.