As Prices Drop, Southwest Florida Home Loans More Affordable for Borrowers

Interested in a 3-6 percent discount off listed home prices? Head to the southwest and look into Florida home loans in the area.

As areas such as the Brevard County housing market see house values rise, other sectors of the state are experiencing the opposite outcome. One such example is Charlotte County/North Port. Prices have dropped 2 percent in that region when compared with a year ago. Consequently, sellers must offer incentives to those seeking a Florida home mortgage loan.

Moreover, the May median sales price was $211,500, down from $216,200 during the same month last year.

A resetting of prices across Florida real estate market

While Sarasota-Bradenton did not experience a drop, the market’s prices rose only 2 percent, another likely sign that it, too, is returning to more normal values. In such lean times, sellers and builders must find ways to cope.

People in the Florida real estate industry hope that pricing continues to behave like it has: a slowly leaking balloon rather than anything resembling a popping sound.

“We are getting back to a more rational market,” said Lynn Robbins, director of business development for Coldwell Banker Residential Real Estate.

Why is this the case? One reason might be that there is a lot to look at these days. Inventory is sky-high, as those hoping for a Florida home loan have many properties from which they may choose.

In the Sarasota Multiple Listing Service, for example, there are now 7,304 houses available for sale, three and a half times the level of a year ago. The average weekly sales rate is now 97, down 38 percent from a year ago.

“It’s a price-sensitive market now. There’s a lot more inventory,” said Nick Figlow, president of Re/Max Gulfstream Realty in Bradenton. The momentum has “swung to the buyers; they dictate prices.”

Sue Louis, senior vice president for Coldwell’s Sarasota Bay division, has a theory about why prices have softened: The average median price went down because of activity in the $250,000-and-under market.

“This increase in activity is partially attributable to first-time homebuyers making the decision to buy before [Florida home loan rates] rise.”

Future of Florida home loans

Observers say that continued low interest rates, strong employment numbers and healthy corporate profits have kept the landing in the Florida housing market soft. In congressional testimony on Tuesday, Mickey Levy, Bank of America’s chief economist, said the negative impact that slower housing activity will have on consumer spending is overstated.

In comments likely to comfort real estate agents and builders, Levy said that although “housing activity and prices will flatten” they will “not fall materially.”

The fact that consumer spending has not yet dropped precipitously, despite rising Florida home loan rates and weaker housing activity and prices, leads some to the conclusion that the economy’s resilience might have been under-appreciated.