South Florida Housing Market Remains Stagnant

Roxanne Arnold quit her job six years ago and started flipping houses instead, buying and selling about 20 homes in that time.

But nowadays, it’s getting harder. A three-bedroom townhouse she owns in Ft. Lauderdale has been on the market for more than year, and business has gotten so slow that she had to pick up a part-time job.

“Everyone that needs a home to live in has bought one, and the people that still need a home can’t afford these prices. I would not call it a buyers’ or sellers’ market, because there is no market,” she said.

Too extreme? Perhaps not. Numbers released Tuesday showed that the once-torrid South Florida housing market has stalled as the summer months dragged on. Many builders and brokers have already labeled 2006 a year to forget, the Florida Association of Realtors said, and it’s only July.

• The region’s home prices in June were flat, and sales were almost unchanged from May. Compared to a year ago, prices were the same or up slightly, and at the same time, sales were down sharply.
• A single-family home at the median price in June cost $378,000 in Miami-Dade County and $377,400 in Broward County, compared to $379,700 and $379,800, respectively, in May.
• A median-priced condo went for $257,600 in Miami-Dade and $212,300 in Broward in the month of June, compared to $250,900 and $212,300 in May.

The market slowdown, which some argue started last fall, is due to several factors, notably prices soaring beyond the reach of many buyers, investors fleeing the market and Florida home loan rates creeping up. Last week the 30-year, fixed rate mortgage increased from 6.74 percent to 6.80 percent, according to Freddie Mac.

Skyrocketing insurance rates and the prospect of higher property taxes have done their part to chill the market as well. Yet many area sellers refuse to lower prices, clinging to the notion that the roaring market will return. Buyers, for their part, are willing to wait it out for a better deal. The result is a standoff.

Housing inventory has more than tripled in the past year due to these conditions, with some 54,691 homes listed for sale in June, compared to 15,830 a year ago. That figure is also up from May, when 53,933 were listed for sale.

Sales of single-family homes and condominiums sold in June were down more than 30 percent from a year ago. Compared to May, sales for houses were up 1 percent in Miami-Dade and unchanged in Broward, whereas condos were down four percent in Miami-Dade and down two percent in Broward.

The National Association of Realtors chief economist, DavidLereah, believes activity will pick up once sellers lower their prices. Mild South Florida price increases in June have led some experts to think sellers are starting to do just that.

“We are starting to see a little more price drops. Sellers are starting to understand they have to be realistic,” said Gus Rubio, Senior V.P. at Coldwell Banker, noting that many more condos are slated to come onto the market, adding even more inventory and perhaps extending the slowdown.

But others contend the market may bounce back sooner rather than later.

“I am advising all sellers not to blink,” said Craig Studnicky, president of International Sales Group in Aventura, which primarily sells new condos but also existing properties. “If 1,500 people a day are moving to Florida and we have a mild hurricane season, then I think the demand curve could catch up by fall.”