Florida Home Mortgage Demand Returning to Boca Raton, but Supply Still at Record Highs

Across Boca Raton, the cooling conditions of the Florida real estate market are apparent.

“There’s a lot of product out there, but prices are going down” said Boca Raton Realtor Marlene Piccolo.

Signs of optimism are slightly popping up, as those looking for a Florida mortgage loan sent in an increased number of applications last week. That proves some interest is out there. But Jack McCabe, president and chief executive officer of Deerfield Beach-based McCabe Research & Consulting LLC, agreed, said the supply and demand formula that usually fuels the market “is not returning to normal.”

“The demand side of the supply ratio is returning to a historical norm,” he said. “The supply side is at the highest level in history.”

McCabe does predict a dropping in prices at least, meaning affordability will be there for lower-income buyers in the Palm Beach housing market that have had trouble receiving Florida home loan approval recently. Hopefully, the foreclosure rates for these individuals will fall back down in the near future.

Buyer incentives offers by builders

How does on bump up the Florida home mortgage loan demand? By bribing people, essentially. Builders and developers in Boca Raton have been offering buyer incentives for months, McCabe said. “Now, individual sellers are doing the same to try and sell their properties.”

Recent statistics compiled by the Florida Association of Realtors (FAR) indicate that June existing single-family home sales for the Boca Raton-West Palm Beach area totaled only 947 - a 39 percent drop from the same month in 2005. In addition, condominium sales totaled 512 - 41 percent less than June of last year, when 872 were recorded.

“This year, appreciation levels for Palm Beach were completely flat for the first time in five years,” McCabe said. “Broward and Miami-Dade appreciated slightly, but nothing of that sort happened in Palm Beach.”

Historically, normal appreciation for South Florida homes - prior to the 2000-2005 boom - was 6 to 10 percent, he said. “The last five years, appreciation was artificially inflated to 20 to 42 percent.”

Many potential owners are currently saving money, biding their time, waiting to apply for a Florida mortgage home loan until prices have truly plummeted. They will return, however, meaning this is no time for seller panic.