South Florida Housing Market: Existing Home Sales to Rebound

Finally, some good news for the South Florida housing market: Existing home sales across the region could rebound in the next three to six months, but demand for new homes probably won’t pick up until 2008, a real estate analyst said Wednesday.

“The Realtors will get happy before the builders,” Brad Hunter told more than 400 people attending an Urban Land Institute conference at the Palm Beach County Convention Center in West Palm Beach.

According to Hunter, if hurricane season ends Nov. 30 without another storm hitting the region, hesitant buyers will start applying for Florida mortgage loans and making offers on the inventory of unsold homes. It will take about 18 months after that for new home sales to increase, he said.

Other Florida housing market views

Other real estate observers are more skeptical of short-term improvement in a local housing market that slowed dramatically in 2006 after the five-year boom, when the price of a typical home more than doubled to well above $300,000.

Aside from the threat of hurricanes, buyers are afraid to commit for fear that falling prices will tumble more, Hunter said. But Moody’s Economy.com issued a report last week that suggested the worst of the housing squeeze is over in South Florida.

The West Chester, Pa., research firm said median home prices in Palm Beach County for existing homes fell from late 2005 through the third quarter of 2006 but won’t go any lower. Broward County’s median will continue to decline through the third quarter of 2007, according to the report.

Florida mortgage rates are holding steady, and former Federal Reserve Chairman Alan Greenspan said this week that he expects the slumping market to stabilize. It’s all pointing to renewed demand in the near future.

“The key thing that has to happen,” Hunter said, “is that the (buyers’) psychology has to change, and it’s going to.”

Once those interested in a Florida mortgage see rates stabilizing and prices remaining low, they’ll jump back into the market. For many, that time has already come.