South Florida Housing Market Not Reflective of National Home Sale, Price Trend

The Miami Herald asks an interesting question this week: Is this what a housing bust looks like?

Across the country new home prices fell last month by the largest amount in 35 years, while owners are being warned to brace for further declines, especially in formerly hot markets. Yet after years of increases, some buyers say prices are still out of their range; they’re still hesitant to apply for any Florida home loans.

The price decline for new homes in September came while the national sales pace actually picked up, rising by 5.3 percent. It was the second consecutive increase in sales following three months of declines. But even with the improvement, sales activity is down 14.2 percent from a year ago.

South Florida housing market: A different trend

The picture is somewhat different in the South Florida housing market, where prices in general are steady - but sales continue to decresae. Some economists say sales are not likely to rise until prices fall, which is what is happening nationwide.

Many potential Florida mortgage applicants are remaining on the sidelines, waiting to see figures fall further.

Separately, new housing starts in Miami-Dade declined 35 percent in the third quarter compared to the same period last year, real estate consulting firm Metrostudy reported Thursday. It reported that Broward housing starts were up more than 40 percent.

But Bradley Hunter, director of Metrostudy’s South Florida division, said the jump in the Broward housing market was largely due to the fact that builders started more townhomes last quarter than single-family houses, which come with a more expensive price tags.

According to Moody’s Economy.com, many of the formerly hot sales markets in Northeast and in Florida, California and Arizona could see severe the price drops, given the double-digit price gains in those areas in recent years.