Brevard County Housing Market Report: Fewer Permits, More Foreclosures

The Brevard County housing market continued to linger in the doldrums in November, according to Florida Today, which obtained the latest stats from the Home Builders & Contractors Association of Brevard.

The number of housing construction permits issued throughout Brevard County in November was 235, down from 613 permits in November 2005 and down from a short-lived increase of 512 permits in October of this year.

Of the 235 building permits issued last month, 201 were for single-family homes - the lowest number for single-family construction in any month this year. The 201 permits in November were down sharply from earlier this year, when more than 400 single-family home permits were being issued each month.

“It’s been pretty serious. It’s going to get a little bit more serious before it gets better,” said Franck Kaiser, the association’s CEO.

How serious is it? The number of Florida mortgage foreclosures in Brevard County has increased in recent months as housing prices have fallen and sales have slowed since last year, according to Kaiser and others in the local real estate industry. In places such as Palm Bay, “For Rent” signs have become a somewhat common sight in front of homes.

A lot of the Brevard housing slump stems from investors who bought homes last year - when prices peaked - and they haven’t been able to sell at a profit, or break even, since. The

“We’ve seen a spike in foreclosures,” said Sue Pierce, owner and principal broker at Integrity Home Loans in Melbourne. “I just saw a foreclosures list with about 200 people on it from the Palm Bay area. A lot of them are investors who are stuck in the market… It’s not normal to have that many on a foreclosure list. Usually, you’ll see only a handful of names.”

It’s not just investors, and it’s not just happening on the Space Coast.

A new study by the Center for Responsible Lending found that 2.2 million home owners nationwide will lose their homes due to foreclosures in the subprime lending market.

According to the non-profit group, risky bad credit Florida home loan practices have played a part in “the worst foreclosure crisis” in the modern market - projecting that one of five subprime loans issued in the state from 2005 and 2006 will ultimately fail.

On the bright side, Pierce said she is beginning to see signs of new life in the Brevard County market. Kaiser said he expects home sales and prices to pick up a bit in the first half of 2007, but substantial increases could take longer.

Ingo Winzer, president of The Local Market Monitor, a Massachusetts firm that tracks real estate market trends, said in many areas, the decline in prices was accompanied by a decrease in population from people moving out of an area, and Florida does not have that problem.

That’s why the Florida housing market downturn should not last as long as in some other states, where housing prices were flat for up to a decade following a market decline. Instead, Florida has been more like the stock market, where investors treated housing like a “speculative commodity.”

In Brevard County, the median sales price of an existing single-family home in October was $212,400, down 11 percent from $238,200 in October 2005.

Condominium prices dropped to a median of $179,000 in October, down 17 percent from $214,400 in October 2005, according to the latest statistics from the Florida Association of Realtors.