In Florida and Throughout Southeast, One Market’s Loss is Another’s Gain

The South Florida housing market nearly screeched to a halt in late 2005, said Alvin Arner, a real estate agent with Coldwell Banker Residential Real Estate in Stuart, Fla., and has been climbing back to normal conditions every since.

There was a temporary standstill in 2004, too, after the double blow of hurricanes Frances and Jeanne in the area. The “snowbirds” - property owners and vacationers who travel to Florida from colder-climate areas - have been slow to return.

Speculators have mostly skidded out of the market, home builders have cut way back on new construction project, and prices have retreated about 15-20 percent in some areas.

He expects 2007 to be a better year, though, and 2008 to be better still. Coastal regions tend to experience sharper pains and gains from Florida real estate gloom and boom than those regions with more moderate swings in market conditions.

No two local markets are the same, of course, and some market areas are tracking with the general slowdown in the housing market, while others thrive or dive.

It has been a decidedly mixed bag for housing markets in the Gulf Coast area, for example, as some communities are luring relocating hurricane victims with higher ground and lower prices, while other Gulf Coast communities have seen an outmigration of residents.

Arner said taxes and insurance can be a big problem for buyers in Florida.

“The combination of property taxes and insurance… has killed more than one deal,” he said. “Rising appreciation and taxes are in some cases trapping (owners) in the property they are in now because the taxes would be too much to bear if they purchased another home in the area.”

The supply of buyers has dried up significantly, and Arner said he has focused on working with sellers. In today’s market, “If you want a quick sale, take the price down,” he said.

Indeed, with Florida mortgage rates what they are, and inventory levels so high, buyers are in the driver’s seat. Sellers who realize this and price their properties realistically are still able to achieve sales.

Heidi Greer-Mosher, a leader for The Greer Group, described local market conditions as “good sluggish.”

“It’s still a buyer’s market. Buyers are scared - afraid the market is still going down,” she said. “While there are some areas with double-digit price appreciation, all in all it is flat.”

She also said that there are new types of projects gaining steam in the area, such as lofts and mixed-use properties. The local economy continues to improve slowly, she said, with growing technology and medical-related industries.

It’s a different story to Florida’s west.

West of New Orleans, in Reserve, La., Ronald Hill of Hill #1 Realty said “property values have skyrocketed,” perhaps 25-30 percent in the St. John Parish area that includes Reserve.

In a normal market, he said values might grow about 5-10 percent per year.

Rents are going up, too.

“You almost can’t find anything to rent, and new construction isn’t keeping up with the demand for housing. A lot of homes suffered wind damage from the two hurricanes that hit the area last year,” Hill said.

Hurricane-displaced residents from New Orleans are powering the market changes in the area, Hill said, and he expects many will end up settling permanently in other areas, such as Texas, Alabama and Baton Rouge, La.

Vernice Simon, also a Realtor with Exit Realty Professionals in Metairie, said homeowner’s insurance “is a problem - it’s too expensive.”

The rising costs of building materials are partly to blame for the rising cost of homes throughout the Southeast, experts say, and despite the low cost of Florida home mortgage loans, a diminishing supply of land and the rampant speculative buying of 2001-2006 has pushed prices beyond the reach of many buyers. The slump we’re seeing now is the result.