Economists: Treasure Coast Housing Market to Remain Soft Until 2009

Encouraging signs may be popping up across the state, but don’t expect the Treasure Coast real estate market to make any positive strides until 2009.

That’s according to a new report by Hank Fishkind, principal of Orlando-based Fishkind & Associates, which we mentioned yesterday in discussing housing market outlooks for overly-inflated Lee County.

The 2007 Real Estate Forecast released Wednesday showed that the market will remain relatively flat in most of Indian River County, Martin, St. Lucie and Palm Beach County — beginning its rebound in 2009.

“It’s going to take some time to absorb the inventory levels in the residential market. Residential housing prices rise like rockets and drop like feathers,” Fishkind said.

In Indian River County, volume will continue to decline for the existing homes market, bottoming out in 2007 with 2,600 units closing. Even as the number of available homes gradually increases by 2009, prices are expected to remain at an average of $270,000.

The new-homes market is expected to behave similarly.

After a substantial speculative run-up in condo prices the past few years, those units are expected to return to normal levels by 2007 as the rates of Florida mortgage loans remain steady, with the prices remaining around $200,000.

Local Realtors quickly questioned the report.

“It’s not fair to generalize because there are three different markets in Vero Beach: commercial real estate development, oceanfront and mainland properties,” said Bill Glynn, a Realtor with Michael Thorpe Real Estate Inc. in Vero Beach. “We do know that for mainland properties, it will take some time to cut into those inventory levels.”

In Martin County, the number of homes is expected to remain flat through 2007. An estimated 600 homes are expected to be closed on during 2008, with the number increasing to slightly more than 700 in 2009. Area home prices will continue to grow at a steady rate, passing $400,000 by 2009.

“It’s still an incredible time to buy right now because you can get some great deals,” said Jennifer Atkisson-Lovett, president of the Realtors Association of Martin County. “I don’t have a crystal ball, so I can’t say what will happen in the future, but I think the market will come back before 2009.”

The reports said that with Florida mortgage costs expected to remain at low rates, the new home market in St. Lucie County will peak again a few years after 2009. However, prices are expected to remain relatively flat during that period.

Condos remain the softest part of the South Florida housing market. Closing volume for new condominiums will continue to decline through 2009. The new condominium market is not expected to reach the bottom until late 2010 or 2011.

“I can tell you that sales have slowed in our area because of inventory, so it will take a while for things to settle down here,” said Sherry Wetzel, president of the Realtors Association of St. Lucie County.

“We do have about 3,500 homes for sale at the moment, but I don’t think that it will take until 2009 for things to recover.”
Palm Beach County new home closings have slipped from a peak of more than 10,000 units in 2003 to about 7,000 units in 2006.

Overall, Fishkind said the Treasure Coast real estate market is still doing better than other parts of the county, and mortgage applications should pick up a bit this year.