From One Day to 180: Central Florida Homes Linger in Soft Real Estate Market

Sunday’s Lakeland Ledger tells the story of Carissa and Jerry Saus, one of many couples suffering a seller’s fate in a buyer’s market.

Despite a price drop of $15,000, the couple’s home is still on the market after four months. Nestled between Mulberry and Lakeland, the 1,611-square-foot, three-bedroom, two-bath, four-year-old home has a nice lawn with fenced backyard and a pond view.

Beginning price: $219,900
Current price: $204,900

Thursday, we talked about the current woes experienced by those selling in the Polk County housing market. So when this couple put their home up for sale, they weren’t surprised that it didn’t sell right away.

“We figured it would take a while,” Saus said. “There are several others in the area that are for sale. They have been up for a while, too.”

Brian Dockery, their Realtor from Keller Williams Realty in Lakeland, said that in the Central Florida housing market, lowering the price is becoming a necessity and the wait to sell a home is getting longer.

A little more than a year ago, homes sold within hours. It was a buyers’ bidding frenzy that was at or above the asking price in a boiling market towards the end of 2005.

But now there’s more room for negotiation.

“It used to be that 90 days was common for a house to sell,” Dockery said. “But now, 180 days is more of the norm. People just don’t come. There are too many out there to compete with.”

Only a handful of people came to the last several open houses he hosted, mainly for the free food. And Realtors these days are on a tight budget.

There were 4,215 listings for homes, condominiums and townhomes throughout Polk County last month. But in that time, only 362 sold, a 26 percent drop from 488 in December 2005, according to the most recent data from the Mid-Florida Multiple Listing Service.

“With so many homes currently listed in the Orlando area, sellers need to make their home stand out, and the most effective way of doing so is to reduce the price,” said Justin Kranitz, who is also a Realtor with Keller Williams.

He says Central Florida has reached the stage in the market where buyers can opt to be very picky and choose not to purchase a home because of one minor thing they don’t like about the home. Previously, buyers would rather purchase a home and fix or change the minor detail they did not like.

But now, if you are selling, experts advise you not to take out a Florida home improvement loan and spend a lot of money renovating it. Instead, simply reduce the price and let the next person improve it.

One impact on the slow housing market is an oversupply of new homes from builders. And with Florida mortgage costs exceeding what many buyers can afford, that inventory just continues to pile up. That inventory reduces home sales and makes it difficult for Realtors and their clients.

“It is really affecting resales in a negative way,” said Judy Cleaves, a Realtor with Judy Cleaves Realty in Winter Haven. “It is causing the sellers to realize we are competing with new homes.”

But sales should increase as the inventory declines through 2009, according to a recent real estate forecast. Builders have an advantage with new homes because of the incentives they can offer, not to mention a lower price.

New homes are being priced in the $150,000 range, a significant drop from asking prices a year ago. Incentives like $3,000-5,000 in closing costs plus free upgrades make selling even more difficult.

The pricing of a home is critical, especially with Florida mortgage loans so expensive, experts say. Those priced under the $200,000 mark move much quicker. But there aren’t that many out there.

“The prices got so far out of hand a year and a half ago,” one Realtor said. “We’re just now getting a correction in resales.”