In Brevard County, Market Projections Vary
A new federal study indicates the Brevard County housing market - while a lot less strong than it was in recent years - remained in the top third in the country for price appreciation over the last year.
The study, conducted every three months by the Office of Federal Housing Enterprise Oversight (OFHEO), found the value of homes in Brevard County rose 9.67 percent from the third quarter of 2005 to the third quarter of 2006. That ranked Brevard in the top third of U.S. metropolitan areas in the ranking - 81st out of 275.
The findings differ sharply from data recently compiled by the Florida Association of Realtors, which showed a 10.8 percent drop in home resale prices during the past year.
The difference reflects how the two studies are done. The OFHEO index is based on repeated sales on the same property over time, for single-family properties that were financed or refinanced by Fannie Mae or Freddie Mac. The agency’s index attempts to look at the experience on homes and who’s buying them with Florida home loans over long time frames.
In contrast, the Florida Association of Realtors compiles data for all sales by Realtors, and its reports are not necessarily an apples-to-apples comparison between time periods, according to Stan Smith, professor of finance at the University of Central Florida. Smith issued his own report analyzing the data as it relates to the Central Florida housing market.
Smith said different types of houses may be selling better in different time periods, and the federal report makes for a better comparison tool.
He said the latest numbers from OFHEO indicate there is no bubble bursting or about to burst, and that Florida mortgage demand remains strong.
“The current numbers suggest that, in general, Central Florida housing markets are currently experiencing the soft landing that many hoped for,” Smith said. “As we watch the effects of higher inventories and discounts on new homes, it is possible that the situation may change. For right now, the Central Florida housing market looks like a good investment, particularly as one’s investment horizon increases.”
“It may be raining, but the sky’s not falling yet,” he added.
Nationally, OFHEO said home prices were 7.73 percent higher in the third quarter of 2006 than they were one year earlier.
Across the nation, they were up 0.86 percent from the second quarter of 2006 to the third quarter of 2006. The quarterly increase is the lowest since the second quarter of 1998. The increase for the quarter was even less in Brevard County - up 0.04 percent.
“Brevard has always been a county of opportunity,” said Gene Collins of the Melbourne Area Association of Realtors. “Real estate always has value, and it’s a great time to buy. But we’re only having a soft landing, if you believe we hit the bottom, and, let’s face it, the inventory hasn’t gone anywhere. There are more than 10,000 properties in Brevard County. Buyers are coming back, but there’s so many more homes to choose from.”
“The urgency to ‘buy quickly or it won’t be available’ is gone, so that makes for a fabulous time for buyers,” Collins said. “It’s all on their side of the ledger. Short-term [Florida mortgage loan rates] are down, and you have a lot of Realtors who want to work with buyers.”
The average rate for a 30-year, fixed-rate mortgage is hovering around 6.25 percent, still a relatively low level, according to Freddie Mac. Various surveys relay information about local home sales, and the amount of inventory on hand, but home price appreciation is something that regards the home equity investment, Smith said.
