Charlotte County Housing Market: Signs of Life

The Charlotte County housing market looked remarkably stable compared with the rest of the state as a tumultuous 2006 drew to a close, according to the Sun-Herald.

Even while sales of existing homes dropped 28 percent statewide during the 2006 fourth quarter compared to 2005, home sales in Punta Gorda and Port Charlotte were off a statistically insignificant 2 percent, according to figures released Thursday by the Florida Association of Realtors.

Elsewhere, the close of 2006 was tough on sellers.

Every other metropolitan area in the Florida real estate landscape reported a double-digit volume decline, except Miami, down 3 percent, and Melbourne-Titusville-Palm Bay, which was up a remarkable 20 percent.

With Florida mortgage costs more than many residents can handle, volume of sales in Fort Myers-Cape Coral was off by 20 percent compared to the 2005 period. Sarasota-Bradenton was off 11 percent, while incomplete figures for Naples-Marco Island suggest a 34 percent drop in volume.

What didn’t drop (much) was the shockingly high cost of a home in paradise. Sellers may be complaining about having their houses listed for months on end, but this has not yet translated into a general price adjustment throughout the state.

Statewide, the median cost of an existing house declined only 1 percent during the fourth quarter to $242,100. With a large inventory of homes for sale, this is not a figure that would motivate buyers - much less provide relief for young working families looking for starter homes.

But the Punta Gorda metropolitan statistical area - which also includes all of unincorporated Charlotte County - reported a 10 percent drop in median prices, a healthy step toward putting the market back in motion.

Punta Gorda’s fourth quarter median home price of $209,700 (a more reasonable sum for a prospective Florida mortgage loan seeker) is a lot better off compared with $233,700 during the 2005 period.

“This is still a hot market, and these numbers show it,” said Bill Dryburgh, president-elect of the local Realtors, and immediate past president of the Realtors Multiple Listing Service.

“We are happy that our area appears to be one of the more stable areas in the state,” said Alan Mitchell of the Punta Gorda-Port Charlotte-North Port Association of Realtors. “We have been kind of aware of that for some time. We have been running some ads to let people know that this is the time for people to get out there and buy.”

Certainly, there has been a significant amount of unhappiness from sellers who can’t find a buyer to make an offer at their asking price and agents who are finding it harder to close deals.

Local Realtors have coined the term “reality-based pricing” to reflect the decline in prices, which they largely see as a positive development.

Simply stated, if you want to sell your house, cut your price at least to what similar properties have sold for locally.

It’s also important to remember that the current “slow” market is slow by comparison with the frantic period following Hurricane Charley, when any structurally sound dwelling could command top dollar.

“The real estate agents who are self-motivated and do their homework are making money while the agents who just sit back and wait for someone to call are starving,” observed one Realtor.

Both of Charlotte County’s neighboring metro areas in the Southwest Florida housing market showed both a drastic drop in sales volume combined with a big drop in median prices.

At least through the end of 2006, “reality-based pricing” wasn’t enough to turn prospects into buyers. Median prices in Fort Myers-Cape Coral were down 23 percent, to $256,400. Sarasota-Bradenton was the same story - down 18 percent to $281,500.

So 2006 turned out to be a disappointing year for many prospective sellers, who missed the opportunity of cashing out during the overheated housing market years of 2004 and 2005.

But the Realtors report predicted that with Florida home loan rates still low, the market will firm up this year. Indeed, the drop in home sales volume tells only part of a more complicated story.

“One important indicator of the real estate market is occupancy rates, and these appear to be stable or increasing in most markets, including apartments, office buildings, retail space and industrial warehouse and distribution space,” said Wayne Archer, director of the Bergstrom Center for Real Estate Studies at the University of Florida.

“Employment is very good and the fundamentals that drive rental income and occupancy are still very strong. In addition, mortgage rates have remained a little more stable than some people expected,” he added.