South Florida Borrowers Enjoy Wide Selection of Available Homes

The number of homes with For Sale signs in the South Florida housing market reached new highs in February. At the current sales pace, it would take nearly three years to sell all the condominiums on the market. For single-family houses, it would take almost two years.

Why so long? Even as sellers get more creative, and desperate - one Weston man is throwing in a 52-inch, $5,000 television for potential Florida mortgage applicants - sales of existing homes continue to move in slow motion. They dropped 20 percent or more in February over last year, new figures show.

But prices were mixed, depending on the market sector: Broward condos were down 10 percent over last year, for example, while Miami-Dade house prices rose 3 percent over last year.

”The market is trying to find itself,” said Richard Barkett, CEO of the Realtor Association of Greater Fort Lauderdale. “We are still in correction mode.”

February marked Miami-Dade’s lowest number of sales in the past year, according to data from the Florida Association of Realtors. In Broward, sales were near the year’s lows, but up compared with January.

NOT SOLD
Sluggish sales pushed the number of unsold homes in Miami-Dade and Broward counties up to 69,734. A year ago, it was 37,495. With an outsized number of sellers and a slow sales pace, prices were scattered.

The median price for Broward condos came in at $194,800, down 10 percent from a year ago and down 2 percent from January. For Broward houses, the median price was $362,200, flat from a year ago and 1 percent down from January.

A median-priced house cost $381,400 in Miami-Dade, a 3 percent increase from February 2005 but down 3 percent from January. Miami-Dade condos were $279,500 in February, up 5 percent from last year and up 9 percent from January.

The February numbers come amid increasing worry about a meltdown in the bad credit Florida mortgage market, a record number of new condos coming online in the next two years and increasing foreclosures. Many properties remain unaffordable.

The Florida Legislature is also weighing changes to the state’s property tax system, which some say is hampering the housing market because the taxes are too high or unfairly assessed.

At the same time, South Florida’s unemployment remains low and Florida home loan rates competitive. An average 30-year fixed rate mortgage is 6.16 percent, according to mortgage buyer Freddie Mac.

THE CONDO GLUT
Still, the biggest obstacle remains the ever-growing number of homes for sale that can’t find buyers. Over the last 12 months, the number of condos for sale grew 81 percent to 21,308 in Miami-Dade and 91 percent in Broward to 22,243 — that’s 36 months’ worth of inventory in Miami-Dade, 31 months in Broward, at the current sales pace.

Single-family homes aren’t as bad, but still overloaded. Miami-Dade’s ranks increased 91 percent to 12,128 and Broward increased 83 percent to 14,055. That means it would take 24 months for all houses to sell at the current pace.

In a healthy market, with equal parts buyers and sellers, it typically would take between six and 12 months for everything to move. Market watchers have long said inventory must shrink before the market picks up again. For that to happen, they say, sellers must be more willing to drop prices to meet demand.

`YESTERDAY’S WORLD’
”Sellers must make adjustments,” said Gus Rubio, the Miami-Dade head of Coldwell Banker, the biggest residential brokerage in South Florida. “If not, you are a seller thinking in yesterday’s world.”

For its part, nationwide, February sales actually rose on a monthly basis by the largest amount in nearly three years. The 3.9 percent increase was attributed to a milder-than-normal winter in areas like the Northeast.

Yet, sales were down when compared to a year ago. And the national median price was also off: down 1.3 percent from a year earlier to $212,800. In South Florida, many sellers are not only dropping prices but turning to all sorts of incentives and gimmicks to stand out.

Some are offering to pay closing costs or to furnish the home. These are definitely added reasons to contact our Florida mortgage brokers today and see what sort of deal you can secure.

SOURCE: Miami Herald