Ocala May Dodge Home Price Decline
The bad credit Florida mortgage crisis and tighter lending criteria may lead to the first dip in the median price for existing homes since 1968.
Nationally, the sale price for an existing home should dip 0.7 percent to $220,300, after a 1 percent increase in 2006, the National Association of Realtors forecasts.
With mounting defaults in the subprime mortgage market - mortgages given to borrowers with weak credit - and many home loan lenders filing for bankruptcy protection or ceasing operations altogether, lending standards are expected to become much more restrictive.
That all means any recovery in the housing market (at least nationally) will be slowed as home prices in many areas could be driven down, said Walt Molony, a spokesman for the National Association of Realtors.
“There is a downgrade in the forecast as a result of the subprime (bad credit mortgage) lending crisis,” Molony said earlier this week.
But whether the median price in Florida declines remains to be seen. Nancy Riley, president for the Florida Association of Realtors, had a more upbeat outlook for the state’s real estate portfolio.
She said that if state lawmakers find a way to ease property tax rates and stem skyrocketing homeowners’ insurance costs, then Florida mortgage demand would bounce back and the market would get a boost.
“People want to move to Florida,” Riley said.
Wilbur Van Wyck, former president of the Ocala-Marion County Association of Realtors, said that with home prices in the Ocala area already the most affordable in the state, he couldn’t see a significant drop-off coming.
The median price for a home in the Ocala area in February was $161,300 - the cheapest in the state, and a very affordable Florida home mortgage amount for a prospective first-time buyer.
“Our prices have not plummeted because we didn’t get that high in the market compared to other areas,” Van Wyck said.
Van Wyck said that while Marion County isn’t short of prospective buyers stagnant markets in both the South Florida housing market and in the Northeast have made it difficult for people to make the move here.
“The biggest problem I’ve seen is that people want to buy here, but they can’t sell homes elsewhere,” Van Wyck said.
Molony said sales numbers nationally are somewhat skewed.
That’s because sales for moderately priced homes are in the midst of going through a strengthening while sales for homes in high-cost markets are waning. That’s in contrast to the situation a year ago.
“So we’re not quite getting an apples to apples comparison,” Molony said.
SOURCE: Ocala Star-Banner
