South Florida Housing Market Awaits Property Tax Answers
South Florida home sales stayed sluggish in March, as buyers and sellers waited to see whether the Florida Legislature will lower property taxes.
Tax relief could deliver a jolt to the struggling housing market, but for now it’s prompting Florida mortgage loan borrowers and prospective buyers to hold off until the issue is decided.
In March sales of existing single-family homes were down 33 percent in Miami-Dade County and 25 percent in Broward compared to a year ago. For condominiums, sales plummeted 45 percent in Miami-Dade and 32 percent in Broward.
Sales for the month went up across the board when compared to February. Yet that did nothing to shrink the outsized inventory of homes with For Sale signs. Nearly 75,000 houses and condos were listed for sale in March, a 4 percent increase over February and a 58 increase over a year ago.
”The [South Florida housing market] is still trying to find itself,” said Richard Barkett, CEO of Realtor Association of Greater Fort Lauderdale. “Sales are soft. I think the next thing will be a softening in home prices. That would be a very good sign, part of the healing process in our real estate market.”
If prices fall, buyers could return, whittle down the inventory of unsold homes and ultimately send prices up again. But in March, sellers remained reluctant to drop prices, though they continued offering incentives like paying closing costs or offering to furnish a home.
The median price of a single-family house in Broward County was $372,400, up 1 percent from last year and 3 percent from February. In Miami-Dade County the median sales price for March was $382,600, flat compared to last year and February.
”The properties that are moving are on the high end,” said developer Edgardo Defortuna, who heads Fortune International in Miami. “It is the market in the $400,000 to $1 million range that is suffering most. There is a lot for sale and very little demand.”
That’s sometimes true even at lower prices. Four months ago Marty Blondwine put her 2-bedroom condo in Fort Lauderdale up for sale. Since then she has dropped her price from $269,000 to $239,000.
”No buyers yet, no showings,” said Blondwine, an accountant pondering a move out of the state because of the high cost of living. “I can’t lower the price anymore. If I do, I will lose money.”
Nationally, existing home sales showed the biggest drop in 18 years, partly because of poor weather. The National Association of Realtors reported home sales fell to a 6.12 million annual rate, an 8 percent drop from February and the sharpest plunge since January 1989.
The national median home price for March was $217,000. That compares to $213,600 in February and $217,600 a year ago.
In South Florida, reasons for the ongoing slowdown range from overbuilding and rampant speculation to a lack of affordability and tightening credit standards. Many also point to the high cost of insurance and property taxes. The Florida Legislature has already passed reforms aimed at lowering insurance premiums - though many complain they aren’t working well enough - and is now seeking to lower homeowners’ tax bills. Ronald A. Shuffield, president of Esslinger Wooten Maxwell, a South Florida real estate brokerage, said South Florida mortgage applicants are waiting for a possble property tax reduction.
“Some buyers are saying, `I would hate to buy today and not get the benefit of any new program,’ ” Shuffield said. “But the legislators don’t even know what the outcome of the plan will be. Until everything is put to rest, there is a tendency to say, `Let’s wait a month.’ ”
SOURCE: The Miami Herald
