Florida Housing Market Doesn’t ‘Spring’ Into Action
The spring season typically sets the tone for the last half of the year in the Florida real estate market. This year, that tone is fairly gloomy.
Just listen to what experts have to say on the first quarter of 2007:
“The housing market is struggling to get back on its feet,” according to Sal Guatieri, economist at BMO Nesbitt Burns Inc.
“The spring-selling season is coming well below expectations,” agreed Mario Ricchio, a housing analysts with Zacks.com.
At the beginning of the year, there was hope that housing had turned the corner. But these expectations seem to have faded away as Florida mortgage activity continues to sag.
“We were seeing signs of recovery last year, but a lot of that reflected warmer than usual weather,” Guatieri said.
Economists say housing is bumping down near the bottom, but hope remains that the general easing of Florida mortgage rates will help buyers re-enter the industry.
“We think the housing market will remain weak right through this year. It probably won’t be until early next year that we see a stabilization and some recovery,” he added.
Many factors are at work. Buyers are hesitant to buy a home if they think prices are falling. Sellers have pulled homes off the market, waiting for prices to rebound. It’s a waiting game on both sides.
“It is a buyers’ market and except for certain places, not too much of good property is available to be sold,” said Rajeev Dhawan, director of the Georgia State Economic Forecasting Center.
In addition, tightening lending standards are hurting home buyers. At the same time, speculators are fleeing the market, Ricchio pointed out.
New-home sales are expected to fall 0.1% to 857 million units in April. Last month, similarly, new-home sales fell 2.6% and are down 23.5% compared with March 2006.
Existing-home sales are expected to only inch higher by 0.5% to 6.15 million units in April, after a sharp 8.4% decline in March - the biggest decline in 18 years. The more this trend continues, the more Florida mortgage loan borrowers will have the market tilted in their favor.
Sellers will have no choice but to bring prices down even further.
SOURCE: MarketWatch
