In Southwest Florida Housing Market, Builders See Reason For Hope

Are there more signs of life in the Southwest Florida housing market? Some local builders seem to believe there are.Milt Flinn and Pat Neal, prominent real estate players, saw a bump in activity during April, giving them reason to believe that the fortunes of the local market could be turning.

“All the experts are reporting that we are in the initial stages of a market correction,” said Neal, the namesake of Lakewood Ranch-based Neal Communities.

“Our strong April sales and traffic support this research data. With our current traffic and sales, we anticipate that this quarter will also reflect this improvement.”

But despite their reason for Florida mortgage loan optimism, news from one of nation’s largest real estate organizations was much more grim Tuesday.

The National Association of Realtors lowered its expectations for the housing market this year to reflect stricter lending standards and the decline in mortgage originations to borrowers with poor credit.

The group expects existing home sales of 6.29 million in 2007 and 6.49 million next year. The 2006 figure was 6.48 million.

The median price for existing homes is also forecast to dip 1 percent to $219,800 this year, but to rebound 1.4 percent in 2008.

Southwest Florida already saw one indication of a strengthening market in March. Sales rose 16 percent when comparing March’s 834 to the 721 homes sold in the same month a year ago.

Even the condo market saw a boost in sales for March, rising 7 percent when comparing that month with March 2006.

The Charlotte County-North Port market saw a 25 percent drop in sales: from 315 in March 2006 to 237 in March 2007.

Flinn, president of Lakewood Ranch Realty, said that his 90-agent firm had more than $20 million in closings during April, unseating its previous record month of March 2006 by 26 percent.

Neal, whose company has built more than 7,000 homes in the region during nearly four decades, reported 15 home sales in April, an increase of 53 percent when compared with the same month in 2006.

Prices for 11 homes sold in Lakewood Ranch averaged $528,352 while three others in The Harborage in Manatee County averaged $328,833.

The region’s real estate community, and certainly homeowners trying to move their houses, have been looking for good news since the market’s slide from the boom years of 2004-05.

Sarasota-Bradenton’s experience in March was not repeated across the nation or state. National sales dropped 13 percent that month when compared with March 2006 and statewide sales dropped by 28 percent.

The NAR report on Tuesday anticipates new-home sales of 864,000 in 2007 and 936,000 next year, down from 1.05 million last year.

The median new home sales price is forecast to remain unchanged at $246,400 in 2007 and then gain 2.2 percent next year.

Housing starts will also drop, the group predicts, to 1.46 million units this year and 1.52 million in 2008, from 1.80 million in 2007.

Speculative buyers, who pushed home prices up to record highs in the past five years, have more or less disappeared from the market.

This is a boon to traditional home buyers and first-time Florida mortgage seekers looking for lower prices, said Lawrence Yun, NAR’s senior economist.

“It’s good that we’re getting beyond the tendency of some buyers to view housing as a temporary asset to accumulate short-term wealth, which is not to be expected in a normal market,” Yun said.

Despite its downward adjustment, the NAR still believes the housing slowdown will be moderate.

“If it weren’t for a favorable economic backdrop, housing would probably have a hard landing. As it is, we see this as a soft landing with home sales rising gradually in the second half of the year and prices recovering a bit later,” Yun said.

Meanwhile, home builders continue to suffer from the slow market.

On Tuesday, luxury player WCI Communities said it fell to a wider-than-expected loss in the first quarter on disappointing sales in Florida and increased defaults on some properties.

Losses for the Bonita Springs company totaled $15.8 million, or 38 cents a share, versus a profit of $40.2 million, or 89 cents per share, for the first quarter.

“Lower margins in our traditional and tower divisions as well as fewer home closings during the quarter resulted in a net loss for the first quarter,” said Jerry Starkey, president and chief executive.

Only time will tell if bad credit Florida mortgage troubles continue to take their toll on the region, or if Southwest Florida is on the verge of smoothing itself out.

SOURCE: Sarasota Herald-Tribune