Stubborn Sellers Struggle in Buyer’s Market
Sales in the South Florida housing market plunged in April, while prices mostly held steady. That’s no way to move a property in a buyer’s market, as sellers are discovering.
Richard Coren was sure that his three-bedroom house in Pembroke Pines was worth around $420,000 when he put it up for sale in November.
And like many local home sellers, he appeared to be the only one.
After it sat for six months on the market, Cohen knocked about $40,000 off the asking price and found a buyer willing to pay $383,500.
“I figured if the market was bad, I had to change with the times,” Coren said, recalling how his real estate agent urged him to ask for less money.
“We got instant activity as soon as I took her advice.”
Coren was one of the 580 people who sold a home in Broward County in April, 16 percent fewer than did so a year ago this month, Florida Association of Realtors data shows.
Miami-Dade County’s housing market took a much bigger dip: Single-family home sales plunged 37 percent to their lowest April level in at least 10 years.
But home prices held steady for the past month, which appears to be keeping buyers on the sidelines. A report issued Thursday showed sales of new homes surged 26 percent nationally amid steep discounts by builders in April, who cut prices 11 percent.
Florida mortgage rates surged to their highest levels since October, but still remain near historic lows.
Cyndy Wald has been urging local homeowners to follow a similar strategy. A real estate agent with the Keyes Co.’s Weston office, she listed Coren’s Pembroke Pines house and was the one who told him his original $420,000 asking price was “yesterday’s news.”
“We’re still in this correction phase,” Wald said, using a term for a market with retreating prices. “They have to price it competitively.”
Compared to last year, housing prices are mostly flat in South Florida.
The Realtors report said the single-family market barely moved the appreciation needle since last year, with median prices up 1 percent in Broward to $363,800 and up 2 percent in Miami-Dade to $382,300.
But sellers are dropping prices slowly in the short-term: Houses sold for about 3 percent less in April than they did in March.
As is to be expected, Florida home mortgage activity was stronger geared towards single-family homes than toward South Florida condos.
For condominiums, the market was mixed: The median price dropped 8 percent in Broward to $197,800 and grew 7 percent in Miami to $268,000 over April 2006. Both markets saw activity plunge from a year ago. Condo sales were down 22 percent in Broward County and 30 percent in Miami-Dade.
David Dabby, a Coral Gables real estate consultant, said a healthy economy and affordable Florida home loan rates are keeping the prices from sinking along with sales. A change in either measure could force buyers to slash prices with gusto in order to find buyers.
The buyer’s market that took firm hold of South Florida’s housing market last year extended its grip in April. Unsold inventory has grown 9 percent since January to 76,063 units in Broward and Miami-Dade counties - but the 12-month figure shows how much things have changed: unsold inventory grew 36 percent in Broward since April 2006 and a 53 percent in Miami-Dade.
SOURCE: Miami Herald
