Palm Beach County Sales Drop in Face of Florida Mortgage Slowdown
The number of single-family homes sold in the Palm Beach housing market plunged 25 percent from May 2006 to May 2007, the Florida Association of Realtors said Monday. It was the 18th consecutive month of declining sales, while the inventory soared to nearly a three-year supply.
Nationwide, home sales fell to their lowest level in nearly four years, the National Association of Realtors said in its May report released Monday, while the supply of homes for sale increased 5 percent to a record 4.4 million. That’s a nine-month supply at the current sales pace, the largest since June 1992
In Palm Beach County, buyers and Florida mortgage loan borrowers closed on 741 homes in May, down from 982 in May 2006. The county’s sales slump was more than double the U.S. rate of declining home sales.
One of the main reasons for Palm Beach County’s sales decline and the pressure on Florida housing prices is the number of unsold homes in the market. In May, that figure climbed to 24,862, double what it was a year ago, according to Illustrated Properties Real Estate, which has offices throughout the county.
“Buyers are waiting for prices to drop, and sellers are not reducing their sales prices to more realistic levels,” said William Cozart, chief executive of the Realtors Association of the Palm Beaches.
Indeed, the median price of an existing single-family home in Palm Beach County fell only 1 percent in May, to $387,800 from $391,000 a year ago.
“The buyers’ market continues,” said Mike Pappas, president of The Keyes Co.
Meanwhile, tightened credit rules squeezed the pool of eligible buyers, especially those of lower-priced homes, while rising interest rates, insurance costs and property taxes clobbered those who could afford home ownership in this increasingly unaffordable locale.
“Realtors in a number of markets feel that recent median sales prices have been inflated because of the disproportionate impact of recent [Florida mortgage] tightening on sales of lower-priced homes,” said analyst Tom Lawler, an economist in Virginia.
In the Treasure Coast, single-family home sales fell 39 percent, to 315 from 519 in May 2006. New-home builders in the Treasure Coast, which saw an explosion of new development during the housing boom, have been slashing prices and offering buyer incentives, which have cut into the sales market for existing homes.
“If you could buy a new home or an existing home for the same price, which would you buy?” said Mike Morgan of Morgan Florida Real Estate Group.
The median price of an existing single-family home in the Treasure Coast fell 9 percent in May, to $228,500 from $252,300 in May 2006. Statewide, single-family home sales fell 34 percent, to 12,607. The median price fell 5 percent to $237,000.
“It’s not just a housing recession anymore,” said Nouriel Roubini of Roubini Economics in New York. “It looks more and more like an economic recession.”
The condominium market had some of the only bright spots in Monday’s reports.
In Palm Beach County, the number of condos sold to Florida mortgage applicants rose 11 percent, to 613 from 552. The median price of an existing condo fell 1 percent, to $217,400 from $218,900.
The number of condos sold in the Treasure Coast rose 39 percent in May, to 118 from 85. The median price of an existing condo rose 9 percent to $220,800.
Statewide, though, the number of Florida condos sold fell 28 percent, to 4,090 from 5,671. The median price of a condo fell 4 percent to $202,500.
SOURCE: The Palm Beach Post
