Miami, South Florida Sellers Refuse to Drop Prices
South Florida homes continue to sit on the market, waiting for buyers, while more and more are being put up for sale. Some real estate experts now say it will be 2009 before the housing market starts to recover.
While sales of existing homes plunged in June in Miami-Dade and Broward counties, prices largely held steady, reported the Florida Association of Realtors Wednesday. But market watchers cautioned prices can’t hold much longer given stagnant sales and ballooning inventory.
”We are at the early to middle stage of the market correction,” said economist J. Antonio Villamil of the Washington Economics Group. “The thing that moves initially is sales volume decline and inventory increasing. Eventually, prices will move down too.”
A drop in prices will spur buying, Villamil said, and Florida mortgage demand will ultimately catch up with supply once more. ”It’ll be a couple-year process,” he said. “For those caught on the wrong side of this, there will be blood on the floor.”
For now, the median price of a single-family house in June was $371,600 in Miami-Dade, a drop of 2 percent from June 2006 and 7 percent from May. Broward’s median price was $382,000, a 1 percent gain from last year and 4 percent gain from May.
There were bigger price swings in the Florida condo market. Miami-Dade’s median price was $275,500, up 7 percent and 1 percent from May. Broward’s median priced condo fell 9 percent to $194,100. That was down 4 percent from May.
But the big story remains the ongoing dearth of sales activity. Existing Miami-Dade condo sales plummeted more than 50 percent in June from the same month last year and 15 percent compared to May. Similarly, the number of existing Miami-Dade single-family houses sold in June plunged 47 percent compared with a year ago. Sales were off 5 percent from May.
Broward single-family home sales were off 22 percent compared to the same period last year but up 17 percent from the month before. Condo sales dropped 35 percent compared with the same period a year ago and down 9 percent from May.
Reflecting the lack of sales, the inventory of unsold homes continued rising. Owners of more than 77,000 single-family houses and condos have listed properties for sale. A year ago that number was just over 50,000.
Gabriella Berenyi, 47, has been trying to sell her three-bedroom townhome in Oakland Park for two months. She hasn’t received any offers; one person she encountered couldn’t qualify for a Florida mortgage loan. Yet, Berenyi hasn’t budged from her $289,000 asking price - but she’s thrown in a vacation timeshare membership in hopes of enticing a buyer.
”I’m so desperate,” said Berenyi, an accountant, who lives in another home nearby. “It’s only been two months and I know some people have been waiting more than a year for a buyer. But the market is very, very sluggish.”
Signs don’t suggest improvement anytime soon.
Home loan giant Countrywide Financial, in reporting a 33 percent second-quarter earnings drop Tuesday, said the ”worst is still likely ahead.” It said the national and Florida housing market won’t recover until 2009.
That timeframe strikes some local observers as reasonable for South Florida, though some sectors and neighborhoods could take much longer.
Craig Studnicky, president of condo brokerage International Sales Group, said established areas like Aventura or Miami Beach may be first to recover but emerging areas like downtown Miami will need more time. Jack Winston of Miami’s Goodkin Consulting said he surveyed downtown Miami’s condo market and concluded the market will need five to seven years to digest all of the units under construction and be ready for new development.
”But for the broad market, you may start to see steady appreciation in 2009,” said Winston. “Right now, people selling homes still have not adjusted their thinking to what the reality is. The sooner prices start to come down, the sooner this market returns.”
SOURCE: The Miami Herald
