Tuesday, January 30, 2007

Florida Real Estate Update

Florida's and the nation's existing-home sales continued to soften in December, capping a year that marked the end of a historic, five-year real-estate boom -- and left plenty of questions about the year ahead.

Sales of existing homes nationwide slipped 0.8 percent last month, the National Association of Realtors said Thursday, closing out a year in which demand slumped at the fastest rate in 17 years.

For all of 2006, sales dipped 8.4 percent to 6.48 million homes and condominiums -- the biggest annual decline since 1989, when sales fell 14.8 percent. But last year's sales total was also the third-highest annual count, trailing only the record of just over 7 million units sold in 2005 and the 6.78 million units sold in 2004.

Even with the sharp drop in sales last year, the median price for all existing homes sold nationwide managed to rise 1.1 percent, to $222,000, from the previous year.

That was far below the double-digit percentage gains during the boom years. The median home price in 2005, for example, rose 12.4 percent.

In Florida, 12,415 existing single-family homes sold in December, down 28 percent from a year earlier. The total for the full year also was down 28 percent, according to the Florida Association of Realtors.

The statewide median price -- half sold for less and half for more -- slipped 2 percent during the month to $241,100. For the year, the median in Florida rose 6 percent, contributing to a five-year gain of nearly 95 percent.

Randy Martin, president of the Orlando Regional Realtor Association, noted that 2006 was the second-best year on record for Orlando Realtor sales, despite the slowdown late in the year. New-home builders have been offering many incentives to clear out inventory, Martin said, adding to the competition for customers, but the thinking now is that "builders will burn through their available homes sometime in mid-2007.

"Some independent experts said, however, that they expect the home market to remain sluggish at least through 2007."

We're about to enter the selling season with a really, really big supply overhang," said Michael Larson, a real-estate analyst with Weiss Research in Jupiter.

The Florida report showed that single-family home sales in Metro Orlando -- Orange, Seminole, Lake and Osceola counties -- dipped 26 percent for the year, close to the statewide average of 28 percent. All 20 Florida metro areas showed declines.

Metro Orlando's median price rose 14 percent for the year, according to the Florida Realtors' report, more than double the statewide average of 6 percent. Orlando condo prices edged down 3 percent, while the state average was up 1 percent. Courtesy of Orlando Sentinel.