Palm Beach County Housing Sales Update

It was by far the sharpest annual percentage decline since the Realtors’ group started keeping statistics in 1994.

Existing sales countywide fell slightly last year, to 6,953 from 6,971. Sales may finally have hit bottom as South Florida’s housing slump enters its fourth year, but prices could keep falling through 2009 and into 2010 until the excess inventory of homes for sale dissipates, experts say.

“The excesses of the housing boom coupled with the economic downturn have produced the most severe recession for housing in this area in recent memory,” said Chris Lafakis, an economist covering Florida for Moody’s Economy.com.

Mortgage rates have plummeted to near 5 percent and sellers are offering major concessions, but many potential buyers still are holding off. Some can’t qualify for mortgages, and others fear for their jobs during the recession.

There’s also the belief that prices will keep dropping.

Ed and Bobbi Miller want to move to the Ocala area, so they put their two-bedroom house west of Boynton Beach on the market in November.

Their real estate agent, Bob Melzer, says the property is competitively priced at $289,000, and it gets plenty of showings, but they’re still waiting for a buyer.

“Everybody walks in and says, ‘Your house is immaculate and wonderful, yada, yada‘ and then I never hear back from anybody,” Bobbi Miller said last week.

Real estate observers say people secure in their jobs who find houses they can afford at good interest rates should feel comfortable buying now.

“Risk-takers will probably come out smelling like a rose five years from now,” said Randy Bianchi, broker-owner of Paradise Properties of Florida in West Palm Beach.

Adjustable-rate loans taken out during the housing boom of 2000 to 2005 have caused thousands of people to lose their homes to foreclosure. But by the end of 2008, mounting job losses were being blamed for the rash of mortgage defaults that will likely worsen in 2009.

Overall consumer prices started falling toward the end of last year as a result of a decline in oil prices, but the housing market isn’t benefiting because of the sharp rise in unemployment.

Although the federal government has pumped hundreds of billions of dollars into the banking system to loosen credit, the National Association of Realtors says lenders still are slow to approve mortgages for home buyers.

President Barack Obama has pledged to fight the foreclosure debacle, but there’s no guarantee that federal programs will be instrumental in keeping people in their homes. With a strong push from the federal government, major banks such as Bank of America have responded by promising to modify many mortgages rather than repossessing homes.

Another factor that could hammer housing this year: Two weeks ago, lender Fannie Mae has imposed new requirements on mortgages for Florida condominiums. Fannie says, for example, that it won’t approve loans for buyers in condo buildings where more than 15 percent of the owners are delinquent on association dues.

That’s likely many buildings in South Florida where the housing bust has ravaged the condo market because of the investor-led buying frenzy during the boom years.

Palm Beach County’s existing condo sales in 2008 were up 7 percent from the year before. The median condo price last year was $143,800, off 27 percent. The median means half sold for more and half for less.

Nationally in 2008, 4.9 million homes changed hands, down 13.1 percent from 2007. It was the lowest number of sales since 1997. The median home price last year was $198,600, down 9.3 percent from 2007.

With buyers scooping up bank-owned properties at low prices, regular sellers should buckle up for another rough ride in 2009, Weiss’ Larson said.

“People are buying all the cheap stuff, and the rest is languishing,” he said.

The information herein is believed to be accurate but not guaranteed and may be subject to errors, omissions and changes without notice. This is not to be construed as a solicitation of property presently listed for sale. All information is derived from the Palm Beach County Property Appraisers website and the MLS.