Florida Home Sales ‘Show Signs Of Market Adjustments’
The Florida realtors have their January numbers out. “Coming off several years of blistering home sales at a record pace, Florida’s housing sector followed the national trend in January and showed signs of some market adjustments, according to FAR. Realtors from across the state report that more homes are available for sale, improving what had been tight inventories in many markets.”
“Statewide, sales of single-family existing homes totaled 12,815 in January compared to 15,745 homes sold a year ago for a 19 percent decrease.”
“Sales of existing condominiums in Florida also decreased last month, with a total of 4,456 condos sold statewide compared to 5,461 in January 2005 for an 18 percent decline, according to FAR. This release marks the first time that FAR has reported monthly condo sales in the state’s metropolitan statistical areas.”
Not mentioned in the release, but viewable in the tables at the bottom of the link is that of the 20 regions, all but 2 had declining sales, year over year, with several down 20-40% plus.
Comparing previous month numbers, from December 2005 to January 2006, Fort Myers-Cape Coral SFH median price dropped $35,100 to $287,200. Fort Walton Beach SFH median was off $16,600 to $225,500 and Pensacola’s median SFH was down $12,600 to $158,100.
There may be a reason they split the condos from the detached homes; besides similar sales volume decreases, some median prices saw yoy declines. Fort Walton Beach median condo prices were down 57% and Pensacola was off 61%.
Note: many of the FAR statistical links are PDF files.
I was waiting for these numbers to come out. What I found noteworthy: Only TWO markets in the entire state showed a YOY gain in sales. That disproves the whole “it’s all Hurricane Wilma” related claptrap we’ve been hearing. Wilma only impacted those of us in South Florida. Also, it’s January … and Wilma hit in late October. So the fact we’re STILL seeing huge declines in YOY sales in southeast FL (-39% in Boca/West Palm Beach market) is a testament to something much more fundamental at work, in my view.
Finally. And my friend is now becoming very anxious. I would be too if 15 units identical to mine went on the market the same weekend.
You have NO idea what the inventory situation is like here — homes are for sale EVERYWHERE. I’ve tracked listings on Realtor.com since June 2005. Simple question: How many properties with at least 2 beds, 2 baths are there on the market for between $100,000 and $500,000.
When I started, I got 150 hits. This week? 471. That means inventory per my search parameters has more than tripled. Some of it may be higher priced properties getting cut and therefore “falling” into the upper end of my price band. But the lion’s share appears to be fresh listings.
And anecdotally, driving around this weekend, I saw several intersections with 3, 4, or 5 “open house” and “for sale” signs on them. Condo converters are now offering massive discounts on craigslist (12 months of mortgage payments … developer fee waivers … closing costs paid, etc., etc.). One nearby complex was built in 2003 or 2004 as apartments. Went condo more recently and in the past several weeks, started offering “special unit releases” at supposedly discounted prices. The funny thing is, their newspaper ads and web ads keep changing the “last day of savings.” Just today, it’s listed as 3/5/06. A little while ago, it was in mid-February. Before that, early February, etc., etc. Guess those units must be flying off the shelves, eh?
Link: http://www.legacyplaceapts.com
should have clarified that my tracking is in my local zip code, 33458
Those look like 10%, or slightly less, drops in median price. That’s huge. In San Diego, median price is holding steady, despite doubling inventory and halving sales. I’m so impatient for our median prices to drop, too. Every house I see is just sitting for months, multiple price reductions, but the statistics are not showing this yet. I don’t know why - perhaps higher end stuff is selling.
In most of the Fla markets median sales price is up year over year. The only declines are in hard hit hurricane areas. Lets see if that changes going forward.
Perhaps a better metric to use would be $/SF. The median can be unchanged but IMO that median amount is buying more house now than it did last summer. Any thoughts on this?
Also, MLS listings aren’t always reliable. There is a vested interest for the folks who input the MLS data (ie realtors) to keep prices up.
Yes, MLS fraud. This what I copied of another blog:
MONDAY, FEBRUARY 27, 2006
I hold a real estate license in South Florida. I’ve discovered evidence of rather widespread fraud in the MLS system we use. I’ve tried to report it but no one in the real estate community seems to be too interested. I’m very curious if this goes on all over the country.
One Reason Why the Real Estate MLS shows property values in South Florida going up, up, up.
Real estate agents use the MLS or Multiple Listing Service as their principle source of sales information. From it they can produce all sorts of reports regarding sales and sales trends for their area. They regularly present this information to consumers in the form of competitive market analysis, appraisals, and in other forms. They use this data to provide buyers with information related to what they should offer for a property and to sellers to provide information related to what they should expect to receive from a sale. The data may also be used to provide statistics for an entire area or region such as price increases over a period of time. Consumers and many agents assume this data to be accurate for the most part. But in South Florida at least that isn’t necessarily the case. Here’s one reason why.
The ‘sold price’ of real estate is input by the selling agent and is often inflated by the realtor so as not to reflect low sale prices or prices not close to asking prices.
Here’s how this happens. When an agent inputs a record in the MLS much of the information comes via a link directly from the county tax records. Examples of this data are lot dimensions, room size, tax information, etc. . The agent cannot manipulate this information. However, since a sale is not posted in the tax records for days or even weeks or months after a sale, the agent must manually enter the sold price. The system assumes the agent will input the data honestly and correctly so there are no checks or balances. So any agent who wants to show that his listings always sell for close to list price or more just needs to fudge the figures a little, or a lot. Any agent who wants to show potential clients that prices are going up, up, up just needs to fudge the figures a little, or a lot.
Here’s an example:
3505 South Ocean Drive Hollywood, Fl. Last 20 sold listings. 14 MLS records matched the tax records. 6 did not. They were:
MLS M929875 shows sold for $445k tax records reflect $415k
MLS M998406 shows sold for $450k tax records reflect $410k
MLS D1069919 shows sold for $330k tax records reflect $300k
MLS H781865 shows sold for $455k tax records reflect $380k!
MLS N243785 shows sold but there’s no tax record of the sale. Possibly the property didn’t even sell.
MLS D1046673 shows sold for $460k tax records reflect $392k ouch!
i don’t understand. is this the same property sold 20 times over? or various condos in 1 building?
I googled it. Seems like it’s a condo building.
I think that all you have to do is take this evidence to the Tax Assessor’s office in that county. They will be very interested, as the amount shown in the MLS might give them the opportunity to reassess the property, for tax purposes, at the higher amount. If that happened, and word got out, home buyers would be out buying rope.
Is there a way to track the listing agent?
Wouldn’t it be interesting if the same agent “mistakenly” entered incorrect numbers multiple times…
I am sure State and local governments would love to know about this.
Basically the agents are either fudging the tax records to get the buyer a nice discount on property taxes
or they are fraudulently reporting false data to various government and financial institutions… Didn’t we just see some pretty big companies go down over this? Lets see Arthur Anderson, Enron, Worldcom, and others all reported false info on earnings and prices and so on ?
“Wilbur Van Wyck, president of the Ocala/Marion County Association of Realtors and broker-owner of Coldwell Banker Riverland Realty in Dunnellon, says people are drawn to the area’s scenic beauty, relaxed lifestyle and friendly community. “People are coming up from South Florida where traffic and living conditions are much more congested,” he says. “This area is gorgeous and it’s a great place for retirees to live.”"
How can they compare the lifestyle of South Florida to Ocala, it’s like moving a person from New York City to Wyoming.
The scenic beauty there is going away fast, as one development after another eats up what used to be beautiful rolling hills and horse farms. Traffic is horrible on 441 in the vicinity of The Villages, a mega-retirement community. There is still a lot to like about Marion County — if you don’t need a high-paying job other than in medical care — but like many other areas of Florida, the density is increasing at a fast clip.
…signs of some market adjustments….
I love the way they use words to hide bad news.
I still think it not statistically accurate to compare YOY sales to late ‘04 and early ‘05 due to the hurricane activity.
Inventory is the real story:
Holy Crap.. a 39 % drop in sales in Palm Beach county. Wait until the resets start on the I/O’s… Supply and Demand folks.
Another homebuilder, Ryland Group Inc. (RYL : The Ryland Group, Inc.
News , chart, profile, more
Last: 69.67-1.45-2.04%
3:19pm 02/28/2006
RYL69.67, -1.45, -2.0%) , in its 10-K filed Friday said in the first two months of the year it has experienced a decline in sales orders for new homes compared to last year.
“The company believes its sales order results to date in 2006 reflect recent broader market trends toward a softening in demand for residential housing,” Ryland said in the filing.
The company added that it may revise its outlook for 2006 if sales orders do not improve.
I live here in Polk County ( between Orlando and Tampa ) and I can tell you first hand from ancedotal conversations that this place is goin’ headfirst into the tank.
Lots and lots of spec buildouts around Lakeland, Winter Haven and even Bartow are sitting idle and the builders are getting nervous.
Talked to a Title Insurance girl I know at the bar last weekend and was told that the bottom has fallen out of this market. Completely bottomed out as of mid-January.
They have way overbuilt to the tune of hundreds of spec homes in the area.
Nothing has changed here. We are still a quiet agricultural community with a bunch of low paying jobs. The snowbirds didn’t even make it down in big numbers this year as expected. The Baby Boomers are not gonna show up in force this spring and bail these speculators and builders out either.
I will be looking to make a firesale discount purchase in 2007. Maybe sooner.
interesting some places are off 10% alreadyhttp://post.polls.yahoo.com/quiz/quizresults.php
I would really like to see some data on numbers sold at defined price levels. With the run-up in inventory, there must be many more lower priced units available - and as these sell, the median price drops. I would bet that for every given region in the country, there is now a price above which SFH’s just do not sell.
Just wait till the school year ends in FL and everyone flees the hurricane zones! Talk about a glut of homes for sale!
Just wait until the school year ends in FL and many flee the “hurricane zone”. More inventory??? U bet!
Off topic here… but wondering if anyone has any hard numbers on what’s happening to the Katrina mortgage deliquencies? Aren’t there about 200,000 mortgages down there that aren’t being paid?
this just in from the ny times on the decline of the stock market today.
In another indication of a cooling housing market, the National Association of Realtors reported that sales of existing homes last month fell to their lowest level in two years as condominiums and co-op purchases tumbled almost 11 percent. The number of homes on the market also climbed, but prices were still up from year-earlier levels.
The Conference Board’s consumer confidence index fell to 101.7 this month, from 106.8 last month, as Americans expressed greater concern about the short-term health of the economy and their immediate job prospects.
And the Commerce Department said that the gross domestic product price index, a measure of inflation, rose 3.3 percent in the fourth quarter, not 3 percent as previously estimated. Excluding food and energy, prices rose 3.3 percent in the quarter, up from 2.8 percent in the third quarter.
Investors have been concerned that an upturn in inflation will prompt the Federal Reserve to raise short-term interest rates as much as twice more in the coming months. Rising rates dampen economic growth broadly and could prove to be an especially severe strain on the housing sector, which is dependent on low mortgage rates.
Looks like Sarasota/Bradenton had one of the largest percentage drops of home sales..not surprising. I can’t beleive hits place is now nearly as expensive as Ft Lauderdale and Miami. Well, inventory is still rapdidly increasing so I don’t think prices are going to hold. Yet another local article predicing double digit gains for the forseeable future….incredible.
Sarasota Bradenton (single-family) Inventory
3bed/2 bath $300k-$400k:
7/22/05 - 234
2/25/06 - 1465
The values now in Ft Lauderdale and Palm Beach are back to their May 05 levels.
It seems to be 30k off the peak which was in Aug/Sept.
So all the flippers that bought something in past 9 months are screwed.
There was a big jump in 2005 from January (310k) to May (370k).
Hope that doesn’t happen this year.
Did anyone notice Naples only going up 3% in 2005?
Where did you get your listing numbers for $300K to $400K please? I am dumbfounded that Sarasota Bradenton (median price) is now almost as expensive as Ft. Lauderdale.
Jim-
I use ‘Realtor.com’ for tracking the inventory searching under Bradenton but I check off all the nearby areas which includes Sarasota, Ellenton Parrish, etc.. The latest NAR data for median price in Sarasota/Bradenton/Venice as of Q4 was $375k. Pretty insane considering when I moved her in 2003 it was about $180k if memory serves me right.
I have a guess at another reason the condo numbers now are separated. If the FAR expects the greatest losses in values and sales numbers to be in condos over the next year or two, it seems to me they might want to strip condos out of the overall numbers, so as not to spook SFR buyers into thinking the losses are as heavy in the SFR market. Call it Real Estate Triage. They’re throwing the wounded guy overboard in an attempt to save the rest.
mike in FLA -
i always look forward to your encouraging testimonies.
To be balanced, in theory it is possible that the “protection” could go the other way, re condos versus SFRs, but I think that very unlikely. Since the entire world knows that South Florida condos are rife with speculator-owners, this could be a way to isolate them in the statistics, so to speak, and protect the value-conception of the non-spec properties, particularly in the more northern parts of the state. Reminds me, in an odd way, of the Fed decision to stop publishing M3. No one will ever convince me that this kind of stuff is done without a lot of forethought.
Whoa, Mama! Just picked this article up from Yahoo! News. It talks about how much more expensive hurricane damage is predicted to be than even last year - a LOT more.
http://tinyurl.com/k6bzp