“No Bottom In Sight”
Douglas Hanks from the Miami Herald brings us an article that discusses the free fall that the South Florida Real Estate market is experiencing. A recent Case Shiller report shows that values in 2011 were down by 5% when compared to 2011 (51% off the peak in 2006). Houses would have to double in value to be even with values from 2006! That said, there are many Realtors in South Florida who feel that the market is stabilizing. Many site that the inventory level is decreasing. My question is whether the decreasing inventory level has anything to do with the glut of inventory that banks have yet to put on the market
Time will tell which camp is on target!
Case-Shiller: No bottom for housing in South Florida
BY DOUGLAS HANKS
Values off almost 5 percent from late 2010 levels, wiping out more than half of the gains South Florida property owners enjoyed in the boom days. Consumers still feeling more optimistic, though.
Here’s a scary thought for homeowners: what if South Florida’s worst year for real estate has only just begun?
New numbers from the Case-Shiller housing index dashed hopes for an official bottom to a historic crash in real estate prices, a downturn that now threatens to enter its sixth year. The November Case-Shiller report released Tuesday showed South Florida’s housing prices are off nearly 5 percent from 2010, dropping extremely close to all-time lows set earlier in the year.
The latest readings from the closely watched index leave home values off 51 percent from their peak in November 2006. With banks expected to dump tens of thousands of foreclosed home onto the resale market at bargain prices in the coming months, some experts say the long-awaited floor on values will have to wait at least another year.
“I think we still have a ways to go,’’ said Jack McCabe, CEO of McCabe Research and Consulting in Deerfield Beach. He predicted the real estate crash at a time when others dismissed fears of a pricing bubble as overblown.
“This is not going to be a year of stabilization,’’ McCabe said. “It’s going to be sometime in 2013, but not before.”
Other forecasters and real-estate trade groups see that kind outlook as too grim, citing an improving economy, healthy home sales and pent-up demand from buyers who have opted to rent throughout the downturn.
Another dive in home prices could prove a major blow to a recovery that appears to be gaining steam, both in Florida and across the country.
On Tuesday, the University of Florida reported consumers statewide are feeling more upbeat than they did for almost all of 2011, with outlooks on their personal finances and the national economy both surging. The UF index hit 77 in January, the highest since January 2011, when the national economy also seemed ready to move from a halting recovery to something with more momentum.
Chris McCarty, director of the survey, said the readings reflect national surveys that also show consumers feeling less timid and more optimistic. But he cautioned the numbers haven’t improved enough to demonstrate that Florida is truly ready to come out of its bunker.
“The question is was this some sort of euphoric bump, or are we getting some real traction here?” McCarty asked. He noted consumer spending remains iffy, with gains in income landing in savings accounts rather than cash registers.
Sales tax collections remain well above where they were a year ago — up 4 percent in Broward and 9 percent in Miami-Dade. Home sales also are up even after surging in 2010, according to Realtor groups. In December, resales of single-family homes rose 9 percent in Broward and 16 percent in Miami-Dade, according to the Florida Association of Realtors.
“Our numbers are already showing recovery,’’ said Ron Shuffield, president of Esslinger-Wooten-Maxwell, a top South Florida brokerage. “We’re selling some properties for more than we’re asking. There’s just more interest out there.”
Shuffield acknowledged that banks’ foreclosure inventory remains a concern, but he predicts pent-up demand and a declining supply of homes for sale will let the market absorb the distressed properties without hurting the recovery. Other market watchers predict a rough year ahead.
Moody’s sees a 12 percent drop in South Florida’s Case-Shiller index for 2012, followed by another 4 percent drop in 2013. That would roll back property values to where they were in June 2001. In early 2009, during the worst days of the global financial crisis, South Florida’s home values were only down to 2003 levels. (November’s report landed values back to where they were in late 2002.)
But the dire outlook doesn’t mesh with the market that brokers describe as having already turned a corner. The December Realtors report showed the median home price up 7 percent in Broward (to $189,600) and 5 percent in Miami-Dade (to $182,300) over the prior year.
“The inventory levels are really declining,’’ said Lynda Fernandez, spokeswoman for the Miami Association of Realtors. “Optimism has been building. Now there is a lot of excitement because we see the market recovering faster and stronger than we expected.”