Home prices still climbing in South Florida

By Alexandra Navarro Clifton & Robin Benedick

08/24/2005

The median price of an existing single-family home in Broward County continued to rise in July when it cost $83,700 more to buy a home than a year ago.

But the blistering pace of escalating prices is leveling off, growing only 28 percent compared with this year's high of 34 percent in May.

While the median price rose to $385,600 in July, sales in Broward County dropped 28 percent from a year ago, according to data released Tuesday by the Florida Association of Realtors. The figures do not include condominiums or townhouses.

"When you get double-digit price increases year after year for the last four years running, ultimately, the law of supply and demand shows us that the number of sales has to decrease," said real estate analyst David Dabby of the Coral Gables-based Dabby Group. "In the past we've always had cycles, and we're in one now."

In Palm Beach County, the median price, which means half the homes sold for more and half for less, dipped below $400,000 in July, a decrease from June's price. But the $391,600 median price is still the second highest in the state behind Naples. The median price in Miami-Dade County rose to $363,800, a $79,500 jump from July 2004. Sales in Miami-Dade were down only 2 percent in July.

Real estate agents across South Florida say that some homes are staying on the market longer, but in more desirable neighborhoods lack of homes to sell is the biggest problem.

In southwest Broward, Realtor Karen Skornia-Charneco of New Castle Realty is seeing homes priced at $800,000 or more staying on the market for a few weeks longer this summer than they had been.

"But anything priced at $400,000 or lower is still flying off the shelves," she said. "I don't even get a chance to put the listing in my computer before it's sold."

For the $385,600 median price in Broward, a buyer in Coral Springs can get a 1,271 square-foot, 3-bedroom, 2-bathroom house with a pool built in 1978.

Last year at this time, a 2,062 square-foot, 3-bedroom, 2-bathroom home built in 1995 sold for $370,000. Today, that home would sell for $450,000, said Marta DuPree, a Realtor with the Keyes Co. in Coral Springs.

Nationally, median home prices also continued to rise in July, according to the National Association of Realtors. The national median home price, which includes condos, townhouses and co-ops, was $218,000, a $27,000 increase over July 2004. Sales were up 4.7 percent, compared with July 2004, with 7.16 million homes sold.

While prices in Broward County were rising at up to 34 percent in May during the same month a year earlier, the pace appears to be leveling off during the past few months. But analyst Dabby warns that month-to-month changes do not necessarily make a trend.

"We have to see what happens in September, October and November," he said.

Jeff Kahn, a senior vice president at Expert Realty in South Florida, said the real estate market is going through a slight correction.

"The bubble is not going to burst, but the air is just starting to leak out," Kahn said. "I'm not Chicken Little and the sky is not falling, but we have to be real and see that the market is balancing itself out now."

South Florida real estate agents say there are fewer homes to sell for a variety of reasons.

Fort Lauderdale real estate agent Toni K. Napolitano said she was not seeing as many local sellers because of the doubling or tripling of taxes sellers face when they move to another house. Those reluctant sellers represent an entire segment of possible buyers staying away from the market.

"Even though they would make a lot of money, people aren't willing to sell," said Napolitano. "A tremendous amount of people are not willing to sell unless they're moving out of the state." While sales were also down in Palm Beach County, real estate agents say that only homes at the highest price ranges are staying on the market longer than 90 days.

In Boynton Beach, there were 365 listings in the Multiple Listing Service used by Realtors. Of those, 300 had been on the market fewer than 90 days and 167 were on the market fewer than 30 days.

"It's getting tough to find the right house that fits a buyer's wants and needs," said Lisa Riddle, a Realtor with DeFalco Real Estate Group in Boca Raton. "People want to get in before prices escalate even more, so they're settling for not getting exactly what they want."

The tight market is making it more challenging for both real estate agents and homebuyers, said Realtor Ramon Capote of the Illustrated Group's West Palm Beach office.

"When something hits the market, it's picked up instantaneously," said Capote. "People who have been looking for a while get more and more anxious, and when they find something they buy it right away."

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