Housing prices nudge back upward

by Jeff Ostrowski

04/26/06

Amid fears of a protracted housing slowdown, Palm Beach County's real estate market perked up a bit in March.

The median price for a single-family existing home in Palm Beach County was $393,700, the Florida Association of Realtors said Tuesday. That's up slightly from $391,000 in February.

The number of single-family home sales in the county was 929, up significantly from February's 707 but down 33 percent from a year ago.

In the Treasure Coast, the news was similar: The boom is over, but there's no bust yet.

The median price was $258,000, off last year's peak but up 10 percent from a year ago. The number of sales in Martin and St. Lucie counties was 573, down from 19 percent a year ago.

There's little agreement among Realtors and economists about where the housing market will go next. Some expect more pain ahead, while others say the worst is past.

Brad Westover, head of American Harbour Realty in Jupiter, is among the optimists. He sees sparks of activity, and he's telling antsy sellers to hang on until June, when buyers with children will begin to move.

"Families don't generally move in the middle of the school year," Westover said. "It's been a very quiet four months, and now the phones are starting to ring."

Others, such as Douglas Rill, head of Century 21 America's Choice in West Palm Beach, remain pessimistic.

"I'd love to say it's getting better, but I don't think the market has hit bottom yet," Rill said.

He points to an Acreage home for sale where the buyer recently slashed the asking price from $399,000 to $299,000 and still hasn't received an offer. Another listing near State Road 7 has been toured by buyers 70 times with nary a nibble.

"People are still suffering from post- and pre-hurricane trauma," Rill said. "We have some clients who are trying to get out before hurricane season. They're also looking at sticker shock from gas prices and interest rates that are up."

Bob Graeve, an agent at Illustrated Properties in Palm Beach Gardens, sees mixed signals. His analysis of home sales data shows that the average time on the market for homes in central and northern Palm Beach County soared to 103 days in March from 72 days last summer.

But, he said, sellers are becoming increasingly motivated, which could be good news for buyers.

"I just had a seller call and ask to drop the sale price by $40,000," Graeve said. "There's some great deals to be had out there right now."

Some warn that rising interest rates and a glut of homes for sale mean this slowdown could take several years to shake out.

"This has been a housing market bubble for the last three years," said Gregory Miller, chief economist at Atlanta-based SunTrust Banks Inc., during a visit to Palm Beach. "Housing bubbles don't dissipate or correct spontaneously."

Most frothy housing markets typically are followed by three years of slower sales and flat or dropping prices, Miller said.

Yet the condo market, often called the most vulnerable part of the real estate economy, remains strong, according to the Florida Association of Realtors.

The typical Palm Beach County condo sold for $224,600 in March, up from $220,800 in February. Sales remained essentially unchanged at 706 units.

The median condo price in the Treasure Coast was $186,300, down 1 percent from a year ago. Sales volumes were down 34 percent from a year ago.

Statewide, the median home price was $248,200, up 17 percent from a year ago. Nationally, the median was $218,000, up 7 percent.

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