Home Sales Prices Fall as Sellers Lose Edge

Home prices for February went down from the month before, and buyers and sellers are in a waiting mode.

BY MATTHEW HAGGMAN
mhaggman@MiamiHerald.com
Interactive | Report on South Florida housing market
Posted on Fri, Mar. 24, 2006

Sarah Caldicott is moving to Chicago because she's sick of hurricanes. But one problem: After six weeks, she hasn't received a single offer on her house.

''In my community, homes sold last year were selling from three days to three weeks,'' said Caldicott, who has lowered her asking price to $835,000 for a five-bedroom home in Weston. ``I'm double the average where things were last year.''

Caldicott's experience reflects what the numbers show for February: Prices for single-family houses in Broward and Miami-Dade counties are down from the month before, although they're up from a year ago. Sales are modest, and inventory is high.

What it all points to is a market where both buyers and sellers are struggling to adjust to the new reality that the boom days are gone. Some market watchers think growth will be steady, if slower, while a few predict a tumble in prices -- especially for condos. But for now, both buyers and sellers appear to be in a waiting mode, playing somewhat of a game of chicken.

''I am seeing a stalemate,'' said Marc Blackburn of Century 21 Prestige Realty Group in the Upper Keys. ``Buyers are not willing to pay the price and sellers are not willing to come down.''

The median price for existing single-family homes in

Miami-Dade dropped to $368,700, from $376,300 in January. It was the third consecutive month of price declines, but they're still 19 percent up from last year.

Similarly, a median-priced single-family home in Broward is now $360,800 -- down from $370,500 in January. But in Broward, prices have wobbled more in recent months, and they're also up 13 percent compared to last year.

REACHING THE LIMIT

Skyrocketing home prices may finally be reaching the limits of what people will pay, especially with interest rates creeping up. But the price slowdown is also because buyers have so many more homes for sale to choose from.

In Miami-Dade, the number of homes on the market increased from 8,811 in June to more than 20,000 in February. Broward's jump has been even more dramatic: leaping from roughly 7,000 homes in June to more than 22,000 last month.

'I believe we have truly evolved into a buyers' market,'' said Harvey Abraham, owner of Keller Williams Properties in Weston.

Last year, Abraham would bring his laptop to showings so he could prepare offers on the spot. Now he tells sellers to consider incentives such as picking up some of the closing costs.

But one economist said that while the housing market is adjusting from its lofty heights, the economic fundamentals remain strong. For instance, mortgage rates are below 7 percent, the region's population is growing and foreign investment continues to stream into South Florida.

''The question is whether we have a systemic risk,'' said economist J. Antonio Villamil of the Washington Economics Group. ``But we don't see that.''

LESS THAN LAST YEAR

Meanwhile, the number of single-family homes and condos sold in February dropped significantly -- by more than 20 percent in each county and housing sector -- compared to last year.

But February sales were up modestly compared to January. And there are indications that sales are set to increase further. In the last three months, for instance, the number of pending home sales has increased, said Ronald Shuffield, president of Esslinger Wooten Maxwell.

But most observers agree that the old days of buying and selling for a quick profit are gone.

''The times of buying up property and flipping immediately for a 40 to 50 percent profit,'' Gustavio Rubio, senior vice president of Coldwell Banker in Miami-Dade. ``We are not going to see that for a while.''

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