The residential real estate market in the Sunshine State, like most of the rest of the country, is still experiencing a cold spell.
As the statewide Florida market continues to soften following the end of the nationwide housing boom that peaked in 2005, some areas are suffering more as housing sales lag.
Downtown Miami and the city’s financial district have been hit the hardest, said Oliver Ruiz, the Miami area manager of Fortune International Realty, which primarily services Miami-Dade and Broward counties.
“There is a lot of inventory and very few sales,” Ruiz said.
Frank J. Kowalski, a realtor at Metro Dade Realty, said Miami-Dade listings are just stacking up as buyers vanish. “The taxes are expensive, and the prices for homes are expensive,” he said.
Among existing Miami homes, there were 624 condominium unit sales in March, a 45 percent drop from March 2006, according to the most recently released data from the Florida Association of Realtors. The median sales price dipped 18 percent from a year ago, to $295,100.
Existing single-family home sales dropped nearly as much as condos, down 33 percent from last year — to 634 — but prices remained virtually flat at $382,600.
The downturn will likely not abate in the near future, since many properties were speculative purchases by investors hoping to turn a quick profit after using cheap mortgages to buy the properties. A spate of new developments is also flooding the inventory channel.
Market analyst Jack McCabe, CEO of McCabe Research & Consulting in Deerfield Beach, said 20,000 new condominium units are slated to hit the Miami-Dade County market in the next 18 months.
In South Florida alone, about 70 to 80 percent of condo sales were strictly bought with the intent to flip for profit, McCabe said.
Because of sluggish sales, those investors are unsuccessfully trying to unload their units or crossing their fingers that the market will bottom out soon.
But high-priced homes are selling like hotcakes in Miami, as well as in other areas of Florida, according to brokers.
Price drops for more modest houses are also evident on the west coast of Florida, in places like Naples, Tampa and Fort Myers, McCabe noted.
In Tampa, St. Petersburg and Clearwater, the number of condo sales plunged 48 percent this March from last, to 500 units. Prices dipped, too, 5 percent to $164,100, data from the association shows. Single-family home sales fell 38 percent to 2,502 units this March from last. Their prices dropped 4 percent to $209,700.
In Central Florida, the Orlando market has seen significant drops in sales and prices, but the Jacksonville area in the northeast part of the state has been comparatively unscathed by the market softening, McCabe said.
He predicts that it could become the strongest Florida market in the next five to 10 years because it is not a speculator-driven market, there are good financial services jobs in the area, employers pay well, and land costs and the cost of living are lower than in the rest of the state.
A longtime broker and former president of the Florida Association of Realtors, Maurice “Moe” Veissi, had a similar but more cautious assessment of Jacksonville.
“The Jacksonville area may have [felt] the least amount of impact, but it may have the least amount of development as well,” Veissi said.
March numbers from the trade group, however, cloud a rosy picture, though the Jacksonville market is doing better than Miami-Dade.
Sales of condos in Jacksonville declined 35 percent to 152 in March year-over-year and single-family homes sales fell 23 percent to 1,314. Prices dropped 5 percent in the condo market to $150,400, and 2 percent in the single-family home market to $201,300.
Demand isn’t keeping up with supply throughout the entire state.
Home sales were down about 30 percent year-over-year for the first quarter of the year, and prices were down 3 percent, according to the association’s housing market report.
Those numbers are conservative, said McCabe, who added that buyers are also benefiting from incentives that don’t necessarily show up in the sales price, such as a seller throwing in a free pool.
Florida’s market began its downward slide in earnest by the beginning of 2006, as speculative buyers, who made up as much as 70 percent of deals in some local markets, pulled back or out of the overvalued market.
The market “really flipped like a switch,” McCabe said. “You can point your finger to brokers who told people there was a bidding war, to the lenders that created a lot of exotic loans, and individual speculators and companies that were buying units.”