The number of existing home and condo sales in Florida increased in May from the month before, according to a report from the Florida Association of Realtors released Thursday, marking the second consecutive month of improvement for the sluggish market. Sales of existing single-family homes were up 8.7 percent to 12,175, while existing condo sales were up 3 percent to 4,018 units.
“Sharp price reductions are leading to a quicker discovery of price equilibrium points,” FAR chief economist Lawrence Yun said in a release. He said that is unclear yet whether most of the “bargain hunters” buying discounted property in Florida are investors or owner-occupants.
Existing home sales in the state decreased by 5 percent compared to May 2007, when there were 12,882 homes sold. The year-over-year drop for existing condo sales was steeper, falling 10 percent from 4,458.
The median price in both categories increased slightly from April to May. The median price for existing single-family homes was up 2.2 percent to $203,300. The median price for existing condos rose 1.5 percent to $181,800.
One broker who works in the Miami area, Keyes Company president and CEO Michael Pappas told The Real Deal that he believes South Florida’s pace of sales in the existing single-family home market has already “bottomed out,” and that prices may have bottomed as well.
“The market will probably be grinding out at this bottom through the end of 2008 and some of 2009,” Pappas said.
Compared to last year, the price for an existing single-family home fell 15 percent from $239,000. The price for condos fell 14 percent from $210,200 over that period.
In year-over-year comparisons of metropolitan areas, Miami’s existing single-family home sales were down 31 percent from last May, to 339, while the median price dropped 20 percent to $320,900. The West Palm Beach – Boca Raton area posted less harsh declines, down 5 percent in sales to 702 this May, while median price fell 15 percent to $330,900.
Fort Lauderdale’s single-family home sales were down 8 percent to 530 in May 2008 from the previous year. The median sales price for that market fell 19 percent to $296,800 over the same period.
The Fort Myers– Cape Coral market actually posted a significant increase in home sales, up 43 percent to 823 single-family homes sold in May 2008. The median price there dropped 25 percent over the past year to $212,400.
Pappas said that the “possible trump card” for the market is the “foreclosure crescendo.” While historically the distressed market of bank-owned properties has not competed with the owner resale market, the boom in foreclosures in South Florida may cause the two to intersect, thus keeping resale prices down for a longer period of time.