The Real Deal Miami

Pending homes sales hit high mark in South Florida

By Paul Bomberger | November 24, 2009 03:10PM

Call it South Florida’s year-end home sale surge.

The number of residential properties under contract to be sold in South Florida continued to rise, nearly doubling from this time last year.

A report from Miami-Dade County-based real estate consulting firm Condo Vultures Realty said there are 18,277 pending sales of existing single-family homes, condominiums and townhouses in Palm Beach, Broward and Miami-Dade counties, as of Nov. 16. Condo Vultures drafted the report using data from the Florida Association of Realtors.

The new report provides strong evidence that more buyers than ever in the tri-county region are responding to the raft of deeply discounted residential properties and taking advantage of the federal government’s homebuyer tax credits.

Scott Agran, broker and owner of Lang Realty in Boca Raton, said his agency saw a “push” by buyers over the last month because they knew the tax credits were set to expire at the end of November.

Then two weeks ago, President Barack Obama extended until April 30, 2010, the $8,000 tax credit for first-time homebuyers and added a $6,500 tax credit for buyers relocating after living in a home for at least five years.

Amanda Fell, who had been renting for three years, recently jumped at the chance to buy for the first time to take advantage of the tax credit. Fell bought a townhouse via short sale in PGA National in Palm Beach Gardens for $131,000.

“You’d be silly not to buy when you’re going to get $8,000,’’ she said.

The latest South Florida pending housing sales total is almost double the 9,302 properties that were under contract near the end of November last year, the Condo Vultures report says.

“[The] South Florida residential resale market with some effort is poised to surpass the 20,000 pending sales threshold in 2010,’’ said Peter Zalewski, a principal with Condo Vultures.

The bulk of the region’s record residential pending sales activity is taking place in Miami-Dade County, with 8,293 properties under contract, and Broward County, which has 7,349 properties under contract, according to the latest figures. There are 2,635 pending sales in Palm Beach County.

Of the region’s 18,277 pending housing purchases, 52 percent or 9,581 of the contracts are for condos and townhouses, while 48 percent or 8,696 of the contracts are for single-family homes.

South Florida has been struggling this year to recover from its three-year housing market slump, following the boom from 2000 through 2005. During the steep downturn, residential property prices sunk to 2003 levels.

And prices keep falling. According to ZipRealty, a national real estate brokerage, home sellers in the Miami-Fort Lauderdale-West Palm Beach region cut their prices in October by an average of 15.7 percent, or $40,000, the biggest slice among major metropolitan areas nationwide.

The low prices and appealing mortgage rates have finally given the region’s housing market momentum, as confirmed by the new peak in sales contracts. In fact, the 30-year, fixed-rate mortgage rate stands at an average of 5.06 percent, according to a recent Bankrate.com survey of large national lenders; that’s the lowest rate in the 24 years Bankrate.com has conducted the weekly survey.

“The impetus for somebody to buy in this market is still price,” Agran the broker said. “The only people buying are people looking for deals.”

However, skyrocketing unemployment has tempered the short-term housing outlook statewide.

The University of Florida’s latest quarterly survey of real estate experts found that the real estate recovery is being hurt in large part by increasing joblessness. Florida’s seasonally-adjusted jobless rate was 11 percent at the end of the third quarter, its highest mark since 1975, the school determined.

“Most economists think the recession is over but people are afraid to spend money as unemployment keeps going up, which creates problems for every sector of the real estate market,” said Timothy Becker, director of the university’s Bergstrom Center for Real Estate Studies.