PALM BEACH, FL - South Florida's existing home sales skyrocketed in February as irresistible prices and low mortgage rates continued to win out over the deepening economic gloom. Palm Beach County sales rose 33 percent last month, to 532 from 401 a year ago, the Florida Association of Realtors said March 23. The median price fell 34 percent, to $228,100 from $344,600, meaning houses now cost roughly what they did in 2003.
The region's housing slump lingers in its fourth year, and mounting foreclosures and short sales are expected to depress prices through 2009 and likely into 2010. While today's sellers grimace at the plummeting prices, more affordable homes ultimately will help the market rebound sometime next year, analysts say.
Despite rising unemployment and tight credit, year-over-year home sales in Palm Beach County have increased in seven of the past eight months as investors and first-time buyers scoop up distressed properties at bargains. But weak job security has many potential buyers sitting on the sidelines hoping prices keep falling and the economy improves.
The average 30-year fixed mortgage rate nationwide was 5.13 percent last month, down from 5.92 percent a year ago, according to mortgage giant Freddie Mac. Last week, average mortgage rates dropped below 5 percent and are expected to stay there.
"There's still a pool of people who have the financial wherewithal to buy a home, and now they're saying this is the right time," said Brad Hunter, a housing analyst based in West Palm Beach.
Palm Beach County's existing condominium sales also were brisk in February, rising 10 percent from a year ago. The median condo price was down 36 percent to $101,900.
The increased sales activity for homes and condos is making a dent in South Florida's bloated inventory.
Palm Beach County has 27,907 available homes, townhouses and condos, down 6 percent from the end of November, according to a report Monday from Condo Vultures, a Bal Harbour-based real estate consulting firm.
"All-cash buyers are spooked by the stock market, and a lot of people are looking for peace of mind, and that's in bricks and mortar," said Peter Zalewski, principal at Condo Vultures.
Terry Story, a real estate agent for Coldwell Banker in Boca Raton, said on a recent weekend she had 27 showings, nearly triple her normal number.
"If you're a serious seller, and you price it right, the home will sell," Story said.
But many sellers who bought recently say they can't price their properties to make a profit or break even because they paid peak prices themselves during the housing boom of 2000 to 2005.
Cathy Kusuma and her husband are like many potential buyers: Eager to find a home but not able to take the plunge until they sell their existing property. The Kusumas have a sales contract on their Margate townhouse and expect to close in May. Last week, they put in an offer on a four-bedroom Parkland house, but it's a short sale and they don't know whether the bank will accept their bid.
As a result, they're keeping an eye on other listings in case the Parkland deal falls through, all the while hoping their townhouse sale goes off as planned. "Circumstances have to line up just right," said Kusuma, 31.
Source: SunSentinel.com