| With
buyers hesitant, S. Florida home prices start to level off
By Robin Benedick
Staff Writer
Posted September 17 2003
Broward's red-hot real estate market is cooling down as
more houses go up for sale, real estate agents say. The result:
More buyers are turning up their noses at prices they consider
too high and are holding out for better deals.
For the past three years, there were more buyers than houses
for sale, resulting in bidding wars and multiple contracts
on the same house. Sellers of homes under $400,000 typically
got their asking prices and sometimes more.
But in a trend that began in late spring and continues to intensify,
sellers are being forced to accept less than they want. Though
buyers aren't exactly in the driver's seat yet, the dramatic
shift has agents advising sellers to keep list prices more realistic
or risk losing a sale.
"I'm seeing more buyers saying, `I'm willing to pay
a fair price, but I'm not going to be gouged,'" said
Ellen Bithell, an agent with RE/MAX Executive Realty in Hollywood.
"This shift is making the market more balanced and
forcing sellers to be more competitive," she said. "Things
are staying up for sale longer, and we seem to be having
a little bit of a plateau in prices."
Broward buyers typically pay 4 percent to 5 percent less
than list price in the $200,000 to $400,000 range, but that
gap is widening as more homes hit the market, real estate
agents say.
Even harder hit is the luxury market, where there are more
homes for sale over $1 million than there are buyers, agents
say.
"We're used to seeing the hesitancy in the over-$600,000
market, but it's finally trickled down to the lower prices," said
Jeff Kahn, managing broker of Davie Ledbetter Inc. Real Estate
in Fort Lauderdale.
He said buyers fear if they pay too much now, they could
lose money if they sell in a few years.
Patient buyers
Marisol Sordo-Lema is willing to wait for the right deal.
She recently moved with her husband, Humberto, and their
three children from the Hallandale Beach house they had owned
for 15 years to a Weston rental apartment.
They plan to stay there until they find a house to buy in
Weston. The family's belongings fill the apartment's two-car
garage.
She and Humberto, a car broker, are willing to spend up
to $350,000 for a four-bedroom home in Weston. They have
made offers on three houses without success.
"I'm finding sellers who won't come to a price I feel
is fair," said Sordo-Lema, a nurse in Miami Beach. "I
don't regret what I did, moving to this apartment, because
eventually I'll find the house I want."
While Broward buyers have a bit more leverage than they
did a year ago, real estate experts warn that they, too,
must be realistic.
Since 1996, home prices have had the highest annual appreciation
rates in at least two decades of tracking. Homes that sold
for $150,000 or $200,000 three years ago are now almost double.
Homes that cost $500,000 now approach $750,000 or $1 million.
The median sales price in Broward in July was $236,700,
up from $204,500 a year ago, according to the Florida Association
of Realtors. That means half the homes sold for more and
half for less.
The skyrocketing prices have made it harder for first-time
buyers to find single-family homes. Many have had to turn
to condos or townhouses. Bidding wars and multiple contracts
are still common on homes under $150,000.
For first-time buyer Todd Jennings, a renter in Pembroke
Pines, finding a condo has been a challenge.
After looking for eight months, he found a two-bedroom furnished
condo in Davie he liked, but the owner wants $134,999 --
about $14,000 more than any other unit in the building has
sold for.
Jennings, 35, a military supply sergeant in Miami, said
he wouldn't own the most expensive unit in the complex.
"I'm patient," he said. "You have to be with
these sellers who are unreasonable. I'm just not going to
bend. I'm not going to overpay. Something is going to give,
and it's not going to be me."
The flip side
The news isn't quite as good for buyers in south Palm Beach
County, who face a short supply of homes in the under-$500,000
range.
"It's still clearly a seller's market here, with sellers
getting high prices," said Allan Spiro, buyer specialist
for the Bass Group at Keller Williams Realty in Boca Raton.
In Palm Beach County, the median price was $244,500, up
from $202,300 a year ago, according to the state Realtors
association.
Rates are key
In South Florida and across the nation, the housing market
has been the one bright spot in a sluggish economy. The National
Association of Realtors said sales of existing homes soared
to record highs in July -- partly because of the recent spikes
in interest rates, which have pushed buyers and sellers off
the fence.
Interest rates on 30-year mortgages are up a point or more
above their four-decade low of about 5 percent in June.
On a monthly basis, a small rise in rates can have an impact.
According to mortgage broker Russell Langstroth in Fort
Lauderdale, the typical monthly payment on a $100,000 fixed-rate,
30-year mortgage is $531 when rates are at 5 percent. At
6.5 percent, the monthly sum jumps $101 to $632. At 7.5 percent,
it's $699. None of those figures includes property taxes
or insurance.
If interest rates reach 8 percent, real estate analysts
predict South Florida's housing market will slow. They envision
a glut of luxury condos, because demand is likely to wane
as rates increase and more apartment complexes are likely
to be converted into condominiums.
"Even a half percent increase in rates can knock someone
out of the house they wanted," said Jack McCabe, a Deerfield
Beach-based real estate consultant. "I think the magic
number is going to be around 8 percent when we'll see a tremendous
slowdown, particularly in condo sales."
Robin Benedick can be reached at rbenedick@sun-sentinel.com
or 954-385-7914.
Copyright © 2003, South Florida Sun-Sentinel
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