South Florida home sellers dropped prices last month to combat a buyer’s market that has taken firm hold of the real estate industry this year.
The median November sales price for existing homes declined 2 percent in Miami-Dade County over a year ago to $372,400, and 7 percent in Broward to $362,000, the Florida Association of Realtors reported Thursday. That marked the second consecutive month with a price drop for Miami-Dade houses and the fifth for Broward.
The closely watched report offered the year’s last look at a real estate market still adjusting to a post-boom era. Sales volume in single-family homes dropped in both counties for the 10th time in 11 months, with the pace off about 24 percent from the end of 2005.
“We’re glad to say goodbye to 2006,” said Mike Pappas, president of the Keyes Co. real estate brokerage in Miami.
Pappas said Keyes, one of South Florida’s largest brokerages, saw revenue from home sales drop 20 to 25 percent this year. But he predicted a stable 2007. “We’re not searching for the bottom,” Pappas said. “We’ve found the bottom.”
Other market watchers aren’t so sure. Jack Winston, a real estate analyst with Goodkin Consulting, noted 2007 will bring a slew of new luxury condominium buildings in the Miami area — and likely a gaggle of owners eager to flip their units.
“If you look at the skyline, a lot of those buildings have not been finished,” Winston said. “We know 70 to 80 percent of those buyers were speculators. They’re going to have to face the music.”
Condominium prices also were sluggish in November: down 6 percent in Miami-Dade and flat in Broward, according to the Realtors’ report. Sales volume matched the steep declines seen throughout the year: down 24 percent in Miami-Dade for the first 11 months of the year and down 33 percent in Broward.
The plunging demand for real estate across the region has sellers grudgingly adjusting their expectations, brokers said.
Broker Andy Weiser recently closed a deal for a condominium in Fort Lauderdale’s upscale Victoria Park neighborhood that sat on the market for eight months with a $319,000 price tag.
When the seller agreed to drop the asking price down to $295,000, the two-bedroom unit sold within two weeks for $290,000.
“If sellers aren’t re-positioning their property to reflect current conditions, they’re out of their minds,” said Weiser, a Coldwell Banker agent. “I’m pricing things approximately 10 percent less than I was pricing things last year, which doesn’t make everyone happy — especially if you bought last year.”
Though sales volumes for single-family homes have been down off-and-on for more than two years in South Florida, prices continued to rise in both counties throughout 2005, according to Realtors’ statistics. That changed in 2006: median sales price dipped 1 percent in July in Broward and 3 percent in Miami-Dade in October and have not recovered in either market.
“The market is rolling back to a normal period,” said Michael Cannon, head of Integra Realty’s South Florida office.
The November report, which tracks closed sales, comes with a meteorological asterisk: a slow-moving Hurricane Wilma struck South Florida on Oct. 24, 2005. The storm’s approach delayed some real estate transactions until November, skewing the month’s results.
The picture was somewhat different across the nation. Nationally, sales of existing homes managed to eke out a small increase in November, but the price of homes sold fell for a record fourth consecutive month.
The National Association of Realtors reported Thursday that sales of previously owned homes rose 0.6 percent in November to a seasonally adjusted annual rate of 6.28 million units. That followed a 0.5 percent sales increase in October and marked the first back-to-back sales gains since spring 2005.
The slight increases in sales were not enough to halt a slide in U.S. home prices. The median price for an existing home sold in November dropped to $218,000, down 3.1 percent from the price a year ago.
As in South Florida, the U.S. numbers extended a string of price drops: the first time on record that year-over-year prices declined for four straight months nationally.
Winston, the Goodkin analyst, said the South Florida price declines weren’t as steep as some predicted. “Instead of the bubble bursting, it ended up being a soft landing,” he said. “We’re going through the soft landing now.”
The Associated Press contributed to this report.