Home prices still soaring in hot South Florida market
 

Low inventory creates high demand

Taken from the pages of the May 23, 2005 issue of the Sun Sentinel

     When the prices of existing single-family homes continued to rise in April, Realtors across South Florida say inventory is so tight and homes are selling so fast that buyers are being forced to pay prices well above the median.

     Palm Beach County remains the second-most expensive county in the state for an existing home, according to data released by the Florida Association of Realtors on Tuesday.  The county's median price for a home, second only to that in Naples, rose to $372,300, a 32 percent increase over the same time last year.

     Prices in Broward and Miami-Dade counties rose 27 percent, with Broward's median price reaching $343,900 and Miami-Dade's up to $333,600.  The median price means half the homes on the market are priced higher and half are priced lower.  The figures do not include condominiums or townhouses.

     Low mortgage rates and flexible mortgage options such as interest-only loans are adding to South Florida's high-demand market.  Homes listed below the median sell within days of being listed.  And even those willing to pay the rising median price are having a hard time finding homes.  When a buyer does find a home, a bidding war with at least a half-dozen other buyers in now the norm.

     The lack of inventory has contributed significantly to the steep drop in home sales in South Florida.  The decline in Broward County was the sharpest in the state, with a 19 percent drop in sales during April.  Sales dropped 10 percent in Palm Beach and 4 percent in Miami-Dade.  "There's no question, it's a feeding frenzy," said Mike Pappas, president of the Keyes Co., a real estate company based in Miami.  "There's no inventory, and at the same time there's tremendous appreciation and demand."

     In Coral Springs, for example, there were 152 single-family homes for sale Tuesday through the Multiple Listing Services used by real estate agents.  Of those listed, only nine homes were priced at or below Broward's median home price.  And while the lowest price for a single-family home in Coral Springs was about $204,000 last year, the lowest price today is about $270,00.

     "Realtors have to adjust to the changing markets as much as buyers and sellers have had to," said Marta DuPree, a Keyes agent in Coral Springs.  "If you want to buy a $350,000 house in Parkland, I just would not have a house for you."

     In Palm Beach County, where there is more inventory than in Broward, it's still a challenge finding a home at a traditionally affordable price.  "We warn people at the very beginning that if they want anything under $500,000, it's going to be a very popular market, and there is a lot of competition for homes," said Jeff Booker, a Realtor with Prudential Florida WCI Realty who specializes in single-family homes in Broward and Palm Beach counties.  "People want areas based on distance to work and school zones, and they're willing to pay."

     For buyers searching in Boynton Beach, there were 459 homes listed Tuesday in the Multiple Listing Service.  Of those, only 77 were listed in the most popular neighborhoods west of Congress Avenue and at or below the county's median price of $372,300.  Statewide, median home prices were up 26 percent over last year to $218,600, and sales were up 3 percent.  Florida prices are still higher than the national median home price reported Tuesday of $203,800, a 15 percent increase over last year.  But national sales rose to 4.5 percent in April, a 5 percent increase over the previous year.

100 best places to live and launch

Population: 167,255
Pro: Strong tourism industry
Con: This region has been hit hard by the subprime lending fiasco

Fort Lauderdale has been trying for decades to convince the public that it's not a hub for raucous co-eds on spring break, but, rather, a nice place for families and for business - and it's a valid point.

Sure, the real-estate downturn brought on by subprime lending has taken its toll on the economy, but Fort Lauderdale has felt less impact than the regions in and around Miami. The hottest businesses here are a reflection of the subtropical climate and locale. Pleasure-boat construction and services are a major sector, while the tourism industry, in general, stays strong, thanks in large part to the Canadians and Europeans attracted to the weak dollar. What's more, a 600,000-square-foot convention center plays host to trade shows that bring a variety of industrial leaders from all over the country in contact with local businesses.

Besides the usual pleasures to be expected from a city by the sea (sun, surf, sailing, and swimming), Fort Lauderdale offers a lively downtown, with museums, galleries, live music, theater and fine restaurants. And for sports-crazed fans, there are no less than seven pro teams to root for in the surrounding area. -Peter Galuszka

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