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South Florida homes market shows signs of life

Miami Herald - 9/25/2008 12:00:00 AM
by Matthew Haggman

South Florida home sales rose in August at a rate not seen in more than four years, amid signs that lower prices are drawing buyers back into the region's long-slumping housing market.

The market still has a long way to go: The inventory of homes for sale actually rose in Miami-Dade County compared to a year earlier, and market watchers say that number needs to shrink before prices will stabilize.

Numbers released Wednesday by the Florida Association of Realtors showed existing single-family home sales in Miami-Dade County increased 22 percent and Broward sales increased 12 percent compared to the same period a year ago. Condominium sales were up 13 percent in Miami-Dade, while Broward condo activity for the month was even compared to August 2007.

It's the first time since June 2004 that sales across the board have not declined compared to the year before.

That prompted at least one real estate analyst to proclaim: ''We've hit the bottom of the market.'' Said Michael Cannon, a Miami real estate analyst who tracks home sales, ``In spite of the Wall Street woes, we hit bottom in the second quarter of this year.''

Cannon said the rise in home sales over the first six months of the year supports his conclusion. Though he predicted that sales will continue to rise, he suspects prices have not yet stabilized.

''We are rolling back to prices of second-quarter 2004 when the market peaked,'' he said.

Others disagreed, with the backdrop of Congress considering legislation to bail out a financial system in its most perilous condition since the Great Depression. Credit remains hard to find for many would-be home buyers seeking mortgages.

Stuart Miller, chief executive of Miami-based home builder Lennar, said earlier this week that the market has not touched bottom. Real estate analyst Lew Goodkin said he doesn't see a turnaround until at least the second half of next year.

''We were in the doldrums for so long that any sign of life is pronounced as the bottom of the market,'' Goodkin said. He said the rise is positive, but he called it too early to indicate a rebound.

''What would make me think we've bottomed out is stabilized prices in combination with increased sales activity,'' Goodkin said.

Prices for existing South Florida homes continued to fall in August, driven by foreclosures and sellers lowering asking prices in the face of the toughest housing market in years. Prices were at least 20 percent lower in August than a year ago for single-family homes and condos in Miami-Dade and Broward.

The median price for a Miami-Dade single-family home was $276,000 in August, a 30 percent drop from last year. For Broward single-family homes, the median price was $269,800, down 27 percent.

The median condo price in Miami-Dade was $210,400, a 20 percent decline; it was $133,300 in Broward, off 25 percent from last year.

In Broward, the combination of slashed prices and increased sales made a dent in the inventory of unsold homes. Single-family home inventory dropped by 4 percent and condo inventory by 6 percent.

Miami-Dade's inventory continued to swell, however, even as sales jumped.

The South Florida sales results were in contrast to the rest of the country. Sales of existing U.S. homes fell by 2.2 percent in August, even as the number of unsold homes on the market also dropped sharply from the previous month's record high.

Median prices for existing homes dropped nationally, declining to $203,100 from $224,400 a year ago.

It's such price drops in South Florida that are prompting some to dive into the market. Adam and Jennifer Clarin purchased a four-bedroom Palmetto Bay home in July for $405,000 from a seller who bought the home two years earlier for $670,000.

''People are saying the market is horrible,'' said Jennifer Clarin, 26, who moved from Plantation to the Miami-Dade city because her husband took an optometry job there. ``But the market is not horrible if you are a buyer right now.''