Florida sellers need a reality check
Florida Housing Crash, Mortgages, The Economy, Real Estate April 30th, 2008
This from the Palm Beach Post:
Lower prices can put ‘real’ in real estate
Could reality, at last, be setting in among Florida home sellers?
Given how things have gone since late 2006, last month’s area real-estate numbers didn’t so much contain positives as they contained fewer negatives. Prices went down again, but sales went up a little, even if month-to-month figures aren’t as significant as year-to-year.
These days, the suckers aren’t biting. Last week, the Palm Beach County School District reported its third straight year of enrollment decline. The housing bubble burst because it was unsustainable, and the burst followed two bad hurricane years that pushed up insurance rates. As home values went artificially high, so did property taxes. Fewer young families are coming, and more are leaving.
In mid-2000, after several years of a good economy, the median home price in Palm Beach County was $139,300. In Martin and St. Lucie counties, it was $105,000. If you assume even an overly generous annual increase of between 7 percent and 8 percent, which happened at times during the 1990s and is a very good return, the respective prices would be about $250,000 in Palm Beach County and about $170,000 in the Treasure Coast.
The real March 2008 numbers are $320,200 and $169,700. Maybe more sellers in Martin and St. Lucie are catching on. The Palm Beach County number looks shabby only when compared with the nosebleed high of $421,500 in December 2005. Those who sold pre-bust probably made a killing. Those numbers, though, can induce unreality. Check the real-estate transactions every Wednesday in Neighborhood Post. Most homes bought just before the boom or earlier are selling for decent profits.
