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TMCNet: Palm Beach County home prices, sales fall again: County housing prices drop 12 percent

[July 25, 2008]

Palm Beach County home prices, sales fall again: County housing prices drop 12 percent

(South Florida Sun-Sentinel (KRT) Via Acquire Media NewsEdge) Jul. 24--Price cuts still ruled in June as South Florida's housing slump trudged into its 30th month.

Palm Beach County's median price for existing homes was $334,300, off 12 percent from $377,900 a year ago, the Florida Association of Realtors said Thursday. Sales fell 3 percent, to 744 from 764 during the same period last year.

Both sales and prices were up slightly from May, suggesting that the rate of deterioration in the market has slowed. But experts still don't think the region's housing sector will perk up before 2009.

"We're seeing a lot of bottom-fishing," Mike Larson, a housing analyst with Weiss Research in Jupiter, said of buyers. "We're still a market that's struggling."

A lifeline could come from Congress, which is nearing agreement on landmark housing legislation that would encourage lenders to refinance troubled mortgages and give first-time home buyers a $7,500 tax cut.

But the nation's weakening economy, along with tighter lending requirements and increased costs for gas and food, could keep many prospective home buyers from getting into the market.

"Ultimately, somebody's going to purchase a house based on how comfortable they feel in their job and where home prices are in relation to their income," said Jim Sahnger, a mortgage broker and executive with Palm Beach Financial Network.

Gregory Niles recently bought a two-bedroom house in Fort Lauderdale, but only because the price was perfect, his interest rate ideal and closing costs next to nothing.

"Otherwise, I wouldn't do it," said Niles, 47, adding that he expects other prospective buyers to hold off because of the sagging economy. "There are so many more deals now than there were a year ago, but most people are not going to push themselves to the limit. It's drastic what's happening right now."

Still, condominium sales appear to be stabilizing as international buyers swoop in to take advantage of the favorable exchange rate as desperate sellers slash prices.

Existing condo sales in Palm Beach County increased 9 percent in June, to 577 from 529 a year ago. It was the third consecutive month with a year-over-year sales increase. The median price plummeted 24 percent, to $153,200 from $201,500 last year.

"That's a way to own something at a cheaper price, for sure," said Bob Melzer, a real estate agent in Boynton Beach.

Many buyers are getting deals scooping up foreclosed homes and condos, or through so-called short sales, in which lenders take less than what is owed on the mortgages and forgive part or all of the remaining debt. But Pat Mortorano said these bargains can be misleading.

She and her husband, Patrick, are looking at properties near Boynton Beach and recently toured a house being offered for $1 million, $800,000 less than what the seller paid two years ago.

Even though it was a good deal in theory, the Mortoranos decided to pass because they say they would have had to spend about $100,000 in remodeling costs.

"If you buy a short sale, expect to do some work," said Pat Mortorano, 59. "All that glitters is not gold."

Down south, the median price and sales of existing homes in June declined in Broward County. Sales across Florida fell 5 percent in June, while the median price of $205,500 was off 16 percent from a year ago.

Nationally, sales dropped by 2.6 percent last month to a seasonally adjusted annual rate of 4.86 million units, double the decline that had been expected. The median price for a U.S. home sold in June fell to $215,100, down by 6.1 percent from a year ago. That was the fifth largest year-over-year price drop on record.

The median means half sold for more, half for less.

Individual sellers are struggling, in part because they can't drop their prices as low as lenders, who aren't as emotionally attached to the foreclosed properties, said Kulbeer Sanghera, an agent with Campbell & Rosemurgy in Palm Beach and Broward counties.

"How can sellers compete with the banks on price? They can't," Sanghera said. "I think it's going to take another year or two before some normalcy returns to the market."

Paul Owers can be reached at powers@sun-sentinel.com or 561-243-6529.

Broward County

Existing home sales

-5% -3%

Median home price

-20% -12%

Condo sales

-1% +9%

Condo price

-20% -24%

ONLINE

Get a month-by-month breakdown of South Florida's home prices and sales, plus tell us if you think the housing market has hit bottom yet, at Sun-Sentinel.com/business/realestate

To see more of The South Florida Sun-Sentinel or to subscribe to the newspaper, go to http://www.sun-sentinel.com/.

Copyright (c) 2008, South Florida Sun-Sentinel
Distributed by McClatchy-Tribune Information Services.
For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

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