Is The Time Right To Buy In Florida?

South Florida home values see nation’s biggest drop in a year
MIAMI – Aug. 10, 2010 – South Florida home values suffered the worst decline of 25 large metropolitan areas in the second quarter of this year, falling 15 percent compared with 2009, according to a national real estate report.

The data, released Monday by analysts at Zillow, found that the median home value in Palm Beach, Broward and Miami-Dade counties fell to $146,500, down nearly 7 percent from the beginning of this year and a whopping 52 percent from housing’s peak values in 2006.

Nationally, median home value, including townhomes and condominiums, dipped 3.2 percent from the same time in 2009.

Zillow’s chief economist, Stan Humphries, called Monday’s study a “mixed bag,” with several areas in California seeing a continued increase in values.

In Los Angeles, home values jumped 5 percent compared with 2009. San Diego homes saw a 7 percent increase.

“Markets in other parts of the country, like Miami and Phoenix, are not yet showing signs of reaching a bottom in home values,” Humphries said. “High supply continues to be a challenge in states like Florida and Arizona.”

A separate report released Monday by analysts at Miami-based Condo Vultures showed a 4.6 percent increase in housing inventory in South Florida since May, with 68,254 single-family houses, condos and townhomes on the market.

Humphries predicts home values will bottom out nationally during the latter half of this year.

“But we continue to be cautious about the impact of declining home sales,” Humphries said.

The Phoenix area showed a 12 percent decline in median home value compared with last year, while Detroit values plummeted 14 percent.

The Zillow Home Value Index measures the median value of all homes, not just sales.

In Palm Beach County, values for single-family homes showed only a 1 percent decline, while Martin and St. Lucie had declines of 5 percent and 4 percent, respectively.

South Florida’s homes are treading water in one measurement, managing so far this year not to sink further into negative equity.

Zillow found that 44 percent of South Florida single-family homes with mortgages are underwater – real estate slang for owing more on a loan than the home is worth.

That’s about the same percentage as the beginning of the year and just below the second quarter of 2009, when 47 percent of homes were underwater.

In the Treasure Coast, 55 percent of homes with mortgages were underwater during the second quarter of this year, compared with 56 percent earlier in 2010.

Nationally, 21.5 percent of homes with mortgages had negative equity in the second quarter.

Humphries said foreclosures and bank takeovers help clean out the inventory of negative equity homes, but the typically lower sale prices of those homes also continues to weigh down values of neighboring properties.

Peter Zalewski, a principal for Condo Vultures, is more optimistic about Florida’s market turning around even with rising inventories. He believes financing opportunities are increasing, meaning more people will be able to buy.

“I think that 2009 will be the year most people realize was the bottom,” he said. “I would be surprised if there was another big increase in underwater homes.”

Copyright © 2010 The Palm Beach Post, Fla., Kimberly Miller. Distributed by McClatchy-Tribune Information Services.