Among single-family homes, Broward showed a 1% year-to-year drop to $373,700 from $380,400 last year. Likewise, Miami-Dade showed a 1% drop to $377,400. Palm Beach County dropped 5% to $372,200 from $390,100 last year.
Condo statistics, on the other hand, were mixed. In Broward, median price fell 10%, to $187,200 from $209,100 a year ago. In Palm Beach County, fell 23 percent to $178,200 from $231,300 a year ago. Dade actually showed an increase in condo median sales price, rising 13% to $285,000.
Anyone who follows our current housing market knows that these numbers provide by FAR do not even come close to representing reality. This is especially true for the Dade County condo market, which clearly has not been going up in value. A previous post on the “Myth of the Median Price” shows how the median sales price is used to distort reality.
A much better gauge of market performance is the median listing price. Here is an update on the median listing price in South Florida (source: Housingtracker.net):
This shows that listing prices have dropped by 10.37% across the board in South Florida from one year ago (or 14.49% since the earliest available data in April 2006). It also shows sustained and constant drops. Clearly this chart shows a much different picture than painted by FAR.
Even more important is the continued ballooning inventory of listed homes in the South Florida area:
As the chart shows, inventory has grown by 25.5% since August 2006 and an amazing 47.36% since April 2006.
Is anyone surprised that the three major newspapers are not showing these graphs?
Stumble It!
6 comments:
One thing that I'm still seeing, believe it or not, are these "cash back at closing" deals.
They are pretty easy to spot. You can safely assume that any property sold ABOVE listing price was a cash-back under the table deal. Hell, at this point, any full-price sale should be suspicious, too.
Especially now that you can't get a loan without a down payment, you'll still see these things happening. The seller is essentially inflating the sale price to give the buyer a down payment, thus facilitating the deal.
I know they're trying to crack down on these things more now, but they'll always be around.
Those deals, along with incentives, are part of the reason for the screwy median price data.
We have so much over building here SF right now, it will take a long time to clear out!
Braziliano,
I should have specified that the numbers in the inventory graph only represents existing (resale) homes that are listed on the MLS. It does NOT reflect new construction inventory (or FSBO homes).
Unfortunately, I haven't been able to find a data source to figure out how much new construction is for sale or will be hitting the market in the coming months. There has been some anecdotal figures in some news articles, but I yet to see an concrete estimate of the expected new construction to hit the South Florida market.
However, one only has to drive through downtown Miami, Homestead, Miramar, or West Sunrise to see that there will be tens of thousands of units hitting the market in the next year.
This flood of new construction is going to weigh very heavily on existing home sales. While most homeowners are reluctant to lower prices (especially below their equity level), builders will dump their inventory at any price rather than holding on to an empty unit.
I've already seen some new construction that are priced considerably below the typical listing prices of similar, existing homes in the same neighborhood.
The developers have a stranglehold on FL. Tell me how the same new home advertised $99,999. eight years ago was $399,999 two years ago? Did the cost of construction go up that much in six years? greed. The politicians keep taking their money to turn cheap land into big profits.
Mish has a good article explaining some of the flaws in Schiller's median price index:
http://tinyurl.com/2o3sf6
If you buy now, you will find a house like the one you bought for $100K or more less than what you paid. You effectively will be catching a falling knife and become instantly underwater on your mortgage! Imagine going to the bank and asking, "I'd like to open an account for minus (-)$100K". After years of deposits adding up to $100K you will have $0 in the account. Silly isn't it? Well that is exactly what you will be doing if you bought a house right now. Maybe a little more, or a little less, but either way doesn't sound too good does it?
http://patrick.net/housing/crash.html
email me your thoughts on the south florida market to dontbuy2007@yahoo.com
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