Forget ‘improving’ or ‘rebound’ – Fla. is ‘on fire’

Forget ‘improving’ or ‘rebound’ – Fla. is ‘on fire’

Lesley Deutch, senior vice president at John Burns Real Estate Consulting, said the “Florida market is on fire” in her latest update on the state’s housing market.

Deutch says she traveled the state recently and visited more than 20 communities. While recovery reports differ between Florida cities and urban areas, she reports five major trends:

1. Land prices. While the price of land continues to rise quickly statewide, Orlando feels the most pressure. Deutch says she saw some submarkets where “land and finished lot prices have now surpassed peak levels.” In Orlando, she sees developers buying raw land “just to gain a position and market share.”

2. Home prices. Some communities, such as Orlando and Naples, are seeing 1- to 2-percent new-home price increases monthly, Deutch says. The hallmarks of a seller’s market have also returned, such as lotteries. She expects a 2013 price increase of at least 10 percent in many Florida markets.

3. 55-plus market. Deutch reports a 20- to 25-percent jump in potential buyers interested in active adult living, according to builders in Southwest Florida. She also notes a boost in customer traffic in second- and third-tier markets.

4. Foreign buyers. It’s more than Miami, Deutch says. While in Orlando, she visited a sales office that had three active buyers: One from Brazil, one from Germany and one from China.

5. Foreclosures. While the state has a notoriously long foreclosure process, Deutch says banks are slowly releasing foreclosures. But investors continue to buy new foreclosures shortly after they hit the market.

© 2013 Florida Realtors®

Home prices rise in Oct. by most in 6 years

Home prices rise in Oct. by most in 6 years

A measure of U.S. home prices rose 6.3 percent in October compared with a year ago, the largest yearly gain since July 2006. The jump adds to signs of a comeback in the once-battered housing market.

CoreLogic also said Tuesday that prices declined 0.2 percent in October from September, the second drop after six straight monthly increases. The monthly figures are not seasonally adjusted. The real estate data provider says the decline reflects the end of the summer homebuying season.

Steady price increases are helping fuel a housing recovery. They encourage more homeowners to sell their homes. And they entice would-be buyers to purchase homes before prices rise further.

Home values are rising in more states and cities, according to the report. Prices increased in 45 states in October, up from 43 the previous month. The biggest increases were in Arizona, where prices rose 21.3 percent, and in Hawaii, where they were up 13.2 percent.

The five states where prices declined were: Illinois, Delaware, Rhode Island, New Jersey and Alabama.

In 100 large metro areas, only 17 reported price declines. That’s an improvement from September, when 21 reported declines.

Mortgage rates are near record lows, while rents in many cities are rising. That makes homebuying more affordable, pushing up demand.

And more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.

At the same time, the number of available homes is at the lowest level in 10 years, according to the National Association of Realtors. The combination of low inventory and rising demand pushes up prices.

Last week, an index measuring the number of Americans who signed contracts to buy homes in October jumped to the highest level in almost six years. That suggests sales of previously occupied homes will rise in the coming months.

Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in six and a half years last month. And builders broke ground on new homes and apartments at the fastest pace in more than four years in October.

The Associated Press

Steve Geving
Jones and Co Realty

Florida home prices bottomed earlier than previously thought

A new home sales measure says Florida prices hit a soft bottom in 2009, years earlier than what some experts have declared as the low point for real estate.

The measure, similar to the respected national Standard & Poor’s/Case-Shiller price index, was created by Florida Realtors Chief Economist John Tuccillo to be a more accurate reflection of sale prices in the state.

Tuccillo said he was surprised that the index pointed to 2009 as a bottom, but said that was also a time when investors began eyeing Florida for real estate deals.

“Since then we’ve been sort of rocking along on a bumpy road,” said Tuccillo, who developed the index over about a year’s time. “It’s essentially been flat – but in this context, flat is probably good news after the large run-up and drop.”

According to the index, Florida sales prices increased 152 percent from January 2000 to the peak of the market in November 2006. They fell 43 percent from the peak to mid-2009.

Realtors have long complained that the current method of reporting monthly median home sales prices doesn’t offer a true measure of increasing and decreasing values. The median, which means half of homes sold above the price and half below, can be greatly influenced if a large number of either distressed properties or luxury homes sell in one month.

Florida’s new index is considered a “repeat sales index.” It combines Florida Department of Revenue data with prices of the same individual properties sold over time. The index is expected to be released quarterly but because of a lag in some statewide data, the first index runs only through August 2011.

Like Case-Shiller, the Florida home price index measures sales as compared with January 2000 when the index was set at 100. Case-Shiller’s Florida data include Tampa and South Florida, which combines Palm Beach, Broward and Miami-Dade counties.

National Association of Realtors spokesman Walter Moloney said he’s not aware of another state that has its own price index. California releases an “affordability index” that measures the percentage of all households that can afford to purchase a single-family home, but its sale prices are reported as a median.

While the public may prefer a median sales price that reports an actual dollar figure over an index, the index is considered more accurate.

Still, Palm Beach County Realtors said a statewide index doesn’t always reflect regional specifics.

Kevin Kent, a broker-associate with Platinum Properties, which has offices in Jupiter, Juno Beach and Stuart, said South Florida’s home sale prices probably hit a bottom later than 2009.

“When you step back and look at the entire state, that’s probably accurate,” Kent said. “But when you break it down into pockets and certain areas that were hit the hardest, the numbers wouldn’t be the same.”

In April, analysts at the online real estate database Zillow said South Florida sale prices hit bottom at the end of 2011. Case-Shiller’s index shows a bottom in Palm Beach, Broward and Miami-Dade counties in April 2011, but that prices had stabilized some before that.

Florida International University real estate professor Ken H. Johnson agrees that 2011 marked the bottom.

“Back in November, I thought it was pretty clear we had bottomed and housing was as affordable as it’s been in 40 years,” he said. “I said that was the turn, and we’ve not seen prices go down.”

© 2012 The Palm Beach Post (West Palm Beach, Fla.), Kimberly Miller. Distributed by MCT Information Services

Steve Geving
Jones and Co Realty

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