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Coming off several years of blistering home sales at a record pace, Florida’s housing sector followed the
national trend in January and showed signs of some market adjustments,
according to the Florida Association of Realtors® (FAR). Still, the
statewide median sales price for existing single-family homes last month rose
21 percent to $248,600; a year ago, it was $205,100.

Housing industry analysts nationwide noted it may take a while for home
price growth to cool, following a long period of short supply and sellers
accustomed to exceptional price gains. In January 2001, the statewide median
sales price for single-family homes was $115,800, which means a gain of about
114.6 percent over the five-year-period, according to FAR records.

Realtors from across the state report that more homes are available for
sale, improving what had been tight inventories in many markets. Statewide,
sales of single-family existing homes totaled 12,815 in January compared to
15,745 homes sold a year ago for a 19 percent decrease.

2006 FAR President Mike Dooley notes that the market is coming into better
balance between buyers and sellers. “For years, many areas in Florida reported
tight inventories of homes available for sale,” he says. “Now that buyers are
seeing more choices, it’s even more important for both buyers and sellers to
seek advice from real estate professionals. With the expertise and services
that Realtors bring to the table, they help to bridge any differences between
buyers and sellers that may arise during the sales process and work to keep
the transaction going smoothly for everyone involved.”

In December 2005, the national median sales price for existing single-
family homes was $209,300, up 10.8 percent from the previous year, according
to the National Association of Realtors® (NAR). In California, the statewide
median resales price was $548,430 in December; in Maryland, it was $311,914;
in New York, it was $279,900; and in North Carolina, the statewide average
resales price was $209,810.

Sales of existing condominiums in Florida also decreased last month, with
a total of 4,456 condos sold statewide compared to 5,461 in January 2005 for
an 18 percent decline, according to FAR. The statewide median sales price for
condos rose 12 percent to $221,300 last month; a year ago, it was $197,300.
NAR reported the national median existing condo price was $228,100 in December
2005.

This release marks the first time that FAR has reported monthly condo
sales in the state’s metropolitan statistical areas. In conjunction with the
University of Florida Real Estate Research Center, FAR began compiling data on
closed condo sales for comparison purposes in 2005.

Last month, interest rates for a 30-year fixed-rate mortgage averaged
6.15 percent, up from the average rate of 5.71 percent in January 2005. FAR’s
sales figures reflect closings, which typically occur 30 to 90 days after
sales contracts are written.

Among the state’s larger markets, the Orlando Metropolitan Statistical
Area (MSA) reported higher existing condo sales last month but slower sales of
single-family homes. A total of 439 condos changed hands in January compared
to 185 condos a year ago—a dramatic increase of about 137 percent. The
market’s median sales price for condos rose 42 percent to $185,100; a year
ago, it was $130,400.

Beverly Pindling, president of the Orlando Regional Realtor Association
and broker-partner/sales training manager with Orlando Real Estate
Professionals, says condos offer an affordable housing choice for many buyers,
as well as a more maintenance-free lifestyle.

“The Orlando area offers exciting options for residents,” she says. “There
are job opportunities here, a new medical school is coming and, compared to
many places in the north, the cost of living here is lower. Orlando is a
convenient, comfortable place to work, shop, live and obtain an education.”

Among the state’s smaller markets, Ocala reported higher sales of existing
single-family homes in January, with a total of 428 homes sold compared to
378 homes a year ago for a 13 percent boost. The median sales price rose
39 percent to $166,200; a year ago, it was $119,600.

Wilbur Van Wyck, president of the Ocala/Marion County Association of
Realtors and broker-owner of Coldwell Banker Riverland Realty in Dunnellon,
says people are drawn to the area’s scenic beauty, relaxed lifestyle and
friendly community. “People are coming up from South Florida where traffic and
living conditions are much more congested,” he says. “This area is gorgeous
and it’s a great place for retirees to live.”

Two charts showing statistics for Florida and its 20 MSAs follow. One
chart compares the volume of existing, single-family home sales and median
sales prices; the other compares the volume of existing, condominium sales and
median sales price in January 2006 to January 2005 based on Realtor
transactions.

The Florida Association of Realtors®, the voice for real estate in
Florida, provides programs, services, continuing education, research and
legislative representation to its nearly 155,000 members in 68
boards/associations.

The Orlando area’s existing home inventory continued to build in January, but sales and the median price continued to rise as the market settles into “a very comfortable stride,” the Orlando Regional Realtor Association reported today.

Sales of existing homes in metro Orlando rose to 2,318 in January, up 6.2 percent from the same month a year ago, the Realtor association said.

Reflecting the cooling market is the rising inventory, though, as the 12,015 existing homes for sale in January in the core Orlando area was nearly four times greater than in January 2005.

The median price rose to $242,050, a 25.4 percent increase from a year earlier, but less than 1 percent higher than in December, a flattening of prices that began in late 2005.

Association President Beverly Pindling said in a statement that the surge in homes for sale is partly the result of sellers looking to take advantage of the recent rise in prices, and the fact that more sellers are turning to Realtors to list their homes.

Warm weather inflates reported number of housing starts in January, but economists still expect the market to cool.

By Chris Isidore, CNNMoney.com senior writer
February 16, 2006: 1:00 PM EST

NEW YORK (CNNMoney.com) – Unusually warm weather led to a spike in home building in January, but most experts still believe the real estate market will cool off later this year.

Housing starts jumped 14.5 percent to an annual rate of 2.28 million last month, the highest since March 1973, the Census Bureau reported. Economists surveyed by Briefing.com forecast that housing starts would come in at an annual rate of 2.02 million in the month.

But part of the jump came from seasonal adjustments, since government number crunchers usually assume cold weather in January. Instead, the month was the warmest January on record in the United States, which prompted many builders to start work unexpectedly early.

“The weather basically gave the builders an opportunity to move things forward. No one changed their plans,” said David Seiders, chief economist for the National Association of Home Builders. “But I’ll probably change my forecasts for the next two months lower, even if I keep the first quarter forecast at pretty much the same level.”

Taking out seasonal adjustments, the raw number of housing starts rose 11 percent last month, making it the best January for housing starts on record since the bureau started keeping records in 1959.

Still, there have been numerous signs recently that the real estate market is cooling, and most housing economists expect both home sales and residential construction to slip from the record levels reached in 2005.

“When one looks at the Mortgage Bankers Association data that reveal that applications for the purchases of new homes are down 7.5 percent on a year-over-year basis, it is not hard to see that the gain reported this month is not a sustainable trend,” said Anthony Chan, chief economist for JPMorgan Private Client Services.

Federal Reserve Chairman Ben Bernanke said in Congressional testimony Wednesday that a slowing housing market was one of the risks to economic growth, although he expected a gradual slowdown, and for the market to remain robust even as it slows.

Good … for January
Despite the strong “headline” number, economists said Thursday’s did little to change their outlook for the full year.

“It’s a very good number for January,” said Phillip Neuhart, economist for Wachovia. “But should we get carried away with the seasonally adjusted number? No. We still expect a slowdown in 2006, no question about it.”

Still, the report also shows some strength that can’t be explained away by the weather.

Statistics from the South, which accounts for nearly half of new home construction in the country, and where weather and seasonal adjustments are less of an issue, showed a roughly 9 percent gain in housing starts.

Building permits seen as a sign of builders’ confidence in the market, came in at an annual pace of 2.22 million in January, up 6.8 percent from December. Permits are much less affected by weather and seasonal adjustments than housing starts.

Much of the gain in the permits issued came from a 24 percent jump in multi-family home permits; single family home permits gained only 2.4 percent.

“There is some reassurance in that (single-family) permit number that the market is not exploding on the high side, and not collapsing,” said the home builders’ Seiders. “I still think we’ll see them move down, but I expect it will be an orderly slowing from the unsustainable growth last year.”

The January boom probably also got some help as mortgage rates edged lower. The average 30-year fixed rate mortgage rate was 6.15 percent last month, according to mortgage financing firm Freddie Mac, down from 6.27 percent in December and 6.33 percent in November.

But rates have started climbing again, and reaching 6.28 percent—the highest in nearly two months—in the most recent reading.

By HOLDEN LEWIS
bankrate.com
February 09, 2006

• After five years of sizzling growth, U.S. home price appreciation is showing signs of cooling.

For prospective homebuyers, the market shift provides a chance to remaster an old negotiating tactic: the art of the lowball offer. Strategies for securing a below-market price vary by locality. In any region, however, experts say bargain-hunting buyers can close favorable deals by applying a few basic principles.

Here are seven bargain-hunting tips for homebuyers.

First tip: Buy in the offseason. The best time to buy a house is the week between Christmas and New Year’s Day, says Robert Irwin, a real estate author and investor. Why? No one is looking.

“The only ones out there are people who desperately need a home or investors looking for a bargain,” says Irwin.

By the same logic, early spring ranks among the worst times to make a deeply discounted offer. It’s a popular time for sellers to put homes on the market, taking advantage of pleasant weather, longer daylight hours and heightened interest among buyers.

That seasonal pattern applies to most of the country. But warm climates might be the exception. Florida, Arizona and other locales popular with sun-seekers are likely to see high levels of home-buying activity in winter.

Second tip: Accept imperfections. Lots of buyers are looking for spacious, well-maintained homes in upscale neighborhoods. Few will find bargains meeting that description.

To secure a low price on a home, buyers ought to accept a few shortcomings, says Ilyce Glink, a real estate writer and talk show host. This might mean a property that needs repairs or faces a busy street. It could also be a home in a more run-down neighborhood that appears to be improving.

Third tip: Accept rejection. Unless it’s truly the house of your dreams, don’t be disappointed if a seller turns down your initial offers. Rejection is a normal part of the negotiating process. Some would even call it essential.

“Never make an offer you think they will accept,” says Thomas Early, president of the National Association of Exclusive Buyer Agents, who lists rejection as his first rule of savvy home buying.

His second rule? More rejection.

“Make the seller say ‘no’ at least twice. It’s too easy to say no the first time.”

Granted, that strategy doesn’t work everywhere. Early wouldn’t recommend it for competitive real estate markets, where it’s been common in recent years for sellers to get multiple offers above the asking price.

Fourth tip: Find a guide. When you see a great-looking house in a real estate circular, you might be tempted to call the agent listed by the photo. That could be a mistake.

“A lot of buyers think that ‘If I call the listing agent, I’ll get a better deal.’ That’s not true,” said Bob Wilson, an agent with the Guiltinan Group in San Diego County. Because listing agents have a duty to get the best possible price for the seller, they’re not suitable advisers for crafting a lowball offer.

Buyers need someone to represent their interests. Typically, that person is a buyer’s agent, who researches listings exclusively for a home seeker. When a purchase closes, the buyer’s agent normally splits the sales commission with the seller’s Realtor. In most states the buyer’s agent is required to deal with the seller honestly, but unlike the listing agent is under no obligation to get the highest possible price for the seller.

Fifth tip: Look for motivated sellers. The more desperate homeowners are to sell, the more likely they are to accept discounted offers. Therefore, bargain hunters should be on the lookout for homeowners anxious to unload their properties.

One strategy that broker Chris Edwards of Raleigh, N.C., recommends is to look for listings that have been on the market longer than normal. In Edwards’ market, a well-kept home in a good neighborhood typically sells within a month. Sellers with homes on the market two months or more are probably more receptive to lower offers.

Sixth tip: Don’t fixate on list price. The true value of a home might not be reflected in its listed price. A property’s listed price simply reflects what a seller hopes to get, usually based at least in part on selling prices of similar homes.

Glink cautions buyers against taking too much glee in getting a property substantially below list. In some cases, initial list prices are so inflated that even a buyer who negotiates a substantial discount still overpays.

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The benchmark 30-year fixed-rate mortgage rose 4 basis points to 6.32 percent, according to the Bankrate.com weekly national survey of large lenders. A basis point is one-hundredth of 1 percentage point. The mortgages in this week’s survey had an average total of 0.35 discount and origination points. One year ago, the mortgage index was 5.59 percent; four weeks ago, it was 6.22 percent. And on June 30, 2004, it was 6.3 percent.

The 15-year fixed-rate mortgage rose 8 basis points to 5.95 percent. The 5/1 adjustable-rate mortgage rose 10 basis points to 5.99 percent.

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