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Nation, state and local property sales and prices tumble

October 25, 2007

September home sales throughout Florida plummeted to the lowest level in more than a decade, and experts say the slump will likely continue into 2008.

The state's real estate agents sold just 8,688 homes last month, down 38 percent from a year earlier. But the number looks even worse when you compare it with previous years. In September 2003, agents handled 18,222 transactions, according to the Florida Association of Realtors. Their records go back to 1993, when September sales totaled 9,249.

"If you look at the existing home numbers for the nation as a whole it is the same story, and Florida is just worse," said economist Adam York of Wachovia Corp.

Lenders making tougher loans "could be at least delaying closings, if not canceling them outright," York said.

In the Sarasota-Bradenton metro area, home sales dropped 25 percent from a year ago to an even 500 transactions, while the median price slipped 15 percent from a year ago to $244,300.

"We have obviously been suffering, but not as badly as in other markets," said Kathy Roberts, executive director of the Sarasota Association of Realtors.

The median price for a home in the Sarasota-Bradenton market during January 2006 was $353,500. From then until now, the two-county area has taken a 31 percent hit, or $109,200 off the median price.

In Charlotte County-North Port, the median went from $227,400 in early 2006 to $170,000 last month, a 25 percent drop.

Looking at numbers like these across the state, the incoming president of the Florida Association of Realtors, Chuck Bonfiglio Sr., joked that he asked if he could go from president-elect to immediate past-president.

"But they wouldn't let me," said Bonfiglio, who works in Fort Lauderdale. His market suffered so much so that its single-family home sales for the month were actually less than in the Sarasota-Bradenton market, at 441 transactions. The figure was off nearly 50 percent from one year earlier.

Miami's median was flat at $372,300. But real estate agents in the market sold only 360 homes in September, a 53 percent drop. That compared with 500 sales in Sarasota-Bradenton and 189 in Charlotte County-North Port.

Some buyers, meanwhile, are capitalizing on the pain.

Consider David Dutch, a 46-year-old natural gas trader who works for a Houston-based merchant bank, and who just landed a waterfront house on Longboat Key for what he thinks was a great deal.

Previously, Dutch had found he "couldn't touch anything under a million directly on the bay."

The seller for Dutch's house was a speculator with multiple mortgages, including an ARM with a fast-approaching reset. The seller's original asking price was $1.5 million, but he got no offers. Then he dropped it to $1.3 million. Still no offers.

"The seller received a $1.1 million offer a while back, which was rejected," said Dutch, who bought for $800,000. "It felt good."

Dutch thinks the local real estate market is still a couple of years away from normalcy.

"Did we catch the bottom? I don't know, but I think that Florida rose and fell the fastest, so hopefully we bought at the right time," he said.

Dutch and everyone else is still trying to figure out where that bottom is. But driving that equation right now is the massive inventory that Southwest Florida built up during the boom.

"Housing was starting to show the signs, at least nationally, of a tentative bottom this summer, and then we got the mortgage market problems and housing took another leg downward," said economist York of Wachovia. "We don't see a bottom in sales before the end of this year."

That is actually an optimistic projection. Moody's recently projected prices in Sarasota-Bradenton are in the midst of a decline that started in January 2006 and will bottom in August 2008.

Nationally, sales of existing homes plunged by a record 8 percent in September, coming off an August marked by turmoil in mortgage markets that only exacerbated a housing industry in its worst slump in 16 years.

As in Southwest Florida, weak sales put pressure on prices nationally. The median fell to $211,700, down 4.2 percent. It was the 13th time in 14 months that the year-over-year sales price has decreased.

Sales were down 6 percent in the South, 10 percent in the Northeast, 9.9 percent in the West and 7 percent in the Midwest.

In southwest Florida, meanwhile, the price drops have occurred across all strata.

Robert Vernon, a 90-something-year-old retiree needed to sell his Venice doublewide mobile home so he could move to a retirement home in Roswell, Ga.

He listed for $94,900 in January, but Coldwell Banker Realtor Peggy Lewis told Vernon he had to go lower. He did, but still found no takers.

"We had generated a great 'traffic' price, but still no offers," Lewis said. Vernon ended up settling for $72,500. "He knew that they would go elsewhere if he didn't negotiate."

Kevin and Wanda Wallace, two hotel executives who moved to Sarasota recently from Orlando, just bought a 2,900-square-foot Medallion Home in Manatee County for $510,000. They looked at 15 other homes, settling on one that had been bought by an investor for $536,000, for which he was asking $550,000.

"We were very worried about the timing for the sale of our Orlando home, but we were lucky and were able to sell at an acceptable price," Kevin Wallace said. "It took a leap of faith."

David and Pam Charron needed a house after David got a job offer in Sarasota. Pam Charron, a Prudential real estate agent in New Hampshire, hired Prudential Palms' Michael Bowers and the couple decided on a Lee Wetherington home in the Toscana community.

It had been sold to an owner who could not sell their previous house.

The asking price was $800,000, but the Charrons got it for $720,000.

"We knew there were a lot of homes for sale and did not want to get into a protracted negotiation with the seller," Pam Charron said. "We were not looking to steal the property but wanted a fair price."

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