The risk of a drop in local home prices is far less than the U.S. average, data show.

Jerry W. Jackson
Sentinel Staff Writer

April 14, 2006

Don't worry about that real-estate bubble bursting just yet -- at least not in Metro Orlando. But homeowners in Tampa, Fort Lauderdale and Miami might be in for a rough time.

The latest national rankings show that nearly all of the country's 50 biggest metro areas face a greater risk of declining values than they did three months ago.

According to the PMI Mortgage Insurance Co.'s most recent market-risk index, the four-county metro area -- Orange, Seminole, Osceola and Lake -- has a 16 percent chance of a decline in home prices during the next two years -- well below the 28.7 percent U.S. average.

"We're still very healthy, in this market," said Sue Trover, broker for All Star Vacation Homes in Kissimmee. Trover, a 21-year veteran of residential real-estate sales, said the Orlando area has advantages over many other parts of the country -- from steady tourism to ongoing population growth.

The news wasn't as good for Tampa, Miami and Fort Lauderdale, which are among the 25 riskiest metro areas, according to PMI's second-quarter rankings.

Fort Lauderdale's metro area is the 17th-riskiest area in the nation, with a 42.3 percent chance of a price decline in the next two years.

Miami came in at 21st, with a 32.7 percent chance, and Tampa-St. Petersburg was 22nd, with a 29.4 percent chance.

Fourteen of the 50 largest metro areas in the country have a 50 percent or greater risk of home-price declines within the next two years.

Although Metro Orlando's risk rating was good, some area brokers say the region's fast-rising inventory of homes for sale is cause for concern. Asking prices are dropping, and many homes are staying on the market for months -- with few offers.

Denis Le Marchant-Smith, owner of Hightower Realty in Kissimmee, said he has seen prices for vacation homes in Central Florida drop about 10 percent in the past year, since he opened his company. "It was a bit of a shock," he said.

Le Marchant-Smith predicts that prices could drop another 10 percent in the coming year before stabilizing.

"I'm a bit more encouraged in just the last few days, in fact. I've sold a couple of homes, and I am getting a few more calls and e-mails. A lot of homes have simply been unrealistically priced."

Home-price appreciation has slowed in recent months in nearly half the metro areas surveyed by PMI. Company experts said the continued strength of the national and local economies suggests that, in the absence of an unexpected economic shock, the once red-hot housing market will continue to cool gradually.

The PMI risk index takes into account variables such as housing prices, labor statistics, housing affordability as measured by local household incomes, home-price appreciation and the costs of conventional mortgages.

Rates on 30-year mortgages climbed this week to their highest point in nearly four years -- a development that could further dampen housing activity.

Freddie Mac, the mortgage company, reported Thursday that rates on 30-year, fixed-rate mortgages averaged 6.49 percent for the week ended April 13. That was up from 6.43 percent last week and was the highest since mid-July 2002.

One segment of the nation's housing markets that could lead a price decline: second homes. Vacation-home and investment-home sales set records in 2005, accounting for four of every 10 residential transactions, according to the National Association of Realtors.

There were 3.34 million second-home sales during the year, up 16 percent. About 1.02 million of those were vacation homes, a 16.9 percent increase.

The Orlando Regional Realtor Association does not break out vacation- or second-home sales in its statistics.

"A home is a home, as far as we're concerned," spokesman Kevin Fritz said.

Baby boomers are driving the demand for vacation homes, and sales of those should remain strong, said David Lereah, chief economist of the National Association of Realtors. But the pure "investment-home" market will probably decline this year, he said, because of higher interest rates.

Though there is overlap in the two categories, there are differences between pure vacation-home buyers and second-home investors in terms of how they are defined nationally. About 72 percent of "vacation-home" buyers purchase their properties for vacations or as a "family retreat," NAR said, while about 90 percent of "investment-home" buyers purchase to generate rental income or to diversify their assets.

But in the Metro Orlando market, the national definitions do not fit, said Steve Trover, who oversees All Star Vacation Homes, the rental-property management and marketing arm affiliated with All Star Vacation Home Realty, run by his wife, Sue.

About "99 percent" of vacation-home buyers in the Osceola County/Walt Disney World area also rent out their properties, Trover said. That generates a whole new set of prospects for further sales.

"Our renters often become our buyers," he said.

Jerry W. Jackson can be reached at jwjackson@orlandosentinel.com or 407-420-5721.


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March 2, 2006
The following article from the Orlando Sentinel, confirms the trend that I have seen playing out in this Mount Dora market these past few months. The "Frenzied Seller's Market" we experienced last year is history. Supply and Demand have turned around. The inventory of homes for sale in Mount Dora is up over 300% from just one year ago. I do not see this as a bad thing. It's pretty much back right where it was before this frenzy began a couple years ago. We now see the return of sanity to the selling price of a home. Sanity is a good thing. Don't you agree? No longer can the seller expect to ask whatever he wants and actually get it. A return to reason and logic. No more histeria. I like that.
-Denise Beyer

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Residential resales decline statewide, rise 6.2% in Orlando
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Jerry W. Jackson
Sentinel Staff Writer

March 1, 2006

January was a relatively warm month in terms of weather but a chilly one for the real-estate market.

Existing-home sales in Florida fell 19 percent in January compared with the same month a year earlier, and they slipped to a two-year low nationally, a pair of reports said Tuesday.

The supply of unsold homes nationwide hit its highest level since 1998, as the real-estate market continued its long-forecast cooling.

The National Association of Realtors said U.S. resales in January dipped 2.8 percent to an annual rate of 6.56 million, compared with a revised 6.75 million in December,

Sales of existing and new homes are forecast to decline this year after five years of record gains, the Realtors group reported, as higher interest rates temper demand.

Analysts said the sales slowdown is helpful because it lessens the chances that there will be a bone-jarring plunge in home prices, the "bubble bursting" scenario that many experts have long debated.

"Home resales continue to move lower, which is actually good news," Chris Rupkey, senior market economist with Bank of Tokyo-Mitsubishi UFJ in New York, told Bloomberg News Service. "The housing bubble is much more likely to end with a whimper and not with a bang."

Last week, the Orlando Regional Realtor Association reported that the local inventory of homes available for resale hit a record high 12,015 in January.

But existing-home sales in Metro Orlando were up 6.2 percent in January from a year ago, according to the local association's calculations, and the median price was up 25.4 percent during the same period to $242,050.

The Orlando trade group, the state association and the national association all use slightly different methodologies or reporting dates and deadlines for their monthly and quarterly reports, yielding different results.

The Florida Association of Realtors, based in Orlando, said the January median sales price statewide -- half sold for less and half for more -- was $248,600, up 21 percent year-over-year.

Florida Realtors President Mike Dooley said home sales are actually "coming into better balance" between buyers and sellers. For years, he said, many areas had reported exceptionally tight inventories, but now home sellers are turning to Realtors for professional help marketing their homes, boosting the various multiple-listing services.

For the first time, the Orlando association also has begun reporting monthly condominium sales for metro areas, in conjunction with the University of Florida Real Estate Research Center.

Statewide, condo sales slipped 18 percent in January, falling to 4,456 from 5,461 the same month a year ago, the report noted. The median condo price rose 12 percent to $221,300.

For Metro Orlando -- Orange, Lake, Seminole and Osceola counties -- the number of condos sold surged a whopping 137 percent from a year earlier, to 439 from 185. The median price for an Orlando condo rose 42 percent to $185,100.

Beverly Pindling, president of the Orlando Regional association and broker-partner/sales training manager with Orlando Real Estate Partners, said condo sales boomed in Orlando because they are a more affordable choice for many buyers and offer a more maintenance-free lifestyle.

Jerry W. Jackson can be reached at jwjackson@orlandosentinel.com or 407-420-5721. Bloomberg News Service contributed to this report.



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