Housing prices might be at peak, group says
Third-quarter sales could be high point of five-year boom, one forecaster says.
By HELEN HUNTLEY
Published November 16, 2005
Orlando and the Fort Myers-Cape Coral area are two of the three hottest housing markets in the United States, with prices last quarter up 44 percent over 2004, a real estate trade group said Tuesday.
But the group's top forecaster also warned that the quarter probably represented a peak for the housing market.
"We're fairly confident that third quarter home sales will prove to be the high point of the five-year housing boom," said David Lereah, chief economist for the National Association of Realtors. He said he expects fewer homes will be sold next year, although it is likely to be the second best year on record.
On average, the median price of an existing single-family home in U.S. metro areas was $215,900 for the quarter, a 14.7 increase over the same period last year, the Realtors association reported.
Florida markets experienced much larger price increases. Statewide, the median price of an existing home was $248,600 last quarter, a 31 percent increase over last year, according to the the Realtors group. The median price represents the midpoint, with half the homes selling for more and half selling for less. Five years ago the median was $119,700.
The Florida association reported 64,978 houses sold during the third quarter, 7 percent more than a year ago. However, it cautioned that the year-ago numbers were depressed because of the hurricanes that crisscrossed the state. Many sales were delayed because homes had to be reinspected for damages or homeowners had difficulty getting property insurance.
The Tampa Bay area ranked 15th out of 20 Florida markets for the quarter with a 29 percent price increase over last year. The median sales price was $216,100. The most expensive market in the state was Naples with a median price of $489,200. The least expensive was Ocala, with a median price of $151,600.
The slowest-appreciating market in the state was Tallahassee, where the median price gained 9 percent over last year.
The rosy numbers mask some of the signs that the housing market is cooling. Statewide and Tampa Bay area prices peaked in July, then leveled off in August and September. That's in marked contrast to the first half of the year when prices rose steadily each month.
In many markets, homes are taking longer to sell and listings are increasing, which means buyers can be choosier. However, some real estate experts say this is a positive sign.
"The good news is that inventory levels are improving and housing supply will come closer to buyer demand in 2006," economist Lereah said. "We expect a healthy and more balanced market next year."
Rising interest rates also could affect sales. Last quarter the average fixed-rate 30-year mortgage was at 5.76 percent. Last week it was 6.36 percent.
Six of the 69 price areas included in the national report had price declines. The biggest price drop was reported in Elmira, N.Y., where the median price fell 5.4 percent to $77,100. The Phoenix-Mesa-Scottsdale area led the nation with a 55 percent increase.
Information from AP was used in this story. Helen Huntley can be reached at hhuntley@sptimes.com or 727 893-8230.