State's home prices buck trend

Published November 28, 2006

In October, once again, Florida bucked national real estate trends.

Across the country, the median price for existing homes was down 3.5 percent from a year ago, hitting $221,000, the National Association of Realtors said Tuesday. It was the biggest year-over-year price decline on record.

But in Florida and the Tampa Bay area, the median sales price refused to budge. It registered at $242,500 statewide and $225,800 locally, virtually unchanged from a year ago, the Florida Association of Realtors said Tuesday.

But real estate experts say the numbers, both nationally and statewide, don’t tell the whole story.

Part of that is due to the way prices are measured.

“Just because the median price of homes sold in October declined (nationwide), it does not mean that housing prices are falling,” said Mark Vitner, senior economist at Wachovia Bank.

Prices across the country have actually been flat over the year, he said. The median price has fallen because more

lower-priced homes are being sold.

It’s a point that most publications are missing, Vitner said.

Meanwhile, Brad Monroe, president of the Greater Tampa Association of Realtors and a managing broker for Coldwell Banker in New Tampa, said local home prices are already softening, even if the median price comparisons to a year ago don’t reflect that.

Hillsborough County has a glut of homes on the market — enough to last 11½ months, he said. Prices will continue to soften until inventory is down to a six- or seven-month supply, which is typical for the area.

Since hurricane season was kind, and the state keeps churning out jobs, Monroe is optimistic that more buyers will come along. He thinks inventory will return to normal in six to eight months.

Prices across the state are also being lowered in ways that aren’t reflected in the data from the Realtors groups, said David Denslow, a University of Florida economist. Sellers are offering free upgrades and repairs to entice buyers.

Nationally and statewide, he said, “the decrease in prices is probably a little bit more than these numbers suggest.”

October’s prices varied dramatically throughout the state. In Gainesville, they were up 15 percent from a year ago, to $225,600. But they were down a whopping 44 percent in the Fort Myers-Cape Coral area, to $249,200.

On a national level, the National Association of Realtors played down the 3.5 percent decrease in median sales price.

Though it’s technically true that it’s the biggest year-over-year price decline on record, the numbers are a bit biased, said spokesman Walter Molony.

That’s because there was a big spike in housing prices in October 2005. “We don’t have an explanation for that,” Molony said.

The state was more aligned with the rest of the country on the number of existing homes sold. Nationwide, sales fell 11.5 percent from a year ago. In Florida, they fell 22 percent.

In the Tampa Bay area, they fell more than anywhere else in the state — 35 percent, down to 2,419 homes.

Still, that’s an improvement over the bay area’s 42 percent drop in homes sold in September compared with the previous year.

Monroe said the decline is a correction over last year’s unsustainable gains, not a slump.

“Truly,” he said, “it’s the third best year on record. And that’s not bad.”

Christina Rexrode can be reached at (727) 893-8318 or crexrode@sptimes.com.