2008 offers hope for housing

Jan 25, 2008

Floridatoday.com: January 25, 2008

2008 offers hope for housing

Property tax vote, insurance action helping to erase memories of 2007


To the surprise of few, the final 2007 existing home sales numbers in Brevard County and other parts of the country, were ones many in the industry would like to forget.

Now, with mortgage rates expected to recede and sellers reducing home prices, housing industry officials are hoping 2008 will be rosier than last year.

A break on taxes and property insurance — something lawmakers were working on during the past year and an issue that’s partially addressed on Tuesday’s ballot — certainly wouldn’t hurt things.

"A cut in interest rates may help stimulate sales," said Cindy Kelley, president of the Space Coast Association of Realtors. "But taxes and insurance still remain a major culprit."

On Tuesday, Florida voters will decide whether to approve a constitutional amendment that would let them take a current assessment cap with them to a new primary home — an idea known as portability. Amendment supporters, including Realtors, believe it could help ignite the state’s real estate industry.

Critics counter that the amendment’s passage could erode precious revenues to schools and public services.

In a statement accompanying the Florida Association of Realtors’ year-end report, association President Chuck Bonfiglio said the housing market from 2001 to 2005 "was a market like we have never seen before. . . . Existing-home median prices went up statewide over the past five years by some 60 percent."

He said homeowners still are "experiencing a sizable return on
their investment if they have owned their home over the past six years."

Bonfiglio said he expects the housing market to "start to normalize," with gains by the end of the year.

The median resale price in Brevard County — the point at which half the homes sell for more and half for less — was $169,800 in December.

To help keep things in perspective, five years ago in Brevard, before the start of the housing bubble — December 2002 — the median sales price for a single-family home was $118,500.

Median prices for existing homes in Brevard peaked in August 2005 at $248,700.

Shahla Shahsavari, a Realtor with Showcase Properties & Investments, is surveying the current market for clients and herself, as she tries to sell her Viera home for $450,000.

It’s good time to purchase a home, but she cautioned against any gimmicky loans, and urged buyers to stick with traditional 30-year, fixed-rate mortgages.

"This is not a market to buy and flip," Shahsavari said, "but it is a good time to buy and hold on to it."

Home construction also has been down in the Space Coast.

Statistics show that permitting fell in 2007 to its lowest level since 1982, according to figures released last week by the Home Builders & Contractors Association of Brevard.

There were 1,894 construction permits issued for single-family homes in Brevard last year — the lowest annual total since the 1,718 issued in 1982.

Commercial construction and development typically lags behind residential trends by a year to 18 months. That means the commercial sector might soon see some of the slowdown associated with the residential side.

Nationally, the most recent market outlook from the National Association of Realtors predicts that, as conditions for the mortgage industry improve, existing-home sales should hold fairly steady over the next few months, rise later in the year and continue to improve in 2009.

In a statement, National Association of Realtors Senior Economist Lawrence Yun said: "A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late-2008."