Miami Herald: Survey: Home values will plunge even more
Oct 22, 2009
This article was published by the Miami Herald on October 22, 2009
BY MONICA HATCHER
While recent evidence shows South Florida’s home values have begun to flatten out, a new forecast says prices of single-family homes will take another serious tumble in the year to come.
And, among 381 metropolitan areas ranked nationwide, Miami will be the biggest loser, according to Fiserv, a financial information and analysis firm.
The firm predicts Miami home values will plunge another 29.9 percent by June 2010, on top of price declines of 48 percent since peaking in 2006. Orlando fared second-worse, with values shrinking 27 percent. Prices are forecast to fall another 26 percent in Fort Lauderdale.
Nationwide, Fiserv predicts home values will slide another 11.3 percent
In Miami, that means the median home price would fall to $150,500 by next June and $153,100 in the Fort Lauderdale metro area. The price deductions are calculated from the median price at the end of the second quarter.
The forecast contradicts recent evidence from the highly regarded S&P/Case-Shiller index as well as median price data from the Florida Association of Realtors. Both measures have shown single-family home values mellowing in South Florida. Fiserv bases its forecast on Case-Shiller data, but also other economic variables, including interest rates, demographic trends and labor market conditions.
Jack McCabe, a Deerfield Beach-based real estate analyst, said the Fiserv forecast was unrealistic. He predicts prices will fall another 10 percent to 15 percent regionwide before bottoming out. After that, they will remain flat for two more years, as the effect of a massive number of foreclosures lingers.
McCabe said Case-Shiller data generally lagged other real-time housing indicators available to analysts. He agreed, however, that South Florida’s housing woes were not over.
“Distressed properties are going to fuel the inventory pipeline through 2010,” McCabe said.
“Because they are distressed, they are going to have the lowest asking prices and they are going to dictate market conditions.”