Home Sales and Prices Are Still Falling
Is 2008 Your Year To Buy ?

    January 8, 2008

      If you were smart enough not to buy a home or condo in Florida during 2007, will 2008 be the year to make the move?

    The primary cause of the price downturn is the enormous inventory of homes for sale right now. There is nearly a year's supply of homes for sale on the market. Based on recent data, at the height of the Florida real estate market in 2005, there were about 1,600 homes and 1,150 condos for sale at prices that were admittedly atmospheric. Fast forward to today and you'll find over 8,000 homes and more than 4,700 condos on the market -- and they are not selling. The Florida Association of Realtors predicts that real estate prices will fall a bit more in 2008, but that 2008 may be the right year to make your move.

    It should come as no surprise to anyone that home prices in Florida had gotten far away from reality. One agent reported that a waterfront condo that changed hands in 2000 for $175,000, re-sold in 2003 for $295,000, then again in 2004 for $367,000 and by mid-2005 would have brought $579,000. Now that same unit is on the market listed for $449,000 and no one is even coming to see it. As another example, an updated 2 bedroom, 2 bath recently sold for under $450,000, yet prospective sellers who still haven't accepted reality are asking up to $519,000 for the equivalent unit in the same development. However, there are early signs that reality is beginning to take hold and with it, the hope that 2008 will see a coming together of seller price expectations and buyer willingness to buy.

    Another reason why you might want to start thinking seriously about making your move if you are interested in the Florida real estate market in 2008 is that mortgage rates are still at historically low rates, averaging about 6%. With inflation beginning to rear its ugly head, interest rates will soon begin rising. When that happens, the amount of home or condo you can buy for a given monthly outlay will start dropping. A modest inflation-driven increase from a 6% to a 7% mortgage interest rate will reduce the amount of home you can buy for the same monthly outlay by nearly 17%.

    2008 will clearly be a "buyer's market" in Florida and those willing to spend the time looking can find real bargains in the real estate market. While you're wintering in Florida this year may be a great time to contact a Florida Realtor® and begin shopping for that Florida home or condo you've been dreaming about.