News Room

Palm Beach County home sales advanced in February

By Kimberly Miller

March 21, 2012 – WEST PALM BEACH – Palm Beach County's home prices gained 9 percent last month compared to January as house hunting got even harder.

The median sales price of $190,000 on an existing single family home was still 10 percent below where it was in February 2011, according to a report released Wednesday by the Realtors Association of the Palm Beaches.

But with total sales 7 percent higher than the same time last year and housing inventory at its lowest level since 2005, economists and Realtors said the market may finally be gearing for a comeback.

"The biggest complaint I have from my agents is there's nothing out there to sell," said Bill Richardson, district sales manager at The Keyes Company in Boca Raton. "There are so many buyers right now."

Statewide, sales of single-family homes in February were down nearly 5 percent compared to last year, but median prices increased 7 percent to $134,000. The inventory of homes on the market dropped 34 percent from 2011.

The story was the same nationwide with the National Association of Realtors reporting a 19 percent decrease in February inventory compared to the same time in 2011, while median sales prices inched up 0.3 percent.

Overall home sales nationwide decreased 0.9 percent in February from January for a seasonally adjusted annual sales rate of 4.59 million. However, they were up 8.8 percent year-over-year.

"The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy," said Lawrence Yun, chief economist for the National Association of Realtors.

The dip in sales nationwide surprised some economists, including George Mason University real estate finance Professor Anthony Sanders, who noted on his blog that the current market is the most affordable since 1990 because of price declines and low mortgage rates.

According to federal mortgage backer Freddie Mac, the national average commitment rate for a 30-year fixed mortgage was a record low 3.89 percent in February, down from 3.92 percent in January.

Wednesday's sales report coincided with a housing market survey from Zillow that said economists are pushing their prediction for a nationwide real estate recovery to 2013.

Zillow Senior Economist Svenja Gudell, said South Florida home prices are expected to remain flat through 2012.

"The bottom in home prices always seems just around the corner but never quite here," said Zillow Chief Economist Stan Humphries.

And what remains largely unknown is the impact of the shadow inventory, which includes the number of mortgages in default or homes in the process of bank repossession that could hit the market at reduced prices.

CoreLogic analysts estimated Wednesday there are 1.6 million homes in the shadow inventory nationwide, with Florida, California and Illinois accounting for more than a third of the properties.

There are an estimated 368,000 backlogged foreclosure cases in Florida's courts statewide, including an estimated 34,800 pending cases in Palm Beach County.

The $25 billion foreclosure settlement between the nation's five largest banks and the state attorneys general, could jumpstart those cases as lenders now have guidelines on how to proceed.

Notable in Palm Beach County's sales report was a 71 percent decrease in the number of homes sold as short sales and foreclosures in February compared to last year.

But Richardson said he's seen more distressed properties enter the market in recent weeks.

"I think foreclosures are being processed faster and short sales are happening faster," he said. "It's been a logjam for a while and hopefully that's easing a little bit." (www.palmbeachpost.com)