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Mixed outlook seen for housing |
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Written by Site Admin
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Tuesday, 02 May 2006 |
WEST PALM BEACH, Fla. -- April 28, 2006 -- Florida's housing market probably won't improve in 2006, but the long-term outlook remains promising, the chief economist for the National Association of Realtors said Thursday.
"Is this a bad year? Yes," David Lereah told more than 400 people at the Hilton-Palm Beach Airport in West Palm Beach. "Are you going to bust? No."
Lereah predicted that price increases for existing homes in South Florida, once at 25 percent and 30 percent, will fall to about 5 percent and that sales declines in many markets will continue at double-digit clips...
WEST PALM BEACH, Fla. -- April 28, 2006 -- Florida's housing market probably won't improve in 2006, but the long-term outlook remains promising, the chief economist for the National Association of Realtors said Thursday.
"Is this a bad year? Yes," David Lereah told more than 400 people at the Hilton-Palm Beach Airport in West Palm Beach. "Are you going to bust? No."
Lereah predicted that price increases for existing homes in South Florida, once at 25 percent and 30 percent, will fall to about 5 percent and that sales declines in many markets will continue at double-digit clips.
But with the regional economy staying strong and interest rates still affordable, the state's housing industry should pick up in the middle of 2007, Lereah said. "Particular markets may not, depending on inventory levels," he said.
South Florida is one region where the number of homes for sale has increased substantially since last year.
Listings have more than doubled in Palm Beach County, according to the Regional Multiple Listing Service. The MLS figures don't include the town of Palm Beach.
The situation is even worse in Broward, where listings have more than tripled, according to the Realtor Association of Greater Fort Lauderdale.
Lereah blamed Wall Street analysts and the media for perpetuating negative hype regarding the housing slowdown.
"They're telling us we're in a bubble and that we're going to come crashing down," he said. "There is nothing that could be further from the truth."
Some question the economist's alliance with the Realtors trade group and the fact that he wrote a book titled Why the Real Estate Boom Will Not Bust -- And How You Can Profit From It.
But Lereah insists he's not being unfairly optimistic. Although he remains positive about Florida, other areas, such as San Diego, could face sustained slowdowns because of flawed market fundamentals, he said.
Abe Himelstein, managing broker for Prudential Florida WCI Realty in Boynton Beach, said he was encouraged by Lereah's comments at Thursday's event, sponsored by the Realtors Association of the Palm Beaches.
"Real estate is not a quick-fix business," Himelstein said. "But I'm seeing trends that business is increasing. I've had the best month I've had in four months."
Other agents weren't as impressed. Mike Morgan, a Stuart broker with clients in Palm Beach County, said it could be two years before the housing market rebounds. He said it's so slow that builders are paying buyers' mortgages for six months and giving agents double commissions. Individual sellers also are offering incentives.
Lereah is not preparing the industry for rough times ahead, Morgan said. "It was more of a pep-rally speech than anything else." |
