Dim outlook for area home sales

Published: Friday, January 25, 2008 at 6:01 a.m.
Last Modified: Thursday, January 24, 2008 at 11:45 p.m.

The final numbers are in on 2007 and tell us what we already knew: It was a bad year for home sales just about everywhere.

As for 2008, real estate professionals are advising to wait until next year for a housing rebound in the Gainesville area.

Nationwide, sales of new and existing single-family homes and condominiums fell 13 percent for the year, the largest drop in 26 years, according to the National Association of Realtors.

The median price was down 1.8 percent to $217,000, the first drop in 40 years of recordkeeping and possibly since the Depression of the 1930s, according to NAR chief economist Lawrence Yun, The Associated Press reported.

Florida sales of existing single-family homes were down 29 percent for the year, and the median price went down 5 percent to $233,600, according to the Florida Association of Realtors.

The Gainesville metro area, consisting of Alachua and Gilchrist counties, fared better than most of the state, with sales down 17 percent from 3,174 in 2006 to 2,644 last year and the median price down 1 percent to $210,400.

Without the degree of speculative buying as in some parts of the state, Gainesville didn't have as far to fall, said J. Parrish, president of Coldwell Banker/M.M. Parrish Realtors and the Gainesville-Alachua County Association of Realtors.

The number of Realtors in the area dropped from about 1,300 to 1,060 over the year, an 18 percent decrease, Parrish said.

"That reduction is primarily people who weren't doing it full time anyway," he said.

Looking ahead, Parrish said he expects the housing market to "bounce along" until 2009 and then recover a little sooner than the rest of the state.

Homes sales tend to increase around elections, Parrish said. "It probably has to do with consumer confidence. I think the election does lend a little bit of hope to folks that perhaps change is on the horizon."

But state budget cuts to the University of Florida could have a significant impact.

"Gainesville is very dependent on dollars from Tallahassee to maintain the health and integrity of the local economy, which is often an advantage for us, but it can be a scary notion when the state is experiencing major budget shortfalls," Parrish said.

The Attorneys' Title Insurance Fund is predicting a slight rebound for Alachua County's existing single-family market in 2009, noting projected moderate growth in employment and population, but for new homes to bottom out in 2009 due to weak economic conditions, with 660 closings compared to 1,000 in 2005.

The state housing market hit bottom with the subprime mortgage crisis of August 2007 and is expected to recover in the next several years, according to The Fund.

Florida is still one of the leading states for job creation, and its population growth, though slowing, is still above the rest of the Southeast.

Economists are concerned that housing and credit troubles could lead to recession, however. After a sharp sell-off in global stock markets, the Federal Reserve cut a key interest rate three-quarter points before U.S. markets opened Tuesday, and Congress is negotiating tax rebates to jumpstart the economy.

"Time will tell whether their response is sufficient to help prop everything up right now," Parrish said.

For state and national home sales, NAR and FAR officials are predicting an upturn by the end of the year, continuing into 2009.

Alachua County started the year with a 7.4-month supply of new and existing homes on the market based on the 2007 rate of sales, according to a report by Steve Elwood, senior vice president with M.M. Parrish.

In a buyers' market, sellers are having to price right or get creative to stand out.

Michelle Brown decided this week to throw in a free 2001 Saturn SC1 and lower the price on her condo at The Links at Haile Plantation after six months on the market. She said the $171,900 listing is $1,000 less than she paid for it a year ago.

"I was thinking of getting a new car and using (the Saturn) as a trade-in, but I figured if I can get the money for the condo, I can get a new car anyway," she said.

Existing condo sales were down 27 percent statewide in 2007 and the median price down 3 percent to $205,100. In the Gainesville area, condo sales were down 27 percent, from 1,284 to 939, and the median price up 1 percent to $154,900.

The Fund anticipates a significant drop in Alachua County condo sales this year with prices flat in coming years.

Anthony Clark can be reached at 352-374-5094 or anthony.clark@gvillesun.com.

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