South Florida housing prices have hit bottom, Zillow analysts declare…..

By KIMBERLY MILLER
Palm Beach Post Staff Writer

There are three little words South Floridians have longed to hear since the housing slide began: “We’ve hit bottom.”

Analysts at the online real estate database Zillow are declaring just that for Palm Beach, Broward and Miami-Dade counties in a report to be released today that shows tri-county home prices bottomed out in the latter part of 2011.

Although the first quarter Zillow Home Value Index was down 2.3 percent in Palm Beach County on a year-over-year measure to $140,600, small increases in monthly and quarterly measures were enough for senior Zillow economist Svenja Gudell to predict an end to free-falling prices.

“The last two years we’ve seen the rate of decline slow and now we’re seeing this uptick for the first time, where instead of sloping down, the curve is sloping up,” Gudell said.

Of the 30 largest metropolitan areas measured by the Seattle-based Zillow, 14 were declared to have hit bottom either at the end of 2011 or between January and March of this year, including Orlando and Tampa.

The optimism was echoed by Florida International University real estate economist Ken Johnson, who began predicting a bottom in November when prices hit 2002 levels.

“It just makes really strong financial sense to buy right now,” Johnson said. “We can’t go down anymore.”

Zillow’s index considers the value of all homes, not just those that sold during the measurement period, and South Florida Realtors are often skeptical of the company’s South Florida data. Zillow’s website states that as of February, its estimates were within 5 percent of the actual sales price of a South Florida home just 27 percent of the time. About 49 percent of the time the estimates were within 10 percent of the price.

Zillow estimates the national home value during the first quarter of 2012 was $146,200, a 3 percent decrease from the same time in 2011, and predicts the country as a whole won’t hit bottom until the end of the year.

That’s more in line with some other reports released this week that offered mixed signals on the state of the housing market.

Nationwide, new home sales in March fell from the previous month, according to a U.S. Department of Commerce report released Tuesday, while the Standard & Poor’s/Case-Shiller home price index was down 3.5 percent in February from the same time in 2011.

South Florida, however, was a bright spot in Case-Shiller, showing a 0.6 percent bump up from January and a 0.8 percent increase from February 2011.

Gudell said investors are driving South Florida’s price increases, which Zillow estimates will climb 5.6 percent in the next year.

Still, there are 373,550 foreclosure cases backlogged in Florida’s courts that could depress prices once they hit the market. Johnson said he’s less concerned about the so-called shadow inventory because people are finding creative ways to dispose of current foreclosures, such as with bulk sales.

“They may hinder the speed of the bounce-back, but I don’t see prices coming down anymore,” Johnson said. “My hopes and intuition tell me it will be a slow but steady recovery.”

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