Real State

Zillow: Home value declines lessen for some

South Florida Business Journal - by Susan R. Miller

South Florida home values fell 4.36 percent in the second quarter, compared to the first quarter, and were down nearly 23 percent, year-over-year, according to Zillow, an online real estate company.

There were a few glimmers of hope. Prices were up, quarter-over-quarter, in higher-priced areas such as Fisher Island, where the average home price is nearly $2 million (up 3.97 percent); Golden Beach, where the average home price is nearly $1.5 million (up 3.68 percent); and Manalapan, where the average home price is $2.5 million (up 14.43 percent).

Vicki Minnaugh, a Realtor with Century 21 AAA in Pembroke Pines, said there is a market for homes on the water.

“People who have that kind of money aren’t worried,” she said. “They are buying that location.”

But, not all of the increases were limited to the multimillion-dollar neighborhoods. For example, in the far western reaches of Palm Beach County’s Belle Glade, where the average price of a home is $112,000, prices ticked up 2.31 percent, quarter-over-quarter. Prices rose 4.58 percent in Broward County’s Hillsboro Beach and 4.84 percent in Miami-Dade County’s Norland neighborhood.

Some of the areas posting the greatest quarter-over-quarter declines were North Bay Village (down 10.68 percent), Pembroke Park (down 13.23 percent) and Sunny Isles Beach (down 14.22 percent).

Minnaugh suggested that the high concentration of condos in Sunny Isles Beach and North Bay Village are to blame for the declines.

“The bulk of those areas are Old Florida homes and condos, and some of the surrounding areas have changed – and that’s all a factor,” she said.

Nationwide, home values posted a 10th consecutive quarterly loss, falling 12.1 percent, year-over-year, according to Zillow. However, the index also found that the rate of decline has shrunk slightly, from 12.4 percent in the first quarter.

Home sales in June fell 23.7 percent compared to a year ago, but were up 3.8 percent over May.

Minnaugh said she saw sales rise in June and July – “and that’s important because until this whole inventory of REOs and short sales clear out, the prices aren’t going to level.”

Foreclosures made up 22 percent of all home sales nationwide in June, and 29.2 percent of all homes were sold for less than what the owner originally paid.

Negative equity continues to plague homeowners, with 23 percent of all single-family homeowners owing more than what their home is worth.

Minnaugh said there are predictions that those who purchased homes in 2007 and 2008 will, by next year, be upside down, as well.

“If people who bought in 2007 and 2008 walk away, they will do a short sale, which will perpetuate more negativity,” she said. “I hope they are wrong.”

Still, 29 percent say they would be at least somewhat likely to sell if they see signs of a turnaround.

“While we are encouraged by the increasing sales in many markets and the overall improvement in the rate of decline in the Zillow Home Value Index, I hate to be overly optimistic for the near future,” said Stan Humphries, Zillow chief economist.

He notes that foreclosures are keeping home values down, and increasing unemployment, coupled with higher rates of negative equity, will create “fertile breeding ground” for more foreclosures.