Florida: home price spike likely to continue

By DICK HOGAN • dhogan@news-press.com • October 26, 2010

September’s home sales dipped while prices spiked up in Lee County – but more recent chaos in the foreclosure process could make those patterns seem mild.

The median price of an existing home sold in Lee County in September was $94,400, compared to $88,400 in August; the number of sales fell from 1,193 to 1,102 for homes sold with the assistance of a Realtor, according to a report released Monday by Florida Realtors (formerly Florida Association of Realtors).

But in early October, some of the nation’s largest banks abruptly yanked some houses off the market that they’d taken back in foreclosure – citing potential irregularities in the way the paperwork had been handled.

In Lee County and around the country, the announcement by Bank of America, JPMorgan Chase and others caused fears that flawed foreclosure documents could keep buyers on the sidelines in the final months of the year.

A trend of fewer sales and higher prices likely will continue, although the extent on final sales won’t be known until next month, said Steve Koffman, a real estate broker with Century 21 Sunbelt in Cape Coral.

“It’s kind of a false sense of security when you see the median go up,” Koffman said.

The trend likely will mainly reflect that most of the houses pulled off the market were the most inexpensive ones for sale. With much of the bottom of the market gone, Koffman said, the median price will likely rise further by default.

A smaller inventory of houses for sale likely will mean fewer sales, he said, although that’s not certain – investors could simply switch to higher-end homes.

But it’s not clear how strong that effect will be, said Brett Ellis, head of The Ellis Team with Re/Max Realty Group in Fort Myers.

For one thing, he said, some banks continued filing foreclosures and getting judgments in existing cases, although there were some delays.

“I never saw a pause whatsoever,” Ellis said.

The Naples Area Board of Realtors does not make its sales and prices public.
Nationally, sales grew 10 percent in September to a seasonally adjusted annual rate of 4.53 million, the National Association of Realtors said Monday.

Still, sales could fall further if potential lawsuits from former homeowners claiming that banks made errors when seizing their homes make consumers fearful of buying foreclosed properties.
In a survey taken by the association this month, about 23 percent of the 2,000 agents surveyed said they have a client who is no longer interested in purchasing a foreclosed property due to the foreclosure-document mess.

“You’re going to see uncertainty on the part of homebuyers,” said Quinn Eddins, director of research at Radar Logic Inc., which tracks the housing market.

Mortgage applications to purchase homes last week were 29 percent below the same week a year ago, according to the Mortgage Bankers Association. At that time, buyers were rushing to purchase homes to qualify for federal tax credits.