Slide in South Florida home prices continues

South Florida homes continued to shed value, sellers were still slashing prices and distressed sales were still dominating the market in the third quarter of the year-- all signs that the real estate recovery has a long way to go.

A report released Wednesday by real estate firm Zillow found that 45.2 percent of South Florida homes sold between June and September were sold for a loss, up slightly from the previous quarter, but down 2 percent for the month.

``Distressed sales have contributed to that 50 percent decline,'' said David Dabby, president of Coral Gables-based Dabby Group. ``They will continue to put a lid on prices for the foreseeable future.''

The continued slide has added to the ranks of underwater homes in the region. Since the June 2006 peak, home values have fallen 53.5 percent in South Florida, the largest drop among the top 25 markets covered by Zillow. That has left some 42 percent of single-family homeowners underwater, or owing more on their mortgages that their homes are worth.

That's slightly better than the third quarter of last year, when 45.1 percent of homes were underwater, but still much higher than the national average of 25 percent.

A high foreclosure rate and a weak job market continued to influence housing in the third quarter, the report found.

Deborah Katsikas, who recently sold her home in Southwest Miami-Dade County, said she had to cut the price, finally accepting an offer that was considerably less than she originally hoped for.

``The only way to sell is if you're competitive with everything that's out there,'' she said.

Now she's reaping the benefit of a buyer's market as she looks to purchase a new home. She has a contract to buy a short sale in Palmetto Bay, and the price of that home has been slashed multiple times, said her real estate agent, Anthony Askowitz.

According to Zillow, 21 percent of South Florida home sellers reduced prices in the third quarter, with a median reduction of 10 percent. The median selling price for a single-family home was $221,200 in the third quarter, up 1 percent quarter-over-quarter, but down 7.8 percent from last year.

For South Florida condominiums, the median sales price was $109,800, down 4.3 percent over last quarter, and down 14.2 percent from last year.

Askowitz, who owns two Re/Max offices, said price-cutting is the new normal, as home sellers seek to compete with the glut of foreclosures on the market.

According to a sales analysis by Esslinger-Wooten-Maxwell Realty, short sales and foreclosures account for more than 60 percent of South Florida home sales.

Source: http://www.miamiherald.com/2010/11/10/1917884/slide-in-south-florida-home-prices.html

By TOLUSE OLORUNNIPA
tolorunnipa@MiamiHerald.com