Local News

2014 local real-estate market prognosis: Slow but steady?

SEBRING - This year, nearly half of metro areas in the United States tracked by Clear Capital, which does real estate valuation and data reports, recorded double-digit growth in home prices.

This "red-hot recovery" in home values may have eluded Highlands County so far, but local Realtors say the market has stabilized and expect the trend to continue in 2014, when a meteoric rise in home prices in many of these "red-hot" markets is expected to slow down.

"It's not a buyer's market. It's not a seller's market. It has evened out," explained Ann Pollard, Century 21 Compton Realty Realtor and the 2013 Heartland Association of Realtors president.

"This past year has definitely seen an improvement," concurred Evelyn Rossi, Realtor with MIDFLORIDA Real Estate Sales, adding the first six months were stronger. "It is vastly improving from a year ago. We hope it continues into the new year."

As far as the real estate market goes, Highlands County has a year-and-a-half lag from the two coasts, Pollard said.

So if real estate sale prices rose about 19 percent this year in Miami-Fort Lauderdale and 16 percent in Orlando, it does not mean it will automatically happen here at that same time.

The upside, though: It's taking, on average, much less time to sell a house in Highlands County and the inventory of unsold homes has gone down.

In 2010, assuming no new listings were added, an existing home for sale would have taken about two years to sell, Pollard said. Now, that time frame is roughly about six to seven months on average.

According to the Heartland Association of Realtors, from August to November this year, the median days a single-family home has been on the market has been from 66 days to 50.

While it might be unrealistic for someone who bought a home in 2004-'05 to make a profit or even break even, "a lot of people are looking and seriously buying," Pollard said.

Multiple offers and bidding wars are going on for foreclosed properties selling for $40,000 or under, Pollard said, as investors try to grab these properties, fix them up and either flip them or eventually rent them out.

These buyers are making cash offers, which still dominates about half of Highlands County real-estate sales, from not just investors but retirees looking to get out of the snow or those who want to retire soon.

Realtor/Broker Ronnie Carter said he's selling homes "all over the board," from affordable housing to "pretty good sized homes." Today, for instance, he is closing on a $525,000 home, he said.

Heartland Association of Realtors Executive Director Sheila Richards said Florida Realtors have projected a 5-6 percent gain in homes sales in the U.S. in 2014.

"Low interest rates and lower home prices have increased home buyer affordability," she said. "In Sebring, from January 2012 to September 2013, we have seen an 8 percent price recovery."

According to Heartland Association of Realtors figures, the average sale price of a single-family home in October 2012 was $101,562 and fell by 1.1 percent this October, to $100,487.

August's average sale price was 3.4 percent higher, at $101,973, compared to August 2012, and was the highest this year of a four-month period from August to November.

In September, the average sale price decreased by 1.1 percent to $96,221 compared to August 2012's $95,208.

November's average sale price of a single-family home was the lowest of the four-month period.

At $87,516, it was 4.2 percent lower than last November and about 14 percent lower than August, although only 79 closings were reported this November compared to 100 from November 2012 and a 123 from this August.

"The holiday season is a slow time as people concentrate on other things," Rossi said. "It will pick up again as the new year progresses."

While that slowdown locally may be temporary, it is happening nationally, said Clear Capital.

"National and regional rates of growth showed clear signs of moderation in November, as summer buying activity gave way to the typical winter slow down," the company added in a report.

"As the year comes to a close, make no mistake, home prices across the country are cooling from the red-hot 2013 recovery," said Alex Villacorta, vice president of research and analytics at Clear Capital, in a report. "Though some market observers may take this as a sign of a deflating bubble, we see this as a natural, and welcomed evolution on the horizon of the new housing landscape. Since the market trough in the fall of 2011, national prices are up 17 percent, undoubtedly a strong resurgence in overall prices. Yet national prices today are back to where they were in 2003, indicating that overall the housing market is at pre-run-up norms.

Distressed properties, like short sales and foreclosures, which typically sell below the market price tend to hammer down average sale prices.

Until these properties are sold and taken out of circulation, home prices don't tend to rise at a higher rate, Richards and Rossi said.

Foreclosures and short sales accounted for 21.6 percent of all national sales over the previous quarter, Clear Capital reports, although it was substantially lower than peak rates of 41 percent in 2011.

Distressed properties, however, still appear to form a big portion of Highlands County home sales although not as much as they were two years ago.

In November this year, for instance, they were more than half of the single-family homes sold, although it was about 40 percent last November.

Nobody knows when the short sales and foreclosures will be out of the system.

Rossi hopes that when happens "this market can turn around and we would see some new construction."

"It might take one year, it might take longer," she added.

The good news: Pending foreclosures are going down.

In Highlands County alone, 1,471 cases were pending in 2012, the height of the foreclosure bubble. That same year, even though Circuit Court chief judge David Langford assigned himself to the problem, banks took back 896 houses and lots from property owners.

In 2013, however, the real estate market turned around and fewer foreclosures have been filed, said Court Clerk Bob Germaine.

"They're moving down," Germaine said in an earlier Highlands Today report. "The judges are really working these dockets."