Realtors blame uncertainty on taxes, insurance
The Florida Association of Realtors (FAR) released September figures of existing home and condominium sales Wednesday, showing sales and prices down both in the Tallahassee area and statewide.
Local Realtors attribute the downturn to uncertainty about the mortgage market, availability of insurance and future property-tax bills. Realtors hope the uncertainty is coming to an end as the Legislature grinds its way through a property tax reform special session this week and Florida’s insurance commissioner deals with a series of company rate filings.
“I’ve not ever heard that (sales prices are depreciating),” said Virginia Glass, a veteran residential real-estate agent. “In fact, I was talking to an appraiser just this week who told me Tallahassee has the steadiest market he has seen anywhere.”
“This is the first month we’ve been down in median price,” said Steven Louchheim, executive director of the Tallahassee Board of Realtors, of the 3 percent dip.
The FAR numbers also showed the number of existing home sales down by 37 percent September 2007 to September 2006 for the Tallahassee listing area of Leon, Wakulla, Gadsden, Jefferson, Franklin, Madison and Taylor counties. The state average reduction in existing home median price is 9 percent and statewide sales are down 38 percent.
“If you look at a bar graph of our market, every year you see a steep decline in sales in September,” Louchheim said. “It happens every year.”
Sales will pick up a little in December and follow a “steep incline” beginning in March that extends through September, Louchheim added.
He said there is no question the area is “in a correction,” but it seems more severe in a market that had median price inflation of 16 percent per month just 18 months ago.
The figures in condominium sales are more stark: a 62 percent loss, nearly twice the statewide average. But local Realtor Priscilla Tharpe, who specializes in condo sales, said the numbers are misleading. She said 2006 numbers are “skewed by” sales of high-rise condos in downtown Tallahassee, as well as “any number of student condo complexes.” And the Tallahassee area condo numbers are small. In September 2006, 45 sales were recorded, compared to 17 in 2007.
“At least 40 to 45 percent of that (62 percent loss) is the difference in new construction not coming online this year,” she said, noting that sales in Tallahassee’s northeast and east neighborhoods are “still brisk.”
The median sales price for an existing home in the area was $178,700 last month and $185,000 in 2006. This year 248 sales were recorded versus 395 last year. The median price of a condo sold in Tallahassee last month was $137,500 compared to $143,000 in 2006.
Louchheim said he doesn’t pay attention to median price as a measure of market performance. “It just doesn’t tell you a whole lot,” he said.
Besides, he said, viewing your home as an investment does not drive the best real-estate decisions.
“That’s a gravy thing,” he said. “Our homes are about shelter and about sense of community and security for your family.”
Looking to the future, Louchheim and the Realtors in his association are optimistic. Property-tax issues will be resolved and insurance cancellations will come to an end, leaving the marketplace with low interest rates, a stable mortgage industry and ready inventory.
Contact Business Matters Editor Steve Liner at (850) 599-2238 or sliner (at) tallahassee (dot) com.
