The local real estate market nearly screeched to a halt in late 2005, said Alvin Arner, a real estate agent with Coldwell Banker Residential Real Estate in Stuart, Fla., and has since been climbing back toward normal conditions.
There was a temporary standstill in 2004, too, after the double blow of hurricanes Frances and Jeanne in the area. The “snowbirds” — property owners and vacationers who travel to Florida from colder-climate areas — have been slow to return. Speculators have mostly skidded out of the market, new construction projects have slowed down, and prices have retreated about 15-20 percent, said Arner.
He expects 2007 to be a better year, though, and 2008 to be better still. Coastal regions tend to experience sharper pains and gains from real estate gloom and boom than those regions with more moderate swings in market conditions.
No two local markets are the same, though, and some market areas are tracking with the general slowdown in the U.S. housing market, while others are thriving or diving, say real estate professionals. It has been a decidedly mixed bag for housing markets in the Gulf Coast area, for example, as some communities are luring relocating hurricane victims with higher ground and lower prices, while other Gulf Coast communities have seen an outmigration of residents.
Arner said that taxes and insurance today can be a big problem for buyers in Florida. “The combination of property taxes and insurance … has killed more than one deal,” he said. Rising appreciation and taxes are in some cases “trapping (owners) in the property they are in now” because the taxes would be too much to bear if they purchased another home in the area, he said.
The supply of buyers has dried up significantly, and Arner said he has focused on working with sellers. In today’s market, “If you want a quick sale, take the price down,” he said.
Heidi Greer-Mosher, a leader for The Greer Group, an agent team for a Keller Williams real estate office in Westminster, Colo., described local market conditions as “good sluggish.”
“It’s still a buyer’s market. Buyers are scared — afraid the market is still going down,” Greer-Mosher said. While there are some areas with double-digit price appreciation, “all in all it is flat.” She also said that there are new types of residential projects gaining steam in the area, such as lofts and mixed-use properties. The jobs market continues to improve slowly, she said, with growing technology and medical-related industries.
Karen Greer, Greer-Mosher’s mother who is also part of the real estate team, said that markets close to Denver are doing well. “Our markets don’t stay down,” she said.
West of New Orleans, in Reserve, La., Ronald Hill of Hill #1 Realty said “property values have skyrocketed,” perhaps 25 percent to 30 percent in the St. John Parish area that includes Reserve. In a normal market, he said values might grow about 5 percent to 10 percent per year. Rents are going up, too, he said. “You almost can’t find anything to rent,” and new construction isn’t keeping up with the demand for housing. A lot of homes suffered wind damage from the two hurricanes that hit the area last year, Hill said.
Hurricane-displaced residents from New Orleans are powering the market changes in the area, Hill said, and he expects many will end up settling permanently in other areas, such as Texas, Alabama and Baton Rouge, La.
In Metairie, La., northwest of New Orleans, Leza McNeel of Exit Realty Professionals said the market has been improving. “Right after the storm things were selling very quickly,” she said. Meanwhile, there are still some hurricane victims who are waiting for insurance settlements and are still living with family or friends, she said.
Vernice Simon, also a Realtor with Exit Realty Professionals in Metairie, said homeowner’s insurance “is a problem — it’s too expensive.” And there aren’t many companies offering coverage. Simon said she has considered whether to sell her own home. “My insurance has gone up tremendously in the last year.” She related a story about a doctor who was ready to buy a home but had to back out of the deal because he couldn’t find proper insurance for the property.
It’s a complicated process to keep up with, figuring out which local areas are rebuilding from the storms, said Simon. She said some Realtors in her office have been holding regular meetings to compare notes on which neighborhoods are coming back. McNeel said that the demand for housing has led some property owners to convert apartments into condos.
About 90 miles north of New Orleans, in Hattiesburg, Miss., Ric Corts, broker-owner for RE/MAX Real Estate Partners, said growth has been rapid since the hurricane hit last year. Population grew from about 100,000 to 110,000 in the past year, compared with a typical rate of about 3 percent to 4 percent per year. “Our market has been excellent.”
Almost 100 new subdivisions have been approved in the area, he said, to help meet the demand, though he noted that there is a labor shortage in the region. Home prices are up about 10 percent since the storm, he said. Grant money from the federal government should continue to pour into the area and will help to sustain the real estate market, he said. Some of the new residents to the area are commuting to areas where they used to live, he said.
And in Hernando, Miss., close to Memphis, Tenn., Becky Austin of Austin Realty Group said that sellers now are getting close to list price for their homes, which is uncommon for the area. The area is popular for retirees, and the market for newly built homes is competitive with the existing-homes market, she said. While the market has slowed somewhat and it’s harder to find homes under $100,000 in the area, Austin said there are still plenty of sales.
The rising costs of building materials are partly to blame for the rising cost of homes, she said.
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