South Florida home value slide slows

By Kimberly Miller
Palm Beach Post Staff Writer

Losses to South Florida home values are estimated to be $6.5 billion this year, an amount that, while daunting, is a considerable improvement from 2010.

Last year, Palm Beach, Broward and Miami-Dade counties lost a combined $28.6 billion in housing values, according to a recent report from real estate analysts at Zillow.

Nationwide, home values in 2011 dropped by $681 billion, down from the previous year’s staggering loss of $1.1 trillion.

But while the thrashing to home worth has lessened, it’s not about to turn around completely, warned Stan Humphries, chief economist for Seattle-based Zillow.

More than three years into the market meltdown, economic uncertainty and a backlog of foreclosed homes destined for resale continue to delay a recovery.

“Unfortunately, when we look ahead to next year, the unabsorbed pool of housing supply, dragging levels of consumer confidence, high unemployment and negative equity will continue to put downward pressure on the housing market,” Humphries said.

His prediction for a potential recovery: late 2012 to early 2013.

Just nine of 128 real estate markets tracked by Zillow nationwide showed gains in home values during 2011, with New Orleans topping the list with a $3.5 billion gain and Pittsburgh in second place with a $2.7 billion increase.

Of the 20 largest regions measured, Los Angeles showed the biggest loss, with home values down $75.5 billion. New York and Chicago trailed with losses of $44.8 billion and $41.7 billion, respectively.

The Zillow report says the large losses in Los Angeles, New York and Chicago are because of the high number of homes in those metro areas as well as decreases in values.

South Florida Realtors are often skeptical of Zillow’s home value estimates. The company’s website states that as of September its estimates were within 5 percent of the actual sales price of a home just 29 percent of the time. About 52 percent of the time Zillow’s estimates are within 10 percent of a home’s sales price in South Florida.

But some South Florida experts did agree on an extended market recovery time that will drift into 2013.

“I thought that we were going to be in better shape in 2011 because we’d have more foreclosures moving through the system, but then we had the robo-signing scandal and it all got stalled,” said Jack McCabe, chief executive of McCabe Research Consulting in Deerfield Beach. “Now I think the rebound will be 2013 or even later, and that’s barring natural disasters or other debacles we can’t anticipate.”

McCabe is estimating median prices for single-family homes in South Florida will drop 5 percent, with condominiums experiencing up to a 10 percent decline.

In November, the median price for an existing single-family home in Palm Beach County dipped to $183,700, down 12 percent from the same time in 2010. Palm Beach County median condominium prices fell 2 percent from 2010 to $77,700, according to a report the Florida Realtors released last week.

Also, a Tuesday report from Standard Poor’s/Case-Shiller Home Price Index showed prices in Palm Beach, Broward and Miami-Dade counties fell 4 percent in October from the same time in 2010.

Bill Richardson, president of the Realtors Association of the Palm Beaches, has a slightly more positive outlook than McCabe and Zillow. He says prices will stay mostly flat in 2012.

“I don’t see a lot more value loss,” Richardson said. “We may be a little up or down, but not too much either way until 2013, which should be better.”