Median Price Drop Affects 10% of South FL Homeowners

Unfortunately, for many people in South Florida, the second part of the dream has not come true during our current economic crisis. Their median priced home values have fallen so far that they are equal to or lower than those of similar homes sold in 1999. It is highly unlikely that these homeowners will realize a profit if they sell their homes today. In fact, if they bought their homes within the last 10 years, they may even be looking at a loss.

That is the broadly depressing aspect of this newsworthy statistic. The good news, however, according to the South Florida Sun-Sentinel, is that only 9 zip code areas in Broward and Palm Beach counties showed lower median prices today than they did back in July of 1999. There are close to 90 zip code areas between the two counties; that means the median prices in only about 10% of communities have really fallen to levels below those of 1999.

This does not negate the fact that thousands of homeowners in so-called healthy zip codes are upside down in their loans, and that their homes are worth less than they paid for them. That is a totally different problem.

The median price measurements simply indicates that for the purpose of computing the value of homes in today’s market, the majority of homes currently owned in South Florida have increased in value since 1999.

For those who purchased before 1999, and who are not over-mortgaged, the dream of owning a home and using it to create additional value is very much alive. In the nine unfortunate zip codes, according to Metrostudy in West Plam Beach, the change in value is more than likely due to banks granting too many sub-prime loans within the area. This indicates that disproportionate numbers of foreclosures and short sales will often combine to lower the prices of homes in a neighborhood that may deserve better.

For those whose homes have fallen in value, but don’t need to sell, the best advice is to weather the housing storm. Eventually, as excess housing inventory in South Florida clears out over the next couple of years, the simple laws of supply and demand will drive prices back up, and median prices in most neighborhoods will increase.

If you’re someone who needs to sell, and the median home prices in your area have fallen dramatically, there is no pretty picture to present. If you’re not upside down on your loan, take whatever profit you can and move on. If there’s no profit, but you’re not behind in payments, try to sell as close to break-even as you can. That way, even if your wallet takes a small hit, your credit won’t be adversely affected.

For people who have to sell and are upside down in areas where median prices have fallen dramatically, the short sale option may be the best alternative for you. Consult your financial advisors, your bank, and your attorney before taking this step.

Written by Marc Jablon, Realty Associates
marcjablon@yahoo.com / 561 / 213 – 6139
www.MarcJablonHomes.com
Boca Raton FL
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