Parkland Livestyle November 2013

eal estate
Home Rise
Single-family home prices in South Florida
continue to improve, even though interests are on the
rise as well. And there’s more to come.
By Darcie Lunsford
Mortgage interest rates keep going up * ….
But so do median housing prices in South Florida… **
5%
*
30-year fixed rate
**
Single-family homes
Interest Rates
Median Housing Prices
300000
Home sales in South Florida—and across the state—are
becoming the economic version of the Man of Steel. Not
even interest rates moving faster than a speeding bullet
seem able to put a chink in their armor.
August marked the 20th consecutive month that the price of
a single-family home was higher than it was the same month the
previous year. The median price for a single-family home in South
Florida jumped 21 percent year-over-year to hit $254,000, according
to Florida Realtors data. Prices on condos and townhomes in August
told a similar story of resilience and rebound, rising 35 percent to
$139,000.
But August also marked the seventh consecutive month that
interest rates on the all-important 30-year fixed mortgage jogged up.
In fact, as of August, interest rates had soared more than a
percentage point since January, fueled largely by Ben Bernanke and
other Fed officials hemming and hawing that the Fed could—and
eventually will have to—stop its $85 billion a month bond-buying
program.
When the Fed does stop snapping up mortgage-backed and
Treasury securities, bond values will fall and interest rates will rise
some more. In today’s post-traumatic-recession environment just
the mere mention that the Fed may taper these asset purchases is
enough to send the Dow toppling and mortgage rates surging.
In South Florida, meanwhile, the housing market continues to
shine, far below the daunting macro-economic storm clouds.
“It is still a very good time to buy,” says Doug Leever, mortgage
sales manager of Miramar-based Tropical Financial Credit Union.
“People who have their finances in order are ready to buy.”
Demand for new mortgages at Tropical Financial has nearly
doubled since last year, Leever says. And he doesn’t see that stopping
even though he does expect, “rates to continue to trickle up.”
Sustained demand despite more expensive borrowing costs? It
makes sense when you put today’s market in context.
Rates and home values are still well below where they were at the
market peak in 2006. In 2006, for instance, the average mortgage rate
was 6.4 percent and the median price of single-family home in South
Florida was hovering around $400,000. Today, rates and home prices
remain about a third lower.
“I think some buyers are feeling like they missed the boat,” says
Joanne McKeage, an agent with Coldwell Banker in Fort Lauderdale.
“But home prices are still under-valued and prices are going to go
up. Interest rates are still historically low.”
4%
250000
Darcie Lunsford is a veteran South Florida business journalist
and real estate writer who now works as a commercial real
estate broker specializing in office and medical leasing. Email
Darcie at darcielunsford@gmail.com.
3%
Jan
3.41
214,500
Feb
3.53
220,000
Mar
3.57
240,000
Apr
3.45
250,000
May
3.54
250,000
Jun
4.07
254,500
Jul
4.37
250,000
Aug
4.46
254,000
200000
28 NOVEMBER 2013 | LMGFL.COM