REAL ESTATE
Home prices continue steep rise
Broward and Miami-Dade home prices continued climbing skyward in June, as home prices nationwide leaped at the biggest rate in more than two decades.
Amid fretting that soaring home prices are hitting unsustainable heights, South Florida existing single-family home prices continued a dizzying rise in June, while home prices nationwide jumped at the fastest clip in nearly a quarter of a century.
The median price of a home in Broward soared 29 percent in June compared to June 2004, and prices in Miami-Dade surged 27 percent, according to figures released Monday by the Florida Association of Realtors.
Across the country, existing single-family home prices jumped 14.7 percent in June from a year earlier, the National Association of Realtors reported. That marks the biggest increase since November 1980, the Washington, D.C.-based trade group said.
''I have never seen a time like this,'' said Marilynn Obrig, a real estate broker at Intercoastal Realty in Fort Lauderdale with 26 years experience. ``I have seen a lot of ups and downs, and this is the longest up.''
In Miami-Dade, the median price of a home in June was $363,100; in Broward it was $378,000. Those prices mark hefty gains from just the prior month, May 2005, when a median-priced home sold for $354,600 in Miami-Dade and $367,000 in Broward.
Statewide, the June median price jumped to $248,700, a 31 percent rise compared to the same period a year ago and more than double the price of an existing single-family home in Florida five years ago.
Nationally, the median price for all types of housing now stands at $219,000. The median price is the point at which half of the homes are sold above and half sold below.
Experts attribute the roaring housing market to a range of factors, including stubbornly low interest rates and home-financing mechanisms like interest-only mortgages that enable people to buy homes they otherwise couldn't afford.
Observers say South Florida's robust job growth -- unemployment for instance is at a 20-year low -- is helping fuel the price gains. Meanwhile, the supply of South Florida homes remains exceptionally tight as the region continues to be a favorite for second-home buyers in the Northeast, Europe and South America. In addition, many investors now prefer real estate over the stock market.
But the lofty price hikes continue to raise concerns. Affordability, even for relatively well-paid wage earners, is becoming an increasing problem. Some employers and recruiters consider rising home prices a primary impediment to the region's economic development, because people can't afford to move here.
And the galloping market in South Florida, across the country, and in many parts of the world, has spawned worries the housing market is over inflated and poised for a tumble.
Last month, The Economist, a respected news magazine, asserted that the global housing boom is ``the biggest financial bubble in history.''
Yet many local observers contend the worst that will happen is a market wide slow-down in the rise of prices rather than a decline.
Bradley Hunter, South Florida regional director for research firm Metrostudy, said home prices are ''sticky,'' adding: ``If someone owns a real estate asset, especially if they are living in it, they can just hold rather than sell at a loss. A lot of people will have lost value in their house but won't realize their loss in a financial sense because they won't sell.''
Hunter predicts prices will begin to cool next year. And one real estate broker said there is already anecdotal evidence of a softening.
''The breaks are starting to be applied,'' said Jo Sumberg of the Masters Brokers Forum and Avatar Real Estate Services in Coral Gables. ``While people are asking crazy numbers, they are not getting them [sold] as fast.''
Some economists suggest that China's recent move to link the yuan to a basket of foreign currencies rather than solely the dollar may push up U.S. interest rates, which in turn would make real-estate mortgages costlier, damping housing demand.
Meanwhile, the number of existing single-family homes sold in South Florida in June was mixed. Broward was down 15 percent in June compared to a year earlier and Miami-Dade volume was up 2 percent.
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