Brevard County’s housing market continued to be in the doldrums in November, according to the latest statistics from the Home Builders & Contractors Association of Brevard.
The number of housing construction permits issued countywide in November was 235, down from 613 permits in November 2005 and down from a short-lived increase of 512 permits in October of this year.
Of the 235 permits issued last month, 201 were for single-family homes — the lowest number for single-family construction for any month this year. The 201 single-family permits in November were down significantly from earlier this year, when more than 400 single-family home permits were being issued each month.
“It’s been pretty serious. It’s going to get a little bit more serious before it gets better,” said Franck Kaiser, the association’s chief executive officer.
How serious is it?
The number of mortgage foreclosures in Brevard County has increased in recent months as housing prices have fallen and sales have slowed since last year, according to Kaiser and others in the local real estate industry. In places such as Palm Bay, “For Rent” signs have become a somewhat common sight in front of homes.
A lot of it stems from investors who bought homes last year — when prices peaked — and they haven’t been able to sell at a profit, or even break even.
“They can’t carry all that debt,” Kaiser said. “They can’t make the payments.”
“We’ve seen a spike in foreclosures,” said Sue Pierce, owner and principal broker at Integrity Home Loans in Melbourne. “I just saw a foreclosures list with about 200 people on it from the Palm Bay area. A lot of them are investors” who are stuck in the market.
“That’s not normal to have that many” on a foreclosures list, Pierce said. “Usually, you’ll see only a handful of names.”
It’s not just investors, and it’s not just happening on the Space Coast.
A new study by the Center for Responsible Lending found 2.2 million homebuyers nationwide will lose their homes due to foreclosures in the subprime mortgage market.
According to the nonprofit group, risky lending practices have played a part in “the worst foreclosure crisis” in the modern mortgage market — projecting that one of five subprime loans issued in 2005 and 2006 will fail.
“In the subprime sector, the most vulnerable borrowers are sold the most dangerous loans,” said Mike Calhoun, the center’s president. “For families who lose their houses because their loans fail, savings and economic security will be way out of reach.”
On the bright side, Pierce said she is beginning to see signs of new life in the market. Kaiser said he expects sales and prices to pick up a bit in the first half of 2007, but substantial increases could take longer.
Ingo Winzer, president of The Local Market Monitor, a Massachusetts firm that tracks real estate market trends, said housing prices have fallen by 25 percent in the worst market slumps around the country in recent decades. In those cases, the decline in prices was accompanied by a decrease in population from people moving out of an area, but Florida does not have that problem.
That’s why Winzer said a housing market slump in Florida should not last as long as in some other states, where housing prices were flat for up to a decade following a market decline.
Instead, Florida’s real estate market has been more like the stock market, where investors treated housing like a “speculative commodity,” Winzer said.
In Brevard County, the median sales price of an existing single-family home in October was $212,400, down 11 percent from $238,200 in October 2005.
Condominium prices dropped to a median of $179,000 in October, down 17 percent from $214,400 in October 2005, according to the latest statistics from the Florida Association of Realtors.
“That’s a pretty big drop. But I wouldn’t expect that to continue,” Winzer said. “It’s easier to correct mistakes (in a housing market) when people keep moving into an area.”
Contact Blake
sblake@flatoday.net.
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