Maybe this will bring out more of those "on the fence" buyers. Now if we can just stabilize the luxury condo market, we'll be doing fine.
By Anne Straub, Florida Today Newspaper - 5/31/09
Brevard County home prices are lower than they should be, according to a statistical analysis by a forecasting and consulting firm.
At an average price of $129,400 for the fourth quarter of 2008, Space Coast home prices were undervalued by 19.3 percent, according to IHS Global Insight. That's outside the plus or minus 14 percent range that the Lexington, Mass.-based company considers fairly valued.
Brevard prices fell within the fairly valued range the previous two years, and were overvalued during the housing boom earlier in the decade, the study said.
To determine where prices should be for an area, IHS analysts consider home prices, interest rates, household incomes, population density and any historical premiums or discounts areas have shown over time. That might include factors such as weather or quality of school systems.
For homebuyers and sellers wanting to know whether the low values will continue, the answer varies.
Appraiser Bill Geiger has seen home prices at the lower end of the range begin to increase. "It looks like a bottom has been established," said Geiger, a partner in Geiger Geiger and Associates.
The Cocoa Beach-based appraisal firm covers the entire county. He also has seen some price appreciation over the past six months in lower priced, non-waterfront homes in beachside communities.
First-time buyers taking advantage of price declines -- as well as the $8,000 federal tax credit -- appear to be helping the lower end of the market stabilize.
"Homes at $150,000 and under are going quicker now," said Sandy Nickless, a Realtor for Paradise Properties of Brevard.
Investors also are buying some of the less-expensive homes to use as rentals because prices are low enough that they can cover most of their expenses with rental income, she said.
It's the higher-priced homes that haven't found a bottom yet, particularly those priced from about $400,000 to $1 million. "There's just so much on the market in that price range," Geiger said.
During the housing boom, builders focused on upscale communities and overzealous homeowners took out second mortgages to improve their homes, Geiger said. The result is a surplus of well-appointed homes competing for buyers.