This real estate market analysis, reported by CNNMoney.com, takes a look at pockets of overvalued property across the United States. It’s no surprise that many communities in Florida, California and New York are, according to findings by National City Corp. and Global Insight, “severely overpriced and subject to possible price corrections.”
Topping the list is Naples, Fla., a lovely little town on the state’s Gulf Coast. Even before we lived in Florida, we would make it a point to get out that way whenever possible, mainly to visit nearby Corkscrew Swamp.
On our first trip to this spectacular sanctuary, we thought we’d never find it, it was so far out in the southwest Florida boonies. On our last visit, about two years ago, we were stunned, and saddened, to see housing developments eating up all the land surrounding the preserve. Thank goodness the Audubon Society got there first, or the birds and wildlife would be homeless.
Those new properties are probably what helped push the median home price in Naples to $329,970. That, the study contends, is 84 percent more than the $180,956 a house there should cost.
Well, the Corkscrew critters and human home buyers may soon get a bit of a break. Various reports, reporters and real estate pundits are saying that the hot real estate market is cooling.
Anecdotal indicators seem to support the popular analogy that the housing market correction will be more like air leaking from a balloon than a bubble bursting. This seems to be the case on the other side of the Sunshine State. In our old Palm Beach County stomping grounds, the Palm Beach Post reports that existing-home sales in the county dipped in December and the median home price fell to $408,200, from $421,500 in November.
Not exactly affordable housing just yet, but an adjustment nonetheless. And more homes are on the market, indicating that it’s becoming a buyer’s market there.
Still, there’s no reason for South Florida homeowners to panic. 2005 was a fine year for home sellers. It certainly was for us. As I told our Realtor last year, as much as I loved our home there, there’s no way I’d pay the price he suggested we ask. I’m sure glad I was the seller this time. So even if prices level off or slip a bit, I suspect SoFla sellers will still be just fine for quite a while to come.
Meanwhile, things have picked up a bit in our particular undervalued market. Austin home prices, according to National City/Global Insight analysts, were about 7 percent below their appropriate level. But they may be on their way to where that group thinks they should be.
According to the American-Statesman, Austin home sales hit a record last year (and we helped!). And another survey, this one by Houston-based consulting firm Metrostudy Corp., predicts that the Austin area's new-home market will experience a strong 2006, with housing prices continuing to climb.
Eldon Rude, Austin director of Metrostudy, told the Austin Business Journal, "Clearly, it is difficult to make a case for a housing price bubble in Austin or anyplace else in Texas, for that matter."
A pigskin-covered crystal ball: When it comes to housing, we can compare various and varying numbers and debate methodology ad infinitum. Dan Green makes that point in his blog, The Mortgage Reports.
Remember, figures don’t lie, but liars figure. So maybe we need to look elsewhere for our real estate prognostication.
The Inman Blog says if the Steelers win, call your Realtor quickly because the market will tank. Two terrible real estate market years followed the Pittsburghers’ 1975 and 1980 wins.
Greg McBride, Bankrate.com’s economics expert, FedOutlook blogger and die-hard Steelers fan, isn’t buying it: “I prefer to think it works in the inverse manner. BECAUSE the market will tank, the Steelers will win the Super Bowl. How else can you explain our lack of success in reaching the Super Bowl in the past several years as the housing market boomed?”
Hey, if Greg says there’s no connection, I believe him. After all, he tosses around phrases like “inverted yield curve” and “capacity utilization” and knows what they mean. Makes tax topics look like kindergarten class!
And, as a Cowboys fan who suffered mightily at the hands of Bradshaw and crew, I think the explanation of Steelers’ woes might simply be payback for beating up on my team in Super Bowls X and XIII all those years ago! Although the Triple X edition sure was gooood! You can catch highlights of these and other big games on the NFL Network this Sunday.
TODAY’S TAX TIP: If you most recently were a buyer instead of a seller, you might have paid points for your mortgage. In addition to getting you a better loan rate, the points also could help reduce your tax bill. Even if you decided to stay put and refinanced to pull out some equity to pay for home improvements, the points could still pay off at tax time. Check out this story for details on how to claim this deduction.