Gainesville Home Prices Down

(Gainesville Sun, April 25, 2007)

Median home prices in Gainesville area dipped in March, with industry watchers pointing to high inventories and dropping prices for two- and three-bedroom homes.

Median home prices in the Gainesville area took a rare dip in March, with industry watchers pointing to high inventories and dropping prices for two- and three-bedroom homes.

The median for existing single-family homes in the Gainesville Metropolitan Statistical Area, consisting of Alachua and Gilchrist counties, was $206,600, the Florida Association of Realtors reported Tuesday. That's down 5 percent from a year ago at $218,600.

The median is the middle number with half the homes selling for more and half for less.

Sales were down 22 percent from a year ago, from 298 in March 2006 to 233. Statewide sales were down 28 percent and the median down 4 percent to $236,000.

Nationwide sales of existing homes were down 11 percent from a year ago and the median price down 0.3 percent, according to the National Association of Realtors. February to March sales were down 8.4 percent, the largest one-month decline since January 1989, reflecting bad
weather and increasing problems in the subprime mortgage market, The Associated Press reported.

Realtor Ben Curry of RE/MAX said local inventories are outpacing sales and driving down selling costs. From March 15 to April 15, 665 new homes came on the market, but only 275 sold, according to numbers Curry provided from the Multiple Listings Service for Alachua County. At that rate, a total inventory of 2,504 homes would take nine months to sell, if nothing new came on the market.

Another factor driving down costs are 731 vacant homes on the market, a 2. month inventory with sellers anxious to sell, Curry said.

Curry said he uses such numbers to convince stubborn sellers that they can lower prices now or later.

The MLS listings also show that average costs for two- and three-bedroom homes are down from a year ago, while four- and five-bedroom costs are up, according to Gene Ritch, executive vice president for Coldwell Banker/M.M. Parrish Realtors

Ritch said March's median decrease is the first he remembers. In a small statistical sample like Gainesville, he said the numbers could be right back up in April.

He said local sales are still strong despite the comparison to 2006.

"All these flippers got into the market, all these investors trying to make a quick dollar," Ritch said. "When you compare to 2006, it doesn't look that good, but when you compare to 2004-2005, we're getting back into that line that we should have been in of that 6 percent increase or so each year."

While nationwide sales plunged from February to March, they were up 25 percent in Florida and 27 percent in Gainesville, validating a survey earlier this year by the University of Florida's Bergstrom Center for Real Estate Studies.

Center Director Wayne Archer pointed to population growth, relatively good employment and low interest rates for sustaining the Florida and
Gainesville markets.

Condominium sales were down 33 percent in Gainesville - 68 compared to 102 a year ago - while the median price was up 8 percent to $162,000. Statewide condo sales were down 32 percent with the median up 2 percent to $208,800.