Good News, Bad News

Good News, Bad News

HOUSING TRENDS by Janet Leiser | Senior Editor

In the first quarter of this year, Florida ranked second in the nation for the fastest home appreciation, behind Arizona, according to the Office of Federal Housing Enterprise Oversight. But don't be too quick to cheer.

News of that study was quickly followed by a report, this one by the research firm of Global Insight and National City Corp, that predicts 71 metropolitan areas, including Naples and Sarasota, are overvalued and ready to pop. The report was based on sales price data from the Office of Federal Housing Enterprise Oversight.

Global Insight and National City based their valuations on historical market premiums and discounts, population density, household income levels and interest rates.

National City studied 66 metro regions over the past 20 years that suffered through a 10% or greater decline in prices. Not one of the areas was in Florida. The study found that home prices declined an average of 17% when overvaluation was 34% or more prior to the correction.

According to the joint study:

• Coastal states of Florida and California continue to show the highest concentration of overvalued markets, accounting for 17 of the top 20.

• Price appreciation peaked in the second quarter of 2005. The highest in the nation was Naples at 12.6%, followed by Phoenix at 11.8%.

• Single-family house prices rose 7.3% nationwide during the first quarter, excluding the influence of mortgage refinancings.

• After peaking at 12.1% in the second quarter of 2005, price appreciation has steadily declined nationally, with the exception of key metro areas.

• The first quarter experienced the fifth consecutive quarterly increase in mortgage rates to 6.35% for a 30-year fixed rate for conventional conforming mortgages. This is the highest level since the second quarter of 2002.

HIGHEST PRICE APPRECIATIONS

SELECT FLORIDA AREAS

MSA National Ranking 1-year 1st Quarter/06 5-year

2. Naples-Marco 37.73% 4.55% 140.42%

3. Cape Coral-Fort Myers 36.90% 6.12% 140.91%

5. Lakeland 35.60% 6.21% 89.55%

7. Orlando-Kissimmee 31.98% 4.82% 100.14%

10. Fort Lauderdale-Pompano Beach- 29.29% 4.26% 139.76%

Deerfield Beach

12. Sarasota-Bradenton-Venice 28.23% 3.75% 125.04%

13. Miami-Miami Beach- Kendall 28.03% 4.80% 133.11%

16. Deltona-Daytona Beach-Ormond Beach 27.36% 2.33% 115.16%

17. West Palm Beach-Boca Raton- 27.32% 4.75% 138.94%

Boynton Beach

20. Tampa-St. Petersburg-Clearwater 26.22% 4.54% 99.71%

21. Punta Gorda 26.06% 3.32% 125.62%

VALUATION INCREASE

METROPOLITAN

RANKINGS

1. Naples

2. Port St. Lucie-Fort Pierce

3. Punta Gorda

4. West Palm Beach

5. Sarasota

6. Miami

7. Cape Coral-Fort Myers

8. Fort Lauderdale

9. Vero Beach

10. Palm Bay-Melbourne

11. Deltona-Daytona Beach

12. Panama City

13. Ocala

14. Orlando

15. Fort Walton Beach

16. Lakeland

17. Tampa-St. Petersburg

18. Jacksonville

19. Pensacola

20. Gainesville

21. Tallahassee

HOUSING STARTS

By County

Annual Starts

Market Area April '05-March '06

Hillsborough County 11,148

Pasco County 7,961

Hernando County 1,876

Manatee County 4,603

SarasotaCounty 3,282

Charlotte County 1,625

INFORMATION

Florida Metropolitan House Valuations

Price/Overvaluation

Area '02/Q1 '03/Q1 '04/Q1 '05/Q1 '06/Q1

Cape Coral-Fort Myers $116,800/9.5% $131,900/0.3% $149,100/7.2% $183,100/24.3% $245,500/63%

Deltona-Daytona Beach $96,200/7.6% $107,700/1.5% $123,100/11.8% $149,200/28.1% $186,000/53.6%

Fort Lauderdale $126,900/8.2% $146,200/51.% $170,000/16.1% $207,500/31.2% $262,600/57.3%

Gainesville $97,800/.5% $105,900/2.6% $118,000/7.3% $135,900/14.2% $157,200/26.7%

Lakeland $77,900/8.9% $83,900/5.7% $90,800/2.2% $103,300/5.2% $137,200/37.2%

Miami $137,600/1.8% $159,300/10% $184,600/21.9% $221,600/37% $277,700/64.4%

Naples $182,100/1.9% $204,100/14.6% $231,000/28.8% $284,000/53.3% $383,000/102.6%

Ocala $78,200/5.4% $85,100/1.9% $93,500/4% $110,200/16.8% $140,600/46.6%

Orlando $113,800/7.5% $124,400/2.4% $136,600/2.3% $161,400/12.6% $208,500/40.2%

Panama City $92,600/2.6% $101,900/1.1% $116,100/9% $149,000/31.2% $175,000/49.8%

Port St. Lucie-Fort Pierce $111,700/10.8% $131,400/3.9% $157,900/22.7% $198,100/48.5% $240,800 77.4%

Punta Gorda $104,900/1.7% $119,000/11.1% $140,000/29.1% $170,900/48.5% $210,900/73.4%

Sarasota $124,500/8% $140,500/4.9% $159,400/15.3% $198,400/36.5% $249,000/64.4%

Tallahassee $98,500/7% $108,100/0.6% $119,500/4.8% $136,600/11.5% $155,800/22.5%

Tampa-St. Petersburg $98,900/9% $109,400/2.7% $122,600/4.4% $144,100/14.8% $178,000/36.1%

West Palm Beach $136,700/13.6% $157,400/2.3% $185,500/17.9% $230,900/38.9% $287,700/65.5%

Source: National City Corp. and research firm Global Insight