Housing market among hottest

Lee-Charlotte cities ranked ninth

By Dick Hogan

Published on February 16, 2005

Southwest Florida once again is near the top of a national list of hot real estate markets.

In statistics released Tuesday by the National Association of Realtors, the Fort Myers/Cape Coral/Punta Gorda area was ninth and Sarasota was 10th for the increase from the fourth quarter of 2003 to the fourth quarter of 2004 for single-family homes sold.

"I think the price is driven by the demand, by the increasing population coming this direction" in Southwest Florida, said Fiona Finn of The Finn Team Realty in Fort Myers. "A lot of the baby boomers are coming a few years before they retire; they want to buy at today's prices."

In statistics released Tuesday by the Florida Association of Realtors, Lee County's median price increased 27 percent to $205,000 in the fourth quarter and Naples increased 17 percent to $360,700, the highest in the state.

Around the country a record number of metropolitan areas — 62 out of 129 — experienced double-digit home-price gains between the fourth quarter of 2003 and the fourth quarter of 2004. The previous record was set during the second quarter when 49 metros were up 10 percent or more.

The national median price for existing homes in the fourth quarter was $187,500, according to NAR, an 8.8 percent increase from last year.

"With more buyers than sellers nationally, what we're seeing is a natural pressure on home prices as buyers compete to bid on available properties," said NAR chief economist David Lereah. "Fortunately, the historically low cost of debt service on a home purchase means that we have a comfortable buffer

in most of the country because the typical family can afford to buy a home well above the median price."

Las Vegas topped the list as the market with the greatest appreciation over the past 12 months, with a 47.3 percent gain. In San Bernardino and Riverside counties in California, prices were up 34.7 percent.

But Florida is stealing some of the limelight from California. Six of the top 10 markets for the fourth quarter were in the Sunshine State. Prices in West Palm Beach and Boca Raton increased 34 percent over the past year, while in Bradenton they were up 32 percent.

"The boomers are in their peak earning years, buying second homes and retiring to Florida," Lereah said. "We're seeing a lot of development and a lot of building but demand is greater than supply."

Though prices remain high, houses in Southern California aren't selling quite as fast as they used to. "Sales are strong, but not at a peak, and price increases are slowing down, especially in the markets that took off first back in 1998 and 1999," said Marshall Prentice, DataQuick president.

Not everyone got rich on real estate in 2004. Homeowners in Atlanta, Chicago and Denver saw average gains of 3 percent, 2.7 percent and 1.7 percent, respectively. Prices in four cities, including Austin, Texas, and Indianapolis, fell during the past year.

"In the handful of areas with price declines, none had previously experienced rapid price growth," Lereah said. "In fact, they were all lower-cost areas experiencing one or both of the conditions necessary for temporary price softness — local economic weakness, mainly in jobs, or a large supply of homes available in the local market."

— CNN Money contributed to this report