Slowdown in 2006?

Sharp price declines not generally expected.Expert predicts housing slowdown

Southwest Florida's housing market is in for a slowdown in 2006 as interest rates and inflation continue to rise.That's the message Orlando-based economist Hank Fishkind presented Tuesday at the 18th annual Regional Economic Conference by the Chamber of Southwest Florida. About 300 people attended the event at the Barbara B. Mann Hall at Edison Community College."We're talking about a housing market that's peaked," he said. "There clearly is a housing bubble."
In recent months, he said, the number of housing permits issued in Lee County and around the state has outpaced the increase in population statewide.In Lee County, for example, 1,410 permits were issued in October compared with 1,095 in November 2004.
That can't last forever, he said. "We are going to see the volume of activity come down."The median price of an existing home sold in the county was $322,000 in October 2005 — up 65 percent in a year.But real estate broker Denny Grimes of Denny Grimes & Co. in Fort Myers said he's already seeing signs of a slowdown and said August may have been the peak. In Lehigh Acres, for example, lot prices are declining.
"Activity is down tremendously. The average price of a lot is below $50,000 for the first time since June."October's high median price may have been a result of a decline in sales in the lower end of the market because of rising interest rates, he said.
Like Fishkind, Grimes said he doesn't expect a sharp drop in prices. "There are some unrealistic buyers out there thinking there's blood in the water."But, he said, "I really am a believer this might be one of the better years to buy. It's not going to go in the tank, it's going to take a breather. Now's the time to step up and get a fair deal, not a steal."