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Market recovery picking its spots

Although it was the first open house she had hosted at the West Kendall home, real estate agent Ana Escoto sensed her chances of snaring a buyer were more than a little slim.

Several cars slowed, but only three prospects stopped to look. The price was still too high, Escoto said of the three-bedroom house -- especially in a neighborhood that has lost appeal.

"People aren't looking here -- the gas, the traffic, " Escoto said. "People want to live close to Metrorail or close to downtown."

Monthly statistics from the Florida Association of Realtors show buyers are easing back into the market, but they aren't doing so everywhere.

Only three homes sold in West Kendall in May, according to statistics from the Multiple Listing Service, or MLS.

MLS numbers do not include homes sold directly by owners, new homes sold by developers and other kinds of arrangements, but they capture as much as 80 percent of sales activity brokered by real estate agents.

Widely cited regional numbers, although a useful gauge, cannot diagnose the vastly different communities that make up South Florida's real estate market -- from affluent, vertical cities on the water like Aventura, to newly constructed suburbs near the fringes of the Everglades. Not all are being affected equally in the downturn.

NUMBERS VARY WIDELY

May numbers, for instance, showed the median priced existing home in Miami-Dade and Broward counties dropped roughly 20 percent compared to a year ago. Yet in Weston, prices fell 30 percent. In Miami Springs, the figure was only 8 percent.

Few communities have escaped the consequences of the crash -- foreclosures, abandoned property and a large inventory. But from unpaid association fees on condo units in foreclosure to selling impossibly long commutes in an era of escalating gas prices, each faces its own challenges in luring buyers back.

Overall, sales of existing homes were up for the third consecutive month in May, a positive sign. Yet they fell in Homestead, North Miami and in the area of Pembroke Pines east of I-75, while the number of homes for sale in those communities rose, according to data from the MLS.

"The neighborhood picture can vary dramatically right now, " said Beth Butler, chief operating officer of Esslinger-Wooten-Maxwell Realtors.

Real estate agents said European and out-of-state investors may be primarily behind the early uptick in sales regionally, especially in perennially attractive markets like Miami Beach.

Indeed, that city saw more sales in May than almost any other area in Miami-Dade, with 136 condos sold. The median price remained virtually flat compared to a year ago at $376,000.

BARGAIN HUNTERS

Investors, however, will have less to do with stabilizing the market region-wide than they did in fueling South Florida's boom, according to Jack Winston, a real estate analyst with Miami-based Goodkin Consulting.

"Investors are looking for isolated bargains, and there is not enough of that going on to really influence the dynamics, " Winston said.

"The dynamic of the market now is for primary housing, for people who have jobs who can qualify for mortgages, " he added.

Their choices will determine which cities, neighborhoods and even individual condominium buildings recover quickly from the meltdown.

"Among used homes, I think you are going to start to see greater activity in the close [to downtown] markets because of the gas problem, which means markets like Doral, Hialeah, North Miami and the more affordable markets, other than Coral Gables, " Winston said.

Instead of buying a house in Homestead, families might decide a moderately priced condo conversion in Kendall makes more sense, Winston said.

In Broward, Chris Vlad, chief appraiser with Hollywood-based Alpha One, said activity is picking up in areas that are being hardest hit by foreclosures and the flagging economy, notably west Hollywood, Miramar and sections of Lauderhill.

"It's very possible those areas had most of the option [adjustable-rate mortgages], where the people barely managed to qualify in the best of times, " Vlad said.

Rapidly sinking property values in those areas offer a silver lining: Hundreds of homes are being recycled to buyers who were sidelined by soaring prices during the boom.

In Broward, about 651 houses and condos listed for less than $199,000 exchanged hands in May, more than in any other price range.

In Miami-Dade, sales are registering in well-established areas such as Coral Gables and Pinecrest, according to Butler, though price declines have been steep. In Coral Gables, for instance, the median in May was down 35 percent to $655,000.

"People feel more comfortable buying in a well-established neighborhood and markets . . . and we've already starting to see that."

In the Gables, 20 homes were sold in May.

TOUGH TO FINANCE

Financing is a barrier in all market segments as lenders are requiring higher down payments and credit scores to qualify for mortgages.

But in high-end markets, buyers may find it particularly difficult to come by jumbo loans of more than $750,000 because the secondary markets for them have withered in the credit crunch.

Consequently, real estate agents say they have seen a sharp rise in all-cash deals, especially from investors.

"Last year we were at 18 percent cash deals, and, now, we are up to 28 percent of our deals, " said Gus Rubio, vice president of Coldwell Banker.

Miami Herald business writer Bridget Carey contributed to this report.

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