Reporting live from ground zero ...
Florida used to be a relocation destination of choice for retirees and those in search of balmier climes. Now, however, the state's housing market is weathering a storm consisting of high hurricane activity, correspondingly escalating housing-insurance costs, ballooning property taxes, and further damage from the presence of more flippers than you'd find at a convention of penguins.
As a result, lots of folks are seeking to put the state in their rearview mirrors in favor of places like the Carolinas and eastern Tennessee. Count my wife and me among them. Oh, yes, I take my work at The Motley Fool sufficiently seriously to be happy to report to you from the epicenter of U.S. mortgage foreclosures. But today, a "for sale" sign began to grace our front yard, an indication to passers-by that our hacienda is on the market -- at a price more than 20% below where a lesser home three doors away changed hands just a year ago.
Clearly, while our falloff in Florida may have been somewhat steeper than those in most other parts of the nation, we're not alone. On Tuesday, the normally sanguine National Association of Realtors reported that sales of existing homes fell by 8.4% in March, representing the biggest one-month drop since January 1989. The group also reported that the nation's median home price fell to $217,000, or 0.3% below last year's March national average. I'm not a mathematician, but I think 20% is bigger than 0.3%.
The Realtors' group attributed the March softness to bad weather and increasing problems in the subprime-mortgage market. I'd reverse that order and blame near chaos in the subprime market and perhaps a touch of bad weather here and there.
But what does it all mean?
I suppose there are a couple of potential answers. First, it may indicate that the nation was suddenly beset in March by a shortage of jackets that made it impossible -- or at least uncomfortable -- for folks to go out and search for their dream homes. If that's the case, my capable Foolish colleague David Meier will be at your service with the names of retailers likely to benefit from this unexpected anomaly.
More likely, it means that my better half and I will be ensconced in Florida for many, many moons, pending the sale of our current home, and that a general recovery in housing is even farther off than we'd have thought as recently as, say, the December holidays.
The latter possibility cannot be good news for the homebuilders. Such major builders as Pulte
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