Florida real estate this season: a seller’s market
Friday, June 26th, 2015 at 11:21am.
As we know, real estate markets change from month to month, and good news for sellers is not such great news for buyers. We don’t currently have a balanced market in Florida real estate. The problem for buyers (and therefore the advantage for sellers!) is that there’s just not enough property to go round.
What would a balanced market look like? Well, economists typically look at what they call the ‘real estate absorption rate,’ which is calculated by taking the number of houses currently on the market by the number of sales. The result gives us a figure that show the number of months’ supply of homes available, or we could say, the number of coming months during which the market can offer as many homes are currently in demand. The market favors sellers when there is less than a 4 month supply of homes, while the buyers are happy when they can choose from more than say 7 months of homes. Balanced markets tend to have what economists see as a 6 month supply of real estate available, but in the last few months, figures have been well below this level.
What we’re seeing in Florida this year so far, is a cut in the new homes coming to market, and existing homes for sale being in short supply. Current statistics from Florida Realtors show around 5.8 months’ supply of townhouse-condos available in May, with only 4.7 months supply of single-family homes.
If you’re looking to sell real estate in Florida, these are figures are worth noting. Prices are rising and properties are in greater demand, with completed sales reaching a significant 7.7% increase in May compared with the same month last year. And when there’s insufficient properties on the market, prices trend upwards. In other words, great news for sellers but potentially more challenging if you’re looking to purchase. If you have a single-family home to sell, you can expect to reach around 94% of asking price in these market conditions, and the story is basically the same with townhouse-condos. The average asking price for both townhouse-condos and single family homes has continued to rise for the last 3.5 years, month on month.
Average house prices this season
Let’s take a look at average house prices. (We’ll use the median value - in other words, the average by ranking in order of price, so that half of the properties would have reached a higher price and half lower). In May 2014 the median cost of a single-family home was just above 10% lower than in the same month this year, where the median cost was $200,000. For townhouse-condos the average was just below 10% during the same period, with a median townhouse-condo price across the state reaching around $159,000. The figures were similar back in April, as compared with the year before in the same month. Comparing the real estate prices in Florida with other states, we find that New York is approximately the same, Maryland slightly higher in value, and homes in California selling at just over $480,000 - more than twice the cost of an existing Florida single-family home.
Sales of townhouse-condo properties in Florida were basically static in May, with a difference of less than 1% since the previous year. This was due to a slowdown in short sales, which usually close between 30 and 90 days after contracts. Borrowing interest rates are down half a percent from last year, with the going rate for a fixed-rate mortgage over 30 years being around 3.84%.
Those are the stats, but remember market conditions change constantly, so if you’re looking for property keep your hopes up because the right property is out there.