Florida’s housing market, often described as the nation’s real estate microcosms, is posting improvements in home values, inventory and sales that indicate the recovery is taking hold.
“The Florida housing market has totally shifted to a seller’s market,” says president co-CEO of FBC Mortgage, Rob Nunziata, due to a number of reasons. As loan amounts “continue to increase at a rapid rate” inventory levels decrease, plus the improving economy is motivating buyers to take advantage of the low rates and is adding fuel to the rebound.
According to the Florida Mortgage Report for February 2013 conducted by Orlando-based FBC Mortgage—which excludes condos and cash transactions—the state’s mortgage and housing market is off to a strong start in 2013.
For example, even though mortgage rates ticked up for a second consecutive month averaging 3.5% for 30 year fixed rate mortgages, year-over-year loan amounts increased approximately 25% to $200,000.
The report found that conventional loans are king in Florida where they now account for 70% of all financing transactions—in part due to “a resurgence of mortgage insurance companies” that tend to be more aggressive with the loan to values in Florida.
“Each month brings more positive signs,” said 2013 Florida Realtors president Dean Asher, a broker-owner with Don Asher Associates Inc. in Orlando.
According to housing data released by Florida Realtors, in February year-over-year statewide median sales prices for both single-family homes and for townhouse-condo units increased for the 14th month in a row.
Properties are selling faster “especially at certain price points” as median days a home is on the market dropped about 15% for single-family homes and 10% for townhouse-condo units, Asher said. In addition sellers received more than 92% of their original listing price for both types of properties.
Year-over-year sales of existing single-family homes that “typically occur 30 to 90 days after sales contracts are written,” he said, increased 10.3% totaling 15,666 in February, while pending sales for existing single-family homes increased 26.7%.
The state’s median sales price also increased by 12.8% to $150,000, which rivals the 12.6% the national median sales price for existing single-family homes reported by the National Association of Realtors for January 2013.
And since sales of foreclosures and other distressed properties “downwardly distort the median price because they generally sell at a discount,” he added, the price increase is significant.
In February’s Florida Realtors report, the inventory for single-family homes and townhouse-condos was at a 5.5 months’ and 6.1-months’ supply, respectively.
New trends are emerging, according to Florida Realtors chief economist John Tuccillo.
One distinctive feature is the continuing growth of cash sales, which represent half of existing single-family sales in the state, he said. More new listings indicate “low inventories are convincing sellers to come to the market.” Plus, as the lowest price home listings “are just about wiped out” the $300,000-$500,000 price tier homes are seeing the biggest movement.