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Prices Rise as Inventory Shrinks
Rising prices and shrinking inventory couldn’t cool home sales in Southwest Florida last month.
Sales up 20 percent statewide
- Statewide, sales of existing single-family homes increased 20 percent to a total of 27,729.
- The median sale price was $203,500, a 10 percent increase.
- Condo sales totaled 10,991, a 15 percent gain for the year.
- Condos traded for a median $152,076, up 8 percent.
“With the continued growth in both sales and prices in Florida, it raises the question of whether the market is starting to overheat,” said Florida Realtors chief economist John Tuccillo. “The decline in inventories to seller-market levels, and the decline in days on market, tend to suggest that possibility as well.”
But he cites mitigating factors: much of the inventory pressure is in the lowest-price tiers, and the rise in condo sales and prices will be eased by an increased supply of newly built towers coming on the market.
“And finally, the Federal Reserve will soon be raising interest rates, which will have a dampening effect on demand,” Tuccillo said.
Inventory in Florida now stands at 4.6 months for homes and 5.5 months for condos.
Nationwide, Americans bought homes in June at the fastest rate in over eight years, pushing prices to record highs as buyer demand has eclipsed the availability of houses on the market.
The National Association of Realtors reported sales of existing homes climbed 3.2 percent to a seasonally adjusted annual rate of 5.49 million, the highest rate since February 2007. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has risen just 0.4 percent.
The median home price has climbed 6.5 percent over the past 12 months to $236,400, the highest level — unadjusted for inflation — reported by the Realtors.
Home-buying has recently surged as more buyers have flooded into the real estate market. Robust hiring over the past 21 months and an economic recovery now in its sixth year have enabled more Americans to set aside money for a down payment. But the rising demand has failed to draw more sellers into the market, limiting the availability of homes and sparking higher prices that could cap sales growth in the coming months.
“The recent pace can’t be sustained, but it points clearly to upside potential,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Nationally, a 5 months’ supply of homes was on the market in June, compared with 5.5 months a year ago.
Herald Tribune 7/24/2015
