Florida’s Housing Market for 4Q 2007: Sales Activity Remained Soft
ORLANDO, Fla., Feb. 14, 2008 –In fourth quarter 2007, Florida’s housing sector continued to report high inventory levels of homes for sale in many markets, median prices edging down and sales activity levels that reflect the impact of tighter lending standards and on-the-fence buyers.
Statewide, sales of single-family existing homes totaled 26,130 during the three-month period, a decrease of 31 percent compared to 37,879 homes sold during the same time a year earlier, according to the Florida Association of Realtors® (FAR).
The statewide existing-home median sales price was $216,000 in the fourth quarter; a year ago, it was $239,800 for a decrease of 10 percent. In 2002, the fourth-quarter statewide median sales price was $142,600, which reflects an increase of about 51.5 percent over the five-year period. The median is a typical market price where half the homes sold for more, half for less.
Sales activity is expected to remain soft through the first half of the year despite a generational low in mortgage interest rates, according to the National Association of Realtors®’(NAR) latest market outlook. “Household formation was only half of what it should have been last year given the demographics of a growing population and sustained job growth, so there clearly is a pent-up demand from buyers who are on the sidelines,” said NAR Chief Economist Lawrence Yun. “Existing-home sales have moved narrowly since last September, but when the full impact of higher loan limits for conventional mortgages begins to register on the market, there is likely to be a notable rise in home sales and prices.”
Continuing low mortgage rates remain another positive influence on the housing market. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 6.23 percent in fourth quarter 2007; one year earlier, it averaged 6.25 percent.
Looking to Florida’s existing condominium market, sales of existing condos also decreased during the quarter, with a total of 7,923 condos sold statewide compared to 10,820 in fourth quarter 2006 for a 27 percent decline, according to FAR. The statewide median sales price for condos for the three-month period was $189,600; a year earlier, it was $205,800 for an 8 percent decrease.
Among the state’s larger markets, the Sarasota-Bradenton metropolitan statistical area (MSA) reported 1,676 existing homes sold for the quarter compared to 1,959 homes sold a year earlier for a decrease of 14 percent. The market’s existing-home median sales price was $259,100; a year earlier, it was $282,300 for an 8 percent decline. A total of 661 existing condos sold in the market over the three-month period, up 1 percent from fourth quarter 2006, while the existing-condo median price decreased 6 percent to $230,500.
Debbie Roth, president of the Manatee Association of Realtors and a broker-associate at RoseBay Real Estate Inc., says, “We’re seeing a lot of government financing like the FHA for home loans, and having the loan limits increase will be a boost for the market. Mortgage rates are still very favorable; people should take advantage of the rates and the current inventory. It truly is a great time to buy, and owning your home is one of the best ways to build financial security. And Bradenton and the Manatee County area is a wonderful location to enjoy beautiful beaches and other amenities of the Florida lifestyle.”
The Fort Walton Beach MSA, one of the smaller markets in the state, reported that 490 homes changed hands in the fourth quarter, a decrease of 2 percent compared to 502 homes sold a year earlier. Over the same period, the market’s existing-home median home price was $197,900; a year earlier, it was $224,200 for a 12 percent decline. A total of 134 existing condos sold in the Fort Walton Beach MSA during the quarter, an increase of 15 percent from the previous year, while the existing-condo median price decreased 16 percent to $364,300.
“Sales in our area are at least comparable to last year’s activity, and are better in some parts, which makes us optimistic that the housing market has started to stabilize and may in fact be starting to improve slightly,” says Cliff Chaplin, president of the Emerald Coast Association of Realtors and director of operations at Anderson Auctions Inc. “We attribute this to several factors, including a huge psychological boost for the area from having no significant storms in 2007. Our sugar white sands and emerald green waters have always been a huge draw, and our seasonal visitors are starting to come back stronger then since before Hurricane Ivan hit.”
Two charts showing statistics for Florida and its MSAs are attached. One chart compares the volume of existing, single-family home sales and median sales prices in the fourth quarter of 2007 to the fourth quarter of 2006, based on Realtor closed transactions from local Realtor boards/associations within the MSAs. The second chart compares the volume of existing condo sales and median sales prices in fourth quarter 2007 to fourth quarter 2006, based on Realtor closed transactions from local Realtor boards/associations within the MSAs.
The Florida Association of Realtors (FAR), the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its 150,000 members in 67 boards/associations.
