Latest nationwide and state data for the US property market points to a record first three months of the year. Sales reached their highest levels and house prices continued their upward trend. Increases went into double-digits in 30 metro areas including several key markets for property in Florida.
While prices rise across the board, the US property market continues to suffer from lack of supply. Inventory levels plummeted further and although new housing starts improved, the number of new homes on the market still lag far behind demand. A shortage of available property together with rising prices has weakened affordability and as a result, rentals remain the only alternative for many people.
Strongest sales in decade
Figures released by the National Association of Realtors (NAR) for Q1 this year report the strongest rate of sales in a decade. The number of properties sold during the first three months of this year reached 5.62 million, up 5% on the year and the highest since Q1 2007.
“Prospective buyers poured into the market to start the year,” said Lawrence Yun, Chief Economist at NAR, commenting on the data. “Those able to successfully buy most likely had to outbid others – especially for those in the starter-home market – which in turn quickened price growth to the fastest quarterly pace in almost two years.”
Prices also increased during Q1. Those for single-family homes went up by 6.9% nationally, although many areas saw considerably higher price hikes. 85% of the total 178 metro statistical areas (MSAs) included in the NAR experienced price gains, while 30 MSAS in the US property market registered double-digit increases.
Against a backdrop of strong sales, inventory levels continued to plummet in Q1. The number of available homes on the market dropped by 6.6% in the year to Q1 and supply currently stands at 3.7 months.
Hotspot in US property market
Several Florida locations number among the MSAs with higher than average price rises. For single-family homes, Tampa registered one of the biggest hikes with a 14% increase. Single family properties in Cape Coral went up by 13.5% while those in Jacksonville and Orlando saw a 10.3% and 10% rise respectively.
The market for condo properties in Florida was just as hot in some locations. North Port-Sarasota-Bradenton registered a 13.9% rise in apartment prices. Condos in Jacksonville went up by 12.3% and those in Tampa by 12%.
Florida property in Q1
Figures released by Florida Realtors for Q1 in the Sunshine State show that the property market continues to boom. Single-family homes sales went up by a massive 15.1% and prices for this type of property in Florida reached US$226,000, an increase of 10.7% on Q1 2016.
Condo properties also experienced brisk sales during the first three months of the year. They increased by 16% in the year and this strong demand pushed prices up 9.2% to reach a median of US$167,000.
Like the rest of the US, the Florida property market has serious supply problems. At the end of March, inventory levels for single-family homes in the state stood at 4.1 months while those for condo properties were slightly higher at 6.3 months.
Forecasts for Q2
After a more than buoyant start to the year, the US property market looks set to continue to register brisk sales and a steady upward trend in prices. This is particularly true of those MSAs with strong job creation.
“High demand is poised to continue heading into the summer as long as job gains continue,” said Yun. “However, many metro areas need to see a significant rise in new and existing inventory to meet this demand.”
The need for more inventory, particularly in the form of new home starts, is echoed in Florida. “A shortage of both new and existing homes for sale throughout much of the state continues to drive the Florida housing market narrative in 2017,” says Florida Realtors Chief Economist Dr. Brad O’Connor in a press release accompanying the Q1 figures.
“The most recent figures for the Florida and US property markets clearly show the continued imbalance of demand and supply,” says Dies Poppeliers, Managing Director of BRIC Group. “This imbalance creates two clear openings for investment in US property: in the buy-to-let market and in the new homes market.”
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Sources: National Association of Realtors, Florida Realtors)