Latest statistics reveal that Florida property prices went up yet again in October. This latest monthly rise is the 59th in a row showing the market continues to forge a full recovery. Fewer sales and tightening inventory levels point to a tougher market for buyers, many of whom have no option but to rent housing.
October brought higher prices to the Florida market where single family homes rose by 11.7 per cent and townhouse-condo properties by 8.1 per cent in the year. This latest price hike brought the median price for single family homes in Florida to US$220,000 and to US$161,000 in the case of apartments.
Higher percentage of asking price and fewer short sales
Another characteristic of the Florida property market for October was the rise in the percentage of asking price achieved by sellers. For all properties sellers are close to reaching the full price.
Sellers of single family homes received on average 96.1 per cent of their asking price while those of townhouses and condos got 94.8 per cent of the listed price. These figures point to a market dominated by sellers with little room for negotiation from buyers.
Short sales – properties sold for less than the outstanding mortgage – dropped remarkably in October. Short sales of single family homes in Florida fell by nearly 40 per cent in the year and by just over 37 per cent for townhouse-condo properties. This statistic gives a good indication of how foreclosure properties no longer dominate the Florida market.
Higher Florida property prices behind drop in sales
In the 12 months to October sales of property in Florida dropped. The number of single family homes sold in the month fell by 5.3 per cent compared to October last year. Sales of townhouse-condo properties fell by the even higher rate of 12.3 per cent.
To explain the drop in sales, analysts point to various factors. October is traditionally a quiet month and the impact of the US Elections may also be behind fewer sales.
However, the main cause would appear to be low inventory levels. The supply of single family homes in October continued to dwindle and it stood at 4.2 months, considerably below the 6 months widely regarded to be a sign of a balanced market. The inventory of townhouse-condo properties in Florida is slightly better, although the 5.9 months’ supply still falls in favour of the seller.
“A shortage of new listings could impact home sales in the long run,” said Matey Eissi, President of Florida Realtors, commenting on the October statistics. “A decline in the median time it takes for a home to sell shows buyers are still in the market.”
Price rises in MSAs
The rise in Florida property prices affected metropolitan statistical areas (MSA) across the board, although some MSAs showed considerably higher price hikes than the state average. Some of the highest took place in Punta Gorda MSA in Charlotte County. Here single family homes went up by 18.6 per cent in the year to October to reach a median price of US$205,000. This figure is still, however, below the state median indicating that this particular MSA market has plenty of room for growth.
Florida property prices also rocketed for apartments in Tampa, Orlando and Jacksonville in October. Those in Tampa went up by 17 per cent, in Orlando the rise was 10.8 per cent and in Jacksonville property prices rose by 10.2 per cent. All three MSAs register townhouse-condo property prices that are considerably lower than the average for Florida, again pointing to scope for price rises in the short term.
“Lack of available listings is obviously affecting Florida property prices and pushing them beyond the reach of many potential buyers,” comments Dies Poppeliers, Managing Director of BRIC Group. “While this is not such good news for the buyer, it’s excellent news for buy-to-let investors in Florida. Rental properties are the only alternative for buyers who cannot buy a home, which is very much the situation in the Sunshine State right now.”
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.