ORLANDO, Fla., April 25, 2006 — Slowly rising mortgage rates and higher levels of for-sale inventory influenced Florida’s housing sector in March as the state’s market continued to adjust on the heels of a five-year record pace. Statewide, sales of single-family existing homes totaled 18,881 last month compared to March 2005’s sales of 24,091 homes for a 22 percent decrease, according to the Florida Association of Realtors® (FAR).
While housing industry analysts predict that home prices eventually will cool, annual appreciation currently remains in the double-digits in many markets throughout Florida and the U.S. Realtors report that demand continues to impact housing prices across Florida, as the state’s warm weather, scenic attractions and favorable business climate attract new residents.
Last month, the statewide median price rose 17 percent to $248,200; a year ago, it was $212,600. In March 2001, the statewide median sales price was $121,600, which is an increase of about 104 percent over the five-year-period, according to FAR records. The median is a typical market price where half the homes sold for more, half for less.
The national single-family existing home median price was $208,500 in February 2006, up 11.6 percent from a year earlier, according to the National Association of Realtors® (NAR). In California, the statewide median resales price was $535,470 in February; in Massachusetts, it was $339,450; in New York, it was $300,000; and in Maryland, it was $294,577.
Looking to Florida’s existing condominium market, sales of existing condos also decreased in March, with a total of 6,481 condos sold statewide compared to 8,388 in March 2005 for a 23 percent decline, according to FAR. The statewide median sales price for condos rose 2 percent to $214,200 last month; a year ago, it was $210,300. The national median existing condo price was $214,300 in February 2006.
In March, the average interest rate for a 30-year fixed-rate mortgage was 6.32 percent — still favorable for potential buyers, but higher than the rate of 5.93 percent a year ago. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Among the state’s larger markets, the Miami Metropolitan Statistical Area (MSA) reported a 21 percent increase in home sales last month with a total of 942 homes sold; a year ago, a total of 777 homes sold. The median sales price rose 19 percent to $383,100; last year, it was $322,300.
Norka M. Diaz, president of the Realtor Association of Miami-Dade County and president and broker-owner of Norka Realty Inc. in Hialeah, says she sees a lot of first-time buyers entering their market. “Our inventory is up, but properties are really moving,” she says. “People feel they are wasting their money by renting and are ready to buy, and mortgage rates remain favorable. Miami is a gateway for international travel and a great place to live — it’s fast-paced, with many business opportunities and things to do.”
Jacksonville, another large Florida MSA, also reported a higher level of resales activity last month, with 1,701 homes changing hands for a 9 percent increase over the March 2005 figure. The market’s median sales price also rose 15 percent to $197,400.
Among the smaller markets in Florida, the Ocala MSA had higher sales in March, with 598 homes sold compared to 566 homes a year ago for a 6 percent gain. The median sales price rose 27 percent to $161,100; a year ago, it was $126,800.
Gregory Lord, president-elect of the Ocala-Marion County Association of Realtors and co-owner of Homes To Ranches Realty Inc. in Ocala, says the area’s laid-back lifestyle and friendly residents draw buyers. “People are still looking for the quality of life in new ranch homes that Marion County has to offer,” he says. “Our area remains a little more rural, with a relaxed atmosphere that appeals to many newcomers. And we’re well-known in the horse world — if people are looking for an equestrian community, this is the place to be.”
Brett Ellis of The Ellis Team at RE/MAX Realty Group noted that Fort Myers – Cape Coral home sales declined 29% over March 2005, and prices climbed 12%. While sales declined from 2005 levels by 29%, they actually increased 40% over February 2006 levels. Prices remained steady near $280,000 which means the market may be stabilizing with increased sales and stable prices.
The Fort Myers – Cape Coral condo market reported a sales drop of 53% from 2005 levels, but also a sales increase of 38% over February 2006 levels. Condo prices gained 39% over year ago sales in March 2005, but dropped 10% in price from February 2006 levels, suggesting that buyers are now getting back in the market now that values are more in line.
Other smaller MSAs in the state reporting higher March sales compared to last year include: Tallahassee, where 499 homes changed hands for a 10 percent increase; and Gainesville, where 298 homes sold for a 4 percent gain. The median sales price also rose in those markets: in Gainesville, 28 percent to $218,600; and in Tallahassee, 12 percent to $173,500.
A chart showing statistics for Florida and its 20 MSAs is attached. The chart compares the volume of existing, single-family home sales and median sales prices in March 2006 to March 2005, based on Realtor transactions.