Marla Martin, Communications Manager, or Jeff Zipper, Vice President of Communications
407/438-1400, ext. 2326 or 2314
Editor’s Note: You may wish to use this information with today’s release from the National Association of Realtors®.
Florida's Housing Market for 3Q 2006: Sales Down, Median Price Level
ORLANDO, Fla., Nov. 20, 2006 -- In third quarter 2006, Florida's housing sector continued to mirror the national trend, showing higher inventory levels of homes available for sale in many markets and a slowdown in sales. Statewide, sales of single-family existing homes totaled 43,395 during the three-month period, a decrease of 34 percent compared to 65,364 homes sold during the same time a year ago, according to the Florida Association of Realtors® (FAR).
The statewide existing-home median sales price remained stable at $247,900 in the third quarter; a year ago, it was $247,800. In 2001, the third-quarter statewide median sales price was $132,000, which is an increase of 87.8 percent over the five-year period. The median is a typical market price where half the homes sold for more, half for less.
To gain insight into current trends in Florida’s real estate industry, the University of Florida’s Center for Real Estate Studies recently conducted a new statewide quarterly survey of industry executives, market research economists, real estate scholars and other experts. The threat of spiraling insurance rates was mentioned as the biggest concern, followed by the softening housing market as the second most-mentioned trend.
Still, even if a sharp downturn in the housing market occurs as some analysts predict, Florida will be less affected by it than other states because of the insulating effect of its high population growth rate, said Dr. Wayne Archer, director of UF’s Center for Real Estate Studies. Despite some people’s worst fears, housing is unlikely to suffer the same fate as tech stocks at the beginning of the decade, he said. “Unlike tech stocks, housing has a use, which means it can’t just evaporate,” he said.
According to David Lereah, chief economist of the National Association of Realtors® (NAR), the housing market is showing signs of life and sales may be leveling out. “Many potential buyers who have been taking a wait-and-see attitude or are being methodical in the search process are being enticed by lower home prices,” he said. “Given a positive economic backdrop of lower interest rates and job creation, we expect sales activity to pick up early next year.”
NAR’s latest economic outlook calls for existing-home sales to be fairly stable in the fourth quarter, with 2006 expected to be the third strongest year for sales after consecutive records in 2004 and 2005.
The U.S. economy experienced relative tranquility in the third quarter, analysts pointed out, noting that the Federal Reserve declined to raise interest rates when policymakers met in August and also in September. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 6.65 percent in third quarter 2006; last year, it was 5.76 percent.
Looking to Florida's existing condominium market, sales of existing condos also decreased during the quarter, with a total of 12,538 condos sold statewide compared to 21,240 in third quarter 2005 for a 41 percent decline, according to FAR. The statewide median sales price for condos decreased 3 percent to $204,300 for the three-month period; a year ago, it was $210,900.
Among the state’s larger markets, the Miami metropolitan statistical area (MSA) reported 2,137 existing homes sold for the quarter, a decrease of 30 percent compared to the 3,070 homes sold a year ago. The market’s existing-home median sales price increased 4 percent to $377,700; a year ago, it was $363,300. A total of 2,264 existing condos sold in the market over the three-month period, down 28 percent from a year ago, while the existing-condo median price declined 4 percent to $258,200.
The Pensacola MSA, one of the smaller markets in the state, reported that 1,324 homes changed hands in the second quarter, down 14 percent compared to 1,540 homes sold a year ago. Over the same period, the market’s existing-home median home price declined 1 percent to $168,800; a year ago, it was $170,800. A total of 127 existing condos sold in the market during the second quarter, down 32 percent from a year ago, while the existing-condo median price declined 2 percent to $161,700.
Two charts showing statistics for Florida and its MSAs is attached. One chart compares the volume of existing, single-family home sales and median sales prices in the third quarter of 2006 to the third quarter of 2005, 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 third quarter 2006 to third quarter 2005, 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 more than 155,000 members in 68 boards/associations.
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The Florida Association of Realtors®(FAR), the voice for real estate in Florida, provides programs, services, continuing education, research and legislative representation to its more than 155,000 members in 68 local boards/associations.
© 2006 FLORIDA ASSOCIATION OF REALTORS®
