Florida housing market thrives as foreclosure woes and cash buyers fade
Florida’s housing market is recovering, actually for some time now. As one of the hardest-hit metros during the housing crisis, it also enjoys one of the strongest comebacks during the recovery.
It seems now the Florida market is thriving as much as ever, according to data from Florida Realtors. Though the inability to fully quantify the all-cash investor's fading presence in the market is dampening the good news.
"Home sales continue to increase, it’s taking less time for sales to close, and median sales prices are on the rise," said 2013 Florida Realtors President Dean Asher. "This is the 17th month in a row that we’ve seen the statewide median sales prices increase year-over-year for both single-family homes and for townhome-condo properties."
As Florida residents begin to see the momentum in the Florida market, more sellers are deciding to list their property for sale. Statewide, new listings for single-family homes rose 10.2% in May, while new townhome-condo listings increased 7.1%.
Closed sales of existing single-family homes equaled 22,375 in May, an 18.7% increase year-over-year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations.
Pending sales — contracts that are signed, but not yet completed or closed — for existing single-family homes increased 30.8% year-over-year in May, an indicator that the tight inventory crunch is soon to lessen.
Median sales price for a Florida single-family existing home was $171,000, a 15.9% increase from the previous year. However, Florida remains low compared to the national median sales price for existing-single family homes, which sits at $193,300, up 11% from the previous year.
In California, the statewide median sales price for single-family existing homes in April was $402,760; in Massachusetts, it was $315,000; in Maryland, it was $258,093; and in New York, it was $218,875.
Analysts note that a rise in foreclosures and other distressed properties are often a factor behind lower-than-average median prices. According to a recent Business Insider article, one in every 302 Florida homes received a foreclosure filing, with activity up 20% from last month and 12% from a year ago. Meanwhile, foreclosure starts were up 39% on the month, but down 17% from a year ago.
"The numbers continue to move in the right direction," said Florida Realtors Chief Economist John Tuccillo. "We remain concerned about the rise in the percentage of sales accounted for by all cash buyers. These numbers understate the true condition of the market in that a great many sales are conducted directly with the financial institution holding the property, and thus do not appear in the Multiple Listing Service."
He added, "But those crying doom-and-gloom who read this growth in investor activity as the sign of a new bubble are far off-base and simply don’t understand the texture of the current market."
The already hot Florida market could become even hotter after Florida’s governor signed a much-discussed foreclosure bill, enacting a series of provisions aimed at speeding up the default process in the state.
In the latest RealtyTrac report, Florida was pointed out as one of the states with the longest foreclosure timeline alongside New York. Florida currently houses 55,503 vacant foreclosures, while New York only deals with 9,173.