There is a word that no one who follows an active real estate market wants to hear, and that word is “plateauing.” What does that mean in real estate lingo? It means leveling out rather than breaking through, and it’s a word that more than one economist has recently used. Before you start looking up at the sky waiting for it to fall, it’s not all bad, and some of it may be good.
According to the National Association of Realtors, existing home sales nationally in March declined 1.2 percent from last year. This translates to the national single-family home median selling price being $250,400 in March, which was 5.8 percent higher than March of last year. The March results were largely in line with economists’ expectations for the housing market this year – not a great performance. As we already know, a limited supply of homes has driven up prices and curtailed sales volume.
The March sales statistics from the Realtor Association of Sarasota and Manatee’s website are also looking a little off in both selling price and sales volume for single-family homes. The number of closed sales in March of this year was 580 for single-family homes. Last year it was 581, no real change, but there has been a change in the median sale price. After three months of median sales price being at or above $300,000, in March of this year, it was $285,000, a decline of 1.7 percent from last year.
The average sale price for single-family homes in March was $367,268, up 8.4 percent from last year. In addition, the median time to contract was 47 days, a very good number, and we still have only four months of properties available for sale, a very bad number. By comparison, the state of Florida’s median single-family home sale price during March of this year was $250,800, an increase of 8.2 percent from last year.
Condo sales numbers were all around better. The median sale price for this year was $201,500, up 15.1 percent, and the average sale price was $245,563, up 15.7 percent from last March. This March we closed 284 condos compared to last year where we closed 259. The median time to contract was 46 days, a good number, and we are holding at four-and-a-half month’s supply of available properties, a bad number.
It’s pretty much the same old story – too little inventory is pushing prices up overall and keeping properties off the market. The low number of days for both single family and condos on the market before going to contract proves this. With interest rates starting to go up, keeping fewer buyers in the market, something will have to give, which is why we may be seeing a leveling off.
But there is good news too. It appears that Florida is one of a handful of states in the country that are importing vast numbers of residents from other states. Since 2007, Florida has gained 850,000 residents. Texas, another state without income tax, has gained 1.4 million. Combined, Florida and Texas have gained a net of $50 billion in income and purchasing power from other states. Compare this to California and New York, which have given up a combined net of $23 billion, and this does not include other states like Connecticut, New Jersey, and Minnesota, which have consistently lost residents. Economists predict this exodus will only continue when the tax cut bill fully takes effect, capping state income tax at $10,000.
Will the influx of residents from out-of-state keep our real estate market from plateauing or are we going to start feeling a little pain? Like everything in real estate, stay tuned.