It seems like new home construction and home renovations are taking over Manatee County. If you dare to take a ride east of the beach, you’ll run into new construction starting on Cortez Road, then on El Conquistador Parkway, and don’t even ask about Lakewood Ranch and Parrish. Even the new construction and major renovation projects on Anna Maria Island are making the traffic out here worse than in recent years.
There is a lot of construction activity not only here in Florida, where it seems everyone wants to move, but also around the country. This demand is adding to a shortage of lumber and an increase in lumber prices. The National Association of Home Builders reported that there has been an unprecedented spike in lumber prices, adding more than $24,000 to the price of the average new single-family home and $9,000 to the price of a multi-family home.
Basically, there is a shortage of domestic lumber since lumber mills have closed because of COVID-19. There is also a shortage of Canadian lumber because of COVID as well, but also because of a recent United States tariff on imports from Canada. In addition, although builders have increased activity in the past year, they are hampered by shortages of labor as well as all materials – not just lumber.
A deficit of new construction, as well as the continuing shortage of resale properties, has made the U.S. housing market 3.8 million short on single-family homes. This figure was determined by Freddie Mac after a recent analysis. This single-family home shortage is especially damaging for entry-level buyers who can’t keep up with the ever-increasing sale prices and competition from cash buyers.
Across the country, housing prices are climbing at the fastest pace in 15 years. The January average national home price grew 11.2% from last year. The S&P CoreLogic Case-Schiller National Home Price index reported the price growth rate in two major cities in Florida. Tampa’s prices increased 11.9% and Miami increased 10.4% for single-family homes since last year.
We’re certainly not immune to any of this, as you can see from the March sales statistics for Manatee County reported by the Realtor Association of Sarasota and Manatee.
March single-family properties closed 37.8% more than last March. The median sale price was $395,000, up 23.6%, and the average sale price was $536,981, up 37.4%. The median time to contract was nine days, 79.5% less than last year, and the month’s supply of properties is 0.7% months, 79.4% less than last year.
March condos closed 63.7% more than last March. The median sale price was $245,000, up 14% above last year, and the average sale price was $299,824, 19.4% higher than last year. The median time to contract was 19 days, 55.8% less than last year, and the month’s supply of properties was 0.8 months, 81.8% less than last year.
Cash sales were up for both single-family homes and condos – 75.4% for single-family homes and 40.3% for condos. Unfortunately, this makes buyers who require financing less competitive, resulting in a serious negotiating disadvantage.
The Manatee County housing market continues to surpass all pre-pandemic levels for March, according to the Realtor Association of Sarasota and Manatee. They go on to say that half of all single-family homes are closing above list price, and lack of inventory continues to be the biggest challenge to our real estate market.
If the amount of new construction and the soaring sales prices bring a little shiver to your spine, you’re not alone. I spend several days a week wondering where exactly we’re headed; as always, be careful what you wish for. Stay safe.
