National heat wave
The country is boiling; and the mid-west and northeast are experiencing average high temperatures that are higher than Florida’s in August, which is pretty darn hot. Right up there with the sizzling temperatures is the sizzling housing data and so far we’re only reporting on June.
Prices of existing homes sold in the United States climbed to a record high in June, higher even than the high water mark of 2006 and the strongest sales increase in more than eight years. According to the National Association of Realtors, the median sales price for a previously owned home jumped 6.5 percent in June from June of last year topping out at $236,400. This figure is higher than the previous high of $230,400 recorded in July of 2006. In addition, the number of sales increased from May to June of this year by 3.2 percent.
Economists are giving credit for the great summer selling season to a stronger employment picture as well as buyers who are anxious to get into the market before mortgage rates and prices go up further. According to Freddie Mac the average rate for a 30 year fixed rate mortgage rose in June to 3.98 percent from 3.84 percent in May. At the end of 2012, rates were at their lowest point of 3.35 percent.
Existing homes account for about 90 percent of all home purchases in the country and at the current pace of sales it would take five months to exhaust the inventory leaving a shortage of homes to purchase pushing prices up further. In addition distressed property sales were only 8 percent of the market in June, the lowest since 2008.
Florida’s housing market is right up there with the national averages reporting more closed sales, higher median prices and tightening inventory in June. According to data released by Florida Realtors, closed sales of existing single family homes statewide totaled 27,729 in June up 19.6 percent over June of last year.
Andrew Barbar the president of the Florida Realtors’ association said “Florida’s housing market shows positive momentum with a rising influx of people moving to the Sunshine State and a steadily improving jobs outlook in June, the state’s unemployment rate was 5.5 percent.” He also reported that statewide new listings for single family homes in June rose 10 percent year-over-year while new townhouse and condo listings rose 5.2 percent.
The statewide median sales price for single family existing homes in June was $203,500, up 10 percent from the previous year, and the statewide median price for townhouse and condo properties was $152,076, up 7.9 percent from last year. This information is compiled from Florida Realtors Industry Data and Analysis Department in partnership with local realtor boards and associations. The decline in short sales in June also points to a recovering market. Short sales for townhouse and condo properties declined 36.1 percent while short sales for single family homes dropped 30.4 percent.
The only danger, according to Dr. John Tuccillo, Chief Economist for Florida Realtors, is whether the market is starting to overheat. In June there was a 4.6 month supply of single family homes on the market and a 5.5 month supply of townhouse and condos. A six month supply of inventory is considered the benchmark for a balanced market between buyers and sellers.
Only time will tell if the real estate markets both nationwide and in Florida are overheated or will ultimately find the correct balance. In the meantime the temperatures keep sizzling and the buyers keep coming.