Inventory concerns only issue on bright Florida's home/condo market

By John Haughey | The Center Square

There were more single-family home and condo sales, more pending sales, declining inventories, and higher median prices last month in Florida when compared to November 2018, according to Florida Realtors.

Single-family existing-home sales rose 14.4 percent in Florida while existing condo-townhouse sales statewide increased by 8.6 percent this November over last, Florida Realtor's documents in its monthly report.

November also marked the 95th month in a row that statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year, the state’s largest Realtors group reports.

Overall thus far this year, Florida home sales are up 2.4 percent and dollar volume is up by 4.6 percent, Florida Realtors reports.

The statewide median sales price for an existing single-family home was $265,000, and $195,000 for an existing condo-townhouse, in November 2019, up 3.9 and 5.4 percent respectively over November 2018, according to data from Florida Realtors Research Department in partnership with local realtor boards/associations.

The good news comes with several discordant notes, such as the first sustained inventory deficit between interest and availability – December’s statewide inventory of on-market single-family homes is down about 10.5 percent and listed condos/townhouses are down 7 percent compared to a year ago.

“The November data shows that many homebuyers are eager to find the Florida home of their dreams – but demand and a tight inventory in many local areas continue to put pressure on prices,” Florida Realtors President Eric Sain said in a statement.

Inventory “declines were not driven by market conditions in any particular part of the state,” Florida Realtors Chief Economist Dr. Brad O’Connor said, noting single-family home inventory was down in all but two of Florida’s 22 metro areas, and condo/townhouse inventories down in all but three, this November over last.

O’Connor warns in the Florida Realtors’ November report that mortgage rates are starting to rise at rates unseen since 2011.

“The main takeaway is that we had a one-year reprieve from a worsening inventory shortage, but that reprieve is now over,” O’Connor writes. “The underlying fundamentals of the shortage – insufficient new construction and a lack of listing activity from existing homeowners – are still with us and will be for some time to come.”

Last month, Florida Realtors cited the state’s 2.8 percent job growth and historically low 3.1 percent unemployment rate as evidence that “Florida's business-friendly outlook continues to attract investment and growth.”

Bringing much of that anticipated “investment and growth” will be expected “new residents” which, in turn, “provide a strong foundation for the state's housing market,” Florida Realtors maintains, referring to projections that the state will add 330,000 people a year and top 30 million in total population by 2030.

Also, last month, Florida Realtors – which represents 187,000 members in a statewide network of 51 real estate boards/associations – noted in its annual "Profile of International Residential Real Estate Activity" update that the number of foreigners buying homes in the Sunshine State declined this year, although overall sales remained strong.

“A strong dollar, worsening global economic outlook and rising U.S. home prices slowed international sales during the past year,” Florida Realtors noted, adding a “robust level of domestic housing demand has been more than enough to insulate us from any decline in home purchases by international buyers.”

According to the annual "Profile of International Residential Real Estate Activity" update, sales of homes to international buyers between August 2018 and July 2019 declined by 30 percent in Florida, slightly less than 31 percent drop nationwide, Florida Realtors reported.

Florida Realtors says foreign buyers purchased 36,400 existing homes in Florida worth $16 billion between August 2018 and July 2019, which is 9 percent of the year’s home sales and 12 percent of the dollar volume of Florida’s existing-home sales, confirming the Sunshine State remains popular among international real estate investors.

“The state was home to 20 percent of all U.S. international sales in the latest report; in 2018, it was home to 19 percent,” it states.