Florida's Housing Market: More Closed Sales, Rising Prices in June 2015

Florida's housing market reported more closed sales, higher median prices and tightening inventory in June, according to the latest housing data released by Florida Realtors^®. Closed sales of existing single-family homes statewide totaled 27,729 last month, up 19.6 percent over June 2014.
"June marked the 43rd month in a row – more than 3½ years – that median sales prices rose year-over-year for both single-family homes and townhouse-condo properties," says 2015 Florida Realtors President Andrew Barbar, a broker with Keller Williams Realty Services in Boca Raton.
"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. Statewide, new listings for single-family homes in June rose 10 percent year-over-year, while new townhouse-condo listings rose 5.2 percent.

"Meanwhile, June's new pending sales for single-family homes increased 10.4 percent from a year ago; new pending sales for townhouse-condo properties rose 2.7 percent."

The statewide median sales price for single-family existing homes last month was $203,500, up 10 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The statewide median price for townhouse-condo properties in June was $152,076, up 7.9 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to the National Association of Realtors (NAR), the national median sales price for existing single-family homes in May 2015 was $230,300, up 8.6 percent from the previous year; the national median existing condo price was $216,400. In California, the statewide median sales price for single-family existing homes in May was $485,830; in Massachusetts, it was $341,000; in Maryland, it was $275,292; and in New York, it was $226,500.

Looking at Florida's townhouse-condo market, statewide closed sales rose last month with a total of 10,991, up 14.6 percent compared to June 2014. The closed sales data reflected fewer short sales in June: Short sales for townhouse-condo properties declined 36.1 percent while short sales for single-family homes dropped 30.4 percent. Closed sales typically occur 30 to 90 days after sales contracts are written.

"With the continued growth in both sales and prices in Florida, it raises the question of whether the market is starting to overheat," says Florida Realtors Chief Economist Dr. John Tuccillo. "The decline in inventories to seller-market levels, and the decline in days on market, tend to suggest that possibility as well. But there are mitigating factors here. First of all, the real inventory pressure is in the lowest price tiers, which has been the case for several months. Secondly, going forward, the rise in condo sales and prices will be mitigated by increased supply in the form of condo towers now under construction.

"And finally, the Federal Reserve will soon be raising interest rates, which will have a dampening effect on demand."

Inventory continues to tighten, with a 4.6-months' supply in June for single-family homes and a 5.5-months' supply for townhouse-condo properties, according to Florida Realtors. Most analysts consider a 6-month supply of inventory as the benchmark for a balanced market between buyers and sellers.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.98 percent in June 2015, down from the 4.16 percent average recorded during the same month a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors' website under "Research." Association members (login required) also have access to local data specific to their market.

Reprinted courtesy of Florida Realtors. © 2015 Florida Realtors® Original post here: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=325909

US home sales surged in June to fastest pace in 8-plus years

US home sales surged in June to fastest pace in 8-plus years

By JOSH BOAK, AP Economics Writer

WASHINGTON (AP) -- Americans bought homes in June at the fastest rate in over eight years, pushing prices to record highs as buyer demand has eclipsed the availability of houses on the market.

The National Association of Realtors said Wednesday that sales of existing homes climbed 3.2 percent last month to a seasonally adjusted annual rate of 5.49 million, the highest rate since February 2007. Sales have jumped 9.6 percent over the past 12 months, while the number of listings has risen just 0.4 percent.

The median home price has climbed 6.5 percent over the past 12 months to $236,400, the highest level - unadjusted for inflation - reported by the Realtors.

Home-buying has recently surged as more buyers have flooded into the real estate market. Robust hiring over the past 21 months and an economic recovery now in its sixth year have enabled more Americans to set aside money for a down payment. But the rising demand has failed to draw more sellers into the market, limiting the availability of homes and sparking higher prices that could cap sales growth in the coming months.

"The recent pace can't be sustained, but it points clearly to upside potential," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Nationally, a mere five months' supply of homes was on the market in June, compared with 5.5 months a year ago and an average of six months in a healthy market.

Some markets are barely adding any listings. The condominium market in Massachusetts contains just 1.8 months' supply, according to a Federal Reserve report this month. The majority of real estate agents in the Atlanta Fed region - which ranges from Alabama to Florida - said that inventories were flat or falling over the past year.

Some of the recent sales burst appears to come from the prospect of low mortgage rates beginning to rise as Fed officials consider raising a key interest rate from its near-zero level later this year. Past efforts by the Fed officials to reduce their stimulus efforts have led to higher mortgage rates, creating expectations that homebuyers will face increased borrowing costs later this year.

That possibility is prompting some buyers to finalize sales before higher rates make borrowing costs prohibitively expensive, noted Daren Blomquist, a vice president at RealtyTrac, a housing analytics firm.

The premiums that the Federal Housing Administration charges borrowers to insure mortgages are also lower this year, further fueling buying activity, Blomquist said.

It's also possible that more homebuyers are aggressively checking the market for listings, enabling them to act fast with offers despite the lack of new inventory.

"Buyers can more quickly be alerted of new listings and also more conveniently access real estate data to help them pre-search a potential purchase before they even step foot in the property," said Blomquist, adding that this could help to explain why sales growth have dramatically outpaced new listings so far this year.

Properties typically sold last month in 34 days, the shortest time since the Realtors began tracking the figure in May 2011. There were fewer all-cash, individual investor and distressed home sales in the market, as more traditional buyers have returned.

Sales improved last month in all four regions: Northeast, Midwest, South and West.

Still, the limited supplies could prove to be a drag on sales growth in the coming months.

Ever rising home values are stretching the budgets of first-time buyers and owners looking to upgrade. As homes become less affordable, demand will likely taper off.

Home prices have increased at more than three times the pace of wages. The average hourly wage has risen just 2 percent over the past 12 months to $24.95 an hour, according to the Labor Department.

Some would-be buyers are also spurning their limited options on the market. Tony Smith, a real estate broker in Charlotte, North Carolina, said some renters shopping for homes are now choosing instead to re-sign their leases and wait until a broader and better selection of properties comes onto the market.

Construction has yet to satisfy rising demand, as builders are increasingly focused on the growing rental market.

Approved building permits rose increased 7.4 percent to an annual rate of 1.34 million in June, the highest level since July 2007, the Commerce Department said last week. Almost all the gains came for apartment complexes, while permits for houses last month rose only 0.9 percent.

The share of Americans owning homes has fallen this year to a seasonally adjusted 63.8 percent, the lowest level since 1989.

Real estate had until recently lagged behind much of the six-year rebound from the recession, hobbled by the wave of foreclosures that came after the housing bubble began to burst roughly eight years ago.

But the job market found new traction in early 2014. Employers added 3.1 million jobs last year and are on pace to add 2.5 million jobs this year. As millions more Americans have found work, their new paychecks are increasingly going to housing, both in terms of renting and owning.

Low mortgage rates have also helped, although rates are now starting to climb to levels that could slow buying activity.

The average 30-year fixed rate was 4.09 percent last week, according to the mortgage giant Freddie Mac. The average has risen from a 52-week low of 3.59 percent.

Reposted courtesy of Josh Boak and The Associated Press. © 2015 The Associated Press. All rights reserved. Original article published here: http://hosted.ap.org/dynamic/stories/U/US_HOME_SALES?SITE=AP

NAR: Pending home sales at 17-month high

Pending home sales in March continued their recent momentum, rising for the third straight month and remaining at their highest level since June 2013, according to the National Association of Realtors^® (NAR).

The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, climbed 1.1 percent to 108.6 in March from an upward revision of 107.4 in February. It's now 11.1 percent above March 2014 (97.7).

The index has increased year-over-year for seven consecutive months and is at its highest level since June 2013 (109.4).

"Demand appears to be stronger in several parts of the country, especially in metro areas that have seen solid job gains and firmer economic growth over the past year," says Lawrence Yun, NAR chief economist. "While (it's) certainly good news, the increased number of traditional buyers who appear to be replacing investors paying in cash is even better news. It indicates this year's activity is being driven by more long-term homeowners."

Yun expects a gradual improvement in home sales in the coming months, but he says insufficient supply and accelerating prices could be a speed bump.

"Demand in many markets is far exceeding supply, and properties in March sold at a faster rate than any month since last summer," Yun says. "This in turn has pushed home prices to unhealthy levels – nearly four or more times above the pace of wage growth in some parts of the country.

"Simply put, housing inventory for new and existing homes needs to improve measurably to improve affordability," Yun adds.

The PHSI in the Northeast fell (1.5 percent) for the fourth straight month to 80.2 in March, but it's 0.6 percent above a year ago. In the Midwest, the index declined 2.5 percent to 107.5 in March, but it's 11.3 percent above March 2014.

Pending home sales in the South increased 4.0 percent to an index of 126.5 in March and they're 12.4 percent above last March. The index in the West rose 1.7 percent in March to 103.7, and it's now 15.6 percent above a year ago.
 
© 2015 Florida Realtors®
Reprinted courtesy of Florida Realtors
Original post: http://www.floridarealtors.org/NewsAndEvents/article.cfm?p=1&id=322676