For real-estate investors interested in a “hot” market, Florida is once again the place to purchase a home.
Sales of existing homes in Florida rose in April and remain at a higher level than a year ago. The median sales prices in April for single family homes increased 10.2% to $144,350 and 16.1% to $108,000 for condos (Florida Realtors Industry Data and Analysis). These improvements in sales and prices were evidenced across all regions of the state. According to Lawrence Yun, NAR chief economist, the housing recovery is underway. “It is no longer just the investors who are taking advantage of high affordability conditions. A return of normal home buying for occupancy is helping home sales across all price points, and now the recovery appears to be extending to home prices.” This can be evidenced as well through the information released by the Florida Association of Realtors®, which states that for April 2012, the pending sales are up, prices are rising, and the inventory rate is reaching a balanced market.
Nationwide the median existing-home price for all housing types was $177,400 in April, a 10.1 percent increase from April 2011. According to the Standard & Poor’s/Case-Shiller home price index, there is more evidence of a steady recovery in the housing market. Home prices increased in March in 12 of the 20 cities that they tracked for the first time in seven months. In Florida, both Tampa and Miami experienced a 2.5 percent gain over the prior year’s reading, the biggest year-over-year gain since February 2007.
The positive real-estate information is supported by a variety of other market data. The current mortgage rates have never been lower. The average rate on the 30-year fixed mortgage is 3.78 for the 3rd week of May. This is the lowest mortgage rate since long-term rates began in the 1950s. Builders are also displaying confidence in the Florida market, breaking ground on more homes and requesting more permits to build single-family homes later this year.
The State economy has been demonstrating marked improvements as well. According to Smith Travel
Research, room revenue rose 10.9 percent in Florida last year compared with 8.8 percent for the U.S. Florida tourism has been regaining market share since January 2011, at a rate that is 2 percentage points above the rest of the US. This increase in tourism has also impacted the job market, as travel-related employment rose to 1.01 million, an increase of 38,000 jobs.
The encouraging market in Florida real estate has had more than a local impact. Florida is the most popular market in the US for global homebuyers (Inman News March 2012). 58% of international sales in 2011 came from just four states: Florida (31 percent), California (12 percent), Texas (9 percent), and Arizona (6 percent), according to National Association of Realtors® data. Canadians account for a large share of those international home buyers in Florida. For example, Canadians represent 77.2% of the international buyers in the Sarasota market, 72.3% of the Tampa-St. Petersburg-Clearwater market, and 67.4% of the Cape Coral-Fort Myers market.
Clearly, Florida is an attractive market to both national and international home buyers. The eventual national lows in home values are still expected later this year, even though there is significant upside risk in this forecast given the current bullish home value trends. What we do know is that in Florida home sales are up, the mortgage rates have never been lower, builders are displaying confidence, and the regional job market is growing.