However, according to the New York Times, average sales figures for single family homes across the south were flat last month. That means despite Florida’s fast pace, several other areas declined slightly. However, the general tenor of the news is that lower mortgage rates, combined with the $8,000 tax credit, continue to drive sales.
And, according to the Associated Press –RE/Max housing report, sales activity rose again in three large major metro areas in Florida -- Miami, Orlando and Tampa. Sales also rose in Washington, D.C. This is not surprising, since that city is the seat of our national government; as the government takes over more functions, it has to hire more functionaries. The D.C. increases helped boost the South’s selling average.
What’s even better news for Florida is that, according to the Florida Association of Realtors (FAR), condominium sales showed an increase of 45 percent last month when compared to August of 2008. It’s not surprising that this sales boost was helped by a further drop in median prices: they collapsed by an additional 30%, down to $107,000.
Furthermore, according to FAR, in Tallahassee, the capital of Florida, median home prices remained stable at $186,000. And in Pensacola, a price gain of 1% moved the median to price to $156,000.
Despite the continuing success story in Florida, the National Association of Realtors (NAR) reports that nationally, existing home sales dropped in August from July levels, but remained higher than a year ago.
However, on another positive note, Lawrence Yun, chief economist of the NAR indicated that residential real estate sales will remain on an upswing during the last three months of this year. While there may be a drop-off in sales if the government eliminates the current incentives, Yun suggests that it will only be temporary because our economy is showing continuing signs of resiliency.
There is, perhaps one major stumbling block on the horizon for residential home sales, even in Florida. Right now, the market has around 8.5 months of inventory. Stability occurs when the supply of unsold homes reaches 6 months. However, seven million housing units are on their way to foreclosure. That could add 15 additional month’s worth of inventory to the market.
Hopefully, banks will ration these properties intelligently. If they do, investors will continue to snap them up, and our recovery will not be hindered. Meanwhile, in Florida, residential foreclosures continue to fly off the shelves, which helps keep our home sales average up.
Written Marc Jablon, Realty Associates
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