Inventory Shortage Leads to Higher Home Prices

ORLANDO, FL—The continued shortage of for-sale home inventory is causing home prices in Florida to rise and is beginning to raise the blood pressure of some frustrated home buyers.

The Florida Realtors trade group reports that the statewide median single-family home sale price rose 8.2% in March to $250,800 and the townhouse/condo median sale price shot up 7% to $183,000 as compared to a year earlier. The monthly sales results point to a continued strong housing market in Florida. March was the 75th consecutive month that the statewide median sales prices for both single-family homes and townhouse-condo properties rose year-over-year.

The home sales market in Florida continues to see strong demand, particularly from first-time home buyers. At the same time, for-sale inventory continues to decline. March’s for-sale inventory tightened even further with active single-family home listings falling 7.5% from a year ago. Inventory is now at a 3.8-months’ supply for single-family homes and a 5.9-months’ supply for townhouse-condo properties, according to Florida Realtors. New single-family home listings in March were down 3.1% and new pending sales were down 2.2%.

Sales of single-family homes statewide totaled 25,020 last month, down 3.5% compared to March 2017, while statewide closed sales in Florida’s townhouse-condo market totaled 10,997 last month which were, down 1.8% compared to a year ago.

Closed sales data reflected fewer short sales and foreclosures last month, the trade group reports. Short sales for single-family homes dropped 49.3% and foreclosures fell 53% year-to-year; short sales for townhouse-condo properties declined 51.7% and foreclosures fell 41.4% year-to-year.

Florida Realtors chief economist Dr. Brad O’Connor notes that the March home sales decline was the largest in over a year excluding September 2017 when Hurricane Irma briefly shut down the Florida housing market.

“Still, year-to-date, single-family home sales are down a little under 1%, so it will be important to watch the April numbers very closely when they come out next month,” O’Connor says. “At that point, we’ll have a better idea if March was just a blip, or perhaps whether it was the beginning of a very gradual slowdown in sales growth that appears to become more inevitable the longer our statewide housing shortage persists.”

Some of the major Florida housing markets posted mixed results, For example single-family home sales in Miami-Fort Lauderdale-West Palm Beach fell 7.6% as compared to March 2017 but the region’s median single-family home price rose 7.4% to $350,000. The Orlando-Kissimmee-Sanford MSA saw its single-family home sales fall 4.5%, but its single-family median rose 9.2% to $259,900. Single-family home sales in Jacksonville in the month of March were basically flat (down 0.8%), but its median single-family home price shot up 13.6% to $250,000.