Rising Cost of Energy, Insurance, Florida Home Loans Slowing Tampa Real Estate Growth
The Florida housing market continued its decline with lagging sales in the month of June. In short, our state’s housing market is in a down swing because the following are on the way up:
- Energy costs
- Inventory levels
- Florida home loan rates
- Property insurance premiums
All of the above continue to take their toll on the housing sector. The Tampa Bay Business Journal reports that homes sales dropped 34 percent in Tampa last month, falling to 3,442 from last year’s 5,230. In Sarasota/Bradenton, sales fell 40 percent to 762, down from 1,276 last year.
But, as we have seen across the state, slowing sales don’t translate to cheaper Tampa real estate. The average price of the homes sold in the Tampa area was still up 15 percent — at $239,600 — from the $208,700 posted last year at this time. The median price in Sarasota/Bradenton dropped 3 percent to $326,800.
Statewide, the existing-home median price rose 3 percent to $257,800 last month. A year ago, it was $249,800. A total of 18,089 existing single-family homes sold in Florida last month, a decrease of 29 percent from the 25,552 homes sold in June 2005.
In June 2001, the statewide median sales price was $132,500, representing an increase of about 94.5 percent over the five-year period. Nationally, the median price for existing single-family homes was $229,700 in May, up 6.4 percent from a year earlier.
Home sales are projected to ease modestly, but stay within a relatively narrow range over the remainder of the year, industry analysts. Despite the rise in Florida home loan borrowing costs and prices that are causing sticker shock, the National Association of Realtors expects 2006 to still be the third strongest sales year on record. Most analysts agree that while the market is in decline, a return to normal was inevitable.
Looking to Florida’s existing condo market, sales of existing units also decreased in June, with a total of 5,241 condos changing hands statewide compared to 8,109 in June 2005, marking a 35 percent decrease. The median sales price for condos remained relatively flat last month at $212,500. A year ago, it was $215,700. The national median condo price in May 2006, meanwhile, was $229,300.
A big reason for the decline is the steady rise of Florida home loans. Last week’s survey from Freddie Mac showed the average rate for a 30-year fixed-rate mortgage was 6.80, and for June as a whole, the figure was 6.68, up from 5.58 percent in June 2005. It remains to be seen whether sellers will lower lofty asking prices and jump start the market again, or whether the current flat-lining is just getting started.
