Single-Family Home Sales Decrease in Second Quarter

While the numbers don’t back it up just yet, experts expect the Florida home mortgage market to pick up in the near future. Second quarter figures, however, show a decrease in sales throughout the year.

Statewide, single-family home sales dropped 27 percent, to 53,161, compared with the same period last year. In Tampa Bay, there were 10,187 sales, 31 percent fewer than last year’s demand for Florida home loans.

“Sales of existing single-family homes in Florida behaved like much of the U.S. in the 2006 second quarter, with the declining strength of the domestic economy continuing to act like a stiff wind in the face of the existing real estate market,” David Scott, executive director of the Dr. Phillips Institute for the Study of American Business Activity and professor of finance at the University of Central Florida, said.

As sales dropped, though, prices didn’t follow suit. The statewide existing-home median sales price rose 9 percent to $254,800 in the second quarter. Consequently, many “bubble sitters” may begin to worry that they need to move quickly on their Florida mortgage loan. Otherwise, they may be priced out of the market entirely.

Such a housing environment is likely to endure across the remaining months of 2006 owing to several factors, Scott said, including:

- The declining rate of growth in the real gross domestic product - A tepid increase in the number of jobs being created over the past three months - Rising conventional Florida mortgage rates - A rising inventory of homes for sale

He said the rising costs of gasoline and energy are starting to strain many household budgets while wages are just barely keeping up with the recent price inflation of about 3.6 percent a year. Individuals should consider energy-efficient Florida home loans as one solution, at least.

The latest economic outlook from the National Association of Realtors notes the housing market is in the process of stabilizing, with little change in overall sales volume expected over the balance of the year. Analysts report that the level of activity remains high historically and 2006 is expected to be the third best year for existing home sales.

Therfore, potential buyers and sellers needn’t worry too much. There’s little reason to panic and move out of the South Florida housing market. Wait for the market to stabilize shortly.