Examining Trends and Gauges of the Sagging Florida Housing Market

Those thinking about a Florida mortgage loan are hearing a lot these days about the slow market. Across the bard, various experts chime in about an assortment of indicators.

But what does it all mean? It seems helpful to discuss a series of gauges economists use to determine just how severe the current state of financial affairs is.

For example, last week the Commerce Department reported that construction starts on new homes dropped 6% in August from July. That “housing starts” figure was about 5% lower than forecasted and 20% lower than the year earlier. A significant drop off all around. Declining figures in this realm mean that builders are holding back until demand for Florida home loans return and sales actually increase.

Other Florida home mortgage market measures

Other gauges used by insiders to track progress (or regress) include new home sales, existing home sales, median house prices and the inventory of unsold homes.

New home sales figures, for instance, reflect market trends more quickly than do existing home statistics. How come? Because new homes are counted as sold when the Florida home loan contract is signed, while existing homes are counted as sold only when the deal closes, which may be 30 to 60 days later.

Meanwhile, the median sales price of existing homes, which is a good indicator of the market’s momentum, was $230,000 in July, up 0.9% from the July 2005 price of $228,000. That’s smaller than the double-digit year-over-year appreciation gains posted in 2005.

Finally, there’s been a spike in the number of existing homes for sale. The Realtors group says 3.86 million homes were on the market last month, up from 2.76 million a year earlier. In addition to reflecting a diminished appetite on the part of buyers and/or Florida home mortgage loan seekers, such a growing inventory may reflect the unwillingness of sellers to lower their asking prices enough to tempt buyers.