What Do Recent Home Sale Increases Mean for Florida Housing Market?
Yes, new home sales in the state rose in August. It was surprising, good news for those that feared the slowdown in the Florida housing market was dire and headed for even worse levels.
However, in a sign that builders are facing a tougher industry than they were a year ago, the median price of a new home fell to $237,000, down 1.3 percent from a year ago. This means that buyers are still receiving the better end of the deal and it’s a prime time to look into a Florida home mortgage.
In its monthly report on the condition of the new home market, the Commerce Department said Wednesday that sales rose to a seasonally adjusted annual rate of 1.05 million, 4.1 percent higher than in July.
Therefore, the inventory of unsold new homes rose to a 6.6-month supply. In other words: at the current selling rate, it would take 6.6 months to sell the new homes currently on the market. At some point soon, sellers will have to drop prices even further or watch as the housing decline grows worse.
Good news for the Federal Reserve
While such news is unwelcome for anyone trying to sell a home, the slowdown in the housing market is just what policy makers at the Federal Reserve have been looking for. As inflation quickened over the past several months, members of the Fed, led by its chairman, Ben S. Bernanke, have said that cooling in the housing market would be essential to holding prices down.
At the same time, the government has tried to help with the Florida affordable housing problem. So far, the Fed’s economic forecast has been realized, with inflation slowing and home sales and prices falling.
On Tuesday, Miami-based Lennar Corp., - one of the nation’s largest home builders - said third-quarter profit fell 39 percent as the housing slump worsened faster than expected.
Earlier this week, the National Association of Realtors reported that for the first time in 11 years, the median price of an existing home fell on a year-over-year basis. In August, prices slipped 1.7 percent compared with a year earlier to $225,000.
Median prices also fell last month in the South Florida housing market: Broward’s median dropped $24,200 to $362,800, while Palm Beach County’s median declined $25,400 to $386,000.
As always, most of this is unsettling for sellers, NOT buyers. If you’re in the market for a Florida home mortgage loan, now is the perfect time to receive approval and make an offer. Let our brokers help by completing the COST-FREE FORM atop this page.
