The Florida Real Estate Market is on fire!!
How do I define a real estate FIRE?
FIRE: Is a combustion of real estate sales by consumer confidence, in which these substances combine with low inventory and high demand to stimulate the market. This explosion usually gives out a bright light, heat, and smoke in Florida neighborhoods that increases prices.
Or in other words “the statewide median sales price for single-family existing homes last month was $240,000, up 7.1 percent from the previous year”, according to data from Florida Realtors Research department in partnership with local Realtor boards/associations. “July marked the 68th month-in-a-row that statewide prices rose year-over-year”. According to National Association of Real Estate, “Florida’s rate of employment growth continues to outpace the nation’s, and a substantial number of Florida’s millennials have started looking for their first home. Consumer confidence is also at a 16-year high. Statewide there is 3.9-months’ supply for single-family homes and a 5.6-months’ supply for townhouse-condo properties, according to Florida Realtors. Economists say that inventory falling below 6 months signals a sellers’ market.
- The median price in Orlando has increased for 72 consecutive months and the median price has doubled since 2010.
- Single-family home prices in the Tampa Metropolitan area soared nearly 14 percent compared to 2015. That was the biggest year-over-year gain in at least six years and the largest increase of any major metro area in the state, according to newly released figures from Florida Realtors.
- Foreign buyers purchased $6.2B of residential property in the last year an 80% of those purchases came from Miami-Dade County.
- Currently Jacksonville only has 3.4 months of inventory which has helped drive the median price up 12% in the last year
However, everybody isn’t bullish about Florida Real Estate futures. Jack McCabe a research & consulting expert who called the housing crash that launched the last recession said, “Probably by 2017 were going to reach a platinum period and then we are going to see prices decrease again.” McCabe predicted that prices would fall by the end of 2016. Jack Mcabe’s advice to sellers, “Sell this year or plan on waiting three to five years for a price recovery.”
I agree with some of McCabe’s assertions except for his timeline. It is important to factor in what I call market “Over Compensation”. In areas where the public is not aware of market trends that caused decreases in inventory, as demand grows the market frenzy begins. The hysteria manifests itself in price as multiple offers begin to push price up and attempts for the market to correct the overvaluation can linger for months. So prices tend to go up and above value. The same thing happens when prices crash consumer confidence tends to stay down which has a longer negative effect on prices.