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Florida single-family homes, townhomes, and condominium units are selling at a brisk pace as supply tightens. Increased competition for distressed properties will likely continue to edge selling prices on foreclosures and short sales higher, though forecasts for higher mortgage interest rates and continued narrow lending standards should keep price increases in check. An interesting trend in Florida real estate is the continuing increase in cash sales. According to Dr. John Tuccillo, Florida Realtors Chief Economist, such sales make up “half of existing single-family closed sales statewide and more than three-quarters of townhouse-condo closed sales.” The high number of cash sales indicates that investors may be driving Florida’s real estate and foreclosure markets. There are a number of reasons for buyer positivity in the Florida market, which are helping to shape the direction of real estate trends in the state overall. Sales of Single-Family Homes, Townhomes, and Condos Ticking Up The median sale price for a single-family home in Florida in February 2013 was $150,000, a 12.8% increase over the median sale prices in February 2012. At the same time sale prices are rising, time on the market is decreasing; median days on the market for February 2013 was 62, a 15.1% decrease year over year. The majority of closed sales continue to be within sale prices between $50,000 to $99,999 and $100,000 to $149,999. The median sale price of foreclosure and bank owned properties in February 2013 was $95,000, with 2,864 closed sales. Short sales were also a significant contributor to February’s housing numbers, with 2,772 short sales closed at a median sale price of $120,000. In February 2013, 8,028 closed sales on townhomes and condos were reported, a 7% increase year over year. As with single-family homes, most sales fell between $50,000 to $99,999 and $100,000 to $149,999. In February 2013, 1,171 closed sales were foreclosures or bank owned, at a median sale price of $75,000, whereas 1,094 closed sales were short sales, at a median sale price of $80,000. In both cases, the median sale price was up significantly year over year. Reduced Availability of Distressed Property, but Opportunity Still Beckons Florida continues to lead the nation in foreclosure rates, with an estimated one in 282 housing units in the state subject to a foreclosure filing in February, compared to the national average of one in 849; Miami, Orlando, Ocala, Tampa, and Palm Bay are the top five metropolitan areas for foreclosures nationally. New construction starts are pointing towards a steadier heading for South Florida’s economy and supporting gains in job growth across multiple segments of industry. Florida’s statewide unemployment rate recently dropped below the national rate for the first time since 2008. This improving job market is tied to an improving multi-family housing market, with sales volumes on these properties in South Florida outpacing volumes recorded for the past five years. The developments in multi-family housing activity point to opportunities for investors. The rental of Florida foreclosures and short sale properties to help meet this demand can help investors gain a foothold in the Florida real estate market at a significant savings to traditional property purchase or lease with high investment returns supported by competition for desirable rental units. Homebuyers can also use these trends to their benefit, as the strengthening job market and housing market overall can lead to openings on foreclosed properties overlooked by others. The twin keys are for investors and homebuyers to partner with the listing agency to find distressed properties and to act quickly; multiple-bid situations are rising as the Florida real estate market finds its footing, even on distressed real estate.
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