Florida strong in new housing starts and home sales
They say if you want to know where to do business, follow the real estate market. That’s certainly true in Florida where new reports show single-family housing starts as well as existing home sales are outpacing the USA average by double-digits. And economists say it’s fed by historically low unemployment, new job creation, and favorable mortgage rates. It’s all in this week’s Construction and Real Estate Digest.
Pent-Up Demand: The National Association of Home Builders is forecasting an overall average 3% increase in single-family housing starts this year to about 920,000 homes. But that’s 100,000 to 200,000 units short of demand. Not so much so in Florida, which along with Texas and Arizona, are leading the nation in new housing. Florida markets with at least a 20% gain in new home growth in 2019 were Ocala and The Villages in Central Florida and Port St. Lucie and Sabastian on the Atlantic coast.
A recent realtor.com® research report states that a shortage of construction workers, a lack of buildable lots, and rising costs are all contributing to the underbuilding. Economists say that even with an above average pace of new construction, it’ll take homebuilders four to five years to catch up. Existing home inventories meanwhile, remain at all-time low levels, while the population continues to grow – all creating a strong demand for housing.
The report notes that home prices and rents are expected to continue to outpace inflation in most areas, with nationwide home prices predicted to rise 4.8% in 2020 and single-family rents to rise 3%.
Single-Family Sales Up, Too: The news from the Florida Realtors® on sales is strong. Single-family home sales across the Sunshine State in December were up almost 24% from the previous December, totaling 25,557 homes. All the factors previously mentioned apply here, too, as reasons for the great growth. Existing single-family homes had a 3.4 months’ supply of inventory in December, while condo-townhouse properties showed a 5.2 months’ supply.
Prices continue to rise, too. The December statewide median sales price for single-family existing homes was $270,000, up 5.9% from the previous year. The median price for condo-townhouse units was $200,000, up 8.1% over the previous year figure.
LMA Newsletter of 2-3-20