Florida has a severely limited 0.9-months' supply of available home listings, condos at 1.2-months' supply
According to Florida Realtors' latest statewide housing data, the severe lack of housing inventory, rising mortgage rates and home prices continued to impact Florida's housing market in February, slowing closed sales and pushing median prices to increase compared to a year ago.
"February's statewide housing data follows the same trend we've been seeing for months: a limited supply of for-sale inventory, high buyer demand and rising prices," said 2022 Florida Realtors President Christina Pappas, vice president of the Keyes Family of Companies in Miami. "Home prices continue to be impacted by this shortfall in inventory. When homes are available for sale, they're going under contract very quickly. The median time to contract statewide for single-family existing homes in February was 12 days compared to 21 days during the same month a year ago. And the median time to contract for existing condo-townhouse units was 14 days compared to 38 in February 2021.
Last month, closed sales of single-family homes statewide totaled 23,661, down 1.2% year-over-year, while existing condo-townhouse sales totaled 10,975, down 3.6% over February 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
According to Florida Realtors Chief Economist Dr. Brad O'Connor, over the past four months, single-family home sales have been about the same as they were the year before. Still, the level of sales remains quite high by historical standards: Total closed single-family home sales last month were 14% higher than the sales level of two years ago.
He said, "Why has single-family home sale growth slowed down? Several factors are in play, but primarily it's a result of our continued lack of inventory, in combination with rising mortgage rates and home prices. There's still no shortage of housing demand, but affordability is becoming a bigger challenge for potential buyers as each month goes by. Although a fair number of homes are still being listed for sale, we are falling way short of where we need to be on the supply front. This problem isn't going to go away overnight. In the long run, we simply need more housing to be built. For now, though, prices continue to rise rapidly."
The statewide median sales price for single-family existing homes was $381,481, up 21.1% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $290,000, up 24.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
In the face of higher mortgage rates, price growth is expected to eventually slow, said Dr. O'Connor. "Sales growth may slow, as well. New pending sales of single-family existing homes were down 12.6% year-over-year in February while new pending sales of condo-townhouse units were down 17.1%, which might indicate this has already begun. If that's the case, we should expect sales next month to be below last year's levels, but still well above pre-pandemic levels. Slower price growth may follow in the late spring. But there's still a lot of uncertainty here - the timing is hard to predict."
He added, "The crystal ball remains hazy, but as of right now our baseline expectation is for higher mortgage rates to cool down the market somewhat throughout the year. Sales in 2022 are currently expected to be somewhat lower than last year but still above the totals from the pre-pandemic years of 2018 and 2019. Price growth should eventually slow as well but will remain above historical growth rates.
"Therefore, even if we have a decline in the total number of sales, we still expect the sales volume for 2022 in terms of dollars to be like that of last year. The dollar volume of sales in February was up 15.5% year-over-year for single-family homes and 14.8% for condos and townhouses, despite the decline in closed sales for both categories."
On the supply side of the market, inventory (active listings) continued to be limited in February. Single-family existing homes were at a severely limited 0.9-months' supply while condo-townhouse inventory was at a 1.2-months' supply.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.76% in February 2021, significantly higher than the 2.81% averaged during the same month a year earlier.