Florida’s Housing Market 2017
The sun is shining on the Florida housing market. Florida realtors say the year began with a jump in sales for single family homes, along with higher prices. Zillow also named Orlando and Tampa as the best two cities in the nation for first-time homebuyers. And, of course with lower prices and strong sales growth, they are also great for investors.
The Florida Realtors group says that sales are up 5.1% in the sunshine state for the first quarter of this year compared to last year. That includes a higher number of traditional sales and fewer foreclosures and short sales.
Closed sales topped 60,000 for the first quarter. That’s about 3,000 more than the first quarter of last year. The median home price for the state has also risen 10.7% from about $204,000 to $226,000. And, the realtors group is “not” expecting the market to slow down.
Florida Realtors Chief Economist Dr. Brad O’Connor says: “Homes are selling faster this year. Half of the single-family homes which sold so far in 2017 went under contract in 50 days or less. That’s almost 6% faster than the 53-day figure reported at this point last year.”
He says as buyers snap up homes, the faster timeline for closing helps explain the tight inventory. He says: “A shortage of both new and existing homes for sale throughout much of the state continues to drive the Florida housing market narrative in 2017.” He says new listings were up just one percent in the first quarter, while the number of closed sales jumped more than 5%.
A higher proportion of sales are also traditional sales. Foreclosures dropped almost 50% while short sales were down about a third from 2016. Florida Realtors President, Maria Wells, says: “Distressed property sales continued to drop – which underscores solid stability in the state’s housing market.”
Right now, there’s a 4.1-months’ supply of single-family homes on the Florida market. 4 to 5 months is average so despite a tightening of inventory in Florida, there are still plenty of properties to choose from.
Today’s Hottest Florida Markets: Orlando — Tampa — Jacksonville
While much of Florida is sizzling hot right now, Zillow placed Orlando, Tampa, and Jacksonville on a top-ten list for first-time homebuyers. That ranking encompasses several criteria that also make sense for investors.
These cities offer homes at lower prices with a strong potential for equity growth. If a buyer is leveraging the property, the down payment will also be lower. These cities also have relatively more inventory than other cities which decreases the competition among buyers and the likelihood of bidding wars. Listings for these cities also tend to have more price cuts which also decreases competition.
— In Orlando, Zillow’s median home value is $202,000 with an expected home value growth of 3.8% over the next year.
— In Tampa, the median home value is $183,000 with a 3.2% expected increase in home value.
— In Jacksonville, buyers will find a median home value of $179,000. Growth in equity is expected to hit 3.0% over the next year.
More Jobs, Growing Economy
Driving this hot market is a hot economy and job growth. Wells says: “A growing economy boosts the state’s housing sector as well.” She says there’s a downside however — that: “Many local markets are reporting a low inventory of for-sale homes at a time of increasing buyer demand.” She says: “For sellers, it’s a good time to list their homes, as they continue to get more of their original asking price at the closing table.”
In February of this year, the realtors group reports that sellers of existing single-family homes ended up with about 96% of their original asking price. Wells says: “In these kinds of market conditions, serious home buyers must be prepared to act fast, and work closely with a local Realtor to find the right home for their needs and their budget.”
The difficulty in such a hot market is winning the deal AND not paying too much in a bidding war. That’s why investing in a rental fund can be helpful for busy people or out-of-state investors. An experienced team can acquire properties the day they come on the market, because they know what to look for. That’s a lot harder for individuals to do – especially if they are busy or live far away from the property.
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