Real Estate market continues to sizzle

Northeast Florida’s housing market desperately needs more homes.

In June, the region’s residential market continued its frenzied pace, with low interest rates and a limited inventory fueling record high sales prices.

With an available months’ supply of inventory declining 58.1% to a mere 1.3-months of inventory compared to the same time last year when it boasted 3.1-months, June’s housing market numbers showed another record increase in average and median sale prices. Also, worth noting was a 55% decline in the number of days homes stayed on the market – 71 days in June 2020 to 32 days in June of this year.

Specifically, June’s median sales price of $301,000 leapt 18% from $255,000 in June 2020. Meanwhile the average sale price of a home on the First Coast was $373,378, a dramatic 20.7% increase from the year before when the average price was $309,269.

“Many buyers have gone to the sidelines and are continuing to rent or double up with others, as the affordability of homes compared to incomes becomes a bigger issue,” said Missi Howell, president of the Northeast Florida Association of REALTORS®. “Sellers continue to reap the benefits, as long as they have somewhere to go that can fit within their budget. Many sellers continue to choose not to sell, because they have nowhere to go, lending to the undersupply of existing homes for sale.”

If they do have a home to move to, sellers have a lot of incentive to put their residences on the market. In June, sellers received 100.5% of their original list price. This number is derived from dividing a property’s sales price by its original list price and taking the average for all properties that were sold in a given month, while not accounting for seller concessions. This also represents a 4.6% increase over the percentage of 96.1 in June 2020. Also in June, 43.3% of closed sales sold for more than the most recent list price, a 220.7% increase over June 2020 when that was 13.5%.

Home builders are trying to meet the increased market demand with new construction. Housing starts were up 3.6% in May from April, according to the U.S. Commerce Department. “Builders are building, but labor and material shortages have elongated their timelines,” said Howell.

“Several builders have slowed production due to uncontrollable and unforeseen but anticipated price increases that may have them building beyond what the market value appraisal could bring. First-time home buyers have been the hardest hit with their budgets blown due to rapidly increasing prices coupled with a lower supply of money in the state’s housing trust funds to help with down payment and closing-cost assistance. The institutional investors, which include iBuyers, institutional investors, and local real estate investors, continue to be strong players in our Northeast Florida market, buying up homes to turn around and rent,” she continued, referring to iBuyer companies that use technology to make offers on homes instantly.

“The summer demand and supply will be interesting to watch, as peoples’ eyes turn from listing and selling to focus on travel and vacations. But they generally turn back to listing and selling as the summer wanes. At present, there is little to no relief in sight for the lack of homes needed in our market,” Howell said.

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