The October Housing Report released by Dr. Bard O’Connor of the Florida Realtors® could be misinterpreted if you just look at the top line of sales. In October, just after Hurricane Irma, which shutdown the housing market in a huge, important section of the state, sales were down 24.6 percent as compared to the previous year, but you could easily make a viable argument that Hurricane Irma affected these numbers as much as the economy. The next few months will determine if that is a trend or just a hurricane anomaly.
If you look at the housing report numbers, you will see some statistics which suggest the housing market in Florida remains very robust. Here are the facts which make this case:
Months of housing supply is only 2.7 months which is woefully low with new listings down 18.1 percent. People are staying in homes because they can’t afford to move due to the increase in interest rates. Without new listings, housing inventory and selection will continue to be tight in Florida.
The median sales price is $401,990 which is up 12.0 percent from the prior year, and homes are being sold on average within 25 days. If the market was in bad shape, these numbers would be much worse.
Foreclosure sales were down 16.3 percent with the buyer paying 13.8 percent more for a foreclosed home while short sales were down 51.5 percent and those buyers paying a whopping 32.9 percent more from the prior year. Homeowners are not losing their homes which indicates the economy is strong.
The percentage of cash sales was 28.4 percent, which is a huge part of the market that is not impacted by rising interest rates. This means people are moving to Florida with wads of cash in their pockets.
The problem in the housing industry is that homeowners and analysts always want to compare the market to when it was at its zenith and the demand was way overheated.
There is a good chance that now that hurricane season is over, the interest rates are stabilizing, and material costs and supply chains are returning closer to normal, Florida may have gone through its worst part of the housing downturn.
The October Housing Report from the Florida Realtors® suggests the Florida housing market is not only very resilient but it remains strong. Inventory and selection availability of housing remains tight, pricing is still going up, and distressed housing numbers are dropping- this doesn’t sound like a housing market that is about to bust, but maybe about to boom again. The next few months will provide clarity, but I predict that 2023 will find most potential homebuyers struggling to find the home of their dreams at an affordable price.
Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc., and he is also the host of the “Around the House” Show which can be seen at AroundtheHouse.TV.