Local Housing Market Remains Red Hot
The real estate market in Lake, Sumter, and Marion counties remains red hot with high demand and historically low inventories based on information from the Realtors® Association. Some local housing analysts point out that since the mid-summer, the housing demand and supply equation have eased some, but the market numbers continue to suggest there are more buyers than sellers with continued rising home prices.
In August, the number of new listings was 2,128 which is up from 1,744 in January. However, as compared to the last 5-year average, the number of August listings is only 110 units more which is somewhat stunning considering the 2020 pandemic period with no vaccinations. The total active listings for the area were 2,756 with August sales of 1,733 units. The total active listings in January were significantly higher at 3,526. Based on these numbers, there was a net of 628 more homes on the market for 1,733 units sold.
These numbers explain why there was only 2 months of housing inventory available in August for Lake, Sumter, and Marion counties. In June, the housing inventory was 1 month, but don’t let a one-month improvement get you excited when it could simply be a rounding error. To put these housing inventories in perspective the local housing market had a 13-month supply in 2011 just as the rebound from the crash started. Two months of housing inventory indicates homes are selling fast and buyers in a better financial position who typically have cash or very strong credit, and a down payment, are scooping up most of the homes. Marginal buyers of affordable homes will have a hard time finding a home in the current environment.
The best indicator of the local housing market is probably the average sale price. In January 2021, the average selling price of a home in Lake, Sumter, and Marion counties was $261,021, and in August, the average selling price had jumped to $321,435 or 23.1 percent. This is a huge increase and suggests many homes have multiple bids and are being sold above the asking price.
What do these numbers really mean for the home seller and buyer?
If you are selling a home, now is a good time unless you are looking for replacement home in exchange. Due to the articulation in price over the last few years, a different home may not compare to your older home. Before you sell, know what you can buy and be ready to move quickly. Don’t expect months on the market from the time you list your home until the move out day.
If you are a home buyer, you must get your financing airtight and be ready to move. Whether you are paying cash or financing be ready to sign offers and contracts quickly because there is a good chance the home you are looking at today will cost more in the next few months. Cash and strong credit are King.
Finally, August is not the home selling season in Florida. It begins later in fall when the winter residents start making their return to Florida. If the pandemic resolves in the fall, expect the buying season to be one of the strongest in years as there is significant pent-up demand. If there is a surge of winter residents, prices could escalate quicker than the last 8 months as many of these buyers are coming down with cash in hand.
Unlike the mid-2000s, this is not a housing bubble brought on by speculation and easy lending. This has the makings of a housing boom brought on by real demand and very low inventories. While it will be good for many, working families who need affordable housing will have a tough time finding a home. Don’t expect these local housing markets to settle down anytime soon with inventories low and demand high.
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.