Friday, February 19, 2016

Florida’s housing market 2015: Report Card

Now that the Real Estate industry has final numbers from 2015, they are releasing that data and the subsequent results of last year. As we have reported many times throughout the last 12 months, 2015 was a very strong year in the housing market. After reflecting on 2015, FL Realtors President Matey Veissi states “Florida’s economy is in growth mode, more jobs are being created and mortgage interest rates remain at historically low levels which will continue to drive the state’s housing market in 2016.” Let’s see what else the 2015 FL housing market report says and the impressive numbers it contains. We are going to grade the major indicators we talk about and how we feel they did in the last year’s market.
 
Total closed sales on existing homes is always a leading indicator for housing market experts. In 2015, there were 274,769 resale transactions! That is an increase of 12.4% from 2014, which is enormous. On the pricing side of resales, there was another sharp increase (real estate agents love to see this). Specifically, the median price of sold homes was up 10.1% over the previous year for an average of $196,000. Double digit percentage increases in sold homes and average sales prices is huge, and solidifies all of the positive outlooks for the current year. FL Realtors Chief Economist Dr. O’Connor predicts to see “home prices continue to rise at an elevated pace in 2016, as much of the state is in the midst of an inventory shortage that is likely to persist throughout the year”. When supply is down, prices shoot up! The NAHB (National Association of Home Builders) released their own statistics which document how new home construction faired in 2015. NAHB reports there was a 9.9% increase in new home sales from 2014 to 2015. Nearly identical to the increase in resales. So we are going to give the number of closed homes sales on the resale side a grade of B+ and on the new home sales side a grade of B. Finally, the average sales price earned a solid A-.
Short sales were everywhere here in Florida between 2010 and 2014. Even Tampa was hit really hard with many owners trying to unload their mortgages they could no longer afford. Short sale activity is another leading indicator of the housing market, determining how healthy it is. More great news here, because the numbers from 2015 are both positive and mind boggling. Short sales for condos and townhouses were down a staggering 44.6% in 2015. Nearly half as many short sales as 2014 clearly shows us how strong the housing market was last year. Short sales for single family homes were also down heavily, dropping 34.1% from the previous year totals. These kind of numbers earned short sale statistics an A+ from the SI Real Estate team.
The slightest housing market indicator we are reflecting on is interest rates. When interest rates are attractive, they persuade buyers to take out a mortgage. They also determine how much house you can afford. 30 year fixed interest rates in 2014 averaged 4.17%, and in 2015 they dipped down to average 3.85%. Rates in the 3’s are nearly unheard of, and way below the average of the 90’s and early 2000’s. The fact that so many new homes as well as resales were sold last year can be largely attributed to the extremely attractive interest rates banks were offering. In 2016, rates will remain incredibly attractive to help keep the housing market surge front and center. The 2015 rates earned another A+ on the housing market report card.
2015 Report Card Summary:
Closed Home Sales (resales): B+
Closed Home Sales (new homes): B
Average Sales Price: A-
Short Sales: A+
Interest Rates: A+

- SI Real Estate Tampa Bay
Nibal Elsaadi, Licensed Real Estate Broker