Home Sales Continue to Rise; Prices Dip Slightly

The statewide median sales price for single-family existing homes last month was $199,900, up 8.1 percent from the previous year, according to data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards/associations. The changes are in part due to the steady job growth and low mortgage rates that have encouraged current homeowners to purchase homes while keeping first-time buyers at a distance.

Existing home sales, tabulated when a contract closes, are an important barometer of housing demand because they account for more than 90 percent of the residential market.

“We have this broad-based housing shortage”, Lawrence Yun, NAR chief economist, said at a news conference as the figures were released. NAR said that the estimated share of first-time homebuyers fell to 28 percent, down 2 percent from June. The median existing home price was $234,000, a rise of 5.6% from the same month of 2014. This in increase marks the 41st consecutive month of year-over-year gains.

“Five years ago, distressed sales represented 33 percent of the market in July”, said NAR President Chris Polychron, executive broker with 1st Choice Realty in Hot Springs, Ark. She also added that market conditions like “faster wage growth, continued relaxed lending standards, and interest rates hovering around 4 percent” will be needed to reach first-time buyers.

Properties typically stayed on the market for 42 days in July, an increase from June (34 days) but below the 48 days in July 2014. Unsold inventory is at a 5.0-month supply at the current sales pace, down from 5.1 months in May. Sixty-four% of investors paid cash in July. Foreclosures sold for an average discount of 17% below market value in July (15% in June), while short sales were discounted 12% (18% in June).

The slow six-year recovery from the Great Recession has now begun to revitalize the housing market. The median forecast in a Bloomberg survey of economists called for July sales to fall to 5.43 million.

The decline in building permits was responsible for a 0.2 percent decrease in the July index of leading economic indicators, according to a report Thursday by the Conference Board. The median existing condo price was $221,800 in July, which is 3.2 percent above a year ago. Last month’s sales pace was the highest since February 2007. So far this year, the share of the U.S. population who owns homes has fallen to 63.4 percent, a 48-year low, according to the Census Bureau.

The median price in July in the Chicago PMSA was $226,700, up 4.0 percent from $218,000 in July 2014. The median price of a home in Chicago was $285,000, up 5.2 percent over July 2014 when the median price was $271,000.