Sales of single-family homes in Florida totaled 20,633 last month, down 9.9% compared to December 2017, the Florida Realtors reported Tuesday.
"Notably, this year-over-year decline in sales for December was felt across the nation, not just in Florida, which is evidence that interest rates played at least some role in dampening the number of closings," said Florida Realtors Chief Economist Dr. Brad O'Connor. "Thirty-year fixed mortgage rates began to ramp up in September and had reached a multi-year high of close to 5% by mid-October, which is typically when financed sales closing in December go under contract."
In December, statewide median sales prices for both single-family homes and condo-townhouse properties increased year-over-year for the 84th consecutive month. The statewide median sales price for single-family existing homes was $255,000, up 4.2% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $185,000, up 2.8% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
"Florida's housing sector is continuing to show signs that inventory levels are finally easing in many local markets after being constrained for a long time," said 2019 Florida Realtors President Eric Sain, a Realtor and district sales manager with Illustrated Properties in Palm Beach. "Improving inventory and interest rates that, though rising, remain historically low offer a good opportunity for homebuyers who have been waiting on the sidelines to work with a local Realtor to find their dream Florida home."
In the condo-townhouse market in December, statewide closed sales totaled 8,156, down 11.4% compared to a year ago. Closed sales data continued to show fewer short sales and foreclosures in November: Short sales for condo-townhouse properties declined 39.7% and foreclosures fell 33.7% year-to-year; while short sales for single-family homes dropped 49.8% and foreclosures fell 26.8% year-to-year. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Interest rates likely will continue to play a role in determining the direction of Florida's housing markets going forward, O'Conner said. He added, "Home buyers considering sitting on the fence until prices come down might want to take note that we're also likely to see significantly higher mortgage rates by that point. While there has been a slight softening in the pace of home price growth since mid-2018, there are currently no signs that Florida home values will experience any wholesale declines over the next year."
Potential home buyers should also note that Florida's active listings – or inventory levels of for-sale homes –have been trending up across the state, according to O'Connor.
"Statewide, active listings of existing single-family homes have been on the rise since July, which has helped contribute to the softening of price growth, and they continued to climb in December," he said. "At year's end, inventory was up over 13% compared to the end of 2017. Importantly, inventory levels are now rising across most of the pricing spectrum, including in some of the more affordable ranges."