USA: Florida Q4 2013 report

Florida Boom Q4 2013 Report

Florida Q4 2013 Report

The housing market of Florida continued to grow in the third quarter of 2013. Main factors of its improvement were more closed sales, higher median prices, more pending sales and steady supply of homes for sale as compared to the same period of preceding year.

“Data from the third quarter of 2013 shows that Florida’s housing market continues to grow and gain strength,” said 2013 Florida Realtors President Dean Asher, broker-owner with Don Asher & Associates Inc. in Rolando. The housing sector is considered as essential to the economy of Florida, and many realtors in the whole state are reporting of increased activities in their respective markets.

In the third quarter of 2013, Florida’s overall closed sales of existing single-family homes was 60,661 units, up by 17.3 percent in contrast with the previous year, according to the data from Florida Realtors Industry Data and Analysis department in partnership with local Realtor boards. Generally closed sales happen 30 to 90 days after signing of the sales contract.

And for the pending sales of single-family homes, it climbed by 17.0 percent in the third quarter of 2013 as compared with figure of the prior year. Moreover third quarter median sales price for the whole of Florida was $175,000 up by 18.6 percent compared with the same period of last year.

The state-wide year-to-year comparison for sales of townhouse-condos reached a total of 27,200 units sold in the third quarter, up by 11.3 percent from similar period of last year. Pending sales for townhouse-condos in third quarter of 2013 rose to 12.4 percent in contrast with the previous year, while state-wide median price for townhouse-condos was $130,000, up by 23.8 percent over the same period of last year. Furthermore its median days on market for single-family homes and townhouse-condos were 48 days and 54 days respectively.

“What’s remarkable for the third quarter data is that all metro areas in Florida show year-over-year increases in both prices and sales for single-family homes, and year-over-year increases in sales for condo-town home properties,” says Florida Realtors Chief Economist Dr. John Tuccillo. “Inventories have begun to pick up a little bit, which may be consistent with cash sales declining as a percentage of overall sales. We’re alert to the fact that it may signal a trend, which could be good for the long-term stabilization and health of Florida’s housing market.”

It is interesting to note that the investment hotspots of Florida’s housing market are Fort Meyers, Lehigh Acres and Miami. These places have shown remarkable increase in market price, great demand and even significant reduction in number of days on market. In these three places demand for housing have outstripped supply.

USA Advantage has seen these exciting figures which show clear signs of great and sustained economic upturn for Florida most especially in Fort Myers, Lehigh Acres and Miami.

Market Figures

From the most closely watched gauges of the housing market, the recent Standard & Poor’s Case-Shiller Home price Index for Miami, Florida indicated this data. For the month of June the figures which were released September 24 but were not seasonally adjusted or adjusted for inflation are shown below:

1. Home price index, year over year change +14%
2. Home price value since peak, -18%

From Zillow, Home Prices and Home values as follows:

1. Home value index – $146,000, 14.8% Y-O-Y
2. Median sale price – $166,000, 19.0% Y-O-Y

A)   Investment Benefits

By all indications, Florida’s housing market has been showing a sunny outlook for investors. Some of the few factors that Florida’s investment may give benefits to the housing investors are as follows:

1. Amazingly lower prices – Florida’s home prices have just bottomed-up in the recent years and continuously rising going back to its previous peak price. All indications are pointing to economic recovery; thus, this would be the best time to invest in any type of property in Florida.
2. No state tax – there is no state tax for individuals and business structures in the state of Florida; thus, this would be a great attraction for entrepreneurs.
3. Low mortgage rate – mortgage rates are still at the lowest levels which will help housing investors to multiply its purchasing power.
4. Purchasing incentives – these incentives are offered by the federal, state and local housing programs to help home buyers to make big purchases. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 (for more details please consult your local mortgage lender about this program).
5. Major ships’ port of call – there are major changes in the Panama Canal operation which will allow container ships to dock Florida in 2014. This will be an opportunity for the state to become a distribution centre of imports to the eastern seaboard.
6. High population growth – long term economic and demographic forecast continue to show interesting data. Recent pronouncement by economists that Florida will become the third-most-populated state in the country, and one of the 10-fastest-growing states in the U.S. Population growth is considered as driver for the other economic developments.

Strengths

In general the housing market of Florida has been growing and continuously gaining strength in every aspects of the market. This strength is influenced by strong buyer demand together with limited supply of resale houses. This resulted in putting upward pressure on housing prices, and ultimately enhancing the vibrancy of the housing industry.

Moreover the positive momentum in the recent quarter continued to achieve more closed sales, higher median prices and a lot of pending sales which fuelled the housing market to move forward at a faster rate.

Recent data shows that Florida has lower unemployment rate as compared with the entire nation. Hence more jobs will give more stability for future growth in the state’s housing market and its general economy.

One of the most vital factors which contributes to the strength of Florida’s economy is its geographical location. It is considered as one of the top tourist destinations because of its all year-round fine weather condition. Hence this feature draws substantial number of tourist and consequently ensures higher demand for the housing sector.

Moreover Florida has the natural and health-friendly climate which attracts people who will not only stay for a week but for years. These are the retirees who are choosing Florida as their permanent residence because of its climate which comfortably fits to their lifestyle and physical condition.

Core Industry

The economic progress of the state is usually dependent on its core industries, and these industries usually drive the economic growth of the state. Some of the few major industries of the State of Florida are as follows:

1. International Trade – this one of the biggest income generating industry of the state in which about 40% of all U.S. exports to Latin and South American countries pass through the ports of Florida.
2. Tourism industry – there are about 90 million visitors a year that visited Florida, and is considered as one of the top travel destination in the world. The tourism industry has given to state’s economy of about $70 billion a year.
3. Space Industry – this industry represents about $4.1 billion of the state’s economy. The average annual wage of aerospace workers is approximately $67,000. The number employed at Kennedy Space Centre (KSC) alone is 13,000 and Florida ranks 4th among the states in overall aerospace employment with 33,000 jobs.
4. Agriculture industry – Florida’s agricultural income leads the southeast states in farm income. The state produces about 67% of the U.S. oranges and accounts for about 40% of the world’s orange juice supply.
5. Construction industry – this industry sector’s strength is mainly due to the steady flow new residents and visitors who are welcomed to Florida every year.
6. Services industry – this industry has shown tremendous growth in high tech, financial & back office operations.
7. Software industry – this industry has developed many small, entrepreneurial companies.

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