Florida Housing Market: Rising Home Sales and Prices 3Q 2014

Closed sales of single-family homes in the Sunshine State during the 3Q 2014 were up 7.6 percent over the 3Q 2013 figure. Florida leads the nation in housing cash sales during the 3Q 2014, with a higher percentage of cash sales than any other state.

Main Beach Park, Fernandina, Sunrise at Boardwalk
Florida Living: Fernandina Sunrise at Boardwalk, Main Beach
Florida’s housing market data for the 3rd quarter 2014 indicates rising sales and prices for single-family homes. Closed sales of single-family homes in the Sunshine State totaled 64,633 in 3Q 2014, up 7.6 percent over the 3Q 2013 figure, according to data reported by Florida Realtors. “The 3Q 2014 statewide median sales price for single-family existing homes rose 4 percent from the same time a year ago,” according to Florida Realtors.

According to Florida Realtors’ Chief Economist Dr. John Tuccillo, “The third quarter numbers actually confirm what we have seen in the monthly data…The housing market has settled into a stable pattern of activity that is reminiscent of the market before the craziness of the last few years…The good news is that this type of progress in the real estate market is likely to continue. We should see continued growth of the market for the rest of 2014 and into 2015.”

Florida All-Cash Home Sales Highest in USA

Florida leads the nation in homes bought with cash during the 3Q 2014, with a higher percentage of cash sales than any other state in the US. The top five metro areas in the Sunshine State (populations exceeding 500,000) had 50% or higher cash sales, according RealtyTrac housing data.

Florida Homes Supply vs. Demand

Statewide housing inventory “was at a 5.4-months’ supply in the third quarter of 2014 for single-family homes,” according to Florida Realtors. Housing inventory of around 6 months is what the real estate industry generally considers to be a “balanced market” of buyers and sellers. Over supply puts pressure on prices to decline and creates a “buyers market.” The opposite is true when inventory is tighter, creating a “seller’s market” with buyers competing for fewer available homes.

The familiar adage of real estate “location, location, location,” is a reminder that smaller micro-markets exist. This year in Florida, some areas have been seller’s markets (with tighter inventory, some properties getting contracts quickly, seller’s receiving multiple offers). Market conditions can vary neighborhood by neighborhood, just ask a Realtor.

Amelia Island/Fernandina Beach Housing Market

Fernandina Beach "Home Value Index" on Zillow includes Off-Island Properties
Fernandina Beach “Home Value Index” on Zillow includes Off-Island Properties
The most popular real estate website (highest web traffic) is Zillow. Since so many people now use this online resource to search for homes (reportedly 4 out of 5 homes in the U.S. have been viewed on Zillow), it’s worth noting the following regarding the local housing market:

Out-of-towners who are unfamiliar with Fernandina Beach and Amelia Island area should note when browsing Zillow’s “overview market snapshot,” that the median home value number includes properties not actually located in the city limits of Fernandina Beach on Amelia Island (since thousands of homes on the mainland — not on Amelia Island — were given the 32034 zip code of Fernandina Beach. Large PUDs (planned unit developments) coveted the Fernandina Beach address with zip code 32034 for the marketing of their new home communities (rather than having a Yulee, Florida address with its associated zip code of 32097).

Amelia Island Homes For Sale Under Half a Million

Want to live by the beach? Taking a glimpse of properties listed in the Amelia Island-Nassau County MLS under half a million dollars in zone 3 “BEACHES,” and searching moderate-sized homes for sale (at least 3 BR/2BA single-family homes with minimum size of 1,800 square feet), resulted in less than ten homes available as of November 15, 2014 (most of these were listed in the $430s to $450s price range). Zone 3 “BEACHES” are properties located outside the resort areas. Taking a look at what’s available for sale within the resort areas using the same parameters noted above (single-family homes under $500,000 with at least 3 BR/2BA and minimum size 1,800 SF), resulted in three available properties (one in Summer Beach Golfside South listed at $429K, and two located within Omni Amelia Island Plantation, both listed at $499K). While inventory is slim for an island home walkable to the beach in the areas noted (listed under $500K), buyers do have additional housing options further away from the beach but still on the island, plus many off-island properties on the mainland east of I-95. Also, a few new home communities are sprouting up on Amelia Island and will bring some new single-family homes to the market for those who can wait to build.

Declining Negative Equity Bodes Well For Home Sellers

Florida home value appreciation has caused declines in the amount of negative equity (i.e., homes with “underwater mortgages”). Therefore, more Florida home sellers can make a move under better balanced market conditions than a couple of years ago.

According to Zillow research, for the Jacksonville, Florida metropolitan area, of 20 cities covered by Zillow, Duval County’s Ponte Vedra Beach and Neptune Beach plus Nassau County’s Fernandina Beach are the three lowest “negative equity” communities in northeast Florida. (The percentage of negative equity was 10.6 for both Ponte Vedra Beach and Neptune Beach, and 13.4% in Fernandina Beach. (Zillow’s most recent negative equity data available was for 2014Q2.)

Florida Demographics, Population Growth Trends & Baby Boomers

Another factor in the dynamics of supply vs. demand is population growth. “Florida’s population is still on track to break the 20 million mark by the end of 2015, becoming the third most populous state sometime before then, surpassing New York… Florida’s population is forecast to grow to 23,877,889 by 2030,” according to The Florida Legislature Office of Economic and Demographic Research.

Missing from the housing marketplace across the nation have been first-time homebuyers. However, with recent relaxation in what many describe as “overly restrictive” lending rules, it’s anticipated more first-time home buyers will be making purchases while interest rates remain historically low.

But a more mature demographic, a whopping 24% of the US population (or approximately 77 million people) — those born between 1946 to 1964 — are entering “seniorhood.” Historically, Florida attracts a sizable share of retirees. Looking forward, this “coming of age” of the largest generation of Americans, Baby Boomers reaching retirement, is a major pool of potential Florida buyers. Whether purchasing primary residences or second retirement homes to escape harsh winters, the cold and snow, a tidal wave of boomers flowing into Florida may possibly be on the horizon.

Will a wave of boomers wash across Florida in years to come? Or will they decide to stay put in their hometowns in higher numbers than the past? Only time will tell. The real estate and stock markets can be unpredictable like weather forecasts. Similar to trying to accurately predict how many hurricanes will hit land in a season. Florida hasn’t seen a hurricane make landfall in nine years as of October 2014, “a record hurricane-free streak for the Sunshine State” according to The Weather Channel (with records dating back to the year 1851). Who could have predicted that?