Despite another active hurricane season, Florida’s housing market thrived in 2005, registering a record year in terms of closings and median price for sales of existing single-family homes statewide. By year’s end, Florida came close to reaching the 250,000 mark for annual sales, according to the Florida Association of Realtors with a total of 248,565 homes sold - a 2 percent increase over the 242,597 homes sold the year before.
And the prices of those homes keep rising.
Statewide, the median sales price rose 29 percent to reach $235,100; in 2004, it was $181,900. In 2000, Florida’s median sales price was $115,900, which represents a gain of 102.8 percent over the five-year period, according to FAR records.
The Jacksonville area was the bigger gainer among the state’s larger metropolitan statistical areas, reporting double-digit gains in number of sales and median sales price in 2005 compared to the previous year.
With a total of 18,101 homes sold last year, the figure was 13 percent higher than the area’s 2004 sales activity, when 16,050 homes changed hands. The median sales price rose 17 percent to $186,300; the year before, it was $158,600.
Kay Seitzinger, president of the Northeast Florida Association of Realtors and assistant manager with Watson Realty Corp. in Ponte Vedra, says last year’s Super Bowl helped focus attention on the Jacksonville area.
“This area offers job opportunities, sports and recreational activities, and other amenities that provide for a great quality of life,” she says. “We still have land available for development and that helps with housing affordability. Jacksonville is a large area with a hometown feel.”
Mike Dooley, the 2006 FAR president and a broker with Illustrated Properties in Hobe Sound, says the 2005 existing-home sales data demonstrates the continued strength of Florida’s real estate industry despite local market disruptions caused by three hurricanes striking the state this year and one brushing by - even as the state continued a strong recovery from the 2004 hurricane season.
“At the end of 2005, housing industry analysts were seeing signs that the market is coming into a better balance between buyers and sellers,” Dooley says. “We may experience a brief period of adjustment for market conditions. It’s a healthy adjustment - we expect the state’s existing home market will remain strong in 2006.
“There are so many factors and demographics involved that contribute to a positive housing market in Florida: the state’s population grew by more than 400,000 last year, or about 1,100 people a day, according to University of Florida research. Many of those moving here are baby boomers, who are inheriting wealth in record amounts; and the state has one of the strongest job markets in the nation. Florida offers what people want - a great place to live with a wonderful climate, world-class recreation and leisure activities and job opportunities.”
Low interest rates contributed to the state’s positive housing market. Mortgage rates remained under six percent for most of the year, surpassing that mark only in the last months. “The annual average for the 30-year fixed-rate mortgage rate last year was 5.87 percent,” Dooley notes. “For most of 2005, demand for homes remained at a record pace in markets across Florida, which resulted in a tight inventory in many areas that also affected home prices.”
Many housing industry insiders predict that the housing sector will see another historically strong year for sales in 2006, with mortgage rates expected to gradually trend upward to 6.7 percent during the second half of this year and a return to a normal rate of price growth. Realtors anticipate another positive year for home sales in Florida.
Last year’s average of 5.87 percent for a 30-year, fixed-rate mortgage was only slightly higher than the 5.84 percent average rate for 2004. FAR’s sales figures reflect closings, which typically occur 30 to 90 days after sales contracts are written.
Another large Florida MSA reporting higher sales in 2005 compared to a year ago was Tampa-St. Petersburg-Clearwater, where 53,183 homes sold for a 12 percent gain. The market’s median sales price rose 26 percent last year to $201,700; in 2004, it was $159,900.
In the state’s smaller markets, the Ocala MSA reported 6,118 homes sold last year, a 6 percent increase over the 5,754 homes sold the previous year. The median sales price rose 30 percent to $142,000; the year before, it was $109,600.
“Over the past year, we’ve seen an influx of investors coming into the area, especially out of South Florida,” says Wilbur Van Wyck, president of the Ocala/Marion County Association of Realtors and broker-owner of Coldwell Banker Riverland Realty in Dunnellon. “In our market, buyers are getting a lot more home for their money. Our median price is still one of the lowest in the state and that, combined with the other wonderful attributes of this community, have attracted a lot of people to the Ocala area.”
Among the state’s smaller markets, others reporting increases in home resales for 2005 compared to the previous year include: Tallahassee, where 5,258 homes changed hands for a 22 percent boost; and Gainesville, where 3,993 homes sold for a 20 percent increase. The markets’ median sales price also rose last year: in Gainesville, 11 percent to $179,200; and in Tallahassee, 10 percent to $167,600.