from staff
Home sales are traditionally slow the last quarter of the year. The holidays and people being unsure of making a large investment late in the year combine to slow sales statewide compared to the rest of the year. Locally, that doesn’t appear to be the case. According to the Florida Association of Realtors, home sales in Jacksonville are up significantly in the last quarter of 2005 compared to the last quarter of ‘04.
Jacksonville, one of the larger Metropolitan Statistical Areas in the state, reported a total of 4,285 homes changed hands for the quarter, a 21 percent increase compared to the 3,541 homes sold during the final quarter of 2004. The median sales price rose 19 percent to $190,700; it was $160,500 in fourth quarter 2004.
Land availability, continued development and employment opportunities helped to fuel home sales in the area, says Kay Seitzinger, president of the Northeast Florida Association of Realtors and assistant manager with Watson Realty Corp. in Ponte Vedra.
“Businesses are continuing to relocate to the Jacksonville area, and buyers follow job opportunities,” she said. “The growth is phenomenal.”
Despite an uptick in mortgage rates and signs of a lull in economic growth, existing single-family homes in Florida reached a statewide median sales price of $246,300 for fourth the quarter of ‘05, an increase of 29 percent over the median price of $190,700 in the fourth quarter of ‘04, according to FAR.
At the end of 2000, the statewide median sales price was $117,400, which marks an increase of about 109 percent over the five-year period, FAR records show. The median price is a typical market price where half the homes sold for more, half for less.
Across the state, many Realtors reported increasing inventory levels of homes for sale, which is good news for buyers after a long period of extremely tight supply in most markets. Statewide, a total of 50,889 existing, single-family homes sold during the three-month period, a 7 percent drop from the 54,890 homes sold during the same quarter in 2004.
The decline in existing single-family home sales in the fourth quarter of ‘05 was consistent with both rising mortgage rates over that period and a dramatic pause in overall U.S. growth, according to Dr. David Scott, executive director of the Dr. Phillips Institute for the Study of American Business Activity and professor of finance at the University of Central Florida. Scott points out that during the quarter, conventional mortgage rates rose to close at 6.26 percent, while real growth in gross domestic product (i.e., GDP growth adjusted for inflation) declined to a 1.1 percent annualized crawl from a strong 4.1 percent growth rate posted during the third quarter of ‘05.
“Therefore, expect some reasonable slowing in both unit sales and median sales prices across the first half of 2006,” said Scott. “The Federal Reserve should be finished with this wave of interest rate increases as the economy pushes into the 2006 second half. Double-digit growth rates in both unit sales and prices will cease for now and more closely track the performance of the economy. As a professional sector, Florida’s Realtors have done an admirable job of supporting this important element of the Florida economy.”
According to Freddie Mac, a 30-year, fixed-rate mortgage averaged 6.22 percent for the fourth quarter of 2005. For the fourth quarter 2004, the rate averaged 5.73 percent. FAR’s sales figures reflect closings, which typically occur 30-90 days after sales contracts are written.
Another large MSA, Tampa-St. Petersburg-Clearwater, also had higher resales in the fourth quarter compared to the previous year, with 11,653 homes sold for a 4 percent gain. The market’s median sales price was $223,900 for the quarter, a 33 percent gain over the final quarter of 2004’s median price.
Among the state’s smaller markets, the Ocala MSA posted a 2 percent increase in existing home sales for the final quarter of last year. A total of 1,424 homes changed hands compared to 1,400 homes sold during fourth quarter 2004. The median sales price rose 42 percent to $161,700; it was $113,900 in the final quarter of 2004.
Wilbur Van Wyck, president of the Ocala/Marion County Association of Realtors and broker-owner of Coldwell Banker Riverland Realty in Dunnellon cites investor interest as one factor influencing the area’s median price for resales, but many buyers also plan to call it home.
“When people see the scenic beauty of the area and experience the laid-back lifestyle, they want to become a part of our community,” he said.
Other smaller markets reporting high sales for the final quarter of 2005 include: Tallahassee, where 1,150 homes sold for a 9 percent gain; and Gainesville, where 826 homes changed hands for a 7 percent increase.
The median sales price in those markets also rose compared to the previous year: in Gainesville, 20 percent to $197,900; and in Tallahassee, 13 percent to $176,500.