Its time for the monthly update on the National Real Estate News and what it means for South Florida. Overall the national housing data and news is mixed, but it all still points to a continued recovery, albeit probably slower than we have seen in the past year.
National Association of REALTORS®
Lawrence Yun, chief economist for the National Association of REALTORS®, reported last week (video below) that August existing homes sales reached the highest levels since February of 2007. He went on to say that he expects this to be a temporary peak as the shortage of inventory continues and more buyers hold back as interest rates and and home prices are both up. He expects moderate price growth next year, not the double digits that we have seen this year.
Today Mr. Yun reported that pending sales (homes under contract, not sold) for August were down for the 4th month in a row, but he went on to say that the declines are modest and it was still the 4th highest month for pending sales since year 2010. He is forecasting zero increases in sales volume for 2014 and a 6% increase in sales prices.
S&P/Case-Shiller Home Indices
Another leading indicator of the real estate market is the S&P/Case-Shiller Home Price Indices. Their 20-city composite data showed an increase of 1.8% in July over the previous month with all 20 cities showing monthly gains for at least 4 months in a row. The Miami/Fort Lauderdale market was up 2.1% from May to June, 1.2% from June to July and 13.7% over last year.
United States Federal Reserve
In a surprise move, Fed chairman Ben Bernanke announced last week that the Federal Reserve would continue its $85 billion a month bond buying program which is already having a positive impact on interest rates. Florida’s average 30 year fixed rate was down to 4.14% yesterday. The easing of this program is still anticipated to happen soon, so low interest rates will likely be temporary.
What this means for South Florida…
Just like the rest of the country we have an inventory problem, so expect prices to continue to rise, but at a more moderate pace than the past year. If interest rates stay low into the busy winter season then expect our strong recovery to continue, especially in the second home, waterfront and condo markets. Look for inventory levels to rise modestly going into the winter season as some sellers try to capitalize on this years increase in prices while rates stay low. Well priced properties should sell quickly in all price ranges.
Lawrence Yun on August Home Sales…