Florida Housing Market Update: March 2022
4 Factors at Play this Spring Season
It’s Florida’s busiest season for home sales, and a handful of factors, from mortgage rates to inventory, are making year-over-year comparisons difficult. Take a look to hear how things played out in March.
Fla.’s March Median Prices Up, Supply Tight
Florida’s housing market in March and 1Q 2022 showed the impact of rising mortgage rates, increased home prices and a shortfall of for-sale supply, with fewer closed sales compared to a year ago, according to Florida Realtors®’ latest housing data.
“Buyers and sellers in Florida in March continued to see rising mortgage rates, a very limited supply of for-sale homes and rising prices,” said 2022 Florida Realtors President Christina Pappas, vice president of the Keyes Family of Companies in Miami. “Housing affordability remains a challenge, and higher mortgage rates may mean some buyers who had previously qualified under a lower rate are forced to rethink their plans. The continued limited supply means that homes are selling at a fast pace. The median time to contract statewide for single-family existing homes in March was nine days compared to 15 days during the same month a year ago. And the median time to contract for existing condo-townhouse units was 11 days compared to 32 in March 2021.
“Now more than ever, consumers can benefit from the expertise of a local Realtor, who can guide them through current market conditions.”
Last month, closed sales of single-family homes statewide totaled 30,793, down 6.2% year-over-year, while existing condo-townhouse sales totaled 14,631, down 11.4% over March 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Higher mortgage rates and less pandemic-driven buyer demand helped drive the drop in closed sales, according to Florida Realtors Chief Economist Dr. Brad O’Connor. He pointed out several factors that make it difficult to make exact comparisons between last year’s spring homebuying season and this year’s, now underway with the March data.
“First, last year could really be considered our first spring buying season in two years, with the 2020 season having been snuffed out by the onset of the pandemic,” he said.
“So there was an excess of pent-up demand there. Second, the pandemic was still quite severe a year ago and was spurring relocations and second home purchases in Florida from out-of-state buyers. That’s still happening now, but not to the same extent. Third, while our single-family inventory was severely depleted by the beginning of 2021, there was still some slack in our condo and townhouse inventory at the time. That inventory cushion allowed for last year’s massive statewide boom in condo and townhouse sales. And last, but certainly not least, mortgage rates were still near record lows last spring. It simply can’t be understated how much these low rates helped fuel housing demand during the pandemic.”
The statewide median sales price for single-family existing homes in March was $396,558, up 21.3% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $308,000, up 27.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Dr. O’Connor said, “With the rising prices we’re seeing, despite fewer sales so far this year, the dollar volume of closed sales remains high. Single-family dollar volume in the first quarter of 2022 came in at $42.1 billion, an 11.5% increase over the same quarter last year, while condo-townhouse dollar volume was up 16.3%, to $16.1 billion.
“The big question over the next few months will be how much the recent elevation in mortgage rates will slow price growth.”
On the supply side of the market, inventory (active listings) remained tightly constrained in March as well as for all of Q1 2022: Single-family existing homes were at a restricted 1-months’ supply while condo-townhouse inventory was at a 1.2-months’ supply.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 4.17% in March 2021, significantly higher than the 3.08% averaged during the same month a year earlier.
