Market Update May 2022 With Brad OConnor Ph. D.
TRT: 4m 14 sec Video Transcription Brad OConnor directly addresses camera:
This year’s rising mortgage rates continued to depress sales of existing Florida homes in May, based on the latest statistics from Florida Realtors. On a statewide basis, closed sales of single-family homes were down close to 7% compared to May of 2021, while townhouse and condo sales were down by over 14%. The number of homes for sale that went under contract in May was also down in both the single-family and townhouse/condo categories, by just over 13% and 25%, respectively.
On whole, the current level of sales we’re seeing in Florida is much more comparable to the pre-pandemic years of 2018 and 2019 than what we saw last year in 2021, when mortgage rates were still near their all-time lows. This slowdown in the rate of sales was accompanied by an increase in the rate of homes listed for sale in May. New listings of single-family homes were up on a year-over-year basis by over 10%–the largest such increase since August of last year. New listings of townhouses and condos were up more modestly, by 3.4%. With sales levels falling closer to historical norms and new listings on the rise in May, inventory levels are on the rise, as well. The number of single-family homes actively listed for sale in Florida at the end of May was up over 23% compared to the end of April, and up 31.5% compared to a year ago. These are large increases in inventory, of course, but we started from a very low level.
We are still only at about 1.4 months supply of inventory, which means we’re still deep in seller’s market territory. But we are starting to make some progress back toward a balanced market. Half of the single-family home sales which closed in May were only on the market for 9 days before going under contract. That’s still incredibly low, but notably is a step up from April, when the median time to contract was only 8 days. At the end of May, townhouse and condo inventory was up by almost 16% month-over-month, but was still down on a year-over-year basis by 20.5%. This is because one year ago, we still had a relatively adequate level of inventory in this property type category, at least compared to what we had for single-family homes. But by the end of 2021, the inventory in both of these categories was more-or-less depleted.
Still, townhouse and condo inventory is rising, and the gap between this year’s and last year’s inventory levels will become increasingly narrow in the coming months, if current trends hold. The median days on market for closed townhouse and condo sales in May was 10 days so not much longer than that of single-family homes. The supply of inventory in this property type category remained quite low, at 1.5 months, but this figure is slowly inching upward. Inventory is still very tight, but it is moving in the right direction if you are hoping for a more balanced market and moderating growth in home prices. The prices of May’s closed home sales, however, showed that home price growth, at least for now, remains stubbornly high. The median sale price for single-family homes in May was up almost 22% year-over-year, to $420,000. As for townhouses and condos, their median price increased by nearly 29%, to $322,000. As more inventory continues to come on line, we will be looking closely at prices for signs of a moderation in their rate of growth. Remember, the statewide statistics are useful in analyzing the broader trends, but Florida is a tapestry of very unique housing markets, so it’s important for you to follow your local market trends, as well! Visit sunstats.floridarealtors.org to check them out! See you next month.