While analysts talk about a double dip recession, we are seeing signs that point to a healthier, recovering and somewhat stable, real estate market. Home prices were up 1% this past June from May according to S&P’s 20-city home price index, up a total of over 4% from June last year. Despite a drop in sales for July this year’s annual sales are still expected to reach 5 million, beating out the average of 4.9 million of the past 20 years, and home prices nationally have continued to increase according to the National Association of Realtors.
In the second quarter of the year, 100 out of 155 MSAs (metropolitan statistical areas) had higher median existing single-family home prices in comparison to the previous year, and 91 for the first quarter. Existing-home sales in the South increased 10.9 percent in to an annual rate of 2.10 million and are 18.8 percent above a year ago.
The good news continues with Orlando area home sales up 36.12% from last year, as affordability hits an all-time high. Consumers signing contracts right now are benefiting from record low prices, and area average interest rates of 4.61%. Pending home sales also are rising, according to the PHSI (Pending Home Sales Index), which shows a gain of 5.2% for contracts signed in July. According to National Association of Realtors chief economist Lawrence Yun, “Affordability could reach a generational high in the second half of this year because of rock-bottom mortgage interest rates.”
In addition to the price increases, after two months of decline, Americans’ economic confidence is up 2.5 points from July to 53.5, looking better than the 50.5 expected for August by Thompson Reuters. Florida's consumer confidence moved up 1 point to 67 in August. While not a large improvement, it is a good sign nonetheless. Some say the containment of the oil spill, and the realization of tourists that Florida beaches for the most part are unaffected have helped with this increase in confidence.
Let’s hope all of these signs point towards a bright future for Florida’s real estate market.