Despite low numbers early in the New Year, existing-home sales in the U.S. bounced back in February after two consecutive months of decline. According to the National Association of Realtors (NAR), the upward trend reflects a 3 percent increase in completed transactions, which include single-family homes, townhomes, condominiums and co-ops. This rise is due in part to strong gains in the South and West regions of the country and offset by decreasing numbers in the Midwest and Northeast. Affordability issues, however, continue to pose a problem for new buyers, as existing housing supply is still scarce.
Photo Courtesy of National Association of Realtors
The NAR showed a 3 percent increase in sales, which reflects a seasonally adjusted total rate of 5.54 million in February from 5.38 million in January 2018. The low numbers early in the year are attributed to the unusually cold weather experienced in the New Year that subdued sales in the Northeast, down 12.3 percent, and the Midwest down 2.4 percent. With the persisting cold weather and winter storms, the downward trend in these regions continued into March. In contrast, sales soared 6.6 percent in the South and 11.4 percent in the West.
According to Realtor.com’s Market Hotness Index, which measures the amount of time a home spends on the market as well as listing views, it was revealed that the hottest metropolitan areas in February 2018 were spread throughout California, Arizona, Texas and Florida. San Francisco-Oakland-Hayward in California, Midland in Texas, and Miami-Fort Lauderdale-West Palm Beach in Florida all showed a strong increase, with upward trends continuing into the second-quarter and continuing throughout the year.
After a 15-month slump in the market, due in part to the strong U.S. dollar and economic turmoil in several Latin American countries, South Florida’s condo and single-family home markets picked up considerably. South Florida accounted for 52 percent of all international sales and 22 percent of home sales in 2016 were to foreign buyers. Miami-Dade County also rebounded to high sales in March of this year, with an increase of 9.2 percent in sales as median sales prices jumped 15 percent.
Photo Courtesy of Discover Homes Miami
Sales also increased 7.7 percent from March 2017, in the tri-county region, with an 11.5 percent surge in median sales. Across the state, single-family home sales grew 9.3 percent while median sales price increased 10.4 percent. Condominium and townhome sales increased 11.4 percent while median sales climbed 9.4 percent. The upwards trend was also seen in Orlando, Tampa and Jacksonville, and Palm Beach regions which all saw double-digit growth in condo and single-family home sales.
The projected jump in home prices and sales throughout the country, from job growth and insufficient inventory to meet the high demand, is expected to continue. With housing prices in Nashville Tennessee, Miami, Orlando, Palm Bay Florida and Las Vegas Nevada projected to be the highest. While New York, Fort Worth Texas and San Francisco California are expecting a lower housing hike due to larger market availability. With the real estate growth in the Southern U.S., in California, Texas and most notably Florida, the Miami market stands out, being home to some of the finest and most affluent condominiums in the country. It was reported that sales in Miami’s luxury $1 million market increased by 31 percent since last February.
With luxury condominiums as well as mid-line family homes, overall supply is expected to remain tight this year; coupled with high-interest loans that could see lower sales figures than projected. Despite a strong job market, which has given the American consumer renewed confidence in the home buying market, the scarcity of choices in most markets means there will be strong competition and steep prices leading into the second-quarter.