Home sale prices continue to go up, while available inventory is down across the board. According to realtors in Florida and the latest study of the housing market in the state. Last quarter, the number of buyers paying cash for new homes went up by almost half. $355,000 was about the median cost of home purchases in Florida for the third quarter in 2021. $254,900 is the amount buyers paid for condos instead of houses. Cash payments are up across both housing types.
45.5% of buyers paid cash for their single-family homes than they did in 2020. Condos bought in cash also went up by 33.2%. With 29.2% fewer listings of single-family homes in the third quarter of 2021 than 2020, more people continued to pay in cash. Condo listings dropped even more, at 52.2 percent fewer available.
Housing Availability Drops As Buyers Continue To Pay Cash
Ongoing inflation has made this problem worse, affecting everything from the price of gas to the cost of food for thanksgiving dinner ingredients. Most of the world has seen rising prices of gas and the cost of building materials has skyrocketed since the COVID-19 pandemic.
How Is Inflation Impacting Florida Housing?
Lumber prices hit their peak in May, then started to drop in July. The cost for wood to build houses was up 250 percent, which had increased the costs of buying a new home by about $36,000, according to the National Association of Home Builders. There has been a delay in building new homes which is a direct result of expensive material costs. Prices for available homes are just one factor that contributes to the rise of inflation currently sweeping the U.S. It has particularly affected the available housing for purchase or rent.
Since the increase in cash buyers, it’s unclear in Florida which of those buyers are large companies and which are families and individuals. One economist noted that cash payments are a great indicator of active investors in the market.
“Cash sales can be a useful indicator of the extent to which investors are participating in the market. Why? Investors are far more likely to have the funds to purchase a home available upfront, whereas the typical homebuyer requires a mortgage or some other form of financing.”
The Study Also Says That Even Baking, As Well As Housing, Cookies Is More Expensive Due To Inflation
Florida had a mixture of institutional investors to buy houses to turn into rental properties. As rent prices increase, families are looking to buy homes instead of renting. There is competition between families and corporations to buy homes which has driven up the housing costs exponentially. As the housing prices increase, Tampa Bay has become one of the most expensive areas to buy a home in the country. The housing costs go up as rent continues to rise. The rental costs were so high this year that you may have to work more than one full time job just to afford a one-bedroom apartment.
SBA Grants Approved But Money Was Sent Elsewhere
Since the prices have increased along with the amount of cash buyers, this resulted in decreased time to contract or sale and quicker sale times. Single-family homes, time to contract dropped 65.5 percent, from 29 days to 10 days. Time to sell dropped almost 30 percent, from 73 days to 52 days, before purchase. Even though new listings increased, there is limited inventory of homes and the number of pending sales decreased.
We have seen an 18.4% increase in the sale prices of single-family homes compared to last year. The number of closed or final sales decreased by 1.1%. Townhouse and condo sales increased 13 percent, while prices rose 18.6 percent. The price increases across the board are due to inflation and the limited inventory for housing in Florida.
“Closed sales of single-family homes statewide totaled 88,592 in 3Q 2021, down 1.1% from the 3Q 2020 level; closed sales of condo-townhouse properties totaled 37,876, up 13% compared to the same quarter a year ago,” according to Florida Realtors’ data. Communities are seeing double digit increases in all home and condo prices.
Slightly lower interest rates are said to also be a factor of the increase in home prices. According to Freddie Mac, the Federal Home Loan Mortgage Corporation. Freddie Mac is a publicly-traded, government-sponsored enterprise for housing in the U.S.
Feel free to contact us with any real estate related questions here.