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Florida's housing market remains hot

While things cool down nationally, sales of existing homes in Florida were up 6 percent in February.

By JEFF HARRINGTON
Published March 24, 2005

Need further evidence that Florida is defying what appears to be a national cool-down in the housing market?

Consider this milestone of sorts from an industry report Wednesday: The median sales price of an existing home in Florida topped the $200,000 mark in February for the second month in a row.

"We are hotter than a firecracker right now," said Nancy Riley, a longtime real estate agent in Pinellas County. "It is not unusual at all to see multiple offers and multiple back-up offers after one has been accepted."

She recalled one recent listing in Feather Sound for a $350,000 home that drew three offers in a week: two for full price and one for $5,000 above listing. Then there was the condominium that drew five offers within four hours of going on the market.

According to the Florida Association of Realtors, sales of existing homes were up 6 percent in February with 17,562 single-family existing homes changing hands. The median sales price was $201,400, up a healthy 25 percent from February 2004. In 2000, the statewide median sales price was $107,300, which shows an increase of 87.6 percent over the five-year period.

"I've been here five years and I haven't seen a down market at all," said Marla Martin, spokeswoman for the state Realtors group.

Riley, a local real estate agent for 33 years, agreed. "I've seen a lot of ups and downs, but I've never seen such a long, consistent up."

In the Tampa/St. Petersburg/Clearwater market, the number of resales and median sales price posted double-digit increases from a year ago. A total of 3,771 homes sold in the area last month compared to 3,223 homes in 2003 for a 17 percent increase. The median sales price rose 24 percent to $175,200.

Despite the surge, Florida remains affordable compared to many populous states. In California, the statewide median resales price was $485,700 in January; in New York, it was $285,000; in Maryland, $251,984.

Martin attributed the growth to numerous factors: new buyers in the market; a scarcity of properties in many areas; and interest rates staying near historic lows.

Cheap mortgage rates and growing employment also fueled a better-than-expected national housing report Wednesday.

U.S. sales of previously owned homes fell 0.4 percent in February to 6.79-million annual rate, the National Association of Realtors said. Economists surveyed by Bloomberg News had expected home resales would fall 1.5 percent to a 6.7-million annual pace.

Still, the national median price of an existing single family home rose to $188,200 in February, up 9.4 percent from one year ago. Factoring in other types of homes, including condominiums and townhomes, the national median is $191,000, up 11 percent over February 2004.

An improving job market will give buyers the income needed to keep sales strong as Federal Reserve policymakers raise borrowing costs and mortgage rates follow, though sales aren't likely to keep rising, according to economists. Central bankers on Tuesday raised their target interest rate by a quarter percentage point, the seventh such increase since June.

"We are still in a very, very strong market," said Daryl Jesperson, chief executive of a Colorado-based Re/Max International franchise. "A stable employment picture, historically low interest rates and an economy that is doing well are all promoting activity."

Nationally, sales reached a record 6.784-million for all of 2004 and have set records in each of the past four years.

"2004 will (remain) the record year," Martin said, "but this will be the second-highest year for home sales based on what we're hearing."

The government's report on new home sales is due today from the Commerce Department. Sales are expected to rise to a 1.15-million annual pace from 1.106-million in January, according to a survey of economists by Bloomberg News.

Information from Times wires was used in this report. Jeff Harrington can be reached at harrington@sptimes.com or 813 226-3407.

[Last modified March 24, 2005, 01:19:16]