I know the media and many Realtors love to look at the monthly numbers the Florida Realtors research department releases while a few prefer to wait for the quarterly reports. Typically, the majority of deals close at the end of the month and are not reported until the following month, or the closing date is extended or delayed into the following month. The quarterly numbers can reduce the statistical significance of this reporting error. It is easier to catch a sustainable trend and gauge year over year changes than in a given month.
The Florida Realtors research department released the 2015 first quarter data set for the Gainesville Metropolitan area earlier this month. The numbers are very strong and show a healthy real estate market. Two things jump out right away to me. First, the housing supply is at 6.2 months. The National Association of Realtors states that any market with six months housing supply is at equilibrium. That means it is neither a seller’s market, nor a buyer’s market. If nothing else, it’s a welcome change after eight straight years of buyer’s markets.
If you’re reading this, just remember that real estate is a neighborhood market. Your neighborhood market may still remain a seller’s market or a buyer’s market. With the overall number at 6.2, and from what my Realtors tell me, some neighborhoods like Cobblefield are extremely hot (favorable for the seller). A quick survey of the office, and Realtors Cindy Harrington and Dawn Robinette, added Longleaf and anything near campus to the hot list of neighborhood markets.
Secondly, even though the market looks strong and is close to equilibrium, we still have twenty-six percent of the closings coming from the distressed market. This means they account for 138 of 541 sales for the quarter. Senior Vice President and top producer Perry McDonald explains, “Florida and our market are still clearing out the shadow inventory taken back by the banks during the housing collapse. Gainesville had a worrisome start to the year, but March and April have been strong.”
Another concerning figure is the number of cash sales. If you can buy a house with all cash, that is a good thing for you, however, thirty percent of our market sales are cash. This tells me there are more investors and second home buyers at play than we would like to see in a normal to robust housing market.
Click here to see single family home data: Gainesville_MSA_Single_Family_Homes_2015-Q1_Summary
The condo market is reported separately and I watch these numbers as a key indicator of consumer and investor sentiment specifically related to real estate. All of these numbers appear strong. The average sale price numbers show a drop, but upon further examination this number is up when you remove the distressed sales. The percentage of distressed sale is again alarmingly high. Which brings up an interesting point. The gap between the sales price of the distressed market and traditional market is widening.
The difference in both the condo market and the single family numbers is so large, and there are so many sales that it is actually making prices look like they are not appreciating as fast as they are. Make sure you take a look at page two of the reports where the numbers are separated by type of sale.
Click here to see townhouse and condo data: Gainesville_MSA_Townhouses_and_Condos_2015-Q1_Summary