Housing Market In Florida Appreciation Accelerated In 2005
Home price appreciation accelerated in 2005: According to the Office of Federal Housing Enterprise Oversight, the house price index for the state rose 26.8 percent in 2005. Median home prices rose by nearly $56,000 last year, which was a record increase and well above the $7,780 average over the last 25 years. Naples was the fastest appreciating metropolitan market in the state with a annual price gain of $113,000.
The rapid home price appreciation in 2005 further eroded housing affordability for Florida households. According to the National Association of Homebuilders-Wells Fargo Housing opportunity index, just 41 percent of homes are considered affordable for all U.S. households. In stark contrast, only 16 percent of homes in Naples would be considered affordable for a family earning the median income in the metropolitan area.
The inventory of unsold existing homes is growing: By late 2005, home inventories saw significant increases and were outpacing growth in home sales in most Florida metropolitan markets, such as Orlando. In Orlando, the total number of homes listed for sale in January 2006 was 262 percent higher than a year ago representing a 4.8-month supply, up sharply from a 1.5-month supply ago.
Data for early 2006 indicate that single-family and condo sales across many Florida metropolitan areas declined, while condo sales prices along parts of the Panhandle actually fell. The slowing pace of home sales and growing inventory levels from a year ago suggest that marketing times may lengthen, potentially leading to slower price gains in 2006.
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