HOUSING SALES AND BREXIT’S INFLUENCE ON FLORIDA’S ECONOMY
Each month a variety of economic indicators are published for the national, state and local economies. Among these the report on sales of existing homes is one of the most important and most reliable. Sales of existing single family homes in Florida were up 5.2% in October 2019 compared to October 2018 with the median price up 3.6%. For condominiums and town homes, sales were down ½ % but the median price was up almost 6%.
90.7’s Mathew Peddie discusses the latest data with economist, Dr. Hank Fishkind, president of Fishkind Litigation Services.
Matthew Peddie: So how do the home sale stats that you’re looking at compare to sales of existing homes across the United States?
Hank Fishkind: Well, the United States actually outperformed Florida some. Sales of existing single family homes are up 5.4% compared to 5.2% for Orlando, and the condos were up significantly in the United States, almost 2% compared to that little contraction. Sales in both the United States and across Florida are very constrained by this very tight inventory. You know, as we discussed a few weeks ago about migration and how fewer people are moving all across the United States, mobility is down by half, which means that that churn in housing that would occur is down by half. So the inventory levels are so tight. So the result is that we have relatively modest sales in existing homes, which limits people’s variety of homes because there’s very little available for sale. And I don’t see that changing anytime soon.
MP: What about the data for Orlando?
HF: Yeah, well, in Orlando, sales of both single family and multi family homes rose by about 1.6%. So, you know, modestly weaker than Florida and certainly weaker than the United States.
MP: Do you see the construction of new homes picking up anytime soon?
HF: Yeah, it has picked up significantly, especially in the Orlando area. But you know, it’s kind of surprising that Orlando’s home markets performed so weakly, given how strong our job growth and population growth is. But again, that ties back to this lack of supply. Orlando has one of the smallest levels of inventories available in any major metropolitan area in the country.
MP: What about Deltona and Daytona?
HF: Well, they did significantly better. In the Deltona area, single family homes were up 3%; prices were 5% higher and that rebounded from weaker data earlier this year. But what was particularly interesting was the sharp gains in the multifamily and townhouse and condominium markets. Sales were up 12% and prices up 15% in that market, so that market’s finally recovered, and it’s now performing far better than it did earlier this year, Matthew.
MP: Now if we look at Melbourne and Palm Bay sales of single family homes fell 9% compared to last year, why that big drop?
HF: Yeah, it was really weird. You know, it reflects in fact, a retracing of the very strong gains in September. You know, if I look at it over a whole quarter, three months, and we average it out, you know, those sales were up modestly, prices will modestly higher. So, so there’s a lot of volatility in that Melbourne marketplace. So this one time drop, really, we shouldn’t read too much into it, Matthew.
MP: So looking at the next six months, what do you expect for Florida’s housing market?
HF: Well, I think Florida’s housing markets will continue to perform as the have, you know, one to 2% gain in sales over last year; 3% increase in price, but there’s going to be significant impact from some of the things like Brexit that we saw this week.
MP: And let’s talk a little bit about Brexit. What do you see the impact of that being on the economy in the United States and here in Florida as well?
HF: Yeah, I don’t think it’s going to be good in the short run. Certainly, I mean, there’s going to be a lot of chaos and trying to sort out what it’s going to mean. Already there’s a lot of rumblings that Scotland would like to withdraw from the UK. In addition, the consensus view is that in the short run, Brexit is negative for the British economy. And what we’ll see is an erosion of their currency. And so therefore, it’ll make purchases of US housing and especially here in the Orlando area,our resort housing, more expensive for a British investor, Matthew.
MP: Hank Fishkind, thanks so much.
HF: Thank you Matthew.