May closed sales for the Tampa area continued to show strong growth with the median condo price up 14.0% from May 2011, Single family median price up 8% and sales up 14.4% from a year previous. Inventories continue to trend down with a 30.7% reduction in homes for sale. Click for full report
One economic driver behind the recent price increases has been employment: Florida is adding private sector jobs. While the US economy produced only 69,000 jobs in April, 16,800 or 24% of them were in Florida. Florida represents only 6.1% of the US population. Since December 2011 the Florida economy has produced an average of 17,320 jobs per month notwithstanding a reduction in government jobs and the continued battering of construction and related sectors. Statewide unemployment was 8.6% in May, down from 8.7% in April and a steady decline from the 9.9% recorded in December, 2011.
From our perspective the historical rates are most relevant as Florida has suffered some of the highest unemployment rates in the Country since 2009. Poor employment prospects were but one factor leading to the wholesale reduction in Florida housing values: While house prices are off some 30% nationally we are still buying in some areas for 60% off peak price.
While employment is but one indicator of economic health is seems a fairly logical predictor of real estate values as people tend to live near economic opportunity. It seems equally logical that real estate values would lag employment as it takes time for persons to migrate, establish themselves in a new area and ultimately decide to buy a home.
While Florida was “overbuilt” it continues to experience strong population growth. Inventories of homes are now returning to more balanced levels and much of the existing inventory is still priced well below replacement cost. The improved employment outlook is but one factor that will continue to fuel the real estate recovery which is well underway.
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