The median home sale price increased 7 percent in October, the strongest year-over-year growth Redfin has seen in 10 months. Overall home inventory declined for the 13th month with an 8.6 percent year-over-year drop, the biggest decline since May 2013. New listings dropped 6.9 percent, the largest year-over-year decline since December 2012.
Although the substantial increase in home prices and other speed and competition metrics reflect a very active housing market last month, the number of homes sold declined 3.2 percent year over year following two months of double-digit surges in metros tracked by Redfin.
Last month, homes spent a median 49 days on the market, five fewer than a year earlier. More than one in five (21.3%) homes went under contract within two weeks in October, up from 19 percent a year earlier. Another one in five (20.1%) homes sold for more than their asking price, up from 18.9 percent a year earlier.
Seven Florida metros led the nation in home price growth–including Deltona (up 18.4 percent), West Palm Beach (14.8 percent), Fort Lauderdale (14.2 percent), Fort Myers (14.1 percent) and Lakeland (13.6 percent).
“Florida’s growing economy and relatively affordable prices have brought more transplants here this past year,” said Delray Valle, Redfin real estate agent in West Palm Beach. “Local sellers see that they can price high and make a decent profit on the newcomers. Even homeowners who bought at the top of the market just before the recession can now easily fetch double what they paid for at the time, as long as they are patient enough to find the right buyer.”
While the October market rewarded sellers, it hit buyers at the low end of the market the hardest. The lack of affordable new construction, high investor demand for rental units and a slowdown in new listings sent prices for starter homes up faster than they have grown all year. With no new supply surge on the horizon, finding an affordable home will continue to be an unrelenting challenge for first-time buyers for the remainder of the year and into 2017. The good news is that mortgage rates continue to provide an affordability cushion, giving buyers a bit of wiggle room against budget constraints.