US property sales have risen to their highest level in nine years.
Pending transactions in April 2015 climbed for the fourth month in a row, according to the National Association of Realtors, with all four major regions recording an increase. The NAR's index of contract signings jumped 3.4 per cent month-on-month and 14 per cent year-on-year - the largest annual increase since September 2012. The index has now increased year-over-year for eight consecutive months and is at its highest level since May 2006.
Lawrence Yun, NAR chief economist, says the steady gains in contract activity each month this year highlight the strength of buyer demand.
"Realtors are saying foot traffic remains elevated this spring despite limited - and in some cases severe - inventory shortages in many metro areas," he comments. "Homeowners looking to sell this spring appear to be in the driver's seat, as there are more buyers competing for a limited number of homes available for sale."
Indeed, home prices are up and accelerating in many markets. The national median existing-home price for all housing types in April was $219,400, which is 8.9 per cent above April 2014. This marks the 38th consecutive month of yearâoverâyear price gains and is the largest since January 2014 (10.1 per cent).
In Florida, in particular, foreign demand has fuelled price rises.
Miami sold 1,247 single-family homes in April 2015, the most transactions for the market in the month of April since the 2007-09 global recession.
Cash deals represented 51.9 per cent of Miamiâs total closed sales in April 2015, more than double the national average of 24 per cent. Since 82 per cent of foreign buyers in Florida purchase properties all cash, Miamiâs high percentage of cash buyers continues to reflect South Floridaâs ability to attract international buyers.
Statewide, closed sales of existing single-family homes totaled 25,206, up 17.9 per cent over April 2014, according to Florida Realtors. Floridaâs closed sales for condominiums totaled 11,643, up 8.1 per cent annually.
As a result, the median sales price for single-family existing homes in Florida was $195,000, up 11.4 per cent from the previous year. The statewide median price for townhouse-condo properties in April was $155,000, up 10.3 per cent over the year-ago figure.
Yun expects a rebound heading into the summer, but the likelihood of meaningful gains will depend on a much-needed boost in inventory and evidence of moderating price growth now that interest rates have started to rise.
"The housing market can handle interest rates well above 4 per cent as long as inventory improves to slow price growth and underwriting standards ease to normal levels so that qualified buyers - especially first-time buyers - are able to obtain a mortgage," he comments.
Photo: Fifth World Art