This October, an unexpected decline of sales causes a statewide backlog of unsold homes. In October, the real estate market fell 2.7 percent. The unexpected decline signals an increase in unsold homes. In 19 years, this has been the fastest rising price in the real estate market.

According to analysts of Florida real estate, this backlog will reduce future price gains. Although some housing sales are still good and median prices, prices continue to affect the real estate market while signs of cooling go up in October.

The nationwide real estate sales fell up to 5 percent. In October 2004, the median home price was approximately US$188,800. This year, it rises up to 28 percent, as the median price became US$241,000. According to the officials of Florida Association of Realtor, the decline was due to the disruptions of Hurricane Wilma.

In Orlando, an inflating inventory that reached the highest price in eight years was a clear signal of the city’s cooling real estate market. Sales in Orlando experienced two consecutive months of price escalation this September and October. For the first time this year, Orlando’s average existing-home price rose to US$246,790 in October.

The National Association of Realtors reported on Monday that sales of existing condominiums and homes fell by 2.7 percent in October. This fast pace decline of sales left the real estate market with an annual rate of 7.09 million, compared to 7.29 million in September

Economists stated that this depletion is a signal that the booming housing market is beginning to slow down due to the dramatic impact of rising mortgage rates.

This major decline in sales pressed the number of unsold homes to rise at 2.87 million, one of the highest levels in 19 years. At this current sales pace, the inventory level depletion would take at least 4.9 months to recover.

Last month, the midpoint price of unsold homes sold rose 16.6 percent compared to US$218,000 in October 2004.

According to David Lereah, chief economists for the Realtors, the housing sector has finished its peak. The real estate industry is expecting the housing rates to remain at these levels or even go higher.

This summer, almost 69 cities nationwide increased housing prices to double-digit gains. With this recent market report, many economists predict that unsold homes would decrease its prices.

By Paulene Calinawan
Real Estate Portal