The real estate resale market is strong and vibrant. Prices have appreciated over the past few years. Significantly. It remains a great time to sell. However, the rate of appreciation – i.e., the double digit rates of appreciation which we have enjoyed over the past few years has ended. In 2016 prices increased 5 ½ %. In 2015, it was 21.5%. The Average Sold Price increased 5.4%. It was $255,000 in 2016, $242,000 in 2015. Since 2012 we have had double digit appreciation. This past year was the first year of single digit appreciation.
Why the slow down? First, year over year double digit appreciation was/is simply not sustainable. The laws of gravity control: What goes up, must come down. Consider: There were 25% more homes for sale in 2016 than 2015 (7,240 homes for sale in 2016; 5,793 in 2015). There were 6.1% less sold homes in 2016 than 2015. (1,993 homes sold in 2016; 2,122 in 2015). The mathematics is simple. If you have more homes for sale (which we have), and fewer homes sold (which occurred), price appreciation will slow down (which it did). Although, in such an environment sold prices could have gone down (which, they did not).
So. Where are we headed? Historically, the 100-year average has seen home prices appreciate, nationally, 3-4% per year. Here in Florida we tend to do a bit better, due to our feeder markets up North, warm weather, blue skies, full days, and quality of life. So, provided the economy continues to grow, we should continue to experience appreciation at a rate greater than our Northern siblings … at least concurrent with the past year … 5 ½%, 2016 over 2015.