Although latest NAR data reported that home sales in Florida and Texas declined due to the recent hurricanes, new information reveals that the storm didn’t have significant effect on the home prices in the state.
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Home prices in Florida increased slightly in September, according to data from Black Knight Financial Services. Compared to other states in the country, it had the third largest gain of 0.87 percent from the month prior, behind New York which had the highest increase of 1.09 percent and Rhode Island which had an average of 0.93 percent. The average home price in Florida for the month of September was $248,000. That’s 16.26 percent below the market peak back in April 2006 when home prices in the state skyrocketed to $297,000. Comparably, New York set a new record in September with a median home price of $386,000.
In Texas, there was a nominal decline in August. Homes were priced 0.05 percent lower in September, mostly driven by the 0.23 percent decrease in the Houston area which was the region most affected by the hurricane in all of the state. However, home values are still 2.69 percent higher on a year-to-date comparison, and is in fact still up by 3.23 percent since the beginning of the year. The average price of a home in Texas in September was $241,000, a little below the peak value recorded in August at $242,000.
The states which recorded the most decreases in home values for the month of September are Michigan by 0.61 percent, North Dakota by 0.54 percent, Illinois by 0.38 percent, Connecticut by 0.36 percent, and Iowa by 0.34 percent.
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Compared to last year, national home price average increased by 6.36 percent. It also increased by 0.24 percent from the month prior.
Hurricanes Harvey and Irma devastated Florida and Texas in September, causing an estimated $150 billion and $200 billion in damage. This is especially noteworthy being that the two states are two of the most economically important in the country.
Texas accounted for nearly 8 percent of total U.S. economic output last year and Florida, although half Texas’s size, has a wide range of industries that easily magnified the impact of Hurricane Irma.
Despite the disasters, however, only originations seemed to halt, as shown by the data in existing home sales.
As for construction and strength of inventory, more is yet to be known. Inventory scarcity remains one of the most glaring problems for housing in the Land of the Free. The strong demand is barely met by the available units, pushing prices up. This results to many buyers on a budget vying for the remaining affordable units. Priced out buyers have little to no choice but to either delay homebuying or look elsewhere.
In such a competitive market, you need to have the right financial backing to have an edge. If you can’t pay with cash, secure a mortgage pre-approval. This will help you know the range of home prices you can afford based on your current financial standing, while letting your seller know that you’re serious about making the deal.
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