The red-hot housing market just put up a warning flag.
Existing home sales dropped in February from the previous month, and the National Association of Realtors isn’t sugar-coating the news.
Although Chief Economist Lawrence Yun cited winter blizzards and stock market declines as factors, the main problem is growing fear over the economy, he said.
“Home prices and rents outpacing wages, and anxiety about the health of the economy, are holding back a segment of would-be buyers,” Yun said in a statement.
Low supply levels and high home prices are further crimping sales.
“Finding the right property at an affordable price is burdening many potential buyers,” Yun added.
That’s bad news for Florida, which depends on people living outside the state to sell their homes and move to the subtropical climes of Palm Beach County and the Treasure Coast.
Nationally, sales of existing single-family homes, townhouses, condos and co-ops dropped 7.1 percent to a seasonally adjusted annual rate of 5.08 million in February, from 5.47 million in January. Despite the large decline from January, sales nationwide still are 2.2 percent higher than a year ago.
But in the Northeast, an important feeder market for Florida, existing-home sales plummeted 17.1 percent to an annual rate of 630,000. The median price of an existing home sale was $239,700, which is 0.8 percent below February 2015.
In general, prices are higher, too: Nationally, the median existing home price for all housing types in February was $210,800, up 4.4 percent from $201,900 in February 2015, marking the 48th consecutive month of year-over-year gains.
In Palm Beach County, home prices continue to inch higher, too.
The median sale price of a single-family home was $295,000 in February, compared to $284,500 in January and $267,000 a year ago, according to the Realtors Association of the Palm Beaches.
But the number of closed sales fell: Only 1,146 single-family homes closed in February, a 5.1 percent decrease from a year ago, when 1,208 homes closed.
New, federally mandated closing statements that require more coordination between the lender and the closing agent can cause some delays in closings, real estate experts said. This is pushing to March some closings that were supposed to happen in February.
But even getting to the closing table is harder these days, especially for buyers of lower-priced homes.
Indeed, homes priced for less than $200,000 attract immediate attention — and aggressive buyers, said Judy Ramella, president of the Realtors Association of the Palm Beaches and a broker associate with Continental Properties in West Palm Beach.
A West Palm Beach house that went on the market Saturday for $190,000 already has 15 offers, she said.
Homes priced in the $250,000 range also attract multiple offers, Ramella added.
“If your home is priced at market value, you’re going to get buyers left and right,” she said.
The Realtors Association said there was great demand for homes in the $300,000 to $600,000 range, and also homes priced above $1 million.
The multifamily market showed a sales slowdown, too.
In February, there were 913 closed sales of townhouses and condos, down from 801 in January, and 972 during February this past year — a 6.1 percent decline.
The peak in sales appeared to be this past April, when 1,452 sales closed. Since then, it’s been a slow decline, with the lowest dip coming in January, when only 801 sales closed.
The median sales price for condos and townhouses has bounced around, landing at $144,950 in February , a 13.2 percent increase over the same time this past year.
But it’s fallen from December, when the median sales price reached $152,500.
Interestingly, it looks like more people than ever want to sell. In February, inventory rose to 6,669, a 5.1 percent increase during the same period this past year.
In Martin County, tight inventory continued to lift prices. The median sale price in February is up 8.9 percent compared to the same month in 2015.
St. Lucie County, meanwhile, once again looks like the county that area residents look to when they start to feel priced out of markets to the south. Demand grew for homes priced between $150,000 and $600,000.
Despite the recent fluctuations in both the stock and real estate markets, a Merrill Lynch executive said it’s important to look at the big picture.
“You need to put things in perspective and look how far we’ve come over the last seven years,” said Daniel Markow, market executive for Merrill Lynch Wealth Management for the Palm Beach market.
Although Markow noted the real estate market slowdown, he thinks it’s a temporary hiccup.
Markow said the area will continue to be attractive not only to snowbirds but also to younger residents.