Florida Home Sales Increase for the 19th Straight Month, and March Sales Increase by 24% vs. 2009

Florida’s existing home sales rose in March, which means that sales activity has increased in the year-to-year comparison for 19 months, according to the latest housing data released by Florida Realtors.

Existing home sales increased 24 percent last month with a total of 16,294 homes sold statewide compared to 13,090 homes sold in March 2009 (see chart above). Statewide existing home sales last month increased 37 percent over statewide sales activity in February (11,890 homes sold). Also noteworthy: While March’s statewide existing-home median price of $137,000 was down from the same time a year ago, it was 4.3 percent higher than February’s statewide existing-home median price of $131,350.

MP: These recent sales data for Florida paint a much more positive picture of the Florida real estate market than the Case-Shiller home price data released yesterday, which showed annual price declines through February 2010 of -7.7% for Miami and -9.8% for Tampa. For March 2010, the statewide median price decline was only -3% versus March 2009, and the other key variable - home sales - was up by 24% since last March.

Assuming the median home price is not too different than the mean home price, the total housing sales volume increased from about $1.85 billion in March 2009 to about $2.23 billion in March 2010, for a 20.5% increase. If we measured housing market activity like we measured vehicle sales - in unit sales, without regard to price - we would conclude that the Florida housing market is booming, with 19 consecutive monthly increases compared to the same month in the previous year, and a whopping 24% increase from March of last year. And if we measured housing activity like we measure retail sales (total sales volume), we would also conclude that the Florida housing market is doing quite well, with something like a 20% increase in sales volume (assuming the median home price is an accurate estimate of the mean home price).

Isn't that a possible limitation of the Case-Shiller Home Price Index as a measure of the real estate market - it only looks at one of the key housing indicators, price, and completely ignores the other key variable, units sold; and therefore also fails to measure housing sales volume?