Vero Beach FL New Home Sales Surge to Highest in 5 Years
Feb. 26, 2015 – Indian River County Florida new home sales jumped in January from the previous month to the highest level since July 2007, a sign that the housing recovery is accelerating.
Vero Beach Realtors Association reported Tuesday that new home sales rose nearly 16 percent in January. The percentage increase was the largest in nearly 20 years.
Steady job creation and near-record-low mortgage rates are spurring more Americans to buy houses. Sales of previously occupied homes rose to the highest level in five years last year.
At the same time, the number of previously occupied Vero Beach homes for sale is at a 13-year low. This is the smallest supply of new homes on records dating back to 1963. That shortage creates more demand for new homes. Builders began construction on the most houses and apartments in four years last year.
At the current sales pace, it would take just 4.1 months to exhaust the number of new homes for sale, the lowest in eight years. Low inventories should encourage more construction.
Though new homes represent less than 20 percent of the housing sales market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to data from the National Association of Homebuilders.
The increase in home building has helped boost construction hiring. The industry has gained 98,000 jobs since September, the best stretch since the spring of 2006.
A separate report Tuesday showed that home prices accelerated in December. The Standard & Poor’s/Case-Shiller 20-city home price index rose 6.8 percent in December compared with the same month a year earlier. That’s up from November’s 5.5 percent gain over the previous November.
Rising home prices can fuel the housing recovery by encouraging people to buy before prices increase further. They can also bring more sellers off the sidelines.
Higher home values also make homeowners feel wealthier, building confidence and encouraging more spending. And banks are more likely to provide mortgage loans if they are confident that home prices are rising.