Here is a timely riddle: What do Barry Bonds, Alex Rodriguez and the U.S. real estate market have in common?
The answer is that no one can explain their longevity and extraordinary performance, as compared with normal standards. However, the careers of Bonds and Rodriguez were dismissed and tarnished because of alleged use of steroids.
Meanwhile, the rip-roaring residential real estate market acts like it is on steroids, figuratively at least — because it is growing by leaps, with no bounds. And similar to Bonds and A-Rod, it is defying normal standards.
Consider these statistics about the real estate market nationally:
— The national supply of homes for sale is the thinnest in nearly 20 years.
— Homes are selling at the fastest pace since 2010.
— Home sales jumped 9 percent in March (versus a year ago).
— The typical home went under contract in just 49 days.
— The median home price has reached $273,000.
— Homes in Washington, D.C. sold in 12 days or less, and it took 18 days to sell a home in Charlotte, N.C.
— In once foreclosure-flooded Las Vegas, home prices are double what they were five years ago.
— In red-hot Seattle, a one-bedroom/one-bath condo received 21 offers recently, before selling for $500,000.
— The inventory of homes for sale in Seattle and in Denver are down more than 60 percent since 2012.
— In Denver, sellers are receiving five to seven offers this spring, and one home drew 52 offers.
Despite all the positive statistics, there are some negative under linings. Fewer Americans own homes than ever before, partly due to the escalating prices. And many younger people like the mobility afforded by renting.
For first-time home buyers, the down payment alone can be staggering, as sales prices rise. In a survey by Zillow, more than two-thirds of renters say they are staying pat because they cannot meet the down payment of a new home.
In Northeast Florida, home sales slumped to begin this year. Fewer homes sold in January and sold for less. The 1,603 homes sold in the area n January was the lowest monthly total in two years. Obviously, rising home prices and a limited inventory had an impact here.
In Nassau County, 57 homes sold in January at an average price of $229,000. A year ago, 86 homes sold in Nassau at an average price of $215,000.
In terms of prices, homes at the Jacksonville Beaches topped all others in Northeast Florida. Neptune Beach had the highest average prices at $437,000, although only five homes sold there in January. Ponte Vedra North and South exceeded $410,000, with more volume than its neighbor to the north.
However, this follows a blockbuster year in 2016 for Northeast Florida. More homes sold last year — 27,873 — than in any previous year going back more than a decade (according to the Northeast Florida Association of Realtors).
So this is no joke, or laughing matter. Real estate here and nationally is as hot as the August sun in South Florida. And that’s pretty darn hot.
(Steve Nicklas is a financial advisor and a Chartered Retired Planning Counselor with a major U.S. firm. His financial columns appear in several newspapers in North Florida and South Georgia. He has published a book, “All About Money,” consisting of columns he has written over the past 20 years. The book is available at local bookstores and on Amazon.com. He can be reached at 904-753-0236 or at email@example.com.)