Florida Realtors: July Housing Market Had ‘Wave of Closed Sales’

Florida Realtors’ data: July saw more sales, higher median prices, more new pending sales and more new listings year-over-year. Single-family sales rose 11.7%; condo sales were up 6.5% – “the 1st year-over-year increase in this category since March,” says Chief Economist O’Connor.

Florida’s housing market continued its positive momentum in July despite the coronavirus pandemic, with more closed sales, more new pending sales, higher median prices and more new listings compared to a year ago, according to Florida Realtors’ latest housing data.

Single-family existing homes sales rose 11.7% compared to July 2019, “the best monthly performance for this property type since January’s nearly 18% increase,” says Florida Realtors Chief Economist Dr. Brad O’Connor.

“New pending sales of single-family homes also showed big gains, up by 21.7% compared to July of last year,” he says. “Coupled with the 23.2% year-over-year increase in new pending sales in June, all indications are that this wave of closed sales will continue on through the end of the summer and perhaps beyond. Year-to-date through July, statewide single-family existing home sales are only down by about 4% compared to last year.”

Given the recent surge, O’Connor thinks it’s “quite likely that by the end of August, we will be in positive territory overall for 2020.”

O’Connor notes that July’s existing condo-townhouse closed sales rose year-over-year as well, while the category’s new pending sales increased 19% compared to July 2019, after a gain of 19.8% year-over-year in June – “putting us in great shape going into the fall.”

July’s market data shows the underlying strength of Florida’s economy and real estate sector, according to 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton.

“The latest data shows our state’s housing market continues to recover from the stall experienced this spring,” Grooms says. “Even as we all must continue to take the recommended precautions to safeguard our health and our communities due to the pandemic, record-low interest rates and a renewed interest in homeownership are driving homebuyer demand.

“Consumers can turn to a local Realtor for expert advice and guidance on how to navigate the complexities of buying or selling a home.”

Last month’s closed sales of single-family homes statewide rose 11.7% year-over-year, totaling 31,436, while existing condo-townhouse sales totaled 11,147, up 6.5% – the first year-over-year increase in this category since March, O’Connor says. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In July, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 103rd consecutive month. The statewide median sales price for single-family existing homes was $295,000, up 10.1% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $210,000, up 11.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Year-over-year growth in median sale prices was up soundly for both property type categories in July, according to O’Connor.

“I caution that these year-over-year percentage increases may be slightly overstated, as many higher-priced market areas that are normally cooling down this time of year are unusually active because their peak seasons were pushed back (due to the pandemic),” he says. “But most of these increases truly can be attributed to home price appreciation being driven by lower mortgage interest rates inducing greater demand. When rates go down, you can afford a higher-priced home – but then again, so can competing buyers, so we’re definitely seeing prices getting bid upward.”

On the supply side of the market, inventory remains scarce and is an area of concern, particularly in the single-family existing home category, which was at a severely restricted 2.5 months’ supply in July. Condo-townhouse inventory (active listings) was at a 5.6-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.02% in July 2020, down from the 3.77% averaged during the same month a year earlier.

 

Fla.’s Single-Family For-Sale Inventory Hits Record Low in 2Q

There’s never been a better time to sell a home. Fla. had only a 2.8-months’ supply of single-family homes in the second quarter – the lowest amount since at least 2008. Economists generally consider a six-month supply to be balanced between buyers and sellers.

Florida homeowners: There’s never been higher demand for your home. Economists generally consider a six-month supply of for-sale homes (inventory) to be balanced between buyers and sellers. An inventory greater than six months is a buyer’s market; an inventory less than six months is a seller’s market.

In the second quarter of 2020, Florida’s inventory of homes was 2.8 months.

“Apart from the condo-townhouse category, we are at record lows right now,” says Florida Realtors Chief Economist Dr. Brad O’Connor.

Florida Realtors records sales of condominiums and townhouses separately, and at 5.7-months’ supply in the 2Q, the condo-townhouse market remains in seller territory, but it’s closer to a balanced market.

The coronavirus-related shutdown impacted Florida’s single-family inventory, but more homes now appear to be coming into the market.

Still, demand from buyers, thanks in part to record-low mortgage rates, has not subsided. Selling prices have continued to trend upward as buyers find too-few available homes for sale. In the second quarter, the median price for a Florida single-family home was $277,500 – 4.7% higher year-to-year.

“All indications are that Florida will continue to see home sales surge through the end of the summer, with our biggest near-term issue being a severe lack of single-family inventory,” O’Connor said in the report. “With mid-year inventory levels down over 27% compared to last year, the scarcity of homes on the market will continue to propel prices upward. Price growth has remained so strong throughout the pandemic that at the mid-point of the year, Florida has already seen close to $50 billion worth of closed single-family home sales – less than 2% off last year’s pace.”

The inventory problem isn’t just in Florida. Fannie Mae’s latest U.S. market report found similar conditions nationwide, with a few buyers pulling back as home prices continue to rise.

“Supply constraints appear to be applying upward pressure to consumers’ home price expectations, which in turn has contributed to both a sharp reversal in optimism about whether it is a good time to buy a home and further improvement in home-selling sentiment,” says Doug Duncan, senior vice president and chief economist at Fannie Mae.

© 2020 Florida Realtors®

 

 

Fla.’s Housing Market Shows June Upswing Despite COVID-19

 

Florida Realtors’ data: More new pending sales, more pending inventory and higher median sales prices year-over-year in June. Single-family closed sales rose 1.3% – 1st increase since March and a significant change compared to April and May, says Chief Economist O’Connor.

Florida’s housing market in June showed positive signs of recovery despite the continuing coronavirus pandemic, with more new pending sales, more pending inventory and higher median sales prices compared to a year ago, according to Florida Realtors® latest housing data. Single-family existing homes sales increased year-over-year, up by 1.3% – the first increase since March and a significant change compared to April and May, according to Florida Realtors Chief Economist Dr. Brad O’Connor.

“Thanks to this nice recovery in June, plus the unusually strong sales growth we had ahead of the pandemic in January and February, here at the mid-point of 2020, closings are only down a little over 7% for the year compared to the first half of 2019,” he noted.

The June market data shows the resilience of Florida’s residents, economy and real estate sector, according to 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton.

“Over the past few months, our homes have become more important than ever,” Grooms said. “Many buyers and sellers understandably hit the pause button in recent months due to the coronavirus, but record-low interest rates now are helping to fuel pent-up demand.

“As families have been navigating the challenges of working remotely, online classes and other daily activities all together under the same roof, many buyers are considering new must-haves when it comes to their homes. And Realtors in every community can help, with advice and knowledge on local market conditions.”

Last month’s closed sales of single-family homes statewide rose 1.3% year-over-year, totaling 27,650, while condo-townhouse sales decreased 10.9%, for a total of 8,996. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In June, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 102 consecutive months. The statewide median sales price for single-family existing homes was $282,000, up 4.4% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $210,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

New pending sales continued to trend upwards for a second month, according to Chief Economist O’Connor. “If we assume new pending sales trends will continue to provide reliable forecasts of closings in the months to come, then based on the latest numbers from June, we can expect a very good summer. Statewide new pending sales of single-family homes were up 23.2% year-over-year,” he said. “Meanwhile, new pending sales of condo-townhouse units rose 19.8% compared to June 2019.

“Several factors are playing into this renewed demand for housing, but by far, the most important factors are record-low mortgage interest rates and the release of all the pent-up demand from our derailed spring buying season. We can’t expect this supercharged level of sales growth to last forever; at some point, we will burn through this pent-up demand. But interest rates are not expected to rise any time soon and they still have some room to go lower, so we have every reason to be optimistic about sales over the coming months, barring additional negative shocks to the economy.”

On the supply side of the market, inventory remains scarce and is an area of concern, particularly in the single-family existing home category, which was at a restricted 2.8 months’ supply in June, O’Connor noted. Condo-townhome inventory (active listings) was at a 5.7-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.16% in June 2020, down from the 3.80% averaged during the same month a year earlier.

 

Fla.’s May Housing Market Shows COVID-19 Impact, Signs of Recovery

Florida Realtors’ data: Closed sales and new listings were down year-over-year due to the virus and economic turmoil. But median prices were up and new pending sales for single-family existing homes rose 2.3% – a positive sign for recovery, notes Chief Economist O’Connor.

Florida’s housing market in May continued to reflect the economic impact of the coronavirus pandemic that shut down businesses and roiled the global economy. While the latest housing data from Florida Realtors® reported lower levels of closed sales and new listings compared to a year ago, median sales price increased and new pending sales for single-family existing homes rose 2.3% compared to a year ago – a positive sign for the housing sector, according to Florida Realtors Chief Economist Dr. Brad O’Connor.

“The most significant evidence we have of a rebound are the year-over-year changes we see for new pending sales in May,” he says. “That 2.3% increase is in significant contrast to what we saw in April, when new pending sales were about 35% lower than the previous April.”

In contrast, new pending sales of condos and townhouses last month fell by 16.8% compared to May 2019, but that’s an improvement over the April figure. O’Connor adds, “New pending condo and townhouse sales are clearly on a recovery trajectory right now, but are simply being surpassed by the more substantial recovery in single-family home new pending sales.”

“As Florida’s businesses and economy continue to reopen, it remains vital for all of us to follow the recommended health guidelines, practice social distancing and take the necessary precautions to safeguard each other and our communities,” says 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “The pandemic has shown that having a place to call home is priceless – and all across the state, a buyer or seller can turn to a local Realtor for support, advice and expertise.”

Last month’s closed sales of single-family homes statewide ped 36.2% year-over-year, totaling 19,622, while condo-townhouse sales declined 50.3%, for a total of 6,069. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In May, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 101 consecutive months. The statewide median sales price for single-family existing homes was $270,000, up 1.5% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $201,472, up 3.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Chief Economist O’Connor notes that the in closed sales in May wasn’t surprising, based on what the pending sales data in March and April showed. However, “the good news is that this is likely the worst of it for now,” he says. “May’s pending sales clearly show we’re recovering, it’s just that we won’t see this recovery in closed sales until a month or two from now when these deals are finalized.

“Overall, housing demand continues to be driven by record-low mortgage rates that show no signs of rising significantly any time soon. June could be a very strong month for sales given the high levels of pent-up demand that has likely been released in recent weeks. Credit remains tight, but there is some evidence that it’s loosened up a bit compared to where we were in April, as lenders have adjusted to the situation and incorporated new information about the performance of the economy. Lenders continue to face an enormous volume of applications, however, both for purchases and refinancings, which is affecting their ability to accommodate the demand we’re seeing.”

Ultimately, what happens next with the COVID-19 pandemic will affect the long-run outlook for housing in Florida and elsewhere in the U.S., O’Connor says.

“Most of the official economic forecasts from both public- and private-sector economists as of late bake in an assumption that there will not be a major resurgence of the virus this year, which means we should consider those figures cautiously,” he says. “A large second wave of this pandemic is the greatest threat to the housing market and greater economy right now, so it’s important that we all continue to do our part to limit the spread – especially as we continue to try to reopen the economy.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.23% in May 2020, down from the 4.07% averaged during the same month a year earlier.

 

 

COVID-19 Pandemic Impacts Fla.’s Housing Market in April

Florida Realtors’ data: Fewer closed sales, pending sales, new listings and other metrics year-over-year due to the virus and economic shutdown. Chief Economist O’Connor notes home values are generally holding firm.

In April, economic turmoil caused by the coronavirus pandemic, resulting business shutdowns and subsequent rising unemployment rates impacted Florida’s housing market. The latest housing data from Florida Realtors® reported lower levels of closed sales, pending sales, new listings and other metrics compared to a year ago – except for median sale price, which rose compared to April 2019.

“The impact of COVID-19 on Florida, the U.S. and throughout the world was fully realized in April,” said 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “Many businesses shut down as people sheltered in-place to protect themselves and their loved ones, following the governor’s stay-at-home order and recommended health practices. Job losses rose and unemployment claims overtaxed the state’s system. It’s no surprise that many buyers and sellers put their plans on hold for now, because of the pandemic and the current economy.

“As Florida continues to reopen businesses and activities in phases, we continue to follow social distancing and health guidelines to protect ourselves and our communities. People still need a place to call home, and Realtors in every community stand ready to help buyers and sellers who need support and guidance in these uncertain times.”

Last month’s closed sales of single-family homes statewide fell 20.7 % year-over-year, totaling 21,403 while condo-townhouse sales declined 36.5%, for a total of 7,506. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In April, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 100 months in a row. The statewide median sales price for single-family existing homes was $275,000, up 6% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $209,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Florida Realtors Chief Economist Dr. Brad O’Connor noted that April’s decline in closed sales was in line with the in new pending sales shown in the March data. Meanwhile, median sale price continued to rise in April for both single-family homes and condo-townhouse properties, signaling that home values are generally holding firm – a trend that’s in line with what basic economic theory would predict when there are offsetting declines in both demand and supply, he said.

“Looking ahead to May, all indications are that we will continue to see stable prices but will see a further decline in closed sales,” O’Connor said. “New pending sales for April were down over 35.1% in the single-family category year-over-year, and they were down 56.6% in the condo and townhouse category. However, the silver lining is the majority of this occurred in the first couple weeks of the month. In each week of the second half of the April, we saw drastic improvement in the number of homes going under contract.

“The trajectory of this improvement has been strong enough, that preliminary data points to the possibility that we could see positive year-over-year growth in new pending sales in several markets across the state in May – particularly for single-family homes. What’s more, there’s a lot of current housing market data across the U.S. that points toward this being a national trend.”

For example, over the past four weeks, the Mortgage Bankers Association (MBA) has been reporting robust increases in the number of loan applications submitted for U.S. home purchases, the chief economist noted.

“Another metric that showed improvement over the course of April was new listings,” O’Connor said. “Overall for the month, new listings were down over 27.2% year-over-year in the single-family category, while new listings of condos and townhouses were down 38.5% percent. Again, though, like new pending sales, the pace of new listings was slowest in the first two weeks of April, after which it started to recover. This recovery in the pace of new listings was not as strong as what we saw for new pending sales, though – so we appear to be, for now, in a situation where demand is rebounding a bit faster than supply.”

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.31% in April 2020, down from the 4.14% averaged during the same month a year earlier.

 

 
 
 

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