The Florida Realtors released a report on Monday showing that the coronavirus pandemic impacted the housing market across the Sunshine State last month.
The report shows drops in closed sales and new listings when compared to May 2019. However, Dr. Brad O’Connor, the chief economist of the Florida Realtors, pointed to higher median sales prices and new pending sales for single-family homes, insisting those are good signs.
“The most significant evidence we have of a rebound are the year-over-year changes we see for new pending sales in May,” O’Connor said. “That 2.3 percent increase is in significant contrast to what we saw in April, when new pending sales were about 35% percent lower than the previous April.”
Still, new pending sales of condos and townhouses in May 2020 dropped 16.8 percent when compared to May 2019, however O’Connor insisted that was an improvement from April 2020.
“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,” O’Connor said.
Florida Realtors President Barry Grooms, the co-owner of Florida Suncoast Real Estate in Bradenton and a realtor, also weighed in on the report.
“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,” said Grooms. “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.”
Florida also saw a drop in closed sales in May with 19,622 single family home sales, a drop of 36.2 percent from May 2019. Condo-townhouse sales took even more of a dip with 6,069 closed sales, a drop of 50.3 percent from May 2019.
In May, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for the 101st consecutive month. The statewide median sales price for single-family existing homes was $270,000, up 1.5 percent from May 2019. Last month’s statewide median price for condo-townhouse units was $201,472, up 3.3 percent from May 2019. The median is the midpoint; half the homes sold for more, half for less.
O’Connor said the numbers from May was not a surprise after how the pandemic impacted Florida’s real estate market in March and April.
“The good news is that this is likely the worst of it for now,” O’Connor said. “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,” he added.
O’Connor noted the pandemic can continue to impact real estate at the state and national levels in the months to come.
“Most of the official economic forecasts from both public- and private-sector economists as of late bake in an assumption that there will be a major resurgence of the virus this year, which means we should consider those figures cautiously,” he said. “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 percent in May 2020, down from the 4.07 percent averaged during May 2019.