Florida’s Housing Market Makes Up Ground in August

Florida’s housing market reported more closed sales, more new pending sales, higher median prices and more new listings in August compared to a year ago despite the ongoing pandemic, according to Florida Realtors’ latest housing data.

According to a Florida Realtors report this week, single-family existing homes sales rose 8.8 percent compared to August 2019.

“Florida’s housing market continues to gain momentum and provide support for the state’s economy, even as we all remain vigilant in protecting our health, safeguarding our communities and trying to keep businesses going during the ongoing pandemic,” said Florida Realtors President Barry Grooms, a realtor and co-owner of Florida Suncoast Real Estate in Bradenton. “Our homes have become more important than ever over the past few months, as we’ve dealt with stay-at-home orders, working from home, helping children with remote education and more.

“Realtors are available in every community to help guide buyers and sellers through today’s challenging market conditions,” he added.

Last month’s closed sales of single-family homes statewide rose 8.8 percent year-over-year, totaling 29,495, while existing condo-townhouse sales increased 10.3 percent over August 2019 and totaled 11,100. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In August, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 104 months in a row. The statewide median sales price for single-family existing homes was $300,000, up 13.2 percent 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 $217,500, up 14.5 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to Florida Realtors Chief Economist Brad O’Connor, sales in the upper price tiers for both existing single-family homes and existing condo-townhouse properties paved the way for the surge in closed transactions.

“Sales of single-family homes of $1,000,000 or more were up nearly 82 percent year-over-year, while sales in the $600,000 to $1,000,000-range were up almost 72 percent,” he said. “And, as was the case in the single-family category, condo and townhouse sales of $1,000,000 and above increased by 63.5 percent from last August, and sales in the $600,000 to $1,000,000-range rose by more than 71 percent.”

O’Connor added, “The fact that upper-tier properties are leading the resurgence of the housing market at this early stage shouldn’t really be a surprise to any student of economic history. In most recessions, the stock market is one of the first things to recover, and that’s certainly been the trend this time around, just as it was during the Great Recession. Of course, there’s no guarantee that the stock market will continue to trend in its current direction, as there remains a great deal of uncertainty out there. However, stockholders have recovered a substantial amount of asset wealth that they lost during the drop earlier this year; they’re now financially in a good position to reallocate their assets – including into and out of real estate as they see fit. And since stocks are disproportionately held by the wealthier individuals among us, that translates into a lot more real estate sales activity among the upper tier of properties.”

New listings rose year-over-year in both property type categories in August, up by 2 percent for single-family existing homes and 15.1 percent for condo and townhouse units.

“Still, this hasn’t been enough to push our inventory growth into positive territory.” O’Connor said. “This is simply an issue that isn’t going to go away overnight.”

On the supply side of the market, inventory (active listings) remains restricted, particularly in the single-family existing home category, which was at a limited 2.3-months’ supply in August. Condo-townhouse inventory was at a 5.3-months’ supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.94 percent in August 2020, down from the 3.62 percent averaged during the same month a year earlier.

 

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