Demand for single-family homes in Florida driving inventory down, prices up

By John Haughey | The Center Square

Existing single-family home sales in Florida rose nearly 23% last month in compared with November 2019 as low interest rates continue to foster high demand for affordable housing in the Sunshine State despite the pandemic.

According to Florida Realtors’ November data report, the state’s housing market saw more closed sales, more new pending sales, higher median prices and more new listings compared with the same month a year ago.

“Our homes are more important than ever, becoming the hub of our daily lives as we continue to take steps to safeguard our health, our families and our communities in the face of the ongoing pandemic,” Florida Realtors President Barry Grooms said. “With high demand, Florida’s housing market continues to gain momentum and provide support for the state’s economy.”

Florida Realtors’ full housing activity report showed closed sales of existing single-family homes statewide totaled 26,406, up 22.9% year-over-year. Closed sales may occur from 30-90 days after a sales contract is written.

The statewide median sales price for an existing single-family home in Florida was $305,000, up 14.1% from November 2019, according to Florida Realtors’ Research Department, which builds its monthly tabulations in tandem with data aggregated by local Realtor boards and associations.

Condo-townhouse sales across the state in November totaled 11,003, up 30.2% over November 2019, according to Florida Realtors. The statewide median price for a condo-townhouse unit was $228,000, up 16.9% over last November.

The increases in statewide median sales prices for existing single-family homes and condo-townhouse properties rose year-over-year in November for the 107th consecutive month in Florida.

November’s gains in sales and sales prices were the highest monthly year-over-year increase of any month in 2020, except for October’s 26.9% year-over-year boost, Florida Realtors Chief Economist Dr. Brad O’Connor noted.

“This growth in sales remained very broad-based in November, with all 22 of Florida’s metro areas seeing positive year-over-year gains,” he said. “The question remains, though, how long can we keep up this pace?”

Mortgage rates hit a record low last week for the 16th time in 2020. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.77% in November 2020, significantly lower than the 3.7% average of November 2019. [Take a moment to learn the difference between bridge loan vs home equity loan.]

Freddie Mac’s Dec. 24 Primary Mortgage Market Survey reported the average rate on the 30-year fixed mortgage had fallen to 2.66% and the average 15-year mortgage rate fell 2 percentage points to 2.19%.

Mortgage rates edged slightly upward Monday, according to Motley Fool, but the 15-year fixed-rate loan remained the same.

“Mortgage rates remain at all-time lows and demand will likely remain strong in the coming months, but inventory levels – particularly for single-family homes – remain far below normal levels,” O’Connor said. “As of the end of November, our statewide inventory of single-family homes was down 41.3 percent compared to a year ago. Even listings of properties north of a million dollars, where we’ve had more inventory, are down by almost 25 percent.” [Some California buyers use hard money lenders los angeles for their purchases.]

New listings statewide increased year-over-year in November in both property categories by 0.3% for existing single-family homes and by 4.2% for condo-townhouse units.

O’Connor said with interest rates expected to remain low, the biggest problem with the state’s real estate market is existing single-family home inventory, with demand – and prices – anticipated to increase for high-end properties.

“We’ve seen a greater share of luxury home sales this year because the inventory shortage hasn’t hit this segment of the market as hard,” he said. “However, a substantial amount of this increase is entirely due to the lack of supply in the face of strong demand resulting in greater competition among prospective home buyers.”