By John Haughey | The Center Square
Florida single-family home/condo sales are rebounding dramatically after COVID-19 shutdowns stymied spring transactions while the state’s median home prices increased for a 3rd straight month in July, according to Florida Realtors’ monthly report.
“All indications are Florida will continue to see home sales surge through the end of the summer and perhaps beyond, with our biggest near-term issue being a severe lack of single-family inventory,” Florida Realtors’ Chief Economist Dr. Brad O’Connor said.
Florida Realtors’ report notes because of brisk sales, “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 was at a 5.6-months’ supply.”
Sales pressure is spurred by low interest rates. According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.02 percent in July, down from July 2019’s 3.77 percent.
July’s closed sales of 31,436 single-family Florida homes was an 11.7-percent increase over July 2019 sales, “the best monthly performance for this property type since January’s nearly 18-percent increase,” O’Connor said.
Although 2020 year-to-date single-family home sales are down by 4 percent compared to last year, O’Connor said year-to-date sales were down 35 percent in April.
If recent trends continue, he said, “It’s quite likely that by the end of August, we will be in positive territory overall for 2020.”
Florida’s surge in home sales is reflected nationally. July’s 5.86 million U.S. home/condo sales was a 24.7-percent increase over July 2019, notching a single-month record for the second straight month, according to the National Association of Realtors.
Florida new pending sales of single-family homes were up by 21.7 percent compared to July 2019, the second straight month with significant year-over-year increases; new pending sales of single-family homes were up by 23.2 percent in June.
Sales of 11,147 condo-townhouses in Florida last month increased 6.5-percent over July 2019, marking the first 2020 month to top 2019’s monthly totals since March.
July’s condo-townhouse closed sales rose by 19 percent compared to July 2019, after a gain of 19.8 percent year-over-year in June, “putting us in great shape going into fall,” O’Connor said.
The median Florida sales price for a single-family home in July was $295,000, up 10.1 percent from the previous year, according to Florida Realtors, and the median price for condo-townhouse units was $210,000, up 11.7 percent over July 2019.
By comparison, the national median single-family home price is $304,100, according to the National Association of Realtors.
The increases mark the 103rd consecutive month statewide median single-family homes/condo prices have gone up.
O’Connor cautioned the “slightly overstated” surge in median prices can be partially attributed to how COVID-19 skewered traditional sales patterns.
“Higher-priced market areas that are normally cooling down this time of year are unusually active because their peak (sales) seasons were pushed back” by spring COVID-19 shutdowns, he said.
Nevertheless, Florida home values should continue to increase.
“Most increases truly can be attributed to home price appreciation being driven by lower mortgage interest rates inducing greater demand,” he wrote. “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.”
There are regional variations. For instance, home sales in Miami-Dade and Broward counties dropped by more than 6 percent in July from July 2019, although that represents a rebound from May, when year-over-year sales plummeted by 50 percent, and June, when sales declined by 20 percent.
The Northeast Florida Realtors Association, meanwhile, reports 3,514 July First Coast homes sales, a 15.8-percent increase over July 2019 and 339 more than in June.