Real estate markets across the country witnessed a rapid downturn due to the Covid-19 global pandemic and its accompanying lockdowns. Florida governor Ron DeSantis ordered a statewide 30-day stay-at-home order back in April to help flatten the curve and slow the spread of the disease.
While this measure helped, July saw a major resurgence in cases in the state. Numbers declined again following a peak on July 12, 2020, although over 580,000 individuals in Florida have contracted the virus and more than 9,700 individuals lost their lives. Florida realtors, however, kept the housing market thriving, and cities across the state eagerly await a full return.
Across the state, homeowners and potential buyers watched the median price for a single-family home increase 4.4 percent year over year to $282,000. The median sales price increased $17,000 since last January before the coronavirus arrived on America’s shores. Florida condo sales likewise saw a jump in June, witnessing a 40 percent year-over-year improvement compared to May.
Furthermore, buyers saw the median price increase $8,528 during this period to $210,000 on average. Sales ballooned in certain markets, including Tampa, Clearwater, Orlando, and Miami. Visit NRIA for more information on housing markets in popular parts of the country, including Florida, Boston, and Philadelphia.
Individuals and businesses alike worry about the future of tourism in the state. Fewer people travel to Florida at this time, which experts blame on the shutdown of major attractions such as Disney World. Although the park and many other attractions have reopened, they aren’t operating at full capacity.
Cruise ships remain docked in many areas, professional sports have paused or are operating on modified schedules, and more. Florida’s tourist industry continues to struggle today, which is of concern as it is a $40 billion industry.
A Covid-19 vaccine appears to be on the horizon. Many companies continue to work toward finding an effective means of slowing or stopping the disease. Until they do, the housing market may remain subdued. However, individuals who weren’t looking to buy find they now wish to do so in many parts of the country. They discovered they want more open space to move around in the event of a lockdown, or they need more room as they are working from home. Some wish to move to an area that is less densely populated. With low-interest rates today, people find they want to buy now before these rates climb.
Fear of a Housing Market Crash
Lockdowns led to the loss of countless jobs, many in the hospitality sector that serves tourists. This raised fears of another housing market crash, but that concern appears to have been laid to rest with the stimulus money provided to Americans. The United States has avoided a prolonged recession, a housing market crash, and the crash of the stock market. Today, millennials account for forty percent of homebuyers, and they look for homes that remain affordable when purchased with a mortgage.
As Florida home prices remain low, the stimulus funds help make up a portion of the down payment required by lenders when providing a mortgage, and the second round of funds may be on the way. In contrast, homes in California remain out of the reach of many, because of high housing prices in the state.
Homebuyers find they need to look to the supply to get a better picture of the overall market. New house listings increased by more than 7,000 over figures seen in April, but this number remains below last year’s totals. New listings dropped by 8.7 percent, while active listings decreased by 18 percent. Homebuyers and realtors look to other figures when assessing the state of the housing market in Florida. Year to date, home listings in the state dropped by 16.2 percent while months of supply decreased by 17.5 percent. Sellers like hearing this news, as this suggests prices will soon rise.
Certain cities continue to thrive today, including Bradenton, Cape Coral, Daytona Beach, Fort Myers, Jacksonville, Lakeland, Naples, Sarasota, and Walton Beach. They witnessed the highest growth in home prices. Realtors, however, saw sales volume drops in several cities, such as Bradenton, Fort Lauderdale, Fort Walton, Lakeland, Melbourne, Miami, Naples, Punta Gorda, Sarasota, and Vero Beach. Buyers and sellers alike need this information when determining if now is the time to enter or exit the real estate market, as buying in one area often makes more sense than making a purchase in another. It all depends on the current conditions.
Condo and townhome sales increased 5.8 percent year over year statewide while sales decreased 7.1 percent. Cities seeing the largest price gains included Delton/Daytona Beach, Gainesville, Miami, and Sebring. Some of these cities likewise saw large gains in condo sales, such as Delton/Daytona Beach. Other cities seeing gains in condo sales were The Villages and Panama City.
Florida remains an attractive real estate market even in times of crisis. Many factors play a role in this desirability, including low mortgage rates and Florida taxes. The market offers more houses for buyers to choose from, these homes come with more square footage, and the lockdowns led to pent-up demand. All benefit those looking to sell a home in Florida, and realtors should expect to see more activity in the coming months. The warm weather, lack of estate taxes, and recreational opportunities encourage people to move to the state, especially those who want to get away from states with high taxes and extended virus outbreaks.
New York continues to watch people flee from the state. The exodus has led to Governor Cuomo asking his friends to come back, as the state is struggling with decreased revenue. He finds he isn’t alone. California sees residents leaving in droves and heading to states with more favorable conditions. Florida serves as one of those states.
As active inventory remains down about 27 percent, future sales remain a concern as do significant price increases. New home builders want to help resolve this issue, and demand remains high for new houses. However, buyers need to monitor active listings when determining if it’s time to make a purchase. They must consider the entire market to get an accurate picture of when and where to buy and why now is or isn’t a good time