Florida June 2020 Real Estate Market Covid Report
The June 2020 statistics from Florida Realtors have just been released, and they erase any remaining doubts that Florida’s housing market is in the midst of a large-scale recovery. This isn’t to say that every segment of the market is performing well, but on the whole, things are looking better than they have in several months.
Let’s start by looking at the statewide statistics for existing single-family home sales. For the first time since March, closed sales were up year-over-year, rising by 1.3 percent. Remember in April and May, closings were down about 21 and 36 percent, respectively. But thanks to this nice recovery in June, plus the unusually strong sales growth we had ahead of the pandemic in January and February, here at the mid-point of 2020, closings are only down a little over 7 percent for the year compared to the first half of 2019. At our current trajectory, in fact, it’s possible that we may end the year with more closed single-family home sales statewide than we had last year.
Of course, if you’ve been following the numbers with us over the past couple of months, you likely saw all of this coming. After all, new pending sales of single-family homes were up 2.3 percent in May. And if we assume new pending sales trends will continue to provide reliable forecasts of closings in the months to come, then based on the latest numbers from June, we can expect a very good summer. Why? Because in June, statewide new pending sales of single-family homes were up over 23 percent, year-over-year.
Several factors are playing into this renewed demand for housing, but by far, the most important factors are record-low mortgage interest rates and the release of all the pent-up demand from our derailed spring buying season. Of course, we cant expect this supercharged level of sales growth to last forever since at some point, we will burn through all of this pent-up demand. But interest rates are not expected to rise any time soon, and they still have some room to go lower, so we have every reason to be optimistic about sales over the coming months, barring additional negative shocks to the economy.
Over in the condo and townhouse category, existing home sales continue to lag those from the single-family category, but they still show significant improvement. Closed sales in this category were down nearly 11 percent year-over-year in June, but keep in mind, they were down over 50 percent in May. Still, the best signal that condos and townhouses are making a comeback comes from probably the most surprising number we saw this month, which is the nearly 20 percent increase in new contracts compared to the same month last year.
Over on the supply side of the market, inventory remains scarce and one of our most immediate areas of concern particularly in the single-family home category. As of the end of June, there were over 27 percent fewer single-family homes listed for sale in Florida’s MLSs than at this time a year ago. Looking at it another way, in three months’ time, we have gone from nearly 84,000 statewide single-family listings at the end of March to under 66,000 listings here at the mid-point of 2020. Fortunately, the condo and townhouse category has fared better, with inventory being down only about 6 percent compared to a year ago.
The one positive aspect of this reduction in the supply of available housing is that it counteracted the temporary drop in home sales activity we saw in the first couple of months in the pandemic, thereby keeping home values relatively stable. But now that demand has come roaring back, we are starting to see rising prices again. The median sale price for closed single-family home sales in June was $282,000, a 4.4 percent increase from a year ago. Over in the condo and townhouse category, the median sale price was up 7.7 percent, to $210,000. As we continue on through 2020, our biggest concern remains the inventory shortage, which could eventually put a cap on the number of possible transactions. But home values should remain stable.