COVID-19 Pandemic Impacts Fla.’s Housing Market in April
ORLANDO, Fla. – In April, economic turmoil caused by the coronavirus pandemic, resulting business shutdowns and subsequent rising unemployment rates impacted Florida’s housing market. The latest housing data from Florida Realtors® reported lower levels of closed sales, pending sales, new listings and other metrics compared to a year ago – except for median sale price, which rose compared to April 2019.
“The impact of COVID-19 on Florida, the U.S. and throughout the world was fully realized in April,” said 2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “Many businesses shut down as people sheltered in-place to protect themselves and their loved ones, following the governor’s stay-at-home order and recommended health practices. Job losses rose and unemployment claims overtaxed the state’s system. It’s no surprise that many buyers and sellers put their plans on hold for now, because of the pandemic and the current economy.
“As Florida continues to reopen businesses and activities in phases, we continue to follow social distancing and health guidelines to protect ourselves and our communities. People still need a place to call home, and Realtors in every community stand ready to help buyers and sellers who need support and guidance in these uncertain times.”
Last month’s closed sales of single-family homes statewide dropped 20.7 % year-over-year, totaling 21,403 while condo-townhouse sales declined 36.5%, for a total of 7,506. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
In April, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 100 months in a row. The statewide median sales price for single-family existing homes was $275,000, up 6% 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 $209,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Florida Realtors Chief Economist Dr. Brad O’Connor noted that April’s decline in closed sales was in line with the drop in new pending sales shown in the March data. Meanwhile, median sale price continued to rise in April for both single-family homes and condo-townhouse properties, signaling that home values are generally holding firm – a trend that’s in line with what basic economic theory would predict when there are offsetting declines in both demand and supply, he said.
“Looking ahead to May, all indications are that we will continue to see stable prices but will see a further decline in closed sales,” O’Connor said. “New pending sales for April were down over 35.1% in the single-family category year-over-year, and they were down 56.6% in the condo and townhouse category. However, the silver lining is the majority of this drop occurred in the first couple weeks of the month. In each week of the second half of the April, we saw drastic improvement in the number of homes going under contract.
“The trajectory of this improvement has been strong enough, that preliminary data points to the possibility that we could see positive year-over-year growth in new pending sales in several markets across the state in May – particularly for single-family homes. What’s more, there’s a lot of current housing market data across the U.S. that points toward this being a national trend.”
For example, over the past four weeks, the Mortgage Bankers Association (MBA) has been reporting robust increases in the number of loan applications submitted for U.S. home purchases, the chief economist noted.
“Another metric that showed improvement over the course of April was new listings,” O’Connor said. “Overall for the month, new listings were down over 27.2% year-over-year in the single-family category, while new listings of condos and townhouses were down 38.5% percent. Again, though, like new pending sales, the pace of new listings was slowest in the first two weeks of April, after which it started to recover. This recovery in the pace of new listings was not as strong as what we saw for new pending sales, though – so we appear to be, for now, in a situation where demand is rebounding a bit faster than supply.”
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.31% in April 2020, down from the 4.14% averaged during the same month a year earlier.
To see the full statewide housing activity reports, go to Florida Realtors’ Statistics and Research section on floridarealtors.org. Realtors also have access to local market stats (password protected) on Florida Realtors’ website.
© 2020 Florida Realtors®