A Glimpse at the Future of the Florida Residential Real Estate Market
Real estate markets across the country saw a rapid downturn due to the global Covid-19 pandemic and associated lockdowns. Florida Governor Ron DeSantis placed a nationwide 30-day stay-at-home order back in April to smooth the curve and slow the spread of the disease.
While this measure helped, there was a marked revival of cases in the state in July. After peaking on July 12, 2020, the numbers fell again, despite the fact that over 580,000 people in Florida have contracted the virus and more than 9,700 people have lost their lives. However, Florida real estate agents kept the property market thriving, and cities across the state are eagerly awaiting a full return.
Across the state, homeowners and prospective buyers watched the average price for a single family home jump 4.4 percent year over year to $ 282,000. The median retail price has increased by $ 17,000 since last January, before the coronavirus hit America’s coast. Florida condominium sales also rose 40 percent year over year in June.
Additionally, buyers saw the average price increase by $ 8,528 to an average of $ 210,000 during that period. Sales skyrocketed in certain markets, including Tampa, Clearwater, Orlando, and Miami. Visit NRIA for more information on the housing markets in popular parts of the country, including Florida, Boston, and Philadelphia.
Individuals and businesses alike are concerned about the future of tourism in the state. Fewer people are currently traveling to Florida, which experts blame for closing key attractions like Disney World. Although the park and many other attractions have reopened, they are not being used to full capacity.
Cruise ships remain docked in many areas, professional sports have stopped or work according to changed schedules, and more. Florida’s tourism industry is still struggling today, which is cause for concern as it is a $ 40 billion industry.
A Covid-19 vaccine seems to be on the horizon. Many companies continue to work to find an effective way to slow down or end the disease. Until then, the real estate market can remain subdued. However, people who did not want to buy can now find it in many parts of the country. They found that if locked, they would want more space to move around or that they would need more space when working from home. Some would like to move to an area that is less populated. With interest rates low today, people want to buy now before they go up.
Fear of a housing market crash
Lockdowns have resulted in the loss of countless jobs, many in the hospitality industry serving tourists. This raised fears of another real estate market crash, but that concern appears to be due to the incentives given to Americans. The United States avoided a prolonged recession, a housing market crash, and the stock market crash. Today, millennials make up forty percent of homebuyers, and they are looking for homes that will remain affordable when bought with a mortgage.
With Florida home prices remaining low, the stimulus funds are helping to pay some of the down payment lenders need to secure a mortgage, and the second round of funding could be on the way. In contrast, homes in California remain inaccessible to many due to the high real estate prices in the state.
Homebuyers need to pay attention to supply to get a better picture of the overall market. The number of new homes increased by more than 7,000 from April’s numbers, but that number remains below the previous year’s levels. New entries were down 8.7 percent, while active entries were down 18 percent. Home buyers and brokers consider other numbers when assessing the state of the Florida real estate market. Since the start of the year, offers for homes in the state have declined 16.2 percent, while supply months have declined 17.5 percent. Sellers like to hear this news as it suggests prices will go up soon.
Certain cities continue to thrive today, including Bradenton, Cape Coral, Daytona Beach, Fort Myers, Jacksonville, Lakeland, Naples, Sarasota, and Walton Beach. They saw the highest growth in property prices. However, brokers saw sales decline in several cities including Bradenton, Fort Lauderdale, Fort Walton, Lakeland, Melbourne, Miami, Naples, Punta Gorda, Sarasota, and Vero Beach. Buyers and sellers alike need this information to determine whether it is time to enter or leave the property market, as buying in one area often makes more sense than buying in another. It all depends on the current conditions.
Condominium and townhouse sales nationwide rose 5.8 percent year over year, while sales declined 7.1 percent. The cities with the largest price increases included Delton / Daytona Beach, Gainesville, Miami and Sebring. Some of these cities, such as Delton / Daytona Beach, also saw large increases in condominium sales. Other cities where condominium sales increased 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 Florida mortgage rates and taxes. The market has more homes to choose from for buyers, those homes have more space, and the lockdowns have created pent-up demand. All of which benefit those looking to sell a Florida home, and realtors should expect more activity in the coming months. The warm weather, lack of estate taxes, and recreational opportunities are encouraging people to relocate to the state, especially those looking to escape states with high taxes and widespread virus outbreaks.
New York continues to watch people flee the state. The exodus has resulted in Governor Cuomo asking his friends to return as the state grapples with falling revenues. He finds that he is not alone. In California, residents flock to states with more favorable conditions. Florida serves as one of those states.
With active inventory continuing to decline by around 27 percent, future sales and significant price increases remain a concern. New builders want to help solve this problem and the demand for new homes remains high. However, buyers need to monitor active listings to see if it is time to make a purchase. You need to consider the entire market to get an accurate picture of when and where to buy and why or not now is a good time