AUGUST SALES STAY SUPER HOT, BUT INVENTORY STILL TIGHT
Florida Realtors latest housing market data
More sales, higher median prices, more new pending sales and more new listings year-over-year. Single-family sales up 8.8%; condo sales up 10.3% – and sales in the upper price tiers paved the way for the surge, says Chief Economist Dr. Brad O’Connor.
Last month’s closed sales of single-family homes statewide rose 8.8% year-over-year, totaling 29,495, while existing condo-townhouse sales increased 10.3% over August 2019 and totaled 11,100. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
In August, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 104 months in a row. The statewide median sales price for single-family existing homes was $300,000, up 13.2% 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 $217,500, up 14.5% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Luxury Homes Sales Lead Surge
Sales in the upper price tiers for both existing single-family homes and existing condo-townhouse properties paved the way for the surge in closed transactions. Dr. Brad O’Connor states:
“Sales of single-family homes of $1,000,000 or more were up nearly 82% year-over-year, while sales in the $600,000 to $1,000,000-range were up almost 72%,” he says. “And, as was the case in the single-family category, condo and townhouse sales of $1,000,000 and above increased by 63.5% from last August, and sales in the $600,000 to $1,000,000-range rose by more than 71%.”
Dr. O’Connor adds:
“The fact that upper-tier properties are leading the resurgence of the housing market at this early stage shouldn’t really be a surprise to any student of economic history. In most recessions, the stock market is one of the first things to recover, and that’s certainly been the trend this time around, just as it was during the Great Recession. Of course, there’s no guarantee that the stock market will continue to trend in its current direction, as there remains a great deal of uncertainty out there. However, stockholders have recovered a substantial amount of asset wealth that they lost during the drop earlier this year; they’re now financially in a good position to reallocate their assets – including into and out of real estate as they see fit. And since stocks are disproportionately held by the wealthier individuals among us, that translates into a lot more real estate sales activity among the upper tier of properties.”
Video of Housing Statistics
Listing Inventory Still Low
New listings rose year-over-year in both property type categories in August, up by 2% for single-family existing homes and 15.1% for condo and townhouse units.
“Still, this hasn’t been enough to push our inventory growth into positive territory.” O’Connor says. “This is simply an issue that isn’t going to go away overnight.”
On the supply side of the market, inventory (active listings) remains restricted, particularly in the single-family existing home category, which was at a limited 2.3-months’ supply in August. Condo-townhouse inventory was at a 5.3-months’ supply.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 2.94% in August 2020, down from the 3.62% averaged during the same month a year earlier.
2020 Florida Realtors President Barry Grooms, a Realtor and co-owner of Florida Suncoast Real Estate Inc. in Bradenton states
“Florida’s housing market continues to gain momentum and provide support for the state’s economy, even as we all remain vigilant in protecting our health, safeguarding our communities and trying to keep businesses going during the ongoing pandemic,” says “Our homes have become more important than ever over the past few months as we’ve dealt with stay-at-home orders, working from home, helping children with remote education and more.