Aided by Record Low Mortgages, Florida's Housing Market Enjoys Uptick

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Florida's median home price, pending sales rise

Florida Realtors are reporting that the sunshine state's housing market showed positive signs of recovery despite the continuing coronavirus pandemic in June 2020, with more new pending sales, more pending inventory and higher median sales prices compared to a year ago.

Single-family existing homes sales increased year-over-year, up by 1.3% - the first increase since March and a significant change compared to April and May, according to Florida Realtors Chief Economist Dr. Brad O'Connor.

"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% for the year compared to the first half of 2019," he noted.

The June market data shows the resilience of Florida's residents, economy and real estate sector, according to 2020 Florida Realtors President Barry Grooms.

"Over the past few months, our homes have become more important than ever," Grooms said. "Many buyers and sellers understandably hit the pause button in recent months due to the coronavirus, but record-low interest rates now are helping to fuel pent-up demand.

"As families have been navigating the challenges of working remotely, online classes and other daily activities all together under the same roof, many buyers are considering new must-haves when it comes to their homes. And Realtors in every community can help, with advice and knowledge on local market conditions."

Last month's closed sales of single-family homes statewide rose 1.3% year-over-year, totaling 27,650, while condo-townhouse sales decreased 10.9%, for a total of 8,996. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

In June, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 102 consecutive months. The statewide median sales price for single-family existing homes was $282,000, up 4.4% 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 $210,000, up 7.7% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

New pending sales continued to trend upwards for a second month, according to Chief Economist O'Connor. "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. Statewide new pending sales of single-family homes were up 23.2% year-over-year," he said. "Meanwhile, new pending sales of condo-townhouse units rose 19.8% compared to June 2019.

"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. We can't expect this supercharged level of sales growth to last forever; at some point, we will burn through 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."

On the supply side of the market, inventory remains scarce and is an area of concern, particularly in the single-family existing home category, which was at a restricted 2.8 months' supply in June, O'Connor noted. Condo-townhome inventory (active listings) was at a 5.7-months' supply.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.16% in June 2020, down from the 3.80% averaged during the same month a year earlier.