Aided by Strong Inbound Migration, Florida Home Sales Explode

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Florida Realtors are reporting that the sunshine state's housing market continued to be a bright spot for the state's economy in October 2020, even as the coronavirus pandemic showed no signs of easing. More closed sales, more new pending sales, higher median prices and more new listings were recorded statewide last month compared to October 2019.

"Housing is an essential need, and there is strong demand from buyers despite the ongoing pandemic - and perhaps even sparked by the fact that our homes have become more important than ever this year," said 2020 Florida Realtors President Barry Grooms. "But increasing constraints on the inventory of for-sale homes in Florida is making it more and more difficult for buyers, and putting pressure on rising prices, which in turn impacts affordability. In October, the statewide inventory for single-family existing homes was at the record low of a 2.1-months' supply, while the inventory for existing condos dropped to a record low of a 4.9-months' supply."

In October, closed sales of single-family homes statewide totaled 29,659, up 26.9% year-over-year, while existing condo-townhouse sales totaled 12,110, up 30.3% over October 2019. Closed sales may occur from 30- to 90-plus days after sales contracts are written.

The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in October for 106 consecutive months. The statewide median sales price for single-family existing homes was $305,000, up 15.6% 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 $221,000, up 15.9% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

According to Florida Realtors Chief Economist Dr. Brad O'Connor, "the strong and persistent level of demand seen throughout the state, coupled with worsening inventory shortages, continued to drive up home values in October."

He added, "This is probably a good time to remember, however, that while rising median sale prices are almost always indicative of general home price appreciation, they can also be driven upward by a change in the mix of homes that are selling. For example, if starter homes made up a larger share of the homes that sold last year, while luxury homes made up a larger share of those sold this year instead, then of course we'd expect the median - or middle - sale price out of those sales to be pulled upward from last year to this year. And something like this is definitely happening this year, as luxury homes have been selling in abundance relative to last year.

But that factor is only responsible for part of the rise in median prices, according to O'Connor. "A good share of these increases is still being driven by good, old-fashioned price appreciation - especially among single-family starter homes, which are increasingly difficult to find on the market," he said.

New listings statewide increased year-over-year in both property type categories in October, up by 1.6% for single-family existing homes and 3.4% for condo and townhouse units. On the supply side of the market, inventory (active listings) tightened even more in October 2020.

"Active listings of single-family homes continued to fall throughout October, although the rate of decline was not as steep as we've seen in previous months, going back to April," said O'Connor. "Still, at the end of the October, the statewide inventory of single-family homes was sitting at a multi-year low, close to 39.4% below where it was at the same point in time last year. Condo and townhouse inventory, by contrast, was only down by about 11.8% year-over-year at the end of the month."