Florida real estate posted very positive figures for the month of May, surprising analysts and industry professionals. The Sunshine State saw its 101st consecutive month of house price increases and an uptick in pending sales. Single-family home properties performed particularly well. Forecasters predict a busy June, albeit with low inventory levels.
Rise in new pending sales
The month of April was understandably quiet for Florida real estate. The state was in virtual shut-down due to covid-19 and home viewings practically at a standstill. Unsurprisingly, pending sales plummeted during that month.
The picture in May, however, changed drastically. Single-family homes went from a 35% drop in pending sales to a 2.3% rise last month. The increase indicates pent-up demand among would-be homeowners in the state.
More house price rises
Property prices also went up in May. In the case of single-family homes, median prices rose by 1.5% in the year to reach an average of US$270,000. Condos and townhouses also saw a price rise – they went up by 3.3% in 12 months with the average at US$201,472.
The latest price rises confirm the stability of Florida real estate and the demand for property in the state. May marked the 101st month in a row of increases in prices.
Less time on the market
Despite the restrictions of covid-19, properties in Florida remained in high demand and spent much less time on the market during May. Single-family homes spent an average of 44 days on the market (down from 52 a year ago) and took 32 days to reach contract stage (down from 41 in May 2019).
Condo and townhouse properties followed a similar pattern with an average of 87 days on the market, 5 fewer than a year ago. The average time taken to go to contract dropped from 84 days to 76.
Lower inventory
Consistent demand even during stay-at-home recommendations continues to take a toll on the supply of property in Florida. The lack of inventory is particularly apparent in single-family homes. New listings for this type of property fell by 8.7% in May and supply levels stood at 3.3 months.
Condo properties fared slightly better, although in this sector new listings dropped too. They experienced a fall of 16.3% in May leaving the market with 6 months’ supply.
Higher demand and prices plus fewer listings illustrates the solidity of residential real estate during a crisis. “The pandemic has shown that having a place to call home is priceless,” said Barry Grooms, President of Florida Realtors.
Recovery in sight for Florida real estate
Analysts believe that the latest figures for the state indicate that the good health of the real estate sector. “May’s pending sales clearly show we’re recovering,” commented Brad O’Connor, Chief Economist at Florida Realtors. He added that this recovery will be consolidated in closed sales in a month or two.
Record-low mortgages are one of the drivers behind the demand for Florida real estate. A 30-year fixed-rate loan had an average interest rate of 3.23% in May, down from 4.97% a year earlier. And rates show no sign of going up in the short term.
Building single-family homes
New builds form one of the responses to the lack of supply in single-family homes in Florida. The residential construction sector has seen a rise in activity and buyer interest during the pandemic. Homes in quiet suburban areas on large lots are in particularly high demand.
The BRIC Group Florida Land investment gives investors the opportunity to tap into this demand. The plots are in a sought-after area of Southwest Florida, in a prime position and with all infrastructure in place. Investment starts at US$26,500 and a new-build upgrades are available.
(Source: Florida Realtors)
