The figures for the Florida property market in Q2 2020 were always going to be particularly interesting for analysts. All were keen to decipher the unknown effects of covid-19 and the first full quarter of data would provide some insight.
The results show a market where completed sales plummeted due to lockdown or stay at home recommendations. But they also reveal a rise in median house prices and strong pent-up demand.
Sales down and pending sales up
One of the biggest indicators of the effects of the pandemic is on sales. Completed transactions in the Florida property market between April and June fell by 19.2% for single-family homes and by a much higher 33.9% for condos and townhouses.
However, the statistics for pending sales showed a rollercoaster ride of figures. In April, at the height of lockdown, they plunged by 35%. However, in May they made a timid recovery and rose by 2.3% only to power ahead in June with a 23% increase.
“All indications are that Florida will continue to see home sales surge through the end of the summer,” said Brad O’Connor, Florida Realtors Chief Economist. Markets throughout the US are expecting a busy summer season to compensate for the very quiet spring.
Prices rise yet again
Demand for properties in Florida did not flag throughout Q2 and the steady rise in median prices confirms this trend. In the three months between April and June, single-family homes saw an annual increase of 4.7% to reach an average of US$277,500. Condo and townhouse properties went up by a higher 6.2% to US$207,000.
Demand propelled price growth to the extent that in Q2 that by the end of June, closed single-family home sales were only 2% below those a year earlier. “At the mid-point of the year, Florida had already seen close to $50 billion worth of closed single-family home sales,” said O’Connor.
Lack of supply on Florida property market
The biggest obstacle facing the market in the Sunshine State over the next few months will be supply. “Our biggest near-term issue is a severe lack of single-family inventory,” said O’Connor.
He bases his observation on the figures for inventory in Florida. At the end of June, the supply of single-family homes stood at just 2.8 months. This is well below the 6 months that experts consider to be a sign of a balanced market. Condos and townhouses are in more abundance with a pipeline of 5.7 months.
However, analysts believe that the shortage of supply will continue to force house prices up further. This scenario opens up potential for buy-to-let property in Florida and investment in build-to-let homes. These types of properties offer particularly interesting opportunities for single-family homes in sought-after areas of the Sunshine State.
(Source: Florida Realtors)