The COVID-19 outbreak has impacted nearly all aspects of life and work, and the housing market in South Florida is no exception. Even as the state has entered its re-opening phases, Florida realtors are reporting lower numbers across the board, from decreased closed sales to new listings. The economic effects of the coronavirus pandemic shutdowns, while taking a toll on sales and listings, have also seen some positives with most home values holding their own and median sale prices rising over last year.
The Overall Impact
As businesses shut down, the number of underemployed workers rose, and people sheltered in place for safety, every aspect of the pandemic effected South Florida’s housing market. Many potential home buyers and sellers put their plans on hold to await the end of the pandemic and the re-opening of the economy, so the overall impact is not a complete surprise. Realtors, home builders, development companies, and others in the industry have worked to help their clients, whether buying, selling, or building, who need support and guidance in these trying times.
For single family homes, closed sales (which typically occur 30 to 90 days after sales contracts are signed) dropped, as did condo and townhome sales, while median sale prices for both property types continued their ongoing rise, up six to eight percent over 2019 prices. Also included in the overall effects was a decrease in pending new sales, though home values remain firm, a result of equalizing declines in both the supply and demand for new homes during the COVID-19 outbreak and subsequent shelter in place orders.
As the state continues moving forward toward full re-opening, prices seem likely to remain stable though a decline in closed sales and pending new home sales may continue for some time for both single-family homes as well as condominiums and townhomes. The good news is stabilization will come as the number of homes going under contract begins to rebound as people return to work, school, and the new normal following the pandemic. In fact, the Mortgage Bankers Association (MBA), reports recent increases in the number of home loan applications across the United States, a good sign for all, including the housing market in South Florida.
FloridaRealtors.org also reports new listings are on the rise, faster than new pending sales, though the latest statistics show both are slowly beginning to rebound. With low interest rates, hovering around 3.3 percent for a 30-year fixed-rate mortgage, and the housing market rebounding, indicators are positive, though not guaranteed, for a favorable market recovery in South Florida.
The South Florida Market
Though South Florida is unique, having a strong, growing market prior to the pandemic, COVID-19 has had a significant effect, here, as it has around the world. Real estate remained an essential service during the outbreak, but business suffered as buyers and sellers were wary and unsure, and in-person activities were limited. Closings decreased, new listings went down, but home values held firm, with some increases. Demand for properties and requests for showings are on the rise, though inventory is currently limited.
If housing inventory rebounds quickly following demand, it is likely that the housing market will recover quickly in turn, but there are simply no guarantees. Unemployment is still an issue in an national economy struggling to recover following a worldwide pandemic, though for South Florida, the good news is the housing market is not solely dependent on local jobs and resident homebuyers. Instead the housing market in and around the greater Fort Lauderdale area also attracts second home buyers, relocating retirees, and investors. The area is also known for its attractive climate, advantageous tax structure, and outstanding lifestyles, all of which make a solid recovery for the housing market probable.