Florida’s housing market reported strong gains in the third quarter of 2020 even as the coronavirus pandemic continued, with more closed sales, rising median prices, more new listings and more new pending sales compared to 3Q 2019, according to the latest housing data from Florida Realtors.
In fact, Florida’s housing market continued to be a bright spot for the state’s economy in October, 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. Single-family existing-home sales rose 26.9% compared to a year ago.
“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, a Realtor, and co-owner of Florida Suncoast Real Estate Inc. in Bradenton. “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.”
Closed sales of single-family homes statewide totaled 89,562 in 3Q 2020, up 13.7% from the 3Q 2019 level; closed sales of condo-townhouse properties totaled 33,523, up 13.5% compared to 3Q 2019. Closed sales typically occur 30 to 90 days after sales contracts are written.
Quarterly data figures normally offer a good look into prevailing economic and market trends, according to Florida Realtors Chief Economist Dr. Brad O’Connor.
“On the heels of a weak spring buying season brought about by the COVID-19 pandemic, closed sales of existing homes surged throughout the U.S. in the third quarter of 2020, and Florida was no exception,” he said. “And while the release of pent-up demand from spring certainly played a major role in this resurgence, it’s likely that the most important driving factor has been the record-low mortgage rates we’ve been experiencing.”
O’Connor pointed out that closed sales of Florida single-family homes were up 13.7% year-over-year overall in the third quarter, but all-cash sales were only up 1.7%.
“It appears that owner-occupant buyers and investors alike seem to be taking advantage of these low mortgage rates,” he said. “Condos and townhouse sales, which were hit particularly hard in spring, made a strong recovery in the third quarter as well, rising by 13.5% year-over-year. Across the state, single-family closings were up year-over-year in all 22 Florida metro areas, while condo and townhouse sales only failed to rise in two metros.”
Supply and demand impacted home prices across the state, O’Connor noted. He explained, “Because new construction and new listings of existing homes are not keeping pace with the current rate of sales, we observed a substantial amount of home price appreciation in the third quarter.”
According to Dr. 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.”