(The Center Square) – The COVID-19 emergency’s economic fallout has disrupted Florida’s real estate market, with buyers hesitant to pull the trigger and uncertain owners delaying plans to sell.
As a result, Florida home sales have declined between 30 percent to 40 percent statewide since mid-March, with new listings for single-family homes down 3.6 percent and condo-townhouse properties down 10.4 percent compared with a year ago, Florida Realtors said.
“Many buyers and sellers have understandably pressed the pause button,” said Barry Grooms, president of Florida Realtors, which represents about 195,000 Realtors and real estate professionals statewide.
As Realtors prepare for spring and summer, the busiest time of year for home sales, there is optimism the disruption caused by the response to the coronavirus pandemic will be temporary and the state’s real estate market will bounce back.
“We should expect to see significantly lower sales counts for April and May than we did last year,” Florida Realtors Chief Economist Brad O’Connor said. “But movement in sale prices will be more stable for the time being, since the reductions in both supply and demand have countervailing impacts on home values. However, the longer-term forecast is still hazy.”
Housing prices remain stable statewide because, unlike the 2007-08 Great Recession when the state’s housing inventory was “overbuilt,” the demand for available homes in Florida has been below supply since 2015, Florida Realtors said.
“So the prices won’t fall as much as they did last time when there were so many houses to choose from,” O’Connor said. “We haven’t seen a bunch of people leaving their houses on the market and selling for a lower price. What they’re doing is pulling their houses off the market for a couple of months and waiting for all this craziness to go away, and then they will try to put their homes back on the market and sell for a similar value to what they have it posted for now.”
Stable real estate prices is good news for prospective sellers, but buyers also have a motivating impetus to invest in real estate now. According to Freddie Mac, the interest rate for a 30-year, fixed-rate mortgage averaged 3.45 percent in March, down from the 4.27 percent average in March 2019.
Veteran Realtors also cite time-tested anecdotal reasons for a summer rebound in real estate sales, projecting stay-at-home orders will result in an increase in divorce proceedings that lead to home listings, that some owners after spending weeks in their homes may want to find a bigger place to roam, and northerners who fled lockdowns in their states to set up shop, particularly in south Florida, simply may stay.
According to Florida Realtors' Research & Statistics webpage, the statewide median sales prices for single-family homes and condo-townhouse properties in March rose year-over-year for the 99th consecutive month.
The statewide median sales price for single-family existing homes was $275,000, up 7.4 percent from the previous year, and the statewide median price for condo-townhouse units was $210,000, up 10.8 percent over a year ago.
Before the COVID-19 pandemic stymied the market in late March, the 26,611 sales of single-family homes statewide for the month was up 6.4 percent over numbers posted in March 2019.
The biggest pandemic-created obstacle in ushering along the market’s resurgence is not necessarily finding willing sellers and qualified buyers, but in showing properties, with virtual tours using YouTube, Facebook, Zillow and Realtor.com “appointment only” on-site meetings becoming the norm.