According to the Miami Association of Realtors, Broward County Florida’s single-family home median prices increased year-over-year in May 2020, as home sales saw expected declines because of the global COVID-19 situation.
While the latest data shows lower levels of closed sales compared to a year ago, new pending sales in May rebounded in comparison to April. New pending sales for Broward single-family homes decreased 9.5%, an improvement over the April decrease of 54.7%. New pending sales for condos decreased 33% in May, an improvement over the 63.8% decrease in April 2020.
“The Broward County real estate market is already experiencing a remarkable recovery as evidenced by surging pending sales since mid-April despite the COVID-19 impact on May sales,” Broward MIAMI President Sharon R. Lindblade said. “The robust fundamentals of the South Florida housing market, pent-up demand and low mortgage rates will lead to increased buying activity in the coming months.”
Pending sales, which started to surge in mid-April and are stronger than they were before the COVID-19 stay home orders, are expected to result in rising closed sales in the next couple of months.
Mortgage applications are on the rise in South Florida and nationally and the Miami mega region continues to see additional homebuying interest from the Northeast. Nationally, mortgage applications to purchase a home rose 4% last week from the previous week and were a remarkable 21% higher than one year ago, according to the Mortgage Bankers Association’s seasonally adjusted index released June 17. That was the ninth consecutive week of gains and the highest volume in more than 11 years.
The COVID-19 situation has accelerated the trend of homebuyers from New York and other tax-burdened Northeastern states searching and purchasing homes in South Florida.
Before the COVID-19 situation, Broward real estate had record low delinquencies, no subprime mortgage crisis, strong demand/low supply, low interest rates, strong population growth, demand from foreign buyers and tax refugees from tax burdened states, high consumer confidence and a strong job market.
Broward Single-Family Home Median Prices Rise
Strong demand coupled with limited supply continue to drive price appreciation in Broward.
Broward County single-family home prices increased 0.7% year-over-year in May 2020, increasing from $370,000 to $372,500. Existing condo prices decreased 2.8% year-over-year, from $180,000 to $175,000.
Broward Total Home Sales Decrease
Broward total home sales decreased 54.7% year-over-year in May 2020, from 3,376 to 1,529. Broward single-family home sales decreased 51% year-over-year in May 2020, from 1,661 to 814. Broward existing condo transactions declined 58.3% year-over-year in May 2020, from 1,715 to 715.
Dollar Volume Decreases
Single-family home dollar volume decreased 50.8% year-over-year, from $774.9 million to $381.5 million. Condo dollar volume decreased 56% year-over-year, from $391.2 million to $172.2 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 3.23% in May, down from 3.31% in April. The average commitment rate across all of 2019 was 3.94%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
A new condo approval process is expected to increase sales. The new guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR has championed, are expected to generate increased homeownership opportunities.
Broward Distressed Sales Stay Low, Reflecting Healthy Market
Only 4.6% of all closed residential sales in Broward County were distressed last month, including REO (bank-owned properties) and short sales, compared to 3.4% in May 2020.
Total Broward distressed sales decreased 38.6%, from 114 to 70.
Short sales and REOs accounted for 1% and 3.5% year-over-year, respectively, of total Broward sales in May 2020. Short sale transactions decreased 40.7% year-over-year while REOs decreased 37.9%.
Nationally, distressed sales represented 3% of sales in May, about even with April but up from 2% in May 2019.
Broward Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 96.2% in May up 0.2% from 96% last year. The median percent of original list price received for existing condominiums was 94.1%, down 0.2% from 94.3% last year.
The median number of days between listing and contract dates for Broward single-family home sales was 33 days, a 23.3% decrease from 43 days last year. The median number of days between the listing date and closing date for condos was 49 days, a 16.9% decrease from 59 days.
The median time to sale for single-family homes was 76 days, a 9.5% decrease from 84 days last year. The median number of days to sale for condos was 92 days, a 7.1% decrease from 99 days.
National and State Statistics
Nationally, total existing-home sales transactions slumped 9.7% from April to a seasonally-adjusted annual rate of 3.91 million in May. Overall, sales fell year-over-year, down 26.6% from a year ago (5.33 million in May 2019).
Last month’s closed sales of single-family homes statewide dropped 36.2% year-over-year, totaling 19,622, while condo-townhouse sales declined 50.3%, for a total of 6,069. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
The national median existing-home price for all housing types in May was $284,600, up 2.3% from May 2019 ($278,200), as prices increased in every region. May’s national price increase marks 99 straight months of year-over-year gains.
In May, the statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year for 101 consecutive months. The statewide median sales price for single-family existing homes was $270,000, up 1.5% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $201,472, up 3.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Broward Cash Buyers Top National Figure
Broward cash transactions comprised 29.3% of May 2020 total closed sales, compared to 33.1% last year. The national figure for cash buyers is 17%.
Broward’s high percentage of cash sales reflects South Florida’s ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Broward’s cash purchases as 42.5% of condo closings were made in cash in May 2020 compared to 17.7% of single-family home sales.
Seller’s Market for Single-Family Homes, Balanced Market for Condos
Inventory of single-family homes decreased 18.4% in May from 5,835 active listings last year to 4,762 last month. Condominium inventory decreased 0.9% to 8,234 from 8,310 listings during the same period in 2019.
Months supply of inventory for single-family homes decreased 11.4% to 3.9 months, which indicates a seller’s market. Inventory for existing condominiums increased 10.2% to 6.5 months, which indicates a balanced market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of May decreased 8.1% year-over-year, from 14,145 to 12,996. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Broward single-family homes decreased 15.7% to 1,755 from 2,081. New listings of condominiums decreased 5.7%, from 2,015 to 1,901.
Nationally, total housing inventory at the end of May totaled 1.55 million units, up 6.2% from April, and down 18.8% from one year ago (1.91 million). Unsold inventory sits at a 4.8-month supply at the current sales pace, up from 4.0 months in April and up from the 4.3-month figure recorded in May 2019.