It’s a rainy Memorial Day weekend here in South Florida. The charts today include the month of April. This is the first look of how the coronavirus pandemic may be impacting real estate transaction volume and prices in the area. There’s no road trip to the Florida Keys this weekend, so how about a market snapshot while listening to Jimmy Buffett?
First Look at real estate prices
There was only a slight dip in the average sale prices of houses and condos during the month of April. Keep in mind that most of the deals that closed in April went under contract in February or March. The average sale price of a house was $548,505, down from $566,605 in March. The average sale price of a condo was $323,650, down from $341,785. Take a look at the slow grind higher in both the house and condo prices since the last recession.
First look at real estate transaction volume
The pace of real estate closings slowed for the month and that was to be expected due to the coronavirus. Sales of condos declined 36% from 3,998 in March to 2,552 in April. The number of houses sold dropped 24% from 3,996 in March to 3,041 in April. You will notice that there was a big decline last January, when there were 5,113 total closings. In comparison, the total for this April was actually 5,593 closed sales.
Residential inventory in South Florida
There wasn’t much of a change in the number of houses and condo properties on the market in Miami-Dade, Broward and Palm Beach County last month. Total inventory was 46,022 properties in April, down from 46,632 in March. The first data point in this chart was a total of 72,241 properties available for sale in January 2011 when the housing bubble burst. With inventory at current levels, is it a good time for speculators in the vacation rental market to list their properties? Lower inventory and historically low mortgage rates could provide a nice buffer for prices during otherwise uncertain times.
One key component to supporting the housing market is a ridiculously low cost of borrowing. Rates have been low for the past decade and probably won’t move much higher anytime soon.