Florida’s housing market continues its momentum in March, with more closed sales, higher median prices, more new pending sales and increased pending inventory compared to a year ago, according to Florida Realtors® latest housing data. The coronavirus was first detected in Florida on March 1, 2020.
“Even as we continue to deal with the pandemic and the real impact that COVID-19 has had on our lives, this spring is very different from what we saw last year,” said 2021 Florida Realtors President Cheryl Lambert, broker-owner with Only Way Realty Citrus in Inverness. “Intense buyer demand, combined with the high level of home sales sparked by very low interest rates, continue to reduce inventory levels, which is challenging for potential homebuyers. Due in part to this extreme shortfall of homes for sale relative to high demand, home prices keep rising, which also impacts the availability and affordability of housing options, especially for first-time buyers.”
Closed sales of single-family homes statewide in March totaled 32,819, up 23.3% year-over-year, while existing condo-townhouse sales totaled 16,518, up 52.6% over March 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
The statewide median sales price for single-family existing homes was $327,000 up 18.9% 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 $242,000, up 15.2% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Florida’s housing market is off to a strong start for this year’s spring buying season, according to Florida Realtors Chief Economist Dr. Brad O’Connor. However, he explained that the rate of sales growth in the condo-townhouse category continues to “steal the show” – its year-over-year sales growth (up 52.6% this March) has outpaced single-family home sales since last August, even though condo and townhouse sales were hit particularly hard early in the pandemic.
Why are condo and townhouse sales increasing so much relative to single-family home sales?
“For one thing, there is just so little single-family inventory available, especially in more affordable price ranges,” O’Connor said. “We have a very large population group, the millennials, who have moved into their prime home-buying years. However, in recent years, builders have not been building the classic single-family detached starter homes that young American families have long dreamed of one day owning – therefore, there aren’t enough of these homes available for resale to meet the overwhelming level of demand. Any that are listed frequently have bidding wars that price out many young prospective buyers.
“Increasingly, these buyers are giving up on single-family homes and are turning to attached condo and townhouse units instead. Even though these buyers might have had their hearts set on a single-family home, they’re realizing mortgage rates aren’t going to remain this low forever, and they don’t want to wait until they’re well into their 40s or 50s to start building up home equity. More and more, they’re seeing that condos and townhouses are the properties that give them the best opportunity to do that right now.”
In looking at March’s eye-popping positive numbers for new pending sales – up 48.2% for single-family homes and 126.4% for condos and townhouses – Chief Economist O’Connor noted that new pending sales were the first statistic to feel the brunt of the pandemic last year, and so were considerably down last March.
“That’s the reason these year-over-year numbers are so huge,” he said. “It might be more useful, then, to compare this March’s new pending sales to those from two years ago, in March 2019. And when we do that, we find that new pending sales were up by a very satisfying 14% for single-family homes and 47% for condo-townhouse properties.”
On the supply side of the market, inventory (active listings) remained constrained in February. Single-family existing homes were at a very low 1.2-months’ supply while condo-townhouse inventory was at a 2.8-months’ supply.
According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.08% in March 2021, significantly lower than the 3.45% averaged during the same month a year earlier.