Even though temperatures are cooling here in South Florida, there seems to be no slowing of the “Florida Frenzy” real estate purchase trend. According to Florida Realtors’ latest housing data, despite the ongoing pandemic, single-family existing home sales skyrocketed by 22% compared to September 2019.
“September’s market data shows that there are motivated buyers, but the lack of for-sale inventory is affecting their search for their Florida dream home. Statewide inventory for single-family existing homes last month was at the record low of a 2.2-months’ supply. That imbalance of supply and demand could impact the market in the long term as housing shortages continue to put pressure on prices and affordability,” said 2020 Florida Realtors President Barry Grooms.
Lack of international buyers, due to COVID-19 traveling restrictions, has seen domestic buyers from California, New York, Boston, New Jersey, and Connecticut coming to Florida to look for not just a holiday home but a primary residence. This continued surge has caused the median South Florida home price to hit a historic high in September — $425,000 for a single-family home.
Why Are Property Purchases Increasing?
While some of the demand is tied to the COVID-19 pandemic — families are fleeing bigger urban cities to be closer to more tropical homes — brokers say trends show that the increasing growth is also tied to longer-term structural changes. High-income individuals are growing older, looking to retire, and heading to Florida, but younger families also want to escape big cities such as New York and make Florida their permanent home.
Some northern and midwest states are facing large budget deficits in their cities, especially from the economic downturn caused by COVID-19 and the expectation that taxes will rise for high earners. This makes Florida especially attractive as there is no state income tax.
“Historically, we were a market-driven by trends — condo boom, low deposits, second-and third-home buyers, but today many more are primary residences,” said Jay Phillip Parker, CEO of Douglas Elliman Florida.
The statewide median sales prices for both single-family homes and condo-townhouse properties rose year-over-year in September for 105 consecutive months. The statewide median sales price for single-family existing homes was $300,000, up 13.2% 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 $217,500, up 12.7% over the year-ago figure.
“Given all that’s occurred this year, it’s hard to believe we’re already in positive territory again, but here we are. All indications are that we will continue to see strong sales this fall as mortgage interest rates will almost certainly remain at or near record lows. New pending sales of single-family homes were very strong in September, rising by 31.4% year-over-year, while new pending sales of condos and townhouses were up a dramatic 43%,” said
Florida Realtors Chief Economist Dr. Brad O’Connor.
Trends in South Florida Real Estate Sales
Broward County condo new signed contracts were up by a huge 89.5% between October 2019 and October 2020, with most priced over $1 million. For single-family homes, this grew by 44.5%, with most priced between $500,000 and $599,000.
In Miami Dade, single-family home contracts in the same period rose 12.2% from 1,223 to 1,372, with the majority of new contracts priced over $1 million.
“It’s encouraging to see the continued strength. Usually, September and October are slower months, but not this time around,” reported Realtor Mike Pappas, president, and CEO of the Keyes Company.
In Palm Beach, the inventory of homes for sale on the island fell by 79% in the third quarter compared with the same time last year, and there is less than a five-month supply. “The demand for luxury, the perceived security, safety, and pristine environment is very attractive to high net worth clients,” said Parker.
In Palm Beach, the average home price was more than $7 million during the quarter and shows very little signs of slowing as signed contracts jumped 65% in September, according to a report from Douglas Elliman & Samuel Miller.
One of the big recent sales in Palm Beach was the $28-million sale of a teardown mansion owned by Donald Burns, the telecom tycoon. Pulmonologist Norman Traverse sold his seven-bedroom waterfront estate for $51 million, and billionaire Jude Reyes sold his oceanfront mansion for $19 million.
“It may be the hottest real estate market in the world right now. You just can’t find homes to buy there now,” said Parker.
This trend reflects broader demand in South Florida as wealthy residents leave behind high-density cities, higher taxes, colder weather, and increased COVID-19 risk coming into the winter. Prices in Ft. Lauderdale, Miami, Boca Raton, and parts of Tampa have increased by double-digit pace in this last quarter.
In Delray Beach, NRIA, a leading developer in luxury real estate, announced the launch of Gulf Stream Views. The development boasts 14 state-of-the-art luxury condominium townhomes with direct beach access and oceanside views. Starting at $1,895,000, over one-third of the units have already been sold on a pre-construction basis.
“Our team is thrilled to be contributing to the real estate market in South Florida during a time of unprecedented growth,” said Glenn la Mattina, Senior VP of Operations at NRIA. “With reports showing Palm Beach County’s dramatic increase in contracts for single-family homes since the pandemic, the availability of Gulf Stream Views properties will cater to this high demand.”
Florida’s current population of 21,993,000 is constantly growing, and there seems to be no slowing down of real estate sales. Low inventory combined with rising demand means a rise in property prices. Combined with the fact that mortgage rates have never been lower, this will only continue to feed the Florida Real Estate Frenzy!