Florida's Covid-19 Spring Housing Bust to Become a Summer Boom

Florida’s Covid-19 Spring Housing Bust to Become a Summer Boom?

The real estate season is coming to a close in Florida. The typical “season” runs from Thanksgiving Day to just past Easter at the end of April. Obviously, this has changed due to many snowbirds staying on due to the huge impact of Coronavirus in the Eastern states of in particular New York, New Jersey, and Connecticut with many staying on much longer than anticipated.

In Palm Beach there has been sale after sale, including a record-setting deal of $105 million for a sale recorded in December at 1415 S.Ocean Blvd, Palm Beach on the stretch of the A1A coastal road dubbed “Billionaires Row”. This was just before the pandemic began with a vengeance that upended the market, but things may be turning around, with realtors and brokers saying they expect a busier summer. 

The Palm Beach sales momentum recorded as much as $671 million in single-family transactions during the six-month period that began in October, according to quarterly sales reports, that compared to $253 million in sales for that same period a year ago.

On March 16th and emergency order set a nighttime curfew, including all beached being closed. Residents were soon hunkering down at home, restaurants closed, retail stores, movie theaters, hotels. The whole of the economy was closed down as we had never seen it before, the buzz word became “unprecedented”.

As people were no longer traveling, the stock market plunging, the initial first weeks were filled with fear and panic and were followed by several more weeks of sluggish sales. This continued even after Gov De Santis issued an emergency order designating real estate office and related industries as “essential businesses “that could stay open during the crisis.

But as of last week, the town’s single-family market seems to be finding its feet again according to local brokers, agents, and real estate attorneys. “I think there are stirrings of optimism- I think that’s a good way to put it” said Broker John Hackett of Corcoran Group office in Palm Beach as well as other locations in Palm Beach County. “The reality is that I don’t think we’re out far enough from this thing to make any firm predictions. But we anticipate a relatively busy summer if this thing doesn’t make a U-turn and circle back around. Barring that, I definitely see very, very bright spots for Palm Beach real estate.”

Palm Beach real estate attorney Guy Rabideau as seen a spurt of deals over the past week and a half.  “During the initial phase (of the health crisis), a lot of people panicked and tried to cancel contracts. But activity picked up last week,” Rabideau said Wednesday, “and this week it appears to me we are having a near-normal week for the season. I can’t quite believe that, but it looks like we have turned the corner on panic.”

Palm Beach has long attracted buyers for its beauty, climate, tax advantages, and a sense of security and safety, agents and brokers said. But the latter now includes Palm Beach’s relatively low number of officially counted cases of coronavirus related illnesses- — 18 at last count with two reported deaths.

And that situation — along with the realization by many people over the past seven weeks that they can work remotely from anywhere, which means from the beauty of their own homes without having to step outside of their front doors, courtesy of tech platforms such as Zoom or Skype.

Margit Brandt, an agent at Brown Harris Stevens, said she has spoken with young families from the metropolitan areas in the Northeast who have been weathering the crisis for weeks at their parents’ homes in Palm Beach. It wouldn’t surprise her if some of them consider moving here, she said, “now that they’ve seen how appealing Palm Beach is, even in a crisis. They’ve seen how the quality of life here is superior.”

Even with the recent escalation of activity, the effects of the initial news about the pandemic, can’t be understated or underrated.

Broker Linda Gary of Linda A. Gary Real Estate saw the panic firsthand during the first weeks of the health crisis. “I did have a couple of contracts where the buyers canceled — and now they’re both sorry they did,” Gary said. “I’m getting a lot of calls from people looking for homes.”

Available houses for rent, which are always in short supply at the height of the season, were quickly snapped up during the first weeks of the crisis.

And condos for rent were similarly scarce, but for a different reason: Many homeowners associations quickly locked down their complexes by barring visitors — including real estate agents, their clients, and moving-company workers — to help prevent the spread of COVID-19, the disease caused by the virus.

“You can’t (rent) a condominium; they’re are off the table,” said broker Linda Olsson of Linda R. Olsson Inc. “People are looking for a house that’s ready to accept a short-term rental, so it has to be furnished. We’re getting a (prime) seasonal rental rate for the summer months for houses. I have people paying $30,000 or $40,000 a month in the summer for houses. That’s what they would normally be paying during the (high) season. Off-season rentals might usually be $25,000 a month.”

Rentals aside, new sales activity continued to sputter during the first few weeks of April, with some exceptions, although many deals in the works before the crisis closed as planned. Palm Beach also saw two sales above $25 million that went into contract early in April, both closing by the end of the month.

City dwellers who have endured the pandemic indoors may certainly better appreciate Palm Beach’s pleasant climate, open spaces and easily accessible outdoor amenities should disaster strike again, said broker David Fite of William Raveis South Florida, which has an office in Palm Beach.

“What we’re seeing in high-density markets — New York, Chicago, Boston — is that people are looking to Palm Beach rather than having to sit in their 2,000-square-foot apartment,” Fite said.  “If you have to shelter in place, Palm Beach is not a bad place to do it,” he said.

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Gina Stern

Gina Stern

Gina Stern is a property investor who has been flipping homes for the past twenty-five years and has had many years of experience in the Real Estate Arena. She is passionate about passing her knowledge and experience onto other investors whether they be newbies or seasoned. Her other great passion is writing, that is why she is very honored to be part of the Property Onion Educational Team. Her specialty has been in commercial investing, mainly investing in shopping centers and strip malls, but she is now excited to be fixing and flipping in retirement communities.

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