Despite the COVID-19 breakout, Real Estate sales have seen a noticeable increase throughout 2020, compared to 2019. A continuously growing number of people are in the hunt for properties, especially among the younger generations. This is remarkably true in the state of Florida, which has seen record-breaking numbers in the final quarter of the year. However, while Florida sales are staying strong, real estate sales nationwide appear to be slipping.
The National Association of Realtors stated that pending home sales fell in October 2020, in their recent Pending Home Sales Index. This index forecasts home sales using the number of contract signings as a basis. The report showcased that contract signings fell 1.1% (to 128.9) in October, which would be the second continuous month that reported a decline in the index.
Sharing his insight, Lawrence Yun, chief economist for The National Association of Realtors said, “Pending home transactions saw a small drop off from the prior month but still easily outperformed last year’s numbers for October. The housing market is still hot, but we may be starting to see rising home prices hurting affordability.”
Yun also mentioned that the inventory of homes for sale, along with mortgage rates are at all-time lows.
“The combination of these factors – scarce housing and low rates – plus very strong demand has pushed home prices to levels that are making it difficult to save for a down payment, particularly among first-time buyers, who don’t have the luxury of using housing equity from a sale to use as a down payment,” said Yun. “Work-from-home flexibility has also increased the demand for both primary and secondary homes.”
However, while nationwide real estate sales are beginning to slip, Florida reports a non-stopping growth in residential real estate sales. Ever since August, Florida-based realtors have observed an outstanding increase of signed contracts, especially in South Florida.
The increase in sales is most remarkable in Broward County, where the number of newly signed contracts for condos rose 85.9% in October 2020 compared to October 2019. This report was based on the number of contracts on condos and houses listed on the Multiple Listing Service.
People from different states within the US represent a great number of recent Florida homebuyers, mainly coming from Boston, California, and New York. International buyers are also in search of properties, most coming from Canada and Mexico.
A few factors contributing to this recent surge in home sales in Florida are:
- Work From Home Capabilities: With more companies and jobs enabling their workers to work from home due to the Coronavirus, people are able to move to Florida while keeping their salaries from their respective states. And since California and New York salaries, for example, are usually greater than Florida salaries, moving to the Sunshine State becomes an interesting option to consider for many people.
- Desirable Location: Warm weather and beaches make Florida attractive for potential homebuyers
- No State Income Taxes: Florida is one of the 7 states in the US that does not impose an income tax, making it a major advantage for many – especially to those in high-income households.
Real Estate sales seem to be reaching a peak nationwide. In great part due to the increase in housing prices, as a consequence of low housing inventory. However, Florida sales continue to skyrocket and show no sign of slowing down.
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