Home sales in South Florida plummeted in April. Realtors blame the health and economic fears wrought by the pandemic caused.
Sales of both condos and single-family homes dropped nearly 40% in Miami-Dade and Broward from the same month in 2019, according to the Miami Association of Realtors April 2020 report. The activity follows a strong performance in March. Still, median prices continued to increase.
"Activity nearly dropped to zero starting in the end of March," said Juan Aluma, an agent with One Sotheby's International Realty. "There were almost no calls from buyers. I advised sellers not to list their homes. What I can equate it to is when you go fishing and you have a bait. If you throw a stone into the water, it doesn't matter how big that bait is, no fishes will come."
Still, median prices rose in both counties.
And the slump likely isn't over, he said, even though businesses in Miami-Dade and Broward have reopened. "The challenge would be navigating the uncertainty of another potential spike. People are fearful of another spike as businesses reopen and people congregate. Another closure would hurt the economy and that would hurt the real estate market."
Total home sales dropped by 40.1% year-over-year, from 2,629 in April 2019 to 1,576 in April 2020. Transactions of single-family homes decreased by 31.6%; condo sales suffered a 47.9% drop.
"The biggest factor was the inability to do business as usual. It wasn't because people didn't want to buy and sell. It was because this was a health crisis," said Nancy Klock Corey, regional vice president of Coldwell Banker Realty's Southeast Florida region.
Access was part of the challenge, Corey said. Many condo associations did not allow in-person showings — an impact that may linger. "There may be a challenge for short-term sales of condos. But it remains to be seen," she said.
Sales activity will likely increase in June and July, she said. "There's a natural pent up demand."
But Aluma and other Realtors expect single-family homes to outsell condos. "Homes will do better in terms of condos because there's an oversupply of condos and buyers are looking for homes with low density. I've gotten several calls from northeastern buyers saying they were thinking of a condo before the pandemic but then decided to buy a single-family home."
Inventory of existing single-family homes declined by 12.4% — from 6,935 to 6,076 — and by 9% for condos, from 16,049 to 14,599 units. There remains 5.6 months of supply for single-family homes and 12.8 months for condos. A supply of six-to-nine months is considered a balanced market.
Median prices rose for both single-family homes and condos, despite the pandemic and drop in sales. The activity in prices was to be expected, said Corey.
"What went under contract in February and March, closed in April," Corey said. "I'm not surprised that we saw prices increase. It's a reflection of a strong first quarter."
The median price for single-family homes grew up by 7.3%, from $356,000 to $382,000. The median condo price increased by 6.9%, from $248,000 to $265,000.
More than 90% of median priced single-family homes and condos sold for at or near the asking price.
Cash transactions comprised 22.1% of all transactions, down from 34.8% in April 2019. That's still more than the national percentage of 15%.
Total home sales fell by 37.4% from April 2019 to April 2020, from 3,141 to 1,965. Transactions of single-family homes declined by 36.1%; condo sales dropped more steeply, by 38.8%.
The decline will be temporary, predicted Carolyn Block Ellert, chair of the Gold Coast Master Brokers Forum and owner of the brokerage firm Premier Sales Group. "The next month we will likely see opportunity buyers looking for a good deal, then by July we'll probably see more buyers from the northeast, which would normally be an off-season for us in terms of sales."
She expects domestic buyers from New York, Pennsylvania, New Jersey and Connecticut to continue to flow south.
Inventory of existing single-family homes dwindled by 14.9% — from 5,910 to 5,031 — and condos by 6%, from 8,652 to 8,137 units. The supply tightened to 3.9 months for single-family homes and 6.1 months for condos. A supply of six-to-nine months is considered a balanced market.
Median prices grew by 6.1% year-over-year for single-family homes, from $360,000 to $382,000. Condo sales stretched by 7.9%, from $170,000 to $183,000.
"We are seeing some prices increase because inventory is decreasing," Ellert said.
More than 90% of median priced single-family homes and condos sold for at or near the asking price.
For domestic buyers, historically low interest rates are a draw, Ellert said. "In terms of international buyers that would pay in cash, we've had a drop in all three counties. Recently, they had travel limitations. They didn't want to close on a home until they physically inspected the property."
Cash transactions comprised 27.8% of all transactions, down from 37.3% in April 2019. Broward cash transactions remain higher than the national percentage of 15%.
