This Lamacchia Mid-Year Housing Report presents overall home sale statistics as of the first six months of 2021 compared to the same period last year, January 1st to June 30th, 2020. Highlighted in this report are the average sale prices for single-family and condo/townhomes in South Florida (Miami – Fort Lauderdale – West Palm Beach MSA) along with the number of homes listed for sale and newly pending.
Sales Increase by 64.5%
Home sales increased overall by 64.5% for Miami – Fort Lauderdale – West Palm Beach MSA- moving from 36,788 to 60,529 in the first half of 2021.
Single families increased by 41.6% now up to 27,667 from 19,534 in the first half of 2020. The chart below shows single family sales, and how they dropped during the first months of the pandemic but are compensating in the first months of 2021.
Condo/townhome sales increased 90.5% when compared year over year, with 17,254 last year and 32,862 this year.
Condo sales took a hit last year during the pandemic, you can tell because in the same time frame in 2019, there were 22,285 sales. Granted, 2021 is still 47.5% higher than 2019, but the change isn’t as significant as the comparison to 2020. Living in shared spaces is now in demand again now that safety protocols and the vaccines are in place. As well, pricing of single families is making condos more attractive in terms of affordability.
You can see in the chart below, condo/townhome sales are significantly higher for South Florida than they ever have been.
Prices Up 48.7% in South Florida
Average prices overall increased by 48.7% for South Florida, rising to $659,659 from $443,492, in the first half of 2021 and 2020 respectively.
Single family prices increased by 53.8% now at $867,051 from $563,800. Demand for single families over the past year caused many bidding wars and multiple offer situations to drive prices up substantially. Many buyers, during the throws of the pandemic, wanted single family homes instead of communal living, and with that great demand and low inventory came great market value increases. The chart below illustrates this phenomenon.
Condo/townhome prices increased by 39.9% in the first half of 2021 compared to the first half of 2020. 2020 mid-year prices averaged $323,183 and 2021 mid-year prices averaged $452,267.
As you can see in the graphic below, 2021 prices increased over 2020 every month so far this year. The last few years have generally exhibited the same upward pattern, but 2021’s increase has been much greater than we’ve ever seen. High demand and tight inventory are the culprits for this rise.
Homes Listed for Sale:
New active listings overall increased by 15.4% for single families and condos with 73,806 total over 63,965 in 2020. Single family listings rose to 34,228, a 12.7% climb from 30,368 last year. Condos increased 17.8%, moving from 22,333 to 39,670, signaling a very strong market currently for this category. Interestingly enough, 2019 listings were at 73,450, a .5% change from 2021 and it shows that right now there are about the same number of sellers as 2019, but the buyer demand makes it impossible for that supply to keep up.
This increase over 2020 in listings is certainly an improvement considering how historically low the supply of homes has been over the past year. If listings increase like this throughout the summer and fall, we could be looking at a very good fall to buy. Sellers who pulled their necks in during the pandemic have begun to list now more now that the world has opened back up again. Buyers who have secured homes with home-sale contingencies are now under obligation to list their homes and thus the predicted continual increase in listings over the summer. As well, the buyer pool is decreasing as buyers find the homes they want or decide to wait and stay where they are for a little while longer.
The charts below depicting inventory for the first half of every year back to 2018 are quite telling about what’s available. Inventory is what is on the market, and inventory levels are determined by two factors: the amount listed and the amount of those listings that are removed from the market by pending sales. As you can see, single-family, as well as condo/townhome inventory in 2021, are lower than the preceding years.
This is another story about supply and demand. Singles are down 50% from 2020, now at 49,956 on the market compared to 100,012. And condo/townhomes are down 32%, now at 15,503 available homes over 28,264 in the same timeframe last year.
Pending home sales in South Florida increased by 43.8% year over year- a large increase due to the artificial decrease we saw last year. There were 70,814 pending sales at the mid-year point of 2021, up from 2020’s 49,241. 2019 during the same timeframe was at 53,037, still a 24.2% change from 2021, but only by half of what 2021 saw over 2020.
The increase in pending sales has been what consumes whatever listings are available. So, while seeing an increase in the number of listed homes is beneficial to the market, one also has to take the number of homes that are being pulled from the market as buyers scoop them up. This is the game of supply and demand which has put the real estate market into a frenzy.
The other point to make here is that there was great concern that the pandemic was going to incite a housing crisis like 2008. As explained very early on in the pandemic by Anthony Lamacchia, 2020 was nothing like 2008. Back then, supply was at an all-time high, and the number of homes that were being purchased was lower than it is now. Now, supply is at an all-time low, and the number of contacts accepted has increased exponentially.
Predictions for the Rest of the Year:
South Florida is certainly experiencing a real estate market on fire. Sales, average prices, listings and pending sales are all significantly higher than last year at the same time. Sales and prices are up much higher than they were in 2019, and listings and pendings are moderately up over that year as well.
The recent tragedy with the Surfside tower collapse may influence the condo market as homeowners wonder if they should sell, and potential buyers feel hesitant to purchase in an older building. There hasn’t been an effect on that area of the market yet, but we will see in the months to come, first with the number pending sales. That will be the first to decline if this starts to sway buyers into looking elsewhere.
Prices were driven up by homes selling with over asking offers, as explained by Anthony in the July Market Update Video. Anthony’s 2021 Predictions are still holding true, even half way through the year: 2021 will be the biggest year for home sales since 2005.
Buyers were able to sustain the rise in prices due to the drop in mortgage rates. They have been historically low, as driven by the Fed purchasing mortgage backed securities, which is predicted to begin tapering off by the end of this year and potentially causing mortgage rates to start gradually increasing by the end of this year. Rates now though are still so low that buyers who were pre-approved even a couple months ago should consider having their rates revised with their lender. The recent drop helps drive purchase power up and gives buyers room to afford more house or a higher offer. It could be the difference between affording a single family or a condo.
The number of sellers is increasing, which helps the tight inventory. There are still many buyers out there, but as those buyers secure their new homes and list their current homes, or as buyers drop out the race, pause their search and re-sign leases, listings may start to linger on the market a little longer that we have seen. In that event that we see homes last a bit on the market, buyers should be advised that if they see a home they like which has been available for more than a week, to not assume there’s something wrong with it. If supply increases, listings may last a little longer. That’s a good thing for the frustrated buyers who’ve had to compete for homes.
The hopeful prediction is that sellers will continue to list their homes in hopes of finally upgrading or downsizing and the market will hopefully balance out a little more. Doing so now would be the smartest thing for those who are considering selling. Not only will they be able to still take advantage of the demand, but buyers still have the purchasing power to make strong offers with the lower mortgage rates. Many sellers become buyers once their home sells (or vice versa). So those sellers will then be able to take advantage of the rates. The more sellers sell, the more listings the market will offer, the more selection buyers will have, the happier everyone will be.
Data provided by SunStats then compared to the prior year.