South Florida home sales drop, but pending transactions are up

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Miami-Dade and Broward experienced a dip in year-over-year residential transactions in June. But it's not all gloom and doom: Pending sales increased year-over-year, a sign of activity increasing since April.

The total number of home sales decreased by over 20% in both counties, according to the Miami Association of Realtors June 2020 reports. Still, the activity is higher than in prior months. April saw a dip of over 40% compared to the prior year, and May had a drop of over 50% compared to May 2019.

"The drop is due to a pause in the market," said Nancy Klock Corey, regional vice president of Coldwell Banker Residential Real Estate's Southeast Florida region. "June was a timing issue. There was a pause as to how to continue to do business, including with inspections."

Pending sales increased year-over-year for both counties. Miami-Dade saw a 33.8% uptick in single-family homes under contract, from 1,205 in June 2019 to 1,820 in June 2020. The county also saw a 12.9% increase for condos, from 1,310 to 1,504.

Pending sales in Broward grew by 21.2% for single-family homes — from 1,651 to 2,095 — and 1.6% for condos — from 1,681 to 1,708.

"The increase in pending sales is a reflection of pent-up demand for those two months that some transactions couldn't be completed done virtually. There's a lot of demand for single-family homes, and buyers are taking advantage of the low interest rates," said Fernando de Nunez y Lugones, executive vice president and chief economist for One Sotheby's International Realty.

Interest rates are at 2.85% for a 15-year fixed rate mortgage.

There are local, out-of-state and international buyers. Those that are from out-of-state are coming from California, Illinois, Detroit, Connecticut, New York, Pennsylvania, Canada, Mexico and Brazil, said Corey and de Nunez y Lugones.

"There's a huge shift in demand. People are looking for less density. People are first looking for a single-family home, then townhouses and finally condos," de Nunez y Lugones said.

The total number of residential sales declined by 22.3%, from 2,436 in June 2019 to 1,893 in June 2020. The number of transactions decreased by 11.8% for single-family homes and 33.1% for condos.

The inventory of active listings fell by 25.6% for single-family homes, from 6,623 in June 2019 to 4,929 in June 2020, and by 6.8% for condos, from 15,488 to 14,433. The market has 4.8 months of supply for single-family homes, indicating favorable conditions for sellers, and 14 months of supply for condos, benefiting buyers. A supply of six to nine months is considered a balanced market.

Median prices grew by 5% for single-family homes, from $370,000 in June 2019 to $388,500 in June 2020. Condos experienced similar activity, with a 4.8% year-over-year increase in the same period, from $250,000 to $262,000.

Pending sales are rising for single-family homes listed above $15 million, Corey said. The number of pending sales has increased since June for homes in the high-end market and median-priced listings, she said.

Pending sales declined for homes listed between $1 million to $15 million, Corey said.

"Those are for people in the upper-middle class, and these buyers are likely to be more impacted by the pandemic. A lot of the buyers [looking at homes between $1 million to $15 million] are trying to be conservative while those in the high-end are a little more insulated from the impacts of the pandemic," she said.

Sellers saw offers meet 95.9% of their listing price for single-family homes and 92.9% of their listing price for condos.

All-cash transactions dropped year-over-year from 31.9% to about 25.9%. Still, it's above the national average of 16%.

The total number of sales dipped year-over-year by 21%, from 2,954 to 2,333. The number of transactions dwindled by 10.3% for single-family homes and 31.5% for condos.

The inventory of active listings for single-family homes fell by 27.7%, from 5,652 in June 2019 to 4,089 in June 2020. The supply for condos barely decreased: It saw a 0.8% dip, from 8,062 to 8,002 active listings. The market has 3.4 months of supply for single-family homes, indicating a seller's market. The market also has 6.6 months of inventory for condos, indicating a balanced market — one that neither favors sellers or buyers; a supply of six to nine months is considered a balanced market.

Median prices rose year-over-year by 5.4% for single-family homes, from $369,900 to $390,000. Condos saw a 13.8% increase, from $174,500 to $198,500.

Sellers saw offers meet 96.5% of their listing price for single-family homes and 94.6% of their listing price for condos.

All-cash transactions dwindled from 33.5% of all deals to 27.3%. That's still above the national average of 16%.

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