I love data because it doesn't lie, or at least, it's mostly accurate. The question for you as a potential home seller is, should you put your Florida home on the market now or wait?
As a buyer, should you hold off or wait for lower prices? We've done the analysis and we have your answers!
- HOME SALES VOLUME DECLINES 33-to-44%
- SELLERS ARE NOT UNDER PRESSURE
- MID-JUNE/JULY ARE THE MONTHS TO WATCH
- CHART OF HOME SALE VOLUME BY SELECT CITIES: APRIL 2020-2019
- CHART OF HOME SALES BY SELECT COUNTY APRIL 2020-2019
- MARGIN OF ERROR
- CORONAVIRUS EFFECTS ON HOME SALES
HOME SALES VOLUME DELCINES 33% -to-44%
Early April expectations was that Florida Real Estate prices would fall sharply. Fortunately, so far, that prediction was wrong.
For the month of April, Real Estate prices in Southwest Florida have not declined, but the SOLD volume of single family houses fell sharply (see charts below). Because of the forecast and shelter in place orders nationwide, there was a reduced number of buyers in April. Going forward, many other factors will add pressure to home sales volume and price.
IF THE COVID FORECAST HAD BEEN CORRECT, PRICES WOULD HAVE DROPPED
It was originally forecast that Florida was going to see 650,000 cases of Covid and the cases would overwhelm our hospitals. The number of cases continue to climb but fortunately, that forecast was wrong. As of 05/07/2020, Florida had 38,002 cases. Less than a week later (05/12/2020), Florida had 41,923 cases. (A link to a map showing cases in Florida appears at the bottom of this page.) Had the forecast been correct, prices would have dropped.
MOST SELLERS DON'T FEEL THE PRESSURE TO SELL
Many people think of the great recession when they think of a market downturn. The underlying reasons for a potential downturn in 2020 are not the same as the
conditions that caused the great recession. Most Sellers aren't in a financial
situation that forces them to lower their prices.
The volume of sales should pickup during May. If you delayed putting your house on the Market because of the virus, don't wait any longer. Sold prices in May should look similar to April, and the volume should tick up, but volume will remain lower than year over year numbers.
There is strong evidence that the economy will not be able to keep up with current price levels. There are many economic pressures in the market right now that go beyond supply and demand indicators. Several of the top lenders have increased mortgage qualification requirements. Credit scores need to be around 700 -720 and many are requiring a full 20% down. These requirements show that the lenders do not have high confidence in the real estate market right now and it will prevent many buyers from being able to buy.
MID-JUNE/JULY ARE THE MONTHS TO WATCH
Mid-June/July might start to show weakness. As a seller, if prices start to drop, you can always take your house off the market and wait out any pricing pressures.
Keep in mind that analysts get forecasts wrong all the time. If prices start to drop and you choose to wait it out because you heard that any downtrend will be short lived, you may be in for a longer downtrend than the forecasters predicted unless the economy as a whole rebounds. The only analysts you ever hear about after it's all over are the ones whos predictions prove to be correct. The rest of the forecasters that get it wrong are simply forgotten about.
If you have to sell, you should find out the correct price that will get your house sold and list at that price. Don't chase the market down if that is the direction the market heads.
HOME SALES VOLUME DECLINES FOR SELECT CITIES: APRIL 2020-2019
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SINGLE FAMILY HOMES SALES
BY COUNTY APRIL 2020 / 2019
DATA AND THE MARGIN OF ERROR
There is a small margin of error in the charts we put together due to end of month late entry of info by agents into the MLS, but it's a very small difference. These numbers are close enough so were not updating the charts for April. The charts are for single family homes from April 1st to May 1st 2020 compared to the same period in 2019. This is for SOLD volume, NOT PRICE.
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1) SHORT TERM VACATION RENTALS SUSPENDED UNTIL PHASE 2 OF THE REOPENDING OF FLORIDA
1) CORONAVIRUS EFFECTS ON HOME SALES (Exterior Related Website)