Sunshine State’s Hot Housing Market
With the full calendar year 2020 tucked away, browse this summary of key Florida housing market stats. The numbers are a reflection of what took place in the Sunshine State’s residential real estate market during an unforgettable year. Plus a glimpse of what’s anticipated in the Florida housing market in 2021.
The housing data below is from Florida Realtors®, the state’s largest trade association and 3rd largest Realtor® organization in the United States.
2020 was a year shaped by the first pandemic in modern history that cast its shadow across the globe. Earlier in the year 2020, there was much uncertainty as to what would happen in the nation’s housing market as COVID-19 shut down businesses and life’s normal daily activities.
However, as the year went on, it became clear that demand for residential real estate was robust. The Sunshine State’s housing market has been as hot as Florida’s notorious summer weather.
According to Florida REALTORS®, the “rate of sales is better exemplified by what took place during the second half of 2020, with single-family home sales marking an 18 percent year-over-year increase,” stated Brad O’Connor, Ph.D., in his Market Update published in January 2021. O’Connor is chief economist @FloridaRealtors.
In Florida, the housing climate has favored home sellers. Home values remained strong and increasing, with buyers competing for a dwindling home supply.
Median Sales Prices Up 14%
At 2020’s year end, the median sales price of a single-family home in Florida was $309,000, up 14.4% compared to the previous year in December 2019. As for townhomes and condos, the December 2020 median sales price was $230,000, up 13.7% from the previous year in December 2019. Note the definition of median, meaning half of the homes sold for more and half sold for less.
Florida Seller’s Market—High Demand, Low Inventory
The inventory of available single-family Florida homes for sale is extremely low, a reflection of the strong seller’s market.
As for Florida’s inventory of townhomes and condos, the December 2020 available supply for sale was down by 20.8% year-to-year, to a 4.2 months supply.
Benchmark For Balanced Housing Market
The supply of home inventory is a popular way to evaluate housing market conditions — whether there’s market equilibrium or if conditions favor property owners who are selling or potential home buyers. “Months Supply of Inventory” (MSI), and a balanced market is described below, according to Florida REALTORS®:
“The benchmark for a balanced market (favoring neither buyer nor seller) is 5.5 months of inventory. Anything higher is traditionally a buyers’ market, and anything lower is a sellers’ market.”
98.5% Percent of Home’s Listing Price
Another measure of the strength of the housing market is taking a look at Florida’s listing price vs. closed transaction sales price. At year end 2020 during the last month of December single-family homes sold at 98.5% of listing price.
Florida Home Sales Outlook For 2021
The indication is for a “really strong start” in the new year 2021. A look at single-family home pending sales at year end 2020 indicated “new pending sales of single-family homes were up almost 31% year-over-year in December and new pending condo and townhouse sales were up 42% which strongly signals that we’re going to see this surge in closed sales continue into at least the first couple of months of this year,” said Florida REALTORS®’ Brad O’Connor in his “Market Update” commentary published in January 2021.
Home Buying Tips In A Competitive Market
For those who want to buy a home, consider the following advice offered by industry professionals (Realtors® and mortgage companies). With the possibility that the homeowner may get multiple offers for their property, remember:
- Time is of the essence. Houses are selling at a faster pace, so be ready to act.
- Buyers who need financing for a purchase should get pre-approved for a loan before house hunting. A seller will be more confident of the buyer’s financial strength if already pre-approved for financing, when the offer is made to the seller. (Not to be confused with being pre-qualified).
- Those able to do a cash transaction are the most well-positioned since sellers typically prefer cash sales transactions. (They won’t have to worry about the buyer’s financing/deal not going through due to a lender’s decision).
The complete picture of the pandemic’s impact on the housing market and moving/migration patterns remains to be seen down the road when it’s finally over and more sales data is further analyzed.