Did you know? According to the National Association of Realtors, existing-home sales in the U.S. have hit their highest level since 2006. As a matter of fact, August marked three consecutive months of positive sales gains. Total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – rose 2.4% from July to a seasonally-adjusted annual rate of 6.00 million in August. Sales as a whole rose year-over-year, up 10.5% from a year ago (5.43 million in August 2019).
Total housing inventory at the end of August totaled 1.49 million units, a 0.7% drop from July and down 18.6% from one year ago (1.83 million). Unsold inventory sits at a 3.0-months’ supply at the current sales pace, down from 3.1 months in July and down from the 4.0 months one year ago. (Keep in mind, a healthy inventory of homes for sale is typically around 6 months.) Needless to say, we are continuing to see a strong demand from home buyers looking to take advantage of the historically low mortgage interest rates.
New home construction is also an area of great demand right now. Unfortunately, the recent wildfires in California are also contributing to increased lumber prices as there as there is a dearth of lumber. This is also contributing to the tighter inventory of new homes being constructed to meet the demand.
August Home Sale Details
- Properties typically remained on the market for 22 days in August, seasonally equal to the number of days in July and down from 31 days in August 2019. Two out of three homes (69%) sold in August were on the market for less than a month.
- One in three August sales went to first-time buyers (33%), down from 34% in July 2020 but up from 31% in August 2019.
- Individual investors or second-home buyers, who account for many cash sales, purchased 14% of the homes in August, up slightly from July’s 15% and unchanged year-to-year. All-cash sales accounted for 18% of transactions in August, up from 16% in July 2020 and down from 19% in August 2019.
- While the recession has caused some concern about a future uptick in foreclosures, distressed sales – foreclosures and short sales – represented less than 1% of sales in August, unchanged from July but down from 2% in August 2019. This should remain stable for the rest of 2020, however there are many concerns for 2021.
In summary, the current pandemic has not slowed real estate in South Florida. As a matter of fact, the real estate market seems to be leading the South Florida economy. In addition to the strong demand for housing from Floridians, even more buyers are opting to move to The Sunshine State.
