South Florida Commercial Office Market (Third Quarter 2020)
COVID-19 continues to weigh on the commercial real estate market in South Florida. While there are some positive signs in specific markets and sectors, overall the market has been adversely impacted by the pandemic.
Following are the latest statistics for the commercial office market in South Florida (Palm Beach, Broward and Miami-Dade counties).
With dozens of headlines in major news sources explaining how the housing market is setting new records every month, what more can be said? In over 25 years of working in this industry, we have never experienced this level of volatility. Just a few months ago, single-family home sales in the state of Florida were down more than 20% (year-over-year). This past month the number of sale transactions were up by 22% and the overall dollar volume increased by 50% (year-over-year); a staggering change from earlier in the year.
Nationwide, sale transactions rose by more than 20% (year-over-year) and home prices across most markets and most price points are also up considerably, marking 103 straight months of year-over-year price gains.
We are constantly being asked, “How high will it go?”. That’s a tough question to answer but at the current pace of sales, there is less than a three-months supply of homes on the market for sale, so unless we see additional inventory, 2021 could get even more volatile with respect to supply / demand equilibrium.
If you have clients, colleagues or friends considering selling, now may just be the perfect time to do so.
According to the National Association of Estate Planners & Councils, the purpose of estate planning is to “…develop a strategy that will maintain the financial security of individuals through their lifetime and ensure the intended transfer of their property and assets at death, while taking into consideration the unique circumstances of the family and the potential costs of different methods”.
If one owns a home, vacation property or other real estate, you should be aware of the estate planning issues that apply due to real estate ownership. For the average individual or family, the value of a personal residence ranges between twenty and forty-percent of their net worth, so a sizable portion of most estates are typically in the homes equity.
As such, there is a significant relationship between ones real estate holdings and their estate plan. One should ensure that proper planning is conducted well in advance to avoid probate as well as the possibility of triggering estate taxes.
Existing home sales NATIONWIDE (which include single-family homes, townhomes, condominiums and co-ops) rose 10.5% year-over-year during the month of August. Median existing-home prices across all housing types increased by 11.4% to $310,600, marking 102 straight months of year-over-year gains.
According to Lawrence Yun who is the chief economist for the National Association of Realtors, “Home sales continue to amaze, and there are plenty of buyers in the pipeline ready to enter the market”. He continues “Further gains in sales are likely for the remainder of the year, with mortgage rates hovering around 3% and with continued job recovery.”
National Association of Realtors – 2020 Weekly Housing Market Monitor
September 14th to September 17th
The National Association of Realtors just published the Weekly Housing Market Monitor for September 14th to September 17th. The highly detailed report provides updated data on the housing market, mortgage forbearance programs and general economic conditions.
According to this report, “The housing market continues to recover strongly, fueled by low mortgage rates. Contract signings during the past four weeks ended September 13 were up 23% from one year ago, a strong pace despite the slight decline from last week’s pace (26%) as we enter the Fall season.”
The COVID-19 pandemic has led to significant changes in the real estate market, both for the good and for the bad. Over the past few months we have witnessed strong demand in certain sectors like luxury residential homes (outside of dense urban cities) as well as significant weakness in the retail and hospitality sectors.
Where things progress from here is challenging to forecast due to uncertainties with the economy and the political climate as well as the impact from the pandemic. However, certain markets (South Florida being one of them) are starting to see signs of a recovery in most sectors.
Since the onset of the COVID-19 pandemic the commercial and residential real estate markets in Miami-Dade, Broward and Palm Beach counties have experienced significant volatility. In the past 30 to 60 days as businesses reopened and residents went back to work, the number of real estate transactions experienced considerable improvement from their recent lows in April and May but still are far behind prior year levels.
With the resurgence in the number of positive cases which is causing a delay in reopening, not only the real estate market but also the economy is on unstable footing.
Managing Director Chris Losquadro Appointment to the Board of Directors for the East Coast Estate Planning Council
Quantum Realty Advisors, Inc. is proud to announce that our Managing Director and Principal Broker Chris Losquadro has been appointed to the Board of Directors for the East Coast Estate Planning Council of Palm Beach County for the 2020 to 2021 Council year.
Chris has been a member of the Council for four years and is active in the estate planning community across the state of Florida.
What Does a $1 Million Home Look Like in Today’s South Florida Market?
According to the National Association of Realtors, the nationwide housing price increase for the months of April 2020 marked 98 straight month of year-over-year of existing-home price gains.
Reasons for this eight-year growth trend vary based on the individual opinion of the housing professional and have been ranged from record low mortgage interest rates to a general lack of housing inventory. For whatever the reason, what a home purchaser in South Florida could buy for $1 million today is quite different than just a few years ago.
Real Estate & Economic Insights for the week ending June 5, 2020
Where there is still evidence of weakness in certain sectors of the economy as well as the real estate market including retail and hospitality, overall sentiment continues to show improvement. In addition, the number of mortgages in forbearance has started to decline and the Labor Department released a surprising report that 2.5 million jobs were added during the month of May.
While this is cause for optimism, there are still more than 4.7 mortgages in forbearance and US employers have not added back the almost 20 million jobs lost during the COVID-19 pandemic.
During this past week we found the following articles related to real estate and the economy that are useful in highlighting both where things stand and where we are headed