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

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South Florida Property Owners Should Be Prepared to Pay More in Taxes (2020)

Despite the COVID-19 pandemic, taxable property values have risen across Palm Beach, Broward and Miami-Dade counties.  As a result it is anticipated that individual property taxes will increase unless the government officials reduce the millage rates.

According to Florida law, property appraisals are conducted in January which reflected the state of the real estate market pre-coronavirus. If the valuation occurred today, most residential property values would remain consistent but commercial properties like hotels, office buildings, retail shopping centers and free-standing restaurants would likely see a decline in their valuations due to lost revenue and tenant closures. 

2020 Countywide taxable property values based on preliminary estimates are as follows:

  • Palm Beach County: Increased 5.5% to $209.5 billion
  • Broward County: Increased 6.14% to $211.264 billion
  • Miami-Dade County: Increased 4.6% to $322.783 billion

Pending Home Sales See Record Decline in April ’20

According to the National Association of Realtors (NAR) nationwide pending home sales took a large drop in April 2020, down by 21.8% as compared to March and more than 33% year-over-year. This marks the single largest decline since NAR began tracking contract-signing activity in 2001.

Single family home pending inventory levels in Florida were even steeper with a decline of 35.1% as compared to April 2019.

Real Estate Transactions Plunge in April Due to COVID-19

Real estate transactions of all types plunged during the month of April 2020.  On a national level existing home sales were off by 17.8% while commercial real estate transactions dropped to their lowest levels since 2010 with a decline of more than 70%. 

 

Highlights are as follows:

  • Existing single family home sales under $100,000 and over $1 million were down by more than 30%.
  • Single family residential inventory levels have declined by approximately 20% as home sellers removed properties from the market.
  • Median home prices across all housing types rose by 7.4% with gains shown in every region (98 straight months of year-over-year gains).
  • Office and industrial transactions were off by 60% (year-over-year).
  • Hotel sale transactions were virtually non-existent during April, down by 98%.
  • Commercial property prices have risen by 6.5% year-over-year.

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Commercial Office Lease Disposition

Our team assisted a corporate client with the disposition of a 6,634 square foot branch office which was no longer being used and was a drain on the company’s financial resources since the cost of the lease payments were significant.

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How is COVID-19 Impacting Home Sale Transactions? (Palm Beach County)

Although the “official” stats for the Palm Beach County housing market have yet to be published, here are the results for several local area zip codes where are data was obtained from the local multiple listing service.

The accompanying charts shows the number of housing transaction conducted for the years 2018, 2019 and 2020 in six (6) featured zip codes.

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Real Estate & Economic Insights for the week ending May 15, 2020

Individuals and businesses continue to take account of the financial damage caused by COVID-19 as jobless claims continue to rise bringing the total to more than 36 million. However, with more counties and states starting the reopening process and Congress considering another round of stimulus, there may be cause for optimism.

The Real Estate Market is still trying to find its footing with home buyer traffic well below pre-pandemic levels and commercial business expansion virtually non-existent. Opinions on the future of real estate are mixed with many experts differing on how the market will perform for the remainder of 2020.

 

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

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Real Estate & Economic Insights for the week ending May 8, 2020

COVID-19 continues to dominate the headlines as the financial markets react to the US economy losing more than 20 million jobs in April. As businesses start to reopen there is a watchful eye on how many will be able to return back to a meaningful level of operations.

The real estate market in South Florida remains fairly static as Palm Beach, Broward and Miami-Dade county have not started “Phase 1” of reopening unlike the 64 other counties throughout the state. According to Governor DeSantis the South Florida counties were not included as part of the initial reopening as they have much higher rates of COVID-19 cases and related deaths.

To learn more about the residential and commercial real estate market in Palm Beach County as well as throughout South Florida, please visit the Market Reports page on our web site. Every month it is updated with the latest published reports on the housing market in Palm Beach, Martin, Broward, and Miami-Dade counties as well as commercial real estate information which is provided by data providers and local market experts.

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.

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Housing & Commercial Real Estate for the week ending April 24, 2020

For yet another week, news of the coronavirus continues to dominate both the local and national headlines for the economy, housing and commercial real estate. From forecasts for a “V” shaped economic recovery to “gloom and doom” with the most recent unemployment numbers, it has been quite challenging to determine the path of the trend.

Following are several articles relating to housing and commercial real estate which we found to be most significant in highlighting both where things stand and where they are going.

How Stay-At-Home Orders Are Affecting The Real Estate Market

By Amanda Lauren, Forbes

“As coronavirus progressed from an outbreak to a pandemic at the beginning of 2020, the real estate market slowed down significantly by early March. As mortgage rates declined, despite a general fear of the unknown in terms of public health and the economy, there was still some activity with motivated buyers attending open houses and looking at property. But since social distancing and shelter in place orders were mandated around mid-March in most states, real estate activity hasn’t come to a halt entirely, but it has slowed down in a way the industry hasn’t experienced in a very long time.”

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Housing Market Update for March 2020

Prior to experiencing the full economic impact of the coronavirus, the residential housing market was mixed on both a nationwide and local basis.  While prices continue to improve, there is evidence that overall activity is withering which will have a significant affect on the market in the coming months.

The National Housing Market

According to the National Association of Realtors, existing home sale transactions on a nationwide basis fell in March by 8.5% (month-over-month) to a seasonally-adjusted annual rate of 5.27 million units. 

While home sales have declined, prices have remained strong with the national median home price reported to be $280,600.  This is up 8.0% from March 2019 and this increase marks 97 straight months of year-over-year gains. 

Total housing inventory was up approximately 2.7% from February 2020 to 1.5 million units. Unsold inventory equates to a 3.9-month supply at the current sales rate which is down from 4.1 months as reported for the month of September.

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