Housing and the Coronavirus (COVID-19)
The housing market statistics for February 2020 were recently published and it showed that the market continues to remain strong with not only price appreciation, but increasing sales volume. Existing-home sales improved by 6.5% (year-over-year) which was the strongest amount for the month of February since 2007.
The market across four counties in the greater South Florida area also remained quite strong with gains in the number of homes sold as well as the median prices for both single family homes and townhomes / condominiums. The following table highlights the individual county statistics as of the end of February 2020 (year-over-year).
|FOR FEBRUARY 2020 (Year-Over-Year)|
|No. SFR Sales||SFR Median Price||No. Th/Co Sales||Th/Co Median Price|
|Palm Beach County||12.30%||6.80%||12.50%||3.30%|
As of mid-March 2020 with the coronavirus in full swing, a number of states now have ‘Shelter in Place’ orders and significant restrictions on businesses across the state of Florida. This will of course have massive implications on the economy as a whole, but how specifically will it impact the housing market?
How will the Coronavirus impact housing?
While the immediate impact of the coronavirus on housing remains to be seen, it is causing concern at some of the highest levels of real estate finance. Recently the Federal Housing Finance Agency has instructed Fannie Mae and Freddie Mac to suspend foreclosure and eviction actions for at least 60 days and to provide forbearance of mortgage payments to borrowers affected by the pandemic for up to 12 months. Fannie Mae and Freddie Mac accounted for approximately 45% of all mortgages originated in the United States since 2018.
In addition, the Federal Housing Administration (FHA) and the Veterans Affairs (VA) have suspended foreclosures through the end of April. FHA and VA insured loans account for approximately 23% of all new mortgages since 2018.
While there is limited information about the Spanish Flu’s impact on the housing market, there is data from the 2003 SARS pandemic that indicated “monthly real estate transactions fell from 33% to 72% vs baseline for the duration of the epidemic” (per Svenja Gudell, Zillow Group).
During the months of February, March and April, 2019, approximately $3 billion of single-family residential real estate transactions were completed in Palm Beach County. If similar declines in the market are similar to that from the 2003 SARS pandemic, housing sales will decline between $1 and $2 billion during this three month period.
Chris and Amy Losquadro of Quantum Realty Advisors, Inc. are aware of the severe implication that this virus will most likely have on the real estate market and will continue to provide the most up to date real estate market information so you can properly position your real estate assets for as minimal of an impact as possible.
To discuss your individual situation in greater detail, please contact us at 561.624.2680 or click the button below.
Disclaimer: The data for this article was obtained from the local Realtors association and other real estate information sources. While deemed to be reliable, this information is not guaranteed. No warranty or representation, expressed or implied, is made as to the accuracy contained herein and submitted subject to errors, omissions and other conditions.