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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The Economy, Housing & Commercial Real Estate for the week Ending April 17, 2020

There has been no shortage of news this week as the coronavirus continues to wreak havoc on our daily lives. Following are several articles relating to the economy, housing and commercial real estate which we found to be most significant in highlighting where things stand.

Nearly 4% Of All Mortgage Loans Now In Forbearance

Forbes – by Aly J. Yale

“According to the latest stats, nearly 4% of all mortgage loans are now in forbearance—a form of mortgage relief that allows homeowners to temporarily suspend their payments due to economic hardship. That share is up from 2.74% last week and a mere 0.25% in early March.

Loans serviced by independent mortgage banks are seeing the highest share of loans in forbearance at 4.17%. “

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How will the Coronavirus Impact the National Mortgage Market and Housing

For the past couple weeks we have been hearing from the National Association of Realtors and other media outlets about how the coronavirus will have a limited to moderate impact on housing as homeowners and their lenders are in a much better financial position than during the last economic downturn.

During that time our firm was a very active participant in the distressed real estate market representing lenders and servicers including Freddie Mac, JP Morgan Chase, Nationstar Mortgage, Bank of America and CitiMortgage so we saw first hand how these institutions were dealing with the vast number of mortgage defaults.  While a significant number of properties were foreclosed and resold, there was still a large number of mortgages that were modified or sold to a non-bank investor like private equity or a hedge fund.

Since there is virtually no regulation of these non-bank entities, there is a gap in the overall data about the number of possible loans that could be at risk for default. 

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How Home Sellers in Palm Beach County are Reacting to the Coronavirus

The coronavirus continues to wreak havoc on the real estate market as a large number of buyers of both residential and commercial properties continue not to move forward with their existing transactions. Beyond just buyers of real estate, residential sellers are also reconsidering and removing their property from the market.

Locally in Palm Beach County there has been a sudden spike in residential property listings that have been cancelled or temporarily removed from the market.

According to the Multiple Listings Service (MLS) from March 1st to March 30, 2020 there has been more than 1,500 residential property listings in Palm Beach County that have been changed to a “Cancelled” or “Temporarily Off Market”.  This represents more than a 50% increase based on similar cancellations from February 2020.

The following chart below outlines the sudden increase in cancellations / temporary off the market as compared to prior month and prior year levels.

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How the Coronavirus is Impacting Commercial & Business Real Estate

After years of robust growth in commercial property rental rates, occupancy levels and price appreciation, the landscape in South Florida has plunged into widespread uncertainty due to the impact from the coronavirus.

Property owners face significant challenges with respect to receiving monthly rental payments as commercial tenants with “non-essential” businesses have ceased operations without knowing when, or if, they will reopen. This has affected not only local-based small businesses but also national companies as evidenced by the Cheesecake Factory putting landlords on notice that they will not be able to make rent payments as of April 1st.

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Top Home Sales Prices for 2019 – Featured Palm Beach County Towns & Cities

Residential real estate in Palm Beach County experienced another outstanding year during 2019.  Although home sales across all price points were strong, the luxury home market was one of the biggest beneficiaries of price appreciation.

The following is a summary of the five highest priced home sales for featured Palm Beach County area towns and cities and is based on information obtained from the local Multiple Listing Service (MLS). 

Data for each area is based on that provided by the listing real estate agent and while deemed reliable, it is not always 100% accurate. In addition, there may be home sales that occurred during the year there were conducted outside of the MLS service; those individual homes sales will be shown in our analysis below.

 

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Mirasol – Real Estate Market Update for Year End 2019

Mirasol is one of the finest golf and country club communities in Palm Beach Gardens and throughout the northern Palm Beaches. Due to the high overall quality of the community and the popularity of the club, home sales have remained strong over the past several years.  As a whole, Mirasol has a fairly wide range of price points starting from around $400,000’s and exceeding $4 million.  

Over the past five years the housing market in Mirasol has continued to strengthen with respect to price appreciation. This was due to increasing buyer demand, limited inventory levels and historically low interest rates. Similar to that experienced across most luxury home communities in 2019, home sellers in Mirasol were able to take advantage of the strong market as median prices increased by more than 10% year-over-year.  It should be noted, however, that the number of individual home sales declined from 2018 by more than 18%.

Overall how did the real estate market in Mirasol perform in 2019?  Continue reading to learn more.

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PGA National – Real Estate Market Update for Year End 2019

PGA National is one of the more mature golf and country club communities in Palm Beach Gardens and throughout the northern Palm Beaches.  As a result, inventory turnover is lower than other communities in the area which leads to greater overall market stability.

During the past five years the housing market in PGA National has continued to improve with strong sales trends and home appreciation across virtually all price points. This was due to increasing buyer demand, limited inventory levels and historically low interest rates.  As a result, home sellers were able to take advantage of the strong market as priced continued to rise.

How did the real estate market in PGA National perform in 2019?  Continue reading to learn more.

PGA National Real Estate Market – Results for 2019

According to data provided by the local Multiple Listing Service (MLS), there were 368 individual home sales in PGA National for the year 2019 representing a combined sale value of more than $140 million.  

The 2019 results were an improvement over what was experienced in 2018 with 346 individual home sales representing a combined sale value of approximately $129 million.

To put the results for 2018 and 2019 in prospective, there were 172 homes that sold in PGA National during 2010 with a combined sale value of approximately $50.5 million.  Therefore, the market activity has virtually doubled during the decade with respect to both the number of sales as well as the overall volume.

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The Current State of the Housing Market

Nationwide Housing

According to the National Association of Realtors, existing home sale transactions on a nationwide basis rose in October by 1.9% to a seasonally-adjusted annual rate of 5.46 units. Year-over-year sales were up by 4.6% from 5.22 million units in October 2018.  The nationwide median existing home price across all housing types for October was $270,900, up 6.2% from October 2018.  Prices rose in all regions and this month’s price increase marks 92 straight months of year-over-year gains.

Total housing inventory was down approximately 2.7% from September 2019 to 1.77 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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