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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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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