So in the midst of all these coronavirus changes, what's going on with real estate?
Looking at mortgage rates, they are holding near all-time lows since Freddie Mac started tracking this in 1971. The U.S. weekly averages as of May 14th were 3.28% for a 30-year fixed-rate mortgage with .7 fees or points. One interesting note by Freddie Mac was that although purchase applications reached a new low in mid-April, today, purchase demand is only down 10% from a year ago. Great news, so demand is improving and mortgage rates are positively impacting real estate sales.
Now, so many people are wondering how coronavirus will affect home prices. Well, pricing is very market specific, but listening to the experts, it seems that prices will remain stable throughout 2020. Mark Fleming, chief economist at First American, says "housing supply remains at historically low levels so house price growth is likely to slow but is not likely to go negative." Also, Fannie Mae says there remains anecdotal evidence that sellers were reluctant to cut prices and are instead opting to take their homes off the market until fears of contagion subside and social distancing measures are eased.
Here in Miami-Dade County, we are in what is normally our peak buying and selling time for homes. The months with the most number of closings are traditionally May or June, and coronavirus has affected the overall sales numbers significantly. April 2020 numbers of closings of single-family homes dropped 40% from last year and the sales for condos are about half of what they were last year. Only time will tell how this will impact the overall yearly numbers. Will all this volume be made up later in the year after restrictions loosen? We don't know, but one positive report is from ShowingTime, which tracks the number of showings of homes for sale. In Florida, the amount of showings was down about 40% from the expected levels in April. However, things are starting to rebound with about 15% week over week increases and showings have returned to normal levels in some states. As a matter of fact, 12 out of the 41 states they tracked have now reached even new highs for the year, illustrating pent-up demand.
In Miami-Dade County, there was a significant dip in new homes to the market, homes going under contract, and homes being sold. We are now on an upward trend and have been for weeks, each week growing in activity. So overall single-family homes priced $500,000 and below are still leaning towards a seller's market and it's still quite competitive in the lower price ranges.