I always keep an eye on national trends and compare them to what is happening in our local markets. Many times we find strong connections to national trends and othe times the uniqueness of the micro markets in South Florida are influenced by other forces and the trends can be counter to what we see elsewhere. In terms of the recent trends due to COVID, we are seeing similar movement if not more exagerated than national trends due to the low inventory of these highly sought after neighborhoods. Below is an article from CNBC highlighting the record breaking month over month jump in home sales in July. 24.7% is the largest single month gain in sales since it was tracked in 50+ years which does make sense as the COVID pandemic was a universal event effecting all markets. In the Coconut Grove and Coral Gables market, we tracked a similar event which was moe significant than the national number with home sales almost doubling from June to July, jumping a mind boggling 46.2%! Below is the CNBC article in it's entirety for a deeper look into this incredible statistic. 

 

 

Published from CNBC

 

July home sales spike a record 24.7% as prices set a new high

PUBLISHED FRI, AUG 21 2020 10:00 AM EDT
UPDATED FRI, AUG 21 2020 10:41 AM EDT
 
Diana Olick
 
KEY POINTS
 
  • Sales of existing homes soared 24.7% in July from June, according to the National Association of Realtors.
  • The supply of existing homes plummeted 21.1% annually, with just 1.5 million homes for sale at the end of July.
  • The median price of a home sold in July rose 8.5% annually to $304,100.

Sales of existing homes soared 24.7% in July from June, according to the National Association of Realtors.

That's the strongest monthly gain in the history of the survey, going back to 1968, and the highest sales pace since December 2006.

Sales were 8.7% higher from July 2019.

The numbers represent closed sales, meaning contracts signed in May and June. 

The increase in sales came as supply fell, prices rose and mortgage rates stayed low.

The supply of existing homes plummeted 21.1% annually, with just 1.5 million homes for sale at the end of July. This represents a 3.1-month supply at the current sales pace, down from a 4.2-month supply a year earlier. It's the lowest July supply in the history of the inventory survey, which has been tracking single-family supply data since 1982.

"The new listings are running a little higher than one year ago but all those new listings are being grabbed by the buyers and taken off the market," said Lawrence Yun, chief economist for the Realtors.

That shortage drove the median price of a home sold in July up 8.5% annually to $304,100. This is a record high nominal price but also the highest price when adjusted for inflation. When adjusted, it is 3.4% higher than the bubble high set in 2006, when mortgage lending was loose and borrowers could buy a home with no down payment and little to no financial documentation. 

"I think there is a big societal change concerning housing decisions today," said Yun. "The upper income bracket has been more stable in terms of jobs, and they are taking advantage of record low mortgage rates."

Low interest rates are adding fuel to home prices, as they give buyers more purchasing power. Mortgage rates spiked briefly at the start of June but then fell back quickly. The average rate on the 30-year fixed mortgage hovered just above 3% for most of June before then falling below that in July. 

"Continued healing in the housing market is a positive for the overall economy, but elevated jobless claims raise concerns about how sustainable this housing demand is, especially in the face of rising prices," said Danielle Hale, chief economist for realtor.com.

Sales of newly built homes jumped 14% from May to June, according to the U.S. Census. Homebuilder sentiment rose in August to the highest score in the 35-year history of the National Association of Home Builders' monthly index. Builders are benefiting not just from strong buyer demand but from the severe shortage of existing homes for sale.