The last time I wrote my million-dollar update published on March 18, we had no idea what a challenge the next months would be. I ended this column with the wish that the next three months wouldn’t have too many surprises, and here we are – one startling surprise after another.
A lot has happened since mid-March, and as reported, the April Manatee County sales statistics were down in all areas, but the sales prices were up, reflecting many sales that were under contract prior to mid-March. When the May sales statistics are posted later in the month, we’ll likely see more of the same.
However, based on a survey of more than 300 homebuilders, the sales of newly-built homes went up 21% in May from a year earlier. Economists are saying this survey offers a potential look at the sales activity yet to come around the country after the decline in March and April.
In addition, the Mortgage Bankers Association reported mortgage applications for home purchases at the end of May rose for the seventh straight week, up 17% from last year. The speculation is that buyers who may have been thinking of buying next year are moving up their agenda. Part of this is concern about another surge in the coronavirus and buyers’ desire to move out of states or cities where the most infections were. The fear of being quarantined again is motivating buyers to get out of Dodge now and not wait for the other shoe to drop. Not surprisingly, sales were strongest in Florida, up 59% from a year ago, and down in the northeast and California.
Complicating things are rioting in major cities around the country, driving homeowners to consider relocating to safer regions, and the rise of remote working. The rioting will hopefully stop, but the emergence of remote working is probably here to stay.
Major national companies like Facebook anticipate 50% of the workforce will be working remotely within five to 10 years. Even major banking operations have indicated that although they may retain a presence in major cities, remote working is in the best interest of both them and their employees.
What does this mean to the housing market going forward? At the very least there will be a major change in how workers live and work, or as the Zillow chief executive phrased it, “the great reshuffling.”
Let’s see what the upper end of our real estate market has produced in February, March and April. The closed sales are from the Manatee County Property Appraiser’s office and the available properties are from realtor.com as of this writing.
On the market in Cortez, there are four properties listed between $1,299,000 and $1,300,000, the same as the last analysis. The city of Anna Maria has 73 properties listed over $1 million; the last analysis had 63. There is one listed over $6 million, three listed over $4 million, eight listed over $3 million and the balance between $2 million and $1 million. The combined cities of Holmes Beach and Bradenton Beach have 69 properties listed; the last analysis had 93 listed. They range from one over $7 million to two over $5 million, three over $4 million and four over $3 million. The balance is between $2 million and $1 million.
As you can imagine, sales are way off. Cortez had no sales over $1 million, same as last time. The city of Anna Maria had four, all under $2 million; the last time they had 16. And Holmes Beach and Bradenton Beach had five, also all under $2 million; the last time they had 24.
Remember, real estate sales are always a lagging number and half of what we’re looking at was prior to shutdown and half during shutdown. I’m positive things will look better next time. Stay well.
