2019 saw the real estate market soften on Singer Island with a 10% decrease in the number of re-sale units sold and a 6.5% percent decrease in the sales volume compared to 2018. This softening was caused, in part, by the reduction of foreign sales. Thirty-five percent of real estate business in South Florida historically coming from foreign investment. The strenghting of the US dollar and the weaker foreign economies, lead to a decrease in overall condo sales.
Looking back on 2019, let’s recap the year in condominium re-sales on Singer Island and the comparison with 2018:
- There were 160 condominium re-sales on Singer Island in 2019, a 10% decrease from 2018 (179), sales volume contracted by 6.5%.
- Fifty-three percent of the re-sales (85) were below $500K; in 2018, 52% of the re-sales (93) were below $500K.
- Sixteen percent of the re-sales were over $1million as compared to 2018 which saw 17%.
- The highest re-sale for 2019 was the Ritz Carlton Penthouse 01A at $8,500,000.
- There were no short sales in 2019 for the second year.
- Condo inventory ended the year at 162 units; down from 178 the same time in 2018, a 9% increase.
- Price per square foot of the older condos (built 1969-1989) ended the year at $331; and the price per square foot of the newer condos (built 2003-2008) finished at $681. As a comparison, 2018 ended with the older condos selling at $315 per square foot and the newer condos at $582 per square foot.
CLICK HERE: Singer Island 4th Quarter 2019 Market Update
CLICK HERE: Singer Island December 2019 Market Update
Where Will The Housing Market Be In 2020
A strong job market and low mortgage rates should sustain the housing market in 2020. The market is on better footing than it was a year ago, when economic uncertainty caused by global trade tensions, stock market volatility and a government shutdown, along with rising mortgage rates and home prices, put a damper on sales. Mortgage rates, which seemed poised to surpass 5 percent, a level they hadn’t reached since 2011, retreated in 2019. The average rate of the most popular mortgage, the 30-year fixed, has remained below 4 percent the past 32 weeks, according to Freddie Mac data. At the start of 2000, it was 8.5 percent.
The National Association of Realtors expect 10 markets to have home price appreciation that outpaces the rest of the country over the next three to five years: Ogden, UT; Las Vegas; Fort Collins, CO.; Colorado Springs; Dallas/Fort Worth; Columbus, OH; Raleigh/Durham/Chapel Hill, NC; Charlotte; Charleston, SC; and Tampa/St. Petersburg, FL. The 30-year fixed mortgage rate will remain below 4 percent in the coming year, moving to 3.8 percent by the end of 2020.
Realtor.com expects inventory to evaporate making it more challenging for buyers to find a home despite attractive interest rates. The scarcity of homes on the market will drive down existing-home sales by 1.8 percent to 5.23 million. Hispanic homeowners will gain more wealth from home equity than white Americans. The majority of new homeowners are Hispanic, and home values in Hispanic neighborhoods are increasing faster than in white neighborhoods. Mortgage rates will average 3.85 percent in 2020 and will end the year around 3.88 percent.
Zillow expects home value growth to slow in 2020. The median U.S. home value is expected to end the year up 2.8 percent from the end of 2019. That’s lower than last year’s expected growth of 3.6 percent. Home sales will continue to climb, albeit slowly. Mortgage rates are expected to remain near relatively low levels in 2020.
The National Association of Home Builders sees builder confidence higher than it’s been in two decades, according to the trade association that measures industry sentiment. “While we are seeing near-term positive market conditions with a 50-year low for the unemployment rate and increased wage growth, we are still under-building due to supply-side constraints like labor and land availability,” NAHB chief economist Robert Dietz said. “Higher development costs are hurting affordability and dampening more robust construction growth.”
Mortgage Bankers Association, the trade association for the real estate finance industry, expects the 30-year fixed mortgage rate will be around 3.7 percent. New-home sales will rise to 704,000, while existing-home sales will increase to 5.6 million. Home prices will increase by 3.1 percent.
The financial website, Bankrate.com, has the 30-year mortgage rate holding steady around 4 percent.
Where do we see the Real Estate market on Singer Island in 2020 (A Presidential Election Year)?
It is clear that we are in a changing market and sellers must position themselves for the “new market”. Condo values that rose sharply in recent years have leveled off. Expect to see more cautious, watchful buyers. The luxury condominium/second home market is discretionary; buyers today look hard at comparable market conditions, property appraisal values and renovations vs no renovations. Sellers must be flexible, knowledgeable and current on market values.
Since much of Singer Island real estate is a discretionary purchase, consumer confidence will play a large role with buyers and sellers, which may differ from the National statistics.
Walker Real Estate Group wishes you a prosperous and healthy New Year.
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For more information on specific condominium sales activity contact Jeannie at 561-889-6734 or email her at [email protected].