Potential Effects of COVID-19 Vaccinesto Real Estate Activities across Southwest Florida
Going into the festive season, real estate markets seem to favor sellers more this year as more city buyers continue to flock to Southwest Florida. Despite the pandemic’s subsequent ravaging waves, this local housing market records highs of up to 75 daily new buyers.
Since house hunting is no longer following conventional real estate rules, it’s safe to assume that the Southwest Florida market won’t be slowing down any time soon. The pandemic mostly interrupted traditional housing seasonal patterns, and many analysts deem next year’s market trendsas unpredictable.
According to the Naples Area Board of Realtors (NABOR), home-buying rates throughout this region are growing at an unprecedented pace, with homes flying off the shelves much faster than before.
Newest housing data records that the overall regional inventory had a 33.8% year-over-year drop in October from 5,351 listings last year. If it were a regular housing season, October would see an increased listing with sellers preparing for a spike in home demands from holidaymakers throughout the festive season.
The surge in demand coupled with record-low inventories has led to stricter bidding wars than seen before, a special ingredient for rising home prices. Homeowners are reportedly jacking home prices for their already listed properties across the region to get more than the asking price.
A large share of the housing demand results from the influx of people moving in from other cities. With many looking to secure their dream home, with large open spaces for homeschooling and remote work, this lot is booking available homes as soon as they are listed.
NABOR’s October housing report highlighted that homes took at least 11.5% less time to be sold than the 104 days a year ago. The regional housing market is reportedly becoming more competitive. With over 30% of the market seeing a similar increase, it is inclined towards maintaining a sellers’ market status going into the New Year.
According to the NABOR report, the median closed price for a single-family apartment in Southwest Florida rose to $458,000 from $408,500 in 2019’s final quarter. Naples recorded a 65.2% year-over-year rise in closed home sales and a 73% rise in pending home sales.
A different housing survey done by the Regional Economic Research Institute atFlorida Gulf Coast University (FGCU) in November indicated that other counties throughout Southwest Florida had a cumulative 45% year-over-year increase in home sales for single-family apartments.
FGCU also reports that the region has a healthy year-over-year turnover for new constructions, especially single-family properties.
The COVID-19 vaccine and its effects
Despite the joy of having clinically approved vaccines for the Coronavirus, regional real estate specialists are now cautioning that this might have an undesired side effect on the housing market. They are worried mainly that the current influx of newcomers might stop.
While this is a likely outcome, it won’t happen dramatically. This means that depending on how the vaccine plays out and until schools and big companies resume normalcy, pilgrimage to this land of sun, sand, and surf would continue into the first quarter of 2021.
Analysts claim that home-buying activities might retain the status quo as more millennials in the region are reaching mod-late 30’s and are looking to settle down and start their families finally.
The mortgage interest rate is a significant factor that shapes any real estate market. It has been a key player in stabilizing the Naples housing market, especially now that home buying is less seasonal. The record-low interest rates experienced during the pandemic primarily helped support the local housing market and the economy.
With the vaccine now at play, mortgage interest rates are likely to skyrocket as part of a potential economic recovery and growth strategy. The Pfizer vaccine news alone was enough to cause a 6-basis increase in the average mortgage interest rate for the 30-years fixed category.
The rate is currently at 2.72% for a loan in the same category relative to 3.68% a year back.
Since the “Great Migration” to the South proves unstoppable, home prices throughout Southwest Florida will continue rising because buyers are increasingly into better life quality and comfort. The gradual increase in new constructions coming online projects to service this heightened demand even without the vaccine.
As COVID-19 continues to shape various local housing markets, the effects of its vaccine on these markets are primarily unpredictable. The good news is that any change would be gradual, making it easier to monitor market trends. Contact our Woodruff property managers today for more local market insights, analysis, and predictions for 2021.
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