Experts highlight Southwest Florida real estate market's resilience during coronavirus pandemic
Andrew Wigdor
With portions of Southwest Florida's real estate market on the upswing, experts have touted the area's resilience amid the coronavirus pandemic.
While the pandemic caused significant dips in the market in earlier days of the virus' spread in Florida, increases in real estate activity in Lee and Collier counties have been seen in recent weeks. A sector of the market, luxury homes, even broke a record last month, with the most homes priced at $1 million and up going under contract ever in a month of May.
Still, closed sales are down and agents are watching for lingering impacts of the pandemic.
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The Naples Area Board of Realtors recently released its May 2020 market report, which tracks home listings and sales within Collier County, excluding Marco Island. In a news release regarding the report, the group says Realtors were kept busy in May due to "pent-up demand for homebuying," resulting in "a remarkable spike in buyer interest."
The release points to last month's showings increasing 244% from April and outpacing showings in May 2019 with an increase of 5.5%. It also pointed out that pending sales, or homes under contract, increased by 90% from April. Pending sales in the county, however, were still down slightly from last year, with a 4.2% year-over-year decrease.
The group also highlighted the amount of time that homes spent on the market as evidence of increased buyer interest.
The amount of days properties in Collier were on the market decreased by 15% from May 2019, with the average dropping to 91 days on the market compared to 2019's 107 days.
Closed sales, however, were still down by almost 50% from May 2019.
Data from trade association Florida Realtors pertaining to the Lee County market in May was also recently released and displayed similar results.
Pending sales of single-family Lee County homes were up 2.2% from May 2019. However, townhouse and condominium pending sales were down 21%.
The amount of time properties spent on the market was also shortened in Lee compared to May 2019, with 47 days for single-family homes and 55 days for townhouses and condominiums. In May 2019, single-family homes averaged 68 days and townhouses and condominiums averaged 74.
Closed sales were still down in Lee, with a 39% year-over-year decrease in single-family closed home sales in May and a 54.5% year-over-year decrease in townhouse and condominium closings. Additionally, the dollar volume in the county was down by a significant 42.7%.
More up-to-date data has been collected by Mike Dodge, the director of market research for John R. Wood Properties, for the month of June. Dodge's data, which represents both counties combined, also displayed trends in line with what was seen in May.
According to the data, last week's showings were up 65% compared to last year at 9,835 showings. Dodge noted that that number exceeded the amount of showings in most weeks during the market's "peak season," January through April, in 2019.
Additionally, newly pending sales have now exceeded those of last year for the sixth consecutive week after seeing big dips in earlier weeks of the pandemic, according to the data.
"The positive trends that emerged in late April continue, and all leading-edge indicators signify a remarkably resilient market that was able to pull out of the doldrums triggered by the pandemic quicker than most," Dodge said in an emailed statement.
Closed sales, however, are still down in both counties, with a 20% year-over-year decrease last week, the data shows.
Brett Ellis, the team leader for the Ellis Team at Keller Williams Realty in Fort Myers, noted that closed sales in May represent sales that went pending in March and April, when the market was "most impacted" and Gov. Ron DeSantis' safer at home order was still in place. Therefore, the closed sales are more representative of the activity that was happening in the market a month or two prior.
Phil Wood, the CEO of Naples-based John R. Wood Properties, said that business was down about 14% near the end of May for his company. However, he stated that June has picked up substantially with a large amount of pending sales.
"June is going to be one of the best months of the year so far," he said. "It's just unbelievable how many people are out there buying real estate right now."
He also noted that the closed sales will take several weeks to "catch up."
"It's been kind of like we're in the middle of season," he said. "That's been the level ... and it's weird that it's still summer."
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Kevin Williamson, the president-elect of the Royal Palm Coast Realtor Association of Fort Myers and Cape Coral, said that two positive factors are that prices have remained relatively steady and that many homes are seeing multiple offers. Both of these factors are due to the low inventory that has been seen in the area during the pandemic.
Lee County currently has four months of single-family home inventory, which is a 29.8% year-over-year decrease from the 5.7 months that May 2019 had. Inventory in Collier saw a 35.6% decline from 2019's nine months, with a 5.8-month supply of single-family homes.
Williamson said one of the reasons that inventory may be low is due to potential sellers "just waiting" and some pulling their homes off of the market "just because of so many uncertainties."
"The indications that I'm getting from sellers out there is that they're just waiting and kind of making sure we get through the opening and they're going to be putting their homes on in the latter part of the summer or the fall," he said.
A significant negative factor, however, that Ellis pointed to in Lee County was the dollar volume drop. He stated that a shift in volume can lead some Realtors to head "for the exit door."
Out-of-state buyers bring 'steady' stream of pending sales
Ellis attributes the "steady" pending sale increase that has been seen in the last several weeks, in part, to an influx in out-of-state buyers.
With many people losing their jobs during the pandemic, some local buyers were removed from the market, Ellis said. However, he stated that this was partially recouped by pent-up demand from out-of-state buyers.
Ellis' team has even shifted some marketing toward people in other areas who were fed up with the COVID-19-related conditions they were experiencing in some of the more densely-populated Northern states.
"I've run a lot of online ads that attracted those out-of-state buyers," he said.
"They wanted out of lockdown, they wanted a little bit more freedom and they wanted out of the big city," he added. "So we've seen a big push from out of big cities to more rural or to more sunshine ... We're just fortunate here because we're a low-tax state where people want to be."
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He also noted that some companies have found that staff can work just as effectively at home, leading to a permanent shift toward remote work for some. This has freed up certain buyers to live where they want.
"This whole thing has opened companies' eyes," he said. "They learned from that they can almost work from anywhere. So a lot of people said, 'If I can work from anywhere ... I'll work remotely from Florida.'"
Wood also noted that "everyone in town" is talking about how many people they know from Northern states who want to "bail out" of those cities and get to someplace that has been less of a COVID-19 hotspot.
"(The market) is resilient," he said. "It's the desirability of our area."
Concern still lingers with Florida COVID-19 case surge
Despite positive trends, cases are on the rise in Florida, which leaves uncertainty in the real estate market.
Florida has been one of the states breaking records in new daily cases. The state reported over 5,000 new cases for the second day in a row on Thursday.
"That pendulum may swing again, because (cases) are on the rise," Ellis said. "If cases continue to rise ... then it could impact business. And if it impacts business and we shut down and close things, that affects people's pocketbooks ... We are inextricably tied to this health crisis. How that goes will ultimately determine everything ... What's going to happen in the future? I don't know."
"There is some concern, because we don't know how bad it can get," Wood also said of the resurgence of Florida cases.
He noted, however, that it seems like the upticks have been better controlled than the original wave of the virus.
Williamson expects that, as long as most businesses are able to remain open, the market will "level out some more" and continue to "build momentum."
Reach Andrew Wigdor at awigdor@gannett.com and on Twitter @andrew_wigdor