In January of 2020, there was tremendous optimism in the real estate industry. We were confident that this was going to be a very strong year for the Ponte Vedra Beach real estate market. Inventory of available homes was down, average sale prices were up, and average days on the market were down. Economic indicators were representative of a strong financial market. Mortgage rates were low, as was unemployment. How things have changed!
As we all know, on April 3rd, Governor DeSantis instituted a shelter-in-place order for the State of Florida. However, many of us had already started practicing social distancing when the St. Johns County School District asked students to transition to on-line classes after the mid-March Spring Break. When the PLAYERS tournament was cancelled, the threat of the virus and its economic implications became very real in Ponte Vedra.
How has this news affected our local real estate market? While it’s still hard to tell, a story is emerging. Overall, the first quarter was strong when compared to 2019:
- Closed sales were up 26.4% through the end of March
- New listings were up 23.4%
- The median sale price was flat, but the average sale price of sold homes was up
- In the $1 million + market, there were 34 sales in 2020 compared to 23 in 2019, up 47.8%
Unfortunately, there is reason to be cautious when looking at these numbers. Most of the bad news regarding Covid-19 did not reach us until mid-March. Additionally, first quarter sales were reflected contracts written in December or January (since it usually takes between 30 and 60 days to go from an agreed upon contract to closing).
When looking only at statistics from mid-March and forward, we are starting to see weaknesses in pending listings, which is a leading indicator of future sales. We’re also seeing a decrease in active listings, since some sellers are choosing to take their homes off the market until the shelter-in-place orders have been lifted.
Another concern, particularly for high-end listings, is the tightening of mortgage requirements for non-conforming loans, or “jumbo” loans. Several large banking institutions announced last week they will not be issuing mortgages for jumbo loans, which are loans more than $510,400. We are all hoping this is a temporary measure, but with fewer banks issuing jumbo mortgages, many buyers may have to wait to purchase a more expensive home.
Finally, we’ve noticed a big reduction in actual showings of homes for sale. According to ShowingTime, the website that manages real estate traffic across the United States, the number of buyer showings has dropped 65% in Florida since March 21.
Despite the Coronavirus fears, real estate transactions are still going forward! As of this week, there are 69 single family homes under contract in Ponte Vedra Beach, with 40 of those properties are priced above $750,000, including a home listed for $1,890,000 in The Plantation that received multiple offers.
While it’s unclear what lies ahead, just this past week the Governor of New York declared, “the worst is over for his state” (Reuters). However our situation here in Ponte Vedra might compare, there is reason for optimism and hope that things will begin to return to normal before too long.
This article was published in the April 24, 2020 edition of the Ponte Vedra Recorder.