Florida Covid-19 Market Watch – 4/29
About the Author – Jared Jones has been a Florida resident for 26 years. Since then, Jared has been a part of the top 50 in Realtor volume for the Orlando market several times out of more than 14,000 agents, including becoming the top Realtor in the country by volume in 2010 and 2011. He has been featured in Time Magazine Online, and The Wall Street Journal Real Trends Report of Top Agents. He was was listed in the Wall Street Journal and Real Trends Top Agent List, making the #4 spot in the nation by volume. He was featured in “40 under 40” Business Professionals in 2012. He frequently does outreach and training to help shape the minds and business of the local real estate professionals around him. When not running his real estate machine, Jared enjoys spending time with his wife Carrie and four boys, Talon, Connor, Bryce, and Simon doing church activities or catching the very infrequent round of golf! Jared credits his business to blessings given to him from God. He is active in his church and accredits all of his success to adherence to Biblical principles which he chronicles in his book Ancient Wisdom for Modern Day Success.
FLORIDA COVID19 MARKET WATCH APRIL 29
As you know, I’ve been watching the central Florida marketplace, all of the Orlando zip codes, Winter Garden’s 34787 and Clermont, specifically 34711. Week after week, I’ve been reporting the transaction volume is off by 70%. This week, unfortunately, it’s not really been any different. There were 129 properties closed versus over 500 sales on the same week a year ago. So we are absolutely doing less business than we were, which is to be expected.
Interestingly, two thirds of all the inventory that did close this week was not even on the market for a full three weeks. Now this week, new homes going under contract, that means a buyer and a seller agreed on a price, consistently climbed, and it has by between 10% and 20%. Of all the homes that recently went under contract, half of those weren’t on the market a full week before they were under contract. Now, the number of homes that went under contract this week is almost identical to the amount of new listings that were introduced to the market. That has been a consistent statistic for the last three weeks straight. One important thing to note, the amount of homes that are falling out of contract or being canceled, what we call back on market, that number is incredibly high. There were 120 properties that fell out of contract on the same week of time. That represents nearly half of the amount of homes that went under contract that had their contracts come undone. In our world, a 50% fallout rate is incredibly high. Usually in real estate, we bargain for maybe 10%-15% of homes will fall out. That represents a very soft part of the marketplace and I could tell you where that part is found. The average price of a home that sold last week was $376,000. The consistent average price of homes that are going under contract is right at $300,000 it’s been that way for three weeks. If all homes going under contract average at $300,000 price, why is the price point so high on the solds at $376,000? The success rate of homes going under contract all the way through closing at or below the $3,000 price threshold is having a lot of challenges.
What that’s telling us is that properties are going from under contract all the way to closing at 300K to 320K and below all the way to zero. The lower price range homes are having incredible challenges getting through closing without coming undone, falling out first. That price range is very vulnerable to issues that us as real estate agents, we have to be extra vigilant to make sure that the buyers in that price range are ready buyers and can get all the way through the process. I imagine a part of that is loan issues. I also imagine a part of it is market issues, layoffs, furloughs, or cold feet. On brighter news as we get closer to reopening the state, I have noticed in the past week more of a bounce back in responsiveness that was not there two to three weeks ago.
I have seen more buyer conversations and more people looking to bring their home to the market. The market looks to be coming back and engaging more into the real estate process. If you are looking to sell now, now is the time. As I said, nearly 50% of homes that went under contract this week were under contract in less than six days. That means that there’s aggressive demand for a lot of properties right now, but on the downside, not every homeowner is a winner.