Despite stay-at-home recommendations over the last few weeks, the US real estate market has continued to post positive results. Although the number of sales has dropped, house prices show no signs of going down. In fact, those for the month of May were the highest in record.
Highest median price ever
According to the online portal realtor.com, May saw house prices continue to rise with the median reaching a historic high. The Monthly Housing Trends report for May found that the median price for listings on the US real estate market stood at US$330,000.
This represents a year-on-year increase of 1.6%, even when the market has been quieter than usual. And it’s a full point higher than April when despite lockdown, homes went up by 0.6%.
The rise is even higher in the 50 largest metros in the US where median prices increased by 3.3% in the 12 months to May. Los Angeles registered the biggest hike – here, homes went up by a massive 14.9% in the year. Pittsburgh came a close second with a 14% increase.
Underlying strength in market
Analysts believes that the steady rise in prices illustrates the current stability in the US real estate market. “May’s home price data demonstrate the underlying strength of the US housing market despite the challenges brought by the covid-19 pandemic,” said Danielle Hale.
The Chief Economist at realtor.com thinks this trend is here to stay. “Ongoing inventory shortgages also push house prices higher even while homes sell more slowly,” she said. Hale went on to predict “a shortened but strong summer home selling season”.
Fewer listings on the US real estate market
One consequence of the stay-at-home recommendations has been a drop in the number of homes on the market. Many parts of the US already have a shortage of inventory and this has worsened over the last two months.
Realtor.com found that listings dropped by 21.9% in the 50 largest metros, although this is less than half the decrease registered in April. At the height of lockdown, new listings fell by 44.1%.
Longer to sell
Apart from rising prices and fewer homes on the market, property is also taking longer to sell. This is perhaps an inevitable effect of the pandemic because there were hardly any viewings during April.
Realtor.com found that it took an average of 71 days to sell on the US real estate market in May, 15 more than a year ago. In the 50 largest metros, property was on the market for 58 days, up 13 from this time last year.
Florida real estate in May
Like most of the rest of the US, Florida real estate also posted a positive May. Inventory levels fell less than the national average – for example, listings of property in Orlando dropped by just 8.6%. Those in Jacksonville fell by 11.4% and in Tampa by 19.3%.
Prices remained static in Orlando in May at a median of US$315,000. In Tampa, one of the hottest spots for property in Florida, house prices rose by 1.8% last month. Sales also remained brisk and the Florida market did not reflect the national tendency of longer sales. Homes took just 4 days more to sell in Jacksonville and 8 days longer in Tampa.
Buy-to-let properties currently represent one of the best options on the US real estate market, particularly as inventory levels continue to fall. Many would-be homebuyers find that their house hunting is frustrated by the shortage or that they are priced out of the market. In this scenario, rentals often provide the only option.
BRIC Group has a selection of prime buy-to-let opportunities, located in key parts of Florida. Many come with a 2-year rental guarantee plus other advantages to investors. Properties start at US$102,000 and offer rental yields of between 5% and 9% a year.