The May sales report is in and the data is sending mixed signals. May 2020 sales are down 28% compared to May 2019. “Even though closings are down, I’m encouraged by some of the other numbers,” said Jeremy Thomas, President of the Gainesville-Alachua County Association of REALTORS. “Prices seem to be holding, properties are selling, the mortgage market is functioning very nicely, and the market is working,” said Thomas.
He continued, “At 98.1%, the ratio of sold price to list price is amazingly steady year over year. This is a good statistic. It means there is not a panic situation.”
The median price, the price point at which 50% of the sales were above and 50% were below, is holding fairly steady – $235,000 this year compared to $239,000 last year, indicating a 1.7% decline.
The Alachua County market is very tight. The active inventory, the number of homes for sale, in May was 671 this year versus 877 last May. That represents a 22% decline. This represents 2.7 months of inventory compared to 3.3 months in May 2019.
Thomas said “I think back to my economics courses and am reminded that markets function because of supply and demand. The Alachua County market seems to be staying in balance. Sure, our closed activity is down but prices seem to be holding because our supply is in balance with our demand.”
The number of cash buyers declined. In May 2020 there were 36 cash sales in contrast to 57 cash sales in May 2019. Thomas said: “It’s reassuring to see that number decline. Cash buyers tend to be investors. It is my opinion that more people are taking advantage of the outstanding mortgage rates to purchase their primary residence. While I am an advocate for people investing in real estate, I very much support people owning their own home.”
What does all this data mean? According to Thomas: “It’s confusing. There is no question that sales activity has declined in the past four reporting periods but I’m really encouraged when I dig into these numbers and extrapolate the data. From a health perspective, my home has been an emotional, mental, and physical safe haven for myself, and more importantly my family, during the pandemic. Additionally, the recent sales reports have reaffirmed my belief that owning your own home is a smart strategy and financial investment in uncertain times.”