But this is not a typical year.
“We wrote more purchase contracts in the month of June this year than in the 90-year history of our firm,” said Mike Pappas, president and CEO, The Keyes Co., headquartered in Fort Lauderdale.
Low interest rates have something to do with that, Pappas said. So, increasingly, does Florida’s zero state personal income tax - but perhaps most important in this time of pandemic, are changing attitudes about urban living and the rise of telecommuting.
“We’re not just a vacation spot anymore,” Pappas said. “Start-ups are flourishing in South Florida as more tech entrepreneurs move into the region. Why not take up residence where you can live and have fun in the same coastal playground?”
As COVID-19 makes buyers leery about sharing communal spaces, the interest is in single-family homes rather than condos.
“Inventory is tight, and we’re seeing multiple offers on homes in all price ranges with little more than virtual home tours,” Pappas said. “And the luxury market is on fire. A local builder sold five new, $5 million homes almost overnight. One New York buyer sent in a $500,000 deposit, sight unseen.”
In the Blue Ridge Mountains of Georgia, where $250,000 can still buy a small vacation cabin just a 90-minute drive from Atlanta, destination sales are booming.
“After a slow April, with people sheltering in place, we couldn’t get back into the office fast enough in May to accommodate the surge in buyers,” said Faron King, CEO, Coldwell Banker High Country Realty in Blue Ridge. “People from all over the Northeast and as far away as Texas have been clamoring for properties here. We’re doing virtual walk-throughs and fielding multiple offers - sometimes all-cash offers - on sight unseen homes in every price range.”
While one lakeside estate was recently listed for $2.5 million, the average sales price for a well-appointed home at or near lakeside, King said, is between $400,000 and $600,000 - and with inventory hard to come by, prices are rising as demand increases.
“If you see something you like, you’d best be prepared to pull the trigger,” King said, “because someone right behind you is ready to overbid you if you don’t.
The company’s sales volume in June and July, he noted, are nearly double the volume in the same period last year.
Some 2,000 miles away, in the Sierra Nevada mountain resort area of South Lake Tahoe, Realtors are seeing, “a surge of urban refugees,” said Doug Rosner, a broker associate with Chase International Luxury Real Estate.
Rosner, who has lived and sold real estate in the region for 41 years, has never seen a rush to buy like the current one, he said.
“Between the COVID pandemic and the protests and riots going on right now, people can’t get out of the cities fast enough,” he said. “With interest rates at rock bottom and the option to work remotely, business owners and high-tech workers, even physicians and lawyers, are flowing in from the San Francisco Bay area, from Portland, even from Texas, outbidding on another for homes that are in short supply.”
With inventory tight and prices ranging from the high-$400,000’s to $30 million or more for an in-demand lakefront estate, some buyers are being priced out of the market, he said. Yet some 30 percent of Rosner’s pending sales are all-cash-offers, and as demand increases, builders can’t build fast enough to meet the growing demand.
“It seems counter-intuitive,” he said. “With so much uncertainty in the world right now, you’d think people would want to stay put. But it seems it’s exactly that uncertainty that is driving the search for quiet and tranquility.”
In the snowbird haven of Palm Springs, California, where one tongue-in-cheek Press Telegram opinion piece suggested, ‘just giving the Coachella Valley to Canada,’ more than half a million vacationers from Canada and the rest of the Northeast descend on the desert resort area each winter.
“This year, with border closings in place, the Canadians are largely absent,” said Paul Kaplan, president, The Paul Kaplan Group, Bennion Deville Homes, a boutique brokerage in the heart of the small city. “Rentals are up as a lot of people just want to be out of Los Angeles - but home sales have been phenomenal. Our pending sales this June and July year are double what they were last year.”
That is especially telling in an area typically deserted in summer, when temperatures regularly soar to 110 degrees or higher. Yet, said Kaplan, with inventory at less than half of normal, his agents have a list of buyers waiting to be notified the moment a property comes on the market.
Is the rush to such tourist-driven destination markets sustainable?
“That remains to be seen,” said Pappas. “We will certainly be living in a new normal once this pandemic is behind us. Values are changing, but so are opportunities to live and work in more rewarding ways.”
