Second Quarter 2021 Market Report Report Written By: Elliot F. Eisenberg, Ph.D. Source: Stellar MLS
Economic Overview Nationally By: Elliot F. Eisenberg, Ph.D.
2021 Q2 GDP growth will most likely exceed 8%, and possibly even 9%, encouraged by the residual effects of the $1.9 trillion American Rescue Plan and the Covid vaccine rollout, improving job creation, high levels of savings, and a strong demand for dining out, travel and other services that were largely off-limits until recently. 2021 Q3 GDP growth should weigh in at close to 8%, and 2021 Q4 should close out the year at better than 6%. At worst, this year will exhibit the highest rate of growth since the recovery from the double-dip recession of the early 1980s, and at best, it could be the strongest since the very post-WWII early 1950s! As for inflation, while it is now certainly top-of-mind after more than doubling from 2% to more than 5%, the Fed continues to quite successfully reassure investors and markets that inflationary pressures are short-term and will subside over the next year. In addition, bond markets are beginning to factor in multiple variables including the end of peak stimulus, re-emerging Covid concerns, and the realization that GDP growth in 2022 and 2023 will steadily slow and end up no greater than 2.25%. As a result, interest rates have declined slightly even in the face of rising inflation. Next on the Fed’s agenda is tapering of their purchases of $80 billion/month in Treasuries and $40 billion/month in mortgage-backed securities, likely to begin in 2022, with interest rate hikes starting in 2023. I suspect the 10-year Treasury rate will end 2021 up by a quarter point, with mortgage rates up slightly more. As the economy returns to a post-pandemic normal, spending patterns are undergoing change. To wit, real consumer spending in May fell 0.4% M-o-M. This decline was not across the board; real durable goods spending declined 4.3%, while real spending on non-durables eased 0.5%. In a preview of coming attractions, real spending on services, which is 60% of overall spending, rose 0.4%, showing a strong shift away from purchases of goods and towards services. This increased spending on services is being driven largely by households with incomes greater than $200,000, who boosted restaurant spending by 16%. And with savings rates 50% above pre-pandemic levels, there is clearly more gas in the tank. Add strong job creation the rest of the year of between 500,000 and 750,000 new jobs/month and the unemployment rate should decline from the current 5.9% to 4.6%. As for housing, I expect both existing sales and housing starts to remain unchanged through the end of 2021. Legislatively, the $300 billion, five-year Surface Transportation Investment Act of 2021 is working its way through Congress. Hope remains that a much larger bipartisan “hard” infrastructure bill, which will include spending on bridges, broadband, airports, and rail, among other things, totaling around $1 trillion has the votes to also become law. Moreover, efforts are being made to pass a similar sized if not much larger “soft” infrastructure bill along strictly partisan lines. If passed, these proposals will clearly boost GDP growth some over the next five to eight years. Lastly, Congress must eventually vote to increase the debt ceiling, and ideally pass a budget before the new fiscal year starts on October 1, 2021. If a budget is not passed, Congress will do what it usually does and pass a Continuing Resolution to keep the government operating. Hopefully, there will be no stomach for any budget or debt ceiling antics.
Economic Overview Q2 2021 Florida Overview: In Florida, the statewide unemployment rate was 4.9% as of 5/2021, well below the national average of 5.9% and down substantially from the peak of 14.2% in May of 2020. In Hillsborough County, the May 2021 unemployment rate was 4.6%, while in Pinellas County it was 4.3%. As vaccination rates have improved and the national economy rebounds, so too has Florida. Inflation-adjusted real GDP for the state in 2021 Q1 was estimated at $969.6 billion, up meaningfully from the 2020 Q2 trough of $880.4 billion. In fact, if Q1 growth holds true, the state will easily surpass its prior peak by the end of the second quarter of 2021. Across the state of Florida, the median sale price of single-family homes through the month of May (the latest data available) rose to $344,900, a 27.7% gain over last year, while the townhome/condo median sale price rose by 24.1% to $250,000. Average prices for both types of properties were up by nearly 50% compared to last May. Compared to last year, closed sales of single-family homes through May were up 33.7% while condo and townhome sales were up a staggering 71.7%. Inventories remain very tight. With 32,021 active listings statewide at the end of May, there is a 1.1 month’s supply of single-family inventories, down 66.7% from last year. Condo and townhome inventories of 24,639 units are a 2.0 month’s supply of inventory, also down by two-thirds from last year. In Hillsborough and Pinellas counties, June median prices for both types of properties were up by solid double-digits compared to 2020 Q2, with single-family homes gaining 26.2% to $347,000, an all-time high, and townhomes and condos up 17.6% to $225,000, also a record. Average prices were up as well, with single-family homes at $452,231 (up 30.3% over last year) and multifamily at $310,900 (up 8.4%). Closed sales of single-family homes compared to last year were down just slightly while new listings were up, while both closed sales and new listings of townhomes and condos were up significantly compared to last year. Compared to the end of last quarter, month’s supply of inventory of single-family homes is up just slightly, to 0.6, and month’s supply of townhomes and condos is flat. Interestingly, pending sales at the end of the quarter are down compared to the prior quarter. If pending sales are falling because Covid-19 is perceived to be going away and folks are thinking “Outside the House,” that suggests a cooling market. But if it is simply because there is nothing to buy and is the result of tight inventories, then if inventories rise, sales could pick up. If, however, pending sale declines are the result of both painfully low inventories and high prices, then higher inventories will help, but less so. Therefore, while a decline in pending sales is interesting and gives some insight, not knowing why they are falling makes interpretation difficult.
Hillsborough County Single Family Homes Both median and average prices for single family homes in Hillsborough County for the second quarter of 2021 rose to all-time highs. Median prices of $337,000, were up 25% compared to 2020 and average sale prices jumped by 29% to $433,983.
The most expensive single-family home sold in Hillsborough County during the second quarter of 2021 was for a staggering $22.5 million.
Q2 Sales volume skyrocketed to nearly $2.6 billion, up 51% over last year. Closed sales April-June declined 5% to 5,935, while new listings rose 18% to 6,558. There are 1,292 homes available for sale at the end of the month, still just 0.6 month’s supply of inventory. Compared to the same period last year, average days on market declined 63% to 17 and percent of sold price to original listing price bumped from 98% to 100%.
Median Sold Price 350
$269,990
250 200 150
Aver age Sold Price
100 50 0
$433,983
450 2020 2019
SECOND QUARTER
25%
2020 vs 2021
400
2021 2020
350
Thousands
Thousands
300
$337,000
$336,384
300 250 200 150 100 50 0
2020 2019
2021 2020
SECOND Quarter
29%
2020 vs 2021
Closed Sales 7000
6,240
3.0
5,935
6000
Billions
2.0
4000 3000 2000 1000 2019 2020
$2,575,690,059
2.5
5000
0
Dollar Volume
1.5 1.0 0.5 0.0
2020 2021
Second Quarter
$1,707,422,033
2019 2020
2020 2021
Second Quarter
5%
51%
2020 vs 2021
2020 vs 2021
% Sold Price to Original List Price
98% 2020 2019
100% 2021 2020
2%
2020 vs 2021
Second Quarter
New Listings 5,552 2020
Aver age Days on Market
6,558
46
17
2021
2020
2021
Second Quarter
18%
2020 vs 2021
Second Quarter
63%
2020 vs 2021
20256 GULF BLVD
Indian Shores, Florida 4 BEDROOMS | 5 FULL | 2 HALF | 4,148 SQ FT
1615 GULF WAY
St Pete Beach, Florida
5 BEDROOMS | 5 FULL | 4,464 SQ FT
Hillsborough County Condos and Townhomes The median price for townhome and condos in Hillsborough County rose 19% to $225,000, an all-time record, although the average sales price declined 5% to $279,615. Sales volume increased 38% compared to 2020 Q2 to a record $549 million. The number of sold properties this quarter rose 45% to 1,964 and new listings rose 24% to 1,965. There are 275 active listings on the market at the end of June, which represents a little less than two weeks’ worth of inventory. Compared to last year, average days on market for condos/ townhomes fell to 18 days, down by 65% from last year, and percent of sold price to original list price stayed steady at 100%.
In the condo/ townhome market, the most expensive home sold during Q2 in Hillsborough County sold for nearly $3.6 million.
Median Sold Price $225,000
19%
$189,000
150
2020 vs 2021
100 50 0
2020 2019
2021 2020
Second Quarter
Aver age Sold Price 300
5%
2020 vs 2021
$293,289
$279,615
2020 2019
2021 2020
250
Thousands
Thousands
200
200 150 100 50 0
Second Quarter
Dollar Volume
Closed Sales 1,964
2000
500 400
Millions
1500
1,359
1000 500 0
2020 2019
$549,163,761
600
300 200 100 0
2021 2020
$398,579,099
2019 2020
Second Quarter
2020 2021
Second Quarter
45%
38%
2020 vs 2021
2020 vs 2021
% Sold Price to Original List Price
100% 2020
100%
0% 2020 vs 2021
2021
Second Quarter
New Listings 1,585 2020
Aver age Days on Market
1,965
52
18
2021
2020
2021
Second Quarter
24%
2020 vs 2021
Second Quarter
65%
2020 vs 2021
85 BELLEVIEW BLVD Belleair, Florida
3 BEDROOMS | 3 FULL | 1 HALF | 3,676 SQ FT
120 HARBOR VIEW LN
Belleair Bluffs, Florida 6 BEDROOMS | 4 FULL | 1 HALF | 4,315 SQ FT
Pinellas County Single Family Homes In Pinellas County, the median sales price of a single-family home of $360,000 set a new record and gained 25% over last year. The average price gained 32% and rose to $480,866, also an all-time high. Sales volume of single-family homes in Pinellas County during 2021 Q2 totaled more than $1.8 billion, a 33% increase over last year. Compared to last year, closed sales were nearly flat at 3,782, while new listings rose 23% to 4,150. There are 875 properties on the market at June 30, a 0.7 month’s supply of inventory. Average days on market for single-family homes in Pinellas County fell to 18 days during the quarter (compared to 42 days last year), while percent of sold price to original list price rose from 97% in 2020 Q2 to 100% in 2021 Q2.
The most expensive single-family home sold in Pinellas County during the second quarter sold for nearly $7 million.
Median Sold Price $360,000
400
25%
300
$287,000
250 200
2020 vs 2021
150 100 50 0
2020 2019
2021 2020
Second Quarter
Aver age Sold Price
32%
2020 vs 2021
500
Thousands
Thousands
350
400
$480,866 $365,019
300 200 100 0
2020 2019
2021 2020
Second Quarter
Closed Sales 4000
Dollar Volume
3,782
3,738
2.0
$1,818,635,410
3500
Billions
3000 2500 2000 1500 1000
2021
500 0
2020 2019
1.5
$1,364,440,027 1.0 0.5 0.0
2021 2020
Second Quarter
2020 2019
2021 2020
Second Quarter
33%
1%
2020 vs 2021
2020 vs 2021
% Sold Price to Original List Price
97% 2020
100% 2021
3%
2020 vs 2021
Second Quarter
New Listings 3,365 2020
4,150 2021
Second Quarter
23%
2020 vs 2021
Aver age Days on Market 42
18
2020
2021
Second Quarter
57%
2020 vs 2021
56 WINDWARD ISLAND Clearwater, Florida
3 BEDROOMS | 4 FULL | 1 HALF | 3, 518 SQ FT
10312 PAR ADISE BLVD Treasure Island, Florida
5 BEDROOMS | 4 FULL | 1 HALF | 3,687 SQ FT
Pinellas County Condos and Townhomes Condo/townhome prices in Pinellas County during Q2 saw the median price rising 16% to $228,250, and the average sales price rising 18% to $331,246, both records. Overall dollar volume of townhome and condo sales during Q2 rose by a staggering 128% to more than $1 billion, an all-time record.
In the condo/ townhome market in Pinellas County, the most expensive property sold for nearly $3.6 million.
The number of closed sales compared to last year nearly doubled to 3,020, while new listings rose 39% to 2,799. Active inventories are just 584 units, a 0.6 month’s supply of inventory. Average days on market for condos/townhomes in Pinellas County declined by nearly half from 57 in 2020 Q2 to 30 in 2021 Q2, while percent of sold price to original listing price rose from 97% to 99%.
Median Sold Price 200
$228,250 $197,000
150
2020 vs 2021
100 50 0
16%
2020 2019
2021 2020
Second Quarter
Aver age Sold Price 350
18%
2020 vs 2021
Thousands
Thousands
250
300 250
$331,246 $281,227
200 150 100 50 0
2020 2019
2021 2020
Second Quarter
Dollar Volume
Closed Sales
$1,000,364,180
3,020
1000
3000
900 800
2500
700
1,559
Millions
2000 1500 1000 500 0
600 500
$438,433,043
400 300 200 100
2020 2019
0
2021 2020
2020 2019
2021 2020
Second Quarter
Second Quarter
128%
94%
2020 vs 2021
2020 vs 2021
% Sold Price to Original List Price
97%
99%
2020
2021
2%
2020 vs 2021
Second Quarter
New Listings 2,010 2020
Aver age Days on Market
2,799
57
30
2021
2020
2021
Second Quarter
39%
2020 vs 2021
Second Quarter
47%
2020 vs 2021
800 COLLANY RD, #402 Tierr a Verde, Florida 3 BEDROOMS | 3 FULL | 1 HALF | 2 ,852 SQ FT
450 KNIGHTS RUN AVE PH1901 Tampa, Florida
3 BEDROOMS | 3 FULL | 1 HALF | 2 ,20 0 SQ FT
3528 W SHELL POINT RD Ruskin, Florida
2 BEDROOMS | 1 FULL | 816 SQ FT