Home prices in South Florida continue to climb higher despite another drop in transactions.
Miami-Dade County has a median sales price of $618,217 for houses, up from $575,000 a year ago, according to the Miami Association of Realtors home sales report released on Tuesday. The monthly report compared housing activity between October 2023 and October 2022. Condo prices followed suit, rising to $405,000 from $388,531.
Broward saw the same trend, with prices at $575,000 for single-family homes, up from $540,000 — and at $272,750 for condos, an increase from $262,000.
But annual sales keep falling, a trend seen since the start of this year. Miami-Dade recorded 1,971 sales, down from 2,067 a year ago. Broward recorded 2,135 deals, a fall from 2,222.
“When there’s limited supply, prices go up,” said Jason Damm, real estate expert and assistant professor of professional practice in finance at the University of Miami. “The supply is very low, not just in Miami, but across the U.S. People don’t want to sell, because it means getting out of a very low interest rate and moving to another place that would mean taking out a loan with a high interest rate.”
Many first-time buyers blame the steady rise in prices on their inability to afford a home. Experts have told the Miami Herald that national and local trends are creating a challenging market for many buyers. Freddie Mac has a 7.44% fixed-rate for 30-year mortgages, up from 6.61% a year ago and the biggest peak in two decades. These rates, as Damm said, force many would-be sellers to stay in place.
Another challenge? South Florida continues to attract wealthy residents, and corporate expansions are drawing workers with deep pockets and bigger salaries, adding more competition for real estate. As a result, buyers spend more money for the homes they want — usually those move-in ready and in the trendiest neighborhoods, pushing prices higher despite a decline in sales.
Miami-Dade, in particular, said Christina Pappas, draws workers having to move to Florida for their employers. Pappas overseas the Keyes real estate firm as its president. And given Broward’s slightly lower prices than Miami-Dade, it draws more of the first-time homebuyer pool.
Both counties are seeing a rise in prospective buyers from Argentina and Chile.
Miami-Dade saw 42% of all transactions closed in cash; Broward, 41%. Both counties had nearly double the national average of 29% in cash deals.
Miami-Dade has a four-month supply of houses and a 6.3-month supply of condos. Broward has 3.4 months of houses and 4.6 months of condos. These are slight increases from January when Broward had about a three month supply of houses and condos and Miami-Dade had four. A balanced market consists of six to nine months of inventory — anything less gives sellers the upper hand and anything more swings in the favor of buyers.
A look ahead
Buyers may expect even more favorable conditions for home shopping by summer by next year, Damm said, with the combination of rising supply and potentially lower interest rates.
Some economists believe the Federal Reserve will reduce interest rates — leading to lower mortgage rates — given the decline of inflation. Although a decrease in interest rates will increase competition, buyers will likely have an easier time home hunting with more residential options on the market.
“It’s not a good time to buy, because of interest rates,” Damm said. “If I’m a buyer now I’m going to be purposefully holding off to see where interest rates go and see if they go lower.”