The days of intense bidding wars and few homes for buyers to choose from in South Florida are coming to an end.
The South Florida real estate market is becoming a different market than buyers (and sellers) have become accustomed to over the past couple of years. Homes take longer to sell, buyers have more options, and fewer sales occur.
“I think the downturn is becoming more apparent,” said Patty DaSilva, broker at Green Realty Properties in Cooper City. “We have several open days and people attend, but the offers just don’t come in.”
Here’s the state of the South Florida real estate market in terms of sales prices, number of homes on the market, and direction of rents:
The median selling price in the tri-county area again recorded double-digit increases from a year earlier for the month of September, according to figures from Broward, Palm Beaches and St. Lucie realtors.
- The median selling price of a single-family home in Palm Beach County jumped 23.4% to $580,000.
- The median selling price of a single-family home in Broward County jumped 13% to $565,000.
- The median selling price of a single-family home in Miami-Dade County jumped 17% to $568,000.
However, the percentage a seller gets from their original list price has decreased slightly.
Palm Beach County’s median percentage of opening list price decreased nearly 4% from the prior year, while Broward County’s percentage of opening list price decreased 3%. Miami-Dade’s was similar: it was down about 2%.
This can be attributed to several things, Da Silva noted. Sellers can adjust their original list price down if it was too high, or sellers can accept a lower offer than they wanted.
“Some sellers will say this is the only offer they have and the house has been on the market for quite a long time,” she said.
Inventory levels are on the rise in South Florida, a stark change from the pandemic real estate boom when there was only a month’s supply at one point.
Not only does this give buyers more options, but it also signals that the frenzy of the past two years is waning.
In Palm Beach County, the supply of homes on the market jumped 107% to nearly three months of supply. For Broward County, home supply increased 80% to approximately 2.7 months of supply. For Miami-Dade County, it jumped nearly 60% to 3.5 months of supply.
It also takes longer for houses to come under contract.
- Palm Beach County’s median contract day rose 57% to 22 days.
- Broward County’s median contract day rose 69% to 22 days.
- Miami-Dade County’s median contract day rose 33% to 24 days.
“In a declining market, you have to be careful not to overvalue your house and chase it to the bottom, losing money every month the house sits. When the market was rising, pricing a home above its value was less important. More time on the market could literally catch up with a once overpriced listing,” said Whitney Dutton, of the Whitney Dutton Group in Fort Lauderdale.
Completed sales of single-family homes continue to fall as many buyers face record high interest rates combined with higher prices.
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“After the last rate hike to 7%, buyers were shocked by the stickers,” Dutton said. “They slowly stopped looking, writing offers and putting houses under contract.”
- Closed sales were down 30% in Broward County from the previous year.
- Closed sales were down 19% in Palm Beach County from a year earlier.
- Closed sales were down 30% in Miami-Dade County from a year earlier.
Rents are on the rise, but the pace of growth is slowing from last year’s record increases.
According to a rental report from Zumper, Miami and Fort Lauderdale saw their median rents decrease month over month for a two-bedroom apartment.
Fort Lauderdale saw a 19% annual increase for a two-bedroom apartment at $2,950. This is a decrease of 0.7% compared to the previous month. In Miami, the median rent for a two-bedroom apartment rose about 30% to $3,400. This is a decrease of 0.3% compared to the previous month.
West Palm Beach reported a more modest year-over-year rent increase for a two-bedroom apartment of 10% to $2,200.
There are signs that the rental market is returning to more moderate growth, Zumper CEO Anthemos Georgiades wrote in the report.
“Occupancy rates and the pace of rent increases are falling in many major metros as tenant demand weakens and recession fears take hold, with many tenants deciding to stay on the spot or to trade on the most expensive options”, noted Georgiades.