South Florida Sun-Sentinel (Sunday)
South Florida home prices soften slightly
The median sale price of homes in South Florida started to soften this summer, another sign that the market is rebalancing after a year of frenzied growth.
The housing market, while still strong and favoring sellers, is in a state of flux: Buyers may have more options as inventory levels rose over 20%, but their ability to afford homes has gone down due to rising interest rates, reflected in a 20% decline in sales, according to the latest numbers from the Broward, Palm Beaches and St. Lucie Realtors.
“The craziness we saw in 2021, when supply was obliterated and just at all-time record lows, we knew that kind of market was not going to sustain itself,” said Bonnie Heatzig, executive director of luxury sales at Douglas Elliman.
Sale price softens from July to August
The median sale price in all three counties saw declines from month to month, according to the latest numbers from the Broward, Palm Beaches & St. Lucie Realtors.
In Palm Beach County the median sale price for August was $565,000, a decrease from July’s median sale price of $600,000. It was similar in Broward County, where the median sale price of a single-family home was $562,500, a decrease from the previous month’s median price of $600,000.
In Miami-Dade County the median sale price for a home was $551,250, a decrease from July’s median price of $570,000.
There’s a few factors contributing to this: more inventory coming to the market, rising interest rates and sellers who are willing to take offers slightly lower than what they could have gotten at the peak, real estate agents said.
“We are seeing prices soften,” said Whitney Dutton, with the Dutton Group in Fort Lauderdale. “We are seeing sellers make adjustments down to new appraisals, and we are seeing negotiations on appraisals.
“As you are looking for homes and the values tick down one sale at a time, that changes the appraisal on the next contract,
and little by little each property starts coming in lower.”
While softening, prices are still higher than they were a year ago and from pre-pandemic levels.
Prices are 17% higher than they were a year ago in Palm Beach County, and there was a 13% increase in Broward County. In Miami Dade it’s a 10% increase year over year.
“It’s hard to predict what is going to happen,” said Heatzig in regard to how prices will grow in the future.
“It’s all going to be a function of the amount of supply on the market.”
More buyer options, but fewer sales
More homes came on the market in South Florida, a boost for buyers wanting more choices as they look to purchase a home.
Active listings rose 63.1% in Palm Beach County when compared to the year before, while they rose 46.7% in Broward County. In MiamiDade County they rose 26%.
“There’s just so much more supply, so the buyers have a lot more choice,” said Patty Da Silva, broker with Green Realty Properties in Cooper City.
“And when they have more choice they are slower to make an offer, so we’re seeing homes sitting on the market a little bit longer. They’re taking more time to make an offer and they are being more diligent in their process.”
The number of closed sales also declined in South Florida, a result of the market starting to move away from the craziness of last year.
Palm Beach County closed sales plummeted
20.4%. They declined
26.0% in Broward County and 21.2% in Miami-Dade County.
It doesn’t mean buyers aren’t still present in the market or demand isn’t there, but rising interest rates are affecting how much a buyer can get. For every 1% increase in mortgage rates, it causes a 9%-11% decrease in what a buyer is able to afford.
“We are having properties fall out of contract due to buyers not being able to get financing because their pre-approvals were done a year ago,” Dutton said. “Buyers are having to completely change their search criteria.”
The new normal?
The shift has created an environment where buyers have slowly gained some power after two years of desperate bidding wars just to get into a house.
“In the past, it was so brutal for buyers,” said Dutton. “I think we are shifting to more fair transactions, with inspection periods and normal negotiations.”
But there is still good news for sellers: Home values are still far above what they were pre-pandemic levels.
“That type of appreciation usually doesn’t happen in such a short amount of time,” said DaSilva.
“Sellers just have to reset a little bit.”