Allied Realty Group Blog

Cooling process

A cooling process is underway in the South Florida residential real estate market.  Prices are stretched and buyers are finally taking notice.  It has been ten years since the housing bust and some of the same behavior is present in the market today.  Let’s look at a few charts.

Condos cooling off?

During the month of August, it looks like the sale prices of condo properties in the Fort Lauderdale area have already cooled.  Here is a quick snapshot of traditional, short sale and REO sales in Broward County.

Fort lauderdale condos cooling off

Single-family homes are cooling off

It looks like the median sale prices have stopped climbing also.  Its just a matter of time before the flippers get stuck with their properties if they don’t make price adjustments.  If you haven’t already noticed, the yard signs in your neighborhood have been sitting there awhile.  Get used to it!

Cooling house prices in Fort Lauderdale

Not cooling, rates are heating-up!

The trend in mortgage rates is higher and will continue to add downward pressure to real estate prices.  We are looking for the next move in the 10-year bond over 3.12% and its off to the races.  We just surpassed levels from June and the next rally could take us to levels that we haven’t seen since the financial crisis.  People forget how low rates have been since 2009 and they have been a big factor in propelling real estate prices to bubble heights.  As mortgage rates grind higher, you will see residential real estate prices decline.  It’s just basic math!

Not cooling mortgage rates

Transaction volume (should be cooling next)

Residential transaction volume in the Fort Lauderdale area has been good so far when compared to the past six years.  We anticipate that deal volume will decline for the balance of 2018 and continue to soften in 2019.  Keep an eye on deal volume.  As it slows, prices will follow it downward.  This chart shows the average monthly residential transaction volume.

Good deal flow (so far)

As California goes…..

When it comes to residential real estate, California usually leads the way.  Here is a good article on the California real estate market and the recent price activity.

Posted in Condo market, Fort Lauderdale real estate, Market Insight, Mortgage rates, South Florida Real Estate | Tagged , , , | Comments closed

Watching the charts

We are watching closely as the charts of South Florida real estate may be changing.  Today we will look at the sale prices, transaction volume and foreclosure activity in Miami-Dade, Broward and Palm Beach County Florida.  Just as the speculators are getting excited (again), they may be the bag holders for the second time in a decade!  Our first chart today clearly shows prices declining.  From June to July, the average sale price of a house in South Florida dropped 7% while condo prices dropped 16%.  We expect this trend to continue over the next several months.

Watching prices decline

Watching South Florida real estate prices drop!

Watching transaction volume

The number of transactions dropped in July as well.  The number of houses sold declined from 4,353 in June to 3,845 in July. This represents a 12% decline.  Condo sales in South Florida dropped 14% from 4,788 in June to 4.098 during the month of July.  Transaction volume will usually set the tone for sale prices.  If we see the number of closed sales continue to drop, prices will follow that trend downward.

Watching deal volume drop in Miami Fort Lauderdale Palm Beach Florida

As far as the annual average number of closed sales, South Florida is actually o.k. for now.  With a monthly average of 7,943 closed deals, we are up over 2016 and 2017.  You will notice from the chart that 2015 was a big year for South Florida real estate activity.

South Florida real estate deal volume

Watching the residential inventory

As the transaction volume declines over the next few months, it will be interesting to see if the residential inventory starts to climb.  It has been held in check for awhile now, but we may finally see it start to increase again as the market softens.  In July there were 28,501 condo properties and 18,508 houses listed for sale in South Florida for a total of 47,009 residential properties.  We would love to include a chart of the average days on market for listings, but that data continues to be manipulated by real estate agents as recently reported and does not provide an accurate market snapshot.  As listings go stale, agents have a habit of cancelling / relisting properties and that impacts the days on market.  We anticipate that this problem will worsen as market conditions deteriorate.

Watching inventory in Miami, Fort Lauderdale & Palm Beach

Posted in Condo market, Market Insight, Single-family homes, South Florida Real Estate | Tagged , , , | Comments closed

Rolling over

Rolling over is the topic today, as it appears the South Florida housing market may finally be cooling off.  During the month of July we saw prices of houses and condos in the Miami, Fort Lauderdale and Palm beach markets decline.  Our first chart today shows the residential transaction volume across the tri-county area.  The total transaction volume declined from 9,141 deals in June to 7.943 in July, representing a 13% drop.

Rolling over - deal volume

Prices rolling over

Residential real estate prices dropped in the month of July as well.  The average condo sale price declined 16% from $327,173 in June to $275,185 in July.  As for single-family homes, the average sale price declined 7% from $540,314 in June to $501,023 in July.  One month certainly does not make a trend, but if the transaction volume continues to drop, prices will follow.

Rolling over - prices

Not rolling over – foreclosure filings

So this is the recovery folks!  After a huge month of new residential foreclosure filings during the month of June, the numbers dropped slightly in July, but still remain above average and the highest we have seen in years.  It appears that there are a number of real estate markets that are wrestling with the same problem.

Rolling - South Florida foreclosure filings

Mortgage rates

Borrowing costs still remain very low by historical standards. If the residential real estate market is facing headwinds from mortgage rates at these levels, we are in trouble.

Mortgage rates - still rolling at low levels

As we move into the fall, we will keep you updated on all the happenings in South Florida real estate.  Until then, keep rollin’

Posted in Fort Lauderdale real estate, Market Insight, Miami real estate, Palm Beach real estate, South Florida Real Estate | Tagged , , , | Comments closed

Leading indicators

Leading indicators show that the housing market may finally be slowing.  It started in California, which usually leads the remainder of the country when it comes to real estate.  As for the latest South Florida numbers, there were some noticeable gains in single-family home prices, and a slight decline in condo prices.   The average sale price of a house was $540,314 in June and the average price of a condo was $327,173.

Leading with prices - Miami Fort Lauderdale Palm beach

Leading indicator – sales volume

Sales volume gained strength in the single-family home market with deal volume reaching 4,788 in June.  As for the condo market, deal volume declined slightly to 4,353 transactions closed.  We always say the price will follow sales volume, so any sustained decline in sales will lead to lower prices.  This chart clearly shows that June is a strong month each year, so a drop in the next few months is expected.

Leading indicator- deal volume

Leading Indicator – Mortgage Foreclosures

Nobody wants to talk about the elephant in the room:  South Florida Mortgage Foreclosure activity.  This next chart shows that we have a dramatic increase in new foreclosure filings throughout South Florida.  We haven’t seen this may filings since the financial crisis nearly a decade ago.  This problem should not be ignored if you are buying / speculating in the South Florida residential real estate market.  Your real estate agent should be able to show you if the market you are looking to purchase a property has an overhang of properties in default.  It takes a very long time for foreclosures to make their way through the court system, but eventually these properties hit the market and drag prices down with them.

Leading indicator - foreclosures

As for the monthly and annual foreclosure filing averages across South Florida, take a look at the numbers:

Annual Monthly Change
2015    9,557      796
2016  15,194    1,266 59%
2017   13,071    1,089 -14%
2018    8,397     1,400 28%
Posted in Fort Lauderdale real estate, Market Insight, Miami real estate, Palm Beach real estate, South Florida Real Estate | Tagged , , | Comments closed

Going vertical

The chart of foreclosure filings in Miami is going vertical.  For the past several years we have seen condo towers going vertical across the city skyline without any concern for poor fundamentals in the residential real estate market.  Ten years after the last housing crash and South Florida appears to have some  issues piling-up once again.  Although interest rates have been low, they have been artificially suppressed.  Any sharp rate increase will pop this latest bubble and do it quickly.  Today we will focus on the sharp increase in the Miami-Dade residential foreclosure filings.

Going vertical – residential foreclosures

Take a look at the purple line in this chart.  The number of new foreclosure filings in Miami is through the roof!

Going vertical- foreclosures

We haven’t seen this many new filings in years.  This clearly shows that we never recovered from the last crisis and all of the failed attempts to save the housing market continue to fail.  As far as the annual numbers for Miami, Fort Lauderdale and Palm Beach since 2015, here they are:

Annual Monthly Change
2015 9,557  796
2016      15,194          1,266 59%
2017      13,071          1,089 -14%
2018         8,397          1,400 28%

Our next chart shows the single-family and condo property foreclosure filings across Miami-Dade County.  In June we updated the existing foreclosures in the Miami area.

Vertical foreclosure chart

As for the averages and other fun stats in Miami:

Annual Monthly Change
2015  4,638  387
2016 6,855   571 48%
2017 5,393   449 -21%
2018 4,075    679 51%

Mortgage rates

Rates have stabilized for now and don’t appear to be creating much of a headwind for the residential real estate market.  Sometimes a quick spike in rates gets some buyers off the fence.  Rates are still very low by historical standards and unless you see 30-year mortgages over the 5% mark, they shouldn’t be a problem.  However, the residential market in South Florida is priced for perfection and if you have a spike in rates, slowing sales activity and a wave of foreclosures hitting the market, look out below!

Mortgage rates have moderated

Transaction volume

Residential transaction volume picked-up in the last few months, which should alleviate some of the summertime sadness  caused by the onslaught of new foreclosures across South Florida.

South Florida deal volume

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Late cycle behavior

Late cycle behavior is back in the South Florida residential market.  For the last decade it appeared as if this slow grind higher in prices would not abate.  There is evidence of peaking residential prices in the South Florida market and a reversale might be right around the corner.  today we will highlight some of the Broward County residential activity in houses and condo properties.

Late cycle inventory

Inventory declined in the Greater Fort Lauderdale area over the last few months, which has boosted sale prices.  As the spring selling season wrapped-up, the single-family home inventory dipped to 5,317 listed homes in the month of May.  Condo inventory declined to 7,900 condos listed for sale during May.

late cycle inventory

Late cycle prices

Will residential real estate prices move higher from here?  There could be a few months left in this rally.  An alarm will not sound at the top of the market, so we will continue to monitor the charts.  By looking at this first chart, you will notice that the average sale prices of single-family homes in the Greater Fort Lauderdale area have been trending higher, with the average sale price reaching $456,861 during the month of May.  The average sale price of a condo was up slightly to $231,238.

late cycle real estate prices

Late cycle debt

Over the past several years we have warned our readers about the dangers of keeping interest rates so low for so long.  Consumers tend to borrow much more than they should.  You will see in this next chart that foreclosures are making a big comeback.  Many of these are from the last housing crash, but now we have new ones piling-up thanks to the massive accumulation of debt.  We haven’t seen this many foreclosures in Fort Lauderdale since the last crash.  It’s really fun buying stuff, but eventually the bill comes due.  By looking at this chart, you should be able to see that people are facing some challenges in paying their mortgages.

Late cycle debt problems

This foreclosure problem isn’t just an issue in Fort Lauderdale.  The last chart shows how Miami-Dade and Palm Beach County see mortgage defaults climbing also.  We used the appropriate color red for this chart.

South Florida mortgage forelcosures

Good reads

Real estate is local and the South Florida real estate market is certainly unique.  However, real estate is also cyclical and here is a good article we found discussing various signs that the current real estate bubble/ market cycle  might finally be turning.  We haven’t seen the inventory climb or prices drop in South Florida yet, but the level of distressed properties in the tri-county area is disturbing.

Posted in Fort Lauderdale foreclosures, Fort Lauderdale real estate | Tagged , , | Comments closed

A tale of two markets

A tale of two markets is the title for today’s post.  We are noticing a large increase in foreclosure filings across South Florida while prices remain at multi-year highs since the financial crisis.  First, we will look at the foreclosure filings.

A tale of distress

The first chart today will highlight the monthly foreclosure filings in Miami-Dade, Broward and Palm Beach counties.  We have discussed this topic at length since the last housing bust.  All of the foreclosure halts over the last decade have only prolonged the crisis and there still remains a massive overhang of distressed residential real estate in South Florida.

tale of distress in Miami, Fort Lauderdale and Palm Beach

You will notice from the chart that we haven’t seen this level of new foreclosure filings in years.  The FEMA halt in the fourth quarter of 2017 just helped stockpile additional distressed properties.  The stats are below, with the numbers for the last four years.  You don’t have to be an expert to see that there are tons of people not paying there mortgage down here!

Annual Monthly Change
2015       9,557            796
2016     15,194         1,266 59%
2017     13,071        1,089 -14%
2018      8,290         1,382 27%

A tale of high prices

The trend in sale prices has been strong over the last few years thanks to low mortgage rates.The problem with keeping rates so low for so long is that it encourages people to take on much more debt than they should.  Hence, the rise in foreclosure filings.  Just like the last housing bubble, people are somehow convinced that house prices only go up.  Once you remove the cheap money, it should be interesting to see where prices settle.  During the month of May, the average sale price of a single-family home in South Florida dipped slightly to $521,886.  The average sale price of a condo in South Florida actually increased in may to $335,258.  Moving through the summer months we will keep an eye on foreclosures, sale prices and mortgage rates.

Tale of house and condo prices

Posted in Foreclosure activity, Fort Lauderdale foreclosures, Miami foreclosures, Palm Beach foreclosures | Tagged , , | Comments closed

Lofty numbers all around

Real estate prices remain lofty in South Florida as we move into the summer months.  The spring is usually an active season for transactions and prices are still holding up for now.  The average sale price of a single-family home in South Florida was down slightly to $521,886 and the average sale price of a condo rose to $335,258.

Lofty sale prices

Transaction volume gained some steam during the month of May.  If you look at the next chart you will notice that this is usually an active month for sales.  there were 4,535 condo sales closed in may and 4,469 houses sold for a total of 9,004 closed residential transactions in Miami-Dade, Broward and Palm Beach County.

Lofty sales volume

Transaction volume was dragging during the first quarter of 2018, but the month of May helped bring the average up.  take a look at this next chart which shows the average monthly volume in South Florida since 2012.

Average monthly volume

Year Monthly Average
2012         7,167
2013         7,598
2014         7,603
2015         8,034
2016         7,581
2017         7,352
2018         7,593

Lofty foreclosure numbers

Although the market looks healthy from the standpoint of transaction volume and prices, the number of monthly foreclosure filings has been lofty also.  It sure looks like we will be making up for the cases that were halted last fall.

Foreclosure filings

Today we will provide a snapshot of the filings in Miami-Dade County.

Miami forelcosures

We searched by city throughout Miami-Dade and found where the distressed properties are located.  Our max is 5,000, so the city of Miami exceeds that number.  We counted over 23,000 houses and condos in some stage of foreclosure throughout Miami-Dade County as of June 8, 2018.

Miami foreclosure count

Miami Dade Foreclosures 6/8/2018
Houses Condos
Aventura                        15                340
Key Biscayne                        35                  42
Coral Gables                      319                  81
Hialeah                  1,857            1,409
Homestead                  1,524                492
Miami Beach                      152                736
Miami Lakes                      256                111
Pinecrest                        85                  10
Sunny Isles Beach                        10                238
North Miami Beach                      384                205
Surfside                        31                  38
Miami Shores                      124                  17
Doral                      247                442
Miami Springs                        99                     8
*Downtown/Brickell                        50                470
Opa-Locka                      164                  28
Miami Gardens                  2,052                346
North Miami                      554                181
North Bay Village                        13                  76
City of Miami                  5,000            4,642
Hialeah Gardens                      141                  96
South Miami                        68                  24
Totals                13,180          10,032

Good reads and more

With higher real estate prices, affordability comes back into focus not just for buyers, but for renters in South Florida.

Posted in Foreclosure activity, Market Insight, Miami foreclosures, Miami real estate | Tagged , , , | Comments closed

Palm Beach market update

Today we will take a look at the Palm beach, Florida residential market with charts of average sale prices, transaction volume, inventory and distressed properties.  Our first chart shows the average sale prices of houses in South Florida and you will see that Palm Beach led the pack in April with an average selling price of $617,407 for single-family homes.

Palm beach sale prices

As for condos, Palm Beach prices climbed in April and reached $314,139, up 9% from the previous month.  Prices in Miami and Fort Lauderdale condos remained level to a slight increase.

Palm Beach condo

Transaction volume had some strength in the last few months after a quiet start to 2018.  During the month of April, there were 1,690 house deals, up from 1,669 in March.  Mortgage rates were still very low at that point, so that may have served as a stimulus to get deals closed.

Deal volume on houses

The condo market showed similar strength during the month of April.  In Palm Beach County there were 1,407 closed sales in the condo segment, up from 1,347 in March.  You will notice that condo property sales were on the upswing in Miami and Fort Lauderdale as well during the month of March.

Condo sales in Palm Beach

As for the distressed property market, we have seen a steady climb in foreclosure filings since the FEMA hold expired.  Before foreclosures were placed on hold in August of 2017 (before Hurricane Irma), there were 332 residential foreclosure filings in Palm Beach County.  In May, we counted 320 new foreclosure filings so far and will update the number if it changes.

Palm Beach foreclosures

Here is a city-by city look at the existing foreclosures scattered throughout Palm Beach County.   We haven’t run this search in awhile, but the numbers have increased since we last conducted a search in 2016.  On today’s search, we found 14,010 houses and 2,327 condos in some stage of foreclosure scattered across Palm Beach County for a total of 16,337.  Take a look at the raw numbers, followed by a chart.

Palm Beach  Search date:  6/7/2018
Houses Condos
Boca Raton                  1,958                503
Boynton Beach                  1,881                244
Delray Beach                  1,065                348
Jupiter                      659                  76
Lake Worth                  2,092                156
Lantana                      157                  25
North Palm Beach                        80                  60
Palm Beach                        29                  30
Palm Beach Gardens                      484                  43
West Palm Beach                  2,540                563
Wellington                      890                  20
Royal Palm Beach                      785                  53
Riviera Beach                      592                  45
Greenacres                      527                  93
Palm Springs                      261                  39
Highland Beach                        10              29
               14,010            2,327
Total          16,337

 

Houses and condos in foreclosure

Here is a snapshot of our last few searches:

Search dates and property count – existing foreclosures
11/17/2014 1/1/2016 6/7/2018
         27,120          13,621          16,337

We had a short blip of lower mortgage rates for a week or so, but it looks like they may be heading higher again.  Check out this chart from Freddie Mac showing the latest mortgage rates.

Posted in Foreclosure activity, Market Insight, Palm Beach foreclosures, Palm Beach real estate, Shadow Inventory, South Florida Real Estate | Tagged , , | Comments closed

Pump it up

Pump it up!  Memorial Day weekend is here and it’s time to kick back, relax and look at a few charts of the South Florida residential real estate market. Today we will look at the average sale prices, transaction volume, mortgage rates and foreclosure filings.

Pump up the prices

The April existing home sales data was released this week and prices continued to climb in the Miami-Dade, Broward and Palm Beach residential markets.  Keep in mind that these properties were most likely placed under contract in February or early March before the latest spike in mortgage rates.  Single-family homes reached a peak of $535,433 and condos reached $311,381 during the month of April.  Is this a blow-off top?  Only time will tell.  We always say that one month doesn’t make a trend and we will have to sift few a few more months of data to see if this was the peak for the cycle.

Pump up the sale prices

Transaction volume

The monthly average transaction volume has been trending lower after it reached a post-crash high in 2015.  Through four months of 2018, the average monthly volume is down 2% from 2017 and 10% from 2015.

Year Monthly Average
2012         7,167
2013         7,598
2014         7,603
2015         8,034
2016         7,581
2017         7,352
2018         7,240

Deal volume still low

Pump up the mortgage rates

Mortgage rates made a big move in the last few weeks, but may be settling down again.  Our next chart shows how the 15-year and 30-year mortgage rates compare to the 10-year treasury yield which has been on the rise.  It will take a few months to see the impact of these rates moves, but they will certainly be seen in transaction volume and sale prices as we move into the summer months.

Pump up the interest rates

Pump up the foreclosure filings

This last chart is just bananas.  Take a look at this massive move in the monthly mortgage foreclosure filings in South Florida.  After taking a brief hiatus from the FEMA hold after Hurricane Irma, the pace of new filings has really spiked and we anticipate high volume through the remainder of the year.  This should come as no surprise, since many of the lending practices that led to the last crash seem to be back in full force.

Foreclosure filings

Have a nice weekend!

Don’t forget to have some fun over the holiday weekend & enjoy this classic tune!

Posted in Condo market, Market Insight, Single-family homes, South Florida Real Estate | Tagged , , , , | Comments closed
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