Easy come, easy go is one way to describe the boom / bust cycles in real estate. If you have been reading our market outlook, you will understand that this massive bubble in real estate market has been propelled by historically low mortgage rates ever since the last housing bust. Today we will show a few charts that have yet to illustrate the impact of rising mortgage rates. The average sale price of a single-family home in South Florida remained high at $901,562 during the month of February. As for condo prices, the average sale price reached a new high for this cycle at $537,877. A few headwinds to this surge in prices are rising mortgage rates and an insurance problem that continues to be problematic for property owners in South Florida. Here is some easy listening while you cruise through today’s blog & charts.
Real estate transaction volume
There was a small bump in deal volume during the month of February, but the overall trend is down. Most of this can be attributed to lack of inventory. There were 3,442 houses and 4,617 condos sold in February across Miami, Fort Lauderdale and Palm Beach. The increased activity in the condo market can be explained by lack of houses, it’s really that simple.
There is just nothing left to buy! Back in January 2011 after the last housing bubble burst, there were 30,768 houses and 41,473 condos listed for sale across South Florida. Take a look at the far left of the inventory chart above. That is before all of the foreclosures were halted. Last month there were only 5,628 houses and 9,437 condos on the market.
Easy come, easy go – low mortgage rates
Easy come, easy go is a good way to describe the low mortgage rates that fed this massive bubble. We thought that a 4% would slow the market, but mortgage rates this week are nearing 5%. How much will the housing market be allowed to decline before the next bailout? Aside from the outright fraud in these government bailout programs, plenty of South Florida millionaires that didn’t “need” the money took massive COVID bailouts when they were never shut down. You can search on that link or just type the company name and “PPP loan” in Google. Brace yourself, it’s shocking. To most of these people, it was just a bonus to help the buy new houses, boats, vacations and fancy cars on the backs of local small businesses that really needed the money. Come to think of it, maybe there is something in the water down here!
Foreclosure activity is picking-up again
This real estate market outlook covers real estate activity in Miami-Dade, Broward and Palm Beach County, Florida. Here are just a few of the cities in each of these three markets:
- Miami-Dade – Aventura, Coral Gables, Miami Beach, Hialeah, Sunny Isles Beach, North Miami, Homestead, Doral, Miami Lakes, Downtown Miami, Brickell and Key Biscayne.
- Broward – Fort Lauderdale, Pompano Beach, Deerfield Beach, Hollywood, Hallandale, Weston, Parkland, Wilton Manors, Oakland Park, Plantation, Cooper City, Davie, Coral Springs, Sea Ranch Lakes, Lauderdale by the Sea and Lighthouse Point.
- Palm Beach – Delray Beach, Highland Beach, Jupiter, Palm Beach Island, Boynton Beach, Boca Raton, Highland Beach, Palm Beach Gardens, West Palm Beach, Wellington and Lake Worth.