Historically speaking, borrowing costs still remain low.  Below is a chart that illustrates the trend of 15-year and 30-year mortgage rates and the correlation to the 10-year bond rate.  As we have stated in the past, as long as the 10-year bond rate stays below the 3.00% mark, there shouldn’t be too much negative impact on sale prices.  The initial shock of rate increases last spring/summer may have deterred some buyers, but rates have managed to moderate since then.  Take a look at the far right of the chart and you will see how mortgage rates rose as the 10-year bond rate dipped.  It will be interesting to see if mortgage rates become detached from the 10-year bond as the Fed tapers their purchase of mortgage-backed securities going forward.

Here is a chart of median sale prices for single-family homes in South Florida.

In February. the median sale prices of single-family homes in Miami-Dade, Broward and Palm Beach County was as follows:

• Traditional sale – $291,ooo down from $292,000 in January
• Foreclosure / REO sale – $162,000 up from $150,000 in January
• Short sale – $175,000 down from $180,000 in January

Now, a quick glance at condo / townhouse median prices.

In February. the median sale prices of condo / townhouse properties in Miami-Dade, Broward and Palm Beach County was as follows:

• Traditional sale – $160,000 down from $170,000 in January
• Foreclosure / REO sale – $95,000 down from $99,900 in January
• Short sale – $105,000 (unchanged from January)

It should be interesting to see how the flow of new inventory will impact residential real estate prices going through the next year.  As we illustrated in our last post, here is a glance at the South Florida residential inventory and the recent move higher.  Buyers had such limited supply over the past few years, so additional inventory should be a welcomed sight.