Good times bad times is a fitting description of the South Florida real estate market.  We get to experience the extremes during all of the cycles, booms and busts.  So far, this year has been rather sluggish when it comes to deal volume in the South Florida residential market.  The good times are in the ultra-luxury end of the market and it seems like every other component is just plugging along.  Take a look at our first chart above and you will notice that deal volume as a monthly average is the lowest since the housing bubble popped. Today we will look at some charts and maybe we can guess where the market is heading next.  Here’s some background music for your listening pleasure.

Is it time to panic about real estate prices?  Let’s wait a few more months to see if those alligator jaws close a bit on the above chart.  During the month of September, the average sale price for a single-family home in South Florida was $979,353.  The average sale in the condo market was $532,264.   The problem with a slower market is that you don’t really get true price discovery.  If the transaction volume doesn’t increase, prices may actually be supported for awhile.  During the month of September there were 2,694 condo sales and 3,076 single family sales for a total of 5,770 residential transactions.  To put that number in perspective, there were 12,208 transactions back in June of 2021 during the COVID craziness.  The number for September represents a 53% decline from the highs.  If you purchased a single-family home in 2022 or later, there’s a good chance you will lose money if you tried to sell it today.  If you bought a condo during that same timeframe, you will most definitely lose money if you tried to sell it today.  That sounds harsh, but that’s what happens during these boom-bust cycles.

How about Inventory?  It looks like we are slowly absorbing some of the latest surge in residential inventory.  Condo inventory across South Florida reached 33,369 units in May, but slowly declined to 30,428 in September.  This shows that there is still an appetite for condos, even with all the uncertainty.  We talked about the wake-up call coming to condo owners a few months ago on the blog.

How about mortgage rates?  Don’t count on them drifting much lower.  With the astronomical national debt over $38 Trillion and continuing to climb, rates on the longer term debt will most-likely drift higher, dragging mortgage rates with them.  Hopefully this chart illustrates the correlation between mortgage rates and the 10-year bond yield.  People always think that the Fed controls mortgage rates, but even after they reduce rates, the longer terms rates often move higher.

Finally, here is a quick snapshot of mortgage foreclosure filings over the past decade.  There is nothing to be worried about right now, but you will notice that the pace of monthly foreclosure filings is starting to climb.

This 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.