Have you noticed anything different in your neighborhood? Does it appear as if those for sale signs tend to linger awhile longer than they used to? How about that slick real estate investor trying to flip the house down the street for a quick profit? Do you think they have seen a shift in the market? How about your trusted real estate agent that claims to understand trends and prices? Have you asked them if anything seems different? Well, something has changed in the market and if you don’t know, now you know!
Have you noticed prices dropping yet?
Residential real estate prices in South Florida are slipping. The average sale price of a house in the tri-county area is down 11% since June. Condo prices have declined 16% for the same period, Although September is typically a slower month, this may be the beginning of a prolonged decline.
Have you noticed a jump in mortgage rates?
The latest jump in rates may have caught everyone off guard. Not us, we have been warning about this for awhile. The crisis-level interest rates have successfully lured everyone into the real estate market. Now the bills are coming due! We haven’t seen mortgage rates over 5.00% in years and they will place downward pressure on real estate prices. Affordability was a problem in South Florida before the rise in rates.
Have you noticed fewer sales?
It looks like transaction volume is slowing across South Florida. Sales have declined 30% since June. Just take a look at this next chart and check in with your local real real estate agent
How about condo sales?
Condo sales haven’t performed any better. They dropped 25% from June.
We have discussed at length how record low interest rates spurred a great deal of activity in the real estate markets. It has been quite a party since the last crisis. Now it’s time to deal with the hangover.