Higher for longer appears to be the theme South Florida residential real estate market. Nobody could have forecasted that prices would reach the levels that they are today and maintain those levels for an extended period of time. We are currently at a standstill. Also, what’s fascinating is how prices continue to remain elevated (and reach new highs) with mortgage rates between 6 and 7%. It should take at least a few more months for the higher rates to impact prices. Lack of inventory is the main factor right now. Over the next year a combination of higher mortgage rates and the insurance crisis will definitely begin to impact prices.
Today we will look at the average sale price of houses and condos across the Miami-Dade Broward and Palm Beach markets we will also take a look at the residential transaction volume for the area, current inventory and mortgage rates. We won’t bore you with the details of the with the detailed prices and data, but you will notice from the charts that they speak for themselves. The important thing is just to notice the overall market trend. The market moves very slowly. Many people are forecasting a housing crash due to a number of factors affecting the South Florida real estate market but right now it’s too early to tell if that will shake out so let’s look at some charts.
Here is a snapshot of transaction volume across South Florida following the last housing market crash and over a decade of easy money.
Mortgage rates should remain higher for longer, within about one percentage point of where they are right now. So far they haven’t had much of an impact on prices. The Fed kept rates so low for so long that they fueled a massive housing bubble. The question is will that bubble pop or just slowly deflate.
On a separate rant if you were wondering where all the money came from during the COVID pandemic, all of a sudden the rampant PPP fraud and COVID bailouts are back in the news. It seems like people are getting pretty angry out there and they have every right to be. Floridians were happy that their businesses only experienced some brief shutdowns, but of course the wealthiest residents stuck their greedy hands in the bailout cookie jar (for multiple draws). Were all of these bailouts a source of housing price inflation across the market? Of course they were. The problem is that the small business that actually needed the money didn’t get it, but everyone in South Florida knows someone who ran out and bought a new boat or maybe even a PPP Wagon during COVID, when they should have been worried about their business. Why weren’t they worried? Because even if their company was having the best year ever, they proceeded to loot taxpayer money to fund their bogus lifestyle with multiple rounds of PPP funds. They even certified on their PPP application (lied) that their company would fail without the money. When real estate market activity was having the best few years on record, somehow the luxury real estate agents were taking bailouts while closing deals at record prices. When it all shakes out the bulk of COVID fraud probably happened right here in South Florida. People should be angry!
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.