House prices remain elevated even after Fort Lauderdale receiving Wallet Hub’s award for least safe city in America. The average sale price of a single-family home in Fort Lauderdale dipped slightly to $551,565 in October. That is a drop of 3% from the high of $568,978 set during the month of September. Condo prices rose 4% on the average sale price from $233,110 in September to $243,063 in October. The lack of supply of homes may be pushing buyers into the condo market.
Real estate sales volume in Fort Lauderdale area
The chart above clearly shows the steep decline in sales during the spring COID-19 shock, followed by a sharp rebound through the summer. During the month of October, there were 3,241 condo and house sales, up from 2,984 in September. What’s interesting is the next chart which shows how total real estate transactions on an average monthly basis are still below prior years in this cycle.
How about the total number of single-family homes and and condo sales in the area? here is a snapshot in this next chart.
Mortgage rates and the housing bubble
There are a number of reasons why housing prices are so high, but low mortgage rates have kept prices elevated throughout this 10-year recovery from the last housing crash. As long as money is cheap and credit is loose, the party continues. At some point, lenders may reassess their risk and tighten credit. Until then, buyers will continue to pay a premium due to low rates. How quickly people forget that this is what got us into trouble leading up to the last crisis. After 9/11, rates were lowered and people spent the next few years loading up on debt. Then you know what happened after that.
Foreclosure activity in Fort Lauderdale
New foreclosures have been on hold due to the coronavirus pandemic. The latest moratorium lifts in January. If it’s not extended again, you will see a spike in new filings during the first quarter of 2021. All is quiet for now.
Housing inventory in Fort Lauderdale
Too many buyers chasing too few houses. That explains the inventory picture in the Fort Lauderdale area. with such limited inventory, sellers have been in control and able to sell their properties at a premium. This may continue as long as buyers are willing to overpay. The trend may change with an increase in mortgage rates, credit tightening from lenders, or an increase in available inventory. The number of single-family homes for sale may be finally finding a bottom. The number of houses on the market actually rose from 3,234 in September, to 3,278 in October. That’s not much, but it’s a start! Condo inventory declined month over month. There were 7,784 condos on the market in September and 7,720 in October.