I always remind people that one month doesn’t make a trend, but what happened to housing and condo prices in South Florida in January is very interesting.  We actually saw abnormally low inventory and a noticeable drop in prices in the same month.  First, let’s take a look at the inventory:

It appears that the condo/townhouse inventory ticked-up slightly in January while the single family homes remained at historic lows.  Usually, this would mean that so many buyers are chasing properties that the prices would spike.  The condo/townhouse available inventory in Miami-Dade, Broward and Palm Beach County was at 14,739 units in January 2013, up from 14,254 units in December 2012.  However, that is still a dramatic 54% drop from August 2010 when condo/townhouse inventory was at 31,526.  Foreclosures were halted a few months later and that was the start of over two-years of inventory declines.

As far as single-family homes available for sale, that figure rose slightly in January 2013 to 11,894 listed for sale in the tri-county area, up from 11,713 in December 2012.

Now here comes the boom!  We are so used to seeing month over month inventory declines resl=ulting in upticks in prices, but look what happened last month:

I had to go back and quadruple-check the data on this one.  There were noticeable declines in both the single family and condo/townhouse average selling price in January.  The average selling price of a single family home in the tri-county area dropped from $380,136 in December to $286,512 in January.  That is a 25% drop in one month!  Remember that one month does not make a trend, but that volatility is frightening.  As far as condo /townhouse average selling price, it dropped from $254,438 in December 2012 to $217,787 in January 2103.  That drop isn’t as large as the house price drop, but it is still a 15% drop in one month.

I have been telling people that the housing crisis in South Florida is far from over.  These price drops are inevitable as the major banks will continue to dispose of distressed properties via bulk sales, short sales, courthouse sales and finally REO transactions.  The pace of foreclosures has not subsided yet and will not for quite some time.  It should be interesting to review the data over the next few months.  The price drops back in 2010 as inventory swelled made sense, but significant price drops with record low inventory is something new.  Stay tuned!