Let’s try to keep calm during times of uncertainty. Nobody knows the total impact that recent events will have on the real estate market. As with any crisis, there will always be some forms of relief programs available to people who are impacted. So keep calm during this challenging time as we cruise through a few charts of the recent real estate numbers in the Fort Lauderdale area.
Keep calm (for now) look at these prices!
This first chart today is bananas! Look at the average sale price of single-family homes in the Broward County / Greater Fort Lauderdale area through February. The average sale price of a houses was a whopping $544,134 and set a new record. We have been charting these prices since 2012 and that’s the highest we have seen. This is a 21% increase over last February’s average sale price of $451,410. As for condos, the average sale price was $240,071, still up 14% over last February which was $210,668. Not too shabby for a real estate segment that has been sluggish of late! We thought 2019 ended on a high note, but the rally in house prices kept going for a few more months.
The number of available houses on the market continued to decline in February. There were 4,863 houses on the market, down from 5,087 in January. There were 8,026 condos on the market, down from 8,095 the previous month. The highest level of condo inventory was 9,710 back in February 2016, so that level is worth noting to see if we reach that point in the future.
Don’t worry, real estate deals will still be closing, even if the pace slows. As transaction volume declines, there will be a period of price discovery. If property valuations got stretched in the last cycle, this form of correction will bring them back to normal. In February the re were 1,004 house transactions closed and 1,155 condo sales. That’s a total of 2,159 closings for the month, up 5% from last February. The chart below clearly shows that sales slow in the first quarter and ramp up in the spring months every year. I’m not sure if we will get a ramp this year, but deals will still close. The bottom line is that nobody really knows how the remainder of 2020 will turn out. My guess is that some of the speculation will be removed from the market, which typically happens every cycle.