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A look at South Florida residential real estate prices, inventory and transaction types through November
The South Florida residential real estate market has been taking a few interesting turns which may will shape the market in 2014. For our first chart, we will take a look at residential prices for the tri-county area which includes Miami-Dade, Broward and Palm Beach County.
It sure looks like the gradual rise in rates had more of an impact on the single-family home prices than condo prices. In April 2013, the average sale price of a single-family home in South Florida was $403,450 and that price has dropped 10% to $364,332 in November. The average sale price of a condo/townhouse was $231,026 in April and although it was slightly lower in August and September, it rebounded to $233,840 in November.
As for the available supply of residential properties for sale, we are finally seeing month over month increases that we haven’t seen since foreclosures were halted back in 2010.
The left side of this chart illustrates how inventory gradually dried-up once the banks put the brakes on foreclosures when they faced the robo-signing litigation in October of 2010. Finally, it looks like the pricing recently has brought some sellers out of hiding. Single family home inventory increased 5% over October to 17,723 units and condo/townhouse inventory grew by 6% month over month to 23,076 units available for sale. This is a welcomed sight, as supply has been so tight that many buyers have been squeezed-out of the market.
What types of deals are closing? Let’s take a look at the single-family home transactions first.
It is rather obvious from the chart that traditional sales have collapsed once the higher rates hit the market. They hit a high of 2,961 traditional closings in May to 2,208 in November. That represents a 25% slide!
As for the condo / townhouse market, the traditional sales took a 32% hit from May to November. In May, there were 3,586 traditional closings and that number dropped to only 2,424 in November.
There are various headwinds for the South Florida residential real estate market as we head into 2014. We have talked about the impact of borrowing costs and the crucial threshold of 3% on the 10-year bond. From our last chart today, you will notice that we appear to be crossing that threshold. Make sure to see how the increases in rates impacted transaction types and prices over the past several months and the correlation of borrowing costs and the real estate market will become more apparent.