The craziness in the residential housing market has finally subsided. If you were lucky enough to refinance your mortgage in the last few years, there is a good chance you are comfortable staying put for awhile. Also, if for some reason you found the need to pay a pandemic premium on your South Florida property, you may feel like one of the bikers in this classic movie scene. As we finish out 2022, there are two kinds of trapped:
- Property owners that won’t move because they have a historically low mortgage rate and don’t want to finance a new property at the current rates.
- Property owners that overpaid and cannot sell unless they are willing to take a loss.
We have witnessed a housing bubble of epic proportions, now it may take awhile for it to unwind. In our market outlook we have discussed at length the hazards of keeping rates artificially low for so long, now it’s payback time.
Now yous can’t leave – Sale prices are dropping
The selling prices across the tri-county area are starting to decline. You may see small rallies, but the overall trend should be downward for the next year or maybe longer until the market stabilizes. The peak in single-family home prices for this crazy cycle was during June, when the average sale price reached a whopping $1,019,037. In October, the average sale price was $846,424, representing a 17% decline from the June peak. As far as condo prices, they peaked in may at $563,545 and dropped 19% to $458,855 in October.
After a sharp rise in borrowing costs, they seem to be moderating over the past few weeks. This may drag some buyers off the sidelines. Although it may look good on the surface (and for real estate markets), it’s actually pointing toward a slowdown in the overall economy.
The number of houses and condos on the market is finally rebounding. There were 12,230 houses and 13,577 condo properties on the market in October. If this chart continues on the upswing, the market will regain a healthier balance.
Annual real estate sales volume in South Florida
Bonus chart – Foreclosure activity
Not much happening in the foreclosure market for now, but it’s always worth keeping an eye on. With the current homeowners insurance crisis, costs of ownership have spiraled out of control.
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.