Residential real estate inventory was on the rise in South Florida during the month of January. We have noted that some of this bounce is seasonal. Plenty of sellers would rather not have their properties listed during the holidays. They come off in late November and magically reappear in January. What is noticeable this time is that we are now seeing available listings reaching levels not seen since 2011. There were 21,496 houses and 32,221 condos available for sale in the tri-county area in January. It is worth noting that residential inventory hasn’t been this high (53,717 properties) since August 2011! Here is a look at the chart:
Transaction volume tanked!
The volume of closed sales tanked in January. One month does not make a trend, but if this persists it will wreak havoc on prices. Lower transaction volume and higher inventory will eventually lead to significant price declines. There were 5,113 closed sales in January in South Florida. This number is literally off the chart, since we haven’t seen transaction volume this low since we started charting in January 2012. There is a great deal of “air” in this latest housing bubble. If demand doesn’t rebound in the next few months……look out below!
Mortgage rates – still easy money!
What we find so disturbing about this latest housing slowdown is that it is happening with all of this easy money floating around. What would happen if rates had continued to climb back in October? Although some may be cheering the low rates, they have had minimal impact if any at all.