Are you waiting on mortgage rate relief?  Don’t expect it anytime soon.  Most real estate agents probably thought rates would improve after the recent 50bp cut from the Fed, but mortgage rates have moved in the other direction.  Deal volume across South Florida residential markets declined 17% month over month from August to September.  Although there are always plenty of cash buyers in these markets, anyone that has a sub-4% mortgage may be reluctant to give that up for a loan close to 7% now.

How about prices?  Will higher rates eventually hit housing prices in South Florida?  The answer is a resounding YES!  You just have to be patient.  There are plenty of sellers that just haven’t come to grips with the fact that this market is changing.  The double-whammy of higher mortgage rates and astronomical insurance rates will be putting downward pressure on real estate prices for awhile.  For now, prices are still in bubble territory.  Single-family home prices reached a cycle high of $1,058,316 in January 2024.  They are now down 10% from that point to $955,546.  Condo prices peaked at $585,519 in April 2024 and have dropped 14% to $501,839.  There may be some of these months where prices rise, but overall, the trend will be downward over the next year or longer.

How about new supply?  You can tell by the next chart that the novelty of condo ownership in South Florida is wearing off.  The inventory of condo properties available for sale is back at November 2020 levels.  This number will continue to climb and will soon be at pre-COVID levels.  It’s getting to the point where you either have to be very rich or lack basic math skills to own a condo in South Florida.

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.