The best way to see what’s cooking in the Broward County / Greater Fort Lauderdale area single-family home market is to take a look at a few charts. First, let’s see a chart of the average sale price of houses in Broward County, Florida:
By looking at the chart above, you should be able to determine that average sale prices hit a recent high back in May at $390,755 and have declined about 1o% to $350,138 in July. We have noted previously that the April/May period may have been the top in the latest housing and condo price rally and it will be interesting to see if this trend continues.
How about inventory of houses on the market? After hitting a low point back in April 2013 with 4,089 houses on the market for sale, inventory has rebounded 153% to 6,252 houses on the market in July. lack of inventory has been a big problem as plenty of sellers who wanted to sell their house were trapped because they were underwater on the mortgage. As prices started to rise in the fed-induced asset price inflation, more sellers have they opportunity to list their house for sale. The basic economic principle of supply and demand should prove that more sellers entering the market will gradually lead to lower prices.
How about transaction types? Here is a look at the types of deals that are closing:
For the month of July, the breakdown of the 1,516 closed sales in the single-family home segment was as follows:
- 1,174 closings were traditional sales and they made up about 78% of all closings
- 204 transactions were foreclosure sales and that made up 13% of all closings
- 138 were short sales and they made up the remaining 9% of all closings in July
You will notice that the number of short sales continue to decline since the mortgage debt forgiveness act finally expired at the end of 2013 and any debts forgiven by the lender in a short sale will now be taxable income to a distressed property seller. With fewer short sales, the number of properties in foreclosure as shown in our next chart will most likely be on the rise. At the time of our latest data search on July 7, we counted 46,068 houses in some stage of foreclosure throughout Broward County, Florida. This doesn’t include over 14,000 condo properties that are in some stage of foreclosure, which brings the total over 60,000 properties county-wide. Feel free to click on the chart to see how your city stacks-up:
As for rates, they still remain extremely low. The downward pressure on treasury yields have dragged mortgage rates down and kept them a generational lows. I guess the question for housing is that if markets are meeting some resistance in such a low rate environment, what’s going to happen when rates begin to climb?