MIAMI – Home prices in Miami-Dade County fell for the third month in a row in September, giving breathing room to aspiring buyers on tight budgets who have waited months on the sidelines.
Median sales prices dropped last month to $600,000 for single-family houses and $415,000 for condominiums, from $620,000 and $416,000, respectively, in August, according to the latest monthly housing report released Thursday by the Miami Association of Realtors.
Existing home prices have been retreating in Miami-Dade from an all-time high in July of $631,670 for houses and $420,000 for condos.
In addition to buyers dealing with high interest rates on mortgages, the monthly price deflation in Miami-Dade could be the result of the lower end of the housing market attracting the most attention from buyers, said Mariya Letdin, a business professor at Florida State University.
“The jury is still out,” Letdin said. “Summer historically has been not the hottest time in the market. If this trend continues in the cooler months, then that might be a trend.”
Skyrocketing annual homeowner insurance premiums also continue to plague South Floridians.
Meanwhile, median sales prices in September in Broward County were uneven. On a monthly basis, price tags slightly increased for single-family houses to $602,000 and for condos to $270,000. However, Broward condo prices dropped from $275,000 in September 2022.
Although housing prices fell on a monthly basis in Miami-Dade, the cost of entry into the South Florida housing market remains more expensive than a year ago. In Miami-Dade, annual prices for houses are up by roughly 6% to $568,000 for houses and rose 5% on condos to $395,000. It’s a similar pricing situation in Broward.
Total home sales last month in Miami-Dade declined, despite the annual price increases. Miami-Dade had 1,984 transactions in September, down close to 9% from closings a year ago. It was a different story in Broward where sales volume grew annually just over 2% with 1,056 sales.
Supply of homes for sale in South Florida improved, but conditions still favor sellers over buyers. Miami-Dade has a 3.8-month supply of houses and a 5.8-month supply of condos on the market. Broward has 3 months of houses and 4.1 months of condos. A balanced market typically includes six to nine months of home inventory.
Web developer Ellie Moffett moved into a three-bedroom, two-bathroom Palm Beach County home in Lake Worth home in April. He’ll never forget how tedious the process was to find the $300,000 house, although he’s in the northernmost county of South Florida.
“It was pretty rough looking for a house,” said Moffett, 23. “For a while, there were just a bunch of terrible houses for really high prices.”
The Florida Atlantic University graduate previously lived in a two-bedroom apartment that he shared with his brother Lee, 25. Together, the brothers paid $1,600 in monthly rent before their landlord increased it to $2,200. The rent increase made them start searching for a house to buy.
Being in Lake Worth was important for Moffett because he wanted to live near his parents.
Moffett received a $300,000 interest-free loan from his grandmother, and was able to save up money to cover his down payment. “I definitely got lucky,” he said.
Interest rates are expected to remain steady for the next few months, after hitting a two-decade high. Freddie Mac currently has a 30-year fixed mortgage rate of 7.63%, up from 6.94% a year ago. According to financial publisher Bankrate, the average 30-year mortgage rate touched 8% on Thursday, a level not seen since the year 2000.
Melissa Hoff, a real estate agent with the brokerage firm Compass, said that even if rates should rise even higher she expects to see steady housing demand in South Florida.
“Nationwide there will be a slowdown, but I still think people are moving to South Florida and there are people with cash coming down to the market,” Hoff said.
In fact, Miami-Dade saw about 41% of home sales in September close with cash and Broward saw nearly the same with about 40%. Both are far above the national average of 29% cash home purchases.
Looking ahead, Peter Zalewski, founder of the consulting firm Condo Vultures in Miami, predicted condo supply will increase and prices will decrease, as more owners struggle to pay higher condo association fees since the June 2021 collapse of the Champlain Towers South in Surfside.
“Historically, it has always been a buyer’s market. During the pandemic it became a seller’s market. Now it’s going back to being a buyer’s market. No question in 2024 it will be a buyer’s market,” Zalewski said of the Miami-Dade condo market. “The question is will it be first quarter or second quarter.”
Certain people leaving South Florida because more employers are forcing them to return to offices is expected to hinder the Miami-Dade condo market, he said.
“It all comes down to Zoom and that ability to telecommute,” Zalewski said, noting the Broward condo market should hold up better despite the return-to-office dynamic picking up momentum. “People are going back to where they came from, because they have to go back into the office. That cramps everyone’s style.”
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