Here’s a look at how the South Florida housing market is doing – Update Flor

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2021 was a record year for South Florida real estate, yet the last eight months of 2022 have been about a market slowdown. Questions remain as to how bad the market downturn is and whether it is headed for a crash.

There’s no question the market has slowed over the past six to eight months: closed sales are down as buyers struggle with rising interest rates, it’s taking longer to sell a home and bidding wars aren’t as common as they once were.

That doesn’t necessarily mean the South Florida market is crashing.

“There’s a lot of confusion when people talk about slowing down. They automatically think the market is crashing, but it’s not,” said Roni Sterin of Keyes Company in Weston. “The market corrected because it needed to.”

Comparing 2022 to the pre-pandemic housing market of 2019 can add more context to what’s happening now because 2021 was so exceptional.

“It [2021]was such a national phenomenon that when you compare our data with last year, the shift looks very serious in isolation,” said Bonnie Heatzig, managing director of luxury sales at Douglas Elliman in Boca Raton. “Now the pendulum is starting to swing towards a more normal market.”

To gauge where South Florida’s housing market is, the South Florida Sun Sentinel looked at data from 2019, the most recent “non-pandemic” housing market, and compared it to 2022. We considered trends in median prices, inventory levels, prices rise and how long it takes to sell a house.

The latest numbers from Broward, Palm Beaches and St. Figures for October show that while median sales prices for single-family homes in the tri-county area are still showing double-digit year-over-year increases, prices have either started to decline or moderate month-over-month.

This does not indicate a housing bust or decline, rather it means that median sales prices for single-family homes in South Florida are on track to possibly stabilize.

“When people look at houses online, for example, they see prices going down and they feel like the market is crashing,” Sterin said. “What they don’t see is that the same house that sold in 2020, 2021 or even 2019 is still above market.”

On a monthly basis, home prices in South Florida currently appear to be in the initial stages of stabilization. In Palm Beach County, for example, the median home sale price was $600,000 in July before falling to $565,000 in August. It hit $580,000 in September before falling to $570,000 in October.

In contrast, prices in Palm Beach County were relatively flat month over month in 2019. In July, August and September, the median home sale price was about $355,000. As of October 2019, it has increased to around $359,000.

And prices are now, while on the move, significantly higher than they were in 2019.

In Broward County, the median home sales price is 49% higher than three years ago. It’s about 58% higher in Palm Beach County and about 57% higher in Miami-Dade County.

A big indicator of the housing boom in 2021 was how quickly homes disappeared from the market as buyers rushed to place an offer on a home, afraid of missing out on lower mortgage rates.

Now buyers are becoming more hesitant, in part because they have more to choose from as inventories rise. Higher mortgage rates also sidelined some buyers and cooled the frenzy.

Because of that, it’s taking a bit longer to get a home under contract, according to the latest numbers from Broward, Palm Beaches and St. Lucia Realtors.

In 2022, the median time to close a contract on a single-family home increased to 28 days in Palm Beach County, 27 days in Broward and approximately 30 days in Miami-Dade.

However, homes are still selling faster than they did three years ago. In 2019, it took about 50 days to get a home under contract in Miami-Dade County, 46 days in Broward County, and 54 days in Palm Beach County.

“It’s no longer a market where properties sell in five days. It’s more that the properties are still on the market for maybe a week or two,” Sterin said.

Buyers have started to see more homes come on the market in the past few months as sellers rush to list their homes to try to catch the wave before interest rates cool the market.

2021 was marked by record low inventory levels, with most of the tri-county area seeing a little more than one month of homes on the market at that time.

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There are now almost twice as many houses as there were a year ago. There is currently about a three-month supply of houses in the tri-county area.

While the jump was significant, it is still well below the supply of homes on the market in 2019.

Buyers now have more options than a year ago, but it’s still nowhere near a balanced market, which experts say represents about six months of supply on the market. And an increase in supply is not enough to cause the market to crash.

“Inventory is not bloated,” Heatzig said. “When the madness stops and stocks build up, we have a crisis. We don’t have that now.”

For the most part, experts say that despite the rebalancing, South Florida’s housing market is still strong and unlikely to crash.

The current housing market has been largely fueled by low levels of inventory due to years of underconstruction, intense demand from families looking to relocate, and, until recently, record low mortgage rates. The market crash a decade ago was caused by risky lending practices and oversupply in the market.

“Costs occur when there is an extreme imbalance between supply and demand. Currently, we have the opposite. It would take an extreme market move to go from where it is today to a market on the brink of collapse,” said Tim Costello, chairman and CEO of Builder Homesite Inc.

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