While Broward County condo sales remained flat
According to the Miami Association of Realtors, "Fort Lauderdale real estate, Broward County and all South Florida continues to attract domestic and global homebuyers looking to live, work and play in one of the country's top regions," said the Broward-Miami Board President David Dweck.
Broward-Miami Realtors report that Broward County existing condominium sales rose 0.5% year-over-year, from 2,151 to 2,162. Broward single-family transactions decreased 17.6% year-over-year, from 1,870 to 1,541, because of low inventory. Broward total home sales decreased 7.9% year-over-year, from 4,021 to 3,703.
Broward Luxury Condo Sales Surge 53.8%; Mid-Market $400-600K Transactions Jump Also
Broward existing condo luxury ($1-million-and-up) sales surged 53.8% year-over-year to 123 transactions. Broward single-family luxury transactions increased 16.7% year-over-year to 245 sales in March 2022.
Broward luxury condos boast an inventory of 3.9 months of supply. There are 2.8 months of supply in luxury single-family homes. Luxury months of supply continues to trend downward for all property types because of the robust demand.
Homebuyers leaving tax-burdened states to purchase in Florida (no state income tax), new-to-market firms moving here, low interest rates, the appeal of property as an inflation hedge, rising wages and accrued savings in lockdowns, strong equity market performance, a reassessment of housing needs and lifestyles because of the pandemic and expansion of remote work are all factors driving South Florida real estate demand.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers. Global buyers are coming here for the vaccine and purchasing property.
Vaccinated foreigners were allowed to resume travel to the U.S. back in November 2021 and that is leading to more international investment in South Florida - the No. 1 destination in the U.S. for foreign buyers. Global buyers purchase in Miami because Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and acceptance of all cultures, along with all our amenities.
Broward single-family homes priced between $400K to $600K decreased 14.9% year-over-year to 502 transactions in March 2022. Broward existing condo sales priced between $400K to $600K increased 38% year-over-year to 258 transactions in March 2022.
Rising Mortgage Rates Should Eventually Slow Price Growth Nationally, in Broward
Rising median prices is a trend nationwide. Low inventory relative to high demand leads to prices rising. Locally, the greater share of Broward luxury sales over the past year is part of the reason for the large year-over-year increase in median prices.
The Federal Reserve raised rates for the first time in three years in February and has plans for six more rate hikes by year's end. Mortgage rates have increased this month to near 5%, its highest point in more than a decade.
Home sales and prices from March were not impacted by this recent rise. Many of the financed sales that closed in March had their rates established in January and February when rates were mid to high 3%.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 4.17% in March, up from 3.76% in February. The average commitment rate across all of 2021 was 2.96%.
The mortgage rate is projected to land at about 4.5% at year-end 2022, according to NAR. That is still low compared to an all-time average of about 8% in the U.S.
Long term, the hope is higher rates will lead to more days on the market (gives buyers more choices). Higher rates will eventually lead to a moderation of the growth rate of pricing. With the growth rate of pricing cooling, total inventory could grow later. Historically, inventory expands six months after rates rise, but today's market is unlike any other.
Broward County single-family median prices increased 22.5% year-over-year in March 2022, increasing from $445,000 to $545,000. Existing condo median prices increased 13.6% year-over-year, from $210,000 to $238,500.
More Inventory to Arrive Later this Year for Low-Supply/High-Demand Market
Inventory tends to rise in the spring and summer and then it fades in the fall and winter.
Historically in the U.S., total inventory tends to expand six months after mortgage rates begin to rise. A new study by Realtor.com detailed that 64% of possible sellers intend to list their home by October 2022.
New listings of Broward single-family homes decreased 12.8% to 1,852 from 2,123. New listings of condominiums decreased 2.8%, from 2,373 to 2,307.
Inventory of single-family homes decreased 27.2% year-over-year in March 2022 from 2,209 active listings last year to 1,608 last month. Condominium inventory dropped 55.7% year-over-year to 2,504 from 5,658 listings during the same period in 2021.
Months' supply of inventory is down since July 2019 for single-family, reflecting strong demand. Months' supply of inventory for single-family homes decreased 31.3% to 1.1 months, which indicates a seller's market. Inventory for existing condominiums decreased 65.9% to 1.4 months, which also indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of March 2022 decreased 47.7% year-over-year, from 7,867 to 4,112.
Nationally, total housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the present sales pace, up from 1.7 months in February and down from 2.1 months in March 2021.
Broward Real Estate Had a $334 Million Local Economic Impact Just in March 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $90,300, according to NAR. Broward County sold 3,703 homes in March 2022 and therefore had a local economic impact of $334 million.
Broward total dollar volume totaled $2.1 billion in March 2022. Single-family home dollar volume decreased 0.59% year-over-year, from $1.24 billion to $1.23 billion. Condo dollar volume increased 39.49% year-over-year, from $628 million to $877 million.
Broward Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.2% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, lower than the 1.3% in March 2021.
Total Broward distressed sales decreased 16.7% year-over-year in March 2022, from 54 to 45. Short sales and REOs accounted for 0.2% and 0.9% year-over-year, respectively, of total Broward sales in March 2022. Short sale transactions decreased 60.9% year-over-year while REOs increased 16.1%.
Broward's percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented less than 1% of sales in March 2022, equal to the percentage in March 2021.
National and State Statistics
In Florida, closed sales of single-family homes statewide totaled 30,793, down 6.2% year-over-year, while existing condo-townhouse sales totaled 14,631, down 11.4% over March 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, dipped 2.7% from February to a seasonally adjusted annual rate of 5.77 million in March. Year-over-year, sales fell 4.5% (6.04 million in March 2021).
The statewide median sales price for single-family existing homes was $396,558, up 21.3% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month's statewide median price for condo-townhouse units was $308,000, up 27.3% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price for all housing types in March was $375,300, up 15.0% from March 2021 ($326,300), as prices rose in each region. This marks 121 consecutive months of year-over-year increases, the longest-running streak on record.
Broward Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 100% in March 2022, up 1.5% from 98.5% last year. The median percent of original list price received for existing condominiums was 99.3%, up 2.8% from 95.7% last year.
The median number of days between listing and contract dates for Broward single-family home sales was 10 days, a 37.5% decrease from 16 days last year. The median time to sale for single-family homes was 50 days, a 16.7% decrease from 60 days last year.
The median number of days between the listing date and contract date for condos was 16 days, down 60% from 40 days. The median number of days to sale for condos was 59 days, a 28% decrease from 82 days.
Broward Cash Sales 71.4% More than National Figure in March 2022
Cash sales represented 48% of Broward closed sales in March 2022, compared to 37.2% in March 2021. About 28% of U.S. home sales are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects Miami's top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 61.5% of all Broward existing condo sales and 29.1% of single-family transactions.