According to the Miami Association of Realtors, Broward County Florida total home sales jumped double-digits year-over-year for the fifth consecutive month in January 2021.
Broward County's total home sales surged 18.9% year-over-year in January 2021, from 2,031 to 2,416. Broward single-family home sales rose 18.2% year-over-year, from 976 to 1,154. Broward existing condo transactions increased 19.6% year-over-year, from 1,055 to 1,262.
"The pandemic accelerated trends that were already apparent in the South Florida market, including affluent buyers from high-tax and high-density states purchasing in South Florida," Broward-MIAMI President Patrick Simm said. "Home sales are not only increasing by double digits, but properties are going under contract significantly faster than last year, a sign of the robust demand for Fort Lauderdale and Broward real estate."
Broward real estate accounted for 14,981 total home sales in the five-month stretch from September 2020 to January 2021. That is a 21.8% increase in the number of total transactions compared to the five-month stretch from September 2019 to January 2020.
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply.
Broward Luxury Condo Sales Surge 66.7% in January 2021
Broward single-family luxury ($1-million-and-up) transactions jumped 50.81% year-over-year to 92 sales in January 2021. Broward existing condo luxury ($1-million-and-up) sales increased 66.7% year-over-year to 30 transactions.
Broward single-family homes priced between $400K to $600K surged 45.5% year-over-year to 355 transactions in January 2021. Broward existing condo sales priced between $400K to $600K increased 75.4% to 100 transactions.
Record-low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
Strong Price Appreciation in Broward
Strong demand coupled with limited supply continue to drive price appreciation in Broward.
Broward County single-family home prices increased 12.2% year-over-year in January 2021, increasing from $374,450 to $420,000. Existing condo prices increased 22.9% year-over-year, from $170,000 to $209,000.
Single-Family Home and Condo Dollar Volume Increases
Single-family home dollar volume increased 34.6% year-over-year, from $479.7 million to $645.8 million. Condo dollar volume increased 36.2% year-over-year, from $255.5 million to $348.1 million.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.74% in January, up from 2.68% in December. The average commitment rate across all of 2020 was 3.11%.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 13 are approved for Federal Housing Administration loans, down from 29 last year, according to the Florida Department of Business and Professional Regulation and FHA.
A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR have championed, are expected to generate increased homeownership opportunities.
Broward Distressed Sales Stay Low, Reflecting Healthy Market
Only 1.7% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, compared to 4.7% in January 2020. Total Broward distressed sales decreased 56.8%, from 95 to 41.
Short sales and REOs accounted for 0.7% and 0.9% year-over-year, respectively, of total Broward sales in January 2021. Short sale transactions decreased 43.3% year-over-year while REOs decreased 63.1%.
Nationally, distressed sales represented less than 1% of sales in January 2021, down from 2% in January 2020.
Broward Real Estate Selling Close to List Price
The median percent of original list price received for single-family homes was 98% in January 2021, up 2.6% from 95.5% last year. The median percent of original list price received for existing condominiums was 95.7%, up 1.2% from 94.6% last year.
The median number of days between listing and contract dates for Broward single-family home sales was 22 days, a 56% decrease from 50 days last year. The median number of days between the listing date and closing date for condos was 45 days, down 21.1% from 57 days.
The median time to sale for single-family homes was 70 days, a 27.8% decrease from 97 days last year. The median number of days to sell for condos was 92 days, a 8.9% decrease from 101 days.
Broward's Cash Buyers Top National Figure
Broward cash transactions comprised 32.7% of January 2021 total closed sales, compared to 38.2% last year. The national figure for cash buyers is 19%.
Broward's high percentage of cash sales reflects South Florida's ability to attract a diverse number of international homebuyers, who tend to purchase properties in all cash.
Condominiums comprise a large portion of Broward's cash purchases as 44.8% of condo closings were made in cash in January 2021 compared to 19.3% of single-family home sales.
Seller's Market for Single-Family Homes and Condos
Inventory of single-family homes decreased 47.8% in January 2021 from 5,087 active listings last year to 2,656 last month. Condominium inventory decreased 13.3% to 7,021 from 8,095 listings during the same period in 2020.
Months supply of inventory for single-family homes decreased 47.4% to 2 months, which indicates a seller's market. Inventory for existing condominiums decreased 6.9% to 5.4 months, which indicates a seller's market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of January 2021 decreased 26.6% year-over-year, from 13,182 to 9,677. Active listings remain about 60% below 2008 levels when sales bottomed.
New listings of Broward single-family homes decreased 8.1% to 1,712 from 1,863. New listings of condominiums decreased 10.2%, from 2,410 to 2,165.
Nationally, total housing inventory at the end of January amounted to 1.04 million units, down 1.9% from December and down 25.7% from one year ago (1.40 million). Unsold inventory sits at a 1.9-month supply at the current sales pace, equal to December's supply and down from the 3.1-month amount recorded in January 2020. NAR first began tracking the single-family home supply in 1982.