Year-over-year condo sales also implode 25 percent in June
According to the Miami Association of Realtors, Broward County Florida single-family home sales decreased 20.1% in June 2022, from 1,803 to 1,440. Broward condo transactions decreased in June by 25%, from 2,318 to 1,738.
Among luxury sales, homes selling for $1 million and up, Broward single-family luxury transactions increased 0.4% to 245. Broward condo luxury sales decreased 1.3% to 74 transactions.
In June 2021, Broward sales surged to a record-high because of 3% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand.
In June 2022, Broward sales were impacted by higher rates of 5-6% when contracts were established in April and May and lower inventory.
Housing is sensitive to rising mortgage rates. 2018 marked the last time mortgage rates hit 5%. Broward June 2022 home sales finished about on par with the last time the market had 5% mortgage rates in 2018 when Broward had 3,454 sales in June 2018.
Mid-Market $400K-$600K Condo Sales Increase in June 2022
Broward existing condo sales priced between $400K to $600K increased 32.1% year-over-year to 280 transactions in June 2022. Broward single-family homes priced between $400K to $600K decreased 20% year-over-year to 477 transactions in June 2022, due to lack of inventory.
Mid-market condo sales are increasing because that's where the higher inventory is. There are 2.5 months of supply for condos priced between $400K to $600K. That's the third-highest price range in supply, following $1M plus (4.5 months of supply) and $600K to $999,999 (4.1 months). Demand is so high that if Broward had more supply, it would have more sales.
Global buyers are also major condo buyers. With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers.
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.
South Florida: A Bargain in Comparison to Other Global Cities & Many U.S. Metros
Miami-Fort Lauderdale-West Palm Beach's price per square meter is $3,170, far below at least 30 global cities and 13+ U.S. Metros including markets such as Hong Kong ($28,570), New York City ($17,191), San Francisco-Oakland-Hayward, CA ($8,250), Madrid, Spain ($6,173), Los Angeles-Long Beach-Glendale, CA ($4,740) and Seattle-Tacoma-Bellevue, WA ($4,460), according to National Association of REALTORS Profile of International Transactions in U.S. Residential Real Estate 2022.
Broward County single-family home median prices increased 18.4% year-over-year in June 2022, increasing from $498,203 to $590,000. Existing condo median prices increased 19.9% year-over-year, from $221,000 to $265,000.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. The First American Real House Price Index (RHPI) measures the price changes of single-family properties throughout the U.S. adjusted for the impact of income and interest rate changes on consumer house-buying power over time and across the United States. According to the latest RHPI, Miami remains more than 20% under its RHPI peak.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Demand for Broward real estate is at all-time highs. Inventory for Broward single-family homes (1.9 months) and condos (1.7 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of Broward luxury sales is also part of the reason for the large year-over-year increase in median prices.
To battle national inflation, the Federal Reserve has aggressively raised rates this year and has plans for more hikes. High inflation and the Fed's tightening policy are the main drivers behind rising mortgage rates.
Mortgage rates have risen from 3% in January to near 6% in July. On the same $300,000 mortgage, the monthly payment has risen from $1,265 in December to $1,800 today, according to NAR.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.52% in June, up from 5.23% in May. The average commitment rate across all of 2021 was 2.96%.
The mortgage rate is projected to land at 5.3% by 4Q 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.
Single-Family Home Inventory Rises Year-Over-Year for Second Consecutive Month
Inventory of single-family homes increased 22.5% year-over-year in June 2022 from 2,284 active listings last year to 2,798 last month. Condominium inventory decreased 23.4% year-over-year to 3,044 from 3,972 listings during the same period in 2021.
New listings of Broward single-family homes decreased 0.3% to 2,149 from 2,155. New listings of condominiums decreased 1%, from 2,143 to 2,122.
Months' supply of inventory for single-family homes increased 35.7% to 1.9 months year-over-year, which indicates a seller's market. Inventory for existing condominiums decreased 26.1% to 1.7 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 June 2022 decreased 6.6% year-over-year, from 6,256 to 5,842.
Nationally, total housing inventory at the end of June was 1,260,000 units, an increase of 9.6% from May and a 2.4% rise from the previous year (1.23 million). Unsold inventory sits at a 3.0-month supply at the current sales pace, up from 2.6 months in May and 2.5 months in June 2021.
Broward Real Estate Posts $357.5 Million Local Economic Impact Just in June 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 recirculated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $112,500, according to NAR. Broward County sold 3,178 homes in June 2022 and had a local economic impact of $357.5 million.
Broward total dollar volume totaled $1.8 billion in June 2022. Single-family home dollar volume decreased 8.5% year-over-year, from $1.3 billion to $1.2 billion. Condo dollar volume decreased 6.9% year-over-year, from $713.8 million to $664.5 million.
Broward Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 0.8% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.9% in June 2021.
Total Broward distressed sales decreased 27.8% year-over-year in June 2022, from 36 to 26. Short sales and REOs accounted for 0.2% and 0.7% year-over-year, respectively, of total Broward sales in June 2022. Short sale transactions decreased 54.5% year-over-year while REOs decreased 16%.
Broward's percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented less than 1% of sales in June, essentially unchanged from May 2022 and June 2021.
Broward's Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 28,296, down 17.2% year-over-year, while existing condo-townhouse sales totaled 11,796 down 27% over 15,491 in June 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 5.4% from May to a seasonally adjusted annual rate of 5.12 million in June. Year-over-year, sales fell 14.2% (5.97 million in June 2021).
The statewide median sales price for single-family existing homes was $420,000, up 19.7% 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 $324,900, up 26.4% 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 of all housing types in June was $416,000, up 13.4% from June 2021 ($366,900), as prices increased in all regions. This marks 124 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 June 2022, equal to last year. The median percent of original list price received for existing condominiums was 100%, up 3% from 97.1 % last year.
The median number of days between listing and contract dates for Broward single-family home sales was 12 days, a 9.1% increase from 11 days last year. The median time to sale for single-family homes was 51 days, a 10.5% decrease from 57 days last year.
The median number of days between the listing date and contract date for condos was 13 days, down 48% from 25 days. The median number of days to sell for condos was 55 days, a 21.4% decrease from 70 days.
Broward Cash Sales 77.6% More than National Figure in June 2022
Cash sales represented 44.4% of Broward closed sales in June 2022, compared to 40.3% in June 2021. About 25% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. The high percentage of cash buyers reflects South Florida'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 57.9% of all Broward existing condo sales and 28.1% of single-family transactions.