Hurricane Irma threw a wrench in residential sales during the third quarter, according to the recently released Douglas Elliman reports.
But despite steep declines in closings, the region’s residential markets remain on the path to recovery, with the condo market generally outperforming single-family homes, according to the third-quarter reports.
Sales dropped across the board, including in Miami Beach and the barrier islands, Fort Lauderdale and Palm Beach. In Palm Beach, only 17 homes sold during the third quarter, an annual drop of 37 percent.
Jonathan Miller, president and CEO of Miller Samuel Real Estate Appraisers & Consultants, who authors the reports, attributed the declines to the disruption caused by Hurricane Irma, and he expects a slight bump in sales in the fourth quarter. Brokers reported delayed closings across the state following the hurricane.
Pricing appeared to have been unaffected, Miller added. While the high-end markets are “still softer than what you call normal,” inventory is on the decline and overpriced listings on the high end are expiring. Following the housing boom of 2013, 2014 and part of 2015, the market “is healing,” he said.
“Generally speaking, we’re seeing luxury listings expiring,” Miller said. “When a new property comes on the market, you don’t make the same mistake [of overpricing].”
Distressed sales are also continuing to shrivel up. Distressed sales represented up to 40 percent of the market four or five years ago, Miller said. During the third quarter of this year, only 3.5 percent of sales were distressed in Miami Beach.
South Florida is still dominated by cash, but less so than before, Miller said. “That’s a sign of improvement because there’s more confidence in the lending sector.”
Boca Raton, Palm Beach Gardens and Fort Lauderdale were among the better performing markets in South Florida during the last quarter, according to Miller.
Miami Beach and barrier islands
Year-over-year, the median sales price rose 4.2 percent to $400,000 in Miami Beach, Sunny Isles Beach, Bal Harbour, Bay Harbor Islands, Surfside, North Bay Village, Key Biscayne and Fisher Island. The number of sales fell nearly 12 percent to 690 closings, and properties spent more time on the market than a year ago, according to the report. The listing discount remained the same as the third quarter of 2016, which was 8.9 percent.
In the luxury sector, defined as the top 10 percent of sales, condos fared better than single-family homes. The inventory of available condos declined 8.5 percent to 1,130 units while it increased significantly for single-family homes, up nearly 34 percent to 217 units. Both luxury condos and homes spent more time on the market than a year ago, which could also be attributed to the hurricane.
During the third quarter, the median sale price of a residential property in Miami, which includes Aventura, Brickell, Coconut Grove, Coral Gables, South Miami, Pinecrest and Palmetto Bay, increased 5.4 percent to $300,500. The listing discount increased slightly from 5.2 percent to 5.4 percent.
The opposite occurred on the beach than on the mainland: The inventory of luxury condos rose 25.6 percent to 3,115 units, while that of high-end single-family homes fell nearly 21 percent to just under 1,000 homes.
In Fort Lauderdale, the median sale price of condos and townhouses rose 5.3 percent to $300,000, while the median price of houses increased 5.6 percent to $332,500.
Listing inventory declined by 3.4 percent for condos and by 12.7 percent for single-family homes. The top 10 percent of the market was softer, as expected.
Increased activity in the lower half of the market brought down pricing in Palm Beach. Condo sales increased while sales of single-family homes fell, according to the report.
The median sale price of condos and townhouses declined by 26.4 percent to $395,000 in the third quarter, while the median price of single-family homes fell 24.5 percent to $3.1 million. The inventory of homes and condos was stable in the third quarter.