“It’s not dead, it’s just different.” South Florida resi slowdown persists

Months of supply and prices rising, but inventory is below pre-pandemic levels

(Illustration by The Real Deal with Getty)
(Illustration by The Real Deal with Getty)

South Florida home sales continued to fall and prices kept rising in the third quarter compared with last year’s record hot market, according to a new report.
“Yes, there’s been a slowdown in sales by about a third, but inventory is roughly half the levels of pre-pandemic,” said Jonathan Miller of Miller Samuel, who authors the Douglas Elliman reports. “The excess supply was obliterated during the pandemic.”

Miller pointed to the supply of homes on the market in Delray Beach. Inventory of single-family homes rose 58 percent in the third quarter to 307 listings, compared with 194 a year earlier. But compared with the third quarter of 2019, inventory is down 47 percent.

Even with rising mortgage rates, slowing price growth and fewer sales (compared with the “rocketship” that was the 2021 housing market), Miller said this cycle is unlike others.

“This wasn’t built on speculation. This is born out of work from home, which has been a key driver of it,” he said. “The markets are performing almost uniformly. Supply is historically low and prices continue to rise.”

Prices keep rising, he said, because sellers who aren’t getting a price they’ll accept don’t sell. And those sellers are also less likely to sell if they would then have to buy another home at today’s rates, which are likely much higher than their current mortgage rate.

“Part of the stickiness is caused by the connectivity with a favorable mortgage rate they obtained through a refi or a prior purchase,” he said.

The housing market, he said, is not “dead” but “different.”

Miami coastal mainland

Closings decreased 33 percent, year-over-year, to 3,889 in the coastal areas of mainland Miami-Dade, which include Greater Downtown Miami, Coconut Grove, Palmetto Bay and other neighborhoods.

Single-family home sales dropped 27 percent to 1,677 closings. Supply rose to 4 months. The median sale price was $605,000, up 9 percent.

Condo sales fell 36 percent to 2,212, with months of supply increasing to 4.1 months. The median price rose 20 percent to $408,000.

Miami Beach and the barrier islands

Residential sales fell 39.5 percent to 1,034 closings on the barrier islands of Miami Beach, Bal Harbour, Bay Harbor Islands, Fisher Island, Golden Beach, Indian Creek, Key Biscayne, North Bay Village, Sunny Isles Beach and Surfside in the third quarter.

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Single-family home sales dropped 54.5 percent to 92 closings. Months of supply jumped to 10 months. The median sale price for single-family homes rose 18 percent to about $2.8 million.

Miami Beach condo sales declined 37.5 percent to just over 942 closings, with 7.2 months of supply. The median sale price for condos fell slightly, by half a percent, to $516,000.

Fort Lauderdale

Single-family home sales in Fort Lauderdale fell 29 percent to 434 closings. The median price decreased by half a percent to $542,500. Months of supply rose to 4.3 months.

Condo sales totaled 568, down 28 percent. Supply reached 2.4 months, up from the same period last year. The median price rose 29 percent to $482,500.

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West Palm Beach

In West Palm Beach, 358 single-family homes traded in the third quarter, a 36 percent annual decline. Still, 4.5 months of supply were left. The median price for single-family homes in West Palm was $461,000, up 15 percent.

Condo sales decreased 31 percent to 596 closings. Months of supply rose to 2.4 months. The median condo price jumped 22 percent to $219,000.

Palm Beach

Single-family home sales fell 59 percent in the town of Palm Beach to nine closings. Nearly a year of supply was left at the end of the third quarter, more than double that of the same period of last year. The median price actually fell 4 percent to $8.4 million.

Condo sales decreased 43.5 percent to 48 closings, with an increase to about 7 months of supply available. The median price for condos jumped 133 percent to $1.6 million.