Smaller, more affordable homes are making their way onto the housing market, a positive sign for homebuyers still desperate to land a home.
Smaller homes — between 750 and 1,750 square feet — represented 34.9% of homes for sale in South Florida last month, according to new data from Realtor.com. That was up 9.1% compared with the year before.
The increase is a good sign for a market that has been incredibly difficult for first time homebuyers to break into.
Construction of affordable homes has lagged in recent years, and buyers at all price levels have contended with multiple competing offers, often from out-of-state movers who pay with cash.
As a result, many first-time buyers have been trapped into renting, facing escalating prices that make it tough for them to save for a home.
For a variety of reasons, more people are starting to list smaller homes, Realtors say. Those houses made up 34.5% of the market in the tri-county area in July, up 8.6% from the year before.
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Many people are selling because they see money to be made in a roiling market, Realtors say.
Others are leaving the area, selling a second home, selling a rental property or listing the home of an elderly or deceased relative, said real estate agent Jeff Grant in Palm Beach Gardens.
Grant recently had a first-time buyer land a home without facing a competing cash offer, a rarity in South Florida. Most homes Grant has listed for sale were more expensive homes, but he recently put up two listings under the $400,000 price, the median prices of an entry-level home.
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George Ratiu, manager of economic research at Realtor.com, said the injection of more smaller homes “injects a dose of affordability in this year’s hot markets.”
Most areas in Florida saw a similar change.
Jacksonville: 39.2% of the market consisted of smaller homes, a 9.2% increase from the year before.
Orlando: 31.4%, an 8.3% increase.
Tampa: 46%, a 13% increase from the previous year.
Still, no one would say the housing market has become less competitive, said real estate agent Lisa Treu of Treu Group Real Estate in Delray Beach.
“We saw a better chance for buyers in August and the beginning of September. It is still a seller’s market, however,” Treu said.
Instead of 15 to 25 offers for a popular home, there might be three to five, she said.
