South Florida’s real estate market is off to a steady start, already a month into the new year.
Price increases for homes are more modest, mortgage rates are starting to slow down and signs are emerging that more buyers are starting to come to the market.
Here’s where South Florida’s housing market stands in terms of prices, rents, and inventory:
Price increases are more normal
The increase in the median sale price hasn’t shot up as much, according to December reports from the Broward Palm Beaches and St. Lucie Realtors.
In Palm Beach County, the median sale price of a home increased by 3.8% from the year before to about $545,000. For Broward County, the median sale price of a home jumped about 6% to $530,000.
For Miami-Dade County, the median-sale price of a home shot up to $530,900, a 1% increase from the year prior.
“I think personally we are going to more normal returns,” said Whitney Dutton with the Whitney Dutton Group in Fort Lauderdale.
Mortgage rates at a standstill?
Mortgage rates are showings signs of stabilizing after sidelining many buyers who were priced out due to the increases.
Mortgages have dropped to their lowest levels since September, a small breather from when they peaked at over 7% in the fall. According to the latest survey from the Mortgage Bankers Association, the average rate for a 30-year-fixed mortgage was 6.23%.
“Mortgage rates are now at their lowest level since September 2022, and about a percentage point below the peak mortgage rate last fall. As we enter the beginning of the spring buying season, lower mortgage rates and more homes on the market will help affordability for first-time homebuyers,” said Mike Fratantoni, senior vice president of research and chief economist with the Mortgage Bankers Association.
Good news for first-time homebuyers?
Homes are lingering on the market longer, and inventory levels have increased slightly, according to numbers from the Broward Palm Beaches and St. Lucie Realtors.
In Palm Beach County, there is about 3.2 months’ supply of homes on the market. In Broward County, there is about 3 months’ supply. And in Miami-Dade County, there is about 4 months’ supply of homes.
While higher than last year and offering more choices to buyers, inventory levels aren’t high enough to have a significant enough impact on prices coming down.
“Traditionally, the month’s supply of inventory needs to be above six months for a sustainable period before you see a major shift in the market,” said Nathan Zeder with the Jills Zeder Group.
And it appears that buyers are starting to come to terms with the fact that prices won’t fall as much as they were expecting and are slowly returning to the market, noted Dutton.
“For months, buyers have been saying that they thought prices were going to change. And prices aren’t and buyers have to get into homes and they are starting to make adjustments,” Dutton said. “And as interest rates lowered, they started writing offers.”
All in all, it’s still tough for first-time homebuyers who are jumping in the market, but there is good news in that investors aren’t as prevalent in the marketplace.
“As long as a buyer focuses on what they can afford and then choose among those options, there are good opportunities in the market,” Zeder added.
Rents start to moderate
The rental market in South Florida is still tough for renters who are trying to make ends meet, though year-over-year increases have slowed.
Currently, the median rent price for a two-bedroom apartment in West Palm Beach is about 7% higher than a year ago at $2,298, according to Zumper.
In Fort Lauderdale, the median rent for a two-bedroom apartment decreased slightly by about 1%, to about $2,804 when compared to the year before. In Miami, the median rent for a two-bedroom apartment increased 13% to about $3,500.
“Florida remains an enormous opportunity for multifamily owners and operators,” says Juliet Johansson, Zumper’s chief revenue officer. “Renters continue flowing into the state and are often looking for higher-end amenities such as fully managed buildings, fitness centers, pools, and lounges.”
