The Lamacchia Realty South Florida Housing Report presents overall home sale statistics and highlights the average sale prices for single families, condominiums/townhomes in Broward County, Miami-Dade County, and Palm Beach County for January 2022 compared to January 2021. It also looks at other metrics like New Listings and New Pending Sales as they are often the best indicators for predicting future trends in the market
The inventory crisis last year caused demand to spike higher than ever by fall into winter, which in turn caused prices to continue to increase significantly. This rise has continued to present day without reason to expect they’ll decrease any time soon, though the hope is that the rate of increase will slow down.
Broward County single family sales, new listings and pending sales decreased, but average price increased year over year. For condos/townhomes, sales, average prices and pending sales increased, but new listings decreased year over year.
Miami-Dade & Palm Beach Counties
In December of 2021, Miami-Dade saw decreases in closed sales, listings and pending sales year over year for single family homes. Average price remains on the rise. Condos/townhomes show an increase in closed sales, average price and pending sales, but a decrease in new listings year over year.
Palm Beach County saw a decrease in single family sales, new listings and pending sales, but prices are up. Condos/townhomes in Palm Beach County saw an increase in closed sales and average price, but a decrease in new listings and pending sales.
Anthony predicted that the 2022 South Florida market would look like 2021 but happen at an even larger scale – meaning more sales and more price appreciation. Based upon the January housing data, his predictions thus far have been spot on, particularly in the condo/townhouse category. Important to note that, in the beginning of the year, the Omicron variant slowed the market in an unanticipated way. Listings in, not only South Florida but across the country felt the effects of this variant and in turn were lower than predicted. Now, moving forward, pending sales and closed sales will most likely be lowered for the next few months to recover from the market effect of the variant. Generally, COVID-19 ignited the South Florida real estate market as it saw an influx of home buyers into the market in 2021. As travel restrictions lessened international buyers returned to the market and returning snowbirds resumed their migration back to the sunshine state. Several companies and employees relocated to states like Florida for both tax reasons as well as the more ‘relaxed’ Covid restrictions compared to Northern states. Regardless of the reason, Sun Belt states have been reaping the benefit of this buyer influx. However, this influx shrank supply, specifically of single family homes, consequently sky-rocketing demand and competition. We have seen a resurgence of bidding wars, cash offers, waiving contingencies, etc. to combat this increased and intense competition.
With the demand so high, prices have not stopped increasing as a result. But this should not deter buyers from entering the market as mortgage rates are predicted to exceed 4% in 2022 for the first time in over two years as the Fed begins reversing policies enacted as a result of the pandemic. This increasing rate reduces buying power which means that it’s better to secure financing as soon as possible to keep home buying costs from increasing, especially given that the cost of renting is also increasing. Particularly important for the South Florida market, securing financing for a 2nd home will be more expensive as we head further into 2022, as the Federal Housing Finance Agency (FHFA) will be changing lending practices as a result of the pandemic and the Surfside Tower collapse.
Despite the recent regulatory and financial changes to the condo space, there has still been tremendous growth month over month. Very little available inventory is forecasted to be added to the market in the coming years as new construction and development is down year over year. The lack of single-family inventory has made condo living a popular alternative for buyers who are unwilling to sacrifice conditions like location, non-communal living, or square footage. It is predicted that the demand for condo living will only continue to grow in 2022, and prices of condos are expected to rise along with it. Important to note that the inventory levels for condos are just slightly higher than single-family homes currently, so this increased demand for condos will deplete inventory, eventually intensifying competition even more.
*Data provided by Florida Realtors® SunStats