When John and Edna Deluccia went house hunting to upgrade from their Fort Lauderdale condo, they experienced the new frenzy in the South Florida home market.
“One unit I bid on, a bank foreclosure, went for $480,600 — $94,000 over the asking price,” said John Deluccia, a 39-year-old insurance agent with SWBC. “I bid $10,000 over, and I wasn’t even in the running in the top eight.”
Put simply, lots of people are eager to buy a place in South Florida and fewer are willing to sell.
Say hello again to multiple sales contracts, bids coming in above asking prices, and sellers calling the shots with demands for cash only, quick closings and commitments to buy regardless of whether an appraisal confirms the selling price.
As the summer house-hunting season hits full tilt, a buzz of energy is swirling around South Florida real estate for the first time in years.
“Anything in a desirable area that is priced right is moving so fast, it’s basically a frenzy,” said Deluccia, who eventually found a luxury condo at The Beach Club Hallandale. When he and his wife listed their old place for sale, the oceanfront condo on tony Galt Ocean Mile was under contract the same day, he said.
“People know this real estate crisis is coming to an end, and the market is at a bottom,” said Deluccia, who did extensive research on condovultures.com and trekked with his broker through a string of 10 or more properties all over Broward before nailing a good deal.
Driving the market shift is a sharp contraction in the inventory of homes for sale in South Florida. According to EWM Realty International, the inventories of single-family homes and condos for sale in Miami-Dade and Broward counties have hit their lowest levels in more than six years.
The inventory of single-family homes on the Multiple Listings Service in Miami-Dade plummeted to 4,836 in April, down 72 percent from 17,070 in July 2008, when the selection peaked. In April, Broward’s single-family inventory similarly had dwindled 69 percent to 4,438 homes listed from 14,489 in April 2008.
With some South Florida home prices sliced in half from their peak, there are a lot more people who think it’s a smart time to buy than those who think it’s a smart time to sell.
“We’re not going to sell as many homes in 2012 as we did in 2011 because we don’t have enough inventory to meet the demand,” said Ron Shuffield, president of EWM, who said the tight inventory is a classic scenario for prices to rise.
One factor in the shortage: The region has one of the highest rates of homes under water — meaning owners owe more than they could get for them. There is certainly no incentive for those folks to rush to sell when the market appears to be turning up.
Many signs suggest the South Florida market has stabilized after the wrenching upheaval of recent years. Home prices rose 2.5 percent in metropolitan Miami between March 2011 and March 2012, according to S&P’s Case-Shiller Home Price Indices, even as U.S prices overall fell 1.9 percent year over year.
Preliminary data released this month show the taxable value of Miami-Dade real estate — including residential, commercial, industrial and agricultural — rose 1.48 percent between 2011 and 2012, marking the first increase in value since 2007. Broward County’s taxable value rose 1.24 percent this year.