South Florida’s housing market is cooling.
The volume of existing home sales in South Florida slowed in November, the latest sign that the housing market is shifting to a more normal pace after a long stretch of torrid gains.
While home and condo prices in Miami-Dade and Broward counties continue to post double-digit gains from 2012 levels, real-estate experts broadly agree that price increases will slow during 2014, just as sales are doing.
“There are definite, definite signs the market is shifting [from a seller’s market] to a more balanced one,” said Mark Zilbert, president and CEO of Miami Beach-based Zilbert International Realty, who has watched prices for beachfront and Brickell-area condos cool modestly from their summer peaks.
Sales of single-family homes in Miami-Dade fell 2.4 percent in November to 982 closings from 1,006 a year earlier, and were down 7.4 percent from October’s 1,060, according to the Miami Association of Realtors.
Miami-Dade condo sales fell 6.3 percent in November to 1,274 closings from 1,359 in November 2012, and were down 10 percent from October, Miami Realtors said.
Broward single-family home sales fell 11.1 percent in November to 1,076 closings from 1,201 a year earlier, and were down 11.4 percent from October’s 1,214 closings, the Greater Fort Lauderdale Realtors reported Thursday.
Broward condo sales fell 6 percent in November to 1,206 closings from 1,283 a year earlier, and were off 11.8 percent from October’s 1,368 completed transactions.
The slowing of sales in South Florida roughly mirrors a shifting housing market throughout Florida and the nation.
Behind the slowdown: A long stretch of rising home prices coupled with higher interest rates has sidelined some would-be buyers by putting monthly payments out of reach. Interest rates on mortgages, while still low, have increased since April, and are expected to continue that trend in light of the Federal Reserve’s steps to gradually reduce its bond-buying program.
Meanwhile, cash-rich investors are seeing fewer bargains in South Florida.
“As home prices have increased, it’s starting to cool off a lot of investors and hedge funds,” said Stephen McWilliam, past president of the Greater Fort Lauderdale Realtors and president of Florida State Realty Group in Fort Lauderdale. “Probably in the first and second quarter of 2014, you’ll see price increases more in line with a healthy market — 5 percent to 6 percent. These 20-percent and 25-percent spikes in prices won’t be there.”
The sales slowdown comes amid continued robust price gains for houses and condos in both counties.
The median price of a single-family home in Miami-Dade jumped 19.2 percent to $232,500 in November from $195,000 a year earlier, and was up 5.7 percent from October’s median price of $220,000.
The median price of a Miami-Dade condo increased 14.5 percent to $180,000 in November from $157,250 a year earlier and was up 5.9 percent from the October median condo price of $170,000.
The median price of a single-family Broward home jumped 28.6 percent to $270,000 in November from $210,000 a year earlier while that of a Broward condo leaped 27.2 percent to $117,000 from $92,000 in November 2012. The median price of a single-family home was flat with October’s level of $270,000, and the median for a condo inched up 0.6 percent from $116,250 in October, the Realtors’ group reported.
South Florida’s market still shows plenty of strength, as homes are snapped up soon after they are listed and fetch close to their asking price. A single-family home in Broward sold at a median pace of 31 days on the market while condos went at a median of 36 days, both quicker than a year earlier. And single-family homes in Broward sold at an average of 95.3 percent of their original listing price, while condos sold for 94.3 percent of listing price, another sanguine indicator.
A big drop in short sales — in which the seller negotiates with the bank to sell the property for less than the mortgage amount — was a key factor in the lower sales numbers. In Miami-Dade, traditional “non-distressed” sales actually rose in November, as did sales of bank-owned properties taken in foreclosure, amid the plunge in short sales.
Broward also posted an increase in the number of “non-distressed” sales of homes and condos in November, but those gains were more than offset by sharp declines in short sales and bank-owned sales.
With the huge spike in prices over the past two years, more South Florida homeowners have equity in their homes and, thus, the flexibility to sell without having to negotiate a short sale with a lender or to write a check at the closing table.
With prices up sharply, more inventory is coming up for sale, providing buyers with more choices. The selection of Miami-Dade existing homes and condos listed for sale continued to increase in November, with a 14 percent gain in single-family inventory from a year earlier and a 23.5 percent jump year over year in condos on the market.
More unit owners have been listing their condos for sale, sensing that now is the time to sell — before a host of new projects under construction are completed.
“Sellers are finding more competition [from the increase in available inventory], and sellers aggressively pricing their condos are going to find they’re not going to move,” said Zilbert, who scrutinizes local market data.
In Broward, the inventory of single-family homes increased 8.2 percent to 5,090 in November from 4,706 a year earlier, and the number of condos rose 14 percent to 7,153 listings from 6,275 in November 2012.
Still, that amounted to a 4.1-month supply of single-family homes and a 5.1-month supply of condos in Broward, which still points to a strong hand for sellers. Analysts typically consider a supply of less than six months — that is, six times the number of homes sold per month — as a seller’s market.