South Florida homes continue to get pricier, but slowing sales momentum is signaling that buyers are balking at sellers’ lofty expectations as their choices widen.
The median price of an existing single-family home in Miami-Dade County rose 8 percent to $243,000 in April from a year earlier and was up 3.3 percent from March, according to the Miami Association of Realtors. The median condo price rose 10.3 percent to $193,000 from a year earlier, but slipped 3.5 percent from March.
Sales continued to moderate from last year’s hectic pace of double-digit gains. As the peak spring-summer buying season unfolded in Miami-Dade, sales of single-family homes rose 5.6 percent in April from a year earlier and were up 2.3 percent from March. Miami-Dade condo sales totaled 1,557 units in April. That was flat compared to a year earlier, and 10.2 percent above March.
“The Miami real estate market continues to stabilize and reflect more balance between buyers and sellers,” Liza Mendez, chairman of the Miami Realtors Association and broker owner of Pedro Realty International in Hialeah, said in a statement.
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Broward County is experiencing similar market shifts as inventory rises and sales momentum slows.
The median price of an existing single-family home in Broward rose 9.2 percent in April to $273,000 from a year earlier and was up 1.3 percent from March, according to the Greater Fort Lauderdale Realtors. Broward’s median condo price jumped 14.3 percent to $120,000 in April, flat with March.
Broward condo sales fell 8.6 percent year over year to 1,521 closings, but rose 6 percent from March. Single-family home sales inched up 1.4 percent from a year earlier to 1,334 closings, and jumped 10.5 percent from March as the traditional spring-summer shopping season started for families looking to move before the next school year begins.
With prices rebounding sharply for more than two years following the historic crash of the real estate market, many home-sellers in South Florida have become overly optimistic about what their properties will fetch, agents say.
Sellers commonly expect to command a higher price than the home that just sold down the street. But dickering over deals and markdowns is supplanting the bidding wars and back-up contracts of last year.
“I try to counsel a seller that a house is worth what someone is willing to pay for it — not necessarily how much they need to buy their next house,” said Philip Vias, a broker associate with Berkshire Hathaway HomeServices Florida Realty in Fort Lauderdale. “Unfortunately, some sellers are not as realistic as they should be.”
“It can be frustrating,” Vias added.
“It’s starting to slow a little bit, and I think a lot has to do with sellers’ expectations,” said Bette Abrams, a Coldwell Banker agent in Coral Springs. “For the first time, I’ve seen price reductions. A year ago, people were jumping in with the full price and above the full price.”
Miami-Dade condos, for instance, sold at a median pace of 55 days on the market, up from 43 days last year, according to the Miami Realtors. Condo units sold in April went for 93.6 percent of their original asking price — down from 97.2 percent a year ago.
A key shift in the housing market continues to be the rise in choices for home buyers. In Miami-Dade, the number of single-family home listings rose 24 percent to 6,034; condo listings swelled 38 percent to 11,033. That was the highest level of existing condos listed for sale in Miami-Dade since May 2011, and it amounted to 7.7 months of supply — a level that tips the balance toward buyers. Single-family homes in Miami-Dade remain more scarce, with 5.5 months of supply in April.
The swelling level of existing condos for sale comes as Miami-Dade is in the midst of a new wave of condominium construction, which creates competition for buyers’ interest, albeit at higher prices per square foot.
Market-watchers generally consider a six-month supply — or six times the number of homes sold in a month — to be a balanced market between buyers and sellers, with less than that level tipping toward a sellers’ market and more than that favoring buyers.
In Broward, the inventory of single-family homes listed for sale surged 41.2 percent to 5,773 homes in April, while condo listings rose 35.6 percent from a year earlier to 7,969.
For single-family homes, that amounted to 4.6 times the number of homes sold in a month — still a very tight market — but higher than the year-earlier level of 3.4 months of supply. For condos, the supply increased to 5.8 months of inventory from 4.3 months in April 2013.
Throughout South Florida, the run-up in prices is starting to sideline many prospective first-time home buyers. Income levels simply haven’t kept up with rising home costs, and tight mortgage credit remains a concern.
Investors continue to play a major role in energizing the housing market in the two counties, although they have tapered back from last year’s pace. In Miami-Dade, 70 percent of the condos and 45 percent of single-family homes sold in April were in cash deals. In Broward, 75 percent of condo sales and 39 percent of single-family home sales were cash transactions.
Traditional, or non-distressed, home sales continue to become a larger share of the South Florida market. While there are still plenty of foreclosures, short sales — when a lender agrees to accept less than the mortgage balance — have become less common. The reason: A federal tax exemption on forgiven mortgage debt expired at the end of 2013. That means any sum a bank agrees to forgo in a short sale or loan modification becomes taxable income to the seller.
Buoyed by strong demand from investors, South Florida’s housing market has held up better than the national market, where a lackluster start to the year has worried economists and policymakers. The National Association of Realtors reported Thursday that April sales were the best so far for 2014, after a “sub-par housing activity in the first quarter.’’
Total existing home sales rose 1.3 percent to a seasonally adjusted annual rate of 4.65 million in April from 4.59 million in March, the NAR said. Sales were 6.8 percent below the 4.99 million-unit level of April 2013. The median existing-home price for all types of housing rose 5.2 percent in April to $201,700 from a year earlier, NAR reported.