A strong economy and an influx of new residents meant higher home prices in South Florida over the past year.
The resale value of single-family homes in Miami-Dade, Broward and Palm Beach counties grew 9.2 percent in February over the same month in 2014. Only Denver (10 percent) and San Francisco (9.8 percent) saw bigger annual gains.
Nationwide, home prices grew 4.2 percent over the year.
Those numbers come from a closely watched market barometer, the S&P/Case-Shiller Home Price Indices, which measure home prices around the country and are released on a two-month lag.
But rising home values can pose a problem if wages don’t keep up.
“In order for people to move into a second home, we need first-time home buyers to come into the market,” said Bill Banfield, a vice president at the mortgage lender Quicken Loans. “If the jobs being created for younger people don’t have sufficient wages, you’re going to end up with buyers priced out of the market and reluctant to purchase a home.”
As in recent reports, South Florida’s monthly price gains remain slightly less rampant after warp-speed increases post-recession. Analysts say the slow and steady growth is a sign of a healthy market, not a cause for concern.
Between January and February, home values in the Tri-County area grew at a seasonally adjusted rate of 1.1 percent. That was solidly in the middle of the pack compared with the 20 major metropolitan areas measured by the report. San Francisco (3.3 percent), Denver (2.2 percent), Los Angeles (1.6 percent) and Minneapolis (1.6 percent) led the way in terms of monthly growth.
One factor dragging on Miami’s growth: a stubbornly high rate of “distressed” sales, which include foreclosures and short sales. Short sales occur when the seller owes more on a home mortgage than the house is worth. Both usually sell at steep discounts to traditional home sales.
“Investors and others looking to take advantage of bargains were driving up home values in Miami and South Florida,” said Kwame Donaldson, an economist at Moody’s Analytics. “Now that those bargains are growing more rare, we’re seeing less price appreciation. This is a return to a normal market.”
Miami-Dade County led the nation in distressed sales in February, according to a recent report from the property analytics firm CoreLogic, with more than 24 percent of local home sales in February considered distressed. That’s way down from 2009, when one in two Miami-Dade home sales were distressed sales, but the dial has scarcely moved since last year.
Florida’s housing market was hit harder than most other states during the financial crisis, and its court system has struggled to keep up with the pace of foreclosures. Distressed sales accounted for 22 percent of the state’s total home sales in February.
Foreclosures and short sales made up 13.5 percent of home sales nationwide.
“The judicial wheels have stalled in Florida,” Donaldson said.
Information from The Associated Press was used in this report.
Home values across the nation
Prices for single-family homes in Miami rose 9.2 percent in February 2015 over February 2014 — the third-fastest rate of growth in the nation.
Increase from Feb. 2014
SOURCE: S&P/Case-Shiller Home Price Indices