April 2024 South Florida Housing Report

What’s happening in the market?

Inventory in South Florida is up 57% when compared to April 2023, mostly swayed by mounting condo & townhome inventory, though numbers have risen moderately for single family homes as well. New listings are outpacing the number of sales in South Florida – up 29.1% and 5.6% for April 2024, respectively. This, combined with the fact that homes are sitting on the market longer, is leading to a hike in inventory when compared to prior years. This increase in inventory has led to an increase in the number of price adjustments due to the longer time on market and lower buyer activity.

Mortgage rates continue to play a crucial role in consumer decision-making as they climbed to over 7.5% toward the end of the month per Mortgage News Daily. In South Florida specifically, increasing mortgage rates strain affordability even more so than in other parts of the country given the rapid increase in insurance premiums and added special assessment fees for condos in the area.

What does this mean for Buyers?

For buyers, more inventory is great news, especially given the frenzied nature of the South Florida market in the early pandemic years. More inventory means more options, increased leverage, and potentially less competition and a stabilization or eventual reduction in home prices. With price adjustments becoming more and more common given the state of the market, buyers need to remember that there is nothing “wrong” with a home that has been sitting on the market or has had a price adjustment – the market has just changed. If you are a serious buyer, make sure you are ready to strike so that you don’t miss out on a home you want. Additionally, in the face of ever-changing mortgage rates, buyers now more than ever need to make sure they understand every financing option available to them – assumptions, buydowns, ARMs, etc. – to make sure they can accomplish their buying goals this spring!

What does this mean for Sellers?

Condos & townhomes are contributing to the rising inventory levels in South Florida much more than single family homes with inventory for condos & townhomes specifically up 68.4% year over year. Current condo owners are bearing the costs of increased regulations in the form of special assessments, higher HOA fees, increased cost of homeownership insurance, etc. Rather than pay these additional costs, many current condo & townhouse owners are opting to list their properties instead. For prospective buyers, these increased costs put many condo associations outside of their budget as they are facing other strains on affordability such as increased mortgage rates, increased average sale price, etc. Condos & townhomes are being listed faster than they are going under agreement, creating a rise in inventory and, as such, this is where we will see more and more price adjustments due to lower buyer demand and also longer time on market.

The market in South Florida has changed. Gone are the days of excessively low inventory and simply just naming your price for your home. Now, you cannot assume your home is going to sell quickly with a bidding war. Pricing your home competitively will ensure you generate the most demand for your home which will ultimately help to make sure you get the most money for their home. Oftentimes, sellers are also buyers, so generating demand for your home will help when negotiating terms that can help ease the sell/buy process, especially for those who are facing unavoidable life changes such as relocation, downsizing, retirement, etc. and cannot wait to list their homes.

What’s next?

Inventory in South Florida will continue to remain in the spotlight as it greatly impacts housing market activity and trends. Not only will we have to keep an eye on inventory, but the trajectory of the spring market will continue to be heavily impacted by mortgage rates as well as they weigh so heavily in the decision-making process of both buyers and sellers, especially when coupled with other strains on affordability (e.g., insurance premiums and special assessments) for South Florida specifically. It doesn’t really benefit anyone to wait until ‘mortgage rates drop’ as there are no signs of that happening in the foreseeable future. It’s more likely that this level is the new normal, so moving on with real estate goals sooner rather than later would be lucrative for both buyers and sellers. Refinancing down the line is an option for homeowners should rates decrease.