MARCH 2024 SOUTH FLORIDA HOUSING REPORT

What’s happening in the market?

Available inventory and mortgage rates remain the center of attention in the South Florida real estate market in the month of March. Inventory in South Florida is up 48% when compared to March 2023. As Anthony explains in his newest video, this is mainly due to the fact that homes are being listed faster than they are going under agreement. South Florida specifically saw an increase in new listings of 10.8%, but a decline in pending sales of 12.6% in March. As inventory continues to rise, so will the number of price adjustments. In fact, we are already seeing an increase in price adjustments for homes currently listed in South Florida due to the longer time on the market and lower buyer activity. As for mortgage rates, they hovered around 7% throughout the month per Mortgage News Daily, adding to the increased cost of owning a home along with aggressive insurance premiums and added special assessment fees for condos.

What does this mean for Buyers?

The demand for homes in South Florida has been relentless in recent years, but rising inventory is excellent news for buyers in South Florida. In fact, increased inventory makes this the best spring for buyers in the past 5 years! More inventory means more options, increased leverage, and potentially less competition and a stabilization or eventual reduction in home prices. Serious buyers should be ready to strike so that you don’t miss out on a home you want. It is also helpful to understand your financing options in the face of ever changing mortgage rates so you can find the solution that best fits your needs. Buyers also need to remember that there is nothing wrong with a home if it has a price adjustment or if it has been sitting on the market longer than “normal” – this is just a result of the changing market!

What does this mean for Sellers?

The rise in inventory in South Florida can chiefly be attributed to condos and townhomes. The financial burden of owning a condo has risen in South Florida in recent years due to increased regulations as a result of the tragic Champlain Tower collapse. Owners are bearing these costs through things like special assessments, higher HOA fees, increased cost of homeownership insurance, etc. Therefore, many current condo/townhouse owners are opting to list their properties rather than pay the added cost. From the perspective of a buyer, 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.

Those looking to sell their homes in South Florida have to understand that the market has changed. The market is no longer in a frenzied state with buyers consuming inventory faster than it was being put on the market (i.e., Pac-Man Effect). Now, you cannot assume your home is going to sell quickly with a bidding war. Pricing your home competitively is imperative in this changed market to ensure you are creating adequate demand for your home so it sells timely and for the most money. Remember, oftentimes sellers are also buyers, so generating demand for your home will help when negotiating terms that can help ease the sell/buy process. We have noticed that several want-to-be-sellers who were delaying listing their homes are now getting off the sidelines – mostly due to unavoidable lifestyle changes.  

What’s next?

The trajectory of the real estate market in South Florida will continue to be heavily impacted by rising inventory levels. Despite the prevalence of cash sales in the area, mortgage rates are still a hurdle for many prospective buyers and sellers as they greatly impact affordability and therefore consumer decision-making, especially when coupled with increased insurance premiums and special assessments.