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By Amber Randall, South Florida Sun-Sentinel
South Florida Sun Sentinel
South Florida home prices are soaring, and the number of available homes is shrinking, as buyers continue to struggle to find homes in today’s market.
Sellers have the advantage in the market, and buyers are desperate to land a home in an environment where properties are being bought up in a matter of days, as home prices shoot up by 20% in some areas when compared to last year.
“There is what I call the ‘must buyer’,” said Jeff Lichtenstein with Echo Fine Properties in Palm Beach Gardens. “They are doing whatever it takes: they are foregoing inspections, they are foregoing their mortgage contingency, which is dangerous. They are paying sometimes 10-15% more to secure a house when they get into a bidding war.”
As buyers continue to try and land homes in a fiercely competitive market, here is where South Florida’s housing market stands:

Mortgage rates

Mortgage rates have started to creep up, but real estate agents say it hasn’t had a dampening effect on the housing market as of yet.
“They aren’t buying less at the moment,” Lichtenstein said. “We are seeing people who are going crazy because of the rates that they locked in,” he said, in reference to people worried that a contract might fall through, forcing them to search for another house, and with a higher interest rate.
The current average mortgage rate on the 30-year fixed-rate mortgage is 4.022%, according to Nerd Wallet.
“Buyers are a little bit more aware of it [rising mortgage rates], so they are paying attention, but it hasn’t made a big difference yet,” explained Patty Da Silva, broker with Green Realty Properties in Cooper City.
Right now, it’s having the extra cash that can really make a difference for buyers when they enter into a bidding war with other potential buyers.
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South Florida home prices are soaring, and the number of available homes is shrinking, as buyers continue to struggle to find homes in today’s market. Carline Jean/South Florida Sun-Sentinel/TNS

 

Single-family home prices shoot up, inventory tightens

In Palm Beach County, the median sale price of a home shot up almost 25% year over year to $526,500, according to the latest numbers from the Broward, Palm Beaches & St. Lucie Realtors.

The median sale price of a home in Broward County increased 19% compared to the previous year to $500,000.

For Miami Dade County, median sale prices increased $520,000, a 10% jump from last year.

Inventory remains tight in the market, making it hard for buyers to land a home, added Da Silva. There are 1,361 single-family homes available for sale in Broward County right now.

Many potential sellers are hesitant to list their properties, concerned that they will have trouble finding another home in the region. Most listings are coming from people selling their second homes, or people who are moving out of the area, said Da Silva.

“If you have to stay local, how you can afford to buy the next level home?” said Da Silva. “It makes it harder for the move-up buyer who is buying and selling at the same time.”

Rents show no signs of slowing down

A lack of available units, combined with people getting priced out of the housing market, has helped fuel rents increases.

West Palm Beach’s median rent for a two-bedroom apartment hit $2,200, a 42% increase from the year before.

In Fort Lauderdale the median rent for a two-bedroom apartment is $2,900, a 32% increase, while the median rent for a two-bedroom apartment in Miami is $3,200, a 34% increase.

In the private rental market, landlords are taking advantage of the fact that it’s also a seller’s market, and putting their properties for sale when the leases expire at their units, added Da Silva.

New developments on the way

As tough as the market is for buyers and renters, there are new properties on the horizon. A development of 20 affordable single-family homes is headed to Delray Beach in the next year, in a partnership between the Delray Beach Community Redevelopment Agency and home builder Pulte Group.

In Boca Raton, developer GL Homes won approval to build a 679 home community near Glades Road, between State Road 7 and Lyons Road. There will be 26 workforce housing units built as part of it, though no timeline has been released.

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