February 2024 South Florida Housing Report

What’s happening in the market?

New listings in South Florida are up 27.7% while pending sales are down 5.9%. Simply put, homes are being listed faster than they are going under agreement which is contributing to South Florida’s considerable rise in inventory over the last several months. This rise in inventory levels in South Florida will continue to determine the trajectory of the market as we head further into the year. Additionally, at the beginning of February, mortgage rates experienced the biggest one-day jump in over a year after the release of the January Jobs Report per Mortgage News Daily, landing at over 7%. Mortgage rates stayed close to or over 7% for the remainder of the month.

What does this mean for Buyers?

• Buyers, as you keep an eye on mortgage rates, remember there are other financing options available such as buydowns and assumptions that can help you achieve your buying goals.
• Demand was outpacing housing supply in South Florida for quite some time in that as soon as a home was listed, it was consumed right away by a buyer, something we refer to as the Pac-Man Effect. Now, increasing inventory levels is great news for buyers as more inventory means more options, potentially less competition, and a stabilization or eventual reduction in home prices since homes won’t be “eaten” up as quickly.
• With this in mind, if you are a serious buyer, make sure you are prepared and ready to strike in order to find success in the current market!

What does this mean for Sellers?

• Condos are playing a huge role in the rise of inventory in South Florida. In fact, the active inventory of condos/townhomes specifically is up 53% year over year.
• Special assessments, higher HOA fees, increased cost of homeownership insurance, etc. have placed a significant financial burden on current condo owners who are deciding to list rather than continue to bear the cost.
• On the other side, buyers, who are already facing increased mortgage rates, average sale price, etc., are also deterred from exploring condo options because they fall outside of their budget.
• As such, condo/townhomes may start to sit on the market longer than they have been over the last few years. In fact, we are already seeing this happening in the current market. With this, we may also see an increase in price adjustments over the next several months.
• Pricing isn’t just important for condos, but also for single family homes as well. With price adjustments rapidly rising, it is crucial that you are pricing your home competitively to generate the most demand for your home.
• We are also seeing many want-to-be sellers getting off the sidelines mostly due to unavoidable lifestyle changes such as relocation, divorce, growing families, etc. which is also contributing to increased inventory levels.

What’s next?

Rising inventory in South Florida will give buyers a much needed reprieve from the intense competition caused by relentless demand in the region. If inventory continues to rise, we should see a slow in home price growth. Additionally, buyers will have more options and increased leverage in this changed market. Important to note that mortgage rates will play a critical role as the spring market unfolds given that they significantly impact consumer decision making.