If August total home sales statistics are any indication, the housing market in South Florida has recovered from the brief dip generated by the Covid-19 Pandemic. Miami-Dade, Broward, and Palm Beach Counties all saw near double digit year over year increases in home sales. These increases were led by mid market (between $400 and $600k) home sales which jumped over 30% year over year. Luxury homes (over $1MM), sales were very strong with transaction increases well north of 50% over August 2019. Overall, all home categories showed robust increases over last year, and market conditions are pointed to continued strength in housing in South Florida.
National market conditions such as low housing inventory, pent up demand, and low mortgage rates have played their part in strengthening the South Florida market. But, regional considerations also play a role in further solidifying it. South Florida’s consistent and projected population growth, faster than expected migration from tax burdened northeastern states, and the ability to attract foreign buyers looking for stable assets contribute to creating a robust real estate market with positive long term projections.
However, South Florida is not immune to low housing inventory. Over the last year the trend has been a decline in the number of active units. As a result the month supply, except for a blip during the first months of the pandemic, has also been declining, to roughly 5.5 months supply, indicating a sellers market. Conditions do vary depending on property type, with single family homes having less supply than other types.
The prolonged sellers market continues to push prices higher. South Florida is enjoying strong double digit appreciation between 2019 and 2020, across all property types. The combination of low inventory and low mortgage rates has worked to maintain a strong housing market in the middle of a pandemic.
There is little to indicate that there will be significant change over the next few months in South Florida’s housing market. Prices will remain steady and interest rates on mortgages are not going up any time in the near future. However, inventory appears to be slowly increasing, which is a good thing, allowing more buyers to reach their home ownership goals, while reigning in appreciation.
Overall the general outlook is good for housing in South Florida. The market is dynamic, inventory levels appear to be slowly rising, and demand is strong. If this is maintained, the housing market will remain healthy for the near future.