According to the Multiple Listing Service (MLS) system, mid-market condominium sales and total inventory in Broward County surged by double digits in August 2022.
According to BROWARD-MIAMI President David Dweck, "Fort Lauderdale real estate and the Broward County market are experiencing a return of inventory, and homebuyers from within and outside of the United States are taking advantage as indicated by the surge in mid-market condo sales."
Mid-Market Condo Sales in Broward Increase
Homes priced between $400,000 and $600,000 in Broward sold for an increase of 34.7% over the previous year to 229 units. The increase is reflected in a 52.3% increase in new listings at that price range by the initial listing price.
Major businesses moving to South Florida, including Citadel, a hedge fund, and securities firm, are returning international buyers, changing demographics with a rise in senior and millennial homebuyers, a high proportion of the workforce working remotely, rising rental costs and other factors continue to fuel local demand.
Compared to a record-breaking August 2021, total home sales in August 2022 fell from 3,422 to 2,700, a 21.1% year-over-year decline.
Due to low inventory and rising mortgage rates, Broward single-family home sales fell 26% yearly, from 1,625 in August 2021—a record-breaking month—to 1,202 in August 2022. Due to a lack of inventory and rising mortgage rates, Broward's existing condo sales fell 16.6% year over year, from 1,797 record-breaking sales in August 2021 to 1,498 in August 2022.
Due to 3% mortgage rates, increased supply (especially in condos), pandemic-driven demand, and higher supply (particularly in condos), Broward sales soared to a new high in August 2021.
When contracts were negotiated in May and June, increased rates of 5–6% and lesser inventory impacted Broward sales in August 2022.
The Fed is determined to reduce the 40-year high inflation, and today it voted to raise the Fed Funds rate once more. Despite not setting mortgage rates, the Fed has an impact on them through the way it implements monetary policy. As a result, the 30-year fixed mortgage rate has experienced an extraordinary range of volatility over the past 52 weeks, varying from 2.93% to 6.28%.
The sixth month in a row that mortgage rates have been 5% or higher is September 2022. The average commitment rate for a 30-year, conventional, fixed-rate mortgage, according to Freddie Mac, was 5.22% in August, down from 5.41% in July. Throughout 2021, the average commitment rate was 2.96%.
South Florida: Cheaper than Other Global Cities and U.S. Metro Areas
According to the National Association of REALTORS Profile of International Transactions in U.S. Residential Real Estate 20, the price per square meter in Miami-Fort Lauderdale-West Palm Beach is $3,170, far below the prices in at least 30 global cities and 13+ U.S. metro areas, including Hong Kong ($28,570), New York City ($17,191), San Francisco-Oakland-Hayward, CA ($8,250), Madrid, Spain ($6,173), Los Angeles-Long.
In August 2022, the median price of a single-family home in Broward County rose 13.6% compared to the previous year, from $495,000 to $562,500. The typical price of an existing condo rose from $220,000 to $265,000, a 20.5% annual increase.
Due to a long-term drop in rates before March 2022 and the sluggish but constant growth of household income, median prices have increased nationwide, and with them, so can purchase a home. According to Redfin research from August 2022, West Palm Beach (ranked No. 5) and Miami (ranked No. 6) were among the Top-10 U.S. metros where homebuyer income increased the most during the epidemic.
Supply and demand play a role in determining home values. Higher demand and a smaller supply lead to higher pricing. Condos (2.1 months) and single-family homes (2.5 months) in Broward have the little available inventory.
Additionally, rentals, which are sharply increasing, are one of the factors supporting home prices.
Locally, the larger percentage of luxury sales in Broward is one of the factors contributing to the significant rise in median prices year over year.