Miami-Dade, Broward Counties Show Major Drops In Sales; Median Prices Stabilizing

Double-digit percentage drops in Miami-Dade and Broward County existing-home sales show that the South Florida real estate market has officially shifted from go-go to so-so, according to today’s Miami Herald.

Real estate agents sold 36 percent fewer Broward County houses than they did a year ago at this time, while Miami-Dade sales sagged by 28 percent on a year-over-year basis, the Florida Association of Realtors reports. The housing market also continued its month-to-month slide, with Broward sales down a surprising 17 percent from December and Miami-Dade sales falling 13 percent.

”Nothing lasts forever. Overall, the activity is still there. It’s just a market coming back into reality,” said Bob Tenace, of Century 21 brokerage in Coral Springs.

The bad news for prospective first-time buyers is that prices have not yet reflected the lull in sales. Housing costs still show steep gains over 2005, with the median January sales price increasing almost 30 percent in the past 12 months. But house prices have flattened since December. The median price dropped slightly, from $377,700 to $376,300 in Miami-Dade County; and is up just barely, from $369,000 to $370,500, in Broward.

COMING BACK DOWN TO EARTH

This latest evidence of a fundamental shift in the South Florida real estate landscape has drawn a number of viewpoints, from those warning of a bigger decline to those who think the boom is simply leveling off into a more reasonable, sustainable pace.

”Basically, the markets are stabilizing. If you’re buying a home, buy it because you need it. Not because you’re banking on rapid appreciation,” David Dabby, a real estate consultant in Coral Gables, told the Herald.

Low Florida home loan rates fueled much of the buying frenzy in recent years throughout South Florida. Freddie Mac reports that the average interest rate on a standard, 30-year fixed-rate mortgage is currently 6.34 percent, up from 5.69 percent a year ago. While low historically, 6.34 percent is enough of a jump from last year’s levels to quell demand considerably.

CONDO SALES PLUMMETING

Most Florida real estate industry professionals agree that condominiums are the most volatile sector of the real estate market, with many preconstruction investments and projects fueling amazing price surges in the region. The Florida Realtors group released condo sales along with its house report in January, and though they declined, the dropoff wasn’t as steep as many predicted.

• Realtors sold 21 percent fewer condos in Broward than in January 2005, with the median price soaring 31 percent to $211,500 over that span.
• In Miami-Dade, meanwhile, condo sales dropped 13 percent, and the median condo price increased only 11 percent to $259,900.

The numbers follow a string of weak months that some real estate salespeople blame on the hurricanes that hit the region last fall. But Miami real estate and vicinity are mirroring national trends, with overall existing home sales falling by 2.8 percent across the country in January. Real estate agents say they’re adjusting.

”It’s no longer [that] you throw a piece of property on the market today and it’s sold before you get it in the listings,” said Andy Weiser, a Coldwell Banker agent in Fort Lauderdale. But he is not worried about a major decline in values. ”Am I saying anyone is going to lose money? Of course not. There are still more people who want to be down here than we have homes for.”

THE PROPERTY GLUT

Condos outsold single-family homes in both counties in January, but demand isn’t keeping up with owners looking to sell. In January, 11,646 condominiums were up sale in Broward County, and only 984 sold, according to an analysis by Esslinger Wooten Maxwell Realtors. A year ago, 3,710 condos were on the market and 1,399 sold.

In Miami-Dade, the numbers are quite similar. Nearly 12,000 condos on the market in January, with only 790 sold, while a year ago, 5,670 condos were on the market and 1,004 sold. The influx of properties has forced people like Jeff Kaiser, who had hoped to have sold his Coconut Grove condo by now, to do what would have been unthinkable a year or two ago: drop the price and hire a real estate agent.

The 34-year-old contractor put his four-bedroom townhouse on the market four weeks ago at $489,000, but has gotten no offers.

”I’m not going to sit on it too much longer,” he said. “The market is definitely changing. Six months ago, I think it would have been gone.”

Buyers can only hope that the overwhelming number of properties on the market result in price reductions and more opportunities to find a bargain. For sellers, on the other hand, the hope is that the market is correcting and will not get worse. As the Florida home loan landscape shifts, normalcy will set in. A home is a great investment down the line… while the days of flipping and double-digit annual appreciation may be over.