Total existing home sales slid to 2,435 in May, down 10.4 percent annually, according to data from the Miami Association of Realtors. Single-family homes — down 7.2 percent — fared better than condos, which fell 13.3 percent. (Existing condos are competing with a glut of new luxury construction.)
Two factors are contributing to the residential slowdown, which comes after three years of heady sales: First, a strong dollar is crippling the foreign buyers who drove South Florida’s latest real estate boom. Second, investors and flippers have already snapped up much of Miami’s shrinking foreclosure inventory, which ballooned during the recession and fueled sales.
Foreclosures fell from 25.1 percent of all sales in May 2015 to 18.9 percent of sales in May 2016.
Meanwhile, prices are still rising.
About 37 percent of Miami-Dade listings over a million dollars have seen price reductions since Jan. 1, according to research conducted by EWM.
The overall trends suggest single-family homes remain a seller’s market while condos are firmly in buyers’ territory.
While Miami’s luxury market is cooling down, there’s no sign of relief for starter and mid-market homes.
Because of a lack of available land and high construction costs, builders haven’t been able to put up much in the way of affordable homes. The tight inventory means strong sales.
Sales for single-family homes priced between $200,000 and $600,000 beat the rest of the market, growing 5.9 percent in May. There’s no sign of much new supply entering the pipeline at that price point.
Broward County, which is less dependent on foreign buyers, had a better month.
In Broward, single-family home prices rose to $312,500 in May, up 7.8 percent annually, according to the Greater Fort Lauderdale Realtors. Condo prices hit $145,000, up 7.4 percent for the year.
Sales were up, too, likely driven by suburbanites seeking good schools as the summer buying season gets underway.
Broward saw 1,671 single-family home sales in May, up 15 percent from April and 9.5 percent from May 2015. There were 1,570 condo sales, down 1.6 percent compared to May 2015 but up 9.5 percent for the year.
The hot market is being driven by several trends also popping up at a national level: Homebuilders haven’t produced much stock at the lower end of the market. That’s driving down inventory and causing a mad scramble for the few available starter homes.
In Broward, single-family homes stayed on the market for an average of 41 days in May, down from 50 in May 2015. Nationally, homes last just 32 days on the market. Broward’s inventory for single-family homes has fallen to 3.8 months worth of supply. A healthy market generally has between six and nine months.
“Buyers struggling to find an affordable home to buy will continue to do so,” said Svenja Gudell, chief economist of real estate website Zillow, in a statement. She added that the housing market had become “hypercompetitive” for buyers seeking starter and other well-priced homes.
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