Higher Interest Rates, Limited Supply Impact Rising Sales
Broward County single-family home median sale prices rose 2.9 percent to $350,000 in December 2018 as Broward existing condos sold between $400K to $600 increased 4.3 percent year-over-year, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Consistent with market performance throughout the U.S., higher interest rates resulted in fewer Broward home sales in in December.
“After eight consecutive months of sale increases, Broward sales dropped in December mostly due to higher interest rates and limited supply,” said 2019 MIAMI Broward President Jonathan Keith. “But the Broward market still reflects strong demand, as sales in certain price points increased, total sales in 2018 are expected to exceed 2017 levels, and months supply of inventory remain low.”
Here is the full report:
Total Home Sales Decrease in December
- Total Broward County sales decreased 10.3 percent year-over-year in December 2018, from 2,629 to 2,357. The decrease is mostly due to higher interest rates and lack of inventory in lower price points. Since mortgage rates have dropped, sales are expected to increase in the coming months.
- Low mortgage rates make purchasing a home more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage decreased to 4.64 percent in December from 4.87 percent in November. The average commitment rate for all of 2017 was 3.99 percent.
- Broward single-family home sales decreased 11.2 percent, from 1,291 to 1,147. Condo sales decreased 9.6 percent, from 1,338 to 1,210. Condo sales had increased for eight consecutive months before December.
- Total sales volume decreased 11.3 percent to $762.7 million in December 2018. Single-family home dollar volume decreased 11.9 percent from $574 million to $505.9 million. Condo dollar volume decreased 10.2 percent from $286.1 million to $256.8 million.
- Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Of the 9,307 condominium buildings in Miami-Dade and Broward counties, only 12 are approved for Federal Housing Administration loans, down from 29 last year, according to Florida Department of Business and Professional Regulation and FHA.
Broward Median Prices Rise for Single-Family Homes
- Broward County single-family home prices rose 2.9 percent year-over-year, from $340,000 to $350,000. Condo median sale prices decreased 3 percent from $165,000 to $160,000.
Broward Distressed Sales Continue to Drop, Reflecting Healthy Market
- Only 4.7 percent of all closed residential sales in Broward were distressed in December 2018, including REO (bank-owned properties) and short sales, compared 5.5 percent in December 2017.
- Total Broward distressed sales decreased 23.9 percent year-over-year, from 146 to 111.
- Short sales and REOs accounted for 0.9 and 3.7 percent, respectively, of total Broward sales in December 2018. Short sale transactions decreased 39.5 percent year-over-year while REOs decreased 18.5 percent.
- Nationally, distressed sales accounted for 2 percent of sales, unchanged from 2 percent last month and down from 5 percent a year ago.
Broward Real Estate Selling Close to List Price
- The median number of days between listing and contract dates for Broward single-family home sales was 47 days, a 9.3 percent increase from 43 days last year. The median number of days between the listing date and closing date for single-family homes was 85 days, a 4.9 percent increase from 81 days.
- The median time to contract for condos was 47 days, a 24.2 percent decrease from 62 days last year. The median number of days between the listing date and closing date for condos was 46 days, a 9.8 percent decrease from 51 days.
- The median percent of original list price received for single-family homes was 95.4 percent. The median percent of original list price received for existing condominiums was 94.5 percent.
National and State Statistics
- Nationally, total existing-home sales decreased 6.4 percent from November to a seasonally adjusted rate of 4.99 million in December. Sales are now down 10.3 percent from a year ago (5.56 million in December 2017).
- Statewide closed sales of existing single-family homes totaled 20,633 last month, down 9.9 percent compared to December 2017, according to Florida Realtors. Statewide closed condo sales totaled 8,156, down 11.4 percent compared to a year ago.
- The national median existing-home price for all housing types in December was $253,600, up 2.9 percent from December 2017 ($246,500). December’s price increase marks the 82nd straight month of year-over-year gains.
- December marked 84 consecutive months of year-over-year statewide median sale price increases for both single-family homes and condo-townhouse properties. The statewide median sales price for single-family existing homes was $255,000, up 4.2 percent from the previous year. Last month’s statewide median price for condo-townhouse units was $185,000, up 2.8 percent over the year-ago figure.
Broward Cash Buyers Represent Almost Double the National Figure
- Broward cash transactions comprised 36.9 percent of December 2018 total closed sales, compared to 38.9 percent last year. Broward cash transactions are almost double the national figure (22 percent).
- Condominiums comprise a large portion of Broward’s cash purchases as 54.2 percent of condo closings were made in cash in December compared to 18.7percent of single-family home sales.
Seller’s Market for Broward Real Estate
- Months supply of inventory for single-family homes increased 22.2 percent to 4.4 months, which indicates a seller’s market. Existing condominiums have a 5.7-month supply, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six and nine months of supply.
- Although still in a seller’s market, the increase is positive, as high demand and insufficient supply were resulting in a housing shortage and negatively impacting sales.
- Total active listings at the end of December increased 12.3 percent year-over-year, from 12,360 to 13,885.
- Inventory of single-family homes increased 21.5 percent in December from 4,740 active listings last year to 5,757 in December 2018. Condominium inventory increased 6.7 percent to 8,128 from 7,620 listings during the same period in 2017.
- New listings of Broward single-family homes decreased 1.1 percent to 1,223 from 1,236. New listings of condominiums decreased 4.8 percent, from 1,672 to 1,591.
- Nationally, total housing inventory at the end of December decreased to 1.55 million, down from 1.74 million existing homes available for sale in November. This represents an increase from 1.46 million a year ago, however. Unsold inventory is at a3.7-month supply at the current sales pace, down from 3.9 last month and up from 3.2 months a year ago.
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
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