The February market for houses in the Southeast Florida Tri-County area, encompassing Miami-Dade, Broward and Palm Beach, suddenly turned extremely active. Fewer homes came on the market, and while the numbers show a very slight increase in median list prices, the number of sold homes is up drastically, with largely unchanged but rather soft selling prices. Interesting also: the very volatile inventory curve over the last six months.
Pent up demand or investors? The reasons for the sudden activity are not quite clear to me or many of my colleagues. One bird doesn't make spring though; it remains to be seen how this will develop over summer. Certainly Florida unemployment hasn't changed much, which is the biggest factor in property purchase decisions.
Houses for sale: 25,394 (10 months supply, -25.7% m-o-m)
Median list price: $281,300 (+3.6% m-o-m)
Median list price per sf: $137
Units sold last month: 2,465 (+29.2%)
Median selling price: $172,234 (+0.2% m-o-m)
Median selling price per sf: $96
(SFH data Feb 2010 to Feb 2011. Red: median list price, green: median selling price, blue: inventory in months. Data source: SEF-MLS)
THE MODERN HOME MARKET
In the meantime, in the modern market available inventory as well as prices of observed sales are further sinking, while prices per sf went up last month.
The lower end of the market – approx. under $1.5m, really bad under $800k – still looks plundered like a supermarket shelf just before a storm. Good homes generate a lot of interest from multiple buyers and go under contract fast, so it's not the time to lean back and relax if an interesting home does become available.
As always, your comments and questions are welcome!
The November single family home market wasn’t exactly fun. The wee bit of activity that was came at the price of, um, the prices: median list prices fell a timid 1.2 percent, but median selling prices dropped a hefty 8.3 percent. But that still did not buoy the market.
So who’s asleep at the wheel: sellers on 500mg Xanax, wishfully thinking their house is so much better than anyone else’s? Or real estate agents, desperately chasing any listing they can get, as overpriced as it may be? Probably both. Case in point: a house in my neighbourhood, fresh on the market and according to a quick analysis approx. 25 percent (!) overpriced. That’s either major brawn or what’s called “shooting with wet powder”. Good luck. – The November numbers:
* Inventory for sale: 27,538 (13 months supply) * Median list price: $274,667 * Median list price per sf: $138 * Units sold last month: 2,136 (3.7%) * Median selling price: $186,667 (-8.3%) * Median selling price per sf: $105
(SFH data Nov 2009 to Nov 2010. Red: median list price, green: median selling price, blue: inventory in months. Data source: SEF-MLS)
THE MODERN MARKET
The modern market in November went against trend, as this segment so often does: compare the selling price uptick in modern homes vs. selling prices of all homes (green curve). That doesn’t mean stellar performance and ecstatic sellers, but despite inventory going up and absorption rate down, median selling prices as well as selling price per sf managed a 15+ percent increase over the previous month.
Unchanged is the market segmentation: few good properties under ca. $1.3m - $1.5m, really difficult under $600,000, and plenty to choose from above ca. $1.5m to $2m. I do not foresee this situation changing any time soon. And with mortgage rates possibly rising – despite stubborn unemployment, a key factor in housing activity – more buyers may become active in the market. Have a nice weekend!