South Florida’s total home sales dropped by double digits in March. Above: Royal Caribbean’s employees and guests welcomed the ‘Icon of the Seas’ from the Perez Art Museum as the ship turns around in front of Miami’s skyline early Wednesday morning during its first arrival into PortMiami, January 10, 2024.
More homebuyers are sitting on the sidelines in South Florida, leading to a nearly 15% drop in total residential transactions in March.
Miami-Dade County saw 2,141 single-family home and condo sales in March, down from 2,513 a year ago, according to the latest monthly home sales report by the Miami Association of Realtors.
Broward experienced the same trend, with 1,084 home sales, down from 3,133 sales in March 2023.
It’s the first double-digit drop in South Florida since last August and a sign of mounting pressure on home shoppers.
Buyers face two key pressures: mortgage rates and historically high sales prices.
Miami-Dade has a median sales price of $650,000 for single-family homes — an all-time high — and $445,000 for condos. Broward has a median sales price of $607,000 for houses and $288,750 for condos.
People do continue to buy, but real estate analyst Jonathan Miller believes the purchases mostly come from those moving from the Northeast with equity from selling their home, or higher salaries. Miller said more workers will continue to relocate to South Florida and drive activity given South Florida’s business, finance and tech climate.
South Florida “went from a nice place to visit to a nice place to live — that’s the change,” said Miller, president and CEO of the Miller Samuel real estate consultancy firm.
“This was all enabled by work from home,” he said. “That’s why the future outlook for Florida is undergoing a restructuring, the idea that people are looking at it from a different way.”
What is happening with South Florida housing supply?
Buyers have an increasing number of residential options. Miami-Dade has 4.3 months of supply of houses and 8.2 months of condos. Broward has 3.9 months of houses and 7.2 months of condos. A healthy state consists of six to nine months of inventory, with anything below benefiting sellers and anything above swinging in favor of buyers.
Many buyers continue to shop with cash. Miami-Dade saw 37.2% of deals close in cash, and Broward experienced a slightly higher amount at 42.6%. South Florida continues to have a higher percentage of cash buyers than the national average of 28%.
Moving forward, interest rates will likely be the key factor influencing buyers and sellers.
As of Thursday, mortgage lender Freddie Mac has a 7.1% fixed mortgage rate for a 30-year loan, slightly higher from a year ago at 6.35%. Rate cuts appear off the table any time soon, and Miller said that will likely keep more people in place, especially owners and potential sellers.
