MIAMI (AP) — Home prices fell again last month in Miami-Dade County and fell for the first time in months in neighboring Broward County.
The median selling price of Miami-Dade single-family homes fell to $551,250 in August from $570,000 the previous month, according to the Miami Real Estate Association’s monthly sales report released Wednesday. Condo prices also fell from $380,000 in July to the midpoint of $375,000.
Miami-Dade price declines rose steadily from September to June, hitting historic highs of $579,000 for single-family homes and $410,000 for condos, before falling for the second straight month.
Ana Bozovic, founder of Analytics Miami and real estate market analyst, said: “A steady increase by mid-2022 was neither normal nor sustainable.”
In August, Broward showed the first signs of a softening in the residential real estate market. Condo prices remained steady at $265,000 in the median, but median sales prices for homes fell from $600,000 in July to $562,500.
The South Florida housing market overheated during the two-year pandemic as the supply of available housing became tighter and an influx of out-of-state buyers who decided to call the area a new home. Demand and prices were boosted as many of these newcomers outbid local residents and paid cash for homes and condos.
The dramatic shift in white-collar workplaces from office buildings to homes during the pandemic, and the ability of tech, financial, and legal professionals and others to work remotely from anywhere during the pandemic, has helped boost South Florida home prices. The crisis worsened sharply. The coronavirus that emerged in March 2020.
Natives and longtime residents of Miami-Dade and Broward were waiting on the sidelines, betting that runaway house prices would eventually calm down.
Right now, South Florida still has few options for those who are determined to buy a home. Miami-Dade has 3.3 months of housing and 3.4 months of condo inventory. Broward has a supply of 2.5 months of housing and 2.1 months of condos. This is far from a balanced market where you can typically buy 5-7 months of housing supply.
Total home sales transactions increased across the region from July to August. Miami-Dade reported sales of 2,505 from his 2,375, Broward recorded his 2,700 deals, and he topped 2,575 in July. Nearly half of buyers paid cash to buy homes last month to avoid rising mortgage rates, experts say.
Ken H. Johnson, a finance professor at Florida Atlantic University and a real estate market expert, said interest rates will continue to rise through the end of the year.
On Wednesday, the Federal Reserve announced its fifth benchmark interest rate hike in 2022. This is the third three-quarter increase of 1%. This is a positive move to curb lingering consumer price inflation. The Fed’s rate hike has pushed traditional 30-year mortgages to an average of 6%, double what he was a year ago and the highest since 2008.
Johnson believes that part of the Fed’s anti-inflation strategy to keep rates going up may be to limit consumers’ purchasing power. One of his ideas for the Fed is that as mortgage rates rise, fewer people will borrow against home equity through their lines of credit.
“The Fed is aware that the size of domestic equities has made credit available, and is concerned about building larger lines of credit,” Johnson said. I worry that the Fed is creating another form of money supply that it has no control over.”
Meanwhile, North Miami native Joey Francilas, a digital strategist, is looking to buy a home, but soaring interest rates and persistently high consumer prices are forcing him to reassess his schedule. The 32-year-old hopes to purchase his three-bedroom, two-bathroom home in North Miami, similar to the one he grew up in, by late 2023. His mother, Marie-Severe Jean-François, immigrated to New York City from Haiti in 1979 and soon after moved to Miami. She purchased her home in 1998 for her $88,000. Today it’s worth $400,000.
Francilus fears well-funded South Florida newcomers continue to evict longtime residents like him.
“We can grow,” he said of the housing market. “But if we were to estimate the price of the people who make this town, what would it cost? ”
Vanessa Perry, a professor at the George Washington University Business School, has studied the homeowner gap and found that aspiring first-time homebuyers like Francilas are held back by higher mortgage rates than others. I believe it is.
“This is a particular constraint that we’re working on right now because home prices are so high and we’re seeing a massive rate of increase in home prices due to the pandemic,” Perry said. It will be even more difficult for first-time homebuyers to enter the market because a mortgage is required to buy a home and qualifying for that mortgage is even more difficult than it was a year ago. increase.”
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