Despite the restrictive interest rate policy by the US Central Bank (FED), the average property price in South Florida remains on an upward trend. The month of October registered double-digit annual growth, confirming that the imbalance between supply and demand will continue for a long time, keeping the market in the “seller” category (favorable for sellers).
So-called single-family homes, that is, single-family residential homes in the two main counties (Miami-Dade and Broward) rose 17% in October compared to the same period a year ago, according to a report released by the Miami Realtors Association.
Miami-Dade’s average October sale price was $575,000 for single-family homes. For Broward County, the average price was $540,000, up 10% from last October.
In general, the real estate market has been “cooling” across the US. South Florida, however, for some segments, remains warm. Low inventory and growing demand from new residents from other states are the main factors.
At the same time, homebuilders find it difficult to cope with the great demand. There are several reasons, from lack of free areas for construction, to lack of labor and materials. This scenario, which was critical in 2021, has already improved considerably and the prospects for new construction in Florida are optimistic. However, even in a high number of new construction situation, a project can take up to 6 years to be delivered to the buyer.
Another factor that delays the return to normality of the market in Florida is the high number of new buyers willing to pay dearly for a property. These are people who sell their homes in very expensive regions in the north of the USA (Ex.: Manhattan) and are willing to pay cash (in cash) or even make offers above the advertised price.
Such an attitude, at the height of the crisis, led to an unusual situation in Florida, which the market dubbed the “Bidding War”. A single house received up to 6 proposals at the same time.
Inventory increase does not prevent price rise
The increase in interest rates caused the inventory of properties for sale on the market to increase, which shows signs of returning to normality. However, even with significant increases in inventory in recent months, the market remains “seller” (favorable for sellers).
In Miami-Dade County, housing stock rose to 3.7 in October, the highest in 12 months. For Broward County, this indicator was even higher, at 3.8, the best in 2022. However, a balanced market requires that the indicator has between 5 and 7 months of inventory.
Experts warn that the rise will remain throughout 2023.
About AMG International Realty
AMG International Realty is a global real estate company specializing in Florida. If you are interested in finding out more about investment opportunities in South Florida, contact me right now and chat with me on WhatsApp: +1 305 318 6968 (Heloisa Arazi).