MIAMI — Broward County total home sales posted a double-digit increase for the ninth consecutive month in May 2021 as pent-up demand and record-low mortgage rates continue fueling transactions, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
Broward County total home sales surged 142.3% year-over-year, from 1,529 to 3,705. Broward single-family home transactions rose 100.7%, from 814 to 1,634. Broward existing condo sales increased 189.7%, from 715 to 2,071.
“The pandemic taught us you can do business anywhere and if you can do business anywhere why not come to South Florida where your money goes further and the lifestyle is so much better,” Broward-MIAMI President Patrick Simm said. “Fort Lauderdale real estate and Broward real estate continues to be fueled by U.S. homebuyers and companies relocating to South Florida, a region known for being pro-business with low-tax policies.”
Lack of inventory in certain price points is impacting sales, particularly for single-family homes. Increased housing starts and more sellers listing properties in 2021 should help alleviate the lack of supply. More inventory is expected to come to the market later this year as potential home sellers become more comfortable listing and showing their homes. The falling number of homeowners in mortgage forbearance will also bring about more inventory.
Broward Luxury Sales Jump as Tax-Burdened High-Net-Worth Buyers Relocate
Broward single-family luxury ($1-million-and-up) transactions jumped 343.6% year-over-year to 173 sales in May 2021. Broward existing condo luxury ($1-million-and-up) sales increased 371.4% year-over-year to 66 transactions.
Luxury months of supply continues to trend downward for all property types, month-over-month, and year-over-year.
Low interest rates; a robust S&P 500; the appeal of stable assets in a volatile economy; homebuyers leaving tax-burdened Northeastern states to purchase in Florida (no state income tax); and work-from-home and remote-learning policies have all combined to create a robust market for luxury single-family properties.
Broward single-family homes priced between $400K to $600K surged 144.4% year-over-year to 545 transactions in May 2021. Broward existing condo sales priced between $400K to $600K increased 462.1% to 163 transactions.
Broward Homeowners’ Home Equity Surges as Many Pay Lower Mortgage Payments
With interest rates still at record lows, many South Florida homeowners have refinanced their home loans. So not only are many homeowners paying lower mortgage payments today; they are doing so while their wealth (home equity) has significantly increased. Home equity can be tapped for renovations, college loans and more.
Broward County single-family median prices increased 24.5% year-over-year in May 2021, increasing from $372,500 to $463,750. Existing condo median prices increased 20% year-over-year, from $175,000 to $210,000.
The greater share of luxury sales in the current market is part of the reason for the large year-over-year increase in median prices.
Rising median prices is a trend nationwide as record-low mortgages rates and the increased availability of remote work and education has accelerated the demand for housing. Low inventory relative to high demand leads to prices rising.
Lower mortgage rates are making home purchases more affordable. According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 2.96% in May, down from 3.06% in April. The average commitment rate across all of 2020 was 3.11%. Yun expects the 30-year fixed-rate mortgage to remain below 3.5% in 2021.
Should mortgage rates resume their upward climb, home price growth is likely to slow in response. Also, as more sellers list properties in 2021, the increased inventory should ease the growth of median prices.
Broward Dollar Volume Totals $1.7 Billion, Showcasing Impact Housing Plays in Economy
While other industries struggled over the past year, housing lifted the economy nationally and locally. For every two homes sold in the U.S., one job is created. Dollar volume showcases the impact housing plays in the local economy.
Single-family home dollar volume increased 182.8% year-over-year, from $381.5 million to $1.1 billion. Condo dollar volume increased 256.2% year-over-year, from $172.2 million to $613.3 million.
Lack of access to mortgage loans continues to inhibit further growth of the existing condominium market. Only nine of the 1,909 condominium buildings in Miami-Dade, Broward and Palm Beach counties are approved for Federal Housing Administration loans as of June 21, 2021, according to the U.S. Department of Housing and Urban Development.
A better condo approval process is expected to increase sales. The guidance, which went into effect in October 2019, extends certifications from two years to three, allows for single-unit mortgage approvals, provides more flexibility with owner/occupancy ratios, and increases the allowable number of FHA loans in a single project. The changes, many of which MIAMI and NAR have championed, are expected to generate increased homeownership opportunities.
Broward Distressed Sales Keep Dropping, Reflecting Healthy Market
Only 1.2% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, compared to 4.6% in May 2020.
Total Broward distressed sales increased 34.3%, from 70 to 46.
Short sales and REOs accounted for 0.5% and 0.7% year-over-year, respectively, of total Broward sales in May 2021. Short sale transactions increased 18.8% year-over-year while REOs decreased 50%.
Nationally, distressed sales represented less than 1% of sales in May 2021, down from 3% in May 2020.
National, State Housing Demand Robust as More Inventory Expected to Arrive
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, dropped 0.9% from April to a seasonally-adjusted annual rate of 5.80 million in May. Sales in total climbed year-over-year, up 44.6% from a year ago (4.01 million in May 2020).
Statewide, closed sales of single-family homes in May totaled 30,985, up 57.9% year-over-year, while existing condo-townhouse sales totaled 15,491, up 155.2% over May 2020. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, the median existing-home price for all housing types in May was $350,300, up 23.6% from May 2020 ($283,500), as every region registered price increases. This is a record high and marks 111 straight months of year-over-year gains since March 2012.
The statewide median sales price for single-family existing homes was $344,900, up 27.7% from the previous year, according to data from Florida Realtors Research Department in partnership with local Realtor boards/associations. Last month’s statewide median price for condo-townhouse units was $250,000, up 24.1% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Seller’s Market for Broward Homes
Inventory of single-family homes decreased 53.5% in May 2021 from 4,762 active listings last year to 2,214 last month. Condominium inventory decreased 45.7% to 4,472 from 8,234 listings during the same period in 2020.
Months supply of inventory for single-family homes decreased 64.1% to 1.4 months, which indicates a seller’s market. Inventory for existing condominiums decreased 56.9% to 2.8 months, which indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Months supply of inventory is down since July 2019 for single-family, reflecting strong demand.
Total active listings at the end of May 2021 decreased 48.6% year-over-year, from 12,996 to 6,686.
New listings of Broward single-family homes increased 15% to 2,018 from 1,755. New listings of condominiums increased 10.7%, from 1,901 to 2,105.
Nationally, total housing inventory at the end of May amounted to 1.23 million units, up 7.0% from April’s inventory and down 20.6% from one year ago (1.55 million). Unsold inventory sits at a 2.5-month supply at the present sales pace, marginally up from April’s 2.4-month supply but down from 4.6-months in May 2020.
Broward Real Estate Attracting Multiple Bids, Buyers Going Over-List Price
The median percent of original list price received for single-family homes was 100% in May 2021, up 4% from 96.2% last year. The median percent of original list price received for existing condominiums was 96.4%, up 2.4% from 94.1% last year.
The median number of days between listing and contract dates for Broward single-family home sales was 12 days, a 63.6% decrease from 33 days last year. The median time to sale for single-family homes was 57 days, a 25% decrease from 76 days last year.
The median number of days between the listing date and closing date for condos was 33 days, down 32.7% from 49 days. The median number of days to sale for condos was 76 days, a 17.4% increase from 92 days.
Broward Cash Sales More than National Figure
Cash sales represented 38.4% of Broward closed sales in May 2021, compared to 29.3% in May 2020. About 23 percent of U.S. home sales are made in cash, according to the latest NAR statistics.
The high percentage of cash buyers reflects South Florida’s top position as the preeminent American real estate market for foreign buyers, who tend to purchase with all cash as well as some moving from more expensive U.S. markets who can buy more with their profits from real estate sales.
Cash sales accounted for 51.6% of all Broward existing condo sales and 21.8% of single-family transactions.
To access May 2021 Broward Statistical Reports, visit http://www.SFMarketIntel.com
Note: Statistics in this news release may vary depending on reporting dates. MIAMI reports exact statistics directly from its MLS system.
About the MIAMI Association of Realtors
The MIAMI Association of Realtors was chartered by the National Association of Realtors in 1920 and is celebrating 101 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations, the Residential Association, the Realtors Commercial Alliance, the Broward-MIAMI Association of Realtors, the Jupiter Tequesta Hobe Sound (JTHS-MIAMI) Council, the Young Professionals Network (YPN) Council and the award-winning International Council, it represents 52,000 total real estate professionals in all aspects of real estate sales, marketing, and brokerage. It is the largest local Realtor association in the U.S. and has official partnerships with 223 international organizations worldwide. MIAMI’s official website is www.MiamiRealtors.com