Broward County luxury $1-million-and-up total home sales and total active listings rose year-over-year in July 2022, according to the MIAMI Association of Realtors (MIAMI) and the Multiple Listing Service (MLS) system.
“Even with mortgage rate volatility, Broward real estate and Fort Lauderdale real estate continues to see a surge in luxury homebuyers,” BROWARD-MIAMI President David Dweck said. “Another important trend is the surge in active listings for all properties, a great sign for our high-demand, low-inventory market.”
Broward Total Luxury Sales Increase
Among luxury sales, homes selling for $1 million and up, Broward single-family luxury transactions increased 10.4% to 191. Broward condo luxury sales stayed even year-over-year at 53 transactions.
Broward’s July 2022 total home sales decreased year-over-year when compared to July 2021 –one of the best sales months in Broward real estate history. July 2022 sales were down year-over-year, from 3,679 to 2,575.
Single-family home sales decreased 27.8% year-over-year, from 1,680 in July 2021 to 1,213 in July 2022, due to lack of inventory and rising mortgage rates. Broward existing condo sales decreased 31.9% year-over-year, from 1,999 in July 2021 to 1,362 in July 2022, due to lack of inventory and rising mortgage rates.
In July 2021, Broward sales surged to a record-high because of 3% mortgage rates, higher supply (particularly in condos) and pandemic-driven demand.
In July 2022, Broward sales were impacted by higher rates of 5-6% when contracts were established in May and June and lower inventory.
Housing is sensitive to rising mortgage rates. 2018 marked the last time mortgage rates hit 5%. Broward July 2022 total home sales finished 11.2% lower than July 2018 (2,575 vs. 2,900).
Local demand remains fueled by U.S. individuals and companies moving to South Florida, surging demand from global buyers, demographic shifts with rising millennial homebuyer and senior populations, high percentage of workforce still working remotely, surging rental prices and more.
A recent Redfin report highlighted the Miami Mega Region as the No. 1 U.S. metro where homebuyers want to relocate.
With global vaccinations rising and unstable political situations around the world, South Florida is seeing an increase in foreign homebuyers.
Vaccinated foreigners were allowed to resume travel to the U.S. back in November 2021 and that continues to lead to more international investment in South Florida – the No. 1 destination in the U.S. for foreign buyers. Global buyers purchase in Miami for myriad reasons including that Miami is a world-class global city with better real estate prices than other similar global cities. Foreign buyers feel at home with our incredible diversity and inclusion of all cultures, along with all our amenities.
South Florida: A Bargain in Comparison to Other Global Cities & U.S. Metros
Miami-Fort Lauderdale-West Palm Beach’s price per square meter is $3,170, far below at least 30 global cities and 13+ U.S. Metros including markets such as Hong Kong ($28,570), New York City ($17,191), San Francisco-Oakland-Hayward, CA ($8,250), Madrid, Spain ($6,173), Los Angeles-Long Beach-Glendale, CA ($4,740) and Seattle-Tacoma-Bellevue, WA ($4,460), according to National Association of REALTORS Profile of International Transactions in U.S. Residential Real Estate 2022.
Broward County single-family home median prices increased 21.2% year-over-year in July 2022, increasing from $495,000 to $600,000. Existing condo median prices increased 23.3% year-over-year, from $215,000 to $265,000.
While median prices have increased nationally so has house-buying power because of a long-run decline in rates before March 2022 and the slow, but steady growth of household income. West Palm Beach (No. 5) and Miami (No. 6) ranked among the Top-10 U.S. metros where homebuyer income grew the most during the pandemic via Aug. 2022 Redfin report.
Home prices are determined by supply and demand. Lower supply and higher demand create higher prices. Inventory for Broward single-family homes (2.4 months) and condos (2 months) are low. Also, one of the supports for home prices is rents and rents are rising strongly.
Locally, the greater share of South Florida luxury sales is also part of the reason for the large year-over-year increase in median prices.
To battle national inflation, the Federal Reserve has aggressively raised rates this year and has plans for more hikes. High inflation and the Fed’s tightening policy are the main drivers behind rising mortgage rates.
Mortgage rates have risen from 3% in January to near 6% in July. On the same $300,000 mortgage, the monthly payment has risen from $1,265 in December to $1,800 today, according to NAR.
According to Freddie Mac, the average commitment rate for a 30-year, conventional, fixed-rate mortgage was 5.41% in July, down from 5.52% in June. The average commitment rate across all of 2021 was 2.96%.
The mortgage rate is projected to land at 5.3% by 4Q 2022, according to NAR. That is still low compared to an all-time average of about 8% in the U.S.
Long term, the hope is higher rates will lead to more days on the market (gives buyers more choices). Higher rates will eventually lead to a moderation of the growth rate of pricing. With the growth rate of pricing cooling, total inventory could grow later. Historically, inventory expands six months after rates rise, but today’s market is unlike any other.
Broward Total Active Listings Rise: A Great Sign for our High-Demand Market
Inventory of single-family homes increased 37.2% year-over-year in July 2022 from 2,414 active listings last year to 3,313 last month. Condominium inventory decreased 12.4% year-over-year to 3,413 from 3,898 listings during the same period in 2021.
New listings of Broward single-family homes decreased 1.7% to 1,935 from 1,969. New listings of condominiums decreased 2.1%, from 2,017 to 1,975.
Months’ supply of inventory for single-family homes increased 60% to 2.4 months year-over-year, which indicates a seller’s market. Inventory for existing condominiums decreased 9.1% to 2 months, which also indicates a seller’s market. A balanced market between buyers and sellers offers between six- and nine-months supply.
Total active listings at the end of July 2022 increased 6.6% year-over-year, from 6,312 to 6,726.
Nationally, total housing inventory at the end of July was 1,310,000 units, an increase of 4.8% from June and unchanged from the previous year. Unsold inventory sits at a 3.3-month supply at the current sales pace, up from 2.9 months in June and 2.6 months in July 2021.
Broward Real Estate Posts $289.7 Million Local Economic Impact Just in July 2022
Every time a home is sold it impacts the economy: income generated from real estate industries (commissions, fees and moving expenses), expenditures related to home purchase (furniture and remodeling expenses), multiplier of housing related expenditures (income earned as a result of a home sale is re-circulated into the economy) and new construction (additional home sales induce added home production).
The total economic impact of a typical Florida home sale is $112,500, according to NAR. Broward County sold 2,375 homes in July 2022 and had a local economic impact of $289.7 million.
Broward total dollar volume totaled $1.4 billion in July 2022. Single-family home dollar volume decreased 15% year-over-year, from $1.1 billion to $953.3 million. Condo dollar volume decreased 16% year-over-year, from $584.3 million to $490.6 million.
Broward Distressed Sales Keep Dropping, Reflecting Healthy Market
Total Broward distressed sales decreased 2.9% year-over-year in July 2022, from 35 to 34. Short sales and REOs accounted for 0.1% and 1.2% year-over-year, respectively, of total Broward sales in July 2022. Short sale transactions decreased 82.4% year-over-year while REOs increased 72.2%.
Only 1.3% of all closed residential sales in Broward were distressed last month, including REO (bank-owned properties) and short sales, compared to 0.9% in July 2021. In 2009, distressed sales comprised 70% of Miami sales.
Broward’s percentage of distressed sales are on par with the national figure. Nationally, distressed sales represented approximately 1% of sales in July, essentially unchanged from June 2022 and July 2021.
Broward’s Percentage of Sales Continue to Outpace the Nation, State
In Florida, closed sales of single-family homes statewide totaled 23,705, down 22.9% year-over-year, while existing condo-townhouse sales totaled 9,341 down 30.7% over 13,481 in July 2021. Closed sales may occur from 30- to 90-plus days after sales contracts are written.
Nationally, total existing-home sales transactions completed transactions that include single-family homes, townhomes, condominiums and co-ops, slipped 5.9% from June to a seasonally adjusted annual rate of 4.81 million in July. Year-over-year, sales fell 20.2% (6.03 million in July 2021).
The statewide median sales price for single-family existing homes was $412,303 up 16.1% 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 $305,000, up 20.6% over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.
Nationally, the median existing-home price all housing types in June was $403,800, up 10.8% from July 2021 ($364,600), as prices increased in all regions. This marks 125 consecutive months of year-over-year increases, the longest-running streak on record.
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 July 2022, even with last year. The median percent of original list price received for existing condominiums was 100%, up 2.2% from 97.8% last year.
The median number of days between listing and contract dates for Broward single-family home sales was 13 days, even from last year. The median time to sale for single-family homes was 51 days, a 10.5% decrease from 57 days last year.
The median number of days between the listing date and contract date for condos was 14 days, down 41.7% from 24 days. The median number of days to sale for condos was 56 days, a 20% decrease from 70 days.
Broward Cash Sales 74.2% More than National Figure in July 2022
Cash sales represented 41.8% of Broward closed sales in July 2022, compared to 38.5% in July 2021. About 24% of U.S. home sales are made in cash, according to the latest NAR statistics.
Cash buyers are not deterred by rising rates. 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 55.1% of all Broward existing condo sales and 26.9% of single-family transactions.
To access July 2022 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 (MIAMI) was chartered by the National Association of Realtors in 1920 and is celebrating 102 years of service to Realtors, the buying and selling public, and the communities in South Florida. Comprised of six organizations: MIAMI RESIDENTIAL, MIAMI COMMERCIAL; BROWARD-MIAMI, a division of MIAMI Realtors; JTHS-MIAMI, a division of MIAMI Realtors in the Jupiter-Tequesta-Hobe Sound area; MIAMI YPN, our Young Professionals Network Council; and the award-winning MIAMI Global Council. MIAMI REALTORS represents over 60,000 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 230 international organizations worldwide. The MIAMI Commercial Conference will be held Oct. 7, 2022 at the Biltmore Hotel in Coral Gables and the 26th annual MIAMI Global Real Estate Congress will be held Nov. 6-8, 2022 at the Biltmore Hotel in Coral Gables. MIAMI REALTORS has launched its new YPN Global and will host the first-ever YPN Global Congress on Feb. 12-15, 2023, in Dubai. MIAMI has been selected to host the prestigious FIABCI World Congress on June 5-9, 2023. MIAMI’s official website is www.miamirealtors.com