South Florida home sellers still in control as prices rise in February
Tuesday Apr 04th, 2017
South Florida’s housing market may not be as frenzied as it was a few years ago, but the February figures show that sellers are still winning the price fight. Median prices for existing, single-family homes increased last month in Palm Beach, Broward and Miami-Dade counties, nudged higher by a shortage of homes for sale that limits the leverage of buyers.
Palm Beach County’s median price was $315,000, up 7 percent from February 2016, the Realtors Association of the Palm Beaches said Wednesday. Broward’s median inched up 1 percent to $302,500, according to the Greater Fort Lauderdale Realtors. Miami-Dade’s median soared 19 percent to $321,000, according to the Miami Association of Realtors.
Prices have been on the upswing for the past five years following the end of the housing collapse. Low interest rates and a more stable job market have bolstered confidence in housing. Single-family sales rose 1 percent in February in Palm Beach County, but deals were harder to come by in the other two counties. Transactions dropped 16 percent in Broward and 10 percent in Miami-Dade.
Sluggish sales but higher prices were evident across Florida and the nation. Lawrence Yun, chief economist for the National Association of Realtors, said in a statement that a dearth of affordable listings “continues to be the pest that’s pushing up price growth and pressuring the budgets of prospective buyers.” Mike Pappas, president of the Keyes Co. brokerage in South Florida, said demand for starter and mid-priced homes is much stronger than it is for luxury properties.
At the end of February, Palm Beach County had 3,098 single-family listings under $500,000, a 16 percent decline from a year ago, Pappas said. The market is even tighter in Broward, which saw a 39 percent drop in under-$500,000 listings from February 2016, Pappas said.
“Anything under $500,000, if it’s priced right, it’s selling within 30 days,” he said. “Once you get above that price, there is more supply than demand and homes aren’t selling as fast.”
While sellers are still largely in control, buyers are making headway, some real estate observers say. Buyers are holding firm on obviously overpriced homes, and they are more willing to wait for the right property that doesn’t need major repairs, agents say.
Eli Beracha, professor of real estate investment at Florida International University, said rising interest rates are reducing purchasing power. The average rate for a 30-year fixed mortgage in February was 4.17 percent, up from 3.66 percent a year earlier, according to Freddie Mac figures cited by the Florida Realtors.
What’s more, buyers today have learned from the housing bust and are more wary of overspending, Beracha said.
“I think buyers still believe housing prices will go up, but they are afraid, and in some cases unable, to pay too much for a house today,” he said. “But that’s healthy. You want to see two sides with power in negotiations.”