Miami-area home prices soar to set lasting record


Miami’s booming real estate market has left many residents behind. Single-family home prices in Miami-Dade County have risen by double digits for 130 consecutive months.

Miami Herald

The Miami-Dade County housing market surged through September with another annual double-digit price increase, marking an astonishing 130 straight months — nearly 11 years — of year-on-year price increases. other.

While the Miami Association of Realtors happily called a record streak of median single-family home prices on Thursday, that upward trend has shut the door, especially in recent years, on many residents’ homeownership dreams. .

Median condo prices also rose last month in Miami-Dade by double digits from a year ago. Median condo prices have now jumped every year for 132 of the past 136 months.

As home prices continue to climb in South Florida, fewer and fewer people can afford to buy. This conundrum, compounded during the pandemic that began in March 2020, has caused a crisis in housing affordability here like never before. In September, Miami-Dade recorded 2,178 total sales, a 28% drop from 3,031 sales the year before, according to the recently released Monthly Housing Report. Broward County recorded 2,348 sales in the same month, down 25% from 3,136 home closings in September 2021.

Buyers may be relieved if experts’ forecasts for the real estate market come true. Lower demand should force sellers to eventually lower prices. And median prices fell slightly month-over-month in July and August, but remained higher than a year ago.

“Sellers are still anchoring their expectations from early 2022 demand. They’re not going down far enough,” said Florida State University business professor Mariya Letdin. “It usually happens. People raise prices quickly, but it takes longer to adapt.

In Miami-Dade in September, median single-family home prices rose 17% to $568,000 from $485,000 a year ago, while condo prices climbed about 20% to $395,000 against $330,000. Meanwhile, in Broward, median prices for single-family homes rose 13% to $565,000 from $499,450 and jumped 24% for condos to $265,000 from $213,000.

Lower prices should settle down over the next six to nine months, said Letdin, who has expertise in real estate and banking.

Disgruntled sellers can blame falling demand, limited inventory and high mortgage rates as the culprits ultimately predicted they would blunt the South Florida real estate juggernaut. Miami-Dade only has 3.5 months of homes and condos available, and Broward has an even smaller housing inventory, with 2.7 months of homes and 2.2 months of condos. A balanced housing market, according to real estate experts, consists of five to seven months of inventory.

Steadily rising mortgage rates — spurred by the Federal Reserve’s massive effort since the start of this year to raise its benchmark interest rate to stave off inflation — has caused many to put their buying plans on hold Of house. In October, the leading national mortgage lender and backer, Freddie Mac, raised its average 30-year fixed mortgage rate to a hair below 7%, compared to around 3% a year ago. This means that the typical monthly mortgage payments of today’s buyers are significantly higher than those of people who bought homes last year or since the pandemic emerged.

Anxiety as a motivation

Dr Lawrence Rolle, 28, saw no choice but to buy into this expensive housing market, which has been equally cruel to tenants. He needed a stable place to live until at least 2025, when he was expected to complete his medical residency at the University of Miami Jackson Health System. Rolle sought a home in Coral Gables, Overtown and Liberty City — communities the Atlanta native values ​​for their history. He could afford to buy with a special medical loan that required no down payment.

After looking for a home for a year, Rolle said anxiety crept in. Rolle has lost four times to cash offers. Propelled by wealthy people who continue to migrate here during the pandemic, South Florida has nearly double the rate of cash home buyers — about 40% in Miami-Dade and Broward last month — compared to the national average of 22%.

To make matters worse, Rolle had to leave the room he was renting at his friend’s house because a new tenant was to move in. He feared at one point that he would become homeless, having to sleep in his car.

Influencers Realty Group realtor Phillip Calloway – someone with around four years of working with first-time buyers in South Florida – suggested earlier this year the doctor examine a 1,047 home. square feet in Liberty City with three bedrooms and one bath. It was done for Rolle. He closed the house in May for $340,000.

Rolle feels lucky to have landed home. Over the past two years, he has seen fellow medical residents displaced.

“I know residents I’m friends with who have had to move,” he said. “People in the community are being evicted.”

Rolle said from the union he belongs to, the Committee of Interns and Residents Service Employees International Union in Florida fought last year to raise starting salaries for medical residents from $45,000 to $58,000. More of them can buy a house. He hopes Miami-Dade home prices will drop steadily in the coming months to give others a chance to buy.

“People are moved that make Miami. We are losing the city,” Rolle said. “We need changes. It is a critical period. I hope things fall apart, even as a landlord. I plan to have this house forever. I prefer that people live and not suffer.

Miami-Dade had its first month-over-month price drop in July, after a steady rise in prices from the end of 2021. dived again in August, but then increased in September.

“Hard pill to swallow”

South Florida first-timers like Rolle have faced challenges for years. Calloway found that even though interest rates were lower at the start of the pandemic, some buyers were caught off guard by strong competition from cash buyers.

“A lot of first-time buyers have been pushed out of the market because they couldn’t get their offer accepted,” the estate agent said. “If you go into a one-upmanship and you don’t have the money [to put] on the appraised value and no money to conclude, your offer is not accepted. »

These last months. Calloway has noticed that more homes stay on the market longer. Buyers have more ability to negotiate prices and face fewer competing bidders for homes.

“Now if I’m a first-time home buyer, I don’t have to worry about having 15 competing offers with me,” he said. “In most cases, I haven’t written a contract putting the money on appraised value in a few months.”

On the other hand, Florida State’s Letdin said home sellers who still expect to make a net profit are slow to lower asking prices.

“It is no longer the market. It’s a tough conversation with sellers,” she said. “It’s a tough pill to swallow. Bad news takes longer to be absorbed by residential sellers.

Rebecca San Juan writes about the real estate industry, covering news on industrial, commercial, office projects, construction contracts, and the intersection of real estate and law for industry professionals. She studied at Mount Holyoke College and is proud to report on her hometown.
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