Duff Rubin, Regional Sales Vice President of the Southeast Florida region at Coldwell Banker Residential Real Estate, has issued his annual year-end summation, including a few trends to watch in 2017. His observations cover all residential real estate in Miami-Dade, Broward and Palm Beach Counties. Individual micro-markets – like our downtown Miami and Brickell neighborhoods – will vary from these regional averages but I think his overall prognosis is important reading.
Looking back at the residential real estate market in South Florida last year, it seems like 2016 was for the most part pretty normal. That might seem like a negative, but in a volatile industry like real estate – and a year as crazy as 2016 – normal came as a welcome relief.
So while there were a few unexpected ups and downs, things were overall fairly stable. Prices continued to rise, but at an incremental, sustainable rate, and were up 4% year-to-date. Home sales were down following a robust 2015 market, and the inventory of homes for sale was at a mostly balanced level.
In real estate, a six-month supply of inventory – which means it would take six months to sell all of the homes for sale at the current sales pace – is considered a balanced market, one that favors neither buyers nor sellers. Anything less than a six-month supply is typically a seller’s market and more than six months’ worth is a buyers’ market. Our inventory levels have been hovering around the six-month mark most of the year, though they began trending up in the fall as sales slowed down and we ended with a 7.9 months’ supply of homes for sale – moving into buyer’s market territory.
Here’s a look at how 2016 compared to 2015. The figures below are from the Greater Fort Lauderdale REALTORS, Miami Association of REALTORS and REALTORS Association of the Palm Beaches¹ for Broward, Miami-Dade and Palm Beach counties, all property types, in all price ranges.
Property Sales: 93,952 in 2016 vs. 101,855 in 2015, a decrease of 7.8%
Average Sales Price: $343,875 in Dec. 2016 vs. $348,045 in Dec. 2015, a decrease of 1.2%
Property Inventory: 46,653 in Dec. 2016 vs. 50,315 in Dec. 2015, a decrease of 7.3%
Days on the Market: 80 days in Dec. 2016 vs. 84 days in Dec. 2015, a decrease of 4.8%
Overall, things look good, though sellers should make sure they’re pricing appropriately to be competitive. In comparison, the luxury market was a bit softer. A whopping 32 months’ supply of homes for sale in the $1 million and up price-point and fewer property sales meant homes stayed on the market longer. With that in mind, here are the stats²:
Property Sales: 3,701 in 2016 vs. 4,206 in 2015, a decrease of 12%
Average Sales Price: $1,990,628 in Dec. 2016 vs. $2,594,099 in Dec. 2015, a decrease of 23.3%
Property Inventory: 7,670 in Dec. 2016 vs. 6,690 in Dec. 2015, an increase of 14.6%
Days on the Market: 155 days in Dec. 2016 vs. 149 days in Dec. 2015, an increase of 4%
Whether or not these market trends will continue in 2017 depends on a number of factors, including a few worth watching closely. The first is mortgage rates, which have started to tick up. That could encourage any buyers or sellers who have been on the fence that now is the time to act. And if more potential sellers become motivated to list their homes, that could bring inventory levels up even further. Finally, keep an eye on two groups of potential home buyers: Millennial first-time buyers and foreign buyers. Both have steadily been making their move into our housing market, and both are a large enough group to really make an impact in the year ahead.