Home prices dipped in July for the first time in Miami-Dade County since fall of 2021, providing a silver lining for priced-out buyers desperately trying to catch a break in an ultra-competitive housing market finally losing steam.
Single-family houses last month came with a median price tag of $570,000, down 2% from $579,000 in June, according to a monthly housing report released Thursday by the Miami Association of Realtors. Condominium prices, meanwhile, declined 7% to $380,000 in July in Miami-Dade, from $410,000 the prior month.
The drop in median prices reverses the upward trend since September, when the median hit $485,000 for houses and increased monthly through June. Condos experienced a similar ascent starting in October, when prices vaulted each month from $326,790.
“It’s gotten to a point where buyers aren’t willing to pay an astronomical price,” said Jonathan Vega, a real estate broker with ONE Sotheby’s International Realty in Miami. “Some sellers think they can get whatever they want. Then you realize the market is not what it was. I am seeing price reductions and negotiations that were not happening before.”
Relief has yet to come for prospective buyers in Broward County. Last month, the median sales price hit $600,000 for single-family homes — up from $590,000 in June — and remained steady at $265,000 for condos.
After runaway home prices have left most South Florida buyers behind since shortly after the pandemic began in spring of 2020, a retreat in prices and total monthly sales is clearly underway. The big questions now are how low will prices go and how many months will it take for the market to stabilize for buyers and sellers.
Mariya Letdin, a business professor at Florida State University, said South Florida’s real estate market has hit headwinds and she predicted a “small price correction” over the next few months.
Still, median price tags are expected to remain greater than those seen in most of 2021. On an annual comparison, Miami-Dade’s $570,000 median price for houses last month jumped 11% from $515,000 in July 2021, and by 12% for condos to $380,000 last month from $340,000 in July 2021.
Broward’s single-family home sales midpoint price of $600,000 is 21% more than $495,000 a year ago, and the condo sales price of $265,000 is 23% more than $215,000 in July 2021.
South Florida’s residential market remains out of reach for many local residents. An influx of wealthy transplants from across the country has led dramatic price growth during the pandemic, exacerbating a housing crisis that actually started in Miami-Dade years before the pandemic.
Regional home sales began declining in June following mortgage lenders increasing interest rates, following the lead of the Federal Reserve, which is expected to keep boosting its benchmark interest rate to thwart inflation.
However, the sales slowdown is somewhat muted in South Florida by the large number of people still paying cash for houses and condos. In July, 41.3% of total home sales in Miami-Dade and 41.8% of them in Broward were cash deals, far greater than the 24% national average.
Last month, Miami-Dade recorded 2,375 total home sales, a sharp drop from 3,632 sales in July 2021. Broward recorded 2,575 sales, also a steep decline from 3,679 in July 2021.
Lawyers Weston Finn and Diana Correa observed the slowdown in the real estate market, as they tried selling their condo in Lighthouse Point near Fort Lauderdale. When the husband and wife first listed their condo in May, the couple welcomed lines out the door for their open houses. The couple sold their condo for the list price of $565,000 in June, and then started searching for their next residence.
Before finally finishing their three-month search by purchasing a house in The Roads, Finn and Correa said they didn’t see as many prospective buyers or as much competition as they experienced vying to buy their Lighthouse Point home.
Also, house hunters are seeing more home options in the South Florida real estate market, with inventory increasing every month since February. Miami-Dade has 3.1 months of supply of houses available for sale and 3.3 months of condos. Broward has 2.4 months of houses and two months of condos. Those supply figures show South Florida is slowly moving closer to a what’s considered by real estate experts as a balanced market between buyers and sellers: 5 to 7 months of inventory.
While the volume of cash home buyers remains high in the region, the prime reason for that is changing. Cash was king to beat the competition the past couple of years. Now, area buyers are paying cash for houses and condos to save on increasing interest costs attached to 15-year and 30-year mortgages, Florida State’s Letdin said.