“A healthy balance” is how the Miami Association of Realtors described the number of single family homes for sale when compared to the pace of sales in July. That “healthy balance” is a consequence of more properties for sale and a slowdown in the number of homes sold.

Average prices for homes in Miami-Dade, Broward and Palm Beach counties have been easing lower on an annual basis in recent months. Far from a crash, average single family home prices have been relatively stable even as average condominium prices have fallen to some of their lowest levels in almost two years. It is a similar environment across Florida. “The relatively abundant amount of inventory we have in both property type categories is an indication that we still do not have enough prospective buyers relative to sellers to push prices upward,” said Florida Realtors’ Chief Economist Brad O’Connor. “For buyers who can afford to purchase in the current market, this gives them a sizable advantage in price negotiation.” Home and condo sellers in South Florida were willing to drop their prices in order to close a deal in July. Sellers accepted about 95% of their asking price last month. A year ago they were able to command bids closer to their asking prices. One reason is there are more homes for sale for prospective buyers to choose from. That also has extended the time homes are sitting on the market looking for buyers. It took about three months for a home sold in July to find a buyer.

Condominiums on the Atlantic Ocean beach in Key Biscayne, Fla., May 27, 2024. While most of Miami is defying national real estate trends, there has been some cooling in Key Biscayne's condo market.

 

“This could change as prices and or interest rates continue to come down as a lot of sideline buyers who would love to purchase a home, if only the market was a little more affordable, would be unlocked and able to compete with the buyers that are already in the market,” said O’Connor about overall Florida home market conditions.

 

Condo market condition

The South Florida condo market continues to be under pressure. An increase in condos for sale that began more than a year ago has stabilized this summer. Yet, the number of units for sale is up about 50% compared to early 2024. That increase in inventory has led to a fall in average prices, though the rate of price decreases as slowed on a year-over-year basis.

Older condos have been weighing down the market, thanks in part to reforms put in place after the Surfside Champlain Towers South collapse killed 98 people in 2021. A series of new laws requires older condo buildings to undergo structure inspections and review the financial stability of condo associations. The changes have led many older buildings to raise monthly fees and issue special assessments to address maintenance and boost financial reserves.

The impact of the reforms can be seen in the condo market. Sales of units over $1 million in Broward County have increased this year. The sale of units at least $2 million in Miami-Dade County has been steady. These high priced units usually are in buildings less than 30 years old, and thus not subject to many of the reforms.

Meantime, the average price of a Miami-Dade County condominium unit that is at least 30-years old was $294,000 in July.

Financing

Borrowing rates have dropped from their springtime highs. The average 30-year mortgage rate was 6.6% in late August, according to Freddie Mac. It was close to 6.9% just after Memorial Day.

Mortgage rates have a limited impact in the South Florida real estate market, which sees a larger share of cash deals compared to the national average. Cash purchases of single family homes increased across the region last month. They dropped slightly for condos.

One financing challenge realtors often cite is how few condo buildings in South Florida qualify for financing backed by the Federal Housing Administration. FHA insures mortgage loans and requires condo buildings to meet a list of requirements for units purchased with a FHA-insured mortgage to be eligible. Only 16 buildings across Miami-Dade, Broward and Palm Beach counties are listed as approved for FHA-backed financing, according to the agency’s website.