South Florida’s monthly streak of record-breaking home prices ended in August, but price tags still remain significantly higher than a year ago.
Miami-Dade County recorded a median sales price last month of $620,000 for single-family homes and $416,000 for condominiums, according to the monthly housing report the Miami Association of Realtors released Thursday. It’s the first dip in monthly sales prices in nearly a year. House prices have inflated since December 2022 when the median was $530,900. Condos have taken a similar trend since March when the midpoint price was $400,000.
In Broward County, single-family house prices stayed last month at July’s median of $600,000. Condo prices stumbled to $275,000, after hovering at $280,000 for the past two months.
The month-to-month price fluctuation may bring a little bit of relief to aspiring homeowners, but the median annual price jumps still depict a South Florida housing market unaffordable to many middle-class residents. In August 2022, Miami-Dade had a median sales price of $551,250 for houses and $375,000 for condos. Since then, prices have risen by nearly 13% and 11%, respectively. During the past year in Broward, prices have also risen by 7% on houses from a median of $562,500 and increased by 4% on condos from $265,000 in August 2022.
“This shows the market taking a breath. That’s certainly helpful to buyers, but it doesn’t mean prices will correct year over year,” said Jonathan Miller, CEO of Miller Samuel real estate consultancy. “The next couple of months we don’t know if this is an outlier or the beginning of a pattern. It is too soon to tell.”
Median home prices remain much higher than a year ago, because buyers with the financial wherewithal are willing to pay more for the homes they want, real estate experts said. Also, South Florida still sees house hunters and high-rise enthusiasts with deep pockets moving here from across the country.
“Mostly the out-of-towners are the ones paying a little more or asking [price],” said Ileana Abella, a real estate agent with Compass and chair of the residential real estate network Miami Master Brokers Forum. “Locals just think our market is inflated. They will fight more and counter and just be tougher when making offers.”
Total annual home sales plunged again in August. Miami-Dade had 2,178 deals, a 13% drop from 2,505 in August 2022. Broward had 2,410 transactions, down 11% from 2,700 transactions a year ago.
Cash remains king to buy a home in the region. Last month, Broward saw 38% of its home sales close with cash, and in Miami-Dade it was slightly higher at 40%. That’s nearly double the national average of 27% cash homebuyers.
Tight supply of homes for sale in South Florida slightly improved in August, but remains much tighter than the six to nine months needed for a balanced housing market. Miami-Dade in August had 3.5 months of single-family houses on the market and 5.4 months of condos. Broward, meanwhile, had 2.8 months of houses and 3.8 months of condos.
More inventory in the coming months can help keep home price increases to a minimal level, Miller said. Although the Federal Reserve decided on Wednesday not to add to its succession of interest-rate hikes, experts like Miller expect another rate boost later this year, before rates fall sometime in 2024. However, interest rates remain at a 20-year high and that has sharply increased home borrowing costs for buyers taking out mortgages to buy houses and condos.
“The more inventory we get into the market the less upward trajectory we see in prices. It’s a simple as supply and demand,” Miller said. “We can expect an uptick in inventory if rates come down.”