The South Florida condominium market is experiencing a downturn, with declining sales and moderating price growth. This trend is attributed to a combination of factors including new condo safety reforms, elevated interest rates, and challenges in securing financing, creating a buyer’s market in many segments.
Key Takeaways
- Condo sales have seen significant year-over-year declines across Miami-Dade and Broward counties.
- Median condo prices are experiencing a downward trend or flattening, contrasting with previous growth.
- Increased housing inventory, particularly for condos, indicates a shift towards a buyer’s market.
- New state regulations following the Surfside condo collapse are impacting older buildings, leading to higher costs and affecting buyer confidence.
- The luxury single-family home market remains a bright spot, while the broader single-family home market shows signs of cooling price growth.
Declining Condo Sales Persist
Recent data reveals a consistent drop in condo sales across South Florida. In May, condo sales fell by double digits year-over-year in Miami-Dade (-25.1%) and Broward (-24%). This trend continued into July, with Miami-Dade seeing a more than 17% decrease and Broward a 7.5% drop compared to the previous year. March also showed a decline, with Miami-Dade condo sales down 1.7% and Broward down 3% year-over-year.
Price Growth Moderates for Condos
While condo prices saw substantial growth over the past decade, the market is now experiencing a slowdown. In March, the median sales price for condos in Miami-Dade fell to $437,450 from $445,000 a year prior, and in Broward, it dropped to $280,000 from $288,750. By May, the median price in Miami-Dade and Broward counties had fallen compared to the previous year. However, September data showed a slight year-over-year increase in Miami-Dade ($420,000) while Broward saw a decrease ($275,000).
Impact of Condo Reforms and Financing Challenges
New regulations enacted after the 2021 Champlain Towers South collapse are significantly impacting the condo market. These reforms require older buildings to undergo structural inspections and mandate associations to set aside funds for maintenance, leading to special assessments and higher monthly fees. These increased costs, coupled with elevated mortgage rates hovering around 7%, are deterring buyers. Furthermore, a limited number of condo buildings qualify for FHA financing, restricting access for many potential buyers.
Inventory Rises, Signaling a Buyer’s Market
The number of condos on the market has increased substantially. In March, Miami-Dade saw a 43.5% rise in active condo listings compared to the previous year, with inventory reaching 13.2 months. Broward County also experienced a significant inventory increase of 43.4%, with 12 months of condo supply. This growing inventory, combined with falling sales, indicates a buyer’s market where purchasers may have more negotiating power.
Single-Family Homes Show Mixed Trends
The single-family home market presents a different picture. While sales have also decreased in some months, price growth, though cooling, remains positive in many areas. Miami-Dade saw a modest 3.7% increase in median home prices in May, and inventory levels suggest a balanced market. The luxury segment of the single-family home market, however, continues to perform strongly, with high-value sales driving activity.
Sources
- Miami-Dade, Broward post best condo sales report in September, Miami Herald.
- South Florida condo sales keep falling. Home price growth cools, WLRN.
- South Florida real estate July trends: luxury leads, Miami Herald.
- More condos and homes are on the market in South Florida as sales drop – NBC 6 South Florida, NBC 6 South Florida.
- Miami, Broward housing trends: condo sales, prices, Miami Herald.