June 2022 South Florida Housing Report

Rising mortgage rates continue to affect the South Florida housing market as closed sales are down in all three counties for both single families and condos/townhomes for June 2022 compared to June 2021. Additionally, pending sales are down significantly, which is a strong indicator that we will see closed sales down again in next month’s data. Conversely, inventory levels have continued their ascent, inching closer now to 2021 levels, and are expected to surpass 2021 numbers as the year continues.

New listings have increased in some counties for some property types, and even when they decreased, it was only slightly. All of these data points combined clearly demonstrate how increasing mortgage rates are slowing the market down in an attempt to get back to pre-pandemic levels.

As expected, average prices for single family and condo/townhomes were up from June 2021 in all three counties. As inventory continues to increase, prices will begin to respond to the change and slow their ascent, but we will not see a dramatic price drop just yet as you need much more supply in the market to drive prices down than what we are seeing currently.

With prices still on the rise and buyer affordability diminished by rising mortgage rates, many buyers are unable to enter the housing market. Not only is buying a home more expensive now, but so is everything else, with inflation at historically high levels. Despite the fact that increased mortgage rates decrease buyer affordability, it is important to note that there is a cost to ‘waiting for rates to come down’ or renting for another year. The real estate market is changing, not crashing, and there are plenty of ways to take advantage of the cooling market. With fewer buyers in the market (i.e., less demand), buyers will be facing less competition and finally have some more leverage with increased availability, lessening of bidding wars, etc.

To stay competitive in this cooling market, sellers will need to price their home right to sell their home quickly and for the most money. If you are a seller and your home is sitting on the market, the first thing to consider is a price adjustment – which is already a trending theme nationally. Despite the balancing out of the market between buyers and sellers, it is important to note that selling your home can still be lucrative in this market as homeowners’ equity has grown significantly over the last few years, which ultimately means more money in your pocket when selling your home.  

Condos and townhomes in South Florida were a popular commodity throughout the pandemic as the supply of single-family homes could not meet the demand of buyers. Now, increased mortgage rates will impact the market for condos/townhomes too, especially given how depleted inventory became during the pandemic and budget concerns with buyer affordability reduced (e.g., paying mortgage, HOA fees). Additionally, those looking to become condo owners also need to factor new condo regulations into their decision as several have been put in place as a result of the tragedy in Surfside. Staying informed about these changes and how they affect your perspective complex/association will be key in making the decision that works best for you in the long run.