South Florida house sales PLUMMET by up to 40% compared to last year – Miami the most

House sales slumped in South Florida by a drastic 40 percent compared to this time last year, new real estate data has revealed – with rising rates and soaring asking prices keeping prospective buyers from pulling the trigger.  

Desirable locales that saw the most extreme dips in the Sunshine State include Miami, West Palm Beach, and the Florida Keys.

It comes as residential sales in the Sunshine State, like much of the rest of the country, have been on the decline.

Economists think this is due to rising mortgage rates, which are making it too expensive for many prospective homebuyers to purchase.

They also blame continuing surges in price, with some areas now listed as seeing the sharpest slumps in sales also witnessing the largest spikes in average home values.

The data looks at the year leading up to September 27, the day before Hurricane Ian hit – meaning that devastating storm has not had any bearing on the figures.  

Worsening the matter is that many of the areas with falling house sales saw prices rise to never-before-seen heights this year as the real estate market dramatically recharged after bottoming during the pandemic.

The state’s three most populous counties, Miami-Dade, Broward, and Palm Beach, set within a few miles of each other on the state’s southeast coast, all neared the top of the list, which was compiled by real-estate brokerage firm Redfin Corp.

Meanwhile, across the peninsula, on the state’s Gulf Coast, Collier County – home to the also-southern city of Naples – earned the dubious distinction having the most stark decrease among metropolitan areas, with sales falling an astounding 40 percent.

Following close behind were Miami-Dade, Broward, and Palm Beach counties – which also house cities such as Boca Raton, Fort Lauderdale, and other beachside havens – which saw similar drops of 32 percent, 29 percent, and 31 percent, respectively.

All saw decreases of well over 2,000 sales from this time last year – and all saw their prices swell to new heights in 2022 amid the home-buying market’s volatile recovery.

As of late September, Miami-Dade County, the most populous in the state with a population of more than 2,700,000, recorded 3,422 fewer sales from this time in 2021, for a total of 7,136.

Broward, the county just north of Miami-Dade, saw a similar drop, with 3167 fewer deals than on the same span last year, with 7,750 sales, according to Redfin.

A few more miles northward, Palm Beach County, still in South Florida, saw 3,027 fewer sales – after recording nearly 10,000 in 2021.  

The county stretches along the coast into the state’s rural center and includes the northern edge of the Everglades national park, and houses posh, private communities in sought-after nabes such as Palm Springs, Palm Beach, and Jupiter. 

Meanwhile, more rural regions, such as Holmes and Bradford counties in the northern part of the state – which boast estimated populations of 19,000 and 27,000, respectively, actually surpassed some of the aforementioned counties, but due to their size, the sample sets are not as reliable, with sales only in the dozens.

Furthermore, all of the mentioned counties’ prices have rocketed in recent months, with Miami’s average sell price up 22.6 percent year over year, to to more than $551,000, and Palm Beach up a whopping 83.5 percent.

Homes in the US are currently the least affordable they’ve been since 2006, new statistics have revealed, as recent mortgage rate hikes continue to see an unprecedented surge in house prices.

The National Association of Realtors’ revealed this summer that its housing-affordability index – a metric that uses median existing-home prices, median family incomes and average mortgage rates to calculate home affordability – fell to 102.4 in July, where it has since remained.  

The number is the lowest recorded since July 2006, when the index fell to 100.5 – shortly before the housing bubble burst in 2008, and the number of foreclosed homes surged thanks to predatory lending practices by the country’s big banks.

The number is also dangerously close to the lowest level ever recorded by the index, set in July 1990, when the index stood at 100.2. 

The decline depicts a real estate market that is becoming increasingly inaccessible for first-time home buyers, who have been deterred from entering the market by the rapidly rising home prices – which reached a record average of $428,700 in July, the most recent real estate data shows. 

The typical monthly mortgage payment, meanwhile, rose to more than $1,850, the National Association of Realtors said – up from $1,297 in January and $1,220 from a year ago. That’s nearly a 50 percent increase in a span of less than six months.

The number is well above the average monthly mortgage payment prior to the pandemic, which ranged from $1,400 to just under $1,500.

The drastic increases suggest a decline in homeownership is on the horizon, as prospective buyers entering the market inevitably shy away from deals that would see them have to shell out those amounts – unless, of course, sellers slash those asking prices.

The looming housing crisis comes after a period of relative affordability seen in 2020 and last year during the pandemic, due to record-low mortgage rates – despite prices also raising during that period to satisfy an also increasing demand.

This year, though, shortly before the fed decided to raise interest rates to combat record inflation, banks drastically raised mortgage rates last month, in their own effort to cover prospective losses to be incurred by the US’ diminishing dollar.

In its biggest one-week jump since 1987, the 30-year fixed-rate mortgage, the most popular home loan package, was raised to 5.78 percent in June, up from 5.23 percent seen at the end of May.

It has since reached an even more pronounced 5.83 percent as of the week ending July 1, after coming close to 6 percent.

A year ago, the affordability rate was roughly half what it is today, at 2.9 percent.

The sudden rise has since seen the country’s housing market cool significantly, with sales of previously owned homes sliding in May for the fourth straight month, as prospective buyers deal with increased costs.

The drop in demand is expected to see home-price growth reach a peak by the end of the year – before inevitably plummeting, economists warn.

‘We’re in a housing-affordability crisis right now,’ Robert Dietz, chief economist at the National Association of Home Builders, told The Wall Street Journal of the phenomenon, citing how real-estate firms have cut asking prices in recent weeks to compensate for the rapidly shifting real estate market.

Homes in cities that have seen marked price growth in recent years, including Boise, Idaho; Phoenix, Arizona; and Austin, Texas, have seen average home prices slashed in recent weeks, according to Redfin.

Meanwhile, other economists say home prices are likely to continue to rise in the coming weeks, as the inventory of homes for sale generally remains low. 

The data comes just a few months after it was reported that Miami, the seventh most populous hub in the US, had become the least affordable place to live in the US in relation to citizens’ salaries, with prices soaring to nearly $3,000 per month. 

The number rivals average rents in notoriously costly cities such as New York City and San Francisco, where rents are also on the rise.

That figure was similarly up in some the state’s other most bustling cities such as Tampa and Orlando, where renters are required to fork over 45 and 37 percent of their monthly pre-taxed income to average monthly rents, respectively. 

Redfin said that the national share of homes for sale with price drops reached a record high in July, and will likely continue to rise as more data becomes available in the coming months. 

Back in May, existing home sales fell to the lowest level since June 2020, rebounding from the COVID-era slump. Sales rose in the Northeast, but declined almost everywhere else – including in the Midwest, the West and heavily populated South. 

With supply still undesirably low, prices could remain elevated, even though sellers are reducing the list price in some areas where bidding wars were once prevalent.

‘Existing home sales should continue to slow over the course of the year as mortgage rates move higher,’ said David Berson, chief economist at Nationwide in Columbus, Ohio, in June.

He said that the crisis, while serious, should not see a drop in home sales as drastic as the one seen in 2008 – unless the country sees further economic turmoil.

‘But in the absence of a deep and sustained economic downturn, home sales should not drop as they did in the housing bust – allowing prices to continue to move higher on average.’