South Florida home prices rise in 2016

Posted on March 7, 2017

If you owned a South Florida home in 2016, chances are good you saw a modest increase in value.

A shortage of move-in ready homes for sale helped push prices higher in Palm Beach, Broward and Miami-Dade counties, even as the housing market showed signs of cooling, industry observers say.

Palm Beach County’s year-end median price for existing, single-family homes was $306,953, 8 percent higher than 2015, the Realtors Association of the Palm Beaches said Thursday.

Broward County’s median reached $310,000, a 7 percent increase from the prior year, according to the Greater Fort Lauderdale Realtors. The median price in Miami-Dade County finished 2016 at $295,000, up 11 percent, the Miami Association of Realtors said.

Prices in each county have soared since 2012, when the housing market started to recover from the historic meltdown.

Broward’s median has increased 51 percent over the past four years, while Palm Beach County has seen a 47 percent bump. The median in Miami-Dade is up 59 percent since 2012.

“Even though we’ve seen some big price gains in the last four years, prices are still not as high as they were 11 years ago,” said Jack McCabe, a housing analyst in Deerfield Beach. “The prices got so low, so there was still a lot of room to come back up.”

The median means half the homes sold for more and half for less. An increase in the median price doesn’t necessarily mean all homes in the county rose in value.

Terry Story, of Coldwell Banker in Boca Raton, said the higher prices and rising interest rates are pushing the limits of affordability for first-time buyers.

“Some of my young couples have X amount of dollars to spend, and they’re getting squeezed out of the market,” Story said. “They’re eager to buy, but affordability is their biggest concern.”

Home sales, meanwhile, were mixed last year.

Broward was the only one of the three counties to post higher single-family sales in 2016. The county had 17,170 homes trade hands last year, a 2 percent increase from 2015.

Sales dropped 3 percent in Palm Beach County and 5 percent in Miami-Dade.

Sellers have largely been in control of the housing market over the past few years, but buyers have wrestled away some of the negotiating power, analysts say.

Real estate agents say buyers are unimpressed with the quality of homes for sale, even though listings are increasing in Palm Beach and Miami-Dade counties.

Many homes need new kitchens or bathrooms or other upgrades, agents say. In a frenzied market, buyers can’t make offers fast enough and will settle for imperfections, but now they’re more willing to delay purchases.

“I’m dealing with a lot of buyers who make an offer that gets turned down, so they’ll say, ‘Well, let’s wait a few weeks and see if it’s still on the market,’” said Max Martin, an agent for the Keyes Co. in Fort Lauderdale.

In some cases, agents have to sit down with sellers and persuade them to cut their asking prices.

“It takes time, several conversations and data reports to show them that this isn’t what it is anymore,” said Brian Pearl, an agent for Lang Realty in southern Palm Beach County. “That’s a tough truth to deal with.”

In the existing condominium sector, prices were up and sales down in all three counties during 2016.

Palm Beach County’s median price rose 12 percent to $157,000, while Broward’s increased 8 percent to $140,000.

A glut of unsold condos so far hasn’t hurt prices in Miami-Dade, where the median rose 6 percent to $212,500.

McCabe, the Deerfield Beach analyst, said demand remains strong for low- to mid-range homes and condos, so those prices should continue rising in 2017. He’s more concerned about the luxury market, where inventory is growing and demand has leveled out.

McCabe predicts a U.S. recession in the coming months, but he doesn’t think it will dramatically affect home values for middle-income consumers as much as it will for affluent owners of real estate.

“I think a lot of rich investors are going to take the hit this time,” McCabe said.