End of the boom? Property sales in South Florida dropped 20% in 2022
Although property prices remain high and compared to other markets in the country the market is one of the most active, the number of properties sold had its clear peak in 2021
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Soledad CedroFrom Miami, Florida, United States
Although Miami continues to be the most sought-after real estate markets, there was a slowdown in sales (PHOTO: HoraMiami)
The pandemic hit South Florida, and fundamentally Miami Dade County, a national and international epicenter. People from all over decided to move to this area blessed by a tropical climate, low taxes and growing job offers that have come with the move of financial and technology companies to the city of Miami since 2020.
As expected, the increase in demand to live in this area caused the real estate market to explode -and prices to rise-. Although Miami Dade continues to be one of the most sought-after areas in the world, the trend seems to indicate that the peak may already have passed. At least that's what the recent residential property sales report by the Miami Association of Realtors indicates.
In Miami Dade County, 32,627 residential properties were sold in 2022. A very high number without a doubt, but which represents 20% less of the real estate transactions for homes that were closed in 2021, when there were 39,394 sales in Miami Dade.
But just because there are fewer sales doesn't mean prices are down, although you do see a slowdown in the steady property appreciation seen during the pandemic. The 2022 median price for a home in the county was $530,900 and for apartments it was $374,500, just up from a year earlier. In other words, prices continued to rise but slowed down despite the fact that there has not been a substantial increase in inventory.
It is believed that the rise in interest rates may have to do with the slowdown (REUTERS/Marco Bello)
In Broward County, north of Miami Dade where cities like Fort Lauderdale are located or Hollywood, the trend is similar. 32,573 residential properties were sold there in 2022, down 19% from 2021. Median home value there last year was $553,125 and $217,861 for an apartment, very similar to 2021 median prices.
The slowdown in purchases can not only be explained by a decrease in buyer interest, but a fundamental fact is that mortgage interest rates increased from 3% to 7% , making any purchase more expensive and discouraging buyers across the country. In fact, the report indicates that the “cooling off” in sales was noticed towards the end of 2022, when rates rose again.
While there may be a slowdown, experts do not they expect prices to drop a lot or the market to cool down. On the contrary, Miami continues to be one of the most sought-after markets in the entire country.