If any of our South Florida readers have been listening closely, they have likely heard the beginnings of rumblings about one of the most dreaded words in all of real estate: “bubble.” For local residents, it is fairly easy to see why this could be a growing concern. All it takes is a drive by any of the dozens of local construction areas, where condo towers seem to be popping up like spring dandelions. After all, a rapid increase in inventory, along with rising sales prices, is what played a major role when the last real estate bubble burst several years ago.
However, for the time being it seems like all is well on the coastal front. A recent article noted that while we are indeed seeing a rapid increase in inventory in South Florida, along with continually rising sales prices, the good news is that demand is what is driving these increases this time around.
According to the recent article, the median resale price for both condos and single-family homes rose in March of this year in Miami-Dade County, when compared to March of last year. The same was true in Broward County. The data on actual real estate transactions, however, where a sale actually took place, was more varied.
While a real estate bubble may not be in the offing just yet, there is a bit of a noticeable sea change occurring in the local market. Because inventory is growing, in terms of both condos and single-family homes for sale, prospective buyers have more choice in the available offerings – as long as they can afford the sales price. This could mark the beginning of a gradual swing back toward a buyer’s market.
Source: Miami Herald, “South Florida home, condo prices rose in March, despite growing inventory,” Martha Brannigan, April 22, 2014