It seems that the near daily reports about how hot the South Florida real estate market has been for the last couple of years may not actually be matching the conditions on the ground. According to a recent report, the local condo market in particular took quite a hit over the winter months, with the number of real estate transactions for these properties diving to rates not seen in over three years.
The number of real estate transactions for townhouses and condos in both Palm Beach County and Miami-Dade County dropped 5 percent from last year’s rates during winter buying season, and Broward County saw an even bigger drop of 7 percent. The question now, of course, is why did this happen?
Well, the recent article noted that it could be anything, but the most likely cause is that sellers are seeing the reports about how robust the local real estate market is and as a result they are listing the properties that they are attempting to sell at over-inflated prices. There is no doubt that sales prices for all kinds of properties remain high in South Florida, but some properties simply do not warrant that big of a premium.
The other primary factor, it seems, is the fact that condo towers are popping up all over the place, and as a result sellers who are attempting to get the most they can out of their existing property on the market are facing competition from projects that are not yet completed. Some prospective buyers, it seems, are simply more willing to pay for a new condo that will be completed in the near future, as opposed to an existing condo that may be overpriced.
Source: Miami Herald, “South Florida condo market experiences worst winter buying season since 2009-10,” Peter Zalewski, May 25, 2014