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Are We Turning The Corner on Housing Inventory?

By their very nature, real estate markets are cyclical⁠—and South Florida’s real estate market is no different. In a normal market, buyers and sellers are feverishly engaging in the purchase and sale of property from about mid-January to the beginning of June. July and August generally provide a welcomed respite, slowly giving way to the fall selling season, which runs from mid-September to the week before Thanksgiving. The market then slows for the holiday season and then starts the same cycle over in the following year. However, since May of 2020, it would be hard to identify any sort of predictable cycle in the market.

Shortly after the start of the pandemic, seemingly mounting inventory levels began to come down dramatically as a result of an unexpected surge in demand for single-family homes. From May 2020 to May 2021, we saw this demand steadily impact inventory levels.

In select market segments, we began to see inventory rise in June 2021, and again in July 2021. Below we will dive into the data for single-family homes and condominiums in Miami-Dade, Broward, and Palm Beach Counties.

Miami-Dade County | Single-Family Homes | All Price Ranges

For July 2021 in Miami-Dade County, inventory levels of single-family homes were up 4.9%, while sales declined by 4.5%.

Miami-Dade County | Condominiums | All Price Ranges

Condo inventory in Miami-Dade County increased by only 1.3% in July 2021. However, sales decreased by 18%. Condominiums have been a popular alternative option for individuals and families relocating to South Florida from other parts of the state and country. An overly competitive single-family home market is largely responsible for the decreases we were seeing in condo inventories previously.

Broward County | Single-Family Homes | All Price Ranges

The Broward County single-family home market performed much the same as the single-family home market in neighboring Miami-Dade County. Inventory levels were up 6.6% in July 2021, and sales were down 5.1%.

Broward County | Condominiums | All Price Ranges

Surprisingly, condo inventory in Broward County trended downward in July 2021, resulting in a 1.7% decrease. However, sales went down dramatically by 6.3%.

Palm Beach County | Single-Family Homes | All Price Ranges

Palm Beach County has seen the most significant rise in single-family home inventory levels out of all three counties. Single-family home inventory increased by a staggering 12.5% in July 2021, and sales declined by 3.0%. If this upward trend in inventory and downward trend in sales continues, we may start to see this market return to a neutral market that is favorable for both buyers and sellers.

Palm Beach County | Condominiums | All Price Ranges

Condo inventory in Palm Beach County was perhaps the most stable market segment of all. Inventory levels remained flat; only increasing by 0.04%. However, sales declined by 7.2%.

There are a variety of factors that are driving the market, namely historically low interest rates and incredible buyer demand. But with the lifting of COVID-19 restrictions in many areas, it is possible that shifting priorities of would-be home buyers is causing demand to slow⁠—resulting in fewer sales. Conversely, more and more sellers becoming aware of the potential gains that can be made in the South Florida real estate market is the likely reason for rising inventory levels.

Are we turning the corner on housing inventory and moving toward a more neutral market? Perhaps. We will be watching the data closely over the next several months and determine whether this correction in the market is simply a return to a more normal cycle, or a momentary slow-down that will pick up speed again in the fall selling season.

Data is always an important tool when making a decision to buy or sell, but deciding to engage in the real estate market is largely a personal decision. Although you may want to take advantage of the market, it’s best to first make sure that you are in a financial position to do so, and that you have a clear plan as to where you are going to move to next. Our industry-leading Associates at Berkshire Hathaway HomeServices EWM Realty are experts at making sure you have all the data and analytics to help you make that personal decision. We invite you to request a free consultation below and get the answers you’ll need.

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Our Associates write often to give you the latest insights on owning a home or property in the Southeast Florida area.