Are We Due For Another Real Estate Recession?

Florida real estate

Not anytime soon, as most of the top econmists think. The probability of a recession is pretty low right now, however the global fear generated by epidemics like the spread of the coronavirus and the upcoming presidential election can create some turbulence in the real estate market. We may see the economy to slow a little but not for long. The Florida real estate market is still benefiting from pupulation and job growth as well as South American presense in the region.

Historically, the Miami market is growing faster than the overall U.S. real estate market. The recent commercial and residential development boom that has transformed Miami neighborhoods such as Edgewater, Midtown Miami and Wynwood. There is also an influx of financial services companies relocating from the state-tax states thus creating a more sophisticated and resilient local economy.

Additionally, during the last five years a lot of new offices were built, which pushed rates up and the vacancy rate down. Now we are in one of those cycles with a large amount of office space and the demand to fill it.

Broward county reported more home sales in 2019 than Miami-Dade and Palm Beach counties, according to recently released reports.

In 2019, 61,524 homes and condos sold in the tri-county region of South Florida. Broward saw 32,609 residential closings last year, according to the Miami Association of Realtors. While total sales outpaced Miami-Dade and Palm Beach counties, that figure marks a slight (0.6 percent) decline year-over-year in Broward.

The reports from the Miami Association of Realtors give a snapshot of how home and condo sales performed last year, including neighborhoods with the least supply.

Miami-Dade:

In Miami-Dade, residential sales totaled 27,436, a 2.4 percent annual increase from 2018. The year 2013 recorded the highest number of closings, which was 30,032, according to the report.

Last year, there were 13,322 single-family home sales in Miami-Dade, a 3 percent annual increase. Another 14,114 condos sold, up 1.8 percent, year-over-year. Total sales volume came out to $12.9 billion in 2019.

The more affordable price range of $300,000 to $600,000 was the strongest segment of the single-family home market. Homes sales in
that range increased 14.7 percent to 7,231.

The median sales price in 2019 for houses was $365,000, a 4.3 percent increase from 2019. The median price for condos was $245,000, also up 4.3 percent.

The “hottest” neighborhoods with the fewest months of supply and significant closed sales activity were:

Single-family homes:

Palmetto Estates, 2.1 months of supply
Westwood Lakes, 2.3 months of supply
Hialeah Gardens, 2.5 months of supply
Kendall West, 2.5 months of supply
Cutler Bay, 3 months of supply

Condos:

The Crossings, 2.1 months of supply
Kendale Lakes, 2.3 months of supply
Tamiami, 2.4 months of supply
Cutler Bay, 2.6 months of supply
Country Club, 2.6 months of supply

Broward:

In Broward, there were 15,979 single-family home sales in 2019, up 2.2 percent from 2018.

Condo sales totaled 16,630, down 3.1 percent annually. The total sales volume came out to $11.1 billion.

Mid-market home sales outperformed the rest of the market, similar to Miami-Dade. Homes priced between $400,000 to $600,000 increased by 15.5 percent, year-over-year.

The median sale price for single-family homes rose 3.3 percent to $365,000, and it rose 3.6 percent for condos, up to $171,000.

The top neighborhoods, ranked by the Miami Realtors by supply and home sales, were the following:

Single-family homes:

Cooper City, 1.8 months of supply
Coral Springs, 2.1 months of supply
North Lauderdale, 2.1 months of supply
Pembroke Pines, 2.3 months of supply
West Park, 2.3 months of supply

Condos:

Cooper City, 1.7 months supply
Parkland, 2.4 months of supply
Tamarac, 2.6 months of supply
Oakland Park, 2.6 months of supply
Davie, 2.6 months of supply

Palm Beach:

Residential closings fell by 1.5 percent to 30,819 in Palm Beach County, due to a drop in condo sales. Single-family home sales were flat compared to 2018, with 17,421 closings in 2019. Condo sales declined by 3.4 percent to 13,398. Total sales volume in Palm Beach County came out to $13.5 billion, a figure boosted by two record sales of $105 million for single-family homes.

Median prices rose for both condos and houses: increasing 2.9 percent to $354,900 for single-family homes, and up 2.2 percent to $182,000 for condos.

The top neighborhoods were:

Single-family homes:

Lake Clarke Shores, 1.7 months of supply
Palm Springs, 2.4 months of supply
Greenacres, 2.6 months of supply
Royal Palm Beach, 2.8 months of supply
Jupiter, 3 months of supply

Condos:

Greenacres, 2.5 months of supply
Royal Palm Beach, 2.6 months of supply
Tequesta, 3.2 months of supply
Jupiter, 3.4 months of supply
Palm Springs, 3.7 months of supply