South Miami, Pinecrest and the South Grove have been red hot for houses over the past year. Delray Beach and some Palm Beach County neighborhoods have not.
Regional single family home prices have kept climbing in recent months, though the pace of the increases has slowed. And a few areas have seen median prices of existing homes sold fall compared to a year ago.
" Nothing's falling off a cliff in terms of pricing, but the elevated listing prices are starting to take their toll," said Homes.com Director of Market Analytics Juan Arias, based in Fort Lauderdale. "The slow down in the general economy is starting to take its toll."
The median price of a single family home in South Florida that was sold in February was up 7.8% compared to a year earlier, according to Homes.com’s data. While that's better than twice the national rate, it is a significant slowdown from the 20%-plus annual price increases the single family housing market experienced in the years after the COVID-19 pandemic.
"It's still very strong growth relative to pre-pandemic trends," Arias noted.
The February data came before Pres. Donald Trump announced his unprecedented global tariffs on April 2. While he has reduced most of his initial tariffs, uncertainty continues about the fate of the import taxes in July and their impact on consumers.
"When we talk with business leaders in many sectors — basically all the sectors — when we talk with family members, basically what they’re telling us is we don’t know what to expect moving forward," said Federal Reserve Bank of Atlanta President Raphael Bostic Monday night at Emory University. "I think the [economic] fog has gotten really, really thick."
READ MORE: Million dollar-plus condos are holding up the regional real estate market
Consumer sentiment has dropped, the stock market volatility has remained elevated and mortgage rates are still above 6%. Lower priced homes in South Florida tend to be more sensitive to higher borrowing rates. Cash purchases for houses more than $1 million are more common.
"There's no significant pricing contraction yet," Arias said.
He does not expect a major drop in prices like there was 18 years ago during the Great Recession. His confidence stems from the low regional unemployment. Miami-Dade County has the lowest jobless rate in Florida, at 2.4%. The unemployment rates in Broward and Palm Beach counties are higher — 3.4% and 3.7% respectively — but remain near historic lows. There also has not been a marked increased in distressed sales of houses.
Arias also pointed to the lack of single family homes available for buyers to choose from. The inventory of homes listed for sale has been increasing, but it remains tilted toward a seller's market. Some homeowners may be staying put, especially if they refinanced their mortgage during the pandemic when borrowing costs were half what they are today.
Demand, meantime, has grown. For every 6.8 new jobs created in the region since 2019, one building permit has been issued to construct a single family home. "That tight unemployment rate," said Arias, "has really helped save the entire single family home market."
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