Our Local Fort Lauderdale Condo Market
About half of the total sales in our local market (Northeast Broward County) in 2019 were condominiums. When we look at waterfront property sales in our area the percentage of those sales that are condos jumps to 77%. This is not surprising for those who understand our real estate market. If you want to own waterfront real estate in the Fort Lauderdale area, condo buildings are a plentiful as well as a more affordable option on the waterfront. Most of waterfront condos in our area are located on the ocean and inland waterways of Fort Lauderdale, Lauderdale-by-the-Sea, Pompano Beach, Lighthouse Point, Deerfield Beach and Hillsboro Beach. This waterfront condo report includes data from these communities.
Overall Market Highlights
- Sales volume has been very consistent since 2015 averaging 1,612 units sold per year. More recent data however shows a decline in volume of about 10% in the past 6 months compared to the same period last year.
- The median price of waterfront condos in 2019 was down about 5% compared to 2018, but when looking at the last 6 months the decline in median price is much less at only -0.7%.
- Just like last year the real story is about inventory. List prices for waterfront condos in the Fort Lauderdale area vary significantly between $129,000 and $12,995,000. Sales per month are averaging about 111 units with 12 months of supply. This is consistent with last years numbers of 115 units and also 12 months of supply. See below for a breakdown of inventory segments above and below our median list prices.
The median list price for waterfront condos in our local market is $495,000 compared to $475,000 last year. Lets take a look at our sales volume and inventory levels above and below our current median list price. You’ll notice each segment is telling a very different story.
Condos Above $495,000
- This segment is absorbing only 34 units per month, or 204 sales in the past 6 months, which translates to 19.7 months of supply. This is no surprise that we have excess inventory in the upper price ranges, but we’ll be watching this segment closely throughout the winter and spring buying season.
- Sales prices above the median are down in the past 6 months at $748,500 vs. $887,500 in the previous year. While this may seem like a large reduction, we believe much of this is due to a higher volume of newer construction sales in 2018 with higher sales prices. As the buyers move back to more resale options and as sellers continue to lower their ask prices, we expect to see median prices stabilize in this segment once again.
Condos Below $495,000
- The story is much different regarding inventory in the lower price ranges. This segment is absorbing 77 units per month translating to only 8.7 months of supply, which in our market is very close to an equilibrium and down from almost 10 months of supply last year.
- Sale prices below the median are up almost 6% in the past 6 months at $293,750 vs. $278,000 in the previous year.
While inventory may seem high in the upper price ranges, it is too early to be concerned. The good news is that new construction projects in the near future are few and far between. There is simply not much available waterfront land for development. As remaining developer inventory gets absorbed and sellers adjust their prices to reasonable levels we expect this inventory to stabilize once again. Also, consider that a substantial amount of our inventory is over priced and unavailable to most buyers. Our agents in the field report that the available “well priced” inventory is much less than our statistics indicate. This is also reflected in the gap between sales and list prices. List prices are currently 36% higher than recent sales prices, compared to a gap of only 29% last year. As in any real estate market, anything will sell in a reasonable period of time if it is priced right.
What this means for Buyers and Sellers
Buyers have plenty of options
No matter what price range you’re in, you’ll have plenty of buying options in our marketplace. Of course in the lower price ranges you’ll have more competition, so be prepared to make a reasonable offer when you find the right unit. Financing options are also plentiful below the median, so if you’re financing your purchase make sure you have a Realtor® and mortgage broker who understand the mortgage options in each condo building. Start a search with a local specialist.
Sellers need to consider inventory when pricing
Of course pricing your listing is important in any market, but in the lower price ranges you have some more flexibility. Consider the active competition in your building and local market, and then price accordingly. If competition is limited you can “test” the market a bit and try to get a premium price. Keep in mind however that buyers who need a mortgage will also need an appraisal, so your property will still need to appraise in order to get to the closing table. Are you planning to sell so you can “step up” to a higher priced condo? If the value of your unit is below the median then the timing couldn’t be better for selling your condo and stepping up into a higher price range. Sellers in the upper price ranges should price much more competitively. Consider that condo units priced above median are taking almost 20 months to sell, so if you don’t want to wait that long you really need to be priced right and be prepared to accept an offer for less than you might like. Contact a local agent for a free pricing analysis.
“The timing couldn’t be better for selling your condo and stepping up into a higher price range.”
- Interest rates remain historically low and lending institutions have a wide array of products for any price range. Considering that about 43% of condo buyers used conventional financing last year, mortgage rates are a huge factor, especially in a market with affordability concerns.
- New construction sales as a percentage of our overall sales are down with little waterfront development on the horizon. With less new construction on the market we can expect our inventory levels to stabilize, especially in the higher price ranges.
- The overall economy is strong, wages are up and consumer confidence is high. With median prices leveling off, the continued increase in wages should keep demand strong, especially in the lower price ranges.
- The state of Florida continues to be one of the more popular places to live due in part to our desirable climate and favorable tax structure. Our local Fort Lauderdale economy is thriving with an unemployment rate of just 3.5%, below the national average of 3.9%. According to Best Places, job growth over the next 10 years in Fort Lauderdale is expected to be 37.9% versus 33.5% for the entire nation. Bottom line, its a great time to invest in in our local real estate market.