Most people only follow one or two resources for their news and frequently the only real estate data we see is on a national level. When evaluating real estate buy and sell decisions it is important to look at various resources including national, state and local data. The following summary should provide some valuable insight into what is happening here in our back yard as well as around the country.
S&P/Case-Shiller Home Indices – Miami/Fort Lauderdale Up 7.1%
The S&P/Case-Shiller 20-City Composite Home Price Index measures the value of residential real estate in 20 major U.S. metropolitan areas. Their most recent composite data released on February 3rd showed national home price gains of 5.7% year over year. The Miami/Fort Lauderdale market outperformed the national market gaining 7.1% over last year.
REALTORS® Expect Greater Than 5% Increase in Florida
The January 2016 National Association of REALTORS® Confidence Index is based on data collected in a monthly survey of 3,596 REALTORS® across the country. On average real estate professionals expect median price increases of 3.4% in the next 12 months, virtually unchanged from last year. REALTORS® in Florida are again more optimistic, joining just 3 other states (Colorado, Oregon and Washington) that expect median price increases greater than 4% to 5%.
Local Waterfront – Broward County, Fort Lauderdale and Northeast Fort Lauderdale
Getting more local, we pulled data from our local MLS comparing 2014 with 2015 year over year sales for “ocean-access” waterfront property. The best news is in the single family waterfront segment with double digit increases in median prices across the board. The condo data tells a different story however, with decreases or just modest increases in median prices for resale condominiums. The key word here is “resale” since we believe that this segment was hurt most by the increased competition of new construction condos on the east side of town. Many buyers last year who may have otherwise bought high-end resale units chose to purchase new units instead. This should correct itself soon.
ONE MORE THING: Mortgage Rates Low, Rental Rates High
Another important factor to consider is that mortgage rates remain at historically low rates with the average 30 year fixed rate in Florida below 3.5% as of March 1st. This is important since low rates should help maintain demand, especially in our local waterfront neighborhoods where virtually half of our transactions are financed, mostly with jumbo loans. This is even more important for current tenants who are paying some of the highest rents in the country. Low mortgage rates and high rents make home ownership especially attractive, at least in the short term.