Single Family at Equilibrium, Condos Still in Short Supply
The most popular segments in our real estate market are single family homes with ocean access, and oceanfront condos. We follow both of these segments closely since they trend differently than the overall South Florida market. After several years of low inventory and rising median prices, our single family waterfront markets in Northeast Broward County seem to have reached a more comfortable equilibrium. Oceanfront condos on the other hand, are still in short supply. This is likely due to a large number of buyers being priced out of the single family market due to rising prices and higher mortgage rates.
Single Family Homes with Ocean Access
We started the year with over 9 months of supply of “ocean access” homes, which is the most inventory we have seen in years. However, demand was strong through the winter and spring seasons and we now have just 6.4 months of supply. This is essentially a market equilibrium, not favoring buyers or sellers.
The median sale price of waterfront homes over the past 6 months was $1,750,000. This is down almost 7% from the same period last year, but prices have crept up again over the past 6 months. This indicates that the overall market may be returning to normal. However, the median list price right now is still quite high at $3,395,000 with two thirds of the available inventory priced over $2,000,000. This is still very “top-heavy” and many buyers have been priced out of the market.
Pompano Beach is still the outlier in the market where the price per square foot is the lowest at $655 and the inventory is still favoring sellers with only 4 months of supply. With the recent spike in interest rates we expect demand in Pompano to continue, but we also expect inventory to slowly return to normal levels. The higher priced Fort Lauderdale and Lighthouse Point markets have already trended closer to equilibrium with supply at 7.3 months and 6.4 months respectively.
Pompano Beach is still the outlier in the market where the price per square foot is the lowest at $655 and the inventory is still favoring sellers with only 4 months of supply.
Our oceanfront condo market started the year at market equilibrium with 6.3 months of supply. That inventory was quickly absorbed and has trended back to a seller’s market with currently less than 5 months of supply. This is due to normal winter demand and more single family buyers moving to the less expensive condo market.
As expected median sale prices in the waterfront condo market have stabilized. The median price per square foot for oceanfront condos in NE Broward County is essentially the same as when we started the year at $491 per square foot. However, the overall cost of condo ownership has gone up due to rising insurance costs and the new maintenance and reserve requirements in the state of Florida.
With more new construction and its higher priced luxury condos, Fort Lauderdale Beach currently has the most inventory with just over 8 months of supply. Inventory levels are much lower as you move north up the beach. Galt Ocean Mile in Northeast Fort Lauderdale currently has only 4.1 months of supply and Lauderdale-by-the-Sea has the lowest supply at 3.0 months. Condo inventory typically builds back up in the “off-season”, but with the affordability issues in the single family market it is possible condo inventory could stay low and prices may trend upward again.
Ocean front condo inventory was quickly absorbed over the past 6 months due to normal seasonal demand and more single family buyers moving to the less expensive condo market.
While our waterfront markets are definitely trending back towards equilibrium, we will be watching inventory levels closely for the rest of the year. We typically see our supply increase during the off-season months, but despite higher mortgage rates the buyer demand is still very strong. Waterfront property in South Florida has always been in high demand and as the saying goes, “they are not making any more of it.” Furthermore, the overall real estate market in South Florida is extremely strong and unlike many other US markets, our median sale prices are still going up. Read our South Florida Real Estate Report
Buying and selling waterfront property can be tricky business these days. Please make sure you have a local waterfront specialist to assist you.