Median Prices and Inventory Begin to Stabilize
It was only a matter of time before we would see a correction to our waterfront property markets in Northeast Broward County. Demand has been extremely high in recent years for our prized single family waterfront homes and oceanfront condos. As a result inventory has been historically low and median prices have skyrocketed. We were on a trajectory that was unsustainable and a correction was inevitable.
After a busy winter season on the waterfront, we are finally seeing both median prices and inventory levels stabilize. Lower priced markets still favor sellers, but overall the waterfront seems to be getting back to normal. Price reductions are more common and sellers seem more willing to negotiate, especially with well qualified buyers who are getting additional relief from lower mortgage rates.
Single Family Homes with Ocean Access
In January as we entered the busy winter season, we had just over 9 months supply of single family “ocean access” homes. Typical winter demand brought inventory down to our current level of 7.6 months of supply, which is just above equilibrium. Our median sales price over the last 6 months was $1,700,000, down about 8% from the same period last year. The median list prices however, is over $3.5 million which demonstrates our extremely “top-heavy” market.
Buyers are opting for smaller, lower priced homes in our secondary markets like Pompano Beach, where the price per square foot is only $601. That’s about 29% lower than Fort Lauderdale pricing. Inventory in Pompano is also the lowest in the county at only 3.9 months of supply. The more expensive Fort Lauderdale and Lighthouse Point markets, have much higher inventory levels at 9.6 months and 8.2 months respectively.
The oceanfront condo market has also stabilized with inventory just below 6 months of supply and median prices up about 3% on average over last year. Fort Lauderdale Beach currently has the most inventory at 8.6 months, while the markets to the north including Pompano Beach and Lauderdale-by-the-Sea are all below 5 months of supply. Demand for oceanfront condos is typically higher in the winter and spring months, so we expect inventory levels to return to an equilibrium as we enter the slower summer and fall seasons. Median prices are up in Galt Mile, Lauderdale-by-the-Sea and Pompano Beach, but as inventory increases those prices should flatten out as well.
Another factor to consider is that the overall cost of condo ownership is going up due to rising insurance costs and the new maintenance and reserve requirements in the state of Florida. These factors are also increasing the demand for new construction and condos that are less than 25 years old. There are very few new construction projects breaking ground on the sand in Broward County, so this trend is expected to continue for some time.
It seems that our waterfront property markets are finally returning to normal and we expect continued equilibrium in both the single family and condominium markets. As long as people continue to move to South Florida, then demand will remain high for waterfront property. Our real estate here is still relatively inexpensive compared to other waterfront markets in the northeast and on the west coast of the United States. There is no reason to believe we will have a “crash” or a real estate “bubble”. South Florida is still one of the strongest real estate markets in the country and our local economy is thriving. Market equilibrium is good for everyone. Buyers and sellers alike should be comfortable buying and selling in our current property markets. Waterfront property can a be tricky business though. Please make sure you have a local waterfront specialist to assist you.