Demand is up, inventory is low and prices are rising. The battle for South Florida’s residential real estate is back on even though there may still be many more foreclosures to come..
Bidding wars are erupting from Homestead to Weston, as home sales and prices take off, further reinforcing the end of a prolonged market slump.
A two-bedroom, two-bathroom, bank-owned condominium in Coral Springs sparked 64 offers within 10 days — selling for $71,000 on Tuesday, or 34 percent over its $53,000 listing price.
“It was a feeding frenzy. I’ve never seen anything like it,” said Marta DuPree, broker associate and vice president of the Keyes Company in Coral Springs. “It was a rentable building, so all the investors were out.”
In Broward County, the median sales price of single-family homes rose 17 percent in April to $205,000, and condominiums jumped 17.4 percent to $84,300, compared to prices in April 2011. And in Miami-Dade, home prices continued a five-month ascent — up 30 percent for condos, to $150,000, and 8.2 percent for single-family homes, to $183,000, compared to a year ago, according to figures released Tuesday by the Miami Association of Realtors.
Across South Florida, higher demand is leading to multiple bids and, in turn, elevating prices — as the real estate market keeps turning around.
“We have a very limited amount of inventory at this point and there are a lot less foreclosures on the market,” said Tony Garcia, district sales manager for the Keyes Company in Homestead. “What we are seeing is that people are going again to bidding wars … We’re in a situation where for 80 percent of contracts there are at least three or four offers for the same property.”
Realtors say the inventory of residential listings is way down. It has decreased 34 percent in the past year in Miami-Dade, from 17,897 to 11,878, and down 4 percent since March, the Realtors’ Association said.
Similarly, in Broward, the inventory of residential listings has dropped 30 percent in the past year, from 15,781 to 11,086, also down 4 percent from March.
With a housing stock of 16,000 homes and condos in Weston, only 254 single family homes and 91 condos are currently for sale, said Chip Rowand, assistant district sales manager for the Keyes Company’s Weston office.
Neighboring areas of Southwest Ranches, Pembroke Pines, Davie and Cooper City are all experiencing a similar dearth of inventory, said Fritz Hawkins, general manager for the Keyes Company.
“We can put a property on the market and we can have multiple offers in one day,” he said.
Investors with cash — predominantly foreign buyers — continue to fuel the market.
In both Miami-Dade and Broward, 64 percent of closed sales in March were all-cash sales, with the vast majority to international buyers, the Miami Association of Realtors said.
“We’re at a point where builder inventories are low, and in fact, for some builders, sales are proceeding faster than they can build,” said Brad Hunter, South Florida director for Metrostudy, a housing market advisory firm headquartered in Houston.
“For those who are waiting four or five or more years for home prices to stabilize and start edging back upwards, we are essentially there,” he said.
Meanwhile, distressed properties still make up a large number of sales.
In April, 47 percent of all closed residential sales in Miami-Dade were distressed, including REOs (bank-owned properties) and short sales, compared to 59 percent in April 2011 and 49 percent the previous month.
In April, 38 percent of all closed residential sales in Broward were distressed, compared to 50 percent in April 2011 and 41 percent the previous month.
Even more distressed properties are sure to hit the market, which could still dampen prices, analysts say.
“We still have 52,000 foreclosures that haven’t been sold, and it is still taking 809 days to process a foreclosure in Florida,” said Jack McCabe, chief executive of McCabe Research & Consulting, based in Deerfield Beach.
When those distressed properties become available, they may be sold online, rather than through Realtors, he said.
“Things are better, but they are still not great, and there is still a flood of distressed property yet to be sold,” McCabe said. “And that will have an impact on the marketplace.”
Statewide median sales prices in April increased 10.2 percent to $144,350 for single-family homes and 16.1 percent to $108,000 for condos, according to the Florida Realtors Industry Data and Analysis department and vendor partner 10K Research and Marketing. The national median existing-home price for all housing types was $177,400 in April, a 10.1 percent increase from April 2011.