October Fort Lauderdale Real Estate market update 2023

Let’s start out with a broad view for a moment to give some context. On a national level sales fell to a 7 month low. What is keeping buyers on the sidelines nationally, are the same reasons locally.  Limited supply of inventory (buyers have fewer choices), higher sales prices (some people are just priced out of the market), and rising interest rates (don’t fight the fed, this has been a real killer, more than anything else as we had less inventory for sale during covid vs now locally).

Specific to the state of Florida the insurance marketplace is hampering deals.  That is to say the cost of the insurance and the condition the home must be in so that a buyer can obtain insurance (especially the roof age)

In short what’s good for sellers is bad for Buyers.  Limited inventory, with stable to rising home prices.  The big question is at some point does that reverse? I don’t see significant distress entering the market, but I do think there are sellers who now have plenty of equity who will just want to, not need to, want to, sell.

Single Family Homes. This data is going to be from the period of September 1 to September 30, data was compiled and distributed on October 16, 2023.  A note here.  If you’ve listened to me, or read my blog, for any number of years, you know I’m a skeptic. I can’t match the figures up that the real estate association is providing, to sales on the MLS, using the report I showed last month.  While I had tried to use a format that compiles the data more succinctly, I think its best to switch back to the longer form format I had used before.

The agenda will be going over market data slides first for single family homes, then for condo and townhome sales, distribution of sales, clusters of where sales are occurring.

I’m also going to switch over to screen shares, so here we go!

Closed Sales Single Family Homes

The slide I always start with because lets be honest, what matters most to a home buyer, or a home seller, is what’s actually closing.

155 sales in September of 2023, vs 134 in September of 2022. So an increase of 14.5% year over year. Look left, on the whole we’ve come down significantly from 2022 in terms of actual number of sales happening. So while the year over year snippet showed an increase, its important to see the bigger picture of overall sales moving down from the highs.

Median prices have risen from $522k to $535k year over year.  I’m going to show you a 2 year, 3 year, and longer term chart.  Where do you see prices moving? Again, snippet of year over year shows an increase but you can’t convince me that’s the overall trend. Sellers this is a note, if you’re on the fence, you may be better of selling sooner rather than later unless you believe a trend reversal is on the way.  Buyers, you may benefit from holding off.  Caveat to both, if you need to sell or need to buy, then do it. 

The list to sales price is really going to tell you a couple of things.  First, how willing Sellers are, on the whole, to negotiate on price.  This uses the original listing price, so this can also reflect Sellers that listed high, and then adjust price down to market.  When you’re closing to 100% it means sellers can ask what they want and get it.  As this figure moves down the dynamic shifts to favor Buyers.  So from 97% in September of 2022, down to the current 96.5%, I’d say we’re about flat. If I pull back to longer term where are we, we’re just a little above pre covid right?

Median Days to list.  Hugely important statistic.  This shows you, on average, how many days a property is active on the MLS before it goes pending. We moved from 32 days down to 24.  This I believe shows you that there’s still plenty of appetite for single family homes, especially in lower price points as we’ve spoken about before. Look left, we look to be on the lower end of the long term chart. Good news for sellers, and tells buyers, if you like something you have to move on it. So there’s still urgency in the market compared to historic data.

I’m going to skip over median per square foot.  I love per square foot, but its going to be redundant as we dove into median pricing.

Total sales volume.  A couple notes here.  We’ve had some record breaking sales both last month and this month that are going to skew this data to the upside.  Because of that I’m only going to pull this long term chart. I’m not yet convinced that we don’t drop back down towards that $150 mil range once we pass next month, but we shall see.

Months of supply.  Lets start out with a long term view.  This stat is HUGELY important in understanding who is controlling the market, Buyers or Sellers.  As a primer, 6 months of inventory is considered balanced and favors neither buyers nor sellers. We’ve gone from down near 2 months of supply during the covid era, up above 4 months of supply.  So we’ve gone from numbers that were unreal seller favored, up to numbers that are still favoring sellers.  Take a look at this chart.  If no reversal happens we’re headed to a balanced market. So will we level off? Don’t know.  What I do know, again, if you’re a seller, this is still a good time.  If you’re a buyer, its still tough.

This was a real hit last month, so let me continue here with the bracketing of sales.

Here we go again throwing the luxury is dominating the real estate market nonsense out the window. Let’s pull up my homemade slide.

A long time reader of my blog, who turned into someone I represented on the purchase of their current home in Fort Lauderdale emailed me and asked…. “I see the sales brackets, but where in Fort Lauderdale are these sales taking place under $1 million?” Excellent question! Here’s a map view of the sales below $1,000,000

Because I only used Fort Lauderdale in the data you don’t see Oakland Park or Wilton Manors populated here, but they would also show heavy transaction volume in the $1 million or less marketplace.

Let’s take a little breather here and switch to condos and townhomes. Lots going on with condos, rising association fees, assessments, and upcoming legislation that goes into effect out of the Surfside collapse.  Put it all together and its meant a higher cost to carry a condo over the last couple of years.  That being said, if an association has done the structural integrity works, a new buyer could be coming into a building with the cost of upgrade shouldered by the Seller. Townhouse market is separate and distinct from condos and honestly, remains robust in terms of demand, at least from buyers I talk to. So lets switch back to a screen share here.

Number of properties sold down to 129 last month.  There were 186 sales September of 2022, so a decline of 36%.  So that’s brutal. Lets expand the data out to the max. I think if you average it all out it’s fair to say that 150 to 200 transactions is about the norm on this chart. That being said, the current trend line doesn’t exactly scream bullish.

Lets move over to median pricing. Sticking with the wide graph we look pretty good. I’ll move down to the 2 year chart.  $447,500 was the median price in September of 2022, it’s $460k today.  Again, sales down, but prices level or moving up.  I have an idea why, I’ll share that as we get into the distribution of sales.

List to sales ratio is flat year over year. Take a wider view and I think we’re a bit above the norm right? So it looks like Sellers have a bit of an edge here in negotiation, or they’re just pricing properly at the time of list.

Median days to contract, I’d say sellers win again here! Even if we move to a shorter timeframe the days to contract really seem to be headed down.  That’s good for sellers and means again, if Buyers like a property they see, they need to act on it sooner rather than later.

Now we start to see some interesting things, take a look at total sales volume on the 2 year chart. September of 2022 there was $145 million in sales volume.  September of 2023, $78 million.  Ouch. Brutal decline. But wait you say, how is that possible if sales declined only 36%, but the dollar volume decreased by 60%? Good observation, its because the sales currently taking place are occurring at lower dollar amounts.  Really you say? Show me.

Here’s the data broken down by bracket.

Remember I said I have an idea as to why sales are down but prices are level or moving up? I believe part of it is scarcity of supply.  I’ve spoken about this time and again.  We’re geographically constrained. We can’t build more ocean.  So if you have an ocean front condo, you have something with limited supply.  You don’t have to really adjust prices much, because people always want to buy the ocean.  If only there was something that showed me that sales were taking place on or near the ocean!

I give you my sales distribution map.  So what’s selling? Downtown and the Beach.  That’s where the action is.  Great for buyers and sellers to know.